Tech Brew Ride Home - 09/15 – Adobe To Acquire Figma

Episode Date: September 15, 2022

Adobe plans to acquire Figma for the biggest ever private software company acquisition. Is this a sign of things to come in the productivity space? Happy The Merge Day for Ethereum. TikTok just copies and pastes a BeReal clone. And California launches the first lawsuit against Amazon that might have real consequences. Links: Adobe Tumbles After Agreeing to Buy Figma for About $20 Billion (Bloomberg) Canva moves beyond graphic design to launch a visual worksuite (TechCrunch) Zoom Readies Email and Calendar Products to Defend Itself Against Microsoft, Google (The Information) Ethereum activates The Merge as it shifts to proof of stake (The Block) TikTok just launched a BeReal clone called TikTok Now (TechCrunch) California Files Antitrust Lawsuit Against Amazon (NYTimes) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the TechMeme right home for Thursday, September 15th, 2022. I'm Brian McCullough today. Adobe plans to acquire Figma for the biggest ever private software company acquisition. Is this a sign of things to come in the productivity space? Happy the merge day for Ethereum. TikTok just copied and pasted a Be Real clone. And California launches the first lawsuit against Amazon in the U.S. that might have real consequences. Here's what you miss today in the world of tech. Huge news this morning. Adobe plans to acquire UI design and prototyping tool Figma for around $20 billion in cash and stock. Figma CEO Dylan Field will stay on in his role as head of Figma. Though shareholders don't seem to like this news, Adobe's stock dropped 12% this morning on the news. But come on. This is a smart defensive play on Adobe's part, right? Quoting Bloomberg. The deal announced by Adobe, which is a mix of half cash and half stock, confirms an earlier Bloomberg report and would mark

the biggest ever takeover of a private software company, according to data compiled by Bloomberg. Figma, which allows customers to collaborate on software as they build it, saw demand jump during the pandemic while more people worked remotely. The company expanded its customer base in recent years from software designers at big companies like Airbnb, Google, Herman Miller, and Kimberly Clark to also include individuals building lightweight games, maps, and presentations. It has also attracted a loyal student following. The combination benefits, quote, literally anybody who is a knowledge worker, said Adobe chief executive officer Shantanu Narayan in an interview. Adobe, which had been a Wall Street favorite for more than a decade, has been

pummeled in the tech downturn, seeing its shares lose more than a third of their value since the start of the year. Investors have become increasingly skeptical about the dominance of Adobe's line of software for design professionals, which makes up about 60% of its revenue. new. The company has targeted more accessible web-based offerings such as Photoshop Express to sell its creative software to consumers, small businesses, and social media influencers. The initiative ran into friction from upstarts including Figma, Lighttricks, and Canva. San Francisco-based Figma was co-founded about a decade ago by Dylan Field and Evan Wallace. The startup introduced browser-based software design tools that allow software designers to work together in real-time

bypassing the sometimes clumsy process of saving and sending their work to collaborate using a collection of disparate apps. The company was valued at $10 billion in its last funding round a year ago. Figma's backers include venture capital firms, Kleiner Perkins, index ventures, and Greylock Partners, end quote. Actually, recent history is even more impressive than that. Figma's valuation increased from $2 billion to $10 billion in funding rounds between April of 2020 and May of 2021. Well, they doubled from there to reach today's $2 billion price tag. And Pitchbook says that the Series A round for Figma was a $48 million valuation, so nice 413X return for those funds involved in the A.

A couple of thoughts, though. Don't people use Figma to avoid using Adobe stuff? There's a lot of gnashing of teeth and rending of garments out there in design land. Adobe says they'll keep Figma independent with Dillon Field in charge, but quoting Tom Mueller on Twitter, Figma acquisition by Adobe in two steps. One, nothing will change, folks. We're both committed to an excellent collaboration. Two, we are now sunsetting the standalone Figma app and advise all users to transfer their files to creative cloud in the new improved XD app, end quote.

