|Day's range||442.40 - 442.40|
Microsoft on Sunday said it aims to complete a deal by Sept. 15 for TikTok's U.S., Canada, Australia and New Zealand operations. It is likely to have an edge in pricing negotiations as the U.S. is effectively forcing TikTok's Chinese parent, ByteDance, to sell by threatening to ban the app as a security risk. TikTok has taken teenagers around the world by storm and emerged as a significant competitor to Facebook and Google's YouTube.
(Bloomberg) -- In a bid to salvage a deal for the U.S. operations of TikTok, Microsoft Corp. Chief Executive Officer Satya Nadella spoke with President Donald Trump by phone about how to secure the administration’s blessing to buy the wildly popular, but besieged, music video app.Microsoft in a blog post Sunday confirmed talks to buy TikTok’s operations in the U.S., as well as in Canada, Australia and New Zealand, and said it’s aiming to complete the deal no later than Sept. 15.The software giant’s public statement follows closed-door discussions with TikTok and Trump, who floated plans for an outright ban of the app on national security grounds and publicly lambasted the idea of a deal late Friday night. The companies now have 45 days to hash out a plan acceptable to all parties, a deadline insisted on by the White House, according to people familiar with the matter. The two companies have not yet worked out key details for a deal, including price, according to people familiar with the matter.TikTok has become a flash point among rising U.S.-China tensions in recent months as U.S. politicians raised concerns that parent company ByteDance Ltd. could be compelled to hand over American users’ data to Beijing or use the app to influence the 165 million Americans, and more than 2 billion users globally, who have downloaded it. The app also drew ire from the U.S. president after anti-Trump activists used the platform to disrupt campaign activities.In its blog post, Microsoft pledged to add more security, privacy and digital safety protections to the TikTok app and ensure that all private data of Americans be transferred back to the U.S. and deleted from servers outside the country. The company also said it may invite other American investors to take minority stakes in the company.“Microsoft fully appreciates the importance of addressing the President’s concerns,” the company said. “It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury.”TikTok, Hong Kong and More U.S.-China Flashpoints: QuickTakeIf a deal goes through, it would mark a dramatic intervention by the U.S. government in private enterprise and alter the global technology landscape. It would hand Microsoft a much more prominent role in social media and online advertising -- and threaten to end an era of globalization in the tech industry.Microsoft’s statement didn’t explicitly say whether Trump would approve an agreement and forgo a TikTok ban, though Microsoft would likely make such a public pronouncement only if it thought that would be forthcoming. Microsoft’s shares rose more than 4% in Germany.A TikTok spokeswoman declined to comment, while the White House didn’t immediately respond to a request for comment. Bytedance is committed to becoming a global company and strictly abides by local laws, the TikTok owner said in an online statement Sunday.The blog post from Microsoft came after a weekend of tense negotiations that lasted late into the night among Microsoft, TikTok and the White House, as well as a string of appearances on Sunday morning cable shows by U.S. politicians trying to sway the President’s decision.Factions within the administration and Congress have split into two camps: Those that want to keep the wildly popular music video app in operation by delivering it into the arms of an American company, and those that want to ban the app altogether in the U.S. because of TikTok’s Chinese roots. The latter would send a message to China that the U.S. too can also block internet companies from operating on its shores like China does with Facebook, Twitter and Google.TikTok was launched in the U.S. more than two years ago, following Bytedance’s 2017 purchase of lip-synching app Musical.ly, which it folded into TikTok. The app became a social-media hit in the U.S -- the first Chinese platform to make such inroads.As TikTok surged to popularity, officials began calling for a national security investigation into the app. In November 2019, The Committee on Foreign Investment in the United States, or CFIUS, which investigates overseas acquisitions of U.S. businesses, opened a review of the Musical.ly purchase.TikTok has repeatedly rejected accusations that it feeds user data to China or is beholden to Beijing, even though ByteDance is based there. It spent months trying to distance itself from its Chinese roots. It hired its first American CEO in June, former Walt Disney Co. executive Kevin Mayer, as well as dozens of D.C. lobbyists. It announced plans for a new global headquarters outside of China and said it was considering other organizational changes to satisfy U.S. authorities.After the coronavirus pandemic strained relations between the U.S. and China further, the anti-TikTok rhetoric grew louder. In June, Secretary of State Mike Pompeo and Trump both floated a possible ban of the app, suggesting there could be real action behind the China hawks’ words.In response, ByteDance’s venture investors, including Sequoia Capital, urged company founder and Chief Executive Officer Zhang Yiming to head off any U.S. government action by selling a majority stake in TikTok to them, people familiar with the matter told Bloomberg News in July. At first, Zhang was reticent to give up control, but Bytedance feared an outright ban in the U.S. and the loss of a multi-billion business, according to people familiar with the deliberations. India instituted a ban on