The Information


Regulation Talk Hits Silicon Valley

As Mark Zuckerberg was giving his ‘free speech’ speech in Georgetown, I was interviewing his wife and Chan Zuckerberg Initiative co-founder Priscilla Chan and, later, his colleague Fidji Simo, who runs the Facebook part of Facebook. Nice timing, Mark! 

The speech was an important backdrop for our Summit where regulation ran through every interview—from conversations on cryptocurrency to warnings about the effects of a biog tech breakup. 


The Information’s 411 — Trump’s Secret Trade Crackdown

Matt Drange joins to talk about how the Trump administration has cracked down on the volume of sensitive U.S. technology that it allows to be exported around the world. 


Ex-HBO Chief Plepler Has Discussed Launching Studio

Less than a year after leaving WarnerMedia, former HBO CEO Richard Plepler appears to be getting back in the entertainment business. Plepler has told industry associates over the past several weeks that he is looking to start his own production studio, tentatively called Eden Productions, according to people who have spoken to him. 

Plepler was a top executive at HBO for a dozen years, including as CEO from 2013 to earlier this year, a period during which the premium channel aired a string of high-profile shows, including “Game of Thrones,” “Girls” and “Veep.” He left HBO earlier this year as AT&T, which acquired HBO’s former parent Time Warner, moved to exert more control of the company’s management. A person familiar with Plepler’s thinking at the time told The Information that he was leaving because he missed the autonomy he had before the acquisition.


What Wall Street’s Short-Selling Bets Say About Uber, Peloton, Zoom

Stock prices of Peloton Interactive, Uber and Zoom Video have further to fall, judging by big short-selling bets placed by investors in recent months, new data shows. It also reveals that investors have drastically scaled back short-selling bets on Lyft since the summer.

The data is a reminder that the looming expiration of lockup restrictions could produce more volatility in tech stocks as early investors and employees in newly public companies are freed to sell their shares. Uber’s lockup expires on Nov. 6, for instance, while Zoom’s expired earlier this week.


Ripple CEO Blasts Libra, Boasts of Warchest

Ripple CEO Brad Garlinghouse blasted Facebook’s proposed Libra digital currency, suggesting that the initiative would have been met with less pushback had it been led by another company, such as PayPal. 

“I think that the way they approached it demonstrated, frankly, [from] my point of view, arrogance in how they rolled it out,” he said at The Information’s annual subscriber summit, held in Menlo Park, Calif., on Thursday. “I think Facebook did not appreciate the trust deficit they had.”


Instacart Expanded Ad Team FiveFold In Recent Months, Mehta Says

Instacart has grown its advertising sales team fivefold in the last six months, the grocery delivery company’s CEO revealed on Thursday, as part of an effort to build a significant advertising business.

Advertising “is a big and growing portion of our revenue,” said Instacart CEO Apoorva Mehta in an on-stage interview at The Information’s Subscriber Summit in Menlo Park, Calif. Last month Instacart named as chief revenue officer Seth Dallaire, who is joining from Amazon where he helped lead global ad sales. He starts in November.


Affirm’s Levchin Opposes Tech Breakup

Max Levchin, a serial entrepreneur and chief executive of the payment lending company Affirm, added his voice to the chorus of Silicon Valley leaders warning that a breakup of big tech companies by regulators will weaken the U.S. on the global stage, handing an advantage to Chinese competitors.

In a wide-ranging discussion at The Information’s annual subscriber summit on Thursday, Levchin said he was motivated to start Affirm by his frustration with the traditional credit system and also addressed the growing expectation among employees at tech companies that company leaders take stands on social and political issues. 

“The CEO is no longer excused from opining on the state of public affairs around them in this country and maybe even in this world, which I think is a massive responsibility and a burden,” Levchin said. “But if you don’t go there, it comes off as you don’t care.”


Options for Going Public Broadening, Bankers Say

Despite a heated debate among investors and bankers about the best way for companies to go public—via a traditional IPO or the newer direct listing—investment bankers say there is unlikely to be one single answer. Some companies are better suited to IPOs, and others to direct listings, while in the future some might benefit from a customized hybrid approach.

