Hundreds of Google workers condemn firing of AI scientist Timnit Gebru


This post is curated by Keith Teare. It was written by Julia Carrie Wong in San Francisco and agencies. The original is [linked here]

More than 1,000 researchers also sign letter after Black expert on ethics says Google tried to suppress her research on bias

Hundreds of Google employees and more than 1,000 academic researchers are speaking out in protest after a prominent Black scientist studying the ethics of artificial intelligence said she was fired by Google after the company attempted to suppress her research and she criticized its diversity efforts.

Timnit Gebru, who was the technical co-lead of Google’s Ethical AI team, wrote on Twitter on Wednesday that she had been fired after sending an email to an internal group for women and allies working in the company’s AI unit.

Continue reading…

YC-backed BuildBuddy raises $3.15M to help developers build software more quickly


This post is by Alex Wilhelm from Fundings & Exits – TechCrunch

BuildBuddy, whose software helps developers compile and test code quickly using a blend of open-source technology and proprietary tools, announced a funding round today worth $3.15 million. 

The company was part of the Winter 2020 Y Combinator batch, which saw its traditional demo day in March turned into an all-virtual affair. The startups from the cohort then had to raise capital as the public markets crashed around them and fear overtook the startup investing world.

BuildBuddy’s funding round makes it clear that choppy market conditions and a move away from in-person demos did not fully dampen investor interest in YC’s March batch of startups, though it’s far too soon to tell if the group will perform as well as others, given how long it takes for startup winners to mature into exits.

Let’s talk code

BuildBuddy has foundations in how Google builds software. To get under the skin of what it does, I got ahold of co-founder Siggi Simonarson, who worked at the Mountain View-based search giant for a little over a half decade.

During that time he became accustomed to building software in the Google style, namely using its internal tool called Blaze to compile his code. It’s core to how developers at Google work, Simonarson told TechCrunch. “You write some code,” he added, “you run Blaze build; you write some code, you run Blaze test.”

What sets Blaze apart from other developer tools is that “opposed to your traditional language-specific build tools,” Simonarson said, it’s code agnostic, so you can use it to “build across [any] programming language.”

Google open-sourced the core of Blaze, which was named Bazel, an anagram of the original name.

So what does BuildBuddy do? In product terms, it’s building the pieces of Blaze that Google engineers have access to inside the company, for other developers using Bazel in their own work. In business terms, BuildBuddy wants to offer its service to individual developers for free, and charge companies that use its product.

Simonarson and his co-founder Tyler Williams started small, building a “results UI” tool that they shared with a Bazel user group. The members of that group picked up the tool, rapidly bringing it inside a number of sizable companies.

This origin story underlines something that BuildBuddy has that early-stage startups often lack, namely demonstrable enterprise market appetite. Lots of big companies use Bazel to help create software, and BuildBuddy found its way into a few of them early in its life.

Simply building a useful tool for a popular open-source project is no guarantee of success, however. Happily for BuildBuddy, early users helped it set direction for its product development, meaning that over the summer the startup added the features that its current users most wanted. 

Simonarson explained that after BuildBuddy was initially used by external developers, they demanded additional tools, like authentication. In the words of the co-founder, the response from the startup was “great!” The same went for a request for dashboarding, and other features.

Even better for the YC graduate, some of the features requested were the sort that it intends to charge for. That brings us back to money and the round itself.

Money

BuildBuddy closed its round in May. But like with most venture capital tales, it’s not a simple story.

According to Simonarson, his startup started raising the round during one of those awful early-COVID days when the stock market dropped by double-digit percentage points in a single trading session. 

BuildBuddy’s goal was to raise $1.5 million. Simonarson was worried at the time, telling TechCrunch that it was his first time fundraising, and that he wasn’t sure if his startup was going to “raise anything at all” in that climate. 

But the nascent company secured its first $100,000 check. And then a $300,000 check, over time managing to fill out its round.

So what happened that got the company from $1.5 million to just over $3 million? The investor that put in $300,000 wanted to put in another $2 million. The company talked them down to $1.5 million at a higher cap (BuildBuddy raised its round using a SAFE), and the deal was done at those terms.

The startup initially didn’t want to raise the extra cash, but Simonarson told TechCrunch that at the time it was not clear where the fundraising environment was heading; BuildBuddy raised back when startup layoffs were a leading story, and a return to high-cadence VC rounds was months away. 

So BuildBuddy wound up securing $3.15 million to support a current headcount of four. It intends to hire, naturally, lower its comically long runway and keep building out its Bazel-focused service.

Picking a few names from the investor spreadsheet that BuildBuddy sent over — points for completeness to the startup — Y Combinator, Addition, Scribble and Village Global, among others put capital into the round.

Dev tools are hot at the moment. Given that, as soon as BuildBuddy’s ARR starts to get moving, I expect we’ll hear from them again.

Inside Google’s Deal with the French Media


This post is by Frederic Filloux from Monday Note - Medium

Google will end up giving about €150m to the French press over the next three years. The details show a mixture of a genuine and impactful arrangement and the usual convoluted dealings to make a new set of subsidies looking like a sound business deal.

by Frederic Filloux

For those born after 1990, this is a typewriter ink ribbon. Photo to Laura Chouette / Unsplash

(This is the first part of a series about the relationships between the platforms and the news industry)

It took a year of discussion between Google and the representatives of the French media industry to come up with a deal on the European directive on copyright and neighboring rights (see a previous Monday Note). The EU copyright Directive had been translated into a French law, forcing the parties to find an agreement by the end of next year.

The sign that the deal could be a decent one is that none of the parties are gloating about it. There is no obvious winner: the French media tamed its expectations while Google yielded on many points with the idea of keeping the lid on a costly Pandora’s box.

The deal in itself is quite complicated to the extent that not all the publishers I talked to were able to draw a complete picture of it. Here is the best obtainable version of the puzzle:

1 . The arguments

The publishers’ side

Over the past ten years, they say, “Google has profusely siphoned our financial resources by capturing a sizable amount of the advertising we used to own. At the same time, they make tons of money by using our content which appears prominently in their search results pages, without paying a dime for it”.

Publishers refer to this:

“Without the news media,” they add, “Google’s search engine would not perform as it does; it would be less relevant, and would carry only low-quality content. The main search algorithm would not work so well as it would be fed with crappy stuff.”

Among the litany of complaints: “Google knows our readers better than we do and they refuse to share any data that could vastly help our business.” The data sharing has always been a contentious issue for publishers with a yawning gap between their own vague knowledge of their readership and Google’s hyper granular profiling, with thousands of data points on each of us. To the dismay of the French publishers, their attempt to create data a common data hub to regain some credibility vis-à-vis the advertising market completely bombed. Big brands such as L’Oreal that are used to buying splashy ads in the press to showcase their products completely ignored the efforts of the media when quantifiable returns were needed.

Last but not the least, French media have tried to use alternative tools to place their ads or measure campaign efficiency, but were eventually forced to use Google’s prolific toolbox, which offers better performance and is favored by advertisers.

Hence a certain level of bitterness.

Last week, I was offered another view: “You need to put this into a historical perspective”, my interlocutor said. “When Google started to take off, a great part of the lift was provided by the media industry, which brought quality content, credibility, and notoriety. It undoubtedly accelerated the public acceptance of the search engine and later all the services that were stacked upon it. The same goes for Facebook. Without the media industry, Facebook would be MySpace and Google the Yellow Pages. If you add to that the fact that Google has basically destroyed our business, they definitely need to pay at some point.”

The person who said this is not an old media baron, nostalgic for the past luster of the industry. It comes from a smart and witty woman in her thirties, with a business degree and experience abroad. I won’t go into the details of this long conversation, but I told her that building a long-lasting (and global) business agreement can hardly be considered as some kind of “reparations”.

That view is worth considering just as an example of how pervasive and widespread the emotional context is in France. Especially now with the Covid-related crisis, the behavior of American Big Tech is seen as salt in the wound of a media industry that isn’t healing. This element of context, which is often lost in translation when seen from Mountain View, is important to keep in mind.

Google’s Position

For nearly a decade Google adamantly opposed the idea that it had to pay for snippets, the text it shows below headlines, fearing that it would open a Pandora’s box filled with the demands of thousands of digital outlets across the world. More broadly, the firm invokes the fair use legal doctrine, which allows limited reuse of copyrighted content. While it is more restricted in France, in the United States, its extensive use has opened the way to a cottage industry of aggregated content, such as pro or prosumer newsletters (including paid-for) that thrive on it.

Google’s strongest argument — also the least known — is the transfer of value to the publishers, i.e.: when someone clicks on a “blue link” of the search result page, they are sent to the publisher who will (hopefully) monetize the page with ads or various tools to convert the fly-by reader into a subscriber. Google reluctantly agreed to a vague approximation on this in the new deal, saying that it was globally sending 24 billion visits to the press each year. But without any point of reference or any idea of what it encompasses, this figure is completely pointless. This imprecision is a terrible and recurring mistake attributable to an ingrained disregard for strategic communication (I bet Google’s blunders in the matter will be taught someday in B-schools). Too bad because the actual transfer of value would have constituted the best argument ever to not pay a dime to the publishers.

2. The Amount

The most discussed aspect of the new deal was the global amount of money Google was willing to give and for how long. At the opening of the negotiation, the publishers came with a demand of €150m per year. The figure was based on an Ernst & Young research paper, which is unlikely to remain in the audit firm’s best-of portfolio.

Google said no. After a month, publishers came with a sweetened offer: €149m/year. “We knew that we could be there for a long time”, recalls a participant. To put things into perspective, €150m/year is about 12% of the revenue of the entire legacy French press.