TikTok, which quickly devastated its business there.Zhang relented and got on board with selling a majority stake to U.S. investors, but it turned out that arrangement wasn’t sufficient. Administration officials didn’t want to leave the company’s Chinese founder with even a minority stake or for ByteDance’s long-time venture capital allies to have a majority stake in the company, these people said.Meanwhile, Microsoft and TikTok began preliminary deal discussions. Talks beginning in July involved Nadella, Microsoft Chief Financial Officer Amy Hood and President and Chief Legal officer Brad Smith, the people said. Erich Andersen, TikTok’s general counsel -- who spent 25 years at Microsoft, including working for Smith before joining TikTok this year -- was also involved in the conversations.At that point, ByteDance was facing increasingly dire threats in the U.S. Proposals by the company intended to assuage U.S. regulators concerns about TikTok had fallen short and the company was running out of time and options, one of the people said. On Monday, Zhang told employees in a memo that ByteDance, while disagreeing with Trump’s decision, is exploring all possibilities and working round the clock to resolve its intensifying confrontation with U.S. authorities.Over the weekend, Sec. Pompeo said the Trump administration will announce measures shortly against “a broad array” of Chinese-owned software deemed to pose national-security risks, suggesting the actions may go beyond the one Chinese app. In a late Friday night missive, Trump told reporters: “As far as TikTok is concerned, we’re banning them from the United States.”TikTok has hired almost 1,000 people in the U.S. this year and will be employing another 10,000 into “great paying jobs” in the U.S., a company spokeswoman said in a statement. The business’s $1 billion creator fund also supports people in the country who are building livelihoods from the platform, she added.“TikTok U.S. user data is stored in the U.S., with strict controls on employee access,” she said. “TikTok’s biggest investors come from the U.S. We are committed to protecting our users’ privacy and safety.”The purchase of TikTok’s operations in the U.S. and the three other countries, should it be concluded, would represent a huge coup for Microsoft. The world’s largest software company would gain a social-media app that has won over young people with a steady diet of dance videos, lip-syncing clips and viral memes. The company has dabbled in the lucrative sector, but hasn’t developed a popular service of its own. Microsoft acquired LinkedIn, a job-hunting and corporate networking company, for $26.2 billion in 2016.A deal would vault Microsoft into the social media and advertising markets dominated by Facebook Inc. and Google. Microsoft once paid $6.3 billion for Internet ad company aQuantive, the largest deal ever for the company at the time. The effort failed and the company ended up writing down almost the whole value of the deal and then selling its remaining display ad business to AOL in 2015.Microsoft has a search ad business but it declined 18% last quarter. With no consumer social media app, Xbox and Minecraft are pretty much its sole attention-getter among younger users. TikTok would help bolster that business, though it would also push Microsoft to confront controversial areas it has mostly avoided, such as censorship and disinformation.Buying TikTok would give Microsoft “a crown jewel” in consumer social media at a time when Facebook and Google are under massive regulatory scrutiny over antitrust concerns, said Wedbush analyst Daniel Ives in a research note.Microsoft, which briefly employed Zhang, is an American company but it’s also deeply embedded in China. Bing and Linkedin, which both censor content in China, remain the only major search engine and social networking platform allowed to operate in China by U.S. companies.Microsoft and TikTok now have 45 days to hash out a price, terms, how Microsoft would pay for the unit, or how any technology-sharing or transfer of assets of the video-sharing app would work. Deal negotiations may be complicated by tensions between ByteDance investors eager for a big payout for the popular app and Microsoft executives who view themselves as a white knight rescuing a troubled business. The Trump administration could also throw a wrench into the process at any point.An outpouring of support for TikTok and anger against President Trump spread across the Internet in recent days as users displayed outrage with a potential U.S. ban on what’s become one of the most popular media companies in America. Videos with the hashtag ban had more than 620 million views by Sunday night on TikTok.“This is what Trump gets for planning to ban Tiktok,” wrote one user on TikTok named @rainbownursesarah, flashing to a video of a sparsely-packed stadium at a Tulsa, Oklahoma Trump campaign rally that TikTok users sought to disrupt in June.Free speech advocates also piled on against the idea of banning any kind of Internet service, regardless of its owner.“Banning an app that millions of Americans use to communicate with each other is a danger to free expression,” said Jennifer Granick, surveillance and cybersecurity counsel at the American Civil Liberties Union. “Shutting one platform down, even if it were legally possible to do so, harms freedom of speech online and does nothing to resolve the broader problem of unjustified government surveillance.”(Updates with ByteDance’s founder’s memo from the 19th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
MongoDB (NASDAQ: MDB), Microsoft (NASDAQ: MSFT), and Okta (NASDAQ: OKTA) are all experiencing growth during this difficult economic time, and are perfectly poised to keep growing over the long haul. Brian Withers (MongoDB): A lot has happened in the last 50 years, especially in tech.