But also, will this pass regulatory muster? I mean, talk about taking out a major disruptive competitor in a niche space, but maybe, as Gavin Baker tweeted, quote, Last thought, it's great to be a tech company outside of Fang. You can literally do any acquisition you want, no matter the competitive implications, while the FTC instead focuses on Roomba because of a Twitter thread that I initially thought was satire, end quote. So it's an interesting time for these web-based tools disrupting old software-based productivity competitors. Canva, for example, just unveiled new products called docs, websites, whiteboards, and data visualization. which will bring background removing two videos, among other things, and adds a remote control to presentations, but is largely, you would think, targeting, you know, the office suite. Quote, according to Canva, 85% of Fortune 500 companies, including FedEx, L'Oreal, and Salesforce use Canvas design tools. Over 4.4 million customers pay for Canva for Teams launch last year,

but like all of Canvas products, there will be a freemium model for its work suite, like its team's product, the WorkSuite will include collaboration features that allow team members to work together in real-time on documents. Any WorkSuite product will naturally draw comparisons to the Google Suite or Microsoft Office. But Oberich says that Canva isn't trying to compete with these corporate behemists. Instead, he sees Canva as a visual first companion to these tools, end quote. Really? Here's another one, though, quoting the information. Millions of people join online meetings using Zoom video communications app by clicking on appointment links from their digital calendars or email services run by Microsoft and Google. That represents a big vulnerability for Zoom,

as Microsoft and Google make it easier for customers to host virtual meetings through their two company's own competing video conferencing apps. Hoping to stop its customers from jumping ship to those products, Zoom plans to debut its own email and calendar services, possibly as soon as its Zoomtopia conference for customers in November, according to a person and with direct knowledge of the plans. The company has spent the better part of two years quietly developing the new services, which some employees refer to as Zmail and ZCal. Executives haven't unveiled the products to most staff. Zoom CEO Eric Yuan wants his company's forthcoming email and calendar services to be pillars of a productivity suite, especially for the

200,000 businesses that pay for Zoom, most of which are small to medium size. A Zoom manager told the information. The question is, will customers want Zoom versions of products they already have? Microsoft and Google control 85 and 14% of the global market, respectively, for email and other productivity applications, according to research firm Gartner. And it isn't clear whether Zoom plans to launch the kind of word processing and spreadsheet apps Microsoft and Google offer. But Zoom has launched other services such as internet-based voice calling, a digital whiteboard to help employees collaborate, and a product for employees to track the progress of internal projects and collaborate with their customers and partners. It packages the services in subscription

bundles. To avoid meeting the same fate as Slack, a messaging firm that sold itself to Salesforce in 2020, as its sales slowed, Zoom will need to juice growth while preventing its existing customer base from shifting to Microsoft Teams and Google Meet the Zoom alternatives its rivals offer. In the past year, Zoom has launched new types of services aimed at businesses, including ones that help them launch virtual events, offer customer service, and analyze salespeople's interactions with potential customers. The product that handles the latter task can suggest improvements such as listening, more or talking more slowly in sales pitches, end quote. Something tells me the whole productivity tool space is going to be wild for the next few years. Meanwhile, the other big news of the day,

happy merge day. Ethereum has activated its long-awaited merge upgrade in development since 2020, and transactions are now being processed under proof of stake. Quoting the block, The merge upgrade was activated at the agreed upon total terminal difficulty or TTD time on Ethereum's proof of work chain at 64 AM UTC today. TTD is a combined measure of how difficult it is to produce a block for transactions and how this has fared over time. The first epoch was finalized at 6.59 a.m. This is the key development that core developers were looking for to see if the upgrade has gone to plan. And we finalized. Happy merge all. this is a big moment for the Ethereum ecosystem. Everyone who helped make the merge happen should feel very proud today, said Ethereum co-founder Vitalik Buteran on Twitter.

An analogy to better conceptualize this from the Ethereum Foundation is, quote, Imagine Ethereum is a spaceship that isn't quite ready for an interstellar voyage. With the beacon chain, the community has built a new engine and a hardened hull. After significant testing, it's almost time to hot swap the new engine for the old mid-flight. end quote. By the way, Demerge reduces Ethereum's energy consumption by more than 99%. This means that Ethereum is now environmental, social, and governments compliant, which has been a regulatory concern, dissuading businesses from participating in novel sectors such as Defi and NFTs, end quote. On that, here's a tweet from Jonathan Boyes, quote, Ethereum is using 112 terawatt hours of electricity annually.

The world is using about 24,000 terawatt hours annually. After the merge, Ethereum will use less than one terawatt hour annually. So the merge reduces the world's electricity bill by about 0.5 percent, end quote. Big if true. More big if gas fees are suddenly more reasonable. Maybe I'll go back to trying to sell my podcast NFT again. And meanwhile, 31Eath was paid to ensure the whole last Proof-of-work Block was commemorated as an NFT on OpenC. Might be worth something someday because of the history involved. TikTok has added TikTok Now, a be-real-like feature to its app in the U.S., with daily prompts to capture a 10-second video or a photo using the front-and-back camera on your

smartphone, quoting TechCrunch. Snapchat and Instagram have already launched front-and-back camera features, and Instagram is rumored to be working on its own time-based ephemeral feature, but TikTok beat its competitors to the punch by being the first app to just outright cut and paste Be Real into its platform. TikTok now invites you and your friends to capture what you're doing in the moment using your devices front and back camera. The company's blog reads, you'll receive a daily prompt to capture a 10 second video or a static photo to easily share what you're up to, end quote. Every day when the Be Real goes out, users get a push notification telling them it's time to be real, bookended by alert emojis. TikTok's notification looks the same.

