Apple’s App Battle Royale: The Information’s Tech Briefing


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It is fitting that the next mobile app store battle royale is happening over a piece of software that is part of a genre called battle royale games. 

On Thursday, the company behind the hit game Fortnite, Epic Games, announced it was permanently discounting—by as much as 20%—its prices on virtual currency in the game. To do so on mobile, Epic planned to bypass the payment systems on Google Play and the Apple App Store. That would allow Epic to avoid what it called the “exorbitant” 30% fee that the two dominant mobile platforms collect on in-app transactions and pass the savings on to players. 

Pinterest’s Culture Challenge: The Information’s Tech Briefing


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The subject of gender discrimination in Silicon Valley is back in the news after former Pinterest COO Francoise Brougher published a post on Medium about her experiences dealing with sexism at the company. The detailed post is a little reminiscent of Susan Fowler’s Uber missive of a few years ago—and it may have as much of an impact on Pinterest as Fowler’s had on Uber.

To give a sense of her experience, Brougher says she was excluded from the executive team presenting at Pinterest’s analyst day ahead of the company’s IPO—even though, as Brougher said, she was the only member of the executive team to have taken a company public before. And when the company’s IPO filing came out, Brougher learned that her stock compensation vested much more slowly than other senior, male executives. 

September’s (Likely) IPO Spree: The Information’s Tech Briefing


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News that Airbnb will file to go public by the end of this month is the latest sign that the post-Labor Day period may see a spate of high profile tech IPOs. Both Palantir and Snowflake have reportedly filed confidentially to go public, while Asana is also said to be  planning a public debut this year.

Executives at all these companies are likely watching the strong performance of tech IPOs that have occurred in the past couple of months. Check out insurance tech firm Lemonade, which sold shares in an IPO at $29 in early July. Those same shares now fetch more than $60. Or ZoomInfo, which went public in early June at $21. Its shares are now $39. 

WarnerMedia’s Big Job Cuts: The Information’s Tech Briefing


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WarnerMedia’s layoffs of 600 people today were the latest sign that the entertainment industry is coming to grips with its new reality: The golden rivers of money from cable TV are drying up. With the only growth business for most of the companies coming from streaming, which isn’t a profit maker yet, the companies have no alternative than to cut costs.

Warner isn’t the first to make cuts: NBCUniversal began laying off about 10% of its staff last week, although those reductions were more tied to the impact of the pandemic. Disney’s purchase of Fox’s entertainment assets also led to big layoffs last year. But what is particularly noteworthy about the Warner shakeup is how it signals the gradual devolution of traditional entertainment companies back to their original status as standalone film studios a century ago. 

As the company announced late Friday, all of the entertainment programming production at WarnerMedia—for cable channels like HBO as well as TBS and new streaming service HBO Max—is being put under Warner Bros. chief Ann Sarnoff. Warner jettisoned two other senior entertainment executives, Bob Greenblatt and Kevin Reilly, who oversaw cable and streaming production.

It’s a far cry from the Time Warner of the past, where the studio, ad-supported cable channels and HBO were run as very separate businesses. But in those days, the money from cable could support such a structure. That’s not the case today. Warner won’t be the last to make this shift.—Martin Peers

Trump, TikTok and Tencent: The Information’s Tech Briefing


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The Trump administration’s surprise executive orders that would effectively ban TikTok and WeChat in the U.S. raised a flurry of questions, such as whether the ban would extend to video games owned by WeChat’s parent Tencent. Equally unclear: whether a related government effort could thwart lucrative cloud services deals, such as the one we recently reported between TikTok and Google

The White House has made few details of the executive orders known, beyond a deadline: 45 days from now, or mid September. TikTok and owner ByteDance have tried to accommodate Trump’s demands so far, agreeing to discuss a sale to Microsoft. But ByteDance CEO Zhang Yiming also faces criticism in China for bowing too easily to U.S. pressure. TikTok has signaled it could start fighting in court.  

Regardless, Trump may have already accomplished his goal of undermining Chinese tech companies, said Daniel Castro of the Information Technology and Innovation Foundation, a Washington, D.C. think tank backed by tech companies. It has created so much uncertainty about ByteDance and Tencent that U.S. companies will need to reassess plans to continue doing business with them. — Christopher  Stern

Trump, TikTok and Tencent: The Information’s Tech Briefing


This post is by The Information Staff from The Information

The Trump administration’s surprise executive orders that would effectively ban TikTok and WeChat in the U.S. raised a flurry of questions, such as whether the ban would extend to video games owned by WeChat’s parent Tencent. Equally unclear: whether a related government effort could thwart lucrative cloud services deals, such as the one we recently reported between TikTok and Google

The White House has made few details of the executive orders known, beyond a deadline: 45 days from now, or mid September. TikTok and owner ByteDance have tried to accommodate Trump’s demands so far, agreeing to discuss a sale to Microsoft. But ByteDance CEO Zhang Yiming also faces criticism in China for bowing too easily to U.S. pressure. TikTok has signaled it could start fighting in court.  