Did you know what Zoom Video Communications (NASDAQ: ZM) was? Financial fortitude: Zoom has about $1.4 billion in cash, almost no long-term debt, and has brought in $350 million in free cash flow over the past year.
(Bloomberg) -- Microsoft Corp. is exploring an acquisition of TikTok’s operations in the U.S., according to a people familiar with the matter. A deal would give the software company a popular social-media service and relieve U.S. government pressure on the Chinese owner of the video-sharing app.The Trump administration has been weighing whether to direct China-based ByteDance Ltd. to divest its stake in TikTok’s U.S. operations, according to several people familiar with the issue. The U.S. has been investigating potential national security risks due to the Chinese company’s control of the app.While the administration was prepared to announce an order as soon as Friday, according to three people familiar with the matter, another person said later that the decision was on hold, pending further review by President Donald Trump. All of the people asked not to be identified because the deliberations are private.Spokespeople for Microsoft and TikTok declined to comment on any potential talks. The software company’s interest in the app was reported earlier by Fox Business Network.Trump on Friday night said he would ban TikTok from the U.S., and had the authority to do so by executive order or under the International Emergency Economic Powers Act. He was signing the document on Saturday, he said.“As far as TikTok is concerned, we’re banning them from the United States,” the president told reporters. Asked when it would happen, he said: “Soon, immediately. I mean essentially immediately.”Earlier in the day, he said that “we are looking at a lot of alternatives with respect to TikTok.”Any transaction could face regulatory hurdles. ByteDance bought Musical.ly Inc. in 2017 and merged it with TikTok, creating a social-media hit in the U.S -- the first Chinese app to make such inroads. As TikTok became more popular, U.S. officials grew concerned about the potential for the Chinese government to use the app to gain data on U.S. citizens.The Committee on Foreign Investment in the U.S. began a review in 2019 of the Musical.ly purchase. In recent years, CFIUS, which investigates overseas acquisitions of U.S. businesses, has taken a much more aggressive role in reviewing and approving deals that may threaten national security. It can recommend that the president block or unwind transactions.It’s also possible that other potential buyers could come forward, said another person familiar with the discussions. Microsoft’s industry peers -- Facebook Inc., Apple Inc., Amazon.com Inc. and Alphabet Inc. -- fit the profile of potential suitors, though all are under antitrust scrutiny from U.S. regulators, which would likely complicate a deal.A purchase of TikTok would represent a huge coup for Microsoft, which would gain a popular consumer app that has won over young people with a steady diet of dance videos, lip-syncing clips and viral memes. The company has dabbled in social-media investments in the past, but hasn’t developed a popular service of its own in the lucrative sector. Microsoft acquired the LinkedIn job-hunting and corporate networking company for $26.2 billion in 2016.Microsoft can point to one acquisition that came with a massive existing community of users that has increased under its ownership -- the 2014 deal for Minecraft, the best-selling video game ever.Other purchases of popular services have gone less well. The 2011 pickup of Skype led to several years of stagnation for the voice-calling service and Microsoft fell behind newer products in the category. Outside of Xbox, the company hasn’t focused on younger consumers. A TikTok deal could change that, though, and give Microsoft “a crown jewel on the consumer social media front,” Dan Ives, an analyst at Wedbush Securities, wrote in a note to investors Friday.TikTok has repeatedly rejected accusations that it feeds user data to China or is beholden to Beijing, even though ByteDance is based there. TikTok now has a U.S.-based chief executive officer and ByteDance has considered making other organizational changes to satisfy U.S. authorities.“Hundreds of millions of people come to TikTok for entertainment and connection, including our community of creators and artists who are building livelihoods from the platform,” a TikTok spokeswoman said Friday. “We’re motivated by their passion and creativity, and committed to protecting their privacy and safety as we continue working to bring joy to families and meaningful careers to those who create on our platform.”The mechanics of separating the TikTok app in the U.S. from the rest of its operations won’t come without complications. Unlike many tech companies in the U.S. where engineers for, say, Google, work on particular products like YouTube or Google Maps, many of ByteDance’s engineers work across its different platforms and services and continue to work on TikTok globally.On Thursday, U.S. Senators Josh Hawley, a Missouri Republican, and Richard Blumenthal, a Connecticut Democrat, wrote the Justice Department asking for an investigation of whether TikTok has violated the constitutional rights of Americans by sharing private information with the Chinese government.A deal with Microsoft could potentially help extract ByteDance from the political war between the U.S. and China.U.S. Senator Marco Rubio, a Florida Republican and member of the Senate’s Select Committee on Intelligence, applauded the idea of a TikTok sale. “In its current form, TikTok represents a potential threat to personal privacy and our national security,” Rubio said in a statement. “We must do more than simply remove ByteDance from the equation. Moving forward, we must establish a framework of standards that must be met before a high-risk, foreign-based app is allowed to operate on American telecommunications networks and devices.”