Tech Brew Ride Home - Mon. 08/15 – Adam Neumann To Take Another Crack At Real Estate

Episode Date: August 15, 2022

Galaxy Digital shows Elon Musk real reasons to terminate an acquisition deal. a16z is making its biggest ever single investment. You’ll never guess with whom. Snap has more than a million paying subscribers. Cable Internet is losing subscribers for the first time ever. And that time Apple tried to talk Facebook into creating a subscription version of its services. Sponsors: Kolide.com/ride Storyblok.com/ridehome Links: Galaxy Digital terminates its acquisition of BitGo (The Block) Unity rejects AppLovin's takeover bid, to go ahead with ironSource buyout (Reuters) Adam Neumann Gets a New Backer (NYTimes/DealBook) Court Documents Confirm Xbox One Sold Less Than Half PS4 Numbers (GameLuster) Snapchat+ Tops 1 Million Paying Customers, Adds Four New Features (Variety) Cable Finally Loses Broadband Market Share in Q2 with First Negative Growth Quarter Ever (NextTV) The Secret Talks That Could Have Prevented the Apple vs. Facebook War (WSJ) The job openings at Sensel: https://www.indeed.com/cmp/Sensel/jobs 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 tech meme right home for Monday, August 15th, 2020. I'm Brian McCullough today. Galaxy Digital shows Elon Musk real reasons to terminate an acquisition. A16Z is making its biggest ever single investment, and you'll never guess with whom. Snap has more than a million paying

subscribers. Cable internet is losing subscribers for the first time ever, and that time Apple tried to talk Facebook into creating a subscription version of its services. Here's what you miss today in the world of tech. this is a valid reason to back out of a deal. Galaxy Digital has terminated its $1.2 billion acquisition of Crypto custodian Bitgo announced in May 2021 after the service failed to provide audited financial statements. Galaxy Digital also says they ain't paying a termination fee. Quoting the block, Galaxy remains positioned for success and to take advantage of strategic opportunities to grow in a sustainable manner, said Mike Novagratz, CEO and founder of Galaxy

Digital in the release. We are committed to continuing our process to list in the U.S. and providing our clients with a prime solution that truly makes Galaxy a one-stop shop for institutions, end quote. In May of 2021, Galaxy Digital announced the acquisition of BitGo for $1.2 billion. However, the block reported in March that the terms of the deal were being renegotiated. The firm is currently in the process of reorganizing to become a Delaware-based company, which will enable it to list on the NASDAQ exchange, assuming it achieves regulatory approval. It is currently listed on the Toronto Stock Exchange under the ticker GLXY. Galaxy Digital also plans to continue with the planned rollout of Galaxy One Prime, which is a product

offering for institutional investors that includes custody services as well as trading, lending, and derivative services, according to the release. The news of the failed merger comes only a week after Galaxy Digital posted a $554 million loss in the second quarter. Despite the losses, the firm continues to raise capital with an eye toward dealmaking, end quote. Meanwhile, Unity Software has rejected App Loven's $17.54 billion all-stock takeover offer, saying it prefers to instead proceed with its original deal to acquire Iron Source for $4.4 billion in stock, quoting Reuters. App Loven last week offered to buy Unity at a $17.54 billion all-stock deal on condition

Unity terminate its plans to acquire App Loven's smaller competitor Iron Source. Unity said on Monday Appleaven's offer was not in the best interest of shareholders, and quote, would not reasonably be expected to result in a superior proposal, as defined in Unity's merger agreement with Iron Source, end quote. Unity said last month it would buy Iron Source and a $4.4 billion all-stock transaction, which the company said on Monday it remains committed to, end quote. Meanwhile, Andresen Horowitz has cut its largest ever check to a single company. This is the biggest bet in the history of A16Z. They're investing $350 million all by themselves at a greater than $1 billion valuation for the startup in question. Mark Andreessen himself is joining the board of this startup. Who is the startup? The startup is Flo. Who is the founder of Flo? Adam Newman. Yes, that Adam Newman. Quoting Deal Book in the New York Times. Flow is expected to launch.

in 2023 and Mark Andreessen will join its board, these people said. Newman is planning to make a sizable personal investment in flow in the form of cash and real estate assets. It's often underappreciated that only one person has fundamentally redesigned the office experience and led a paradigm changing global company in the process. Adam, Mark Eddresson wrote in a post on his firm's website on Monday, explaining his rationale for investing in the company. Newman has purchased more than 3,000 apartment units in Miami, Fort Lauderdale, Atlanta, and Nashville. His aim is to rethink the housing rental market by creating a branded product with consistent service and community features. Flow will operate the properties Newman has bought and also offer its services to new developments

and other third parties. Exact details of the business plan could not be learned. Flow appears to be financially separate from the crypto company Flow Carbon, which was also co-founded by Newman and raised $70 million in May in a round lead by Andrew. Horowitz. Mark Andreessen said in the blog post that he was interested in flow because the rental real estate market is ripe for disruption. That's especially true, Andreessen said now that more and more people are working from home, and quote, will experience much less if any of the in-the-office social bonding and friendships that local workers enjoy, end quote. He also hinted that the company might try to address one of the biggest challenges renters face. Quote, you can pay rent for decades

and still owns zero equity, nothing. He added, in a world where limited access to home ownership continues to be a driving force behind inequality and anxiety, giving renters a sense of security, community, and genuine ownership has transformative power for our society, end quote. Andresen wrote that, quote, we love seeing repeat founders build on past success by growing from lessons learned. For Newman, he added, quote, the successes and lessons are plenty, end quote. You'd think I'd have something witty to say here, but for the life of me, I can't think of anything. Nothing. Perfect story. No notes. This is neither here nor there in the end, but one great mystery in the recent history of tech has been solved. Remember Microsoft's disastrous launch of the

