fortune--2020-07-29--TikTok CEO calls out Mark Zuckerberg for attacks ‘disguised as patriotism’

At Wednesday’s antitrust hearing, Facebook Inc. Chief Executive Officer Mark Zuckerberg is set to tell Congress his company is an American success story crucial in winning an internet arms race against China.
TikTok’s CEO is already striking back. The hugely popular video app owned by ByteDance Ltd. has become symbolic of Chinese power in the U.S., new CEO Kevin Mayer acknowledged in a statement. “But let’s focus our energies on fair and open competition in service of our consumers, rather than maligning attacks by our competitor – namely Facebook – disguised as patriotism and designed to put an end to our very presence in the U.S.,” he said in a blog post.
Mayer, who left Walt Disney Co. for the viral video platform in May, now leads an effort to convince U.S. regulators TikTok isn’t a threat to national security or America’s youth. The world’s most valuable startup is trying to stave off a possible blacklisting that would cripple its growth, and exploring options such as a sale of TikTok to American investors.
Zuckerberg’s testimony — published in advance — focused on the broader danger of allowing tech firms from the world’s No. 2 economy to dominate the online sphere. After years of trying to bring Facebook into China, he’s choosing the opposite path, setting up Facebook’s success as an alternative to China’s.
“China is building its own version of the internet focused on very different ideas, and they are exporting their vision to other countries,” Zuckerberg will say today, according to the CEO’s testimony prepared for the House Judiciary Committee on antitrust.
The argument is likely to resonate with President Donald Trump, who has already threatened to ban TikTok in an escalation of tension with China over trade, security and the coronavirus.
Facebook competes directly with TikTok, including with a new feature called Reels available in some countries. Mayer mentions the product by name, as well as mini-video app Lasso.
“Their other copycat Lasso failed quickly,” he says. “Bring it on.”
In the meantime, TikTok is investing in reinventing its image and hiring heavily in the U.S. Mayer’s own hiring is regarded as a big help in burnishing TikTok’s credentials. It’s building relationships to show TikTok to be “responsible and committed members of the American community,” Mayer writes.


fortune--2020-07-29--AMC and Universal’s shorter theatrical window deal is ‘a historic, industry-changing agreement’

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In a sign of how the pandemic is remaking Hollywood traditions, AMC Theatres and Universal Studios on Tuesday announced an agreement to shorten the exclusive theatrical window to just 17 days for the studio’s films.
The standard window of theatrical exclusivity typically runs about 90 days. Up until now, the largest chains have steadfastly refused to screen films that don’t give releases a lengthy and exclusive run in theaters before moving onto video-on-demand or streaming services. Studios, meanwhile, have increasingly sought to deliver new movies more quickly into the home.
The new deal covers Universal films — which include the “Fast & Furious” franchise, “Jurassic Park” movies and the “Despicable Me” series — in the U.S. over the next three years.
After a run of at least three weekends, Universal (and its specialty label, Focus Features) will have the option of steering a film to premium on-demand, including AMC’s own service. The shortened window only applies to premium video-on-demand — which often means digital rentals of $20 — not standard on-demand or other home platforms.
The deal has potentially profound ramifications for an industry reeling from the coronavirus pandemic. It’s all but certain to lead other studios to press for similar terms from AMC and other exhibitors. Netflix, which hasn’t been able to previously agree with major chains over briefer runs for its premier releases, could now find deals more palatable. If widely embraced, a three-week window would also put further pressure on independent theaters which tend to rely on longer runs for films.
Adam Aron, chief executive of AMC, called it “a historic, industry-changing agreement.”
The deal repairs a rift between AMC, the world’s largest theater chain, and Universal, which is owned by Comcast Corp. In April, with theaters shuttered nationwide, Universal released the animated sequel “Trolls World Tour” by video on demand. NBCUniversal CEO Jeff Shell then trumpeted the digital release as a success and said the studio would, even once theaters reopened, “release movies on both formats.”
That infuriated theater owners. Aron said the company would no longer play Universal releases and claimed he would do the same for any distributor that “unilaterally abandons current windowing practices absent good faith negotiations between us.”
Terms of the deal weren’t disclosed, but AMC will get a share of the premium video-on-demand revenue.
“The theatrical experience continues to be the cornerstone of our business,” said Donna Langley, chairman of Universal Filmed Entertainment Group. “The partnership we’ve forged with AMC is driven by our collective desire to ensure a thriving future for the film distribution ecosystem and to meet consumer demand with flexibility and optionality.”
Defending the impact at the box office, Aron said that the first three weeks of ticket sales is when “a considerable majority of a movie’s theatrical box office revenue typically is generated.”
The largest chains have been closed in the U.S. for more than four months, threatening their solvency. Exhibitors, including AMC, are currently planning on a large-scale reopening by late August, with Warner Bros.’ “Tenet” prepared to usher moviegoers back over the Labor Day weekend, after debuting a week earlier overseas.
Universal has opted to postpone its largest upcoming films — including “F9” and “Minions” — into next year. The studio sent “The King of Staten Island” directly to homes. Its next scheduled release expected in theaters is “Candyman” on Oct. 16.
The National Association of Theater Owners, the trade organization that represents the country’s theaters, declined to comment on the new deal.


fortune--2020-07-29--Who will business travelers hold accountable for their safety after the pandemic?

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Business travel levels might never return to what they once were before 2020—or at least they won’t return soon—but more former road warriors than you might expect are eager to take their next business trip.
Fifty-nine percent of business travelers expect to feel positively about their next business trip, according to SAP Concur, the German software giant’s travel and expenses unit. Surveyed in May and June 2020, SAP’s findings are based on the responses of approximately 4,850 business travelers in 23 global markets and 800 travel managers in eight global markets.
“Of all corporate spending, travel has always been the most personal expenditure,” says Mike Koetting, chief product strategy officer at SAP Concur. “COVID-19 has made it even more personal, and companies must weigh business needs and meet employees where they are when resuming business travel.”
Perhaps feeling a bit of nationwide cabin fever, more U.S. business travelers than the international average said they expect to feel excited about their next work trip, at a response rate of 41% versus 32%.
Nearly all business travelers surveyed expect a new normal for business travel, with new protocols and precautions to take root for good even once restrictions put in place amid border shutdowns are lifted. Among the most commonly expected measures include mandatory personal health screenings for traveling employees, limiting business travel to only the most business-critical trips, and easier access to personal protective equipment, like gloves or face masks.
And even if people are traveling less and teleconferencing more, domestic and international travel will still be critical to meeting business demands after the COVID-19 outbreak. Ninety-two percent of business travelers expect their companies to experience negative outcomes due to travel restrictions around COVID-19, including a reduced number of deals or contracts signed that require in-person interactions and declines in new business wins that require in-person sales meetings.
“Our world has been impacted by COVID-19 for several months, and resuming business travel is returning to some degree of normalcy for many employees,” Koetting says. “For many businesses, that normalcy includes securing new contracts and winning new business, which often require in-person visits. Our survey respondents reported that they expect a reduction in both of those areas because of travel restriction.”
But health and safety concerns will be more paramount than ever, and the pandemic has finally made it so that employers and HR departments can no longer shirk responsibility for health care concerns that arise for employees while traveling for work. Ensuring personal health and safety while traveling is most important to business travelers, with 65% placing it in their top three considerations. Top concerns about returning to business travel also include infecting their families and getting sick themselves.
“This conversation is sure to continue in public discourse, but based on these survey findings, it is clear that employees do place responsibility for their health and safety on their employer,” Koetting explains. “Businesses must consider and prioritize employees’ health, safety, and personal comfort levels as travel resumes. It’s the right thing to do, on top of having duty of care responsibilities to meet.”
Still, U.S. business travelers are most likely to hold themselves accountable to protect their health and safety when traveling (37%)—compared to the global average of 36%—followed by their employers (17%), travel agencies and management companies (14%), transportation providers (13%), and their government (10%).
Regardless, companies will need to establish new policies to protect employees’ health and safety at every stage of the business trip, and they should over-prepare to meet emerging expectations while also addressing less predictable travel conditions in the future. Among surveyed travel managers, 96% admitted their companies were not fully prepared to manage evolving travel demands during the outbreak. Small-business managers, in particular, said their companies were unprepared to provide any safety guidelines to employees traveling for work.
The biggest pain points included handling the volume of canceled reservations; processing the volume of refunds, receipts, and unused tickets; and determining if it is safe to travel in the absence of government guidelines.
And if companies do not adapt or respond to their employees’ health care needs, many of them intend to act—or even walk. Globally, nearly one in five employees plan to look for a new role—inside or outside the company—that does not require travel if measures aren’t implemented. In the U.S., nearly one in four plan to look for a new role that does not require travel if changes aren’t made.
“Safety is now more than just a responsibility for companies,” Koetting says. “It has become a requirement to retain staff and deliver a positive employee experience. People have to feel confident in their employer and comfortable with the support they’re receiving.”


fortune--2020-07-29--Is gender diversity good for business? Another study makes the case