“There won’t be one or two or three solutions,” said William Connolly, head of technology equity capital markets for Goldman Sachs, speaking at a panel discussion on the future of the IPO at The Information’s Subscriber Summit on Thursday in Menlo Park, Calif. “There is so much more information, there's so much more data that there's just a way to customize around people's objectives in a way that people weren't doing before.”


CZI’s Priscilla Chan Talks About Lessons Learned

Four years after starting the Chan Zuckerberg Initiative, co-founder Priscilla Chan said she had learned a number of lessons, including the need to “work with anyone” on sensitive political issues such as immigration in order to accomplish the organization’s goals.

As the broader tech backlash brought more scrutiny to Facebook and its policies around user data, Chan said she also has had to make clear to potential partners that there is a firm line between Facebook and the philanthropic group. 


Facebook Exec Says Regulatory Scrutiny Makes Acquisitions ‘Really Hard’

One of Facebook’s top executives, Fidji Simo, downplayed recent defections from the group it formed to run its controversial Libra digital currency, while also acknowledging that growing regulatory scrutiny of Facebook has made it harder to acquire other companies.

Simo, one of CEO Mark Zuckerberg’s direct reports who oversees Facebook’s flagship app, said that recent departures of companies like Visa, Mastercard and PayPal from the Libra Association weren’t a surprise given the regulatory challenges the project faces.

“We knew that some members were not going to be here for the entire journey,” she said at The Information’s annual subscriber summit, held in Menlo Park, Calif., on Thursday. “This is going to be a road that’s really hard.”


Airbnb’s Q1 Loss More Than Doubled

Airbnb’s operating loss more than doubled in the first quarter to $306 million from the year-earlier period, previously undisclosed financial data shows, a result in part of a sharply increased investment in marketing. While that spending could bring in a lot of new business, prospective investors could be unnerved if subsequent quarters show similar losses. That could pose an issue for Airbnb, which is preparing to go public sometime next year.

Airbnb boosted investment into sales and marketing to $367 million in the first three months of this year, a 58% increase from the same period last year, according to figures viewed by The Information. The spending increase was bigger than for any other category, such as product development, which grew by 51%. Operations and support, which includes customer service, climbed 30%.


Where Amazon Trails: Digital Payments

Amazon grew into the most powerful online retailer in part by making it effortless for shoppers to buy things with one click. An Amazon effort to become the payment system for other retailers has mostly bombed, though, despite modest improvements in its market position in recent years, new data shows.

The good news for Amazon Pay—as the retailer’s online payments service is known—is that it had six times as many U.S. customers in August of this year as it did at the beginning of 2013, according to estimates by the research firm Second Measure. But while the growth helped Amazon Pay narrow the gap with rival PayPal, PayPal had about 22 times the number of customers using Amazon Pay in August, according to Second Measure. The research firm tracks anonymized purchases and said it is able to identify transactions made through Amazon Pay, which are indicated as such when they are processed. While Amazon Pay has existed in some form since 2007, Amazon launched the service in its current format in 2013.


The Young Firms Rethinking Social Media

The world of social media is dominated by companies like Facebook, Snapchat and Twitter, but that hasn’t stopped a new breed of startups from trying to carve out markets where they think the sector’s giants have fallen short.

These emerging social media firms, four of which we profile below in our latest installment of Startups to Watch, include a business recently launched by two former Facebook employees and another that is capitalizing on the rising trend of wireless headphones. While these founders know they face long odds jumping into a market where a few players command most of the attention, they all are aiming to establish themselves by emphasizing features that might attract younger users. 


As Cord-Cutting Speeds Up, Cable Operators Start to Surrender

Braintree Electric Lighting Department, an electric utility in Braintree, Massachusetts, has been selling broadband and television services to its 16,500 customers for roughly two decades. But over the past few years it has been losing a couple of dozen TV customers per month as people opt to watch their favorite TV shows and movies online. After months of debate, the company earlier this year decided to get out of the TV business altogether, effective in December. In future, it will help customers who want video sign up for streaming services offered by other companies.

