Business Insider reports that Snapchat is looking to beef up its ad tech capabilities and has had discussions with AdRoll as a possible candidate, though those talks seem to have ended at this point. This goes to the heart of one of the big weaknesses Snapchat still has as an advertising platform, namely its inability to give advertisers the insights they want into how their ads are performing or the impact they’re having. That, combined with the lack of user growth, means Snap’s future growth prospects are challenged, and that in turn explains the recent hit to the stock price. The right acquisition (or several) in this space would help change that, but many of the best assets in the market have long since been snapped up (or developed internally) by the major players, so the pickings will be slim and the benefits of an acquisition less than they might once have been.
via Business Insider
Vizio Files Suit Against LeEco Over Merger Termination Fee (Jul 12, 2017)
LeEco was to have acquired TV maker Vizio, but after months of delays the deal finally fell apart earlier this year, and now Vizio is suing LeEco over non-payment of part of the termination fee the companies agreed when they made the deal. The suit also alleges that LeEco never had the means to complete the deal, using it merely as a way to bolster its perceived financial stability at a time when there were lots of reports about its cash constraints. Given that those financial problems have only worsened since the deal closed, I’m not sure Vizio is getting the money it wants anytime soon, even if it wins the case. But LeEco is just getting clobbered at this point as a result of problems entirely of its own making, all of which stem from expanding overly aggressively from what had been a reasonably strong position in the Chinese market.
While ride sharing companies like Uber and Lyft continue to grab the majority of attention in the transportation tech space, with autonomous driving technology companies getting most of the rest, it’s worth remembering that there are various other transportation tech startups out there, not all of them doing all that well. It appears that Uber is in the process of trying to acquire assets and hire staff from valet parking service Luxe, which is one of those services that appears to have struggled to make its business model work. It had recently announced a pivot of sorts to a new model, but it now seems as though all that will remain is a shell once Uber has snapped up the parts it wants. That may or may not mean that Uber expands into the valet parking space – in fact, I’d say it’s at least as likely that Uber simply sees this as a way to get a number of competent staff with relevant skills quickly and easily while also acquiring some relevant technology.
AT&T hasn’t bought Time Warner yet, but that’s not stopping it from doing deals involving Time Warner properties, including this new promotion with HBO. AT&T had already been using HBO as a lure for driving DirecTV Now subscriptions, as it’s bundled the channel first at a discounted rate and then free for subscribers. But now AT&T is also giving away HBO for free to its higher-tier unlimited wireless data customers. Though the merger hasn’t closed yet, there’s a good chance that future prospect has been part of the companies’ closer relationship on this side recently, and it’s easy to imagine more of this kind of thing should the deal go through. It’s never made sense that AT&T would seek to limit distribution of Time Warner content following the merger because that would be counter-productive for the content business even if it benefited wireless subscriber numbers. But zero rating and bundle discounts make a lot more sense, as they lock customers into a much higher total spend and likely lower churn at a fairly low customer acquisition cost, and of course once TW is part of AT&T the cash cost of deals like this will be minimal. And AT&T’s real goal with the merger isn’t so much synergies from owning content and distribution as it is simply owning content, because that’s where the real value is long term.
Spotify Acquires MightyTV to Improve Ad Targeting (Mar 27, 2017)
When I saw some of the headlines about Spotify buying a company which is good at recommendations, I assumed that would be the focus of the acquisition, but it turns out that the focus is actually on improving Spotify’s ad targeting. So you won’t see better music recommendations, and if you’re a paid user you won’t see any change as a result of this buy at all. I was a Spotify subscriber for a time, but have never used the ad-based service, so I don’t know how the targeting is at this point, but if it’s anything like other online video and audio services, it could use some help, so this seems smart. But of course good targeting requires good data on users, and I’m curious to see how Spotify will improve in that department – by itself, it presumably knows relatively little about its users beyond their musical tastes, so better targeting would likely require buying in third party data to enhance its user profiles. And therein, of course, lies the inherent tension in all ad-based business models – user privacy versus effective targeting.
Amazon to acquire Souq, a Middle East clone once valued at $1B, for $650M – TechCrunch (Mar 23, 2017)
This would be one of Amazon’s biggest acquisitions to date, ranking fourth behind Zappos ($1.2 billion), Twitch ($970m), and Kiva Systems ($775m) if it goes ahead at the price reported here. And given how Amazon is competing with local competitors such as Flipkart in India and Alibaba in China, it’s interesting to see it absorbing a smaller one in a region where Amazon itself has no presence. Local infrastructure is critical to Amazon’s success elsewhere, and an acquisition like this potentially gives Amazon a huge head start in the region. I could definitely see it taking out more second-tier e-commerce players in other regions like this over the next few years as a way to accelerate its international growth.
Apple has acquired Workflow, a powerful automation tool for iPad and iPhone – TechCrunch (Mar 22, 2017)
This is a fascinating acquisition in the context of Apple’s recent parting of ways with Sal Saghoian, who ran the Automator app for macOS. That departure had signaled to some people that Apple was abandoning automation as a feature, but this acquisition sends the opposite message. Perhaps more importantly, Workflow is much more user friendly approach to automation than Automator, and what I’d hope we’ll see here is that same approach applied to built-in automation across Apple’s product lines including the Mac. That would make automation a more mainstream proposition, which is an intriguing prospect. That Workflow will remain available in the App Store is interesting too – that’s obviously going to be reassuring to existing users, but there’s no guarantee that it will stay there when Apple is done integrating it into its platforms. Siri stayed available for a time too, but of course disappeared when Apple released its version.