This is the web version of The Broadsheet, a daily newsletter for and about the world’s most powerful women. Sign up to get it delivered free to your inbox.
Good morning, Broadsheet readers! MacKenzie Scott—formerly Bezos—has donated $1.7 billion of her fortune, women protest femicide in Turkey, and the U.K. has a ‘Peter’ problem. Have a thoughtful Wednesday.
– More ‘Peters’ than women. A new study out of the U.K. tells us what we’ve long known; that there’s a business case for gender diversity.
Research by gender diversity consultancy The Pipeline puts a fine point on the matter, finding that FTSE 350 companies that have executive committees with at least 33% female representation have a net profit margin over 10 times that of companies with no women at that level—15.2% versus 1.5%. In fact, this year’s study found that the gap in net profit margin between companies with executive committee-level women and those without is the biggest recorded in five years of research.
That data, however, stands apart from other revelations; it makes the case for gender diversity but the study found little progress toward that end, even as the U.K. pushes for board diversity and pay gap transparency at the federal level.
The share of women on FTSE 350 executive committees inched up 2.7% to 19.8%, but 15% of the U.K.’s largest companies still have zero women at that level. What’s more, it seems that women who are joining executive committees are being appointed to functional roles rather than those with profit and loss responsibility, a more reliable gateway to further advancement. Of all executive committee members with P&Ls, just 10% are women; over two-thirds of FTSE 350 companies do not have a single female executive committee member in a P&L role.
That sparse pipeline of female leaders is evident at the very top; 5% of FTSE 350 CEOs are women. In April, there were more men named Peter than there were women in the chief executive ranks.
Former U.K. Prime Minister Theresa May, who wrote a foreword to the study, called the results depressing. She urged companies—especially those led by men—to groom more female leaders and warned firms with too few women that they soon “will discover that they cannot recruit the talent they need to succeed.”
“Whenever data reveals a disparity of outcome between groups, the challenge to those in power should be—explain it or change it. There can be no good explanation for the massive underrepresentation of women at the top of British business,” she said, “so it must change.”
Claire Zillman
claire.zillman@fortune.com
@clairezillman
Today’s Broadsheet was curated by Emma Hinchliffe.
ALSO IN THE HEADLINES
- $cott in action. MacKenzie Scott—the former MacKenzie Bezos, now using her middle name as her surname—shared some details yesterday about her past year of philanthropic giving. The world's second-richest woman has donated $1.7 billion over the past year to charitable causes, with the most money going toward racial equity organizations, including significant gifts to historically Black colleges and universities. Fortune
- Survey says. Women are more worried about layoffs than their male coworkers, according to a new Fortune-SurveyMonkey poll: 49% of female workers are concerned about the possibility of losing their job, compared to 35% of male employees. Fortune
- Top billing. Watchmen, the HBO series starring Regina King, led Emmy nominations announced yesterday with 26 nods. Other notable honorees included Jennifer Aniston for The Morning Show, in her first nomination in a drama category, four categories for Kerry Washington, and a posthumous nomination for director Lynn Shelton. Fortune
MOVERS AND SHAKERS: The Washington Post promoted Krissah Thompson to managing editor for diversity and inclusion; she is the first person to hold the new newsroom position and is the first Black woman to hold a managing editor title at the paper. Intel promoted Dr. Ann Kelleher, who was head of Intel manufacturing, to lead Intel technology development focusing on 7nm and 5nm processes. Investment management firm LSIA named Karen McClintock president and CEO.
IN CASE YOU MISSED IT
- Home alone. The pandemic has left adolescent and pre-adolescent girls feeling isolated and scared. With some families maintaining stricter quarantine rules than others, the loneliness is magnified on social media as girls see their friends finally getting together. Wall Street Journal
- 'We are here.' After the discovery last week of 27-year-old student Pınar Gültekin murdered by her boyfriend, women in Turkey began speaking out against femicide and violence. "We are here, Pınar, we will hold them accountable,” protesters have chanted at rallies. Guardian
- Rice choice. Another potential VP pick for Joe Biden? Former Obama administration national security adviser Susan Rice. She seriously considered running against Sen. Susan Collins in 2018, and, although she has never held an elected position, is in the running for the veep spot. New York Times
- Higher standards. The coronavirus crisis is testing the model of stakeholder capitalism, CVS Health EVP and president of the Aetna business unit Karen Lynch argues in a new op-ed. Businesses now have new and expanded responsibilities beyond a simple commitment to economic opportunity and employee benefits, she says. Fortune
ON MY RADAR
The Wing was my dream job. Working there turned into a nightmare Elle
McDonald's has a real sexual harassment problem The Nation
Michelle Wie West on motherhood, pain and a possible return to golf New York Times
PARTING WORDS
"I was empowered and happy to have nothing."
-I May Destroy You writer, creator, and star Michaela Coel on turning down a deal with Netflix over its ownership terms


fortune--2020-07-29--VC icon Alan Patricof and SoulCycle vet Abby Levy launch fund to invest in aging

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They’re an unlikely duo with an unlikely plan. If it works, it could change the lives of millions of seniors and upend assumptions about venture capital. It could also make the pair—who are already fabulously wealthy—even richer.
The duo in question is 85-year-old Alan Patricof, an investor who has helped build hundreds of companies including Apple and AOL, and Abby Levy, a much younger executive who has occupied prominent roles at Soul Cycle and Arianna Huffington’s Thrive Global.
On Wednesday, the pair announced the launch of Primetime Partners, a new style of venture capital firm that will bet on innovation related to aging and seniors. In practice, this means making early stage investments of $250,000 to $1 million in startups that products for seniors, while also seeking out entrepreneurs in their 40s or 50s or older.
It’s an unusual strategy. The venture capital crowd lionizes founders in their 20s and 30s, and likes to invest in apps and enterprise software. Older people simply don’t register in this world, which makes Patricof and Levy’s new fund a gamble. But they see a huge untapped opportunity.
A giant and underserved market
Alan Patricof first made his name as an investor in 1960s with timely bets on media brands like New York magazine, before building the private equity colossus Apax Capital. The next phase of his career began in 2006 when, at age 71, he founded the well-regarded venture capital firm Greycroft in 2006. Now, Patricof says he’s ready for a third act—and believes he’s found one in the field of aging.
“The more I looked at it, the more I realized it was a fertile area, a total white space. Older people’s needs are so different, from food to entertainment to technical assistance,” he tells Fortune.
While there is plenty of investment in healthcare, Patricof and Levy say the private sector has paid scant attention to other aspects of daily for seniors. Levy discovered this three years ago when she began looking for activities for her parents, and founder startups catering to every demographic but the elderly.
“Everyone is focused on solving the unmet user needs of the new mom, the college kid and the dog,” she says.
Primetime Partners began accepting pitches from startups in the spring, and has already funded several companies. These include Retirable, a digital financial planning service for pre-retirees, and Carewell, which helps older people navigate online shopping for products like catheters and diapers. A third startup called Bloom matches seniors for a variety of online activities and learning ventures—a collaborative experience that could be especially valuable amid what some fear is an epidemic of loneliness among elderly people.
As for marketing, which consists of social media campaigns in the case of many startups, Levy sees unique opportunities. In particular, she points out that a large number of older people are on Facebook, and that campaigns there can lead to customer acquisition costs that run as low as $3. She adds that Primetime Partners has also been talking to employers who are increasingly including services for the elderly or caregivers as part of their benefit packages.
Meanwhile, the new firm is also talking with numerous older entrepreneurs, who Patricof says are undervalued amid the startup world’s fixation on youth. He also considers founders in their 50s more likely to deliver.
“In studying the field, I learned older entrepreneurs have twice the success than those who are 30. By age 60, they’re battle-tested and have a bigger rolodex,” he says.
Kevin Durant and other investors sign on
The size of Primetime Partners’ fund is modest compared to some Silicon Valley venture funds, which raise hundreds of millions. But Patricof and Levy hope the new fund will soon be followed, and are pleased with the flood of interest from investors.
Those investors are primarily wealthy individuals and family offices, but also include familiar names like Kevin Durant. In a statement, the NBA star cited is mother as a reason to invest.
“My mom has always made huge sacrifices for me and our family,” said Durant. “This fund provides a unique opportunity to give back to her and previous generations that paved the way for us, by investing in companies and entrepreneurs focused on uplifting them.
Durant is not the only one involved with Primetime Partners to cite family as an inspiration. Patricof says the experience of his wife, who has Alzheimers, underscored the need for building companies that serve the elderly.
Then there is Patricof himself. Speaking from his home on Long Island, the veteran investor describes himself as a poster child for the untapped market for products aimed at the elderly, many of whom are very active.
“I just did a 15 mile bike ride with a bunch of people my age—though some of them were in their 70s,” he says.
More must-read finance coverage from Fortune:


fortune--2020-07-29--Ahead of Big Tech’s antitrust hearing, tech experts predict Facebook’s and Amazon’s fates