(Updates with Trump’s comments in the 5th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Microsoft Corp. isn’t the only company interested in buying TikTok’s U.S. operations, according to people familiar with the matter.U.S. government officials probing national-security concerns around the Chinese-owned video-sharing app have had talks with at least one other large company as well as investors in TikTok parent ByteDance Ltd. who are interested in taking a stake in TikTok, according to one of the people, who requested anonymity because the discussions are private. This person declined to identify these companies.ByteDance is considering changes to the structure of TikTok because President Donald Trump is weighing ordering a divestiture of TikTok’s U.S. business, a decision that could come at any time.Venture investors in ByteDance have approached Chief Executive Officer Zhang Yiming with a range of proposals to address U.S. concerns that the app, especially popular with teens, is a security threat, people familiar with the matter have said. Any solution would likely have to pass scrutiny from U.S. regulators in the Committee on Foreign Investment in the United States, as well as U.S. antitrust regulators.The deal provides a rare opportunity to profit off the momentum of the fastest-growing social media app in the U.S. Still, not all companies likely to be attracted to such a deal will even be in the running. TikTok’s valuation is estimated at $20 billion to $40 billion, so few companies would be able to afford it. Most of those that would are likely to find it politically difficult to make the move.The CEOs of Facebook Inc., Alphabet Inc.’s Google, Amazon.com Inc. and Apple Inc. testified this week in the U.S. House of Representatives to answer lawmakers’ questions about their enormous market power. While any one of the four companies could fit TikTok into their product offerings, deals by these giants are already under a microscope.Google, whose YouTube is a competing video offering, is already facing a European Union probe for its much smaller acquisition of Fitbit Inc. Apple doesn’t tend to make acquisitions anywhere near large as TikTok. And Facebook’s years-ago purchases of smaller rivals Instagram and WhatsApp have been brought up anew amid the antitrust scrutiny. The world’s largest social network has already worked to turn lawmakers against TikTok, and is unlikely to court further risk to its already tenuous position on data security. Facebook also looked at purchasing Musical.ly, the predecessor to TikTok, in 2016, and passed.Microsoft, with a market value of $1.55 trillion, is bigger than Google or Facebook, but currently has a better reputation in Washington. The company wasn’t invited to the antitrust hearing on July 29, and has largely escaped recent criticism of Big Tech’s outsize influence. It’s unclear whether Microsoft would seek to integrate TikTok into its own operations, or join with other investors from private equity or venture capital to finance spinning out TikTok as a separate entity based in the U.S. With the second option, investors could seek to gain even more from a TikTok stock listing in the future.Media companies, such as Walt Disney Co. and Verizon Communications Inc., have been interested in purchasing social-media assets in the past. Disney in 2016 considered but ultimately decided against purchasing Twitter Inc., for instance. TikTok’s U.S.-based CEO, Kevin Mayer, was formerly the head of streaming for Disney, and may be better positioned to help broker a deal in the media world.Other social-media companies, such as Twitter and Snapchat parent Snap Inc., have smaller valuations than TikTok and therefore are unlikely bidders. They would need to use stock or outside financial help to complete such a transaction.It’s still not clear how a U.S. divestiture of TikTok would work, and how completely the app would have to separate from its current Chinese ownership. The company hasn’t said how such a move would affect employees, the technology or its product. However the ownership shakes out, there is one group that no potential buyer or investor wants to alienate: TikTok’s 165 million American users.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
With us today are Sundar Pichai and Ruth Porat. Using our technical capabilities, we are helping people find more information about local businesses such as take-out, curbside, updated hours, donations, gift cards, and virtual services.
