The Information


Tech’s Tall Order at Davos

Next week, tech CEOs will trade their vests for furry hats and boots and trek to the World Economic Forum in Davos, Switzerland. Years ago, the trek was a sort of celebratory victory lap. With their businesses skyrocketing, executives from Facebook, Google, Microsoft, Uber and Salesforce, to name a few, were rock stars. But amid privacy scandals and competition concerns, last year unfolded more like an apology tour. 

In 2020, expect more apologizing. But executives are going on the offensive, too. In fact, according to a copy of the agenda, there is an entire track entitled “Tech for Good.”


The Information’s 411 — Drummond’s Base

We dove deep on the story of David Drummond at Google. The company’s chief legal officer recently announced he was retiring, following the lead of co-founders Larry Page and Sergey Brin’s decision to step aside, But his departure re-opened some old wounds with former partners at Google’s venture arm GV. Nick got the backstory on how Drummond and Page clashed with the CEO of GV, Bill Maris over partner compensation. Drummond’s departure prompted an unusually candid and direct statement from Maris on why he left.

But beyond this controversy, Drummond’s leaving raises questions about Google (and Alphabet’s) makeup. Many of the big top executives at the company since its early days have now gone. Jessica explored what effect that has on the company’s culture and what Google will look like in this new era.


SoftBank’s Secret $750 Million Investment in GoPuff

SoftBank’s Vision Fund made one of its largest U.S. venture investments last year in a Philadelphia-based startup that has developed a big following on college campuses for its deliveries of junk food, alcohol and other convenience store items.

The Vision Fund led a $750 million investment in goPuff last August, two people familiar with the matter said, and kept an option to invest an additional $250 million this year, an approach SoftBank has used before. The sizable deal, which also included previous goPuff investor Accel, according to one of the people, shows that SoftBank has maintained a strong appetite for logistics and delivery startups, at least as of last summer, even as the sector has grown crowded, with several companies burning through cash to compete.


Drummond Departure Puts Spotlight on Google Venture Arm

When Alphabet’s chief legal officer, David Drummond, announced his retirement from the company last week, an executive who once ran the company’s main venture investment arm—now known as GV—issued an unusual public statement blasting Drummond. “We have very, very different ideas about how to treat people, and this was a long time coming,” said the executive, Bill Maris, adding that Drummond was the reason he left the company in 2016.

Maris’ comments revealed a behind-the-scenes conflict between the onetime GV chief and Drummond, who was an adviser to GV, one of Silicon Valley’s most prominent corporate investors. The Information has learned that the tiff stemmed in large part from growing friction over how Maris and other partners at the investment group were compensated as GV began seeing significant success from its investments. It has made lucrative bets on everything from Uber to meatless burger maker Impossible Foods. 


Microsoft’s Plan to Go Carbon Negative Raises Bar for Tech Rivals

Microsoft on Thursday unveiled a sweeping, 30-year plan to remove from the atmosphere all the carbon it has ever emitted, effectively eliminating its global carbon footprint. The plan appears likely to raise the stakes for other big tech companies that haven’t set goals anywhere near as ambitious.

By 2025, Microsoft says, it will shift to using only renewable energy to power its facilities around the world. By 2030, Microsoft intends to be carbon negative, meaning that it will remove more carbon than it emits, Microsoft president Brad Smith said in a blog post outlining the strategy. None of the other big tech companies has set a target for becoming carbon negative. (See the above chart.)


The Information’s Troubled Tech Companies List

Once high-flying tech companies like WeWork and Magic Leap have been shedding employees. Others are struggling to fundraise. Following a reckoning in the public markets in 2019, 2020 isn't likely to be kind to tech companies that have been burning through cash and haven't found a way to turn a profit. 

With that in mind, we assembled a list of companies that our reporting suggests could be in trouble in the months ahead. As these businesses continue to lose money, they will need to raise more money in the coming year. Given their flagging growth, raising money on reasonable terms will be challenging. So unless they can come up with a winning strategy quickly, they may have to shut the doors or sell. Here's the list, including companies in much-hyped areas like augmented reality, scooter rentals and crypto.


