I met Thursday in San Francisco with Daniel Zhang, CEO of Alibaba. Zhang claimed little role in the company’s $7 billion bond offering this week—“I just told them to push the button,” he says—but clearly relishes the prospect of the treasure chest it represents. “We are quite healthy in cash flow,” says Zhang. “But we still need to prepare for growth.”
Zhang is less well known than Jack Ma, Alibaba’s executive chairman and guiding light. But as CEO of the Chinese e-commerce colossus, he oversees its day-to-day operations. I asked him Alibaba’s three biggest opportunities, and he ticked off four.
The first is “new” retail, a reference to Alibaba’s aggressive investment in physical retailer. It’s something of an open Trojan horse strategy, according to Zhang. Alibaba will help physical retailers digitize and in the process bring them onto Alibaba’s e-commerce platform. Keeping them in the Alipay payment fold won’t hurt either.
Alibaba’s second thrust is global expansion. The company pines for two billion customers, up from its current 500 million in China. Southeast Asia, which shares cultural characteristics with China, is its most important foray, says Zhang. He chuckles when I ask where’s next, noting only that Alibaba has a presence in Russia and Spain and has started up in India by investing in payments rather than e-commerce.
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Cloud computing—think Amazon Web Services for China—and filmed entertainment are Alibaba’s other big bets. Alibaba also is an aggressive investor in other businesses, and Zhang articulate the company’s approach. It focuses on areas where it can win new customers, sell its technological logistics services, and acquire new technologies.
I asked Zhang one question he’d like to ask his boss, given that Jack Ma will appear onstage next week at the FORTUNE Global Forum in Guangzhou, China. Like everyone else on the planet, Zhang wants to know what outsized feats Ma will perform next. “In 2016 Jack flew 800 hours,” circling the globe promoting Alibaba and a handful of personal causes. “This year’s he’s flown 1,000. Ask him how many he’ll fly next year.”
A few nuggets to end your week … The San Francisco Chronicle reports that city authorities will begin deploying surge prices for parking spots. It’s an eminently sensible idea. But dig into the details and you’ll see that the city of San Francisco isn’t nearly as nimble as Uber in how quickly it raises and lowers prices … I was fascinated to see that the value of South Africa’s Naspers is $121 billion even though its stake in Chinese gaming and messaging giant Tencent is worth $170 billion. (There’s a tax issue involved, but also a lack of faith in the core Naspers media business) … Finally, here’s another good explainer on what bitcoin is and isn’t.
Have a good weekend.
Change at the top. Struggling meal-delivery kit maker Blue Apron said Thursday that co-founder and CEO Matt Salzberg was stepping down. Chief financial officer Brad Dickerson, who joined the company last year, will take over. Blue Apron shares have lost 70% since its initial public offering in June.
First of its kind. The FDA has approved the first medical device accessory for the Apple Watch. Made by AliveCor, a company led by the former head of Google+, Vic Gundotra, the KardiaBand electrocardiogram reader pairs with an app to detect conditions like abnormal heart rhythm and atrial fibrillation.
More of the same. Uber investor and venture capitalist Shervin Pishevar was accused of sexual misconduct by five women, Bloomberg reported. A representative for Pishevar said all of the allegations would be “shown to be untrue.”
Start your engines. Two of the biggest derivatives exchanges in the world, the CME and the CBOE, got permission from regulators to start trading futures contracts based on the price of bitcoin. The greater ease of trading and solid financial standing of the exchanges is expected to attract considerable interest in the new contracts from large, institutional investors.
Friend of my friend. Spotify and Tencent’s Music Entertainment Group are negotiating to swap up to 10% ownership stakes in each other, the Wall Street Journal reports. The Tencent unit’s services, QQ Music, Kugou and Kuwo, dominate the market in China, where Spotify doesn’t compete. Both companies are planning on going public soon.
Internalized. How much of the guts of the iPhone can Apple make itself? Clearly more than it does now. The next bit to get Apple-ified will be the power management chips currently made by Dialog Semiconductor, Nikkei reports. Dialog’s shares dropped about 20% on the Frankfort Exchange on Thursday.