Regardless, Trump may have already accomplished his goal of undermining Chinese tech companies, said Daniel Castro of the Information Technology and Innovation Foundation, a Washington, D.C. think tank backed by tech companies. It has created so much uncertainty about ByteDance and Tencent that U.S. companies will need to reassess plans to continue doing business with them. — Christopher  Stern

The New Uber, Google Founders’ Letter: The Information’s Tech Briefing


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In a sign of the times, Uber said Thursday its restaurant-food delivery revenue surpassed ride-hailing for the first time. Uber Eats revenue rose 103%, to $1.2 billion in the June quarter, and its profit margin—at negative 19%—was the unit’s best in many quarters. Ride-hailing generated just $790 million, down 67% due to pandemic shutdowns.

Uber’s management, starting with its ousted ex-CEO Travis Kalanick, had championed Uber Eats as a business that could both bring in new revenues and piggyback off its transportation network. CEO Dara Khosrowshahi, who arrived three years ago, consistently invested in Uber Eats, even after its financial picture became clouded ahead of the company’s IPO last year. That decision turned out to be wildly fortuitous, notwithstanding challenges from strong U.S.  rivals such as DoorDash.

In contrast, Khosrowshahi’s outlook on ride-hailing was bleak. On a call with investors, he said that if customers move away from big cities as work-from-home trends continue, Uber will operate in more small cities. That’s not a recipe for success in ride-hailing, which needs high density and volume to make real money. —Amir Efrati

Facebook Takes On TikTok: The Information’s Tech Briefing


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Facebook has never been shy about drawing inspiration from competitors. It was already preparing a rival to TikTok—Instagram Reels—even as concern about TikTok’s Chinese ownership reached a fever pitch in recent months. So it wasn’t surprising when Instagram quickly rolled out Reels in India shortly after the government started banning Chinese apps in late June. 

The social network seems to be following a similar strategy in the U.S. now that President Trump has talked about banning the app, which could force it into a complicated merger with Microsoft. (In the latest salvo, Secretary of State Michael Pompeo announced late Wednesday that the Administration would try to block “untrusted” apps like TikTok and WeChat from mobile app stores.)

There’s good reason for Facebook to be excited about the opportunity for Reels in the U.S. and the dozens of other countries where the feature is now available. As we reported last month, after India banned TikTok, usage of Facebook’s apps increased roughly 15% in the country. An Instagram exec said this week that the reception to Reels in India informed its quick rollout in the U.S. and elsewhere. One source at the company told us a TikTok ban could result in a similar 10%-20% rise in the use of Facebook’s existing properties in the U.S.— Laura Mandaro

Disney Streamers Hit 100 Million: The Information’s Tech Briefing


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Disney pulled off a successful misdirection today by getting investors to think less about Covid-19 and more about the invasion of the Huns.

The company said during an otherwise dismal earnings report that it will release Mulan—its twice-delayed big budget release about a young woman who fends off invaders in China—as a rental in September on its Disney+ streaming service for $30. Along with strong growth numbers for Disney+ and Hulu, that news helped paper over a quarter that saw losses of $4.7 billion. Those brutal results were led by the parks and resorts segment, which alone posted an operating loss of $2 billion.

The Mulan decision was just the latest domino to tip in the remaking of the movie business this year—but it could be one of the most significant. Disney CEO Bob Chapek tried to temper the enormity of the move during the earnings call, describing it as a “one off” caused by the pandemic, rather than a wholesale shift in its theatrical strategy. Unlike his counterparts at NBCUniversal, he doesn’t seem eager to tangle with exhibitors.

Disney could have gone even further to bolster its streaming services, for which it now counts a total of 100 million paid subscriptions. It could make Mulan free for all Disney+ subscribers as it did with Hamilton. That would be a truly radical move, perhaps too radical for the company’s new CEO. Time will tell whether the Mulan move is truly a “one-off” or a harbinger of something more dramatic down the line.

Tom Dotan

Disney Streamers Hit 100 Million: The Information’s Tech Briefing


This post is by The Information Staff from The Information

Disney pulled off a successful misdirection today by getting investors to think less about Covid-19 and more about the invasion of the Huns.