Netflix’s Asia Growth Challenge: Trading Price for Volume

Netflix’s stock rises and falls on subscriber growth, which has come to a halt in the U.S. But subscribers are still growing strong internationally, reaching 158 million subscribers at the end of September. Its executives have laid out a case to investors that the next 100 million subscribers could come from places like India and Southeast Asia, which have large populations with high mobile internet penetration. 

But it’s becoming increasingly clear that the only way Netflix can achieve those projections is by cutting its price in those countries. While U.S. users consider Netflix a cheap service, purchasing power in India and Southeast Asia is a fraction of what it is elsewhere. Yet right now, Netflix subscribers pay close to $10 a month in Asia, broadly in line with what the rest of the world is paying.


NBCUniversal’s Peacock Will Look More Like Cable Than Like Netflix

On Thursday, Comcast’s NBCUniversal becomes the fourth company in less than a year to unveil a video-streaming service to compete with Netflix. But NBCU is taking a very different approach to its service, Peacock, than the three earlier companies, Disney, Apple and WarnerMedia, did, making it more of a test case for an alternative approach to video streaming.

While other services are mostly free of commercials but cost subscribers $5 to $15 a month, Peacock will rely heavily on advertising but will be free to Comcast cable subscribers and possibly other people. Secondly, Peacock will rely less on original shows and will fill its lineup with more reruns—in some cases shows that are available on other outlets—as well as news and sports. Netflix and Disney’s Disney Plus both rely heavily on originals as a way of persuading people they have programs that you can’t find elsewhere, and the services don’t carry news or sports. 


My Predictions for the Next Decade

Right before 2010 began, I made a set of thematic predictions about 2020 and then backed them up with 86 specific claims. Having just reviewed and graded my now decade-old calls, it is time to make a new batch of predictions for 2030. 

The optimist in me believes that having already done this exercise once as an adult, my hit rate on predictions should be higher for the coming decade. The pessimist in me worries that my age and experience is clouding my ability to see clearly what a world full of nearly 50-year-old millennials will look like. 


Grading My 2010 Predictions—and What I Learned

At the end of December 2009, I published a set of predictions about both my personal life and what the technology industry would look like a decade later—in 2020. I got a lot correct, I’m proud to say, especially about the big picture of social issues resulting from technological change. 

But I also made some big mistakes in forecasting, from which I hope to learn for the next decade.


The People With Power at Twitter

For more than four years, Jack Dorsey has held the CEO role at both Twitter and Square, splitting his time between the two companies, whose headquarters are near each other in downtown San Francisco. For Twitter, the lack of a full-time CEO has meant that senior leaders are effectively running the company by consensus.

Having to get top executives to agree on everything often drags out the decision-making process and leads to turf battles, said former and current employees. Dorsey’s decision to live in Africa for up to six months this year, which he announced at the end of 2019, is likely to complicate those management challenges further.


‘Masageddon’ and the Limits of the SoftBank Playbook

Back in September, when Cory broke the story of the WeWork’s impending layoffs, we wondered: Was this just the beginning? So, this week, when he got a tip that Getaround—the car rental service backed by SoftBank—was planning to cut a quarter of its staff, he whipped up a chart to keep track of the toll. 

We published that chart—also below— with his scoop earlier this week. And then Friday, the tally shot up. Bloomberg reported that Oyo, the Indian hotel startup SoftBank investors have been hyping for years (and own nearly half of), is laying off 3,000 people


The Information’s 411 — Uber Drowning in the Pool

Welcome back to The Information's 411.

This week, we talked about Amir's exclusive story that outlined Uber's many business problems. As he reported, UberPool loses lots of money. So the company has been working to cut those losses, but when it raises prices, fewer people use Pool. We discuss what that means for Uber's ambition to attract more customers and reshape transportation.

And then there's Twitch. Remember Twitch, the live-streaming platform Amazon bought in 2014? (You first read about that news in The Information, too.) Priya published an exclusive story this week about how the company is grappling with a declining user base and falling short of advertising revenue goals. 


The Article Google Didn’t Want Us to Write

A little over two years ago, I was sitting in my office with reporter Reed Albergotti and our managing editor Martin Peers wrestling with how to tell the story about the interoffice romances at Google that were long rumored but never published. 

Reed had new reporting about Alphabet’s chief legal officer David Drummond’s relationship with a subordinate. But figuring out what was newsworthy and how to frame it was very complicated. For one, we were told the relationship was consensual. But the woman worked in his department and had been removed from her role once the relationship was revealed. We thought it was newsworthy.