(Bloomberg) -- General Motors Co. is unhappy with Facebook Inc.’s efforts to keep hateful and disparaging content away from the automaker’s brands and has joined peer Ford Motor Co. and other companies that have stopped advertising with the social-media company.GM said Friday it has paused placing ads on Facebook in recent weeks and is in talks with the company about improving efforts to eliminate harmful content on its popular platform.GM’s move is a sign that the pressure on Facebook will continue in August and potentially longer. Ford and Honda Motor Co.’s U.S. subsidiary also said Friday they have no plans to resume spending on Facebook. On Thursday, Unilever NV-owned ice-cream brand Ben & Jerry’s extended through the end of the year its halt of paid social-media advertising.“We are not satisfied with the progress Facebook has taken to date and therefore have paused our media investment with the platform,” GM said in a statement. “We are encouraging them to move faster to implement meaningful change so that we can quickly return to a safer digital space that mirrors our brand values.”Ford Reloads YouTubeFord said it is evaluating efforts to curb hate speech on social media operated by Facebook and its unit Instagram Inc., as well as by Snap Inc., Twitter Inc. and TikTok Inc. platforms. However the automaker announced it will resume ads on Alphabet Inc. unit YouTube and Pinterest Inc. after a 30-day pause.“This is an ongoing evaluation and we will continue to monitor all platforms with checkpoints on progress towards our ad accountability agenda,” Ford spokesman Said Deep said in an email. “We will continue to be actively engaged with industry initiatives led by the Association of National Advertisers to drive more accountability, transparency and trusted measurement to clean up the digital and social-media ecosystem.”A month ago, when the StopHateForProfit campaign started, many big corporations said they would stop advertising for the month of July. At that time, GM said it was reviewing its marketing.The automaker qualified its Friday announcement by saying it already had cut its advertising during the pandemic, reflecting lower production and less traffic in showrooms. Its budget for Facebook advertising did not involve a large sum of money, said GM spokesman Jim Cain.(Updates with Ford and Honda keeping ads off Facebook in third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- It looks like the TikTok spinout scenario is fully in play.For weeks, White House officials – including Secretary of State Mike Pompeo and President Donald Trump – have raised the prospect of a ban of ByteDance Ltd.’s TikTok app in the U.S., citing national security concerns. But now it seems the government could be amenable to a middle ground. On Friday, Bloomberg News reported Trump plans to order ByteDance Ltd. to divest its ownership of TikTok. Then later in the afternoon, several media outlets reported Microsoft Corp. is in talks to purchase TikTok’s U.S. operations.To be clear, if ByteDance is forced to sell TikTok under the administration’s pressure, the story won’t be over. TikTok is only one front in a wider campaign of rising political and economic tensions between the U.S. and China. China may retaliate by targeting American business interests on its soil or taking other measures that further inflame the situation. But putting all that aside and in the meantime, let’s consider the merits of a TikTok sale. There seem to be two active bidders for the app. One is Microsoft. As for the other, Reuters reported earlier this week that some of Bytedance’s U.S investors have proposed a bid for a majority stake of TikTok, valuing the company’s non-China operations at $50 billion. The offer would be about 50 times TikTok’s forecast sales of $1 billion this year, Reuters reported.On a personal level, an independent TikTok owned by American venture capital firms is the preferable option. By staying separate, the social media app can hire and retain the best engineers with tantalizing pre-IPO stock compensation. Top-tier technical talent is needed to keep the company on the bleeding edge. And history is littered with examples of upstarts that were acquired by larger companies and subsequently lost their ability to nimbly react to competitors. Examples of M&A debacles include Yahoo’s acquisition of Tumblr and News Corp.’s Myspace purchase.In this instance, though, Microsoft may be the best suitor. On the surface, it may seem strange to contemplate such a large deal in an environment of greater regulator scrutiny over the technology industry’s acquisitions. In fact, we are just days removed from CEOs of four other Big Tech companies getting grilled over their anticompetitive practices before a House subcommittee. However, counter-intuitively this merger can make sense in terms of antitrust principles. A Microsoft-TikTok combination would create a much more competitive U.S. digital advertising market by establishing a powerful third player against the two dominant internet ad goliaths, Google parent Alphabet Inc. and Facebook Inc. And let’s face it, the administration may prefer a sale of TikTok — even to a giant like Microsoft — over banning an app that’s wildly popular with millions of Americans. Microsoft’s businesses would benefit as well by adding scale to its burgeoning digital advertising operation, anchored by its Bing search engine. The company could also cross-promote TikTok’s social media video features across its Xbox gaming console and cloud services. And finally, ByteDance may appreciate a deal with Microsoft for a purely expedient purpose. The software giant valued at roughly $1.6 trillion can quickly and easily pay the Chinese company the tens of billions TikTok is worth without the complications of dealing with multiple smaller investment firms.So at the end if the day, a Microsoft-TikTok combination may be the best and most elegant solution for all parties involved. The happiest may actually be the apps users, celebrating their favorite service’s survival.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tae Kim is a Bloomberg Opinion columnist covering technology. He previously covered technology for Barron's, following an earlier career as an equity analyst.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Jul.31 -- Tim Sweeney, chief executive officer of Fortnite owner Epic Games, discusses his view on Apple's antitrust behavior on "Bloomberg Technology."
