Tech Brew Ride Home - Thu. 04/16 - The Video Conferencing Space Is So Hot, We’re Getting Steamy M&A Action Now.

Episode Date: April 16, 2020

The video conferencing space is so hot, we’re getting steamy M&A action now. Apple wants to get stylish with over the ear headphones. Robinhood bucks a couple of trends with a new round. And is Facebook’s Libra just gonna drop like a stone? Sponsors: Kiwico.com/ride DoubleUp.agency Links: Verizon Buys Zoom Conferencing Rival BlueJeans (The Verge) Apple Developing High-End Headphones With Interchangeable Parts (Bloomberg) Sony Plans Limited PlayStation 5 Output in First Year (Bloomberg) Robinhood Is Raising New Funds at About $8 Billion Value, Sources Say (Bloomberg) Google to Slow Hiring for Rest of 2020, CEO Tells Staff (Bloomberg) Facebook-Backed Libra Cryptocurrency Project Is Scaled Back (NYTimes) Amazon Retools With Unusual Goal: Get Shoppers to Buy Less Amid Coronavirus Pandemic (WSJ) Amazon to close French warehouses until next week after court order (Reuters) TikTok now lets parents set restrictions on their kids’ accounts (The Verge) Lawn love job opening: https://apply.workable.com/lawn-love/j/A749319261/ 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 Thursday, April 16th, 2020. I'm Brian McCullough today. The video conferencing space is so hot.

We're getting steamy M&A action now. Apple wants to get stylish with over-the-ear headphones. Robin Hood bucks a couple of trends with a new round raised, and is Facebook's Libra just going to drop like a stone at this point? Here's what you missed today in the world of tech. Yeah, there really is a new COVID-era horse race going on. Verizon has agreed to buy video conferencing company Blue Jeans Network for less than $500 million. If you are unfamiliar with the horses in this new race, Blue Jeans was the video conferencing tool that for a brief period of about six months, maybe three or four years ago, a lot of companies were suddenly using.

I'm not saying that people stopped using it. I'm just saying that about six months ago, suddenly everyone was using Zoom. and then the virus hit and then Zoom became the thing and you remember all that. You're up to date. Anyway, quoting the journal. The deal announced Thursday is part of an effort to bolster Verizon's business group as the carrier rolls out faster 5G networks and pitches new applications of wireless technology to its largest corporate customers.

The conferencing service gives the carrier the ability to help its corporate customers build telemedicine, remote learning, and virtual training services, said Tammy Irwin, head of Verizon's business unit. The platform security and integration with workplace collaboration tools like Microsoft Teams was part of its appeal, she added. Blue Jeans, the company's brand name, is aimed at businesses rather than consumer users with encrypted video conferencing. It has 15,000 customers and isn't available free to consumers as services such as Skype and Zoom are. Blue Jeans, which recently became profitable and has seen usage surge amid the pandemic, was founded in 2009. It has in the past raised $175 million in venture capital from firms including

A Cell Partners and Battery Ventures, end quote. Mark German, Debbie Wu, Apple Scoop Thursday, although this is one of those headlines that will make you say, of course they're doing this. According to the Bloomberg pair, Apple is developing at least two over-the-ear wireless headphone variants with swappable magnet ear cups and swappable headbands. So a little bit of the Apple Watch style conscious vibe on this of the two designs. One includes a premium version with, quote, leather-like fabrics and a fitness-focused model that uses lighter breathable materials with small perforations, the people said.

Prototypes of the headphones have a retro look with oval-shaped ear cups that swivel and a headband connected by thin metal arms. The arms stem from the top of the ear cups rather than the sides the people added. They asked not to be identified discussing products that haven't been announced. The ear pads and headband padding attached to the frame of the headphones magnetically so they can be replaced by the user. That approach is similar to some headphones from Master and Dynamic, and Bowers and Wilkins, though those models only have magnetic ear pads. Apple's more modular design will allow users to customize their headphones like they do with the Apple Watch. The design may also mean the same set of headphones would be convertible from comfort to fitness.