The number in the headline refers to the acquisition price of Viv, a virtual assistant startup which Samsung bought a few months back and is expected to integrate into the Samsung S8 launching later this month. To put that number in context, it’s around the same amount Apple was reported to have paid to acquire Siri, and tiny in the context of Samsung’s overall business – it generated $180 billion in revenue last year, along with $25 billion in operating profit. So Samsung can far more easily afford this investment than, say, Xiaomi can afford its comparably-sized investment in in-house chip capability. But it’s still a decent chunk of money from Samsung in a year when it also announced the much larger Harman acquisition. Far more importantly, we haven’t yet seen what Viv will do when integrated into a Samsung phone, and whether it’ll be as good as the early hype around the standalone product suggested.
This is an interesting one – Mozilla is mostly still the Firefox browser company, despited repeated recent attempts to become something more, and so I wonder whether the Pocket functionality will end up being embedded into the browser as an equivalent of Safari’s Reading List feature. For now at least, it’s also going to continue to be a standalone app, which is good because I’ve been using it recently as a way to gather links from Twitter and other services to include in Tech Narratives! It’s also fascinating to think of this acquisition as being essentially funded by Yahoo, which of course now provides much of Mozilla’s revenue since it won a bidding war with Google a couple of years back. That’s another relationship that will be very interesting to watch as Verizon takes over, although the deal doesn’t expire until the end of 2019.
SoftBank eyes Sprint, T-Mobile deals – CNBC (Feb 17, 2017)
This isn’t a huge surprise – ever since Donald Trump won the US presidential election in November, the odds of a deal involving Sprint and T-Mobile have gone way up, because the incoming administration is likely to be much friendlier to consolidation. However, that’s no guarantee that a deal will get done – last time around SoftBank was the driving force behind the deal and very keen to control the resulting entity, whereas at this point it seems a lot less committed to its US wireless adventure. At the same time, T-Mobile USA is performing much better as an investment for Deutsche Telekom, making it less likely to sell. One option would be for Deutsche Telekom to take over Sprint, but it’s far from clear that it wants to (and it would certainly be awkward regardless given TMO CEO John Legere’s constant belittling of Sprint). Then, of course, there’s the question of whether a merger is a good idea. On the one hand, scale continues to be enormously important in the market, and Sprint and T-Mobile have a big disadvantage here, but on the other T-Mobile has been pretty well anyway by itself, while Sprint has been doing far less so (or growing by sacrificing margins and revenues). And it will be very hard to argue that a merger at this point would be good for competition, even with Republicans in charge at the FTC, DoJ, and FCC.
Chalk another one up to either the Hardware is Hard or Android is Hard narratives (I’ve tagged this against both). Another Kickstarter-backed hardware company which had an intriguing approach to an established category and got lots of interest from tech bloggers and reporters calls it quits and gets bought by a bigger existing hardware player. I was always skeptical on Nextbit – it just didn’t feel like its few unique features and design were enough to overcome the massive barriers to entry that exist around scale, distribution, and dominant existing players in the Android market. I can’t say I’m surprised to see it fail, though it’s disappointing because the team had some interesting ideas and the design was definitely more interesting than your average phone. Razer seems an unlikely buyer – this Recode piece says the group the Robin team is going to has been focused on gaming, so it doesn’t sound like we’re going to get a Razer phone from these guys anytime soon.
I continue to be really skeptical on this deal or anything like it – the only way it could be approved is if Verizon or Charter sold or spun off their operations where the two companies compete, and even then I’m not sure there’s appetite for another mega merger between broadband and TV providers. I see the rationale – the TV business in particular is all about scale, and AT&T and Comcast tower over the rest of the market (even the new Charter has almost 6 million fewer TV subs than Comcast, and over 8m fewer than AT&T-DirecTV). Combining Verizon and Charter’s subs would approach Comcast’s scale in video, while adding wireless, which Comcast is about to add through a partnership with Verizon. But there would be massive challenges here – combining incompatible technologies for delivering voice and data services to homes, along with the cultures of a telco and cableco. And of course regulators would be likely to be very skeptical at the outset (though this administration will certainly view it more favorably than the last). I’m just not convinced this is the right way for Verizon or Charter to go, and there’s no sign that Charter is even interested.
Fitbit was already in the news recently when it ended its attempts to block sales of Jawbone devices on the basis that the latter appeared to be circling the drain, so it seems even more of a knife between the ribs in the context of an allleged attempt at an acquisition. Though this one failed, it’s further evidence that Fitbit is engaging in a massive rollup of wearable technology companies. But this story is also noteworthy for what it says about Jawbone’s plans to secure a future for itself, which apparently are centered on FDA-approved healthcare devices and therefore potentially an insurance-subsidized model. Fitbit has already pursued the corporate market, and Apple Watches have been sponsored under certain employee healthcare plans too – this is a fascinating new thread in the development of wearables, and one that has the potential to mirror the benefits the iPhone and other smartphones received from the carrier subsidy model.
Report: Snapchat acquires Israeli AR firm Cimagine Media (Dec 26, 2016)
This is a fascinating story in the context of what Snap has done recently with Spectacles. Future Spectacles hardware could bring AR capabilities, but of course AR could also be baked into the Snapchat app in new ways (arguably today’s filters are already a form of AR). Lots of potential here.