The most reasonable negotiators had in mind the 2013 deal signed in person by Eric Schmidt (at the time executive chairman of Google) and then president François Hollande. At the time, the French media obtained a commitment of €60m over three years for its transition to digital. While the effort led to genuine innovations by small companies, for the legacy media it was essentially a brand new subsidy channel. Most of the publishers promptly used the proceeds for current business expenditures such as a top-class TV studio or apps that were already in the pipeline (one publisher even asked for money to offer tablets to its new subscribers). The move also led to the more ambitious and impactful Global News Initiative.

Seven years later, Google’s global revenue has more than tripled and publishers were keen for a serious hike.

Refusing to even consider the €150m demand, Google came up with the actual figure for the value it transfers to the French publishers: a staggering number, several times the amount asked by the publishers. As Google exposed its methodology, publishers quietly rolled back their EY fantasies and the discussion started on the right footing.

The parties agreed on a final mark slightly above €30m a year over a three years initial period (publishers wanted a much larger horizon, if not perpetuity). The distribution will be made through a complex equation mixing various audience metrics, the number of journalists, typology of content (serious news as opposed to entertainment and service). That’s for the base part of the deal.

Adding everything, the final number is about €50m that Google will spend each year.

3. The Deal Structure

Coming up with a convoluted solution that would not appear as a gift, a subsidy, or some kind of settlement required some complicated dealings. For Google, it was also important to not yield, at least formally, to the exotic notion of “neighboring rights” — the “no money for snippets” motto. That’s why the core of the deal is a licensing system based on News Showcase, the latest product engineered in Mountain View to boost the news ecosystem. According to Google:

“News Showcase is made up of story panels that will appear initially in Google News on Android. The product will launch soon on Google News on iOS, and will come to Google Discover and Search in the future. These panels give participating publishers the ability to package the stories that appear within Google’s news products, providing deeper storytelling and more context through features like timelines, bullets and related articles. Other components like video, audio and daily briefings will come next.”

It looks like this:

Publishers retain control over what they publish in Showcase

So that’s the €30m/year part and the framework agreement (everyone signs the same deal). Publishers are not entirely convinced, but at least the money is there and there is good potential. As one of them told me: “We won’t make much of an audience with News Showcase but at least we control the type of stories we will push, and we can put premium content that is good at boosting subscriptions”.

Like in every Western market which has suffered from depleted advertising revenue, subscriptions are key for the survival of the species, and the French press is doing quite well thanks to the lockdown.

The second stage of the rocket involves precisely the subscription model. It is based on the Subscribe with Google (SwG) program:

Subscribe with Google in five easy steps. Works fine.

The product has been deployed in several countries where it proved to be quite successful. It vastly simplifies the subscription process, it’s not expensive for the publisher as Google keeps 5% and the cherry on top is that google agreed to share some data.

But the French press further enhanced it to their gain, not only to stimulate their subscription channel but to squeeze more cash from it.

Here is how it will work: the publishers will first collect financial aid to support their technical teams working on the SwG program. Details remain sketchy, but for some, that will translate into something tangible. That could be seen as the reward for chronic technical incompetence, but never mind.

Even better, Google will support the promotional efforts made by the publishers to sell more subscriptions. Again, more direct money. Example: Le Monde currently has a promotional offer at €1 for one month, then the normal price of €9.99 per month. According to the deal, Google will pay Le Monde for the difference between the promotional and the nominal rates (there are some variations, but that’s the idea). And it worked beautifully for Le Monde as SwG accounts for 40% of its current subscription inflow.

“Le Monde signed early on its own, but we expect the same deal”, a publisher told me. “Even more, Google agreed to pay for the promotion of our subscription packages on any media — including Facebook!” Don’t pinch yourself too hard, dear Anglo-Saxon reader. We are in France, in which good money doesn’t stink and the notion of amour-propre can easily bend to business necessities.

There will be other special deals, like with the powerful regional papers. While editorially mediocre in general — no content that could ruffle the feathers of a local potentate, no scoops or investigative piece that will get national attention and pathetically backward when it comes to their transition to digital — their influence remains high in their own fiefdoms. A few months ago, French President Emmanuel Macron personally weighed in to make sure that the provincial media barons will end up satisfied.

All included, a large media group like Le Figaro, Le Monde, or Le Parisien/Les Echos will each get 3 to 5 million euros in revenue per year (probably closer to 5), which is not a negligible return without even counting the long terms benefit of Subscribe with Google, which turned out to be a powerful conversion channel. The benefits for the regional and local press are more difficult to assess due to the myriad of publications involved, but all my interlocutors told me that they will do well.

I will stop here, for now, though.

In an upcoming series of Monday Notes I will look at this deal through a more global lens:

The snowball effect. How will the French deal reverberate across Europe and the rest of the world? That’s the one billion dollar question for Google (which is the amount of money committed by Google for the news media).

Is it a good deal? Is this kind of arrangement a good blueprint for a sound perennial cooperation between the Big Tech the news media? Could the pubs get something better — I’m not talking about disguised subsidies but actionable items with long-lasting impact?

Advertising and Business model. More broadly, how solid is the argument that puts the responsibility on the tech giants for the devastation of the media revenue model? (This question unavoidably gets me harsh criticism from both sides).

Stay tuned and stay safe.

frederic.filloux@mondaynote.com


Inside Google’s Deal with the French Media was originally published in Monday Note on Medium, where people are continuing the conversation by highlighting and responding to this story.

The Brouhaha over Google Photos


This post is by Om Malik from On my Om

black and white smartphone displaying google search
Photo by Daniel Romero on Unsplash

I am not a Google fanboy. Far from it. While Google is not as cavalier as Facebook or as sneaky as Amazon, it is still a company that plays fast and loose with data and privacy. I point this out because I am about to take a contrarian position to the current brouhaha around Google ending free, unlimited storage on its Photos service. 

In case you missed it, Google recently said that starting in June 2021, there will be no more unlimited uploading of gigabytes of photos to its servers at no charge. If you want to use the service, you will adhere to a 15 GB capacity limit — or you will have to pay. (For comparison, Apple offers a mere 5 GB for free.) The change won’t impact all the photos you have already uploaded to their cloud. Because Google previously touted “free storage” as a feature, many people are upset about this decision. Some think that the soon-to-be-former “free” aspect of the service drove many startup competitors out of business, which may or may not be accurate. 

In announcing the change to its pricing policy, Google noted that there are “more than 4 trillion photos” stored on Google Photos, and “every week 28 billion new photos and videos are uploaded.” You don’t get this big without being good. I tried those apps Google supposedly killed. They were lame. Google Photos was and is better. And it has become better over the years. It has the best facial recognition and clustering technology. It can sift through hundreds of thousands of photos, finding the right people and the right moments. Compared to Apple Photos, it seems like a genius. Still, I didn’t trust Google with my photos. (I try it often, much like I try every product I think is worth keeping an eye on — except for Facebook, which is pure tripe.)

In fact, ever since the Google Reader debacle, I don’t trust Google with anything important to me. Maybe I have become more cynical over the years, but you have to be very careful when someone offers you something for free. As Milton Friedman said, “There is no such thing as a free lunch.” There is always a quid pro quo. The only thing to ask ourselves: What are we giving up in exchange for something free? In the case of Facebook, we gave up control over our social fabric and reality. We give up something in exchange for free search or free articles on a website. Google Mail isn’t free. You get direct mail and marketing messages in your inbox. 

So, why are we shocked that a for-profit company, whose quarterly results are celebrated by the media, and whose stock market performance is saving many 401ks, is looking to charge for a service it has offered for free? It has decided that the photos uploaded to its system have trained its visual algorithms enough that it doesn’t have to eat the cost of “free storage.” 

By the way, those who wanted to host original quality (aka uncompressed versions) photos and their digital negatives have always had to pay for the premium version of Google Photos. For members of the media bemoaning Google’s action, the time to ask the tough questions was when Google Photos launched. Read this article in The Verge, and you’ll see my point. It is not like Google (or other big companies) don’t have a history of doing the switcheroo. As my friend Chris says, you can always switch to Amazon Photos — as long as you pay for Amazon Prime every year. Nothing is free.

But more importantly, we need to get used to the idea of how and what we think of photos and photo storage. Many of us who talk about photography and build photography-oriented products have an old-fashioned idea of photos as “files” and “keepsakes.” In reality, today’s photos are merely data captured by visual sensors that are then processed, consumed, and forgotten — with the rare exception of unique moments to be saved and savored later. This data is part of a never-ending visual stream. A whole generation is growing up with Snap and TikTok, and they think of photography and photos differently from those who came before them. Just as owning music or movies is an antiquated idea, photos aren’t there for storing for this new generation. Instead, they are an expression of their now. 

In many ways, Google’s idea of marrying unlimited storage with the ownership of its Pixel phone is the right way to think about visual data. It creates a lasting bond and reliance on the device, but also allows one to live in ephemeral visual stream. Apple should pay attention. There is nothing like service-dependency for hardware.

For those of us who value our photos, paying to store them is worth the price. More importantly, it is better for all of us to get used to the reality that the era of free stuff (at least, legally) on the web is over. And tech companies are no different than their non-tech counterparts: They are here to make money, keep profits going, and keep the stocks flying high. 


Pandemic CAPEX — Q3 2020 Update


This post is by Charles Fitzgerald from Platformonomics

tl:dr Not much excitement this quarter

Q3 cloud CAPEX numbers are in (Q2 was tracked on Twitter):

Amazon corporate CAPEX (which includes purchases of property and equipment, as well as property and equipment acquired under finance leases and build-to-suit leases, but not operating leases; AWS is very likely a minority fraction of this total) continued to boom (airplanes, trucks, distribution centers, satellite constellations, etc.), while Google and Microsoft at the corporate level were basically flat quarter-to-quarter. Google was down year-to-year while Microsoft was up.

