Data Sheet—Wednesday, October 5, 2016

Oct 05, 2016

Beleaguered Twitter is in play. That means in the not-so-distant future, some titan of tech likely will make a potentially transformative bet to acquire it. Salesforce, Google, and Disney are the most likely suitors. They’d have to pay at least $16.5 billion, Twitter’s deal-rumor-enhanced valuation.

Conventional wisdom suggests that gigantic tech deals don’t work. That’s especially true when the target is an established player or even a mature-ish company like 10-year-old Twitter. Famous flops include Microsoft’s ill-advised purchase of Nokia and Hewlett Packard's acquisition of 3Com.

Tech buyers seem to do better when they gobble up promising but fledgling concerns. Facebook appears to have pounced shrewdly by buying, for huge prices, Instagram and WhatsApp when they were barely businesses. Google struck gold by acquiring a company called Applied Semantics, which became AdSense; Keyhole, better known as Google Earth; and Android, before it was a phone.

Could Twitter, once so promising, mesh with a business software maker (Salesforce), an entertainment conglomerate (Disney), or an ad-tech competitor with a ton on its plate (Google)? It feels like we’re about to find out.

***

Today is the fifth anniversary of the death of Steve Jobs. Fortune’s Don Reisinger explores the sad milestone through the prism of how the company has fared under his successor, Tim Cook.

I looked back Tuesday at the notes I took when I interviewed Jobs six months before his death. Never a fan of acquisitions, at least for Apple, Jobs had plenty to say about what other companies should do. He told me HP should buy Salesforce, which would have been a damn good idea. When we spoke, Cisco had just shuttered its Flip video camera unit, an acquisition Jobs thought Cisco should never have made. He also predicted BlackBerry—still called Research in Motion then—would quickly lose a ton of share in the smartphone business, hardly a foregone conclusion at the time. Now, the BlackBerry phone is on its way out for good.

Time flies.

***

I’m so grateful to my colleagues Erin Griffith, Mathew Ingram, Michal Lev-Ram, Verne Kopytoff, Andrew Nusca, and Jonathan Vanian for spelling me while I was off working on another project. Thanks also to Heather Clancy, the consistent voice of this newsletter. I’m back now and eager to hear from you.

Adam Lashinsky is assistant managing editor at Fortune. Email him.

BITS AND BYTES

Nope, Microsoft and Google aren't helping the feds scan your email. The tech world is digesting a report suggesting that the National Security Agency last year ordered Yahoo to build custom software to search incoming messages. That move would represent a new extension of the agency’s controversial spying practices. It also raises questions about whether other email service providers were asked to do the same. So far, the answer is no. (Fortune)

Caterpillar and GE invest in self-driving tech venture. The two industrial giants are part of a $30 million round for Clearpath Robotics, which develops autonomous vehicles for buzzing around factory floors. One notable rival (at least in the past) was Kiva Systems, which was bought by Amazon in 2012 to help the e-commerce giant update its warehouse operations. The funding will be used to grow Clearpath's industrial division, for applications such as materials handling or mobile robots. (Fortune)

Microsoft opens another cybersecurity outpost in Singapore. The new center will be open to participating government agencies in the Asia-Pacific region that want to examine source code of Microsoft products, access threat information, or consult on security issues. Microsoft plans a similar facility in Beijing. (Fortune)

The market for big data software could top $203 billion by 2020. Corporate spending on analytics technologies is projected to reach $130 billion this year and is on course to grow at double-digit rates for the next four years, according to data published this week by market researcher IDC. The banking industry is behind some of the biggest investments. (InformationWeek)

Kohl's jumps into payment apps wars. The retailer hopes to gain an edge over rivals like J.C. Penney and Macy's by linking its new app with its credit card and rewards programs. That should speed in-store checkouts and make it simpler for shoppers to apply coupons. (Fortune)

THE DOWNLOAD

Your guide to Google's product launch extravaganza. The centerpiece of the tech giant's hardware introductions on Tuesday was its Amazon Echo-killer, called Google Home, which costs $50 less than the product it was built to beat.

Home can do lots of cool thinks like switch on web-enabled lights or stream YouTube video to any Google Chromecast device. What it can't do: play music from the Apple or Amazon streaming services or order products from Amazon's online store.

The other new gadgets branded with the Google logo: a new Android smartphone family called Pixel that will compete with devices from Apple and Samsung, a $129 wireless router that gets around dead spots in larger homes, and a "soft and cozy" virtual reality headset and controller called Daydream View that works with Android smartphones.

PEOPLE AND CULTURE

Pinterest hires former Twitter executive as its first CFO. Todd Morgenfeld was vice president of finance for the beleaguered social media company. Before that, he was VP of corporate development for Hewlett-Packard. His new employer is downplaying speculation that Morgenfeld's hire means Pinterest is preparing for its initial public offering. Rather, it's just scaling up. (Wall Street Journal)

ONE MORE THING

Rocky debut for Facebook's Craigslist rival. Hundreds of listings for adult services, drugs, animals, and guns wormed their way through software filters and onto the social network's new Marketplace service. All of these items violate Facebook’s commerce policy and community standards. (Fortune, New York Times)

This edition of Data Sheet was curated by Heather Clancy.
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