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It’s not a new concept, but I heard the expression “K-shaped recovery” for the first time Wednesday. The divergent prongs of the half of the letter tell the story: surging, resilient, non-physical sectors of the economy are growing while pandemic-walloped industries that cater to the physical needs of consumers are flailing. Tech firms and service providers are in the former group. Airlines, restaurants, and producers reliant on face-to-face collaboration are in the latter.
I thought about the unfortunate end of the “K” while reading in The Wall Street Journal that AT&T, once merely a phone company, wants to sells its advertising technology business, the unfortunately named Xandr. Two years ago, AT&T spent well over a billion dollars to buy a private company called AppNexus, which became Xandr. (If you must know, the name has to do with Alexander Graham Bell, the founder of AT&T.) “Ad tech” likely seemed like a good idea to the acquisitive AT&T, which also swallowed Time Warner, the former owner of a former owner (sic) of Fortune.
It turns out the business of selling advertising technology is dominated by a few giants, namely Google, Facebook, and Amazon. AT&T needs to hop off the merry-go-round, in part because of its mountain of debt—which Geoff Colvin presciently warned about last year in Fortune—and also because the pandemic has slammed entertainment as cord-cutting already was smothering the traditional TV business. (An Apple-instigated food fight among the behemoths is quickly making ad tech a frightening place all around, but that’s a story for another day.)
Weak strategy and bad timing are a tough combination. It puts a company on the downward slope of the “K”—not the place to be right now.
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Last month I picked up The Rise of the G.I. Army, 1940-1941: The Forgotten Story of How America Forged a Powerful Army Before Pearl Harbor by Paul Dickson. I thought it would be interesting to be reminded of a time when the federal government accomplished something great, complicated, and highly coordinated—and during intense political polarization. (Interventionist-versus-isolationist tension was so intense that there was a fistfight on the floor of Congress over a law to institute a military draft.)
Some quick nuggets:
- The Depression-era Civilian Conservation Corps was run by the military, an invaluable precursor to a citizen Army.
- John F. Kennedy studied at Stanford University for a time, after graduation from Harvard but before joining the Navy.
- Underweight movie star Jimmy Stewart, who wanted to serve, got help in the gym from a Metro-Goldwyn-Mayer trainer named Don Loomis, whose job was to help actors put on or lose weight for roles. I’d love to know how his methods compared to today’s fitness techniques.
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Do you know—or invest in, or run—a startup that is tackling key social or environmental issues as part of its business model? If so, Fortune wants to hear from you. We’re soliciting nominations for the Impact 20, a new Fortune list that recognizes venture-backed and private equity-backed companies that are doing well by doing good.
We’ll be looking for relatively established startups that have already shown that they can solve important problems—and are already generating some revenue doing so. To nominate a company, use this form. Fortune editors will announce the final list in late September.
Adam Lashinsky
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Every time a unicorn loses its horn. Virtual/augmented reality startup Magic Leap has been struggling for a while now despite billions down the drain. Now comes word that major investors have written down the value of their stakes by 93%, valuing the startup at less than $500 million. At the other end of the hype cycle, four-year-old Toronto startup Xanadu says its cloud quantum computing platform is open for business. The Beatles-happy firm named its two main products Strawberry Fields and PennyLane. At least they're not more Lord of the Rings fanbois.
Dear Sexy Fish London. They did not make the media section of Fortune's 40 under 40 list, but the Duke and Duchess of Sussex, aka Prince Harry and the former Meghan Markle, signed a wide-ranging deal with Netflix to produce everything from children's programs to documentaries. The couple say they want to make "inspirational family programming" with "powerful storytelling through a truthful and relatable lens.”
California Megahertz Patrol. Feeling a need for speed in your PC? Intel debuted its 11th generation of chips for laptops, dubbed Tiger Lake, with particular emphasis on improved A.I. and graphics performance. Rival Nvidia announced the consumer line up for graphics cards using its latest Ampere architecture, promising double the performance of the prior gen.
Banned in Boston. With election misinformation multiplying at a dizzying rate, Facebook finally joined many of its social media rivals and agreed to ban new political advertising in the week before the November vote (older ads still get to run, it seems).
Who made you king of anything. If you are scoring the mega-legal fights among the mega-tech companies, the battle over the $10 billion Pentagon JEDI project should be Microsoft: 1, Amazon: 0, and Oracle: -1, after Oracle lost a second time. The government already awarded the contract to Microsoft over its two cloud rivals. Now a U.S. appeals court rejected Oracle's attempt to undo the award. In a very different kind of fight, a federal court in Illinois rejected some law enforcement requests of Google for so-called geofence warrants. That's when a crime occurs and the police ask Google for a list of every phone that was in the area at the time. Oh, and Edward Snowden was right: An Appeals Court found the NSA's surveillance program leaked by "Verax" was unconstitutional.
Never make me the underdog. India's upstart wireless carrier Reliance Jio has been making all the headlines and hoovering up all the investor cash this year, but maybe it's time for a comeback from rival Vodafone Idea. Nearly driven to bankruptcy by Jio's cheap plans, the joint venture between Vodafone Group and India's Idea Cellular is on the verge of getting a $4 billion infusion from Verizon and Amazon. That could shake things up. Meanwhile, India banned another 118 Chinese apps including PUBG, Baidu, and Alipay.
FOOD FOR THOUGHT
As a fan of getting rid of Daylight Saving Time, I was pleased to see that the American Academy of Sleep Medicine last week called for doing away with the practice. Writer Nora McGreevy explores the debate in a piece for Smithsonian Magazine.
The body’s circadian rhythms, per the National Institute of Health, are the physical, mental and behavioral changes that drive human’s health—otherwise known as one’s “biological clock,” that tells most humans to wake up with the sun and sleep when it goes down. AASM leaders argue that changing to standard time would help align peoples’ social clocks—for instance, when they’re expected to be at work—with their biological ones.
“Standard time is going to be your best situation where your social clock, your internal biological clock and your sun clock are going to be more likely, for the most time, to be better aligned,” as Phyllis Zee, a sleep medicine specialist at Northwestern University’s Feinberg School of Medicine, who was not involved in writing the AASM paper, tells the Post.
IN CASE YOU MISSED IT
From superstar cities to ghost towns: Two-thirds of workplaces in major hubs have yet to reopen By Lance Lambert
MacKenzie Scott is now the wealthiest woman in the world By Emma Hinchliffe
Rocket Internet comes down to Earth By Lucinda Shen
Bill Gates-backed EV battery startup to go public using Wall Street’s latest buzzy trick By Aaron Pressman
First he took energy trading and the NYSE electronic. Now Jeff Sprecher of ICE shares his plans to digitize your mortgage By Shawn Tully
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
Magician and, what...performance artist David Blaine had one for the ages on Wednesday. It's almost too beautiful to describe but the "trick" involved a bunch of colorful helium balloons, wide open blue skies, and–eventually–a parachute. There's plenty of video, but start with the write up from blogger Jason Kottke. Have a floating away kind of day.
Aaron Pressman