Xbox One? They fumbled things so badly, giving gamers exactly what they didn't want, that they basically seated an entire hardware generation to Sony and the PlayStation. I mean, that's what everyone in gaming has assumed all this time, but now we have confirmation. Over its lifetime, Xbox One sold less than half of Sony's PlayStation 4, quoting Game Luster. Microsoft has been refusing to release console sales information since 2015, claiming it isn't the, quote, key metric of success they like to focus on. Microsoft prefers to focus on engagement, a key factor for the creation of the Xbox Game Pass. The hesitation to release sales figures never stopped business analysts from coming up with

some accurate estimates of sales. Amper analyst data predicted 51 million sales of the Xbox One line of consoles in 2020, and it appears they were right. The information can be found on page 18 of the Microsoft Cork Papers relating to the acquisition of Activision Blizzard. The translated line reads, quote, Sony has surpassed Microsoft in terms of console sales and install base, having sold more than twice as many than Xbox in the last generation.

From a rough Google translation, a member of GameLuster staff who can read Spanish was able to partially read the Portuguese and concurred with this translation. Sony recently released their final PS4 sales figures confirming 117.2 million sales of the console line, making it the second biggest home console of all time. This means the Xbox One consoles must have sold less than approximately 58.5 million units, which is in line with former industry analyst prediction. This places the Xbox one right below the NES and just above the S-NES in terms of all-time sales. 50-something million in sales is hardly a failure, but likely far below what Microsoft had hoped for the Xbox 1, regardless of the numbers Microsoft seems to be learning from its past mistakes. By focusing on delivering games that people want through acquisitions, Microsoft hopes to see increased Xbox sales and rising GamePass subscription numbers, end quote. Really interesting numbers here, but for a more current story,

Story. Snap says it's Snapchat plus subscription launched in June, now has more than one million users globally, and is thus adding new features, including priority story replies to celebrities. Again, am I wrong here? One million paying users is pretty impressive to me. I wonder if all of Twitter's various subscription efforts of late have even come close to a number like that. Quoting variety. It's not going to make much of a dent to offset Snap's stalling ad business, but the company is touting that it has signed up more than 1 million subscribers for Snapchat Plus, its service that provides exclusive access to pre-release and experimental features. Snapchat Plus hit the 1 million mark a little over six weeks after launching the $3.99

per month service at the end of June. On Monday, Snap is introducing four new features for Snapchat Plus. Priority story replies, making your replies more visible to Snap Stars. Post-view emoji, letting you select an emoji friends will see after they view your snaps. new bitmoji backgrounds like gleaming gold or a beach paradise, and new app icons to replace the default Snapchat app icon on your home screen. These are in addition to the seven features of Snapchat Plus, ghost trails on the map to see where your friends who share their location with you have been in the last 24 hours. Best Friends Forever, pin your number one BFF, story rewatch indicator, custom app icons and themes,

a Snapchat Plus badge, friend solar system, see a best friend's badge on someone's friendship profile, which means you're one of each other's eight closest friends, or a friend's badge, which means you're one of their eight closest friends, but they're not one of yours, and the ability to access Snapchat messaging functions on the web. Note that the number of Snapchat plus subscribers is well under 1% of the app's total user base. Snapchat had 347 million average daily active users in the second quarter, up 15 million sequentially and topping its previous forecast for Dow Net Ads, end quote. See, this is like that story about how Netflix has now more than a million daily active gamers.

Like, sure, it's only 1% of Snap's user base, but getting a million people to pay for a free product like Snap scenes, not bad to me? And then possibly the most interesting numbers of the day. For the first time ever, the cable industry's share of the broadband internet market has seen negative growth. Quoting Next TV, the top seven U.S. cable companies experienced a first from April to June. They lost broadband customers in a quarter, 60,239 of them, according to Lictman Research Group's quarterly tally of the U.S. Wireline Internet business. number one cable internet player Comcast was flat in high-speed internet growth in Q2, while number two company charter communications bled 21,000 customers,

and number three company, Altice USA, lost 39,600 of them. According to LRG principal Bruce Leibman, the lowest customer growth figure for wireline broadband that he can remember occurring in the last 20 years of tracking this business, was the second quarter of 2009, the height of the Great Recession, when the leading MSOs only added a quarter of, million subs. For the first time that Next TV can recall cable operators lost market share in the U.S.