I think the best tell for cloud infrastructure-specific CAPEX are finance leases (but Google doesn’t use them) which are likely server purchases:

After both Amazon and Microsoft saw big drops in Q1 (“supply chain constraints”) followed by healthy rebounds in Q2, Amazon was up modestly in Q3 while Microsoft declined.

And on the general cloud (IaaS + PaaS + whatever Google is currently calling Google Docs) front:

AWS growth was flat quarter-to-quarter and down 6 points from a year ago. Both Google and Microsoft accelerated quarter-to-quarter by 2 points and 1 point respectively. I assume Google performance is due to the new and critically acclaimed Google Docs icons, but Google Cloud is still getting outgrown by Azure.

You can share more of my CAPEX obsession here.

Pandemic CAPEX — Q3 2020 Update


This post is by Charles Fitzgerald from Platformonomics

tl:dr Not much excitement this quarter

Q3 cloud CAPEX numbers are in (Q2 was tracked on Twitter):

Amazon corporate CAPEX (which includes purchases of property and equipment, as well as property and equipment acquired under finance leases and build-to-suit leases, but not operating leases; AWS is very likely a minority fraction of this total) continued to boom (airplanes, trucks, distribution centers, satellite constellations, etc.), while Google and Microsoft at the corporate level were basically flat quarter-to-quarter. Google was down year-to-year while Microsoft was up.

I think the best tell for cloud infrastructure-specific CAPEX are finance leases (but Google doesn’t use them) which are likely server purchases:

After both Amazon and Microsoft saw big drops in Q1 (“supply chain constraints”) followed by healthy rebounds in Q2, Amazon was up modestly in Q3 while Microsoft declined.

And on the general cloud (IaaS + PaaS + whatever Google is currently calling Google Docs) front:

AWS growth was flat quarter-to-quarter and down 6 points from a year ago. Both Google and Microsoft accelerated quarter-to-quarter by 2 points and 1 point respectively. I assume Google performance is due to the new and critically acclaimed Google Docs icons, but Google Cloud is still getting outgrown by Azure.

You can share more of my CAPEX obsession here.

Poor Comms…


This post is by Om Malik from On my Om

Every time Google tweaks its communication offerings, I am reminded that it has become a gigantic company, with the same dysfunction associated with large industrial companies. Today they had another go at their communication portfolio and naming convention. Here are some of the names of various products — Hangouts, Meet, Chat, Duo. If you can tell what each one does and why it exists, then you go to the top of the genius leaderboard. I don’t know about you, but these name changes have become such a headache. So much so, there is a little comic strip around it.

Here is how I understand the announcement.

  • Google Meet will now be for video conference calls.
  • Google Hangouts is dead. Google Chat replaces it.
  • Google Chat, which was part of Google Office Suite, is now for everyone. It will work inside Gmail and also in a standalone app. It has group messaging and direct messaging.
  • Google Hangouts won’t work on Google Fi. All SMS messages will flow to Messages.
  • Since Hangouts is gone, you obviously won’t be able to make calls using Google Voice.

“New telecommunications regulations are being introduced in the EU and U.S. beginning in 2021,” Google noted in a blog post. “To comply with these new regulations, we need to remove the call phones feature in Hangouts.”

I am Google Office (nee Workspace) customer. I prefer it over Microsoft Office. But I don’t care about Google’s video conferencing service. I didn’t care about Hangouts. And honestly, I don’t think the new Chat isn’t that important to me. What I want is a product that does everything — and allows me to use my Google ID to access everything in a single place. If I wanted to open a video conferencing app — Zoom is better. If I wanted a text chat app with group messaging, then Signal and Telegram are better.

What is needed is simplicity, ease of use, and singular experience. A communication-related app (or service) should essentially be a simple offering — a tool that works across platforms and devices. It should have one name. It should do one thing — connect people via text, voice, and video. Apple is no different — iMessage, FaceTime Audio, FaceTime Video, and now Intercom. A single brand that offers all functionality should help cut through the clutter of modern life and incessant choices we have to make all the time.

Simplicity and clarity in communications around a product, brand, or strategy reflect a corporate coherence. And that is why I think the chop-crop-paste approach to communication apps speaks of something bigger. Google feels unfocused and hampered by the too-many-cooks-in-the-kitchen. A while ago, I read a piece on the Interbrand’s blog about the 10 most common naming mistakes, and there is one bit that stood out:

People will talk about a name for just a few weeks before they transfer the association and commentary to the product or experience. And real equity exists when the name and the experience become one. So plan your launch, or re-naming and migration strategy, carefully. Give them the right something to talk about.

I wish companies like Apple, Google, and others pay attention to that insight, I have highlighted.

America in decline?


This post is by Om Malik from On my Om

A few weeks ago, Jonathan Stern got in touch, wondering if I would like to participate in a new website he and his best friend, Carter Duncan were creating. “In the spirit of the Federalist Papers, my best friend from Duke and I have built a website called Pairagraph for written dialogue between distinguished individuals,” he wrote. The thinking behind the project was to “bring world leaders across government, industry, academia, religion, and the arts into a conversation about great events and great ideas, and perhaps, to revive the Republic of Letters.” 

University of Berkeley economist Brad DeLong is interested in discussing whether the U.S. is in decline. Is it true, as pessimists proclaim, that America has plateaued? Or that we are mired and trapped in civilizational languor? Is our culture exhausted? As someone who loves Prof. DeLong and his writing, it was such a privilege to have a dialogue with him. 

While the good professor is feeling discouraged about the American prospects, I am a long-term believer. I posted my first response today on Pairagraph! My original draft was over a thousand words, but I can’t go beyond 600 words. For now, here is my abbreviated take on why I don’t think America is in decline despite the recent events. Not yet!   

Macrometa, an edge computing service for app developers, lands $7M seed round led by DNX


This post is by Catherine Shu from Fundings & Exits – TechCrunch

As people continue to work and study from home because of the COVID-19 pandemic, interest in edge computing has increased. Macrometa, a Palo Alto-based startup that provides edge computing infrastructure for app developers, announced today it has closed a $7 million seed round.

The funding was led by DNX Ventures, an investment fund that focuses on early-stage B2B startups. Other participants included returning investors Benhamou Global Ventures, Partech Partners, Fusion Fund, Sway Ventures, Velar Capital and Shasta Ventures.

While cloud computing relies on servers and data centers owned by providers like Amazon, IBM, Microsoft and Google, edge computing is geographically distributed, with computing done closer to data sources, allowing for faster performance.

Founded in 2018 by chief executive Chetan Venkatesh and chief architect Durga Gokina, Macrometa’s globally distributed data service, called Global Data Network, combines a distributed NoSQL database and a low-latency stream data processing engine. It allows developers to run their cloud apps and APIs across 175 edge regions around the world. To reduce delays, app requests are sent to the region closest to the user. Macrometa claims that requests can be processed in less than 50 milliseconds globally, making it 50 to 100 times faster than cloud platforms like DyanmoDB, MongoDB or Firebase. One of the ways that Macrometa differentiates from competitors is that it enables developers to work with data stored across a global network of cloud providers, like Google Cloud and Amazon Web Services (for example), instead of a single provider.

As more telecoms roll out 5G networks, demand for globally distributed, serverless data computing services like Macrometa are expected to increase, especially to support enterprise software. Other edge computing-related startups that have recently raised funding include Latent AI, SiMa.ai and Pensando.

A spokesperson for Macrometa said the seed round was oversubscribed because the pandemic has increased investor interest in cloud and edge companies like Snowflake, which recently held its initial public offering.

Macrometa also announced today that it has added to its board of directors DNX managing partner Q Motiwala, former Auth0 and xnor.ai chief executive Jon Gelsey and Armorblox chief technology officer Rob Fry.

In a statement about the funding, Motiwala said, “As we look at the next five to ten years of cloud evolution, it’s clear to us that enterprise developers need a platform like Macrometa to go beyond the constraints, scaling limitations and high-cost economics that current cloud architecture impose. What Macrometa is doing for edge computing, is what Amazon Web Services did for the cloud a decade ago.”

Illumina buying cancer-screening spinout Grail in blockbuster $8B biotech deal


This post is by Danny Crichton from Fundings & Exits – TechCrunch

Biotech has become one of the hottest areas of venture investment in recent years, as progress in machine learning, genetics, medical devices, and biology fuse together into new products for the gargantuan health industry.

Case in point: Grail, which began in 2016 as a spinoff from genetic sequencing giant Illumina and co-founded by longtime Google executive Jeff Huber (who was involved in the creation of the company’s experimental laboratory Google[x]), is now being spun back in to the tune of an $8 billion acquisition announced this morning.

Illumina originally invested $100 million in the spinout, and Grail would go on to raise more than a billion dollars in funding from prominent biotech firm ARCH, one of China’s top VCs Hillhouse Capital, among many others according to Crunchbase.

Grail’s technology was designed to use modern genetic sequencing tools coupled with data science to detect cancer earlier than other competing products on the market.

As we discussed on TechCrunch back in 2017 when the company raised $900 million, “while liquid biopsies to detect cancer aren’t anything new and GRAIL will have to compete with several other contenders both large and small, the technology to take a blood sample and detect the early, free-floating cancer DNA floating in your bloodstream is revolutionary in the industry and only made possible through new DNA sequencing machinery.”

Cancer screening is a $100 billion market and growing rapidly, particularly internationally as countries like China and India develop economically and more patients require active screening. Detecting cancer early is pivotal for reducing mortality risk, and so Grail’s promise was to offer the “holy grail” (couldn’t help myself) for saving these lives. According to the U.S. government, roughly 600,000 people will die this year from cancer, and it is a leading cause of death.

