Israeli co CHEQ to help Musk battle bots on X

Elon Musk and CHEQ CEO Guy Tytunovich credit: Ananim Business Photography and Reuters
Elon Musk and CHEQ CEO Guy Tytunovich credit: Ananim Business Photography and Reuters

Exclusive: Following a secret meeting with Elon Musk in Israel, cybersecurity company CHEQ will help X reduce the number of fake users on the platform.

Exclusive: Elon Musk visited Israel three weeks ago and held highly publicized meetings with political leaders, visited the Gaza border kibbutzim devastated by the October 7 atrocities and met with the families of hostages.

There was also a meeting held for over an hour, under the media radar, by Musk, Prime Minister Benjamin Netanyahu and Musk's tour organizer, former NBA basketball player and investor Omri Casspi with leading Israeli tech figures: Brigadier General Danny Gold, Head of the Israeli Directorate of Defense Research & Development and one of the developers of Iron Dome; Aleph venture capital funds partner Michael Eisenberg, and Israeli cybersecurity company CHEQ CEO Guy Tytunovich.

The deal between the companies

It is believed that the six men talked about technology in the service of Israel's defense, dealing with fake content and anti-Semitic and anti-Israeli comments, and the use by non-democratic countries of bots as part of campaigns to change perceptions, including on the X platform, formerly Twitter, which is owned by Musk. As one of the solutions to the problem, Musk was presented with the Israeli unicorn CHEQ, as a company that helps social networks and their advertisers deal with bots and fake users, reducing the damage they cause to social networks and advertisers.

The Israeli company has claimed in the past that it can combat fake content by neutralizing the bots disseminating them, usually in the service of interested parties such as political campaign managers or psychological warfare by states. CHEQ generates most of its revenue by working with advertisers to ensure that advertising campaigns that they run on social networks are exposed only to real users and are not wasted through exposure to bots.

"Globes" has learned that following the visit, X signed an agreement with CHEQ, which will help it deal with the high rate of fake users. Apparently, Musk's direct involvement with the Israeli company is what led to the quick closing of the deal between the two companies only three weeks after his visit to Israel.

Twitter's problem

Fake users on the X platform are one of the biggest problems where, due to its simplicity of use, registration to the platform is easy, without many authentication methods, and using it also does not require much effort: many users are content with sharing tweets written by others, in what is called "echoing" of content. This makes it more difficult to detect bots - fake users - compared to other platforms such as Facebook, Instagram and TikTok, where users can be identified based on more behavioral characteristics such as uploading photos and videos, more varied personal details and connections with other users.

Musk has described the high level of bots on the X platform as its biggest problem and before he acquired Twitter in October 2022 for $44 billion even tried to bargain over the final price following new information he claimed to have received that the level of bots was higher than reported to him. The company's management claimed back in 2022 that the percentage of fake users was not above 5% but Musk insisted that this data was not credible although he was eventually forced to buy the company for the original price to avoid a protracted legal wrangle.

About the same time, CHEQ presented research based on a sample of Twitter accounts, which found that close to 12% of accounts on its customers' sites from Twitter were fake. This research supported Musk's charge that Twitter's official figures on bots were inaccurate, even though Musk was not aware of CHEQ's research.

Even after acquiring Twitter, Musk continued to act resolutely against the scourge of fake users, and offered, among other things, a number of controversial solutions, including, for example, charging a user fee of $8 for premium services such as the ability to send direct messages or write to users who are not members, the ability to publish long videos, the possibility to receive a verification badge through a blue V sign, and exposure to only 50% of advertisements that regular users see. The assumption behind the move was that premium users would be more identifiable and receive more prominence in the feed than other users. Musk was not satisfied with just that. He said several times that he was aiming to make X a closed platform for paid users only, which could dramatically cut the number of bots on the platform.

At the same time, Musk has done a lot to make this job more difficult. Estimates are that X's workforce has been cut by 80% with many layoffs of employees tasked with monitoring whether users were authentic. Some were fired from X while others left voluntarily due to the hit to the company's morale.

Musk has also had to fight with many advertisers who have expressed disappointment in the social media platform since he acquired it. According to Guideline, X's advertising revenue has shrunk 60% since Musk acquired the platform, in part due to a boycott by advertisers who were surprised to discover that their ads were placed alongside anti-Semitic tweets and other disgusting content. "The New York Times" reported that in the fourth quarter so far X has lost at least $75 million in revenue from brands such as Apple, Disney, and IBM, which advertise on the platform. Here too Musk has not helped himself. On returning to the US from his visit to Israel, Musk made insulting comments at a conference which was attended by Disney CEO Bob Eiger and ridiculed their decision.

Only a few months ago Musk accused Bnai Brith's Anti-Defamation League in the US, which advocates publicly against antisemitism, that the campaign it was managing against X had resulted in the fall in advertising revenue. The ADL claimed that X under Musk had significantly cut its efforts to combat anti-Semitic tweets on the platform. Within two weeks of buying Twitter, the ADL claimed, the level of anti-Semitic tweets, which had been handled by the company's monitoring teams, fell from 60% to 30%. Now it seems that Musk has had a turnaround after his visit to Israel. He spoke out against Hamas and wears a "Bring the Hostages" home dog-tag around his neck, and he has now chosen an Israeli company to monitor and combat the X-bot phenomenon.

What does CHEQ do?

CHEQ discovers and blocks fake users by tracking user traffic on the sites of Twitter's advertisers and other platforms such as Meta and Google. The company puts users through thousands of digital tests without their knowledge and checks them out in a variety of ways in order to make sure they are human users and not a bot operated by software, for example by examining their web behavior or by discovering a lack of overlap in the data they present. In this way, CHEQ cuts advertisers' costs and prevents waste on exposure to non-human users.

As far as is known, the agreement will allow CHEQ to regularly monitor bots on Twitter servers. The Israeli company also cooperates with Facebook and Google, but this is done through interfacing with its code externally, without any direct agreement with them. CHEQ also works on other advertising networks including Israeli content recommendation company Outbrain (Nasdaq: OB) and mainly serves advertisers such as Disney, Fidelity and Toyota.

CHEQ was founded in 2016 and has raised $182 million to date from investors including Battery Ventures, Miasma, Tiger Global, Hanaco, Key One and Israeli insurance company Phoenix (TASE: PHOE). Since its most recent financing round in February 2022 at a company valuation of $1 billion, CHEQ has seen its annual revenue rise from $25 million to $100 million in 2023. The company has an estimated 265 employees.

As of web posting, "Globes" had not received a response from either X or CHEQ.

Published by Globes, Israel business news - - on December 12, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

Elon Musk and CHEQ CEO Guy Tytunovich credit: Ananim Business Photography and Reuters
Elon Musk and CHEQ CEO Guy Tytunovich credit: Ananim Business Photography and Reuters
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