Tech Brew Ride Home - Wed. 07/13 – Twitter Takes The Gloves Off

Episode Date: July 13, 2022

Twitter officially sues Elon Musk and by the sound of things, has decided to go to the mattresses. Has Apple officially cut ties with Jony Ive? Here come the tech mergers and acquisitions. How streaming has officially killed traditional tv by at least one measure. And an interesting new gadget. Nothing. I’ll explain. Sponsors: StoryBlok.com/ridehome KeeperSecurity.com/techmeme Links: Twitter Sues Musk After He Tries Backing Out of $44 Billion Deal (NYTimes) 15 Revelations in Twitter’s Suit Against Elon Musk (Intelligencer) Apple Ends Consulting Agreement With Jony Ive, Its Former Design Leader (NYTimes) Unity is merging with Ironsource in an all-stock deal valuing Ironsource at $4.4B in a big consolidation play for gaming (TechCrunch) Read the memo Google’s CEO sent employees about a hiring slowdown (The Verge) Nothing officially announces flashy Phone 1, starting at £399 (The Verge) HBO & HBO Max Smash Past Netflix In Total Emmy Nominations As Hulu & Apple Score Strong Showings (Deadline) 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 Wednesday, July 13th, 2020. I'm Brian McCullough today. Twitter officially sues Elon Musk and by the sound of things has decided to go to the mattresses. Has Apple officially cut ties with Johnny Ive? Here come the tech mergers and acquisitions.

How streaming has officially killed traditional TV by at least one measure and an interesting new gadget. Nothing. I'll explain. Here's what you miss today in the world of tech. And the lawsuit has dropped. Twitter is suing. Elon Musk in Delaware's Court of Chancery to force him to complete his $44 billion acquisition of the company as he, quote, refuses to honor his obligations, according to Twitter. Quoting the New York Times, Musk apparently believes that he, unlike every other party subject to Delaware contract law, is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away, the company said in the suit, in a letter to Mr. Musk's lawyers on Sunday,

Twitter's lawyers said that his move to terminate the deal was, quote, invalid and wrong, and that Mr. Musk, quote, knowingly, intentionally, willfully, and materially breached his agreement to buy the firm. The company has said that it is confident in its figures about spam accounts and that it uses experts in spam to audit the count and ensure its accuracy. In its suit, Twitter argued that Mr. Musk, who also leads the automaker Tesla, wanted to exit the deal because of changes in the stock market that affected his wealth. Tesla's stock has fallen in recent months. Twitter said the billionaire used his complaints about bots as a pretext to wriggle out of the agreement. Mr. Musk also broke an agreement not to publicly insult Twitter executives, and he, quote, covertly abandoned, end quote, his efforts to secure debt funding for the deal, the lawsuit said.

In doing so, the social media company said he breached his obligations to use, quote, reasonable best efforts to get a deal done. Musk wanted an escape, the company said, but the merger agreement left him little room, end quote. Yeah, Twitter seems to really be taking the gloves off here. Other sentences in this include phrases like Musk's exit strategy is a model of hypocrisy. Musk's strategy is also a model of bad faith. Musk has been acting against this deal since the market started turning and has breached the merger agreement repeatedly in the process. And here's a couple of other interesting details in this suit as collected by Intelligencer, quote. It shows,

that Twitter's board is far from being at a point where they can work it out with the world's richest man, essentially curdling any speculation that they might be able to put together another deal and are willing to force him to spend his money on them whether Musk wants to or not. Musk asked for a lot of useless data. I had to look this up, but a tebibite is about 1.1 trillion bytes of data. Twitter gave Musk more than 49 tebibytes worth of data in response to his request for information. This is a tremendous amount of information. As anyone who's ever looked at a large spreadsheet knows, most of that information would be useless. The issue, though, is that Musk is the one who requested all of it. In Musk's Friday letter where he announced he's officially trying to

back out of the deal, he claims that he was blocked on data and not able to make a determination with what he got. The picture from the other side shows that it may be true that he wasn't able to come to his own independent determination, but it apparently wasn't for lack of information. But he He didn't look at the most useful thing Twitter gave him. On June 30th, quote, Musk acknowledged that he had not read the detailed summary of Twitter's sampling process provided back in May, end quote. I mean, this is the whole thing. This is what he's been mad about and had been whipping up his real and bot followers about. Look, this is a long lawsuit with a lot of stuff in it that's damning to Musk claims that directly contradict what he said, both in

securities filings, where there's a presumption of truth, and on Twitter, where the standards for honesty are basically non-existent. But if this one is true, it could be the core of Twitter's argument that Musk's thundering over bots is a bunch of BS. Maybe Twitter is just running out the clock. Quote, defendant's ability to terminate the agreement before the presumptive drop-dead date of October 24th, 2022 is extremely limited and carefully circumscribed, the suit says. Twitter mentions this a few times and asks the court for a quick resolution on this. In the world of the courts, just over three months, is lightning speed, so it's no surprise that Twitter would have sued so quickly, end quote.