As part of the deal, Grail will receive $3.5 billion in cash, with another $4.5 billion earmarked for Illumina stock. The company set a deadline of December 20th for consummating the acquisition, at which point Illumina will begin offering Grail $35 million per month in cash payments until the deal closes. The two companies have signed a $315 million merger termination agreement as part of the deal.

The acquisition is subject to customary regulatory review.

In Convenience We Trust


This post is by Om Malik from On my Om

3 men in brown and black camouflage uniform standing

When Amazon announced the addition to its board of directors of General Keith Alexander, the controversial former chief of the National Security Agency, the condemnation came thick and fast. Alexander is the mastermind of a widespread surveillance program. His appointment to the board of Amazon only stoked the fears that Amazon and its Amazon Web Services are part of the new surveillance nexus. In other words, everyone’s worst fears might just be right.

“I argued last year that Amazon has become the world’s largest surveillance company,” tweeted Will Oremus, a technology writer with Medium-owned publication, One Zero, referring to a piece he wrote in June 2019.

As a critic of companies that tend to have abusive policies around personal data and information, I find it heartening to see people with more prominent platforms highlight the issues that need our collective societal attention. But the familiar drumbeat of tweets and criticism about big tech — a place holder for Google, Facebook, Amazon, Microsoft, and Apple — only seems to give way to the usual disappointment. 

Everyone moves on to the next thing, apparently satisfied by our collective armchair morality. We tweet, we share our outrage, and we get angry. And then we go back to our Gmail accounts. Despite knowing it is a cesspool of hate and conspiracy theories, we turn to YouTube for distraction. Media people, too, go right back to Facebook, sharing links to their work, desperately hoping that the algorithmic gods of Menlo Park bless it with attention. 

Of those who are upset about Alexander and speculating about Alexa spying on them, how many are giving up their Prime memberships? We might despise the App Store, but we are Charlton Heston-like in our insistence that our iPhones can only be pried from our “cold dead hands.” 

Don’t get me wrong. I am no better. Sure, I quit Facebook’s empire. Sure, I buy books from Bookshop and support small and independent stores online. However, Amazon still delivers half my household goods, cables, and everything else. Like everyone else, I am helping create future traps such as Door Dash, that comes between people and the local restaurants they tend to patronize.

As I have written in the past, no matter how much we despise big tech, we are beholden to the conveniences they enable. The pandemic has made big tech bigger, and we have helped make that happen. Amazon grows each day. For all our collective handwringing and billions of bytes of outrage, Facebook has become more prominent and more profitable. Microsoft moves forward with impunity. And technology’s role in our lives is only becoming more pronounced

Perhaps, deep down, we are aware of our hypocrisy, which informs our expressions of outrage. The tweets, the hot takes, podcasts, and talking heads on — everything is theater. We are simply distracting ourselves from ourselves, avoiding the feeling that we are ultimately powerless when it comes to meaningfully influencing the outcome. 

“The only obligation which I have a right to assume is to do at any time what I think right,” Henry David Thoreau wrote in his essay on civil disobedience. And he is so right. All we can really do is be self-accountable

I have a simple objective for the next 12 months — to further reduce what I spend with Amazon by another 50 percent. Additionally, very soon, I hope to move away from Google’s commercial mail offering and switch to Hey. I am sure none of these moves will dent the revenue stream of these giants. But it is way better than being trapped in the outrage theater of nothingness. To quote Thoreau again: “A minority is powerless while it conforms to the majority; it is not even a minority then, but it is irresistible when it clogs by its whole weight.”

But getting back to the reaction to the news about Alexander’s appointment to the board of directors. To me, this was Amazon chief Jeff Bezos being Jeff Bezos. He needs powerful and connected allies in Washington, DC. On that front, I am sure Alexander can help. Besides, his Amazon Web Services now has to compete with Microsoft’s Azure for big government contracts — and it is losing. 

Enter General Alexander! 

For a guy who started off selling books online, Bezos has a habit of doing everything by the buck. People often forget that he doesn’t really care what others think. You don’t become the destroyer of all retail by being a nice guy.

September 10, 2020. San Francisco 

Ranked: The Most Popular Websites Since 1993


This post is by Carmen Ang from Visual Capitalist

The Most Popular Websites Since 1993

The internet has become an increasingly important part of our everyday lives.

While it’s hard to imagine modern life without Google or YouTube, it’s interesting to reflect on how much the web has changed over the last few decades.

This animation by Captain Gizmo provides a historical rundown of the most popular websites since 1993, showing how much the internet has evolved since the early ’90s.

The Top Websites

While the web has changed drastically over the years, the top-ranking websites have remained relatively consistent. Here’s a look at the websites with the most traffic since 1993, and when each site held the number one spot:

Date Range Top Ranking Website Highest Number of Monthly Visits
Jan 1993 – Jun 2000 AOL 405,000,000
Jul 2000 – May 2006 Yahoo 5,500,000,000
Jun 2006 – Jul 2008 Google 8,300,000,000
Aug 2008 – Jun 2010 Yahoo 11,600,000,000
Jul 2010 – current Google 81,000,000,000

*Note: Numbers rounded down for clarity.

AOL

AOL was one of the first major web portals, back in the era of CD-ROMs and dial-up modems. In its heyday, the company dominated the market, largely due to an aggressive free trial campaign that cost millions (possibly even billions) of dollars to execute.

Despite the large investment, the campaign worked—at its peak, AOL had over 30 million users, and had a market cap of over $200 billion. It was the most popular website online until the early 2000s, when broadband started to replace dial-up. As the sands shifted, AOL struggled to stay relevant and was eventually sold to Verizon for just $4.4 billion.

Yahoo

Following AOL’s downfall, Yahoo became the next internet giant.

Starting off as a web directory, Yahoo was the first website to offer localized indexes for major cities. At Yahoo’s zenith, it was worth $125 billion, but a series of missed opportunities and failed acquisitions meant that it could not keep up. Like AOL, Yahoo is now also owned by Verizon, but remains a top 10 website globally.

Google

It’s no surprise that Google currently comes in at number one. It started out in the early 90s as a university research project. Today, it’s become virtually synonymous with the internet, which makes sense, considering 90% of all internet searches are made on Google-owned properties.

Old School Search Engines

Prior to Google’s success, there were several other go-to search engines that paved the way for Google in many ways:

  • WebCrawler: One of the earlier search engines, WebCrawler was the first search engine to enable full-text search. At one point, the website was so popular, it’s server would constantly crash, making it virtually unusable during peak hours.
  • Lycos: This was another pivotal search engine, created in 1994 (a year before Yahoo). Lycos was the first of its kind to incorporate relevance retrieval, prefix matching, and word proximity.
  • Infoseek: As Netscape’s default search engine, Infoseek was popular during the web browser’s heyday. Eventually, Infoseek was purchased by Disney and rebranded to go.com.

Unlike Infoseek, Lycos and WebCrawler have somehow managed to stick around—both companies still exist today. Of course, they’re nowhere near comparable to Google in terms of revenue or daily search volume.

The Evolution of Social Media

Unless you are a Gen Zer, you probably remember MySpace. Like Lycos and WebCrawler, MySpace technically still exists, although it’s certainly not the high traffic site it used to be.

Created in 2004, MySpace became a hub for musicians and music fans on the web. In just a year, the website saw massive growth, and by 2005, it was acquired by News Corp. MySpace continued to dominate the social media landscape until 2008, when Facebook took over as the internet’s most popular social media platform.

Facebook’s story is well-known at this point. The Zuckerberg-led creation was a social networking site that was exclusive to Harvard students, but it soon opened up to dozens of other universities and then finally the general public in 2006. Just two years later, and the site had 100 million active users, rising to the top of the social media spectrum.

Although Facebook is often mired in controversy today, the platform remains the world’s most popular social media platform on the internet with close to 3 billion users.

What’s Next?

It’s hard to predict what the future holds for Facebook, or for any of the other websites currently dominating the web.

If anything is clear from the above animation, it’s that the list of the world’s most popular websites is constantly shifting—and only time will tell what the next few decades will bring.

Subscribe to Visual Capitalist


Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

The post Ranked: The Most Popular Websites Since 1993 appeared first on Visual Capitalist.

Visualizing the Social Media Universe in 2020


This post is curated by Keith Teare. It was written by Aran Ali. The original is [linked here]

The Social Media Universe in 2020

Visualizing the Social Media Universe in 2020

Social media has seeped into virtually all aspects of modern life. The vast social media universe collectively now holds 3.8 billion users, representing roughly 50% of the global population.

With an additional billion internet users projected to come online in the coming years, it’s possible that the social media universe could expand even further.

How the Networks Stack Up

To begin, let’s take a look at how social networks compare in terms of monthly active users (MAUs)—an industry metric widely used to gauge the success of these platforms.

Rank Social Network MAUs In Millions Country of Origin
#1 Facebook 2,603 🇺🇲 U.S.
#2 WhatsApp 2,000 🇺🇲 U.S.
#3 YouTube 2,000 🇺🇲 U.S.
#4 Messenger 1,300 🇺🇲 U.S.
#5 WeChat 1,203 🇨🇳 China
#6 Instagram 1,082 🇺🇲 U.S.
#7 TikTok 800 🇨🇳 China
#8 QQ 694 🇨🇳 China
#9 Weibo 550 🇨🇳 China
#10 Qzone 517 🇨🇳 China
#11 Reddit 430 🇺🇲 U.S.
#12 Telegram 400 🇷🇺 Russia
#13 Snapchat 397 🇺🇲 U.S.
#14 Pinterest 367 🇺🇲 U.S.
#15 Twitter 326 🇺🇲 U.S.
#16 LinkedIn 310 🇺🇲 U.S.
#17 Viber 260 🇯🇵 Japan
#18 Line 187 🇯🇵 Japan
#19 YY 157 🇨🇳 China
#20 Twitch 140 🇺🇲 U.S.
#21 Vkontakte 100 🇷🇺 Russia

Here’s a closer look at individual social platforms, and their trials and tribulations:

Facebook

To put it mildly, Facebook has had its hands full. A flurry of companies are boycotting Facebook’s ads, while the platform struggles to fend off the spread of misinformation.