(Bloomberg) -- The Covid-19 pandemic is fueling an e-commerce boom as shuttered businesses move online -- but Google isn’t benefiting in the way its big tech rivals are.Google advertising sales fell 8% in the second quarter, causing overall revenue at parent Alphabet Inc. to shrink for the first time. The company’s main digital ad rival Facebook Inc. saw sales jump 11%, while Amazon.com Inc. revenue soared 40%.Those gaps highlighted how Google has struggled to parlay its online search dominance into a meaningful e-commerce business. Google’s shares fell 3% on Friday, while Amazon rose 4% and Facebook jumped 8%.While Google runs the world’s largest search engine, U.S. consumers are more likely to look for things to buy on Amazon. Facebook’s Instagram has focused heavily on online shopping, and Facebook itself recent unveiled a big e-commerce initiative. Meanwhile, Google’s ad business has been hurt by exposure to the travel industry and brick and mortar retailers, which have been devastated by the pandemic.Google was asked about this disparity during a conference call late Thursday. “We’ve gone through this pandemic where there is a real inflection point. We see it in Amazon’s results,” Mark Mahaney, an analyst at RBC Capital Markets, said. “I’m not sure I see it in Google’s results.”The internet giant is aware of the problem. During Thursday’s call, Chief Executive Officer Sundar Pichai spoke repeatedly about the company’s e-commerce initiatives.He highlighted more investment in a Buy on Google feature that lets people purchase products directly through search results without having to go to a retailer’s website.The CEO also touted Smart Shopping campaigns, a type of ad that lets merchants upload their products, set a marketing budget and then leaves Google’s artificial intelligence software to decide when and where to place ads around the web. The process is meant to make advertising easier for smaller sellers.The company’s YouTube unit is also pushing more ads and features that let people buy directly from the video site.Google is trying to make direct commerce a bigger part of its business in other ways, too. In recent months, it has opened up its Google Shopping marketplace to more merchants, dropped transaction fees and let any seller upload product listings for free. Before this, Google Shopping was mostly an advertising operation that required retailers to pay when consumers clicked on product ads.“Users come to Google a lot to find the products they are looking for,” Pichai said on Thursday. “Sometimes, the journeys may fail because they don’t find what they’re looking for, so we want to make sure it’s comprehensive.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Shopify Inc. is a growing rival to Amazon.com Inc. in e-commerce. The Canadian tech company is still much smaller than the U.S. giant, of course -- except in one respect.Ottawa-based Shopify, which went public only five years ago, has come to have an outsized impact on equity returns in its home country. It now accounts for fully 6.5% of the S&P/TSX Composite Index, more than Amazon’s 4.9% weight in the S&P 500.As Shopify goes -- and most of the time it goes up, not down -- so goes Canada’s main equity benchmark. The stock’s blistering run has added more than 4.5 percentage points to the TSX index’s return this year. That’s far more than the influence of Amazon, Microsoft Corp., Alphabet Inc. or Facebook Inc. on the S&P 500, according to data compiled by Bloomberg.One reason Shopify stands out, of course, is there are no other Canadian tech companies even close to its size: it closed the week with a market value of C$165 billion ($123 billion). As investors pile into the tech sector globally -- and as more retailers turn to online selling to serve customers during the pandemic -- Shopify’s popularity keeps growing. The stock is an easy choice for managers of Canadian large-cap funds who want some local exposure to e-commerce.The three largest sectors in the TSX index -- financials, energy and materials -- have a combined 55% weighting, with 99 of the index’s 221 members.The index has only 10 tech companies. Yet, they now represent 10.5% of the TSX composite, and that percentage has almost doubled this year. For Shopify, its influence has tripled since the end of 2019.Shopify’s stellar earnings report this week provided fresh evidence of how the stock can push around the broader index. After reporting second-quarter sales that nearly doubled, crushing analysts’ estimates, the stock jumped 6.8%.On that day the TSX rose 173 points. Shopify alone contributed 71 points of the gain, data compiled by Bloomberg show.Read more: Big Tech Earnings Surge During Pandemic While the Economy Slumps“Shopify has moved to rival Royal Bank largely because it is perceived as ‘Amazon Junior’ – facilitating the global move to online consumption,” said Canadian Imperial Bank of Commerce strategist Ian de Verteuil in a July 17 report. “Excluding Shopify, S&P/TSX returns over the past year and YTD would be about 500 basis points lower -- as would the percent exposure to the three big sectors.”Here’s what happened this week.Just the NumbersEconomyCanada’s economy has made up almost half of its historic contraction since the worst days of the pandemic, Statistics Canada reported Friday. Gross domestic product expanded 4.5% in May versus April. June was even stronger, with the statistics agency reporting a flash estimate of another 5% increase. Cumulatively, GDP has increased about 10% in the two months, after falling more than 18% in March and April.The Canadian government’s efforts to prevent the economy from collapsing have resulted in more red ink in just two months than in any full year in the country’s history. The shortfall for April and May hit C$87 billion, according to finance department figures released Friday.PoliticsPrime Minister Justin Trudeau denied allegations his ties to the WE Charity led the government to award a contract to the organization. In 90 minutes of testimony to a parliamentary committee, he said he never influenced the public service’s decision to choose WE to administer a C$900 million student-grant program this spring, even though he realized in hindsight he should have recused himself from cabinet’s final decision on the matter.Trudeau unveiled a plan to wind down Ottawa’s flagship Covid-19 income support benefit and bring recipients into an expanded employment insurance system. The Canadian Emergency Response Benefit will be phased out as the first people to receive the C$2,000 monthly payments start losing eligibility at the end of August.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Stocks ended higher on Friday, with the Nasdaq outperforming after a slew of better than expected corporate earnings results from major tech firms. Facebook and Apple posted record closing highs.
“It is time to return to our roots and break up” big tech to “oxygenate the marketplace,” says NYU marketing professor Scott Galloway.
Google Vice President of Engineering Dave Burke provided an update about the Exposure Notifications System (ENS) that Google developed in partnership with Apple as a way to help public health authorities supplement contact-tracing efforts with a connected solution that preserves privacy while alerting people of potential exposure to confirmed cases of COVID-19. In the update, Burke notes that the company expects "to see the first set of these apps roll out in the coming weeks" in the U.S., which may be a tacit response to some critics who have pointed out that we haven't seen much in the way of actual products being built on the technology that was launched in May. Burke writes that 20 states and territories across the U.S. are currently "exploring" apps that make use of the ENS system, and that together those represent nearly half (45%) of the overall American populace.
Nearly 500 pages of evidence were made public during the House Judiciary's marathon hearing this week on potential anti-competitive actions by Amazon, Facebook, Google and Apple . Many are internal documents that were never meant to be exposed publicly — for instance, Facebook CEO Mark Zuckerberg telling a colleague that "we can likely always just buy any competitive startups" shortly before acquiring Instagram in 2012.
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) stock is worth $1 trillion again -- and that's not good news. Before earnings came out yesterday (after close of trading), the internet search giant was trading at about $1,500 a share and sported a market capitalization of $1.05 trillion. Today, investors are selling the stock -- still down 4.5% as of 1:30 p.m. EDT -- and the Google parent's shares are back at the $1 trillion level.
Alphabet Inc's Google said on Friday that 20 U.S. states and territories, representing about 45% of the country's population, are "exploring" contact tracing apps for the novel coronavirus using a tool it developed with Apple Inc. Google had previously said in May that three states - Alabama, North Dakota and South Carolina - would be launching apps using the exposure notification tool.
Airbnb conducted a Zoom meeting with San Diego hosts about a potentially precedent-setting agreement to limit the number of legal rentals there, and told them it plans on lobbying the city council to raise the number of allowed properties, Skift has learned. Facing an outright ban from the city a couple of years ago, Expedia […]
Australia is closing in on a legally binding framework to force adtech giants Facebook and Google pay media companies for monetizing their news content when it's posted to their social media platforms or otherwise aggregated and monetized. Back in April the country's government announced it would adopt a mandatory code requiring the tech giants to share ad revenue with media business after an attempt to negotiate a voluntary arrangement with the companies failed to make progress. Today Australia's Competition and Consumer Commission (ACCC) has published details of a first pass at that mandatory code -- which it says is intended to address "acute bargaining power imbalances" between local news businesses vs the adtech duopoly, Google and Facebook.