After years of fighting cord-cutting, cable operators are starting to wave the white flag. A growing number of small providers are abandoning the TV business and helping customers find alternatives, either through streaming or via satellite TV services they used to compete with. Others, notably CableOne of Phoenix, are sticking with video but putting less effort into keeping would-be cord-cutters in the fold with big discounts. Even cable giant Comcast is moving in that direction, by emphasizing it won't chase "unprofitable" video subscribers.


Export of Sensitive U.S. Technology Slows Under Trump

The Trump administration has made it harder for U.S. tech companies to export sensitive U.S. technologies, such as encryption software, semiconductors and drones. Export license approvals have dropped and rejections have risen in recent years, data obtained by The Information shows, and lawyers advising companies seeking export licenses say it’s taking longer to win approvals.

Still, the overall number of government-approved export licenses for technologies with both military and civilian uses far outpaces denials, the data shows. This suggests President Donald Trump’s desire to clamp down on the export of sensitive technologies, particularly to China, has had a relatively limited impact. 


Bill Gates Mellows—a Bit—at Microsoft

For more than a decade, the public image of Bill Gates has been that of a globe-trotting philanthropist, using his fortune to fight poverty, disease and climate change. A recent three-part Netflix documentary on Gates shows him applying his acumen to invent better toilets for the developing world and extract carbon from the atmosphere. 

What gets far less attention is the moonlighting Gates does inside the company he co-founded, Microsoft, where he still spends as much as 20% of his time pushing product managers to use artificial intelligence in Microsoft Office, reviewing upcoming Surface computers and discussing strategy for forthcoming products.

While he left day-to-day work at Microsoft in 2008, Gates has over the past several years deepened his involvement in the company he co-founded in 1975 at the invitation of Satya Nadella, who became CEO of Microsoft in 2014. His official role is “technical advisor.” But that title doesn’t quite capture the extent of his responsibilities at the company, where he acts as a sounding board for researchers and product development teams and is a figure whose stature as an iconic company founder forces Microsoft employees to bulletproof their work.


Facebook Struggles to Respond to Regulators, Lawmakers on Libra

The companies recruited by Facebook to oversee its cryptocurrency are slated to meet in Geneva on Monday amid mounting questions about the project. Five high-profile corporate partners in Libra dropped out on Friday, the latest blow to the initiative that has faced skepticism from the start from authorities around the world. 

Adding to the doubts surrounding the cryptocurrency, people familiar with the matter said, has been Libra’s shaky rollout on Capitol Hill. For months, these people said, the team heading Libra failed to adequately explain how the project would be run or who would be held responsible in the event significant regulatory or legal issues arose.


What VCs Can and Can’t Learn From 2016

It was the end of 2015, and the U.S. stock market was in a rough place. A big selloff in China dragged down stocks globally. Falling oil prices and concerns about the solvency of Greece added to investors’ fears. 

The pain was felt all the way over in Silicon Valley, where startups who needed to fundraise quickly found investors weren’t willing to pay as much. Median valuations for VC-backed companies raising their second major financings and beyond dropped for the first time in years, according to PitchBook.


The Information’s 411 — God-Zillow

Nick recaps his conversation with Rich Barton and explains why the Zillow CEO is embracing ecommerce despite the heavy investments. He also discusses whether Microsoft's commitment to the surface has paid off. And why Apple's reliance on China may heavily influence its reaction to the protests in Hong Kong.


The New Norm for Digital Media Valuations

The consolidation of the digital media industry is well and truly underway, with Refinery29, New York Media and PopSugar each being swallowed up in the past few weeks. Those deals have highlighted how much valuations have come down from the highs of recent years—with implications for the companies that remain.

Potentially most affected is BuzzFeed, whose CEO Jonah Peretti had been most vocal about the need for consolidation but which so far has participated in none of the deals. BuzzFeed was the most highly valued of the digital media startups to emerge in the past decade, hitting a valuation of $1.7 billion in 2016. Now, though, BuzzFeed’s valuation may be closer to $1.2 billion, based on the valuations placed on the three companies acquired in recent deals. 


Page created: Sun, Oct 20, 2019 - 09:05 PM GMT