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Some people bake bread during a pandemic. Others up their revolutions on the Peloton. Tech analysts at Bernstein, the research-focused brokerage, apparently sit around thinking deep thoughts about the future of mega-cap tech companies.
A troika of analysts unveiled a new report about a trio of tech giants—Google, Apple, and Microsoft—that asks a compelling question: Should Apple buy its own search engine?
The logic is compelling, convoluted, and potentially expensive. Here’s the short version: Google currently pays Apple in the neighborhood of $8 billion annually to be the default search engine on iPhones and other Apple devices. The Bernstein analysts reckon that figure isn’t so much a function of the economics to Google as what Google is willing to pay to keep Microsoft and its Bing search engine—which still exists, apparently—off Apple’s phones.
That’s an enviable position for Apple, but one the Bernstein analysts think could be jeopardized if Google decided to go it alone and if Microsoft chose not to step in at the same dollar value. Their prescription is for Apple to buy DuckDuckGo, the No. 4 U.S. search engine, which I confess I’d never heard of or forgotten about if I had. DuckDuckGo highlights its focus on privacy, making it a good fit for Apple.
It’s food for thought rather than market intelligence.
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I wasn’t sure what to expect last November when I traveled (through the airport in Wuhan) to Guangzhou for the Fortune Global Tech Forum, an event predicated on engagement between China and the West, particularly the U.S. What I found, at least in spirt, was business as usual. The Chinese and Western executives came to do business, as they’d been doing for years, despite the bellicosity coming from Washington and Beijing. Reading this riveting excerpt from the new book by Wall Street Journal reporters Bob Davis and Lingling Wei, I’m not so sure how long business as usual will last.
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My article in February about the state of San Francisco and its government prominently featured the downtrodden Tenderloin neighborhood. As Heather Knight, the city’s most influential newspaper columnist, describes in this sad account, conditions in the Tenderloin have deteriorated during the pandemic. In other words, they’ve gone from bad to horrific. And this is amid the backdrop of city officials having done a laudable job at keeping the overall city safe from Covid-19.
Adam Lashinsky
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Out of sight. In one of the most concrete reactions in tech to the current protests against racism and police brutality, IBM said it was dropping all facial recognition applications. “IBM firmly opposes and will not condone uses of any technology, including facial recognition technology offered by other vendors, for mass surveillance, racial profiling, violations of basic human rights and freedoms, or any purpose which is not consistent with our values and principles of trust and transparency,” CEO Arvind Krishna wrote in a letter to Congress explaining the decision.
Good night and good luck. Disappointed and delayed too many times by Intel, Apple is on the verge of announcing a switch to its own processors, Bloomberg reports. Software developers at WWDC will hear on June 22 about the new Macs with Apple-designed processors arriving for consumers next year. In other debut news, Sony says its delayed Playstation 5 game unveiling event will take place on Thursday.
The perfect storm. On Wall Street, online used-car market Vroom went public, pricing its shares at $22, higher than the anticipated range of $18 to $20. Trading starts later on Tuesday under the symbol VRM. Fintech startup Lemonade filed to go public, revealing that its revenue tripled to $67 million last year.
Gravity. The vice chairman of Samsung, Lee Jae-yong, won't be going back to jail, at least not right now. A South Korean court rejected an arrest warrant for Lee, the grandson of Samsung's founder, over alleged financial fraud. Prosecutors say they are still investigating Lee, who served a year in prison on a related bribery charge.
Men who stare at goats. No, 5G doesn't cause coronavirus, but you knew that. Now Twitter is adding its "get the facts" label to tweets that allege a connection. Meanwhile, a new study from NYU's Stern Center for Business and Human Rights urges social media companies to greatly increase the size of their content moderation workforces and stop using outside contractors for the function. And on Reddit, some 300 moderators sent a letter to CEO Steve Huffman calling for the site to ban racism and hate speech.
The monuments men. Yesterday, we mentioned a lawsuit filed by several Amazon workers in New York charging that the company was not following government health guidelines in its warehouses during the COVID-19 pandemic. Later on Monday, Amazon sent a statement saying it has followed the guidance of all federal and local health authorities and that its facilities have passed all 91 inspections made by state health and safety regulators.
(Headline reference explainer/some diverting cinema recommendations for you from the George Clooney oeuvre.)
FOOD FOR THOUGHT
Some day, lockdowns will end and we will go back to work and to some of our other favorites places to hang out and get stuff done. My friend and author Eric Weiner has written an ode to working in the coffee shop, sometimes known as the "third place" besides your home and your office.
When we think of the ideal place for contemplation, we tend to imagine quiet ones, a belief drilled into us by legions of shushing librarians. But quiet, it turns out, isn’t always best. A team of researchers, led by Ravi Mehta of the University of Illinois at Urbana-Champaign, found that those exposed to moderate noise levels (seventy decibels) performed better on a creative-thinking exam than those exposed to either high levels of noise or complete silence. Moderate noise, Mehta believes, allows us to enter “a state of distracted, or diffused, focus,” the ideal mindset for creative breakthroughs. It’s called the “Starbucks Effect,” and explains a lot about why you find so many writers and entrepreneurs camped out at coffee shops.
ON THE MOVE
A little excitement for our executive moves section today. Former Amazon Web Services vice president of product marketing Brian Hall jumped to Google Cloud–and Amazon is suing, saying Hall violated a non-compete agreement...Speaking of Google, Twitter named former Google CFO Patrick Pichette as its new board chair. Pichette, who left Google in 2015, has been a board member for three years...At Microsoft, LinkedIn SVP Ryan Roslansky is taking over as CEO of that unit from Jeff Weiner, who becomes executive chair...US Cellular named AT&T Mexico boss Laurent Therivel as its new CEO. Outgoing CEO Kenneth Meyers is retiring...Dish Network hired longtime T-Mobile executive Dave Mayo as EVP of network development as it tries to crack the mobile phone market.
IN CASE YOU MISSED IT
Tesla stock closes at an all-time high on bullish sales data out of China By Anne Sraders
Stitch Fix’s new growth strategy: Letting non-clients shop directly, too By Phil Wahba
‘Not an easy decision.’ How Alexis Ohanian justified his departure from the Reddit board By Lydia Belanger
Facebook and Google preach racial equality. But they lack it on their leadership teams By Danielle Abril
White female founders face a reckoning over racism By Emma Hinchliffe
An inclusion expert and a CEO on how businesses can keep the anti-racist momentum going By McKenna Moore
The stock market’s breathtaking rally has some investors worried about another correction By Rey Mashayekhi
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BEFORE YOU GO
We may have to send Adam out on assignment to confirm this story, but apparently the Golden Gate Bridge is now making sounds like the background music in a David Lynch film. Listen and see if you agree. Replacement handrails changed the flow of air across the span, resulting in the moody new soundtrack.
Aaron Pressman
