In an effort to discover why President Trump is so ticked off with TikTok and why Microsoft would want to buy the user-generated video app, I finally relented and downloaded it to my phone at the weekend.
Alarmed that US secretary of state Mike Pompeo had said this was the same as me passing my private information directly to the Chinese Communist party, I was reassured to find I could still watch stupid dance videos without even registering an account. When I did go to the Sign Up page, it turned out I could just use my existing Facebook, Apple, Google or Twitter account to log in, rather than give TikTok any personal details (Note to Redmond supremo Satya Nadella: there is no Microsoft account login option, so you might want to fix that).
Anyway, this pottering around with a pointless Chinese-owned app led me to the conclusion that President Trump is perhaps just mad at China in general, although his advisers may have brought up trade issues and someone just might have mentioned how advances in AI are built on mining and learning from large data sets and facial recognition technology improvements thrive on access to video databases.
Working out Microsoft’s motives was more difficult. TikTok is the polar opposite to its other social media acquisition, the professional networking site LinkedIn. Could there be some mash-up with Skype or the Teams video conferencing service where workers produce Ricky Gervais-type Office dance videos?
Analysts tell us this is instead an attempt to push deeper into a younger demographic, with TikTok a good fit with Microsoft’s Xbox gaming service. Lex argues Satya Nadella may not care exactly how TikTok would fit, but may simply believe geopolitics has handed him a chance to strike social media gold with this distressed time-limited sale by TikTok’s parent ByteDance.
Whatever the reasons, Microsoft said today it would press ahead with acquisition talks, following a conversation between its boss and Mr Trump. There may even be other opportunities out there: the White House has vowed to “take action” in a matter of days against Chinese software companies that it perceives as a risk to security — a sign that Washington is set to broaden its offensive beyond TikTok.
That could cut both ways: Chinese tech stocks jumped on Monday as investors made bets on local companies they believed would enjoy greater support from the government, although in ByteDance’s case, as Yuan Yang explains, there is little reason for Beijing to defend it.
The Internet of (Five) Things
1. Google secures ADT deal for Nest
Google has struck an exclusive $750m partnership with ADT to sell and develop its Nest smart home products. The deal will see Google take a 7 per cent stake in the US home security provider for $450m. In return, ADT will go from selling a range of cameras and other devices to only selling Nest products to consumers and small businesses.
2. Wirecard’s mafia connection
Wirecard processed payments for a Maltese online casino that was later revealed to have laundered money for Italy’s ’Ndrangheta mafia. Valdis Dombrovskis, EU economy chief, said the collapse of the German payments company would galvanise Brussels to upgrade financial supervision.
3. Facebook still failing, say boycotters
The social media giant has “failed to deliver” on most of its advertisers’ demands on content moderation despite July’s boycott, one of its organisers Jonathan Greenblatt, chief executive of the Anti-Defamation League said, as civil rights groups weighed their next move.
4. US looks at semi-detached future
US politicians are looking at legislation that would pour taxpayer money into domestic chip production. The final bill lays out a framework for $25bn worth of direct incentives to stimulate investment in manufacturing capacity, along with advanced research. Richard Waters explains how semiconductors have become a priority as global supply chains come under threat.
5. Roundabout stops for TechHub
TechHub, which for a decade was home to hundreds of start-ups at the heart of London's “Silicon Roundabout” tech scene, has filed for administration. Co-founder Elizabeth Varley blamed Covid-19 for its collapse, saying that it had lost three-quarters of its revenues as the lockdown prevented members from using the space. Its tenants together had raised more than $1bn in funding, she estimated.
Tech week ahead
Tuesday: Consumer electronics and gaming company Sony will report second-quarter results and reveal its forecast for its fiscal year after posting a 36 per cent drop in net profit to 582bn yen ($5.5bn) for the year ended March 31. In the US, Walt Disney reports after the close, with revenues expected to slide due to coronavirus-related disruptions for its theme parks and movie studios while it receives a boost to streaming services like Disney+. Others reporting include video game publisher Activision Blizzard, meat-substitute maker Beyond Meat and dating conglomerate Match. Tuesday is also the provisional deadline for the EU to decide on approving Google’s acquisition of Fitbit.
Wednesday: Samsung Electronics reveals its latest smartphones and mobile devices in an online Unpacked event. A new model of the flagship Galaxy Note and a foldable phone are expected, as well as a tablet, earbuds and a smart watch. Payments company Square reports after the close.
Thursday: Japanese games company Nintendo will report quarterly earnings, which will be boosted by the success of Animal Crossing: New Horizons during lockdown. In the UK, investors will be looking for signs of any recovery in advertising in June and July, when UK broadcaster ITV reports. Ad-spending plummeted and production stopped during lockdown, but viewing figures surged. Uber reports after the New York close, with revenue set to take a lockdown hit. Investors will watch for news on the Eats business after the ride-hailing platform reached a deal to acquire food delivery rival Postmates, marking a milestone in the long-awaited consolidation of the US food delivery sector.
Friday: China’s top contract chipmaker SMIC is expected to report robust second-quarter earnings, thanks to its No. 1 customer Huawei's efforts to stockpile inventory to counter a US crackdown on its suppliers.
Tech tools — Google Pixel 4a
Google today announced a more affordable model in its Pixel smartphone line-up. The £349 ($349) 4a will compete with phones like the iPhone SE, Samsung A10 and OnePlus Nord. It has a 5.8in display with HDR support, 128Gb of storage and a 12.2Mp rear camera that allows “seriously impressive photography”, according to TechRadar. It will be available from August 20 and coming in the autumn are the Pixel 5 and Pixel 4A 5G.
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