On July 29, the CEOs of four of the most powerful tech companies in the world—Apple, Facebook, Google, and Amazon—will appear before a congressional committee eager to grill them about their outsize influence on the economy and their alleged anticompetitive practices.
The all-day event, which the New York Times’s Kara Swisher is calling “Techpalooza,” will be led by Rep. David Cicilline, a Democrat from Rhode Island who has become one of the biggest critics of Big Tech’s enormous clout. The remote appearance of Amazon’s Jeff Bezos, Facebook’s Mark Zuckerberg, Google’s Sundar Pichai, and Apple’s Tim Cook will cap a yearlong congressional antitrust investigation, which has included eight roundtable discussions, 93 requests for information, 43 expert testimonies, and five hearings.
These hearings are just one part of an all-out attack on Big Tech. Politicians and regulators are contemplating new laws on privacy and competition, the repeal of a law that gives platforms broad immunity for content on their sites, and, perhaps most drastically, breaking them up.
The two of us—David Kirkpatrick, founder and editor-in-chief of Techonomy, a conference and media company now focusing on virtual events, and author of The Facebook Effect, and Brian Dumaine, author of the recently published Bezonomics: How Amazon Is Changing Our Lives and What the World’s Best Companies Are Learning From It—discussed what the future looks like for Amazon and Facebook. This discussion has been edited.
Brian Dumaine: David, Facebook has been too slow in addressing hate speech, voter suppression, and other problematic content on its platform. The company lets Trump and other politicians lie or even attempt to incite violence on its platform. A Facebook internal investigation that was released this month concluded that “Facebook’s approach to civil rights remains too reactive and piecemeal.” You’ve written a book on Facebook, follow the company closely, and know Zuckerberg. Is he going to cave to pressure from Congress and change his ways?
David Kirkpatrick: Hardly. His style is to be unyielding even when confronted with compelling critiques of him and his company. In June more than 30 early Facebook employees who no longer work at the company wrote a letter to Zuckerberg, and it was devastating. They made the basic point that it is inaccurate to say you’re not an arbiter of truth; you’re already an arbiter of truth in 1,000 ways. You just choose not to be an arbiter of truth when it comes to politicians because that’s convenient. They pointed out that what Zuckerberg is doing now is an inversion of Facebook’s original raison d’être, which was to be a tool for the empowerment of ordinary people.
And now what the company does is prevent ordinary people from distributing untruths, but it will let politicians distribute untruths. So rather than preferring the hoi polloi, Facebook gives preference to the people who already have power and are catering and toadying to them.
Dumaine: Right, but that means Facebook is curating, and once you curate you should be responsible for the content. Social media platforms like Facebook use Section 230 of the Communications Decency Act—which lets them off the hook for liability—as an excuse for not fact-checking or editing material. But the real reason they don’t edit or fact-check is that it costs a lot of money.
So here’s a question, David. If Bezos was running Facebook, would he do it differently?
Kirkpatrick: He owns the Washington Post so I would say yes, with this major caveat, and that is Wall Street. Tom Friedman said recently that Zuckerberg is the Rupert Murdoch of his generation and all he cares about is money. That’s not a good thing for the company.
But the reality is if you were to really treat Facebook the way the Washington Post is treated, it would not grow at the rate it’s growing. And its earnings would not rise at the rates they are rising, and its P/E [price/earnings ratio] would not accelerate at the rate it is accelerating. Its Wall Street approval would decline precipitously, and that causes a whole set of other related, implosive consequences, including undermining the company’s ability to attract good engineers and to use options-based compensation. Zuckerberg could not really afford to treat Facebook like the Washington Post.
Dumaine: Well, what if Bezos was running Facebook and thought that its reputation has gotten so bad that the company is in danger of being regulated by Washington? Bezos thinks long term. I could see him pivoting, figuring out how to solve the problems that Facebook is being accused of: How do you stop it from being a sewer for bad content? How do you stop it from being politically manipulated?
So Bezos, I believe, would institute stronger standards and would hire more people. Yes Facebook’s margins are going to suffer and its growth is going to slow, but Bezos would argue that if he didn’t do this, then Facebook in the long run would be even worse off after the Washington bureaucrats get through with it.
Kirkpatrick: That would be a reasonable response, but the caveat here is that it depends on who is running the government.
Dumaine: If Biden gets elected, Facebook is going to be worse off.
Kirkpatrick: Zuckerberg appears to have made the calculation that he has to placate Donald Trump in order to keep Facebook from being hit by onerous regulations, and my firm belief is that that explains a lot of his indulgence toward Trump and right-wing speech that is manifested in numerous ways. Now, you’re right, that could prove to be a very faulty calculation if Biden is elected.
Another interesting thing to keep in mind is the diametrical contrast between their relationships with Donald Trump. Zuckerberg has now met in person with Trump twice and spoke to him after the President posted: “When the looting starts, the shooting starts.” (Trump had also tweeted it, and Twitter had removed it.) By contrast, Bezos sued the government because he believes that Trump pulled the rug out from under AWS [Amazon Web Services] on the contract to provide cloud computing services to the Pentagon and claimed that the bidding process was not fair. He also owns the Washington Post and lets it go hog wild on Trump, at least in the President’s view. He doesn’t seem to have the slightest problem with Trump detesting him, while Zuckerberg appears terrified that if Trump gets annoyed with him, his company may not be able to grow.
Dumaine: He’s betting that Trump’s going to get reelected. If he thought Trump wasn’t going to win a second term, he wouldn’t be so afraid of him, because there’s really not much Trump can do to harm Facebook between now and the election.
Kirkpatrick: Zuckerberg is probably making an incorrect assumption about Trump, or he’s maybe still living with the consequences of a gamble he made earlier that Trump would get reelected and now doesn’t see a way to pivot towards Biden’s likely win. It is very important to remember that tech billionaire Peter Thiel is Zuckerberg’s longest-serving board member and the one whose advice he probably listens to more than any other member. He’s a libertarian and a big Trump supporter who spoke on behalf of Trump at the Republican National Convention.
This is really important to understand about Zuckerberg. Thiel’s fingerprints are all over Facebook’s behavior. Also, over the past 18 months Zuckerberg has cycled out every single member of his board except for Sheryl Sandberg and Peter Thiel and Marc Andreessen, because a number of his directors were openly challenging him on a number of his managerial decisions, including the policy of letting politicians lie in ads.
Dumaine: Zuckerberg’s PR is horrible—all those photos of him with Trump have to hurt if you’re trying to hire the best and the brightest of the millennials and Gen Zers. But I think the real issue is that he doesn’t want to pay to build what would essentially be a journalistic organization, and he’d do anything to avoid that.
David, some government officials want to break up Facebook. Does that make any sense?
Kirkpatrick: That’s what Zuckerberg is most afraid of. And one of the reasons he’s afraid of regulation is that there’s not a logical way to break up Facebook. Over the past decade, both these stocks have done extremely well, but I would argue that the future risks facing Zuckerberg are vastly greater than those facing Bezos. I believe Amazon is a much better bet long term than Facebook, because if Amazon were threatened with a breakup, you could think of a way to logically break it up, including spinning off AWS where the profits would continue, where shareholders would have a piece of both successor entities and would cry all the way to the bank.
Dumaine: An Amazon breakup could be similar to when Teddy Roosevelt broke up Standard Oil into many small oil companies, and J.D. Rockefeller ended up many times richer than he had been originally. That was because each of the resulting smaller companies grew into big companies. Exxon, Mobile, Amoco, and Chevron all grew out of the breakup. That’s what could happen with Amazon.
There are risks, however. Amazon’s structure provides—and I use this word cautiously—synergies. There’s a big advantage in speed and efficiency from having Amazon’s e-commerce platform tied to its retail business and distribution network. Separate those two and Amazon’s platform basically becomes eBay. And there’s the great advantage of Amazon’s retail, media, and advertising businesses having ready access to all of AWS’s smart computing capabilities. I worry that if you break up Amazon, the essence of what makes Amazon such a growth machine will be diminished, at least in the short term.
Kirkpatrick: The thing that’s so interesting about Amazon that I take away from your book Bezonomics is the omnivorous nature of the company. Your cautionary advice to every other business is: “Don’t assume they won’t come after you. There’s no limit to what they can aspire to.”
Dumaine: Yes they are omnivorous. They are moving into advertising, finance, shipping, and health care, among other industries. But most of the antitrust focus on Amazon is in e-commerce, and in the U.S. they do command an impressive 38% of the market—they are eight times bigger than Walmart in that segment. What those attacking Amazon miss is that bricks and mortar still account for 90% of all retail in the U.S. That means Amazon has less than a 5% share of all retail in the U.S. and only 1% of the market globally. That’s hardly the kind of market dominance that warrants a breakup.
On top of that, the current antitrust laws ask whether a business is hurting customers. It’s hard to argue that Bezos is hurting his customers with lower prices and faster deliveries. So if the politicians break up Amazon it will be on the basis that it has become too big and too scary. That’s what happened when Teddy Roosevelt broke up the trusts—he felt that they had become more powerful than the federal government and couldn’t be regulated.
No matter what the antitrust laws say, at some point Amazon’s just going to seem too scary, and we’re not even going to know why. These black box algorithms are doing stuff that even people at Amazon can’t understand at the end of the day. It takes on a life of its own, and we don’t know what direction it’s going to lead us in.
Kirkpatrick: There is something fundamentally disturbing about the scale of both of these entities that scares me and is intrinsically wrong. It is societally wrong, and it is ultimately societally unsustainable unless we want to move to a different system of government which is like corporatocracy. We cannot really cede the management of societal systems to large Internet-centric private companies, yet both of these companies operate as if that’s the direction we’re heading as a global society.
The kind of regulation that Zuckerberg fears, and which I think you and I would both agree is actually likely, will slow the company’s growth and will increase the company’s costs, and will depress the company’s stock price. I am continually amazed that investors don’t seem to factor that into their investment in Facebook. And the reason they don’t is that the profits keep growing so phenomenally, and the per revenue dollar profitability of Facebook is so vast—vastly greater than Amazon, by the way. I mean it’s probably 15 or 20 times more profitable per dollar of revenue than Amazon. Facebook for most of its history has been literally the most profitable large public company in human history in terms of its net margins.
Dumaine: I think the reason investors are still bullish on Facebook has more to do with the antitrust case against Microsoft in the 1990s and early 2000s. It was 10 years of a lot of noise and a lot of legal fees and nothing really changed at the end. Often the antitrust regulators are behind the curve when it comes to technology companies. Tech moves so fast, the regulators end up fighting the last war, and maybe that’s why investors are betting on Facebook’s future and maybe Zuckerberg too.
Kirkpatrick: Another advantage Amazon has is that Bezos is an older person than Zuckerberg with more managerial experience. Amazon is a longer-standing company than Facebook, and it’s been public for a lot longer, and he has seen the behavior of his investors and understood them, whereas Zuckerberg only went public in 2012, and he is still a very immature leader. He’s only 36 years old, and Bezos is 56. Zuckerberg does not really care what other people think, so that is a big difference. It seems like one of the most salient qualities about Bezos inside the company is that he listens. I think we’re seeing it proven how much Zuckerberg does not listen.
Dumaine: What Facebook needs is a little more maturity.
Kirkpatrick: Maybe Bezos should run Facebook.
Dumaine: Great idea—in theory.


fortune--2020-07-30--Amazon’s second-quarter earnings results just showed why the online retail giant is soaring during C

Amazon’s second-quarter earnings results just showed why the online retail giant is soaring during COVID-19

Facebook crushes Q2 expectations despite rising scrutiny of its services and coronavirus concerns