use and back again, the people said. Apple plans to use similar wireless pairing and noise cancellation tech in its upcoming headphones to what is already there in the AirPods Pro. The new headphones will use Siri for voice control and have a limited set of integrated touch controls. The product will compete with high-end offerings from Bose, Senheiser, and Sony, which currently retail around $350, end quote. Again, the style angle is really the angle here. I mean, they've already done this with beats headphones to a certain degree. But as with the Apple Watch and interchangeable bands there and higher-end models to signal status, there's no reason why headphones can't be even more of a fashion plate than they

already are. Also from Bloomberg, sources are saying Sony plans to limit its initial PlayStation 5 production run in its first year, partly because it expects lower demand due to a higher expected launch price. The Tokyo-based tech giant is limited. its initial production run in part because it expects the PS5's ambitious specs to weigh on demand by leading to a high price at launch. The people said, asking not to be identified because the subject is private. The global COVID-19 pandemic has affected Sony's promotional plans for the new device,

but not its production capacity, they added. The company has told assembly partners, it would make 5 to 6 million units of the PS5 in the fiscal year ending March 2021, according to other people involved in the machine's supply chain. When Sony released the PlayStation 4 in November 2013, it sold 7.5 million units in its first two quarters. The PS5's loftier price tag may also deter initial take-up. Game developers, who've been creating titles for the next PlayStation, anticipate its price to be in the region of $499 to $549, and Bloomberg intelligence's Matthew Ketterman points to increase component costs, pushing up the price required for Sony to break even. Sony has struggled with its price-setting decisions for the PS5 because of scarce components,

Bloomberg News has reported, end quote. As ever, check out Kyle over at the Gaming Ride Home podcast, as I'm sure he'll have more on this. Plus, I heard him say yesterday that Fortnite's next season has been delayed. Not sure what's up with that, but I'm sure he can tell you. More Bloomberg rumor mongering, and I, of course, mean that in the best way. Sources are telling Bloomberg that Robin Hood is raising a $250 million round led by Sequoia Capital at a pre-money valuation of about $8 billion. So that would be up only slightly from the $7.6 billion valuation during its round last July. Still, all things considered, especially when you remember their trading outage crisis from, what was that, a month ago, two years ago.

I know I did that story back when I was still recording in the office. But I don't know, man. Time is a flat circle these days. Anyway, this is not bad for Robin Hood. Quote, Robin Hood has seen record revenue growth during the coronavirus pandemic, the people said. The volatility of the markets led to new account signups, they said. The firm had about $60 million in revenue in March, roughly tripling from the same month last year, one of the people said.

Robin Hood seems to be bucking the trend of many startups, which have been hit particularly hard during the crisis. An estimated 23,000 employees have been let go at 241. startups since March 11th, according to data compiled by layoffs.fyi. Another financial technology startup, Carter, the software company formerly known as e-shares, said Wednesday it's cutting 16% of its workforce even as it seeks an additional $200 million in funding, according to people familiar with the matter, end quote. Meanwhile, Alphabet has told staff that the company will slow the pace of hiring for the rest of

2020 as it reevaluates its investments, both internal and external in the current environment. Quote, Chief Executive Officer Sundar Pichai told staff about the decision in an email on Wednesday. He also highlighted other areas of cost cutting, saying the company will be, quote, recalibrating the focus and pace of our investments in areas like data centers and machines and non-business essential marketing and travel, end quote. A Google spokesperson confirmed the memo and added that the company will maintain hiring momentum, quote, and a small number of strategic areas while, quote, onboarding the many people who've been hired but haven't started yet, end quote. At the end of 2019, Alphabet employed 118,000 people

full time. The announcement shows how the economic downturn triggered by the coronavirus responses even affecting some of the richest tech businesses. Microsoft, the largest software company in the world, paused some of its recruiting recently, according to Business Insider. Compared with startups that are firing thousands of workers, Google remains a haven for current employees. But the company's revenue has likely been hit as businesses slash ad spending to save money. The crisis has hammered the retail and travel sectors in particular. And these are major Google advertising customers, end quote. Yeah, funny that you should mention that today, because have you ever heard how much money Expedia

has spent year in and year out on search engine keyword advertising around travel? especially on Google. Well, Barry Diller announced on CNBC just this morning that Expedia only plans to spend less than $1 billion on all advertising this year instead of its usual $5 billion. So you have to imagine that a client team somewhere inside of Google Ads has been having a pretty bad month so far.