Yet, its stock price continues to advance to new highs while the traditional economy faces less than rosy forecasts. Facebook still possesses the largest cohort of users, inching closer to the 3 billion MAU mark—a breakthrough yet to be achieved by any company.

Snapchat

Snapchat and founder Evan Spiegel have had a bumpy road since their IPO in 2017. The stock price reached its nadir near $4 in 2018, reflecting investor concerns tied to the introduction of Instagram Stories. In recent times, the stock has advanced past the $20 mark, although there is still long-term unclarity around monetization and profitability.

YouTube

YouTube competes head on against traditional television and streaming programs for eyeballs. The platform raked in revenues of $15.1 billion in 2019, nearly double their figures in 2017.

Parent company Alphabet has invested in YouTube with new rollouts like YouTube Music (merged with what was once Google Music) and YouTube Premium—a bundled subscription-based platform providing music, ad-free content, and YouTube Originals. By the looks of it, the future of YouTube will be much more than just videos.

WeChat

The biggest social platform in China, WeChat has flourished, now holding a whopping 1.2 billion MAUs. As part of the Tencent Holdings conglomerate, they belong to the BATX group that is seen to lock horns with America’s Big Tech.

Reddit

There have been whispers of a Reddit IPO on Wall Street for some time now. While such an event has not yet materialized, Reddit’s success certainly has. With 430 million MAUs relative to 330 million in 2018, the company continues to attract a larger audience. The notion of community has taken on a different meaning in the digital age, and Reddit represents this transition with their ever-growing network of users.

Instagram

Instagram has been vital to Facebook’s success, since its $1 billion acquisition in 2012. The platform attracts a younger audience compared to Facebook and it has demonstrated an ability to remain versatile, specifically by implementing Instagram Stories and Reels.

Twitter

Busy schedules don’t seem to faze Jack Dorsey who has not one, but two CEO jobs in Twitter and Square. Twitter has been able to achieve profitability in the last two years, reporting net income figures of $1.2 and $1.5 billion in 2018 and 2019 respectively. They no doubt have their work cut out for them as they continue to combat fake news and similar controversies on their platform.

TikTok

If any publicity is good publicity, then 2020 has been TikTok’s year. Headlines include privacy breaches with alleged ties to the Chinese Communist Party, a banning of the app by India Prime Minister Narendra Modi, and now, talks of a partial U.S. acquisition. Potential acquirers include leaders Microsoft, Twitter, and Oracle.

Social Media Under Trial?

Despite the list of headwinds social media has faced, about half of the world is now on it—and there seems to be no end in sight for future growth.

How have companies with exposure to the social media universe fared in 2020 so far?

Companies With Exposure To Social Media YTD Price Returns
Pinterest 83%
Tencent Holdings 43%
Snapchat 32%
Facebook 30%
Twitter 22%
Alphabet 17%

Widespread participation in social media comes with its fair set of problems. Some companies such as Facebook have found themselves in the crosshairs on both sides of the political spectrum. As concerns grow around privacy and data, social media will be front and center in shaping the future of government, business, and politics.

Only time will tell just how high user counts will reach. The long-term trajectory suggests there’s more room left in the engine. There are still parts of the world that are just beginning to possess the technological infrastructure for social media to be a possibility. It’s plausible future growth will come from that avenue.

If stock prices of companies linked to social media are of relevance, their performance this year paired with the fact that they are trading near all-time highs supports such a growth thesis.

Subscribe to Visual Capitalist

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

The post Visualizing the Social Media Universe in 2020 appeared first on Visual Capitalist.

Visualizing the Social Media Universe in 2020


This post is by Aran Ali from Visual Capitalist

The Social Media Universe in 2020

Visualizing the Social Media Universe in 2020

Social media has seeped into virtually all aspects of modern life. The vast social media universe collectively now holds 3.8 billion users, representing roughly 50% of the global population.

With an additional billion internet users projected to come online in the coming years, it’s possible that the social media universe could expand even further.

How the Networks Stack Up

To begin, let’s take a look at how social networks compare in terms of monthly active users (MAUs)—an industry metric widely used to gauge the success of these platforms.

Rank Social Network MAUs In Millions Country of Origin
#1 Facebook 2,603 🇺🇲 U.S.
#2 WhatsApp 2,000 🇺🇲 U.S.
#3 YouTube 2,000 🇺🇲 U.S.
#4 Messenger 1,300 🇺🇲 U.S.
#5 WeChat 1,203 🇨🇳 China
#6 Instagram 1,082 🇺🇲 U.S.
#7 TikTok 800 🇨🇳 China
#8 QQ 694 🇨🇳 China
#9 Weibo 550 🇨🇳 China
#10 Qzone 517 🇨🇳 China
#11 Reddit 430 🇺🇲 U.S.
#12 Telegram 400 🇷🇺 Russia
#13 Snapchat 397 🇺🇲 U.S.
#14 Pinterest 367 🇺🇲 U.S.
#15 Twitter 326 🇺🇲 U.S.
#16 LinkedIn 310 🇺🇲 U.S.
#17 Viber 260 🇯🇵 Japan
#18 Line 187 🇯🇵 Japan
#19 YY 157 🇨🇳 China
#20 Twitch 140 🇺🇲 U.S.
#21 Vkontakte 100 🇷🇺 Russia

Here’s a closer look at individual social platforms, and their trials and tribulations:

Facebook

To put it mildly, Facebook has had its hands full. A flurry of companies are boycotting Facebook’s ads, while the platform struggles to fend off the spread of misinformation.

Yet, its stock price continues to advance to new highs while the traditional economy faces less than rosy forecasts. Facebook still possesses the largest cohort of users, inching closer to the 3 billion MAU mark—a breakthrough yet to be achieved by any company.

Snapchat

Snapchat and founder Evan Spiegel have had a bumpy road since their IPO in 2017. The stock price reached its nadir near $4 in 2018, reflecting investor concerns tied to the introduction of Instagram Stories. In recent times, the stock has advanced past the $20 mark, although there is still long-term unclarity around monetization and profitability.

YouTube

YouTube competes head on against traditional television and streaming programs for eyeballs. The platform raked in revenues of $15.1 billion in 2019, nearly double their figures in 2017.

Parent company Alphabet has invested in YouTube with new rollouts like YouTube Music (merged with what was once Google Music) and YouTube Premium—a bundled subscription-based platform providing music, ad-free content, and YouTube Originals. By the looks of it, the future of YouTube will be much more than just videos.

WeChat

The biggest social platform in China, WeChat has flourished, now holding a whopping 1.2 billion MAUs. As part of the Tencent Holdings conglomerate, they belong to the BATX group that is seen to lock horns with America’s Big Tech.

Reddit

There have been whispers of a Reddit IPO on Wall Street for some time now. While such an event has not yet materialized, Reddit’s success certainly has. With 430 million MAUs relative to 330 million in 2018, the company continues to attract a larger audience. The notion of community has taken on a different meaning in the digital age, and Reddit represents this transition with their ever-growing network of users.

Instagram

Instagram has been vital to Facebook’s success, since its $1 billion acquisition in 2012. The platform attracts a younger audience compared to Facebook and it has demonstrated an ability to remain versatile, specifically by implementing Instagram Stories and Reels.

Twitter

Busy schedules don’t seem to faze Jack Dorsey who has not one, but two CEO jobs in Twitter and Square. Twitter has been able to achieve profitability in the last two years, reporting net income figures of $1.2 and $1.5 billion in 2018 and 2019 respectively. They no doubt have their work cut out for them as they continue to combat fake news and similar controversies on their platform.

TikTok

If any publicity is good publicity, then 2020 has been TikTok’s year. Headlines include privacy breaches with alleged ties to the Chinese Communist Party, a banning of the app by India Prime Minister Narendra Modi, and now, talks of a partial U.S. acquisition. Potential acquirers include leaders Microsoft, Twitter, and Oracle.

Social Media Under Trial?

Despite the list of headwinds social media has faced, about half of the world is now on it—and there seems to be no end in sight for future growth.

How have companies with exposure to the social media universe fared in 2020 so far?

Companies With Exposure To Social Media YTD Price Returns
Pinterest 83%
Tencent Holdings 43%
Snapchat 32%
Facebook 30%
Twitter 22%
Alphabet 17%

Widespread participation in social media comes with its fair set of problems. Some companies such as Facebook have found themselves in the crosshairs on both sides of the political spectrum. As concerns grow around privacy and data, social media will be front and center in shaping the future of government, business, and politics.

Only time will tell just how high user counts will reach. The long-term trajectory suggests there’s more room left in the engine. There are still parts of the world that are just beginning to possess the technological infrastructure for social media to be a possibility. It’s plausible future growth will come from that avenue.

If stock prices of companies linked to social media are of relevance, their performance this year paired with the fact that they are trading near all-time highs supports such a growth thesis.

Subscribe to Visual Capitalist


Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

The post Visualizing the Social Media Universe in 2020 appeared first on Visual Capitalist.