Amazon continues to benefit from COVID-19 as the company’s overall sales skyrocketed 40% year-over-year to $88.9 billion in its fiscal second quarter.
The online retail and cloud computing giant easily beat analyst expectations that it would bring in $81.24 billion in revenue for its latest quarter, which ended June 30. Amazon’s profits also doubled year-over-year to $5.2 billion in its latest quarter, which is notable considering the company said in April that it was projecting a loss of up to $1.5 billion in its second quarter due to the high costs associated with operating during the coronavirus pandemic.
Amazon chief financial officer Brian Olsavsky told analysts during an earnings call that the company spent over $4 billion on coronavirus-related expenses. These expenditures included adding additional safety measures at the company’s many warehouses and facilities, purchasing personal protective equipment for its numerous workers, and paying a $500 million “thank-you bonus” to logistics and delivery workers.
But the massive increase in consumers buying more goods via Amazon more than made up for the expense. Olsavsky said that online grocery sales tripled year-over-year in the latest quarter from an unspecified number and that customers of Amazon’s Prime paid-subscription service are “shopping more often” and with “larger basket sizes.”
Olsavsky made no mention of Amazon chief Jeff Bezos’s recent grilling by lawmakers on Wednesday during a congressional hearing about antitrust and the power of tech giants like Amazon, Apple, Google, and Facebook. Analysts on the earnings call also didn’t address the possible ramifications of the antitrust hearings on Amazon, with questions mostly focusing on the company’s solid quarter and what it plans to do with its unexpected big profits.
Olsavsky said that actions like cutting down on marketing spend and reducing travel and related expenses helped contribute to Amazon’s profits for the quarter. When asked whether Amazon would use the extra cash to spend on new investment areas, Olsavsky said that the company already has “a lot of investments already in place” and that Amazon is “always looking for new investments.” He said that much of Amazon’s spending is going to building the necessary infrastructure required to handle the continued heavy demand from customers.
One area that the company cut back on was its Amazon Studios television and film unit, which Olsavsky attributed to Amazon having “to delay production in most studios”—like much of the entertainment industry—due to COVID-19.
“We are doing that to protect the actors and film crews,” Olsavsky said.
Not everything went smoothly for Amazon during its latest quarter.
Sales in the company’s AWS (Amazon Web Services) cloud computing unit only grew 29% year-over-year to $10.8 billion, which, while impressive, marks a decline in how fast AWS is growing. Last quarter, for instance, AWS revenue rose 33% year-over-year to $10.2 billion. It appears that lower corporate spending in IT services, as measured by Gartner in July, is affecting Amazon’s cloud unit in the same way it’s affecting the Azure cloud computing business of Amazon rival Microsoft, which is also growing more slowly than before.
Olsavsky said that companies in industries like hospitality and travel that have been hit especially hard during the coronavirus pandemic are “working very hard right now to cut expenses,” implying that they are spending less on Amazon’s cloud computing service. He said that Amazon will continue to “help our customers save money” for “the long-term health of the relationship.” In other words, Amazon’s not going to be a stickler with its struggling customers right now, because those companies might want to do some major cloud service purchases when the economy recovers.
Still, Olsavsky said that while most companies are hurting because of COVID-19, there are “certainly winners in this.” He said sectors like video conferencing, gaming, and entertainment are “all seeing usage growth,” meaning that companies in those areas are seeing more consumer demand, and therefore, are spending more on cloud services to accommodate.
Indeed, video conferencing company Zoom, streaming service Netflix, and video-gaming company Electronic Arts—who all use AWS—have all had solid quarters during the pandemic, showing big user growth. You can add Amazon to that list of companies thriving during COVID-19.


fortune--2020-07-30--Facebook crushes Q2 expectations despite rising scrutiny of its services and coronavirus concerns

Amazon ’ s second-quarter earnings results just showed why the online retail giant is soaring during COVID-19

Facebook grew its revenue and user count despite the coronavirus pandemic, an ads boycott, an antitrust regulatory hearing, and rising scrutiny over hate speech and content moderation on its services.
“This was a strong quarter for us, especially compared to what we expected at the start,” said Mark Zuckerberg, Facebook’s CEO.
Facebook reported that during its second quarter it generated $18.69 billion, crushing analysts’ estimates of $17.4 billion. Second-quarter revenue was up 11% from the same quarter last year though much slower than the 26% it grew at that time. It also grew its daily active users across its family of apps to 2.47 billion, up 15% from the same quarter last year. Monthly active users across services were up 14% totaling 3.14 billion.
“We think that Instagram has played a major role in Facebook’s ability to withstand the effects of the pandemic,” Debra Aho Williamson, eMarketer principal analyst, said in a released statement. “Although Facebook doesn’t release details about Instagram’s revenue, we believe that Instagram has been a rapidly growing contributor to the company’s total revenue, and that its success is helping to buoy Facebook as a whole.”
Facebook attributed some of its user growth to shelter-in-place orders during the first few months of the pandemic. But the company expects user growth to be flat or slightly down in most regions in the third quarter as restrictions ease.
The company’s stock jumped about 7% in after-hours trading, priced at $250.19 per share, following the announcement.
Facebook’s earnings come one day after Zuckerberg joined the CEOs of Apple, Amazon, and Alphabet to testify before the House Judiciary antitrust subcommittee. All four companies reported earnings on Thursday, each beating analysts’ estimates. The news also comes as companies have slashed their digital advertising budgets during the coronavirus pandemic. (Facebook reported a slowdown in digital ads during the previous quarter, as well.) Alphabet and Microsoft similarly reported slowdowns in digital ad sales.
During the earnings call on Thursday, Zuckerberg spent some time defending Facebook following the previous day’s scrutiny of the congressional antitrust hearing. He touted the company’s services and their importance during the pandemic, suggesting connecting to loved ones and customers would be harder without Facebook. He also suggested Facebook is often misunderstood.
“There’s such a fundamental difference between how the vast majority of people actually experience our services, and the impression you’d get if you just read much of the commentary about Facebook,” he said on the call. “Some seem to wrongly assume that most of the content on our services is about politics, news, misinformation, or hate. Let me be clear: it’s not. “
Sheryl Sandberg, Facebook’s chief operating officer, also addressed the company’s work on hate speech and discrimination, citing the company’s Civil Rights audit and work to improve its content moderation. She said Facebook is working on the problem, “not because of pressure from advertisers, but because it’s the right thing to do.”
More than 1,100 advertisers participated in a one-month Facebook ads boycott over hate speech and discrimination—the effects of which won’t be reported until third-quarter earnings. Organizers of the boycott have said they plan to expand the call for a halt on Facebook ads to Europe and are continuing to communicate with many advertisers in the U.S., who have opted to extend the pause past July.
Analysts have previously said they don’t expect the boycott to have any major effect on the company’s earnings. Facebook said that within the first three weeks of July, ads grew about 10% year over year, in line with second-quarter growth, and that it expects third-quarter growth to be roughly similar to the July performance. Zuckerberg said people wrongly assume that Facebook is dependent on a small set of big advertisers, but the reality is small businesses represent the largest portion of advertiser dollars. While some small businesses did participate in the boycott, many couldn’t afford to take the financial hit that would come with halting ads.
Facebook also said headwinds for ad targeting and measurement to be increase due to regulations like the California Consumer Privacy Act and changes to mobile operating platforms, which the company said was “increasingly significant as the year progresses.”
Aho Williamson of eMarketer said calls the outlook “sobering” but “reflective of the uncertain state of the world’s economy.”


fortune--2020-07-30--Alphabet’s revenue falls for first time ever as ad sales suffer

Alphabet Inc.’s revenue fell for the first time ever as the coronavirus pandemic and ensuing economic fallout forced advertisers to pull back spending.
Ad sales, which make up the bulk of revenue at the Google parent, were $29.9 billion in the second quarter, down 8.1% from the same period last year. That’s the lowest they’ve been since the third quarter of 2018.
Still, overall revenue, which slipped 2%, was slightly higher than analysts had expected. YouTube, the fastest-growing part of Google’s advertising empire before the coronavirus set in, brought in $3.8 billion, 6% more than last year.
“We are cautiously encouraged by our results for the second quarter, although mindful of the fragile global economic environment,” Chief Financial Officer Ruth Porat said on a conference call. Ad sales improved near the end of the quarter.
Porat had tamped down expectations in April, warning the second quarter would be “difficult” for the company’s ad business. But investors still pushed the company’s shares higher as part of a broader tech rally in the last few months. Alphabet’s shares have gained about 15% this year. The stock gyrated in extended trading and was up about 1%.
Alphabet makes the bulk of its money from online advertising in areas like search, where customers in travel and retail have curtailed spending, and YouTube, which has benefited from more people watching videos while stuck at home during lockdown. Still, continued uncertainty in the U.S. as virus cases mount and the government struggles to pass a new round of stimulus funding has made marketers hesitant to jump back in.
Google also cut back on spending, with purchases of property and equipment falling 12% in the quarter.
Cloud revenue was $3 billion, up 43% from the same quarter last year, the Mountain View, California-based company said in a statement. That rate of growth was lower than the 52% the business saw in the first quarter.


fortune--2020-07-30--Apple stock heads for all-time high after earnings smash Wall Street expectations

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Apple had a much better quarter than Wall Street anticipated, as consumers proved resilient despite the COVID-19 pandemic. Apple’s stock jumped 6% in after-hours trading to over $400, which would be an all-time high if it holds up.
Apple’s revenue increased 11% to $59.7 billion for the three months ended June 30, the company’s fiscal third quarter of 2020. Analysts had expected revenue to drop 2% to $52.6 billion on average. And earnings per share of $2.58, up 18%, crushed the average forecast of $2.07.
The after-hours stock price jump held even after Apple CFO Luca Maestri disclosed on a call with analysts that this year’s new iPhones would likely be delayed “a few weeks” due to challenges in the supply chain.
The surprise growth, including in iPhone sales, came as the U.S. smartphone market contracted 25% overall in the last quarter, according to research firm Counterpoint. But in many parts of the world, consumer shopping has improved since the worst of the shutdowns in the early spring. And Apple has a robust e-commerce operation selling phones online.
“We’re conscious of the fact that these results stand in stark relief during a time of real economic adversity,” Apple CEO Tim Cook said on a call with analysts. “We do not have a zero sum approach to prosperity and especially in times like this we’re focused on growing the pie, making sure our success isn’t just our success.”
Apple has expanded some of its offerings, through services such as Apple TV+ and Apple News, which bring in monthly subscription fee revenue that can be steadier than those from device sales. Services revenue jumped 15% to $13.2 billion. Apple also met its 2016 goal to double its annual service revenue within four years.
The rally to an all-time high stock price came after Apple shares closed at $384.76 on Thursday with a gain of 31% this year. Rival Dell has gained 15% in 2020 and Hewlett Packard’s stock is off 16%. The S&P 500 Index is up just 1% on the year. Apple also said it would split its stock four to one, which would lower the entry price for investors but would have no financial impact.
The prior big gain in 2020 had prompted Goldman analyst Rod Hall last week to call the rally in Apple’s stock price “unsustainable,” while recommending that investors avoid the stock. He predicted the price would drop $299 in a year.
The next big challenge ahead for Apple is the debut of the 2020 upgrades of the iPhone. The iPhone 12 is rumored to include as many as four different size models, all with 5G capabilities. Apple did not offer a forecast of its next quarter’s results.