File this under things that might get swept under the rug in the current environment. the New York Times is reporting that Facebook is moving ahead with its Libra project, cryptocurrency, but in a significantly scaled back way. There are, shall we say, significant concessions being made to global regulators, quoting Nathaniel Popper and Mike Isaac. No longer is the group focused on making Libra the basis of a new global financial system, where Facebook could essentially play the roles of Central Bank and Wall Street. In a sign of the change, the Libra project will now be focused on creating a more traditional payment network in which coins will be tied to a local currency,

somewhat like the digital dollars in a PayPal account. While Libra will also have a coin backed by multiple national currencies, which was the focus of the initial design documents, that will be less prominent. Members of the Libra Association, a Switzerland-based group that Facebook created to oversee the project, said the shifts were a response to a global outpouring of opposition to the cryptocurrency. In a new Libra white paper, the association said it would create multiple coins each backed by a different national currency in order to make local commerce easier. A separate coin backed by multiple currencies would be useful for moving money between countries. The association is also abandoning plans for Libra to take the distinctive open architecture of Bitcoin,

one of the best-known cryptocurrencies, which has a so-called permissionless quality that allows anyone to build on it. Such a design had led to widespread concerns that terrorists and other bad actors could use Libra for underhanded reasons. Liber will now be a closed system in which only partners with the approval of the association can build infrastructure, such as wallets for the coins, end quote. There have been signs that Amazon has been getting a handle on the Corona-related shopping volume that it's been struggling with. Third-party sellers are now able to ship non-essential goods once again. But also, Amazon seems to be taking all the steps to make sure they remain on top of this.

Sources are telling the journal that Amazon is redesigning its website to get customers to put fewer items in their carts. They're also canceling Mother's Day promotions. Last month, Amazon began removing fixtures of its site designed to lead customers to make additional purchases. It removed most of its popular recommendation widgets that show shoppers what other people with similar items in their basket also bought, the people said. Also, among the changes, which Amazon hasn't yet announced publicly, the company decided to cancel Mother's Day and Father's Day promotions, typically visible on the site to encourage spending. Its annual July shopping extravaganza, Prime Day, has been pushed back indefinitely, and Amazon has scaled back coupons that encourage shoppers to fill their carts. Quote,

Amazonians are working around the clock to get necessary supplies delivered directly to the doorsteps of people who need them. Amazon Chief Executive Jeff Bezos said Thursday in a letter to shareholders. The demand we are seeing for essential products has been and remains high. But unlike a predictable holiday surge, this spike occurred with a little warning, creating major challenges for our suppliers and delivery network, end quote. We typically want to sell as much as we can, but our entire network is so full right now with just hand sanitizers and toilet paper that we don't have the capacity to serve other demand, said an Amazon employee involved in the changes, end quote.

Meanwhile, a court in France straight up banned Amazon from shipping non-essential items in orders there, I suppose, to help with order volume in that country and explicitly to protect warehouse workers. But in an internal memo that leaked yesterday, it seems that Amazon took this news and decided it's just going to straight up close its 10 French warehouses until April 20th. The company is forced to suspend all production activities in the United States. in all of its distribution centers in order to assess the inherent risks in the COVID-19 epidemic and take the necessary measures to ensure the safety of its employees during that period, Amazon said in the document seen by Reuters. During the suspension, Amazon will tap a state partial unemployment schedule to pay its employees, the group said in the internal document, end quote.

And finally, today, TikTok is helping parents set restrictions on their kids' TikTok usage, limiting screen time, disabling DMs, and restricting content. In fact, you can completely disable DMs for those under 16s in your household, quoting the verge. The update is a big step forward from where TikTok was a year ago. In February 2019, the company paid $5.7 million to the Federal Trade Commission over alleged violations of children's privacy laws, in part for allowing users under 13 years old to sign up without parental consent. TikTok has since made changes to comply with the law and it's added features like screen time limits to give users and parents more control over the app, which is increasingly popular with teens. TikTok began rolling out these

features under the name Family Safety Mode in Europe earlier this year. Today's update makes those limits a lot easier to set. Once two accounts are linked together, parents can control a kid's settings from their own phone. Previously, they'd have to set these restrictions within the app on their kids' device. TikTok offered passcodes so that some settings couldn't be turned off without consent, but it was clearly a less convenient solution and didn't put the controls directly in parents' hands. Parents will still have to get their kids to agree to have their accounts linked under the new system. To set it up, parents need to scan a QR code inside the digital well-being section of their kids' account. Kids will be able to disable the feature at any time, though there are

some roadblocks. Parents will receive a notification and they'll have a chance to relink the account in case it was disconnected by accident, end quote. And of course, Also, that presupposes the adults in question have a TikTok account, so never fear, kids. You maybe can just rely on generational inertia to keep parents prying eyes away. Another tech job opening for you real quick. Lawn Love is a Y Combinator-based startup in San Diego, which says it is scaling up fast to provide an essential service in this time when most of the country is on lockdown. They're hiring a head of green. growth. So if you're interested, there is a link to the job opening in the show notes. Talk to you

tomorrow.