Sources say Apple has ended its consulting agreement with Johnny Ive, that made Apple his firm's primary client and limited Ive from taking on work Apple found to be competitive with itself, quoting the New York Times. When Mr. Ive left Apple in 2019 to start his own design firm, Love From, the iPhone maker signed a multi-year contract with him valued at more than $100 million. That made Apple his firm's primary client. people with knowledge of the agreement said. The deal restricted Mr. Ive from taking on work that Apple found competitive and ensured that

the designer would inform the development of future products, such as an augmented reality headset that is expected to ship next year, people said. In recent weeks, with the contract coming up for renewal, the parties agreed not to extend it. Some Apple executives had questioned how much the company was paying Mr. Ive, and had grown frustrated after several of its designers left to join Mr. Ives' firm. And Mr. Ive wanted the freedom to take on clients without needing Apple's clearance, these people said. Jeff Williams, Apple's chief operating officer, will continue to oversee the company's design teams with industrial design being led by Evans Henke and software design being led

by Alan Dye. Apple's product marketing team led by Greg Jawswiak, the senior vice president of marketing, has assumed a central role in product choices. Mr. Ives' firm, Love From, will continue to work with clients including Airbnb and Ferrari and Mr. Ive, will continue his personal work with Sustainable Markets Initiative, the nonprofit run by Prince Charles that focuses on climate change, end quote. Signs that the expected M&A wave caused by the tech downturn has arrived on schedule. Unity has announced plans to merge with app monetization service Iron Source, valuing Iron Source at $5 billion in the merger after Iron Source had gone public in 2021 via a SPAC merger

at an $11.7 billion valuation. Here is the rumor of the deal as it was originally reported in TechCrunch before confirmation from the companies this morning. Quote, Unity, the massive games and other interactive content development platform is planning to merge with Iron Source, an app monetization platform that provides tools for ads, cross-channel marketing, distribution, and more. The move would bring together two powerhouses in their respective fields, interactive development and app monetization. However, both companies have something else in common. They are publicly traded and have seen their stocks decline in recent months in line with the larger downturn in the technology sector. That's leading to pressure from shareholders on

top of the company's wider strategies to continue growing and diversifying themselves as businesses in what is shaping up to be a challenging climate. In Iron Sources last quarterly earnings reported in May, the company noted a healthy revenue jump of 58% to $190 million, but its guidance for the next quarter and full year were less robust. It adjusted down its expected full year figures to a range of 750 million to 780 million versus previous guidance of 790 million to 820 million. The company operates in the black with a net income of $13.8 million in the previous quarter. The company was one of the wave of businesses that went public via SPAC during COVID-19. In its case, it went public in 2021 when it was valued at over $11 billion.

Meanwhile, Unity's quarterly earnings announced in the same month reported revenue of $320.20.1 million for the quarter up 35% on the year. Yet it also adjusted down its guidance for the next quarter and the full year, citing, quote, challenges with monetization products that we expect to impact 2022, end quote. Q, buying more assets to help with monetization. It said it expects to make between $290 million and $295 million next quarter and between $1.35 and $1.45 billion for the year.

And importantly, despite its size and market traction, Unity is operating in the red. It posted a net loss last quarter of $177.6 million compared to $107.6 million in the quarter a year ago. The deal has been described to me by a second. source as a merger, but one company is definitely bigger than the other. Iron Sources market cap at the time of writing is $2.3 billion, but that figure has dropped dramatically in the last six months. Unity is currently valued at $11.8 billion, although it has similarly been weathering a pretty rough financial storm. Its stock has lost nearly two-thirds of its value in the last six months.

Pursuing M&A as a route to product and user growth has long been a strategy for larger tech companies, but the last several months have seen a number of M&A deals surface among smaller players, too, as funding sources become less free-flowing, performance targets are tightened, and valuations drop, end quote. I don't know if I've given much credence to rumors of an overall recession coming, but if Google is seeing a slowdown, you know, they clearly have broader exposure to the macro environment than a lot of people in tech. The Verge has seen a memo where Sunar Pichai has told employees that Google will slow hiring in the rest of 2022 and will have to work with, quote, greater urgency, sharper focus, and more hunger, end quote. Quoting from the verge.

According to the memo, the company isn't freezing hiring entirely. It'll still hire for, quote, engineering, technical and other critical roles. But Pachai says that the pullback will mean, quote, pausing development and redeploying resources to higher priority areas. Insider first reported Tuesday that Google had slowed its hiring plans. Google isn't the only company that's had to recently pump the brakes on hiring people. Uber has said it'll have to be hardcore about costs. Meta sent a memo to employees warning of serious times and fierce headwinds after implementing hiring freezes for some teams. And Spotify and Snap have also announced plans to slow hiring. Other companies like Twitter, Netflix, and GameStop have recently decided to lay off employees, end quote.