fortune--2020-07-30--Americans prefer an effective coronavirus vaccine over a hasty one

Good afternoon, readers.
As of July 28, there are 25 coronavirus vaccine candidates in clinical development, according to the World Health Organization (WHO). More than 100 others are in earlier-stage development.
Some of these treatments have received considerably more press than others. Pfizer, BioNTech, Johnson & Johnson, AstraZeneca, Sinopharm, and Moderna are in the latest stages of active clinical trials.
But the vaccine game is a tricky one. Developing an effective vaccine can take up to 10 years, according to the World Economic Forum (WEF).
That timeline gets crunched when you’re dealing with a major pandemic, and regulatory agencies rip off some red tape to spur drug development. But that comes with its own tradeoffs. Is a vaccine actually effective? How powerful is it? How long does immunity last?
It turns out that most Americans are wary of those same issues. A Politico/Morning Consult poll of voters finds that more than 60% of surveyed respondents “think the U.S. should fully test any coronavirus vaccine—even if that delays rolling it out and allows the virus to keep spreading in the meantime.”
Per the survey, results were fairly consistent across political and demographic lines on trying to get a vaccine to market as soon as possible without rigorous vetting (though there were differences on whether or not respondents would get vaccinated based on ideology).
Read on for the day’s news.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
Michael J. Fox Foundation rewards groups for advanced Parkinson's imaging. The Michael J. Fox Foundation on Thursday announced the winners of the Ken Griffin Alpha-synuclein Imaging Competition meant to help Parkinson's patients. That's a mouthful, so allow me to explain. Griffin, the billionaire founder of investment firm Citadel, has a personal connection with Parkinson's disease due to his own father's diagnosis a few years ago. He spoke with me last year about his $10 million commitment for this particular project, which seeks to home in on a protein related to Parkinson's disease that's usually discovered after someone has already died, in living patients. That could help spur new Parkinson's drug development. "If we have the imaging capability to observe the pathology that arises from protein-misfolding in real time, and understand how drugs are impacting people in real time, that would be a major advance," Griffin told me. The first grantees will be AC Immune, Mass General Brigham, and Merck.
INDICATIONS
Plasma to fight a pathogen. The Wall Street Journal reports that the Food and Drug Administration (FDA) is close to deciding whether or not a so-called convalescent plasma treatment for COVID-19 may win emergency authorization. These are treatments that use blood plasma from patients who have recovered from COVID and formed antibodies in order to treat those with an active infection, a technique that's been used for other infectious diseases such as the flu. (Wall Street Journal)
THE BIG PICTURE
How to name a virus. Naming a pathogen may strike you as something that should be pretty low on scientists' priority lists right now. Guess what? A bunch of scientists agree! In one of the nerdier debates I've read about (and I read a lot of them), virologists are debating how important it is to set up a classification system for viruses since the current ones are disorganized. Consider it a tale of taxonomy. (Nature)
REQUIRED READING
The economy is no longer the top issue going into the election, by Nicole Goodkind
Health experts on how to run errands safely during the pandemic, by Brooke Henderson
U.S. GDP falls by a historic 32.9%, by Lance Lambert
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fortune--2020-07-30--Big Tech rallies even as the U.S. posts the largest GDP decline in history

On the day that the U.S. economy reported its largest quarterly decline in GDP on record, the Nasdaq Composite ticked up while both the Dow and S&P 500 posted relatively modest losses—a testament to the disconnect between Wall Street’s status quo and the depressed economic conditions currently impacting Main Street.
Shares of Amazon (+0.6%), Apple (+1.2%), Facebook (+0.5%), and Google parent Alphabet (+1%) all registered gains ahead of their earnings reports on Thursday afternoon, one day after the CEOs of the four tech giants appeared before a much-hyped congressional antitrust hearing on Capitol Hill. All four companies saw their stocks climb further post-close, after releasing largely positive results.
Big Tech’s success helped drive the Nasdaq up 0.4%, despite the U.S. reporting a historic 32.9% decline in GDP in the second quarter due to the coronavirus pandemic’s devastating impact on the American economy. Other major tech names like PayPal (+4.3%) and Qualcomm (+15.2%) saw their shares on the Nasdaq spike on the back of positive earnings reported after yesterday’s close.
While the Dow was initially down more than 300 points on Thursday morning, it clawed back some of those losses over the course of the day to finish 226 points (-0.85%) in the red. Likewise, the S&P rebounded to post a 0.4% loss; predictably, of the 11 industry sectors tracked by the index, information technology performed the best—gaining 0.53%.
Despite the stock market outperforming expectations, the bond market indicated growing anxiety over the direction of the U.S. economy—particularly on a day when President Trump questioned whether November’s presidential election should proceed as planned. The yield on the benchmark 10-year U.S. Treasury note fell below 0.55%, as investors flocked to the historically safe realm of U.S. government bonds.
Elsewhere, the U.S. dollar continued to sink in value, with the euro now trading at more than $1.18. Gold pulled back slightly amid a historic rally that has sent prices above $1,900 per ounce, while crude oil prices also slipped, with the benchmark Brent contract settling at just over $43 per barrel.


fortune--2020-07-30--The economy is no longer Americans top concern heading into the 2020 election

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It’s not always the economy, after all.
In prior elections, fears about the economy have always been top of mind for Americans heading to the polls. But voters say that their top political concern heading into the 2020 election are the ongoing COVID-19 pandemic and public health, according to data from a Fortune-SurveyMonkey poll of 2,802 U.S. adults between July 17 and 21.
The survey found that 37% of people say the coronavirus pandemic would be the number one issue on their minds if they went to the polls today. The economy took the number two slot, but virus fears beat economic worries by a longshot with a 13-point spread between the two. Race relations and racism were also of high concern to voters with 15% of all voters saying it occupied their top spot.
Biden had a slight edge when it comes to views on how he’d handle the pandemic. He was favored by 52% of people over Trump’s 45%.
The results spell potential bad news for President Donald Trump, who has been polling behind presumed-Democratic nominee Joe Biden. (Remember that head-to-head polls are just snapshots of a moment and not forecasts of election outcomes).
But regardless of his often double-digit lead in recent presidential polls, Biden hasn’t been able to dent the President’s favorability rating when it comes to the economy. Fortune’s most recent poll found that Biden and Trump were in a dead heat, about half of voters thought each candidate would do a better job repairing the U.S. economy. While the votes fell largely along party lines, more Independents favored Biden.
The President’s economic numbers may soon experience a shortfall as well. Gross domestic product (GDP) sank by an annual rate of 32.9% from April to June, the Feds announced on Thursday—the largest drop since the government started tracking in 1947.
The President replied to the news by falsely claiming that mail-in-voting is inaccurate and fraudulent and by suggesting a delay in the November 3rd presidential election, something he has does not have the legal authority to institute. Whether purposeful or not, the sensational tweet appeared as an attempt to distract from conversation around the economy.
Fortune-SurveyMonkey polling also found that while 15% of respondents said race relations and racism was the number one issue on their mind going into the presidential elections, that number jumped to 25% for those between the ages of 18-34 and to 30% for black voters, two demographic groups that Biden is hoping to win over.
Nearly 52% of voters believe that Trump is racist, according to a recent YouGov poll.
*Methodology: The Fortune-SurveyMonkey poll was conducted among a national sample of 2,802 adults in the U.S. between July 17–21. This survey’s modeled error estimate is plus or minus 3 percentage points. The findings have been weighted for age, race, sex, education, and geography.


fortune--2020-07-30--The tech titan testimony: CEOs are overlawyered and underprepared

