News: Week 50
Airbnb & DoorDash IPOs pop, breaking up Facebook and Google Search 2020 in review.
|Dec 12, 2020|
To those who have signed up since Monday’s edition, welcome to Techonomist. I hope you enjoy my thoughtful nonsense. This is the Saturday edition, where I summarise the weeks tech business stories which felt important and to provide a little context on what it means.
Before we get there…
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Now onto the news…
Airbnb and DoorDash commence trading
In what might be the most anticipated IPO of the year, Airbnb debuted on the Nasdaq on Thursday, and the market did not disappoint with a staggering 113% gain on opening day. Airbnb closed Friday trading valued at $83 billion as investors are betting on a return to travel following the commencement of the mass vaccine programme. Worth noting Airbnb raised $1 billion in emergency debt when the pandemic hit in April at a reduced $18 billion valuation. A lot changes in 8 months. Meanwhile America’s food delivery market leader DoorDash also saw a major pop in its share price on trading day, seeing a 92% increase on Wednesday, before closing the week valued at $55 billion. I’ll be breaking DoorDash down in my Monday edition.
Breaking up Facebook?
After the acquisitions were approved in 2012 and 2014 respectively, Facebook will be required to defend the acquisitions of Instagram and Whatsapp once more, following a lawsuit issued by the Federal Trade Commission in the US. When Instagram was acquired it had less than 50 million active users and 13 employees. Whatsapp had around 50 employees and reported a $130 million loss the year before, from $10 million in total revenue. Instagram and Whatsapp have been part of Facebook longer than they were standalone. Endeavouring to break them up now is really problematic. (story $)
If you’re interested in learning more about regulation in tech, Benedict Evans is a great writer and critical thinker on the topic. You can find some of his essays on the subject here.
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Uber is selling its autonomous vehicle business
In an acknowledgement that it is burning too much cash, and the runway is longer than hoped to reach meaningful production and adoption, Uber is selling its driverless cars project to Aurora, a Silicon Valley autonomous vehicle startup. The dream of driverless Ubers has drained cash and energy from Uber since embarking on the innovation challenge in 2015. Uber has faced many challenges, including a lawsuit from Google over a poached executive and stolen trade secrets, as well as the death of a pedestrian from an autonomous vehicle which was being tested in Arizona in 2018. Uber aren’t giving up on the idea though, they will invest $400 million in Aurora with hopes the startup will accelerate progress more cost effectively by being solely focussed on the endeavour, allowing Uber to turn its attention to rebuilding its ride sharing business post pandemic and growing Uber Eats. Much like Airbnb acknowledged this year, sometimes it’s better to do less but do those things really well. (story $)
Apple Fitness+ arrives December 14
Apple is moving into another media category following original content on TV+. This time they will provide their own exercise content. In direct competition with Peloton, who has a 3.6 million member head start, Apple’s Fitness+ is a monthly subscription service of classes such as HIIT, strength, yoga and more. Apple will not sell any equipment (other than the Apple Watch of course), but cycle and running classes can be done on any machine. Subscriptions will be $9.99 per month, or Apple enthusiasts can bundle Fitness+ into a premium Apple One bundle, which includes TV+, Music, News+, Storage and Games. Peloton’s moat is their instructors, brand and community. It will be interesting to see if Apple can test that moat and make this is a hit like TV+, or will it be another News+? Time will tell. (story)
Apple AirPods Max
Never afraid to test the buying power of their loyal customers, Apple this week launched another premium set of headphones, this time at an eye watering $549 before tax. The overhead noise cancelling headphones will compete with similar products from Bose and Sony, and boast 20-hours of battery life, fast recharge (which I do love about AirPods) and custom acoustic design developed in house at Apple. Question is: who is going to be the first person in your office to rock up to a Zoom call with a pair of these? Remember we all laughed at AirPods at first, well Apple sold 60 million pairs of them last year. (product video)
Stitch Fix earnings
Online retailer Stitch Fix, which recommends clothing to customers based on their style preference, budget and size, enjoyed a near 50% jump in its stock price on Tuesday following impressive quarterly earnings. Stitch Fix grew customers and revenue at around 10% YOY, reporting growth to 3.8 million subscribers and an annual revenue run rate just short of $2 billion. One of the difficult things about online stylist services is getting the suggestion algorithm right, but Stitch Fix clearly has, with 80% of new customers keeping at least one item from their first shipment. (earnings)
Disney+ has Netflix level ambitions
During its 4-hour investor event, Disney zoned in on their direct to consumer streaming business, which has seen huge growth in 2020 with now 87 million subscribers, following hits like The Mandalorian, Mulan and Broadway's Hamilton. Disney wants 250 million subscribers by 2024, and plans to get there by spending mountains of cash on more original content, particularly on Marvel and Star Wars content, as well as Pixar produced animation films. Netflix currently has 195 million subscribers, and released 370 TV and film titles last year, with a mix of licensed and original content. (story $)
Google Search - 2020 in review
The ubiquitous search engine has published popular searches and general trends for 2020. Coronavirus edged out the US Election for most common search globally, while Tiger King was the most searched TV show (has anyone checked in on Joe Exotic recently?) You can filter by categories and countries in the full list here.