Data Sheet—How Digital Transformation Drives Big Deals for Qualcomm, Disney, and Google
It’s a day of the big getting bigger, discussing ways to gang up on bigger rivals, and simply thinking big.
Broadcom opportunistically is trying to buy Qualcomm in what would be the richest tech deal ever. If that unlikely deal were to go through, it would be a triumph of private-equity-fueled growth given Broadcom’s backing from tech private-equity leader Silver Lake. It’s also, surprisingly, a victory of sorts of an old-school survivor. Broadcom is the descendent of a nearly 60-year-old unit of the original Hewlett-Packard. Semiconductor companies are like enterprise software companies: they don’t die easily.
Salesforce and Google agreed to collaborate on the cloud. That’s a victory for Google, which is fighting Microsoft and Amazon in that business. It’s also a win for Salesforce, which presumably got a deal from Google.
Perhaps the most fascinating non-deal of the day is CNBC’s report that Disney tried buying 21st Century Fox’s entertainment assets, not including its news, broadcast TV, and sports properties. Disney has been a savvy acquirer, and it’s surprising that Rupert Murdoch, also typically a buyer, would consider selling. That means he’s likely eyeing what he’ll buy next.
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The underlying theme behind all this is the increasing velocity of digital transformation across multiple industries. End markets for chips are in flux even as they experience great growth. (Smartphones are in; PCs are out.) The cloud, for a while more of a metaphor than a giant business, is re-ordering all sorts of industries. (Microsoft is tech’s most rejuvenated company on the strength of this theme.) And Disney’s machinations can all be viewed through the prism of “cord-cutting,” itself a manifestation of video streaming, a digital transformation if ever there was one.
Two of the keenest writers about China in the Western press are China-based columnists for The Wall Street Journal, Andrew Browne and Li Yuan. Both wrote important pieces in the aftermath of the recent party congress. Browne warned about the dangers of one-man rule following the ascent of Xi Jinping. Li argued that U.S. tech giants may not understand the power dynamics of operating in China nearly as well as they think they do.
Check it out. Music artist Will.i.am‘s tech startup I.am+ has raised $117 million in private backing. Originally focused on making consumer gadgets like headphones, the company is now working on a digital voice assistant for customer service, Reuters reported.
Checked out. Comcast Xfinity Internet service suffered major problems for several hours on Monday, leaving customers in many major cities with slow connections or none at all. Affected cities included Denver, Portland, Chicago, Seattle, New York, San Francisco, Houston, and Boston.
Checked off. The massive leak of millions of documents about international tax avoidance called the Paradise Papers included information about Apple’s strategy after Ireland changed its tax laws. The iPhone maker assigned the tax residency of two Irish subsidiaries to the Channel Island of Jersey, which has no corporate tax.
Check under “surprise.” Intel said it would obtain graphics processing chips from CPU rival Advanced Micro Devices for use in one of its high-end laptop products. Intel said the new offering would combine one of its 8th generation H-series CPUs with an undisclosed AMD GPU and high-speed memory on the same chip, suitable for more expensive and high-performing laptops.
Not checking in. Priceline Group‘s 2017 stock rally came crashing to a halt after its reported third quarter results that met expectations but said its fourth quarter profit would be much lower than Wall Street’s forecast, as growth in hotel bookings has slowed. Forecast adjusted earnings per share of $13.40 to $14 didn’t meet the average estimate of $15.62. Priceline’s shares, which have gained 30% so far this year, fell 8% in premarket trading on Tuesday.
FOOD FOR THOUGHT
The so-called Pottery Barn rule, as stated by former Secretary of State Colin Powell was “you break it, you own it.” That doesn’t necessarily compute in Silicon Valley where a very different aphorism holds sway: move fast and break things. Geekwire’s cloud editor Tom Krazit thinks that after the recent revelations about Russian influence campaigns on major social networks like Facebook and Twitter, we need a new twist on the sayings, as he headlines his essay on the subject: Move Fast and Fix Things. The big Internet companies face a “stark choice,” he writes:
Either admit that their technological approach to policing these issues has failed in a big way and introduce a much greater number of humans into the equation, or quickly find a technical way to sort out deliberate sowers of disinformation on their platforms. A former Twitter engineering leader thinks a combination of artificial intelligence and human editors is the best bet, pointing to Twitter Moments as a first step.
The 2018 election cycle will be one of the most scrutinized mid-term elections in modern American history. If Facebook, Google, and Twitter really do want to make the world a better place, they need to figure this out now and fashion a tech version of something every doctor knows: first, do no harm.
IN CASE YOU MISSED IT
Life in the Channel Island of Jersey, Apple’s Alleged Tax Haven By John Patrick Pullen
Google and Salesforce Just Signed a Big Cloud Partnership By Jonathan Vanian
How to Spot the Netflix Email Scam Hitting Millions of Subscribers By Tom Huddleston Jr.
How to Fix That Really Annoying “i” Bug on Apple’s iPhone X By Lucinda Shen
BEFORE YOU GO
Oh sure, Tyrannosaurus Rex had big, scary teeth but what about those stubby, silly arms? New research by paleontologist Steven Stanley argues that the arms were lethal weapons, too. “Strong forelimbs and large claws would have permitted T. rex, whether mounted on a victim’s back or grasping it with its jaws, to inflict four gashes a meter or more long and several centimeters deep within a few seconds,” he tells National Geographic. Ouch!