The company said during an otherwise dismal earnings report that it will release Mulan—its twice-delayed big budget release about a young woman who fends off invaders in China—as a rental in September on its Disney+ streaming service for $30. Along with strong growth numbers for Disney+ and Hulu, that news helped paper over a quarter that saw losses of $4.7 billion. Those brutal results were led by the parks and resorts segment, which alone posted an operating loss of $2 billion.

The Mulan decision was just the latest domino to tip in the remaking of the movie business this year—but it could be one of the most significant. Disney CEO Bob Chapek tried to temper the enormity of the move during the earnings call, describing it as a “one off” caused by the pandemic, rather than a wholesale shift in its theatrical strategy. Unlike his counterparts at NBCUniversal, he doesn’t seem eager to tangle with exhibitors.

Disney could have gone even further to bolster its streaming services, for which it now counts a total of 100 million paid subscriptions. It could make Mulan free for all Disney+ subscribers as it did with Hamilton. That would be a truly radical move, perhaps too radical for the company’s new CEO. Time will tell whether the Mulan move is truly a “one-off” or a harbinger of something more dramatic down the line.

Tom Dotan

Microsoft’s Focus Gets Fuzzier: The Information’s Tech Briefing


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A few months after Microsoft’s board named Satya Nadella CEO of the company in 2014, Nadella sent a 3,100-word memo to the tech giant’s employees describing what he saw as Microsoft’s “soul” and “unique core.” “Microsoft is the productivity and platform company for the mobile-first and cloud-first world,” he wrote. “We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more.” 

Nadella’s vision of the soul of Microsoft, which has been crucial to the company’s revival over the past few years, is what makes his decision to pursue an acquisition of TikTok in the U.S. and other countries so puzzling. Despite its many charms as a source of entertainment—or maybe because of them—TikTok is on no one’s list of great productivity apps. While it’s true that Nadella said in his memo that there was room enough inside Microsoft for consumer businesses like Xbox, buying a big chunk of TikTok would significantly escalate the company’s investments outside its core. 

Perhaps Nadella believes times have changed and will soon describe a new vision for Microsoft’s soul. Or maybe he will make the case that TikTok fits into his productivity-centric vision for Microsoft. One risk, though, is that Microsoft is simply losing focus. That is a habit that led the company into trouble in the past.—Nick Wingfield

Tech in 2023: What Will and Won’t Have Changed


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The coronavirus will have a lasting impact on business. But from where we sit today, it is difficult to tell which of the changes sparked by the pandemic will be temporary and which permanent. Will we return to office buildings? Very likely yes. Will we shop in stores as often? Probably not.

To help you think through what will last and what won’t, our reporters broke down the changes as they see them transpiring three years from now. We hope you find these predictions useful, and we welcome your thoughts—and your own forecasts for the future—in the comments.

Microsoft Talks to TikTok: The Information’s Tech Briefing


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News that Microsoft is in talks to buy TikTok raises all sorts of fascinating questions. Microsoft in recent years has been much more focused on selling to business customers than individuals; TikTok would take them in the opposite direction. The closest fit within Microsoft’s business would be its Xbox gaming division, although it isn’t that close. 

It also would raise Microsoft’s exposure to the advertising business, which isn’t ideal for Microsoft shareholders. One reason why Microsoft has skated through the pandemic largely unaffected is its lack of dependency on ad revenue. One big question is whether antitrust regulators would approve the deal. True, this is a new area for Microsoft. But one of the concerns expressed by politicians in recent days is the influence of big tech. A TikTok acquisition wouldn’t reduce a big tech company’s power.

It would, however, create a formidable rival to Facebook and Google’s YouTube, both of which compete with TikTok. For that reason alone, antitrust regulators may be happy.—Martin Peers

Amazon’s Big Quarter: The Information’s Tech Briefing


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Any attempts by Jeff Bezos in yesterday’s antitrust hearing to cast Amazon as a minor player in the global retail market quickly got overshadowed by Amazon’s superlative-laden second-quarter results. Sales surged 40% to $89 billion, net income doubled to $5.2 billion and the number of its employees hit one million, it told shareholders Thursday. 

Amazon’s results surprised even its own predictions that it would eat up all its operating profit in the quarter by spending more on safety and other measures for front-line workers—it did spend $4 billion on such costs including special bonuses, but it made $5.8 billion in operating profit. (Amazon declined to say whether it would reinstate those pay increases.)