Despite confidence and competence, platoons of attorneys, 1.4 million documents, 400 hours of setup meetings, and 20 press briefings, the tech CEOs testifying before Congress on Wednesday were underprepared.
Like many other CEOs before them, four tech titans leading Amazon, Facebook, Apple, and Google appeared before Congress on Wednesday. These four were different from others given the immense wealth—with $350 billion in combined personal CEO wealth (Jeff Bezos himself is worth more that the assets of McDonald’s or of Nike), and the size of their companies—with $806 billion in combined sales, their firms would be the 19th largest nation in GDP. They were also different in that they were testifying remotely but on a platform to all of them, Cisco’s WebEx. Finally, they were different in that they are among the most brilliant minds in business and technology.
Accordingly while there is great schadenfreude over their success, such envy does not destroy the folk hero status they represent as entrepreneurs and employers. Unlike the ashamed, angry, or desperate past appearances by leaders of the steel industry, the airline bosses, auto makers, financiers, opioid drug sellers, and of course vilified tobacco marketers, the technology wizards appear with proud track records of accomplishment enriching investors. They could boast of being the creators of 1.5 million coveted jobs directly triggering profound ripple effects of economic development.
So—what did they do wrong? They walked in believing their own heroic myths before a powerful but less adoring group. The House Judiciary Subcommittee for Antitrust has no direct enforcement power but it does have a reputation-breaking impact and can help lay a trail for future Department of Justice or Federal Trade Commission action—let alone future legislative measures.
A key lesson from Yale’s renowned studies of mass communication sixty years ago was that to persuade sophisticated audiences, you have to show them both sides of an argument legitimately first, and then offer solutions. When Jamie Dimon went before Congress over problems at JPMorganChase, for example, he preemptively offered his take on their risk management slippages that led to unexpected massive trading losses in 2012, and in 2008 surfaced the industry-wide problems which led to the financial collapse, citing what should have been better managed.
Each of the tech CEOs’ opening scripts celebrated patriotic, American Dream talking points featuring givebacks to smaller enterprises. They went on to defend themselves against allegations of wrongdoing, or, in some cases, protest ignorance of behavior they were being criticized for.
What they did not provide is any acknowledgement of genuine problems which followed from their success. These are issues having to do with the core mission of this committee on antitrust, mainly not through monopoly exploitation of consumers through higher prices as targeted by the Sherman Antitrust Act 1890 but through the anticompetitive actions targeted by the Clayton Antitrust Act of 1914. In fact, there is a long history of unraveling past cleared acquisitions such as Facebook’s purchase of Instagram. For example, P&G had to divest Clorox in 1960—years after clearance in 1957.
Each company has exposures on this front. Fully 70% of Google’s revenues are from data harvesting (much of which is not transparent to consumers) and advertising. The EU has already fined Google a record $5 billion for leveraging its smartphone market dominance with Android to block rivals. This was on top of another nearly $3 billion for the ways Google favored its own products and services over those of its rivals. Multiple American companies, most notably Yelp and TripAdvisor, have accused Google of using its dominance of the search engine market to unfairly favor its own or closely associated brands and services over that of rivals, effectively picking winners and losers as a gatekeeper to customers and consumers. On top of this, President Trump has repeatedly hammered away at Google for supposedly discriminating against conservatives in its search engine results.
Facebook is surely the most exposed with little sympathy for Zuckerberg, but with 60% control of Facebook voting shares, Zuckerberg does not seem troubled.
Currently Facebook is enduring a month-long boycott by 1,000 major advertisers, who are responding to complaints of toxic hate speech and false malicious posts fomenting seeds of bigotry, which often appears next to the companies’ targeted advertising. After denials and deflections, Facebook recently admitted it was slow to respond to inappropriate content on the site, and the company began to remove over 1 million fake bot accounts a day. The boycott organizers, a group of civil rights organizations such as the ADL, the NAACP, and the Color of Change labeled Facebook’s response as “very disappointing” and “functionally flawed.”
Fully 98% of Facebook revenues are from advertising. While being investigated by the EU, Facebook has already been sanctioned multiple times by the FTC for consumer privacy violations.
Apple, with Tim Cook’s comfortable relationship with President Trump, was thought to be the least exposed. It is, however, already under review by the DOJ and state attorneys general investigating abuses by its second largest revenue source after iPhones—the $46 billion App Store business. Plus, there are allegations that Apple Pay’s proprietary mobile payments systems restrict access on Apple smart mobile devices to Apple’s competitors. Plus, there are unrelated, lingering, rarely discussed concerns over Apple’s unique concessions to Chinese cybersecurity requirements to store its Chinese iCloud data on servers run in partnership with Chinese enterprises.
After 26 years at the helm of the company he founded, this was Bezos’s first congressional testimony. Amazon faces perhaps the most wide-ranging and diverse set of complaints of any of the four companies. Recently, AT&T’s CEO John Stankey has complained that Amazon has blocked the access to its newly launched HBO Max direct streaming service. Antitrust complaints focus on its dominance over e-commerce, edging out other e-commerce competitors as well as traditional brick and mortar retailers, stoked by concerns over Amazon’s entry into new business lines such as groceries (Whole Foods), fashion, and cloud computing through Amazon Web Services. According to the Wall Street Journal, Amazon has also used data from small third-party retailers to advance and benefit its own direct-to-consumer operation despite pledging not to do so and stealing product design at predatory prices.
Other concerns and allegations center on Amazon’s poor treatment of its workers; poor warehouse safety practices; Amazon’s alleged dodging of its fair share of taxes (repeatedly raised by President Trump), and political bias with Bezos’s ownership of the Washington Post.
Amazon defends itself vigorously, arguing that the company’s e-commerce business model is not grounded in selling ads like Google and Facebook, and released a report on small business saying sales by third-party sellers grew 26% in the past year, outpacing Amazon’s own sales directly to consumers.
Instead of legally crafted sales pitches, these brilliant titans of technology should have acknowledged new challenges in influence, impact, innovation, and independence.
Jeffrey Sonnenfeld is senior associate dean for leadership studies and Lester Crown professor of leadership studies at the Yale School of Management.


fortune--2020-07-30--What the heck is ‘brushing’? The scam behind the China mystery seeds

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Thousands of Americans are receiving seeds in the mail wrapped in packages with Chinese characters. The mystery seeds, which the recipients did not order, have triggered warnings from agricultural authorities who say “do not plant them.”
The USDA and FBI are still investigating the packages—which reportedly include seeds for grass, cucumbers, and melon—but the growing consensus among law enforcement is that they are part of a “brushing” scam.
The term “brushing” was unfamiliar to most Americans until news about the seed mystery. Here’s what it means and how the scam works.
What is brushing?
Brushing is a shady way to boost the popularity of an online merchant by sending out unsolicited packages containing items of little value. The merchant—or more commonly a “brusher” middleman who they pay—writes positive reviews using the names of the recipients.
The goal is to appear higher in the search rankings of online platforms like Amazon. The algorithms of those platforms favor merchants with lots of sales and positive reviews from verified purchasers. Since the name on the review belongs to someone who did receive the product, it’s considered a verified purchase. Brushing can make it appear that hundreds or thousands of people have received and praised the merchant’s product.
When did brushing start?
One of the first uses of “brushing” in English-language media came via a 2015 Wall Street Journal report. The report is titled “They call it brushing” and describes how brushing had become a problem in China where unscrupulous merchants used the technique to game Alibaba, the country’s giant ecommerce platform. And in 2016, the Financial Times reported “China’s ecommerce sites try to sweep away brushing.”
The brushing phenomenon appears to have come to the U.S. not longer after that. A 2018 article by an organization called Scam Busters warned that Chinese brushers had begun large scale campaigns that targeted U.S. consumers.
Is brushing legal?
Probably not. It is certainly a violation of the terms of service of websites like Amazon, and several reports say the tactic violates laws against false advertising as well.
Who are the brushers behind the mystery seeds?
That remains unclear. The FBI and USDA have yet to suggest who is behind the recent seed campaign. Likewise, it is unclear if the brushers behind the campaign are selling seeds or gardening supplies—or if the seeds just represent an inexpensive item to put in the mail as part of the scam.
More must-read finance coverage from Fortune:


fortune--2020-07-30--Coastal flooding threatens 20% of global economy by 2100: study

Coastal flooding caused by storm surges and rising sea levels could threaten as much as 20% of the world’s GDP by the end of the century without intervention to tackle climate change or help protect coastal regions, according to a new study from a group of international researchers.
The coasts of Northwest Europe, including the Southeast of England; the East coast of the United States; and India, particularly around the Bay of Bengal, are some of the regions that are particularly at risk, the study found.
The study, Projections of global-scale extreme sea levels and resulting episodic coastal flooding over the 21st Century, was published on Thursday in Scientific Reports, a Nature journal. It was a collaboration between researchers from the University of Melbourne, IHE Delt in the Netherlands, the University of Amsterdam, the University of East Anglia in the U.K., and Humboldt University in Berlin, Germany.
While the overall impact of rising sea levels has long led to dire warnings of the impacts of climate change, the study goes further in mapping out precise “hotspots” that are at risk, as well as the potential economic impact on infrastructure and economic activity in those coastal regions. It also charts in greater detail the impact of not just sea rise, but episodic flooding caused by strengthening storm events and tides, which is expected to be even more damaging, causing an estimated 69% of coastal flooding by 2100.
When it comes to the scale of that flooding, “one major finding is that what is now seen as a 100-year event could occur as frequently as every 10 years or less for most of the coastal locations,” Ebru Kirezci, the lead author of the report and a PhD candidate in Ocean Engineering at the University of Melbourne, told Fortune.
The study doesn’t account for efforts to reduce emissions, or flooding defenses like dykes and barriers that already exist, or are expected to be in place by the end of the century, the researchers said, and so is intended as a demonstration of the scale of the risks to populations and economies the world faces without intervention.
The proportion of the world’s land affected by episodic flooding and rising seas in global “hotspots” alone, where the flooding is expected to be most severe, is expected to expand to a combined area larger than the total landmass of France, the study said. The proportion of the world’s population and assets affected by coastal flooding is also expected to roughly double from current levels—up to 4.1% of the global population, and 20% of global GDP.
While the study did not attempt to forecast population or GDP growth, under the 2015 base model, the reach of that expanded coastal flooding would affect 287 million people, and assets and infrastructure worth $14.2 trillion.
However, the economic impacts of climate change and coastal flooding—alongside other disasters including raging wildfires—are already becoming clear. In April, Swiss Re, the insurance giant, said that weather-related natural disasters had a global economic cost of $1.618 trillion between 2010 and 2019. In 2017 and 2018 alone, insurers paid out a combined $218 billion in insurance for the economic impact of weather catastrophes.
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fortune--2020-07-30--Former GOP presidential candidate Herman Cain dies from COVID-19

Former GOP presidential candidate Herman Cain has died after battling the coronavirus. He was 74.
A post on Cain’s Twitter account on Thursday announced the death. Cain had been ill with the virus for several weeks. It’s not clear when or where he was infected, but he was hospitalized less than two weeks after attending President Donald Trump’s campaign rally in Tulsa, Oklahoma, in June.
The former pizza company executive has been an outspoken backer of the president and was named by the campaign as a co-chair of Black Voices for Trump.
“We knew when he was first hospitalized with COVID-19 that this was going to be a rough fight,” read an article posted on the Twitter account. “He had trouble breathing and was taken to the hospital by ambulance. We all prayed that the initial meds they gave him would get his breathing back to normal, but it became clear pretty quickly that he was in for a battle.”


fortune--2020-07-30--Researchers find COVID-infected children are major carriers, further complicating the school-reopeni

Researchers find COVID-infected children are major carriers, further complicating the school-reopening debate

