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The race for TikTok gets (even more) interesting
As the Chinese-owned video app negotiates to sell itself to avoid being banned in the U.S., The Financial Times reports that a surprising new suitor has emerged: Oracle, the Silicon Valley giant better known for business software than for social networking.
Oracle has held preliminary talks with ByteDance, TikTok’s parent company, according to the FT. Its aim was to buy TikTok’s operations in the U.S., Canada, Australia and New Zealand, the same assets that Microsoft has publicly said it is negotiating to acquire. Like Microsoft and any other potential buyer, Oracle’s talks have included ByteDance investors such as Sequoia and General Atlantic.
• Oracle is only the latest company to express interest in buying TikTok after the Trump administration’s demand to transfer ownership of the app to an American company: Twitter had previously emerged as a suitor, and others are in the mix as well, DealBook’s Michael de la Merced hears.
Oracle has an advantage: close ties to the White House. Both Larry Ellison, its co-founder, and Safra Catz, its C.E.O., are among the few prominent Trump supporters in Silicon Valley. It arguably has a better relationship with the Trump administration than even Microsoft, which has itself navigated the current Washington landscape more deftly than rivals like Alphabet and Facebook.
• But Oracle also faces a question: What would it do with TikTok, given that it has little experience in the way of consumer-facing businesses?
The White House is expanding its battle against the Chinese tech industry. The Commerce Department widened restrictions on Huawei, making it harder for the company to buy chips made or designed with American equipment and software. The net effect of all these moves, The Times notes, is a potential splintering of the internet.
Here’s what is happening
Michelle Obama said President Trump was “in over his head.” The former first lady delivered a searing keynote speech on the first night of the Democratic National Convention, saying he “cannot meet this moment.” Other speakers at the unusual virtual event included Senator Bernie Sanders (who warned, “The future of our economy is at stake”); John Kasich, the Republican former governor of Ohio; and the family of George Floyd. Tonight, a speech by Representative Alexandria Ocasio-Cortez will signal how forcefully the progressive wing of the party will get behind Joe Biden. Other speakers include the former Secretary of State John Kerry, former President Bill Clinton and Jill Biden.
The Trump administration finalized a plan to open the Arctic National Wildlife Refuge in Alaska to oil drilling. The Interior Department said that it would soon auction off leases for oil exploration in the 19-million-acre protection zone. Expect a legal battle from environmental groups.
The University of North Carolina at Chapel Hill reversed course on in-person teaching. The institution said that it would switch to entirely remote learning for undergraduates, after 177 students were isolated upon testing positive for Covid-19. It’s the latest example of how schools are struggling to reopen during the pandemic.
Uber and Lyft are considering switching to a franchise model in California. Under pressure to classify drivers as employees instead of freelancers, the ride-hailing companies are exploring a change to their core business, The Times’s Kate Conger reports. The companies face a court order to employ their drivers by Thursday; they have appealed, saying that they would shut down in the state on Friday if the order is not reversed.
Pinterest added its first Black board member. The social network appointed Andrea Wishom, a veteran media executive, as a director, as it faces allegations of racial and gender discrimination by former executives, including its onetime C.O.O.
The Apple-Epic battle kicks up a notch
One of Silicon Valley’s most closely watched fights escalated yesterday, after Epic Games accused Apple of threatening to block it from important developer services — a move that could have repercussions beyond games like Fortnite, Epic’s marquee title.
Epic said that it could lose access to developer accounts and tools for iOS and Mac operating systems as a result of the company’s dispute with Apple over the 30 percent commission that software developers pay for sales made within iOS apps. Apple removed Fortnite, the hugely popular multiplayer game, from its app store after Epic urged players to pay it directly rather than via Apple.
Losing Apple’s developer tools is a bigger deal than just blocking Fortnite on the App Store. Epic’s software platform, known as the Unreal Engine, underpins scores of other video games and apps (including software for training astronauts). Revoking its developer accounts would leave Epic unable to update that engine for iOS or Mac devices, meaning other developers’ games and apps that rely on it would eventually become unusable.
• That could force developers to use other engines — not a small task — and could put a dent in Epic’s recently minted $17 billion valuation. Apple said in a statement that it was simply forcing Epic to comply with rules that apply to all developers on its platforms.
Epic will be hoping to rally more companies to its cause. It has already tapped into growing frustration with Apple’s power over its App Store, which has become the subject of antitrust scrutiny in Washington and Brussels. And The Information reports that the game developer is trying to form a coalition of like-minded partners, including Spotify and Sonos.
Who’s up, who’s down
Robinhood raised $200 million in its latest funding round. The new round, which was led by the hedge fund D1 Capital, comes after the stock trading app raised $600 million from investors such as Sequoia Capital in May. The fee-free investing app, which is now valued at $11.2 billion, has gained popularity during the pandemic, as day trading emerged as a hobby during lockdown. The money will go toward expanding Robinhood’s customer service team, the company said; service outages and customers caught out by risky trades have tarnished an otherwise stellar year for the company.
Norway’s sovereign fund lost $21 billion. The decline in the first half of the year sounds like a lot of money … until you consider that the fund, the world’s largest, manages some $1.1 trillion, or more than $200,000 for every person in Norway. Still, the 3.4 percent decline lagged its benchmark index at an inopportune time: The Oslo government has tapped the fund to pay for economic stimulus measures.
SoftBank unveiled a tech-heavy stock portfolio. The Japanese conglomerate recently expanded its investment focus beyond the start-ups in its Vision Fund, creating an asset management arm that plans to pour $10 billion into publicly traded stocks. Its initial $4 billion in purchases, disclosed in a securities filing, comprise a pretty standard tech portfolio, with stakes in the likes of Amazon, Netflix and Tesla.
đ In other market news, Walmart reported a doubling of e-commerce sales in the second quarter, Home Depot handily beat sales forecasts as consumers took on more home improvement projects during lockdown, and the inexorable rise in Tesla’s shares means that it’s now worth more than Procter & Gamble, the 10th-largest stock in the S&P 500.
The speed read
Deals
• American Express agreed to buy Kabbage, a fintech firm backed by SoftBank that serves small and midsize businesses. (TechCrunch)
• Shares in Rackspace soared after Reuters reported that Amazon was in talks to buy a stake in the cloud services company. (Reuters)
• Diageo agreed to buy Aviation American Gin, the drink producer co-owned by the actor Ryan Reynolds, for $610 million. (Deadline)
Politics and policy
• Mike Bloomberg promised to spend $60 million to help Democrats expand control of the House. (WaPo)
• Sajid Javid, the former chancellor of the Exchequer in Britain, is returning to JPMorgan Chase, where he began his career. (FT)
Tech
• Workers in the gig economy should be offered more protections, or “this anti-worker practice will be embedded deep into our economy,” Senator Elizabeth Warren and the labor lawyer Shannon Liss-Riordan write in an op-ed. (CNBC)
Best of the rest
• “What If ‘Herd Immunity’ Is Closer Than Scientists Thought?” (NYT)
• There’s an international bike boom, and the world’s biggest manufacturer can’t keep up with demand. (NYT)
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August 18, 2020 at 06:22PM
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TikTok, Huawei and the Splintering of the Internet - The New York Times
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