It’s tough to remember the sound and the fury that was the online daily deals business, dominated by two companies, Groupon and LivingSocial. I remember being perplexed one day when I went to my go-to lunch place to see a queue out the door. The soup-and-sandwich shop was running a promotion on one of the two. It’s a sight less often seen these days because the deals were too close to the proverbial free lunch: Merchants gave away their wares too cheaply, and customers too infrequently returned.
And yet, this glorious time was a mere five years ago. Groupon, which said Wednesday it will buy what’s left of LivingSocial for an amount too trivial to disclose, once was worth $16 billion. Today, its market value is $3 billion. Subtract out its (dwindling) cash stash of almost $700 million, and what remains is even less impressive. As for LivingSocial, it also once was worth seven figures and counted Amazon as an investor.
The daily deals business was an online adaptation of an old idea: coupons. E-commerce is a brutal business, though. Merchants have many mechanisms available to them to move inventory. And it turns out that customers understand it’s a bit iffy if brands hawk too much for too little.
On the flip side, another small company sold itself this week for a relative bundle. The New York Times paid around $30 million for The Wirecutter, a gadget review site started by the journalist Brian Lam. Lam’s creation pursues a radical strategy. It writes meticulously researched product reviews, stakes its credibility on being unbiased, and takes a cut of sales it refers to Amazon. The Wirecutter doesn’t much care about the size of its audience and only updates reviews when warranted. It also doesn’t feel compelled write about every product—just the ones it wants to recommend. (And as in the case of the HP printer I bought Wednesday, it’s not afraid to call it like it sees it, referring to its top pick as “the least bad all-in-one printer for your home.”) Such honesty is worth a lot.
| Adam Lashinsky | |
| @adamlashinsky | |
| adam_lashinsky@fortune.com |
BITS AND BYTES
It's official: Qualcomm will pay $38 billion to buy chipmaker NXP. The combination will give Qualcomm, which is a huge supplier to smartphone makers, far more influence as a purveyor of semiconductors to the automotive industry. (Reuters)
Snapchat's parent wants to raise $4 billion with an early 2017 IPO. The latest scuttlebutt, courtesy of Bloomberg, suggests the messaging company could earn a market capitalization of at least $25 billion. The service is expected to generate $250 million to $350 million in advertising revenue this year. (Bloomberg, Fortune)
Twitter reduces headcount by 9%. The social media company is reorganizing its sales, marketing, and partnership teams—a move that will eliminate roughly 350 jobs. The good news is that its third-quarter revenue of $616 million was better than expected. But the growth rate for the period was just 8% compared with 58% last year. (Reuters)
GE goes with Plan B, buys different German 3D printing company. After its bid for SLM Solutions Group collapsed over an activist's objections, the conglomerate has reached a $599 deal with rival company Concept Laser. (Bloomberg, Reuters)
Lenovo and Fujitsu confirm alliance talks. The two personal computer makers officially revealed they are discussing a collaboration under which the Chinese company could take over some of the Japanese firm's assets, while retaining the Fujitsu brand. That's all they'll say for now. (Reuters, Lenovo)
Microsoft jumps on virtual reality bandwagon. The tech giant is turning Windows 10 into a friendlier platform for VR applications. HP Inc., Lenovo, Acer, Dell and ASUS are among those with headsets in the works. (Fortune)
Campbell Soup is investing in a nutrition app startup. It's the sole backer of Habit, which uses DNA samples to make personalized diet recommendations. The startup is helmed by the former head of baby food company Plum Organics, which Campbell bought in 2013. (Fortune)
WATCH FOR IT
Google, Amazon, and LinkedIn financials under the microscope. After starting the day with Twitter's fiscal health update, analysts and investors will hear from all three Internet companies after the stock market close. Expect more color on Google's progress in video, few surprises from LinkedIn as it moves toward life as part of Microsoft, and more double-digit growth for Amazon.com's e-commerce and cloud services businesses.
Catch the Apple product launch via livestream. If you can't wait to hear more about its MacBook Pro refresh, monitor this link after 1 p.m. ET.
THE DOWNLOAD
Why the secretive Palantir is 'seriously' considering an IPO. CEO Alex Karp has long been philosophically opposed to taking his fast-growing data analytics company public. But as the company nears profitability, that may be the best way to let employees share in the wealth, Karp said during an interview Wednesday.
“The people who create the value of production, the workers at Palantir, they need to know that they have liquidity at a fair price, and this has raised a lot of questions.” More on what changed his mind.
IN CASE YOU MISSED IT
Twitter Shareholder Sues CEO and Board Members Over Inflated Share Price, by Jeff John Roberts
Hands-On With Microsoft's Stunning New Apple iMac Rival, by Lisa Eadicicco/TIME
Uber Will Let Outside Developers Write Apps for Its Drivers, by Kia Kokalitcheva
It's Time to Stop Calling Apple a Hardware Company, by Don Reisinger
Delta's New App Makes It Easier to Keep Track of Luggage, by Michal Addady
AT&T's Bid for Time Warner Could Get Tripped Up By CNN Satellites, by Jeff John Roberts
Zendesk Looks Beyond Customer Service With These New Apps, by Heather Clancy
ONE MORE THING
Tesla reports first profitable quarter in three years. The electric vehicle company reported record shipments of 24,821 cars for the third quarter. Although it is still spending heavily, Tesla managed net income of almost $22 million for the period. Keeping expenses in line will be critical as Elon Musk and company race to get the lower-priced Model 3 to market by the end of next year. (Fortune, Fortune)
This edition of Data Sheet was curated by Heather Clancy.
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