Open the pod bay doors. Amazon created a version of its Alexa digital assistant for the business market. Creatively dubbed Alexa for Business, the new voice-controlled app can interface with popular corporate software from Microsoft, Salesforce, and others.
IN CASE YOU MISSED IT
Taylor Swift Allows Streaming of Reputation and Shocks Everyone By Keshia Hannam
Why Verizon’s 5G Home Internet Service Isn’t Coming to You Anytime Soon By Aaron Pressman
This Is How Apple Is Marking World AIDS Day By Natasha Bach
Angry Birds Has Hatched Angry Investors By Keshia Hannam
Fitbit Is Back on Top of Wearables, But Apple Is Growing Faster By Aaron Pressman
What’s Next for ESPN After Its Latest Round of Layoffs? By Tom Huddleston Jr.
This Intel Alum Is Making a Very Surprise Move Over to Google Cloud By Jonathan Vanian
FOOD FOR THOUGHT
Artificial intelligence is all the rage, but how much progress has actually been made towards the ultimate vision of creating software that can think as well as people?
Stanford has set up a non-profit called the AI Index to track the field and it’s out with a lengthy report for 2017. The whole report is worth a read if you are interested in AI (download the 101-page PDF here), but Will Knight has read it all and written a much shorter article for Technology Review summarizing some of the key conclusions. Spoiler alert in Knight’s headline: “Progress in AI Isn’t as Impressive as You Might Think.” Knight concludes:
FOR YOUR WEEKEND READING PLEASURE
A few interesting longer reads I came across that are suitable for your weekend reading pleasure.
Elon Musk: The Architect of Tomorrow — Rolling Stone
It’s mid-afternoon on a Friday at SpaceX headquarters in Hawthorne, California, and three of Elon Musk’s children are gathered around him – one of his triplets, both of his twins. Musk is wearing a gray T-shirt and sitting in a swivel chair at his desk, which is not in a private office behind a closed door, but in an accessible corner cubicle festooned with outer-space novelty items, photos of his rockets, and mementos from Tesla and his other companies.
How to Tame Google, Facebook, Amazon, and Apple — Bloomberg Businessweek
The result, so far, has been threats of new taxes, regulations, laws and antitrust actions—not only in Europe, where the giants have long been treated as problems, but increasingly from what has been long seen as the more hands-off U.S. government. Some experts see the Justice Department’s lawsuit to block AT&T Inc.’s purchase of Time Warner Inc. as a possible precursor of actions against the tech giants. Even the experts are confused. Are these companies our friends, enemies or frenemies? Are they basically familiar entities that can be dealt with using tried-and-true remedies—or something new that requires a fresh approach?
Finance Pros Say You’ll Have to Pry Excel Out of Their Cold, Dead Hands — Wall Street Journal
A few months into the job, however, Mr. Schiller learned a lesson that rings true with many disciples of cloud computing. Lots of intelligent and otherwise rational people would sooner clobber you with a bat than let you separate them from Excel. Mr. Schiller said the battle with the actuaries reminded him of trying “to talk my dad into buying a new car.”
The Artist Who Drew With Computers, Before Computers Were a Thing — Surface Magazine
Long before she had access to a computer, Vera Molnár was already thinking like one. To create her geometric images in the 1950s, she invented a systematic procedure: a series of exploratory steps and rules that aped a computer’s inputs and outputs, and dictated the final, hand-drawn form of her work. Dubbed “machine imaginaire,” her process was as much a tool as it was a concept with which to reprogram traditional visual practices. It was a radical adoption of technology—however much imagined—that would blaze a trail for computational art and design in the decades to come.
BEFORE YOU GO
Mining bitcoin can get expensive if you have to pay for your own electricity. One Tesla owner developed an ingenious way to avoid the cost: build a mining computer into the electric car and recharge the battery for free at Tesla’s supercharger stations.