The company has tried to avoid looking like it was profiting from the pandemic, particularly as antitrust investigations loom. Early on in the shutdowns, when global supply chains froze and Prime delivery times slowed, it wasn’t clear it would. Yet Thursday’s results show Amazon has not only become a more powerful contender during the pandemic, but has easily absorbed the costs to get it there. —Laura Mandaro 

Scoring the Tech CEOs: The Information’s Tech Briefing


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Members of Congress scored some direct hits against big tech CEOs at Wednesday’s antitrust hearing, in an intense series of exchanges lasting more than five hours. From the opening gavel, the lawmakers asked pointed questions and showed little patience for the CEOs’ attempts to provide long responses that didn’t directly answer questions. 

As expected, Amazon CEO Jeff Bezos, in his first appearance before Congress, faced intense questioning on antitrust issues, while Google CEO Sundar Pichai and Facebook CEO Mark Zuckerberg took the brunt of accusations that tech companies are biased against conservatives. Apple’s Tim Cook got off relatively lightly.

Perhaps the most damning episodes of the hearing involved disclosure of internal company emails that appeared to support the politicians’ contention that the big tech companies used their size to squash competitors. Rep. Pramila Jayapal, a Democrat who represents the Seattle area, said Instagram co-founder Kevin Systrom confided in an investor that he was worried Facebook would go into “destroy mode” if Instagram didn’t sell. —Martin Peers

Real-Time Analysis: Tech CEOs Face Congress


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Congressional lawmakers challenged the business practices of America’s tech giants Wednesday, as Apple CEO Tim Cook, Alphabet CEO Sundar Pichai, Facebook CEO Mark Zuckerberg and Amazon CEO Jeff Bezos faced accusations during a House antitrust subcommittee hearing that they stifle competition and abuse their market power. 

The Information reporters are following the hearing, noting significant moments in the testimony. 

Tech’s High Noon in Washington: The Information’s Tech Briefing


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At high noon tomorrow, Eastern time, Amazon’s Jeff Bezos, Facebook’s Mark Zuckerberg, Apple’s Tim Cook and Google’s Sundar Pichai will appear via videoconference before Congress in a long-awaited showdown with the House of Representatives antitrust subcommittee. If you are planning to watch, make sure you have a comfortable chair and plenty of snacks. The grilling could last as long as six hours.

Don’t be disheartened if things get off to a slow start as both committee members and the tech executives make opening statements. Although the CEOs prepare long written statements that are released ahead of time, their live remarks are likely to be limited to five minutes each. But it is during the Q&A where things should get interesting. If past experience is any guide, most of the action will occur in the first 90 minutes. After that, you may see the back-and-forth become a bit repetitive as various lawmakers take turns posing the same provocative questions to the same witnesses.

Alphabet’s Remote Work Extension: The Information’s Tech Briefing


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There has been a lot written about how the pandemic affects businesses very differently. One subject that maybe hasn’t received as much attention as it should: how businesses cope with the long-term impact of remote work on productivity and employees’ mental health.

Google’s decision to delay a return to work for its employees until June of next year puts that subject in the spotlight. Assuming that date sticks—and of course, there is no particular reason why it will—it would mean 15 months of remote work. And yet, there already is evidence that after just four months, remote work is hurting productivity at some companies, as this Wall Street Journal story detailed last week. Indeed, Alphabet CEO Sundar Pichai said a couple of months ago that productivity was down in some parts of the company.

Tech’s Big Earnings Week: The Information’s Tech Briefing


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Our plans to spend Monday glued to our screen watching big tech CEOs getting grilled by various congresspeople are out the window, likely delayed for at least a week. But next week will be an important one for big tech nonetheless, as all four of the major companies—Apple, Alphabet, Amazon and Facebook—are reporting earnings.

We go into details below, but suffice it to say, the results are likely to be all over the place. This past week set the trend. Microsoft’s revenue growth showed little impact of the Covid downturn. Snap’s red-hot growth slowed sharply, but it still performed well. And Twitter’s business slumped.

Twitter’s Subscription Hope: The Information’s Tech Briefing


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Twitter very successfully changed the subject on Thursday. Most of the discussion of its second quarter earnings results could have focused on the 19% drop in revenue the company reported, which was a marked contrast with Snap’s 17% growth for the same period.

Instead, Twitter CEO Jack Dorsey confirmed that the company was considering introducing a subscription business as part of an effort to generate more revenue. The news captivated investors, who sent Twitter shares up 4%. That’s understandable. Twitter was expected to report a drop in revenue and if there’s one thing Wall Street loves, it’s a subscription software business.