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When it comes to the coronavirus and children, looks may be deceiving.
In a study of children under five who show mild to moderate symptoms of COVID-19, those kids were found to contain higher concentrations of the virus compared to older children, teens and adults, according to researchers at a Chicago pediatric hospital and Northwestern University.
The findings come as parents, educators and policymakers around the world grapple with the question of whether it’s safe to reopen day-care centers and schools in the coming weeks.
The study, which was released Thursday in the journal JAMA Pediatrics, did not test the transmission rate of children—but does raise the prospect that children could be just as, or even more, prone to COVID infection and transmission than adults, although symptoms in the vast majority of children are comparably milder, the researchers found.
“One of the things that’s come up in the whole school reopening discussion, is: since kids are less sick, is it because they have less of the virus?,” said Taylor Heald-Sargent, the lead author and a pediatric infectious diseases specialist at Lurie Children’s Hospital of Chicago, and assistant professor of pediatrics at Northwestern University’s Feinberg School of Medicine.
“And our data does not support that,” she told Fortune. As a result, “we can’t assume that kids aren’t able to spread the virus.”
The study used clinical data collected during the treatment of 145 COVID-19 patients in Chicago with mild to moderate symptoms, who had begun to display those symptoms over the previous week. The sample was roughly divided into three equal groups: children under five, children between five and 18, and adults from 18 to 65. The sample excluded patients who were seriously ill, asymptomatic patients, and patients whose symptoms had been present for more than a week, or whose symptoms couldn’t be tracked.
Nasal swabs taken from those patients indicated that the viral load in children under five was “statistically significant” compared to older children and adults, the paper found.
The trend was first noticed during clinical observations, Heald-Sargent said, when she and her co-authors first noticed that nasal samples from kids who were not particularly ill contained unusually high levels of the virus.
“We were surprised,” she added.
There’s still much to be learned about how most children become infected with the virus, how their immune systems respond to COVID-19, and how they transmit it, she added. What’s better understood is that the symptoms shown in young children tend to be less severe than those of adults—that’s despite the fact that young children are broadly more vulnerable to respiratory infections at a younger age.
The study also warns that because schools and day-care closed early in the lockdown, children broadly were less exposed to the virus than adults. Other studies have also tackled this observation—with mixed results.
Even with the new data, Heald-Sargent herself warns that reopening schools and day-cares is a “complex and nuanced” subject. Other pediatricians have warned that the impacts on children’s mental health, education, and development could be damaged far more by long breaks from school and time spent in lockdown than by the virus itself, complicating the arguments for and against a great reopening.


fortune--2020-07-30--England had highest COVID-19 death rate in Europe, data confirms

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The U.K.’s statistics agency has confirmed that England was hit harder by COVID-19 than any other European country in the first half of this year, even adjusting for population size and other factors.
Confronted with this analysis, Prime Minister Boris Johnson claimed the country had had “massive success” in fighting the pandemic, which has so far claimed nearly 46,000 lives there.
COVID-19 death counts are notoriously difficult to compare between countries, because of differing methods for recording such deaths. So statisticians are increasing looking at the straightforward question of “excess mortality”—how many more people than usual died within a certain timeframe, compared with the same period in recent years—to provide meaningful comparisons.
This approach also has the benefit of picking up deaths that were not directly caused by COVID-19 infection but were nonetheless the result of the pandemic, for example people who died because overwhelmed hospitals could not treat them in time.
In England, there was recently a bit of a scandal over how COVID-19 deaths were being counted, after it emerged that the Public Health England agency had been including every person who had been diagnosed with the disease and subsequently died—even if they got hit by a bus months later.
Against this backdrop of likely overcounting, surely a simple look at excess mortality would improve the picture?
On Thursday, the U.K.’s Office of National Statistics (ONS) provided such an analysis, and the results weren’t pretty.
It is now clear that overall, during the first half of this year, England recorded more excess deaths than any other European country—around 7.5% above average, compared with 6.6% in Spain, 5.1% in Scotland, 3.9% in Belgium and 2.8% in Wales.
England also suffered Europe’s second-highest peak of excess mortality, with only Spain experiencing a worse peak.
What’s more, the ONS’s analysis (based on data from the EU’s Eurostat agency) shows how the coronavirus hit the U.K. more diffusely than other European countries.
Across the whole of the U.K.—which apart from England also includes three other nations: Scotland, Wales and Northern Ireland—every single local authority experienced higher-than-usual death counts between the week ending April 3 and the week ending May 8.
“While none of the four U.K. nations had a peak mortality level as high as Spain or the worst-hit local areas of Spain and Italy, excess mortality was geographically widespread throughout the U.K. during the pandemic, whereas it was more geographically localized in most countries of Western Europe,” said ONS health analysis senior research officer Edward Morgan in a statement.
“Combined with the relatively slow downward ‘tail’ of the pandemic in the U.K., this meant that by the end of May, England had seen the highest overall relative excess mortality out of all the European countries compared.”
In terms of reported death counts, on Thursday morning the U.K. was at 45,961, Italy at 35,129, France at 30,238, Spain at 28,441, and Russia at 13,673. Russia had the most reported cases at 828,990, with the U.K. in second place with 301,455 cases.
According to the government, there were 83 “COVID-19 associated” deaths in the U.K. on Wednesday. So far, 41,360 people have died in England, 2,491 in Scotland, 1,554 in Wales and 556 in Northern Ireland.
Johnson was asked about the ONS analysis on Thursday, and said the country owes it to families of the deceased to “continue our work in driving the virus down.”
“Clearly this country has had a massive success now in reducing the numbers of those tragic deaths,” the prime minister said. “We’ve got it at the moment under some measure of control. The numbers of deaths are well, well down.”
P.S.: One peculiarity of the ONS’s Thursday analysis is that it makes no comparison with Germany, where the official death toll so far is 9,214 and the case count is 209,139. The ONS told Fortune this was because “at the time we were working on this publication, no comparable German data was available from Eurostat.”
However, the Eurostat table linked to from the ONS’s own report does indeed include German data. “That must be new this week,” an ONS spokesperson said. “Had that German data been available on Eurostat even a week ago, we would have happily included it in our analysis.”
Eurostat told Fortune the German data was there, with the exception of data from 2015, the first year of the comparison period for determining excess mortality. The ONS insisted that it had found “no data whatsoever for Germany” in the Eurostat table, though one missing year would in any case have excluded Germany from part of its analysis.
This article was updated to include Eurostat and ONS responses regarding the absence of German data from the ONS comparison.


fortune--2020-07-30--Verizon enters the rural home Internet market with 4G wireless

Verizon announced a modest entry into the rural home Internet market with a service using its 4G LTE wireless network in three areas.
The service is available starting on Thursday in Savannah, Ga., Springfield, Mo., and Tri Cities, Tenn., Va., and Ky. Offering download speeds of up to 50 megabits per second, the service costs $60 per month or $40 if the customer is also a Verizon wireless phone subscriber. Verizon also adds a $10 per month charge for the required router.
The carrier has previously offered wired home Internet service via its Fios brand in nine states and 5G wireless home Internet service in parts of six cities. But by using its widespread 4G network, Verizon can reach many more customers at a much lower cost—the 4G network covers 98% of the U.S. population. Still, the promised top download speed is about one-twentieth as fast as the best speeds available via Verizon’s Fios or 5G services.
But the slower top speed shouldn’t matter much to the targeted customers of the 4G service. The goal is to go after “customers in more rural parts of America who may not have access to broadband Internet service–a critical need, especially now, when so many are counting on reliable connectivity for remote work and educational needs,” Frank Boulben, senior vice president of consumer marketing and product, said in a statement.
People who live in rural areas have had to make do with subpar Internet service for decades. About 80% of the 24 million Americans who lack wired home Internet options live in rural areas, according to a report last year by the Department of Agriculture. Satellite Internet is available, but can be too expensive for many rural households.
If the Verizon 4G service catches on, it could face competition soon from Elon Musk’s upcoming satellite Internet service. Called Starlink, the service will offer speeds up 1 gigabits per second, comparable to the fastest wired services, the company says. But Starlink is expected to charge $80 per month.