Strive to Dominate


This post is by Mauricio Prieto from Travel Tech Essentialist - Medium

Better to strive to dominate your industry than to complain about Google’s dominant position in search.

I’ve written in the past on how OTAs regularly blame Google as a reason for their underperformance: OTAs and Google and The Selective Scapegoating of Google. In recent months, a few influential German travel start-ups have also publicly stood up against Google’s so-called abusive and dominant practices.

In this post, I raise some questions to understand if complaining companies are practicing what they preach, and drive the point that it would serve us all better to focus more on how we can build a unique product and customer experience so that we don’t have to resort to complaining about Google.

According to a German newspaper report, GetYourGuide, Trivago , Flixbus, Omio and HomeToGo filed an antitrust complaint against Google, accusing it of stealing content and data: “Google is abusing its search dominance by asserting its data standards on advertising partners, extracting their data and using it to promote its own products at a cheaper rate. To achieve this, it forces its partners to sign non-disclosure agreements [NDAs] to access their products and data” (Competition Policy International).

Due to the monopoly Google has in horizontal search, just by having this kind of access, they’re so top of the funnel that they theoretically can go into any vertical. And with the power of their monopoly they can turn on products there without doing any prior investment in it. Anyone else has to work a lot on SEO strategies and these kind of things to slowly go up in the ranking but Google can just snap its fingers and say, basically, tomorrow I want to have a product. — Patrick Andrae, CEO and co-founder of HomeToGo. Source.

It is a tough sell to pretend that the good old days of SEO and the 10 blue links were better for consumers than what they get today. When a business relies on a third party continuing to send them free traffic, that’s a good time to rethink the business model. Google does not have the obligation to be sending free traffic to whoever is able to best crack the SEO code or to showcase businesses who are not unique enough to convince their customers to visit them directly.

As Ben Thomson points out, Amazon could have also blamed Google for trying to favor its own shopping channel results. But instead, Amazon worked at improving its product and customer experience from search to delivery to become the aggregator and the go-to platform for product search. Amazon focused on being better than Google in its industry, not on calling for regulatory help.

More product searches start on Amazon than Google, not because Amazon spent its energy complaining about Google favoring its own shopping results, but because Amazon went out and delivered a better experience for users. — Ben Thompson, Stratechery (Nov 2019)

Back in April, the CEOs of 8 German travel companies (Dreamlines, FlixBus, GetYourGuide, Homelike, HomeToGo, Omio, Tourlane and Trivago), wrote a letter to Google requesting a restructuring (cancelation/reduction/delay) of ad payments linked to search campaigns that ended up generating travel bookings that were subsequently canceled by customers as a result of the Covid crisis. The companies asked Google to “share the burden”.

“We’re absolutely not satisfied with the support Google offered during this ongoing crisis.” Patrick Andrae, HomeToGo’s co-founder and CEO (CNBC)

“Trivago has missed a collaborative spirit from Google.” Axel Hefer, CEO Trivago (CNBC)

Two tweets from Alex Bainbridge and ClickMallorca made me wonder if these companies are asking from Google to abide by a set of business practices and behaviors that they themselves don’t adopt.

Twitter

Are GetYourGuide, Trivago, HomeToGo and others (which have raised a total of $2.1 billion to date, not including Trivago’s IPO nor its sale to Expedia) extending towards their own advertisers and suppliers the level of generosity and flexibility that they demand from Google?

Do these companies NOT use their dominant positions towards their suppliers to access their products and data to gain better SEO and SEM positioning?

Are these startups acting with the sense of solidarity and collaboration that they demand of Google?

I don’t really have answers to these questions (if you do, I’d love to hear from you), but at least some of their business practices don’t seem to be consistent with the spirit of their letter against Google. Let’s briefly take some examples from GetYourGuide.

If I search for Casa Batlló in Google, the SERP displays a prime positioned window to purchase tickets. The ticket seller is GetYourGuide. GetYourGuide is certainly getting an extremely valuable distribution agreement and visibility in Google. The fact that GetYourGuide is getting consistently such favorable presence above the fold could be argued by some as anti-competitive as these listings tend to favor few providers (GetYourGuide among them).

Google Booking window in the Search Engine Result Page of a “Casa Batlló” search

If we are talking about fairness and solidarity, why isn’t Casa Batlló showing up as the default booking option?

Is it “fair” towards Casa Batlló to have to pay a commission to GetYourGuide for this transaction? After all, I searched for Casa Batlló and would in all likelihood want to book direct if that option had been provided.

Not only GetYourGuide appear in a prime position as the official ticket seller of Casa Batlló, it also appearing both in SEO and in paid search when I search search in Google using the keyword “Casa Batlló”:

GetYourGuide is also present in SEO and in Paid Search for Casa Batlló keywords

Does all this mean that GetYourGuide is using its dominant position in making its partners (such as Casa Batlló) sign agreements to allow GetYourGuide to bid for its brand and access their products and data? From GetYourGuide’s Supplier Terms and Conditions, it makes it clear that suppliers give GetYourGuide a pretty open-ended access to use and license its content as needed.

GetYourGuide Terms and Conditions

For online marketing and PPC advertising, suppliers have to agree that GetYourGuide can use the supplier’s name for mail marketing and PPC advertising. But suppliers cannot use the GetYourGuide brand for the same purpose. This could also be interpreted by some as GetYourGuide using its dominant position.

GetYourGuide Terms and Conditions

I have heard that GetYourGuide suppliers are having to pay commissions of up to 30% to be distributed in the platform. Quite steep. Is getYourGuide reducing commissions to suppliers as a good faith gesture given the current crisis?

Just to be clear. I am not criticizing GetYourGuide’s or any of the German companies’ business practices. Good for them to occupy as much digital real estate as possible in Google’s results pages. Good for them to close distribution agreements that are aligned with their business and consumer interests. I don’t even have an issue with them charging high commissions. If they’re “too” high, the market and/or other competitors will come in with better or cheaper options. My issue is the knee jerk reaction that many companies have to point their finger at Google and call for government intervention as soon as it is convenient for their business interests. Blaming Google is opportunistic and does not add value to the business. And actually, it seems like the companies that most complain about Google’s dominant position are the ones that have the most dominant positions in Google.

The media and some in the industry have been talking about a Google monopoly in travel since the search company bought ITA in 2010. Since then, Booking Holdings (then called Priceline Group), probably the most Google-dependent competitor in the online travel industry, has gone from a market cap of $9 billion in July 2010 to $78 billion today (in the midst of a worldwide pandemic that has decimated the travel industry). 9X in 10 years. Not bad. Since 2010, billions of dollars in value has been created by online travel companies and billions of VC money has flowed to thousands of travel startups. There has been tremendous innovation in all travel categories. These signals don’t seem to be consistent with a monopolistic environment. They point to plenty of opportunities for companies that have learned to work effectively and profitably with Google, and for companies that have managed to bypass Google in building value.

If a company complains that Google has too much power, it might mean that it’s spending lots of money on Google and/or has ended up overly relying on Google for gaining marketshare and/or is short on innovation. This is on them, not on Google. Others in the travel and mobility industry have succeeded in not depending on Google precisely because they’ve focused their energy in building a unique product and customer experience that consumers go to directly without needing to take a prior stop at Google. And it’s not only the well known companies like Uber, Airbnb and HotelTonight that have succeeded in not depending on Google. It’s also smaller (for the time being) players such as Autoura (AI powered in-destination travel experiences) that are seeking to control their own destiny and using Google opportunistically and not by default.

In today’s digital age where all players are one click away, a company becomes dominant when it builds a product or service that is head and shoulders above its competitors’. Getting to a dominant position is what startups and companies of all sizes should strive for. As Ben Thompson from points out, anticompetitive behavior is often “simply another name for ‘driving differentiation’, which no one should want to be illegal for any company that is not in a dominant position; it is the potential to make outsized profits that drives innovation”

Similarly, companies strive to become a monopoly by building a unique product. In his book Zero to One, Peter Thiel puts it as follows: “All happy companies are different: each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition.”

It would be in the best interest of some travel companies to take a cue on Google’s approach to reaching a dominant position. By never stopping to innovate.

At the end of the day, Google has the dominant position in its value chain largely by providing a better product. Search was better to start, but Google didn’t rest on its laurels: it made search better on mobile in particular with these sorts of modules, and while users could download another app or go to a different URL, they simply don’t want to. — Ben Thompson, Stratechery.

Google earned its way into becoming a dominant platform in search. Amazon earned its way into becoming a dominant platform in retail. 24 years after the launch of the first online travel companies, there is still no dominant multi-product platform in travel. If there is space for a dominant travel platform, and no travel company fills the role, maybe Google or Amazon will take over. But this does not necessarily mean that it would result in less innovation and opportunities, compared to a scenario where a travel industry player would become the dominant platform.

We all should be vigilant of potential monopolies and of Google expanding a natural monopoly in search into neighboring sectors such as travel, where the monopoly may not be natural. But we should also be vigilant of regulation called by competitors against products that have proved to be “too compelling” for customers.

Unlike traditional monopolies, it is hard to argue that Google’s product isn’t getting better. Sure, OTAs need to pay to play on the hotel module, but the hotel module is a genuine improvement over 10 blue links. The same can be said of the other areas where Google gives answers instead of options. I absolutely get the argument that this might be an unfair extension of Google’s search dominance, but the possibility of stifling innovation, both directly and also its incentives, are worth consideration. — Ben Thompson, Stratechery (Nov 2019)


Strive to Dominate was originally published in Travel Tech Essentialist on Medium, where people are continuing the conversation by highlighting and responding to this story.

Yelp! No Help!