Quibi’s Numbers Show High Wire Act

If there’s one thing to be said for Quibi, the short-form streaming service coming from Jeffrey Katzenberg and Meg Whitman this spring, it’s that it doesn’t suffer from a lack of ambition. When it launches, it will join a crowded field of streaming services from big media companies, all offering movies and TV shows for a few dollars a month. But unlike its rivals, Quibi’s flashy shows will be minutes-long episodes to view on the phone.

But some details of Quibi’s financial projections The Information has learned give an indication of just how much of a high-stakes gamble Katzenberg is making on Quibi. The company has raised $1.4 billion in total funding so far, including a $400 million round last month. Yet internally, Quibi at one point last year had projected it would burn through roughly $1.5 billion on both content and marketing in the first year after its launch, said people familiar with internal projections. Of that total, about two-thirds was on programming.


Six Things We Learned at CES

On Thursday, we hosted a conference call for subscribers with takeaways from the big annual event. You can check out a recording of the video call below. 

We also published some of the takeaways from our reporter Nick Bastone, including the focus on 5G. Here are six more things that jumped out at us about the event. 


Be The Information’s Head of Communications

The Information is hiring an executive to be our first head of communications, responsible for establishing The Information brand and amplifying the impact of our journalism. 

Over the past six years, we have built a fast-growing and sustainable premium news business off the back of excellent journalism. Our team of 40 includes an exceptional group of award-winning journalists and senior executives who joined us from the Wall Street Journal, New York Times, Bloomberg, Instacart, Netflix and Spotify. We have offices in New York, Los Angeles, Hong Kong, Seattle, Washington, D.C. and San Francisco.

The Information has been consistently first to major stories in technology and built a strong business and brand in digital media by going against the grain. As we expand our team—both product and editorial—we’re looking for a seasoned and high-energy leader to build greater awareness around our work.

The ideal candidate will have several years of experience at an agency and is looking to take the next step in his or her career to have ownership over the entire communications strategy. This role works very closely with our CEO and is global, offering the opportunity to travel and learn about media markets in the U.S., Europe and Asia. The role can be based in San Francisco or New York. 



Interested candidates should send a resume to jobs@theinformation.com


Where Slack Outspends Bigger Firms

When it comes to tech companies arming themselves against competition, Slack may be hard to beat. At least, that is, when it comes to spending on research and development, the route to new product development. 

Slack spent the equivalent of 38% of its revenue on R&D in its first three quarters of last year, a percentage that was significantly higher than for other subscription software firms we surveyed. The closest were Dropbox and Workday, each of which spent 31%. (See above chart.) That’s likely no coincidence. Slack and Dropbox are essentially single-product companies fighting intense competition from bigger rivals such as Microsoft and Google. Workday, which provides business applications for human resources and financial management, also faces intense competition from giants like Oracle and SAP.


At CES, a Focus on the Next Big Thing

LAS VEGAS—Predicting which technologies at CES—the giant consumer electronics show taking place here this week—will become part of our lives and when is always a crapshoot. 

Personal robots, 3D television sets and a long list of operating systems and devices that debuted at the show in past years all ended up flopping. If there is one technology that attendees at this year’s show regard as a sure bet, though, it is 5G, which promises to be more than just a mere generational change in wireless networking. It could well end up being the cornerstone upon which other consumer electronics—such as augmented reality and autonomous vehicles—build because of its promised speed and minimal networking delays.


Huawei in Talks With Banks to Raise $2 Billion

Huawei is in talks with several international banks as part of an effort to raise about $2 billion through loans and bond sales outside China, people familiar with the matter said. The fundraising is partly aimed at showing that the Chinese company can still get international banks on board for its future financing plans, despite U.S. sanctions.

It is unclear how many of the banks will actually come on board and how much Huawei will end up raising, the people said. While Huawei has worked with international banks for many years, the U.S. government’s attacks on Huawei could make some lenders reluctant to get too involved because of the potential risk of being associated with the company. That makes the outcome of the fundraising an important signal for Huawei’s ability to expand.


Page created: Sun, Jan 19, 2020 - 09:05 AM GMT