News: Week 48
Salesforce eyes Slack acquisition, Musk overtakes Gates & is Microsoft spying on you?
|Nov 28, 2020|
I thought it could be a quiet week with much of America taking the second half of the week off for Thanksgiving. However, Wednesday came through with the goods when The Wall Street Journal broke the Salesforce & Slack news.
So with that, what happened in Week 48;
Salesforce in talks to buy Slack
On Wednesday reports surfaced that the CRM giant Salesforce is currently in talks with work productivity app Slack to purchase the company. I wrote about Slack in September following their Q2 earnings, and suggested (as many others have) that Google might look to acquire Slack to build out its Google Workspace portfolio, but it seems Salesforce will be the buyer. This is about competing with Microsoft and their ability to cross sell Dynamics CRM and Teams into each others’ user base. Salesforce plus Slack would be a compelling alternative productivity and customer record stack for businesses. Slack’s share price closed Wednesday trading up 40% following the news, increasing its market cap to $22 billion. (story)
Big milestones for Elon & Tesla
In a fruitful holiday period for Elon Musk, his electric car company Tesla has received confirmation that it will be included in the S&P 500 from Monday December 21. This inclusion means funds that track the index will need to purchase Tesla, which has driven its market cap to over the $500 billion mark, and made Musk the second richest person in the world. Musk overtakes Microsoft founder Bill Gates, and trails only Amazon’s Jeff Bezos on the list. From CNBC, “In October, Tesla reported its fifth consecutive quarter of profit on third-quarter revenue of $8.77 billion. The company also reported earlier that month it delivered 139,300 vehicles during the third quarter, a record for the carmaker.“ Tesla is now five times more valuable than General Motors and Ford combined. (story)
2020 is the year of ecommerce - Wish files for an IPO
Odds are you have bought something via Wish, even if you didn’t know what you were looking for. Wish is an American ecommerce business that connects 100 million monthly active users (shoppers) to over 500,000 merchants. Nearly two million items a day sell on Wish, with 70% of sales happening through browsing, rather than a search query which is more akin to an Amazon or Google experience. Wish is closing in on $2 billion of annual revenues, and has $1 billion in the bank, but is yet to post an annual profit. Wish is seeking a $30 billion valuation, which mirrors the target of Airbnb who also filed to go public last week. Ecommerce is the business story of the year. (story)
Starling Bank in the black
The first of the UK neobanks to hit the financial milestone of profitability, Starling took the opportunity to share an update on their key metrics this week. In October Starling reported a monthly operating profit of £800k on £9m of revenue. CEO Anne Bodin stated that the bank would retain profitability from now on, having found a sustainable business model. The bank has 1.8 million accounts, and has lent £1.5 billion, much from government backed loan schemes, from £4 billion in deposits. This tells a pretty clear story that banks run on lending books, and for others such as Monzo, long term sustainability will likely rely on traditional banking business models. (story)
Square is buying Credit Karma Tax
To further bolster the services provided by its Cash App product, Square announced that it had agreed to purchase the tax filing product from Credit Karma for $50 million. Tax filing is free within Credit Karma Tax, but an easy to use filing system will bring more users to Square’s Cash App, which Square can then monetise through card transactions, investments, Bitcoin trading and credit products. (press release)
India bans more Chinese apps
While much has been made in the west of Trump’s efforts to ban TikTok in the United States, in India the government has thus far blocked over 200 Chinese apps, with another 43 apps being banned this week. Relations between India and China, who share a border, have been strained this year. Popular Chinese technology companies Alibaba, Tencent and Bytedance have been heavily affected by not being able to serve the world’s second largest market where 700 million people have smartphones. The bans have spurred new market entrants locally. (story $)
Is Microsoft enabling staff surveillance?
In October Microsoft announced a new tool for it’s workplace product subscribers, a productivity score to help managers understand how effective their teams are working. It wasn’t until the product launched on November 17 that people began to see how granular the insights were. Microsoft is now under some media scrutiny for enabling staff surveillance, with the new tool allowing managers to see individual workers' time spent on email, camera use in meetings, and level of contribution in group chats. Productivity insights seem reasonable, but should they be aggregated and anonymised? This is a human and team culture problem, not a software problem, exacerbated by remote working in 2020. (story)
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AWS outage causes havoc
On Wednesday one of Amazon’s 23 geographical AWS locations went down, causing large parts of the internet to go dark. Many popular web services were down, including business tools from Adobe, podcasting tools for Spotify, American newspapers like The Washington Post and many other services. But it wasn’t just internet applications that were affected, people took to Twitter to complain that their smart home products like their door bell or vacuum cleaner stopped working, as they were reliant on AWS. A funny reminder that home appliances still need an “offline” mode, and we’re pretty reliant on a small handful of companies now.
Happy Thanksgiving y’all, have a great weekend.