This post is by Om Malik from On my Om

The Verge had Jeremy Stoppelman, CEO of Yelp, on their podcast. He was talking up his anti-trust talk against Google. The article that accompanied the podcast didn’t mention anything about how much Yelp is dispised by small business owners. I pointed that out in a series of tweets. I decided to turn that tweet thread into a blog post.


According to the dictionary, a yelp is a quick, sharp, shrill cry. And that is exactly the sound emitted by the owners of most, if not all, small businesses when they think about the San Francisco-based company that goes by the same name. 

You are likely familiar with Yelp because its listings are shoved down our throat by Apple. You might also know them for being a festering wound harboring negative reviews that can destroy a small business. And sometimes (just sometimes), it is helpful. Yelp imagines itself as fostering the local community, but in reality, it does anything but. 

For a while, Yelp and its CEO Stoppelman have been beating the anti-trust drum against Google. I don’t have problems with Google’s search monopoly coming under the regulatory microscope. But let’s not make Yelp a martyr — and let’s not give it a free ride in the media. Lately, it seems Guy Raz, The Verge, and many other publications are happy to carry Yelp’s water because it fits the big tech is evil narrative. Most conveniently overlook the fact that small businesses hate Yelp, and many think it is downright evil.

For starters, the company is thuggish in its sales tactics. Try to use its search function, and you are going to be looking at sponsored results. You pay to become a sponsored listing. You pay to become a verified listing. And if you don’t, you are buried way below the fold. Pot, meet, kettle!

I have yet to meet a small business owner who loves this company. Many have told me about the high pressure, bullshit tactics of the company and its sales team. In my own backyard, I can give examples of a dozen companies that have had terrible experiences. For instance, a Yelp salesperson might call a store when the owner is not around. They get an employee to sign up for a free plan — as long as they provide credit card information. Two weeks later…Bam! A charge for a few hundred dollars shows up. And by the way, this unexpected investment did nothing in terms of delivering new customers. And if you want to cancel? Good luck. 

Actions represent a company’s culture and intention. It is a crucial part of what I call the corporate DNA. You can’t change a company’s DNA. That is why no matter what happens, Facebook can’t and won’t change. And neither can Yelp.

Yelp is the same company that routed customers through its own phone numbers instead of the numbers of actual restaurants. It created COVID-19 GoFundMe fundraisers without the knowledge of the restaurants. “I truly cannot believe that Yelp and GoFundMe thought this was a good idea,” Nick Kokonas, co-owner of Chicago’s Alinea restaurant group, told Eater. “It’s the worst kind of fake stewardship in a crisis, crafted to look like charity but taking advantage of a horrific situation.”

That action shows absolute disregard for the businesses that are its raison d ‘être. Yelp is a wolf in sheep’s clothing company. It is hard not to see them as one of the worst representatives of Silicon Valley ecosystem. I wonder why people reserve all the outrage for Uber and Instacart, when Yelp is no different. 

Those in the media need to be more careful and keep Yelp and its management team accountable for their actions. It is fine to go after Google, Facebook, Amazon, and Apple. But let’s not give bad actors a pass just because they don’t belong to the big tech.


The Stocks to Rule them All: Big Tech’s Might in Five Charts


This post is by Aran Ali from Visual Capitalist

Techs market dominance in 5 charts

The Stocks to Rule them All: Big Tech’s Might in Five Charts

American’s tech giants have caught the public’s attention as of late.

Four of the Big Five recently appeared in front of U.S. Congress to discuss their anti-competitive business practices and privacy concerns.

Yet business is booming. Compared to the traditional economy, Big Tech operates within an intangible realm of business. This enables them to move faster, cheaper, and more profitably—with business models that possess widespread scale via the internet.

The above five charts are a reflection of Big Tech’s momentum and the significant role they have played in the swift and vigorous market recovery. Let’s take a closer look at the data.

Company Market Capitalization (In Billions) Weighting in the S&P 500 Index
Apple $1,930 7.1%
Microsoft $1,590 5.9%
Amazon $1,590 5.9%
Alphabet $1,030 3.8%
Facebook $742 2.7%
Total $6,883 25.41%
S&P 500 $27,050 100%

Not All Stocks Are Created Equal

Of the 505 stocks that make up the S&P 500 Index, only about a third have experienced positive returns year-to-date (YTD), with the remaining stocks in the red.

Despite the majority of companies underperforming, the S&P 500 has generated a positive year-to-date return. This is due to the fact that companies are weighted according to market capitalization. For example, the Big Five now represent 25% of the index, despite being just five of the 505 stocks listed.

Big Tech’s dominance is being driven by ballooning market valuations. For instance, Apple reached the $1 trillion valuation in August 2018, and now the company is awfully close to topping the $2 trillion mark after just two years. This is just one of many examples that illustrate the growing power of Big Tech.

Pandemic Proof?

The five Big Tech companies are also seeing business as usual, with revenues in the first half of the year growing steadily compared to the first half of 2019.

Company YTD Price Returns Revenue Growth (H1 2020 vs. 2019)
Apple 52% 6%
Microsoft 31% 14%
Amazon 68% 34%
Facebook 24% 14%
Alphabet 11% 6%
S&P 500 4.5%

Their respective stock prices have followed suit, adding to the divergence between the performance of tech and the overall S&P 500 Index.

The equal-weighted S&P 500 Index provides diversification, but it has underperformed recently. Year-to-date, the equal-weighted index is down -3.5% relative to the positive 4.5% seen for the S&P 500, a spread of 8%. The combination of Big Tech’s outperformance and large weighting is likely behind the index staying afloat.

Dissecting the Disconnect

You may notice the phrase “stock market disconnect” reverberating recently, reflecting consumer views on the state of financial markets and their relationship with the economy, or lack thereof. While the economy combats record levels of unemployment and a plethora of bankruptcies, major American indexes edge closer to record highs.

This disconnect can be explained by the market capitalization weighted qualities of these indexes as well as the geographic source of company revenues in the S&P 500.

The most visible businesses to the everyday individual represent a small and vulnerable basket of companies that account for a undersized component of the stock market. No matter how clobbered they get, their effects on the market as a whole are miniscule.

A Global Footprint

In the era of globalization, American companies are more diversified than ever. Their revenue streams carry a greater global presence, meaning domestic revenues in the United States are less crucial than in times past. For example, the S&P 500’s foreign revenue exposure stands at 42.9% in 2018 and these figures are even higher for Big Tech stocks.

Revenues Recognized Outside of North America/America  
Apple 55%
Microsoft 41%
Amazon 31%
Alphabet 51%
Facebook 54%
Average 46%

Big Tech has outdone itself by virtually any measure.

They’ve shown their capacity to translate headwinds to tailwinds, even under challenging economic circumstances. Going forward, estimates by analysts on Wall Street suggest that even more growth for these companies could be on the horizon.

Subscribe to Visual Capitalist


Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

The post The Stocks to Rule them All: Big Tech’s Might in Five Charts appeared first on Visual Capitalist.

Google giving far-right users’ data to law enforcement, documents reveal


This post is curated by Keith Teare. It was written by Jason Wilson. The original is [linked here]

Exclusive: in some cases Google did not necessarily ban users who were often threatening violence or expressing extremist views

A little-known investigative unit inside search giant Google regularly forwarded detailed personal information on the company’s users to members of a counter-terrorist fusion center in California’s Bay Area, according to leaked documents reviewed by the Guardian.

But checking the documents against Google’s platforms reveals that in some cases Google did not necessarily ban the users they reported to the authorities, and some still have accounts on YouTube, Gmail and other services.

Continue reading…

Google, Nokia, Qualcomm are investors in $230M Series A2 for Finnish phone maker, HMD Global


This post is by Natasha Lomas from Fundings & Exits – TechCrunch

Mobile device maker HMD Global has announced a $230M Series A2 — its first tranche of external funding since a $100M round back in 2018 when it tipped over into a unicorn valuation. Since late 2016 the startup has exclusively licensed Nokia’s brand for mobile devices, going on to ship some 240M devices to date.

Its latest cash injection is notable both for its size (HMD claims it as the third largest funding round in Europe this year); and the profile of the strategic investors ploughing in capital — namely: Google, Nokia and Qualcomm.

Though whether a tech giant (Google) whose OS dominates the world’s smartphone market (Android) becoming a strategic investor in Europe’s last significant mobile OEM (HMD) catches the attention of regional competition enforcers remains to be seen. Er, vertical integration anyone? (To wit: It’s a little over two years since Google was slapped with a $5BN penalty by EU regulators for antitrust violations related to how it operates Android — and the Commission has said it continues to monitor the market ‘remedies’.)

In a further quirk, when we spoke to HMD Global CEO, Florian Seiche, ahead of today’s announcement, he didn’t expect the names of the investors to be disclosed — but we’d already been sent press release material listing them so he duly confirmed the trio are investors in the round. (But wouldn’t be drawn on how much equity Google is grabbing.)

HMD’s smartphones run on Google’s Android platform, which gives the tech giant a firm business reason for supporting the mobile maker in growing the availability of Google-packed hardware in key growth markets around the world.

And while HMD likens its consistent (and consistently updated) flavor of Android to the premium ‘pure’ Android experience you get from Google’s own-brand Pixel smartphones, the difference is the Finnish company offers devices across the range of price points, and targets hardware at mobile users in developing markets.

The upshot is relatively little overlap with Google’s Pixel hardware, and still plenty of business upside for Google should HMD grow the pipeline of Google services users (as it makes money by targeting ads).

Connoisseurs of mobile history may see more than a little irony in Google investing into Nokia branded smartphones (via HMD), given Android’s role in fatally disrupting Nokia’s lucrative smartphone business — knocking the Finnish giant off its perch as the world’s number one mobile maker and ushering in an era of Android-fuelled Asian mobile giants. But wait long enough in tech and what goes around oftentimes comes back around.