fortune--2020-07-30--Demystifying ghost kitchens during the pandemic

Good morning, Term Sheet readers. Tech writer Danielle Abril here, filling in for Lucinda.
I’ve been keeping an eye on the mysterious ghost kitchen.
Ghost kitchens, or commissary kitchens that are geared toward delivery, first crossed my path when I heard that former Uber CEO Travis Kalanick had been quietly working on a new venture called CloudKitchens since 2016. Since then, the Los Angeles-based startup has raised $400 million from Saudi Arabia’s sovereign-wealth fund. Other companies like Miami-based Reef Kitchens, New York-based Zuul Kitchens, and even DoorDash have made their way into the industry.
In the middle of a pandemic, which has led to an increased demand for food delivery, I’ve been wondering: Did the coronavirus also bolster the opportunity for ghost kitchens?
Investors from Accel, Battery Ventures, and 500 Startups all believe so. What they didn’t agree on are which ways ghost kitchens would likely be used—for delivery-only brands or as an expansion mechanism for restaurants seeking a low-cost way to reach new customers.
“This has been an oncoming tsunami that’s going to affect the overall restaurant business,” said Scott Tobin, general partner at Battery Ventures, which has invested in a startup that develops restaurant brands solely for delivery. “It’s been slowly brewing. I think COVID is just going to be an accelerant.”
Last year, investors funneled about $2.9 billion into U.S. ghost kitchen companies, according to data from PitchBook. But over the course of the first quarters of this year, investments merely totaled $426 million. The investment total is not necessarily an indicator of investor sentiment towards ghost kitchens, though. As Binh Tran, 500 Startups venture partner, pointed out, ghost kitchens are capital-intensive due to the real estate associated with the business. So the barrier to entry is much higher than that of software companies, for instance.
Tran said he believes the shift in consumer behavior and need for ghost kitchens is likely here to stay. DoorDash, which opened its first kitchen in Redwood City, Calif. last year, said it’s seen a rise in inquiries from restaurants about its kitchen space, even though it’s already maxed out with six brands there.
Amit Kumar, partner at Accel, agrees. “This rapid wave of adoption is a transformative event for the space, and unlikely to be undone even in a post-Covid world as restaurateurs start leaning into these new revenue streams,” he said. “We’re certainly doubling back to see how this impacts our view on the space and opportunities for investment.”
Danielle Abril
@DanielleDigest
danielle.abril@fortune.com
Anne Sraders curated today’s Term Sheet.
VENTURE DEALS
-Infobip, a London-based cloud communications platform for businesses and customers, raised over $200 million in Series A funding from One Equity Partners, Reuters reports citing sources. The deal valued Infobip at over $1 billion.
-Validity Finance, a New York City-based commercial litigation finance firm, raised $100 million in funding from backers including TowerBrook Capital Partners.
-Omega Therapeutics, a Cambridge, Mass.-based biotech firm focusing on epigenetics, secured $85 million in funding from founder Flagship Pioneering. Read more.
-Guideline, a San Mateo, Calif.-based small businesses 401(k) provider, raised $80 million in Series D funding. Generation and Greyhound Capital led the round, and were joined by investors including Tiger Global Management, Felicis Ventures, Propel Venture Partners, Lerer Hippeau, Xfund and BoxGroup.
-Instrumental, a Palo Alto-based manufacturing optimization software platform, raised $20 million in Series B financing. Canaan led the round, and was joined by investors including Eclipse Ventures, Root Ventures, Stanford StartX Fund, and First Round Capital. Read more.
-AI Foundation, a San Francisco-based online AI platform, raised $17 million in Series B funding. Mousse Partners led the round, and was joined by investors including Founders Fund, Biz Stone, You & Mr Jones and Alpha Edison.
-Candis, a Berlin-based automated bookkeeping software company, raised €12 million ($14 million) in Series B funding. Viola Ventures and Rabo Frontier Ventures led the round, and were joined by investors including Lightspeed Venture Partners, Point Nine Capital, Speedinvest and 42CAP.
-Alydia Health, a Menlo Park, Calif.-based medical device company focused on preventing maternal death, raised $13.9 million in Series C funding. AXA Investment Managers led the round, and was joined by investors including Global Health Investment Fund and Avestria Ventures.
-Whistic, a Pleasant Grove, Utah-based vendor security platform for buyers and sellers, raised $12 million in Series A funding. Emergence led the round, and was joined by investors including Album VC. Read more.
-Magnetis, a São Paulo, Brazil-based digital investment manager platform, raised $11 million in Series B funding. Redpoint eventures led the round, and was joined by investors including Vostok Emerging Finance.
-Siilo, a Netherlands-based collaboration app for healthcare professionals, raised $10.5 million in Series A funding. Heal Capital led the round, and was joined by investors including Philips Health Technology Venture Fund and EQT Ventures.
-Polyarc, a Seattle-based virtual reality game maker, raised $9 million in Series B funding. Hiro Capital led the round, and was joined by investors including Vulcan Capital and Galaxy Interactive via its Galaxy EOS VC Fund.
-KloudGin, a Sunnyvale, Calif.-based cloud-based field service and asset management provider, raised $8.2 million in Series A funding from Cloud Apps Capital Partners.
-byrd, a Berlin and Vienna-based logistics firm, raised €5 million ($5.8 million) in Series A funding. Rider Global led the round, and was joined by investors including VentureFriends, FJ Labs, Speedinvest, Reflex Capital, Hermann Hauser and KK Incube.
-StreamLayer, a Chicago-based live video and connected TV technology platform, raised $4 million in funding. KB Partners led the round, and was joined by investors including Green Dolphin Capital and TYH Capital.
PRIVATE EQUITY
-Warburg Pincus and DTCP agreed to acquire a controlling stake in Community Fibre, a London-based full fibre broadband provider. Existing investors include Amber Infrastructure and RPMI Railpen. Financial terms were not disclosed.
-BC Partners agreed to take IMA SpA, an Italy-based machinery maker, private, in partnership with IMA’s majority shareholder. The deal is valued at €2.9 billion ($3.4 billion). Read more.
-Morgan Stanley Infrastructure Partners (MSIP) bought a 49.99% stake in New York-based broadband provider Altice USA’s fiber business Lightpath for $2.3 billion.
-Crestview Partners invested in Upwell Water, a San Francisco-based specialty finance company focused on water. The investment, along with previous investments from 2040 Fund and Upwell, will create a $1 billion water financing company.
-The Riverside Company invested in GSB & Associates, a Kennesaw, Georgia-based custom flavor developer. Financial terms were not disclosed. Read more.
-W2O, backed by New Mountain Capital, acquired Discern Health, a Baltimore, Md.-based healthcare consulting firm. Financial terms were not disclosed.
-Madison Dearborn Partners agreed to acquire IPL Plastics, a Canada-based packaging company, for C$981 ($735 million) on an enterprise basis.
-BP Energy Partners invested up to $60 million in equity in Catalyst Power Holdings, a New York-based retail energy and energy solutions provider.
-Partnerize, backed by Accel-KKR, acquired Pepperjam, a Philadelphia-based affiliate marketing services provider. Financial terms were not disclosed.
-Cerevel Therapeutics, backed by Bain Capital, will combine with Arya Sciences Acquisition Corp II (Nasdaq: ARYBU), a New York City-based blank check company sponsored by Perceptive Advisors. A group of healthcare investors have agreed to commit $320 million in addition to $150 million from Arya II. The combined company is expected to receive $445 million in net proceeds and will go public under “CERE”.
OTHERS
-Recursion acquired Vium, a San Mateo, Calif.-based digital biomarkers provider. Financial terms were not disclosed.
-Clarivate will merge with CPA Global, a Jersey, Channel Islands-based intellectual property software and technology services provider in an all-stock transaction, for an implied enterprise value of $6.8 billion. Read more.
-ZenBusiness acquired Joust, an Austin-based banking platform geared toward self-employed individuals. Financial terms were not disclosed.
-MightyHive, backed by S4 Capital, will merge with Orca Pacific, a Seattle-based Amazon marketing agency and consultancy firm. Financial terms were not disclosed.
-Mimecast (NASDAQ: MIME) acquired MessageControl, a Chicago-based messaging security software developer. Financial terms were not disclosed.
IPOS
-Oak Street Health, a Chicago-based provider of primary care for Medicare patients in the Midwest, now plans to raise $250 million by offering 15.6 million shares priced between $15 to $17. It posted revenue of $540 million in 2019 and a loss of $137.2 million. General Atlantic, Newlight, and Humana back the firm. It plans to list on the NYSE as “OSH.” Read more.
-Forum Merger III, a Delray Beach, Fla.-based blank check company and third of its kind led by co-CEOs Marshall Kiev and David Boris, filed for a $250 million IPO. It is targeting investments based in the U.S. with aggregate enterprise values between $500 million and $2 billion, but did not specify a particular industry. It plans to list on the Nasdaq as “FIIIU”. Read more.
-Vital Farms, an Austin, Texas-based pasture-raised eggs producer, now plans to raise $156 million by offering 7.8 million shares priced between $19 and $21 in an IPO. It plans to list on the Nasdaq as “VITL”. Read more.
-BigCommerce, an Austin-based e-commerce software developer, plans to raise $130 million in an IPO by offering 6.9 shares priced between $18 and $20. Investors include General Catalyst and GGV Capital. It is planning to list on the Nasdaq as “BIGC”. Read more.
-Petra Acquisition, a New York City-based blank check company led by CEO and chairman Andreas Typaldos, filed for a $125 million IPO. It is targeting investments in the cannabis industry. It plans to list on the Nasdaq as “PAICU”. Read more.
-Acutus Medical, a Carlsbad, Calif.-based medical device maker to treat arrhythmia, plans to raise $125 million by offering 7.4 million shares priced between $16 and $18 in an IPO. It plans to list on the Nasdaq as “AFIB”. Read more.
EXITS
-Calspan Technology Holding Corporation acquired Aero Systems Engineering, a St. Paul, Minn.-based aerospace and ground-based testing solutions provider, from Gen Cap America. Financial terms were not disclosed.
PEOPLE
-H.I.G. Capital added Timur Akazhanov as a managing director. Akazhanov was previously at Blackstone.


fortune--2020-07-30--NBCUniversal’s Peacock hits 10 million signups

NBCUniversal’s Peacock has signed up 10 million users, making the new streaming service a rare bright spot at Comcast Corp.’s pandemic-ravaged entertainment division.
Comcast disclosed the early Peacock results while reporting its second-quarter earnings on Thursday. NBC has said it hopes Peacock will reach 30 million to 35 million active users by 2024.
Peacock, which is free and supported by advertising, made its debut to Comcast subscribers in April and expanded nationwide on July 15. It’s still unavailable through Roku Inc. and Amazon.com Inc.’s Fire TV, the most popular connected-TV platforms.
AT&T Inc.’s HBO Max, which aims to have 50 million subscribers within five years, has 4.1 million activations so far, the company said last week. It also isn’t available on Roku and Fire.
While consumers have been testing out Peacock, NBCUniversal’s theme-park, TV and film businesses have struggled during the pandemic. NBCUniversal’s quarterly revenue declined 25% last quarter to $6.1 billion, Comcast said Thursday.
The company’s theme parks have been hit particularly hard by the virus, recording a loss of nearly $400 million in the quarter. Universal’s theme park in Florida reopened in June but attendance has been thin due to concerns about the coronavirus.
Comcast’s internet business, however, continues to hum along as people rely on broadband connections for entertainment as well as working and learning from home. Comcast added 323,000 internet customers in the quarter, up 54% from a year ago.
That number didn’t include more than 600,000 customers who got internet free or got a break on paying their monthly bills through programs aimed at helping keep people connected during the pandemic. AT&T and Verizon Communications Inc. last week similarly reported swaths of nonpaying customers.
Comcast’s total quarterly revenue of $23.7 billion and adjusted profit of 69 cents a share both surpassed analysts’ estimates, and the company maintained its dividend. Its shares were up 2.2% to $44.87 in premarket trading at 9:09 a.m. in New York.
The company lost 477,000 video subscribers in the quarter, more than double the losses from the same period a year ago. Comcast has raised TV prices and expressed little interest in keeping cost-conscious customers.
The video losses could also be a sign that more people cut the cord because some major sports weren’t playing during the quarter, or because they lost income during a pandemic that’s led to high unemployment.