Users are notified between lightning emojis that it is time to now, which admittedly does not have the same ring to it as Be Real. TikTok says that the feature is now available for U.S. users. In the mock-up images, it looks like now has earned valuable real estate in the bottom navigation bar next to the posting button. On our end, at least, we don't see the feature yet. TikTok added that in other regions, TikTok now may be downloadable as a standalone app. BeReal comes with its own privacy concerns if you aren't careful to turn off your location. You might accidentally be sharing exactly where you live down to the street name with all of your friends. Sure, Be Real is intended for use in your main social circle, but come on, it's the internet.

There's a public feed. In the mock-up images TikTok shared, location doesn't appear to be part of the TikTok Now interface, end quote. Finally, today the California Attorney General has filed an antitrust lawsuit against Amazon, focusing on the company's alleged penalizing of sellers who list products at lower prices on other sites. I'm flagging this because I believe this is the biggest regulatory threat that has thus far actually materialized for Amazon in the U.S. So far, lots of smoke around more coming, but this is the first thing to actually see the light of day, I believe. Quoting the New York Times. The suit is limited at California where officials said Amazon had around 25 million customers,

but if it succeeds, it could have a broad impact across the country. If you think about Californians paying even just a little bit more for every product they purchased online over the course of a year, let alone a decade, which is what is at issue here. The collective magnitude of harm here is very far reaching, said Rob Bonta, California's Attorney General during a news conference announcing the case. The Everything Store has effectively set a price floor, costing Californians more for just about everything, he said. The lawsuit largely focuses on the way Amazon penalizes sellers for listing products at lower

prices on other websites. If Amazon spots a product listed cheaper on a competitor's website, it will often remove important buttons like Buy Now and Add to Cart from a product listing page. That creates a dilemma for marketplace sellers. At times, they can offer products for lower prices on sites other than Amazon because the cost of using those sites can be lower. But because Amazon is by far the largest online retailer, the sellers would rather raise their prices on other sites than risk losing their sales on Amazon, the complaint said, citing interviews with sellers, competitors, and industry consultants. Without basic price competition, without different online stores, trying to outdo each other with lower prices, prices artificially stabilized at levels higher

than would be the case in a competitive market, the complaint said. The California suit is the latest in a string of increasingly aggressive efforts by states and regulators in Washington and Europe to curb the influence of the technology industry's biggest companies. Also on Wednesday, a European Union court gave its blessing to a record multi-billion dollar fine issued against Google in 2018. Given the size of California's economy and Amazon's role in it, quote, this is a piece of legislation that has significant national implications, said Christopher R. Leslie, a professor of antitrust law at University of California, Irvine. If the antitrust claims prevail, quote, there is no way other states won't pick up the mantle and bring other cases, he said,

end quote. Real quick on that sky lounges in the city idea I had at the end of yesterday's show, lots of you got in touch to say, in theory, a we-work membership achieves what I'm looking for because there's some sort of membership tier where you can work out of any we-work you're close to. But more importantly, the great Baratunde Thurston got in touch to say, quote, Brian, just listened to the latest tech meme show and heard your search for something between a Starbucks and Soho House to check into. I got you. Libraries, the New York Public Library and Brooklyn Libraries are here for you. you, Wi-Fi, climate control, desks, and analog stores of knowledge and culture, end quote. Which, yeah, duh, that's so obviously the solution. I'm embarrassed. It didn't occur to me.

And the really dumb thing is, it's a solution that I used to use regularly. When Lisa was finishing her second master's degree, we got in the habit of working out of various libraries around the city. We'd cycle through them like tourists, like, you know, where are you today? Oh, I'm working out of the library on 83rd Street. and yeah, they're in every neighborhood. So thanks for the reminder that libraries are not only a great resource for all the things. When I was working on my book, I basically lived out of the science industry and business library on Madison and 34th. It's also a solution to my problem that doesn't cost a thing. Problem solved. Talk to you tomorrow.