“We’re extremely excited,” said Seiche, when we mention Google’s pivotal role in Nokia’s historical downfall in smartphones. “How we are going to write that next chapter on smartphones is a critical strategic pillar for the company and our opportunity to team up so closely with Google around this has been a very, very great partnership from the beginning. And then this investment definitely confirms that — also for the future.”

“It’s a critical time for the industry therefore having a clear strategy — having a clear differentiation and a different point of view to offer, we believe, is a fantastic asset that we have developed for ourselves. And now is a great moment for us to double down on this,” he added.

We also asked Seiche whether HMD has any interest in taking advantage of the European Commission’s Android antitrust enforcement decision — i.e. to fork Android and remove the usual Google services, perhaps swapping them out for some European alternatives, which is at least a possibility for OEMs selling in the region — but Seiche told us: “We have looked at it but we strongly believe that consumers or enterprise customers actually love [Google] services and therefore they choose those services for themselves.” (Millions of dollars of direct investment from Google also, presumably, helps make the Google services business case stack up.)

Nokia, meanwhile, has always had a close relationship with HMD — which was established by former Nokia execs for the sole purpose of licensing its iconic mobile brand. (The backstory there is a clause in the sale terms of Nokia’s mobile device division to Microsoft expired in 2016, paving the way for Nokia’s brand to be returned to the smartphone market without the prior Windows Mobile baggage.)

Its investment into HMD now looks like a vote of confidence in how the company has been executing in the fiercely competitive mobile space to date (HMD doesn’t break out a lot of detail about device sales but Seiche told us it sold in excess of 70M mobiles last year; that’s a combined figure for smartphones and feature phones) — as well as an upbeat assessment of the scope of the growth opportunity ahead of it.

On the latter front US-led geopolitical tensions between the West and China do look poised to generate a tail-wind for HMD’s business.

Mobile chipmaker Qualcomm, for example, is facing a loss of business, as US government restrictions threaten its ability to continue selling chips to Huawei; a major Chinese device maker that’s become a key target for US president Trump. Its interest in supporting HMD’s growth, therefore, looks like a way for Qualcomm to hedge against US government disruption aimed at Chinese firms in its mobile device maker portfolio.

While with Trump’s recent threats against the TikTok app it seems safe to assume that no tech company with a Chinese owner is safe.

As a European company, HMD is able to position itself as a safe haven — and Seiche’s sales pitch talks up a focus on security detail and overall quality of experience as key differentiating factors vs the Android hoards.

“We have been very clear and very consistent right from the beginning to pick these core principles that are close to our heart and very closely linked with the Nokia brand itself — and definitely security, quality and trust are key elements,” he told TechCrunch. “This is resonating with our carrier and retail customers around the world and it is definitely also a core fundamental differentiator that those partners that are taking a longer term view clearly see that same opportunity that we see for us going forward.”

HMD does use manufacturing facilities in China, as well as in a number of other locations around the world — including Brazil, India, Indonesia and Vietnam.

But asked whether it sees any supply chain risks related to continued use of Chinese manufacturers to build ‘secure’ mobile hardware, Seiche responded by claiming: “The most important [factor] is we do control the software experience fully.” He pointed specifically to HMD’s acquisition of Valona Labs earlier this year. The Finnish security startup carries out all its software audits. “They basically control our software to make sure we can live up to that trusted standard,” Seiche added. 

Landing a major tranche of new funding now — and with geopolitical tension between the West and the Far East shining a spotlight on its value as alternative, European mobile maker — HMD is eyeing expansion in growth markets such as Africa, Brail and India. (Currently, HMD said it’s active in 91 markets across eight regions, with its devices ranged in 250,000 retail outlets around the world.)

It’s also looking to bring 5G to devices at a greater range of price-points, beyond the current flagship Nokia 8.3. Seiche also said it wants to do more on the mobile services side. HMD’s first 5G device, the flagship Nokia 8.3, is due to land in the US and Europe in a matter of weeks. And Seiche suggested a timeframe of the middle of next year for launching a 5G device at a mid tier price point.

“The 5G journey again has started, in terms of market adoption, in China. But now Europe, US are the key next opportunity — not just in the premium tier but also in the mid segment. And to get to that as fast as possible is one of our goals,” he said, noting joint-working with Qualcomm on that.

“We also see great opportunity with Nokia in that 5G transition — because they are also working on a lot of private LTE deployments which is also an interesting area since… we are also very strongly present in that large enterprise segment,” he added.

On mobile services, Seiche highlighted the launch of HMD Connect: A data SIM aimed at travellers — suggesting it could expand into additional connectivity offers in future, forging more partnerships with carriers. 

“We have already launched several services that are close to the hardware business — like insurance for your smartphones — but we are also now looking at connectivity as a great area for us,” he said. “The first pilot of that has been our global roaming but we believe there is a play in the future for consumers or enterprise customers to get their connectivity directly with their device. And we’re partnering also with operators to make that happen.”

“You can see us more as a complement [to carriers],” he added, arguing that business “dynamics” for carriers have also changed substantially — and customer acquisition hasn’t been a linear game for some time.

“In a similar way when we talk about Google Pixel vs us — we have a different footprint. And again if you look at carriers where they get their subscribers from today is already today a mix between their own direct channels and their partner channels. And actually why wouldn’t a smartphone player be a natural good partner of choice also for them? So I think you’ll see that as a trend, potentially, evolving in the next couple of years.”

US-China Tech War: Apple is in the eye of a hurricane.


This post is curated by Keith Teare. It was written by Om Malik. The original is [linked here]

First Huawei, then TikTok and last week, WeChat: we are navigating stormy seas when it comes to the US-China relationship. It all seems very arcane to an average person. After all, it is easy to find a replacement for TikTok. We don’t use Huawei and WeChat as ordinary Americans. But when the blowback comes, it is going to be against a company whose influence in our lives goes beyond its products. 

And that company is iPhone maker, Apple. 

China accounts for about 20 percent of Apple’s iPhone sales. The Chinese App Store is another vital source of revenue for Apple. At last count, the company clocked revenues of $43.7 billion from China in 2019— roughly 17 percent of its 2019 sales. That makes it Apple’s third-largest market. More recently, Apple brought in $9.33 billion during its fiscal third-quarter ending in June 2020 and allowed it to post its best quarter in history — in the middle of a pandemic. More importantly, it manufactures the vast majority of its products in China. Sure it is trying to make products in India. It is using Taiwan and other countries. It will be a long time before Apple can even dream of decoupling its production from China.

Barry Ritholtz, recently noted that “Four industry groups — internet content, software infrastructure, consumer electronics, and internet retailers — account for more than $8 trillion in market value, about a third of the S&P500 and a quarter of total U.S. stock market value of about $35 trillion.” Apple’s market capitalization, which was just shy of $2 trillion last week, is roughly a quarter of that $8 trillion in market value. 

Let that sink in!

Suppose this is a reason for celebration — after all, the market says that the future is the technology and not the old industrial complex. In that case, it is hard to ignore that such a massive concentration of the market’s good fortunes is also its Achilles heel, as noted by Matthew Pipenberg, another friend and investor I follow.” When (not if) even the big boys of the S&P see a sharp decline in price, the S&P, based on the very concentrated nature of its market cap weightings, is in fact, more dangerous, rather than safe,”  he writes.

It is also important to note that Google, Facebook, and Netflix, three of the most significant tech stocks don’t have that much China exposure. Apple is the one with the highest China-risk. The Verge quoting analyst Ming-Chi Kuo pointed out that if Apple had to remove WeChat from its AppStores around the world, Apple’s annual iPhone shipments in China could fall between 25 to 30 percent and sales of other hardware could fall between 15 to 25 percent. And that’s before the Chinese government starts to act against Apple in a hostile manner. 

Any disruption in Apple’s operations is going to have an impact on its market capitalization. And very quickly, Apple’s misfortunes are going to become America’s misfortunes quickly.

Apple’s become such a favorite stock that it is owned by mutual funds, pension funds, and other long term investors who love the company’s ability to make profits. Like many of its big-tech peers, Apple makes up a much larger part of stock indices. It has increased the technology stock’s presence in the index funds.

Even more conservative investors such as Warren Buffett’s Berkshire Hathaway have become an Apple believer. Why not, they got $800 million in dividends from Apple last year. And a lot of pension funds, mutual funds, and other such institutions own the gilt-plated Berkshire Hathaway stock. Of the top 10 companies that make up the S&P 500, Berkshire Hathaway is the seventh-largest stock, in which Apple is number one. 

Former Buzzfeed writer Alex Kantrowitz recently wrote that “New York State’s Common Retirement Fund invests in Apple’s small country’s GDP worth. “The top owners of Apple include The Vanguard Group, Berkshire Hathaway, Blackrock Fund Advisors, SSgA, Fidelity, T-Rowe Price, Northern Trust. Of the top ten mutual funds holding Apple, nine are index funds. There are over 225 Exchange-traded Funds (ETF) that count Apple among their top 15 holdings. 

Start doing the math — Apple’s China misery becomes a problem for many individuals whose 401k and retirement nest eggs are tied to Apple. As noted earlier, Apple and the stock market are intertwined. Apple’s outsized presence in the market, and by extension index funds and ETFs means that it will have an outside impact on the stock market and that will echo across other stocks as well. And that means other technology stocks — many who have defied gravity for months.

What seems like an arcane battle over TikTok and WeChat, will become an American problem.

August 10, 2020. San Francisco

The post US-China Tech War: Apple is in the eye of a hurricane. appeared first on On my Om.