A new phone got announced yesterday. Nothing. It's more than the usual new phone announced, because, this is not just a whole new phone, it's a whole new phone brand. Again, nothing. Now, I'm not doing an Abbott and Costello routine. That's our third baseman. No, the company is called nothing, and it announced its phone, which it is calling the nothing one. That's one in parentheses, actually, starting at 399 pounds with LED strips on the back, two 50 megapixel rear cameras, including an ultra-wide lens, coming to 40-plus markets, but not the U.S.

quoting the verge. After weeks of teases, Nothing is finally announcing its debut smartphone, the Nothing Phone won at a launch event today. Led by One Plus co-founder Carl Pye, it's the well-funded startup's second product release following last year's ear one true wireless earbuds. The big news is that the Nothing Phone 1 will be sold with a modest starting price of 399 pounds, the equivalent of around $475 US, though it's not getting widespread release in the U.S. when it goes on sale on July 21st. 399 pounds gets you the model with 8 gigabytes of RAM and 128 gigabytes of storage, while stepping up to 499 pounds or around 535 U.S. dollars, gets you 256 gigabytes of storage. The model with 12 gigabytes of RAM and 256 gigabytes of storage goes on sale later this summer

for 499 pounds or around 593 U.S. dollars. Unfortunately, as previously reported, the Nothing Phone 1 isn't getting a full release in the U.S. Instead, nothing says the phone one will be released across over 40 markets, including the UK, Japan, India, and countries in mainland Europe. Nothing showed off the phones design a whole month in advance of today's event, revealing an eye-catching set of light strips on the rear of the device called the Glyph interface that are designed to serve a variety of uses. For example, a light strip on the back next to the USBC port can indicate how full the battery is while charging, while a central light illuminates to show when the phone is being charged or charging another device,

wirelessly. All the strips can flash to let you know when you have a notification or an incoming call and can sync up with the phone's ringtones. The strips can also act as a fill light for its cameras, while an additional red LED on the back flashes when the phone is recording video. On the rear of the phone, there are two 50 megapixel sensors, one main and one ultra-wide. The main camera supports both optical and electronic image stabilization, as well as a range of software features including night portrait and document scanning modes. Meanwhile, the ultra-wide camera has a 114-degree field of view and can take macro shots up to distances of four centimeters. The phone one is available in either white or black. Around the front, the phone one has a 6.55-inch

1080-Oled display with a peak brightness of 1,200 nits. Its maximum refresh rate is 120 hertz, but it can drop down to half that depending on what the screen's displaying. There's a small hole punch cutout on the top left for a 16 megapixel selfie camera and an in-display fingerprint sensor for biometric security. Internally, the nothing phone one is powered by a Qualcomm's Snapdragon 778 processor. That may be a disappointment for anyone hoping the phone would use Qualcomm's flagship Snapdragon 8, gen 1 processor, but the company has said this less powerful chip offers a better balance of performance power consumption heat, output, and price. That's paired with either 8 or 12 gigabytes of RAM and 128 or 256

gigabytes of storage. For software, the phone is running Nothing OS, which sits atop Android. The Nothing Phone One is one of the more interesting entrance into the smartphone market in recent years. But rather than attempting to match other more established brands, spec for spec, nothing is emphasizing novel features like the phone one's illuminating light strips in an attempt to set it apart. But with the smartphone market increasingly dominated by Apple, Samsung, and large Chinese tech firms, nothing could have its work cut out for it if it wants to compete at scale, end quote. Finally today, a sign of the times. HBO and HBO Max received 140 Emmy nominations yesterday, while Netflix got 105, Hulu 58, Apple TV Plus 52, Disney Plus 34, and Amazon 30, which means all of the broadcast network TV stations, brands, channels, etc., all of them in total.

hit a new low of only 86 Emmy nods. Quoting deadline. HBO's succession led the pack with 25 nominations while Apple's Ted Lasso and HBO's The White Lotus both got 20. HBO Max's hacks took 17 noms, as did Hulu's only murders in the building. HBO's Euphoria got 16, Barry got 14, while Hulu's dopesick also took 14,

alongside Apple's Severance and Netflix's Squid Game. Disney Plus was well down on last year's Hall, getting only 34 nominations compared to 71 last year. Peacock only managed three noms while Amazon secured 30 up from 20 last year. Paramount Plus got 11, and its sibling network Paramount Network's Yellowstone was snubbed completely. Broadcast Network television took another awards battering with a new low of 86 nominations down from 102 last year and 121 the year before, end quote. Nothing for you today. I don't feel 100%. I feel maybe 80 or 85%, but so far at least least. The dreaded Paxlivid bounceback hasn't really happened to me. I tested negative yesterday.

My son did. My wife did. Hopefully we're all almost through this. Talk to you tomorrow.