wireline business slipping from 68.7% at the end of June compared to 69.6% after the second quarter of 2021. The new LRG tally highlights an abrupt breaking for the U.S. cable industry, which grew customers by a record 1.4 million in Q2 2020, with quarantined customers outfitting their homes with broadband service en masse. Cable operators added over 843,000 Hs. subscribers in the second quarter of 2021, end quote. Those numbers are interesting on their own, but get this. In just one quarter, fixed wireless access added 816,000 customer accounts. Fixed wireless means buying one of those newfangled base stations from, say, T-Mobile or Verizon. In other words, it means getting your internet via 5G towers instead of from wires routed to your

house. Basically, there were 3.2 million net broadband account additions, and fixed wireless accounted for 56% of those. I learned of this story by being a guest on This Week in Tech once again last night, and as I told Leo Leport, what if it's actually happening? What if the promise of 5G is actually becoming real? On the one hand, if you're someone who does most of their computing via your phone, why pay for home internet in the first place? If you've got a decent 5G signal, you probably can't tell the difference between the speed of your 5G and the speed of your Wi-Fi, so why pay double? And if people are actually cutting the cord, but for broadband internet, because again, decent 5G is indistinguishable at this point from your cable internet speeds,

then yeah, maybe for all of the years of overhype of 5G, the disruption of 5G is finally starting to become real. Finally today, picking up something that we missed because of the weekend, According to sources, before Apple made all those big iOS privacy changes, Apple and Facebook sat down to discuss ways to share revenue, like an ad-free, paid version of Facebook with in-app purchases for boosted posts. Quoting the journal. In the years before the change, Apple suggested a series of possible arrangements that would earn the iPhone maker a slice of Facebook's revenue, according to people who either participated in the meetings or were briefed about them. As one person recalled, Apple officials said they wanted to build business.

businesses together. One idea that was discussed, creating a subscription-based version of Facebook that would be free of ads, according to people familiar with the discussions. Because Apple collects a cut of subscription revenue for apps in its app store, that product could have generated significant revenue for the Cupertino-California giant. The companies also haggled over whether Apple was entitled to a piece of Facebook sales from so-called boosted posts, said people familiar with the matter, a boost allows a user to pay to increase the number of people that see a post on Facebook or Instagram. Facebook, which considers boosts ads, has always contended that boosts are a form of advertising, in part because they're often used by small businesses to reach a bigger

audience, said one of the people. Apple, which doesn't take a cut of advertising from developers, argued that Facebook boosts should be considered in app purchases, according to a person familiar with the matter. Apple's standard terms would entitle it to take a 30% share of those sales. Apple and Facebook for years have enjoyed a unique symbiosis. Apple controlled the App Store, the gateway for hundreds of millions of users to download the flagship Facebook app, as well as the company's other popular services, including Instagram Messenger and WhatsApp. But while Facebook's products were among the most popular apps on the iPhone, they didn't generate sales for Apple. This was a persistent frustration

for some Apple executives, according to the people familiar with the matter. The discussions with Facebook came as Apple was shifting its focus away from hardware sales toward software. An important part of Apple's services revenue came from a partnership with Alphabet's Google, which wasn't publicly known until it was cited in a 2020 antitrust lawsuit against Google by the Justice Department. Under the arrangement, Google pays Apple billions of dollars annually to be the default search engine in the Safari web browser. Apple hasn't been accused of wrongdoing, and Google said it pays to promoted services just as many businesses do. In the summer of 2018, Apple rolled out changes to its Safari desktop and mobile web browser that hindered Facebook's

web business, eliminating its ability to track users without their permission as they visited different websites. The next big target for Apple, apps doing the same kind of tracking on the phone. At Facebook's Menlo Park headquarters, Mr. Zuckerberg and his executives were already considering changes to their business, including the once unthinkable move to stop using data collected by other companies to target ads to users, according to people familiar with the discussions. The Facebook executives who internally proposed ending the collection of third-party data argued that by ceasing its reliance on that data, the social media giant could also reduce the company's dependence on Apple and Google's mobile operating systems. Mr. Zuckerberg opted instead to leave

the bulk of its data collection practices in place. The company shut down an ad-targeting option that relied on information collected by data brokers shortly after the Cambridge Analytica scandal was reported on March 2018. But otherwise, Facebook continued to rely on third-party data to target users with personalized ads. Zuckerberg's decision to delay significant changes to his company's data practices to keep its advertising business humming, the people said, was an approach internally dubbed a, quote, rearguard strategy, end quote. All right, I screwed up somehow on Friday, and so you didn't hear the job openings message, the classified from ride home portfolio company, Sensel. It's super quick, so here you go. Sorry for my mess up. Real quick,

portfolio company, Sensel, is hiring. They're hiring for an electrical engineer position, a software test engineer position, a hardware development technician. So why not get on board with the company that is revolutionizing touch interfaces? Sensel. Check out their job listings at Indeed.com slash CMP slash sensel slash jobs. That's indeed.com slash CPM slash sensel slash jobs. There's a link in the show notes. Get a job at sensal. And when you get in touch, tell them Brian sent you.