Friday Aug.09, 2019

Facebook wants to try again with news

_Facebook explaining how it messed up the first time_

Hey Snackers,

$5.2B.

That's how much Uber lost over the last 3 months while you debated "to pool or not to pool" (quick context: Lyft lost $644M the same period).

Markets bounced back from Monday's worst loss of the year — those fresh currency war moves China made have settled down before the weekend.

Inform

Facebook is reportedly planning a new initiative to fix the news it helped break

This has rom-com written all over it... We're at the last 30 minutes when Facebook tries to rekindle its fraught relationship with the news industry. According to the WSJ, Facebook is offering news publishers up to $3M per year to license entire articles and stick them in your newsfeed.

The last time Facebook dated news, it didn't go well... Promises were broken, and the breakup was bad.

How the relationship worked: Just as news publishers were getting disrupted by the internet, Zuck welcomed them to post articles on Facebook, which it would promote in newsfeeds.
The promise to news: People will click on your articles! And you can make money through that web traffic (with ads) or by getting them to subscribe!
What actually happened: FB traffic didn't lead to much money for news publishers, who struggled. Then Facebook tweaked its algorithm to demote news, and promote baby pics instead.
The really bad part: Fake news replaced real news, and the troll-authored content got loads of likes, shares, and comments.

Facebook knows news got burned last time... so it's offering money this time. News agencies aren't buying the "traffic will convert to subscriptions" story. Facebook's eager to prove it can now help news agencies by paying them $$$ for their product. As soon as this fall, we could get a new tab on the FB app for news, with real, paid news in there.

Rise

How Roku quietly became the #1 king for cord-cutters

Rudy...Rudy...Rudy... The streaming company that turns dumb TVs into smart TVs with its HDMI dongle and software just announced 2nd quarter earnings. And Roku's stock surged 21% on a made-for-TV trifecta of growth stories:

+39%: The # of active Roku accounts is up from last year.
+72%: The increase in time users spent Roku-ing with their dongle or Roku-equipped smart TV compared to the same time in 2018.
+59%: The amount of money Roku made last quarter, compared to the year before.

It was already varsity. Now it's the QB... Roku just hit some big milestones that show how the tech company controls cord-cutters' binging time. All that netflixing America loves — it happens via Roku more than anything else.

Roku's the #1 streaming stick with a 39% share of the market. Amazon, Apple, and Google are 2-3-4.
Roku's the #1 smart-TV software with a 33% share of the market. Samsung, Vizio, and LG are 2-3-4.

Its tininess was its advantage... Put all of Roku's stock in a sack and it's worth just under $14B (that's also called its market cap). That's like 2% as big as the tech giants it competes against. Its size helped it avoid the rumbling of its bigger tech rivals:

YouTube was blocked from Amazon's Fire Stick. Amazon Prime Video wasn't available on Apple TV or Google Chromecast.
Walmart refuses to sell Amazon devices (for obvious reasons).
Meanwhile, Roku's stock has quadrupled in the past 9 months.

Procreate

Sperm-analyzing startup raises $5M — and health-tech investments are booming

Self-driving, AI, Internet-of-Things, VR... Fertility. The ability to have babies is a market that VC money is finally flowing into. Polina Marinova's Term Sheet captured its momentum with just 3 numbers:

475: That's the total number of women in the US who froze their eggs in 2009. Out of the entire country. Four hundred and seventy five.
7,300: That's how many did in 2016. Big jump.
$102M: And that's how much venture capitalists have invested in fertility startups so far in 2019.

Just add guys... The fertility-tech industry is now expanding to target men, too. Legacy recently raised $1.5M and mail-order sperm-testing startup Dadi just added $5M. Here's how Dadi's going full "23&Me" on the male fertility market:

The issue: Dadi's website says 1/2 of all fertility challenges are on the man's side.
The value prop: Order the $99 kit and send back a sample. They'll evaluate your fertility percentile and suggest lifestyle changes to up the likelihood you'll be able to conceive.
The revenues: One-time sales are nice, but how do they get recurring money out of this? Subscriptions — $9.99/month keeps the sperm frozen as you age, so it's ready when you are.

"Brand-icorns" are emerging in health-tech... Not unicorns. Brand-icorns. Casper, Allbirds, or Away = digital-first startups that focus on branding, cut out middlemen, and hit $1B valuations. Now health-tech could lead the next wave of direct-to-consumer Brand-icorns. Balding and erectile dysfunction startup Roman is worth half-a-billion and rival Hims just passed the billion mark. Fertility could be up next.

What else we’re Snackin’

Stalled: Uber drops 6% after its worst loss, and slowest revenue growth, ever
Catch-up: Kraft Heinz is forced to write down the value of itself (again)
Decentralized: Barnes & Noble's new CEO wants to let each store choose its own look and feel to become more neighborhood-y
Chill: Netflix outbids Disney to sign the Game of Thrones writers to a $200M make-us-more-original-content deal
Chippin': AMD surges 16% on word the chipmaker's new chips will be used by Google and Twitter
Canceled: Equinox and SoulCycle suffer boycotts on political news that its part-owner supports President Trump

Friday

The United Kingdom's GDP report
Earnings from Tribune Media

Disclosure: Authors of this Snacks own shares of Amazon.

20190809-923180-2783918

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Tangential remarks

Nicolai Tangen, the CEO who holds the purse strings of Norway’s $1.6 trillion sovereign wealth fund, thinks that his fellow Europeans don’t quite stack up to US employees when it comes to pure hustle, telling the Financial Times in a recent interview that there is a difference in “the general level of ambition” and that “the Americans just work harder”.

Tangen has clearly been putting his money — or more specifically Norway’s — where his mouth is: the sprawling Norwegian oil fund, now one of the largest investors on the planet, has been pumping more capital into its US holdings in the past decade, while decreasing its investment into European entities.

The troublesome news for our European readers? Tangen might be onto something. According to data from the OECD, American workers are putting in almost 60 hours a year more than the weighted average for OECD nations… a benchmark that workers from countries in the European Union are already ~180 hours shy of.

Europeans ‘less hard-working’ than Americans | FT

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Sales of what are up 136% since 2019?

Don't be a sucka

$70B

Alphabet shares are soaring in the after-market session, with a initial jump of more than 10% implying a gain of upwards of about $200B in market value when the stock opens tomorrow morning.

Google’s parent company crushed earnings expectations, initiated a cash dividend for the first time, and authorized a fresh $70B in share repurchases for good measure. The market likes it very much.

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No, Apple hasn’t cut its Vision Pro production estimates in half

Quite a few news outlets are reporting that Apple thinks it’s only going to sell 400,000 to 450,000 Vision Pros in 2024, compared a “market consensus” of 700,000 to 800,000. They’re all citing a note from Apple analyst Ming-Chi Kuo.

Obviously there’s no question that Apple’s $3,500 face computer will have a limited audience and could be a huge flop, but this also doesn’t seem like accurate news.

The issue is that 1) this 400,000 number isn’t new. Back in July of 2023, the Financial Times reported that Apple planned to make fewer than 400,000 units in 2024, reducing its initial projections of 1M units, citing two people close to Apple and, the Chinese contract manufacturer assembling the device. 2) It's unclear who was estimating 700,000-800,000 Vision Pros in the first place, but it appears that it was Ming-Chi Kuo himself?