(Bloomberg) -- The White House is keeping up the pressure on regulators to weaken a legal shield that social media giants such as Facebook Inc., Twitter Inc. and Google say is crucial to them.The Commerce Department on Monday asked the Federal Communications Commission to write a regulation weakening protections laid out in Section 230, language in a 1996 law that protects online companies from legal liability for users’ posts, and for decisions to remove material.Kayleigh McEnany, the White House press secretary, told reporters Friday during a press conference that the request seeks to hold social media companies “accountable for their censorship.”The petition, she said, asks the FCC “to end the loophole that allows social media companies to escape civil lawsuits for their own speech fact checks and de-platforming.”Trump issued an order in May seeking the petition. Tech trade groups, civil liberties organizations and legal scholars have slammed the move, saying it was unlikely to survive a court challenge. The companies say they get complaints from both conservative and liberal groups and do not favor one side over the other.On Thursday, the White House issued a press release about the petition, saying that “President Trump will continue to fight back against unfair, un-American, and politically biased censorship of Americans online.”The actions are the latest in a years-long campaign by the president and his allies against social media companies. The companies say they’re combating disinformation and foreign interference after the federal government found that Russia used U.S. social media to try to influence the 2016 election.The Republican-majority FCC is an independent agency and has leeway to reject the request. But Brian Hart, an agency spokesman, said in an email that the “FCC will carefully review the petition.”The agency hasn’t laid out a timetable for its response.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The largest U.S. technology companies are thriving in a pandemic that has increased dependence on their products and services, while hammering much of the rest of the economy.Quarterly results from Apple Inc., Amazon.com Inc., Facebook Inc. and Alphabet Inc. on Thursday show the industry is capitalizing on the crisis as locked-down consumers use tech gadgets and the internet for entertainment, social connection, shopping, learning and work.Together, the four companies reported revenue of $206 billion and net income of $29 billion in the three months ending in late June.“Right now, it’s big tech’s world and everyone else is paying rent,” said Wedbush Securities analyst Dan Ives. “They are consumer staples now and this crisis has bought their growth forward by about two years.”The four companies’ results hit a day after their leaders faced congressional hearings into whether they have broken antitrust rules and need to be reined in. On Friday, most of them saw a surge in their shares. Apple and Facebook rose to records with the iPhone maker’s market valuation briefly surpassing Saudi Arabian Oil Co. Amazon gained as much as 6.4%. Only Google bucked the trend, sliding 4.3%.Apple executives were quick to recognize how their strong results contrasted with an economic collapse that has caused millions of job losses, hundreds of thousands of deaths and many bankruptcies.Earlier Thursday, U.S. government officials reported that gross domestic product contracted by the most on record -- 32.9% on an annualized basis -- and 17 million Americans claimed state unemployment benefits in mid-July.“We’re conscious of the fact that these results stand in stark relief during a time of real economic adversity for businesses, large and small, and certainly for families,” Chief Executive Officer Tim Cook said on a conference call. “We do not have a zero-sum approach to prosperity, and especially in times like this, we are focused on growing the pie, making sure our success isn’t just our success.”Cook cut back on his usual litany of praise for his company’s quarterly performance and instead devoted much of his scripted time on the call to discussing things like a contact-tracing partnership with Google, the deployment of masks, and the design of a face shield for medical workers.The numbers paint a clear picture, though. IPad and Mac sales surged on demand from people working and studying from home. The Mac had its second strongest quarter ever, while the iPad had its best June quarter in eight years, Cook noted in an interview with Bloomberg TV.Amazon posted a record quarterly profit as people avoiding physical stores shopped online. Unit sales at the largest online retailer surged 57%, the fastest pace of growth since the company began breaking out that metric.“The penetration of e-commerce is accelerating,” said Hari Srinivasan, a senior analyst with Neuberger Berman. Amazon a prime beneficiary of the shift, and “the changes are here to stay,” he added.Amazon executives, in the earnings release and on conference calls with analysts and the media, didn’t go out of their way to tout the company’s record sales and profit. Instead, they highlighted the company’s hiring during the pandemic, as well as investments in employee safety.A day after testifying to Congress about Amazon’s sometimes harsh treatment of small merchants, CEO Jeff Bezos noted in a statement that such sellers saw faster growth than Amazon’s own retail operation.Facebook reported better-than-expected results partly because so many small and medium-sized businesses are moving online right now to survive, Chief Operating Officer Sheryl Sandberg said.“A lot of businesses are struggling, but at the same time businesses have to pivot online,” she added. “We become a place you can set up a website, set up a digital storefront.”The company reported that it has more than 9 million advertisers, and over 180 million small businesses that use the free parts of its service, such as a Facebook or Instagram profile.CEO Mark Zuckerberg picked up where he left off at Wednesday’s antitrust hearing, referring to the tech industry as an ”American success story.” But he also took aim at President Donald Trump for the second time this month.“It is incredibly disappointing because it seems like the U.S. could have avoided this current surge in cases if our government had handled this better,” Zuckerberg said.Alphabet’s Google was the only big tech company to report a notable impact from the pandemic on Thursday. Revenue fell for the first time as advertisers spent less. The company is heavily exposed to the travel and retail industries, which have been particularly hard hit by the crisis.Still, other parts of Google’s business performed well. Sales at Google’s cloud business jumped 43%, while YouTube ad revenue rose 6% as more people watched online videos at home.CEO Sundar Pichai played down concern about a regulatory crackdown on Google, which is facing an imminent antitrust case from the Justice Department.“We’ve obviously been operating under scrutiny for a while,” he said. “We realize, at our scale, that’s appropriate.”(Updates with shares in fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Alphabet's (GOOGL) Q2 earnings and revenues beat the Zacks Consensus Estimate. The cloud and YouTube businesses remain strong, while advertising growth slows down in the quarter due to the pandemic
Consumers now want not only to shop at their convenience but also minimize personal contact with point-of-sale devices following the coronavirus pandemic.