Tech, advertising and media companies are smelling blood in the water as user enthusiasm and marketing dollars drain out of Twitter following Elon Musk’s tempestuous takeover, Axios' Peter Allen Clark reports.

The big picture: The chaos Musk has uncorked is creating potential for a real shift where some other businesses wax as Twitter wanes.

• Tech companies are rolling out Twitter-adjacent features for frustrated users.
• Marketers are seeking more "brand-safe" spaces for their budgets, and media companies are courting them.

State of play: Many users have been vocal about fleeing the social platform because of concerns over reduced content moderation, a jump in hate speech and Musk’s professed free-speech absolutism.

• While Musk initially attempted to mollify marketers with a promise that Twitter would not become a “free-for-all hellscape,” his policy pronouncements and postings have led some prominent advertisers to slow or pause their ad buys.

By the numbers: Even before the sale to Musk was final, Reuters reported internal documents that showed Twitter had been losing its most active users since the pandemic began.

• But internally, Twitter is reportedly claiming "all-time high" growth in user numbers since the advent of the Musk era, per The Verge.

Services that offer alternatives to Twitter are seeing the moment as a unique opportunity to entice new users.

• Many Twitter refugees are finding their way to Mastodon, the open-source, decentralized microblogging platform that launched in 2016.
• According to data from Apptopia shared with Axios, daily downloads of the app increased from 3,400 to 113,400 between Oct. 27 and Nov. 6.
• And Mastodon founder Eugen Rochko said Monday that the service now has more than 1 million monthly active users, with 489,003 new users added since Musk bought Twitter.

Other alternatives:

• Tumblr-like social media site Cohost said that its user numbers almost doubled in the last month, with about 16,000 additions in the last two weeks.
• BlueSky, a protocol for building a decentralized social network first announced by Twitter founder Jack Dorsey in 2019, announced that it had 30,000 new signups for its waiting list in only two days at the end of October.
• And upstart social apps BeReal and Gas, which are captivating younger users, remain among the top 10 of App Store downloads.

Other platforms are rolling out new features designed to tantalize disaffected Twitter customers.

• Newsletter service Substack has openly appealed to antsy Twitter users and rolled out a chat feature last week that seems aimed to bring more discussions into the platform and off of spaces like Twitter.
• Tumblr reversed its 2018 ban against nudity last week. Twitter has long been the largest social platform that allows users to post not-safe-for-work material.

The intrigue: Twitter needs marketers way more than they need the social network: The great bulk of its revenue comes from advertisers, but they have many other options.

• General Mills, Pfizer, The North Face and multiple automobile companies have paused or slowed their Twitter ad buys. The Wall Street Journal reports that buyers were considering shifting those dollars to other tech platforms.
• A source told Axios that professional network LinkedIn sent a note to marketers touting the platform's advantages after Musk’s Twitter takeover.

Yes, but: Twitter’s shadow continues to looms large. The communities that users have built there over the years might be extremely difficult, if not impossible, to recreate elsewhere.

• Many users, including authors and journalists, have built whole professional networks on the platform.
• Twitter has also been particularly important for other communities, particularly many underrepresented groups (including the trans, LGB, and disability communities as well as the well-documented Black Twitter).

Meta CEO Mark Zuckerberg on Wednesday said his company will cut 13% of its staff — or more than 11,000 people — in an effort to withstand any further downturn in the economy, Axios' Sara Fischer reports.

Why it matters: It's Meta's biggest round of layoffs in its history, and it underscores the financial pressure the tech giant is under as it pivots its business toward the metaverse.

Details: In an announcement Wednesday, Zuckerberg said he wanted to take accountability for how the company got to this point.

• Zuckerberg said he assumed COVID-driven trends, like the acceleration of e-commerce, would live on past the pandemic, but conceded that he was wrong about that. He also pointed to a slower ad market as a contributor to the company's financial woes.
• "In this new environment, we need to become more capital efficient," he wrote. "We've shifted more of our resources onto a smaller number of high priority growth areas — like our AI discovery engine, our ads and business platforms, and our long-term vision for the metaverse."

Be smart: A slower advertising market, combined with skepticism about Meta's expenses around building virtual reality products that don't have much consumer application today, has caused investors to lose confidence.

• The company reported its second consecutive quarter of year-over-year revenue declines last month.
• Meta has lost more than 70% of its value this year.

What to watch: Meta is one of many tech companies that have announced steep layoffs recently to withstand the economic pullback. Snap, Salesforce and Twitter have also recently shed large numbers of staff.

G0 deeper: What to expect when your tech firm is downsizing

Binance signed a letter of intent to acquire FTX.com, the exchange associated with Sam Bankman-Fried, after it experienced a liquidity crisis, Axios Crypto's Brady Dale reports.

Why it matters: Binance, the largest exchange by volume in the world, is acquiring a fast-growing rival amidst a wider downturn in the crypto market.

The big picture: FTX had taken a significant leadership role in the U.S. blockchain industry as it aggressively sought regulations that would provide the industry with regulatory clarity in its largest market.

• Bankman-Fried, FTX's young CEO, had become one of the industry's most recognized faces.
• Binance has been around the crypto industry for a long time, but FTX's growth has been absolutely explosive, allowing it to quickly rival the market leader.

State of play: FTX's sudden collapse following a run on its assets sent crypto prices spiraling, with bitcoin hitting its worst levels since late 2020.

What they're saying: "This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire FTX.com and help cover the liquidity crunch. We will be conducting a full [due diligence] in the coming days," Binance CEO Changpeng Zhao (better known as CZ) tweeted on Tuesday.

Of note: Both companies have separate companies set up to serve U.S. customers. FTX US will not be impacted by this deal, according to a separate tweet from Bankman-Fried, and the U.S. subsidiary says it was not affected by the liquidity crunch.

Go deeper: Listen to Dan Primack, Crystal Kim and Brady Dale discuss more on Twitter Spaces.

On Tap

• Earnings reports include Unity and AppLovin.

ICYMI

• Sources told the Financial Times that TikTok has slashed its internal revenue forecast.
• The European Commission opened an in-depth investigation into Microsoft's planned acquisition of Activision Blizzard.
• Greece is banning the sale of spyware after the government was accused of using malicious software against politicians, journalists and others. (NYT)
• Twitter plans to add an unpaid "official" tag for some accounts currently labeled with a blue "verified" checkmark. (Axios)
• Salesforce laid off several hundred workers from its sales team on Monday. (Axios)

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