Data Sheet—Monday, October 26, 2015

The screen turned up then-prominent and now-forgotten gems, including Intraware, drkoop.com, and CDNow.com. The Barron’s article also saw clearly that the dot-com bust would smack established companies because they sold to the soon-to-be ailing group. Barron’s specifically fingered Cisco Systems, whose market value peaked that month at more than $550 billion. Today, at $150 billion, Cisco isn’t even one of the 10 most valuable publicly traded companies in the U.S.

There won’t be a similar bloodbath among public tech companies this time around for a simple reason: Too few startups have gone public. But the much ballyhooed cohort of highly valued private companies, the so-called unicorns, are heading for a fall every bit as dramatic as their hapless dot-com brethren 15 years ago. The culprit will be exactly the same, their burn rates.

Already we know that there’s a fair amount of monkey business in unicorn valuations, as I detail in the current issue of Fortune. Tech CEOs pursue a variety of gimmicks, including guaranteed IPO prices (which trigger share issuance if they aren’t met), cash dividends, and other preferential rights in return for ego-gratifying, recruitment-and-retention-stimulating billion-dollar labels.

There will be a critical difference this time in that there won’t be an authoritative study of how much time private companies have left. (Their cash-burn data are hard to come by.) But make no mistake. The companies and their backers know precisely when the money will run out, and fundraising already is becoming more difficult. Fortune’s Dan Primack has documented this trend as well as the real impact that a collapse among poorly funded unicorns will have. He noted that 91 such companies employ 57,000 people. The vast crop of unicorn wannabes employs many more.

Consider as well that businesses like Amazon’s “cloud” software and services provider Amazon Web Services—a darling of Wall Street today—base their success on selling to startups. Even they will be stung by the cascading effect of a unicorn burn-rate bust. It won’t be pretty.

Beginning today, Adam Lashinsky, Fortune’s assistant managing editor for technology coverage, will write a daily essay for Data Sheet. Heather Clancy, who founded Data Sheet, will continue to offer her unique curation of the day’s technology-industry news, including but not limited to a roundup of some of the best articles from Fortune’s technology team. Lashinsky and Clancy welcome your feedback.

BITS AND BYTES

European Union antitrust regulators won't let up on Alphabet scrutiny. So far, the EU's only formal complaint centers on how Google runs its comparison-shopping sites in Europe. But chief Margrethe Vestager isn't through gathering evidence, and active investigations into contracts related to its mobile software business and core advertising services are ongoing. (Wall Street Journal)

Oracle under pressure to clarify cloud computing strategy. Amazon Web Services claims its Aurora database service is attracting new customers at a furious clip, faster than any previous offering, and undercutting Oracle's market dominance. Meanwhile, SAP and IBM are aggressively wooing businesses using Oracle business applications. The long-time database market leader is fighting back against these rivals with an updated cloud database service, new training systems, and migration services that make it simpler for businesses to move their existing applications to Oracle cloud applications. (Fortune, Computerworld)

Alibaba ready to put its financial muscle behind secretive augmented reality company? The Chinese e-commerce giant may invest up to $200 million in Magic Leap, a Florida-based company working on special eyeglasses for layering digital images onto a "real" world view. The company is rumored to be negotiating a substantial infusion—up to $1 billion. It previously raised $542 million in a round orchestrated by Google. (Re/code)

Microsoft sets up shop on New York's Fifth Avenue. The former Fendi space is its largest, most upscale store to date, and only the second located outside a shopping mall. The software giant's combination notebook-tablet computer, Surface Book, has earned prominent shelf space. (New York Times)

Uber seeks eighth financing round. The ride-sharing company has already raised more than $8 billion, but sources "close to the matter" suggest it's about to add $1 billion more. The new funding would inflate Uber's already lofty valuation into the $60 billion to $70 billion range. The unicorn isn't commenting. (New York Times)

Facebook signs high-profile account for business service, reaching 300 accounts. The Royal Bank of Scotland plans to put 100,000 workers on Facebook at Work by the end of 2016. The platform, which doesn't currently carry fees, is being positioned as a corporate collaboration tool that could eventually compete head-to-head with Microsoft's Yammer service, Chatter from Salesforce, and the fast-growing Slack service. (TechCrunch)

THE DOWNLOAD

This man's job? Navigate collisions between Silicon Valley and Capitol Hill

Call Ted Ullyot the black sheep of Silicon Valley. He’s a Republican in a land of Democrats, and a D.C. politico nestled among the gadget and hoodie crowd. And right now, he might just have the most interesting job in the technology industry.

Ullyot recently left Facebook, where he was the social network’s first general counsel. Now he works at Andreessen Horowitz, the fabled venture capital firm that made big bets on Pinterest, Airbnb, and dozens of other buzzy startups. His job? Help the firm and its portfolio companies navigate the collisions that arise when the unstoppable force of tech disruption meets the immovable object of government regulation. Meet the legal eagle at the center of the regulatory maelstrom surrounding the on-demand economy and learn why he advocates more "regulatory humility."

MORE FORTUNE TECH COVERAGE

Crowdsourcing Apple's earnings: Fiscal Q4 2015 edition
by Philip Elmer-DeWitt
Tim Cook's pep talk to Best Buy's CEOby Jen Wieczner
Inside the F1 Race's data center by Stacey Higginbotham
Can TiVo make a comeback? by Don Reisinger
Investors love Alphabet's new CFO by Erin Griffith

ONE MORE THING

Holograms will bring late comedians Andy Kaufman and Redd Foxx to a theater near you next year. The "live" tour will make use of visual recreations and previously recorded routines. (New York Times)

This edition of Data Sheet was curated by Heather Clancy: