The ugly business logic behind Kanye West’s Parler acquisition

On Monday, Kanye West, now legally known as Ye, announced that he would buy Parler, an alternative social media platform, in a surprise move that has sparked both interest in the platform and concern for the billionaire rapper’s plans. But the move comes at a perilous time for Parler, which has seen months of stagnating usage and at least one attempt to find a buyer for the platform before Ye.

According to a source familiar with the discussions, Parler’s parent company, Parlement, has been trying to offload its social media platform to potential buyers over the last few weeks. One prospective buyer described Parlement’s asking price for the platform as wildly inflated, and said they were stunned by the site’s low number of daily active users. 

Reached for comment at the official press line, Parlement declined to confirm or deny the incident but gave the following unsigned statement: “Parlement has always been exploring strategic opportunities for all its brands and continues to do so.”

Parler was one of the first social media platforms to bill itself as a censorship-free alternative to mainstream services like Facebook and Twitter but has struggled in the wake of a post-January 6th de-platforming and the rise of rival networks like Gettr and Rumble. The service currently maintains around 50,000 daily active users, a source familiar told The Verge, compared to hundreds of millions for even moderately sized networks like Twitter and Snapchat.

While user numbers flagged, the company seemed to be exploring a future for the business outside of social media entirely. In September, Parler purchased the cloud services company Dynascale and rebranded as Parlement Technologies. Executives pitched the move as a pivot to “uncancelable infrastructure,” although many saw it as a prelude to dumping the Parler social platform altogether. 

Over the last year, there have been more immediate signs that the company was scrambling for revenue. In March, the platform launched an NFT marketplace called DeepRedSky, but it has largely failed to gain traction. The current featured collection — a series of tokenized portraits of the conservative commentator Brandon Tatum priced at $50 each — has sold only three tokens.

Parler’s email list, one of its most immediately monetizable assets, has been used for months to share a regular cadence of chumbox-like sponsored messages. In October alone, users received emails titled “Plastic surgeon reveals 1 method to snap back Aging Skin” and “Shocking Report Exposes What A Single Diet Soda Does.”

Going forward, the question is whether Ye’s splashy acquisition and the accompanying controversy will entice users back to the platform. Trump’s own personality has struggled to draw a sufficient following to his recently launched Truth Social platform. With Parler struggling to gain critical mass as a social network, the deal could easily turn into an escape hatch for Parlement investors and an expensive protest statement for Ye himself.

Examining the deal from the outside, many experts are skeptical. “Trump has sort of broken that model because not a lot of people use Truth Social,” Katie Harbath, CEO of Anchor Change and former public policy director for Facebook, said in an interview Monday. “People are getting what he’s saying through other places, like seeing screenshots.”

Even if the deal falls through, the news has cemented Ye’s stature among conservatives as a champion of free speech, in the same vein as Elon Musk’s erratic war to own Twitter. But the purchase also comes as Ye is embroiled in a number of cultural controversies, from feuding with Adidas to making a string of antisemitic comments over the last week that saw him banned by both Instagram and Twitter.

Those bans seem to be the most immediate reason for the acquisition. George Farmer, chief executive of Parler’s parent company, told The Wall Street Journal that deplatforming made the Parler acquisition “a very attractive solution to his issues of being censored.”

But Ye’s personal ties may also have played a role in the decision to buy the platform. In that same interview, Farmer said his wife, conservative influencer Candace Owens, approached Ye about a Parler deal while attending his YZY label show at Paris Fashion Week, where they both wore matching “White Lives Matter” shirts, prompting a social media firestorm, earlier this month. 

A possible buyer speculated whether Ye planned to close the deal, citing the platform’s low engagement. Ye had fewer than 100 followers ahead of the announcement and has less than 16,000 as of publication. 

“In a world where conservative opinions are considered to be controversial we have to make sure we have the right to freely express ourselves,” Ye said in a statement on Monday.