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Google employees protest China’s Dragonfly

By Business Desk,

Hundreds of Google employees have signed a protest letter over the company’s reported work on a censor-friendly search engine to get back into China.

The employees, according to a New York Times report, are demanding more transparency so they can understand the moral implications of their work, said the Times, which obtained a copy of the letter.

It has been signed by 1,400 employees and is circulating on the company’s internal communications system, the newspaper said, quoting three persons who are familiar with the document.

The letter argues that the search engine project and Google’s apparent willingness to accept China’s censorship requirements “raise urgent moral and ethical issues.”

“Currently we do not have the information required to make ethically-informed decisions about our work, our projects, and our employment,” they say in the letter, according to the Times.

Employee anger flared with a report earlier this month in The Intercept that Google is secretly building a search engine that will filter content banned in China and thus meet Beijing’s tough censorship rules.

Google withdrew its search engine from China eight years ago due to censorship and hacking.

The new project is said to be codenamed “Dragonfly.”

The tech giant had already come under fire this year from thousands of employees who signed a petition against a $10-million contract with the US military, which was not renewed.

With the secret project, Google employees are reportedly worried that they might unknowingly be working on technology that could help China hide information from its people.

“We urgently need more transparency, a seat at the table, and a commitment to clear and open processes: Google employees need to know what we’re building,” the protest letter says, according to the Times.

At a townhall gathering of employees on Thursday, Google CEO, Sundar Pichai said the firm was committed to transparency, and that while it was “exploring many options”, it was “not close to launching a search product in China,” the Financial Times reported, citing a person present at the meeting.

What Tesla take over proposal could look like

By Business Desk,

Now that Tesla CEO Elon Musk has hired advisers for his plan to take the U.S. electric car maker private, and the Tesla board has named a special committee of independent directors to evaluate it — two steps CNBC reported would happen last week— the next milestone is for Musk to actually put together a formal proposal.

(Ideally, this proposal would already exist, but let’s table that point for now.)

Musk’s offer is likely to include conditional financing from third parties, including Saudi Arabia’s sovereign wealth fund, and may have requirements that a certain number of Tesla shareholders roll over their existing stakes into a private company, according to M&A bankers and lawyers who have worked on similar transactions. Putting these conditions in a proposal will allow Musk to show the board something quickly without having to secure tens of billions in committed financing.

It’s also possible the Saudi sovereign wealth fund could commit much more in financing, but Tesla’s cash-burning business, costly factories and Committee on Foreign Investment in the United States (CFIUS) issues make that less likely, the bankers and lawyers said.

Of course, Musk already tweeted he had secured financing last week, which has reportedly prompted an SEC inquiry. While conditional clauses may aid Musk’s efforts in lining up financing, the SEC will only care about what he knew to be true at the time of his first tweet, said Thomas Gorman, a lawyer at Dorsey & Whitney and a former SEC enforcement attorney who specializes in financial fraud and market manipulation.

It’s particularly important there is Saudi financing in the formal proposal because Musk has specifically said the country’s sovereign wealth fund’s interest in taking the company private was the basis for his “funding secured” comment,” said Gorman.

“The SEC needs to determine if Musk’s first tweet was a false statement when he put it out,” said Gorman. “There must be some documentation around conversations about funding, even if it’s limited. If the Saudi sovereign wealth fund has the ability and willingness to do this, and Musk knew at the time, you might not like the way he did this, but I don’t think that’s an enforcement case.”

Musk did make reference to existing shareholders rolling their stakes into a private company through a special-purpose vehicle when he first tweeted about Tesla’s take-private last week. The details around how such a fund would work weren’t clear, and there’s no obvious precedent for such a thing.

Musk said Monday he is being advised by Silver Lake on taking the company private. Silver Lake helped Michael Dell with his management-led buyout of Dell in 2013. It’s likely Musk wants to emulate how Dell took his company private, Gorman said. Still, Dell dealt with a variety of obstacles, including counterbidders and deducing a fair price for shareholders, when he attempted the leveraged buyout. Musk probably won’t have an easy time moving forward with a buyout even if he avoids the SEC’s glare, Gorman said.

“He can’t make the company do this,” Gorman said. “If the company decides it doesn’t want to do this, then it won’t.”

Tinder founders sue parent IAC, saying it owes them billions

By Business Desk,

A group of founders, executives and early employees of Tinder on Tuesday sued IAC/InterActiveCorp, claiming the parent company deliberately undervalued the dating app to avoid paying them billions of dollars and deprived some employees of stock options.

The lawsuit filed in state Supreme Court in Manhattan stated that IAC and its subsidiary Match Group Inc deliberately prevented the plaintiffs from cashing in stock options they could exercise and sell to IAC. They are seeking damages of not less than $2 billion.

“The defendants made contractual promises to recruit and retain the men and women who built Tinder,” Orin Snyder, a lawyer for the plaintiffs, said in a statement.

“The evidence is overwhelming that when it came time to pay the Tinder employees what they rightfully earned, the defendants lied, bullied, and violated their contractual duties, stealing billions of dollars,” he said.

IAC and Match Group said the allegations in the complaint “are meritless and we intend to vigorously defend against them.”

The plaintiffs, including Tinder founders Sean Rad, Justin Mateen and Jonathan Badeen and several executives and employees were given stock options in Tinder as part of their compensation in 2014, according to the lawsuit. Because Tinder is a private company, they were not able to exercise their options and then sell stock on the open market.

Instead, they were allowed to exercise their options and sell only to IAC and Match on four specific dates, in 2017, 2018, 2020 and 2021, on which the stock options would be independently valued, according to the lawsuit.

Match and IAC, which owns 80 percent of Tinder-owner Match, appointed Greg Blatt, Match’s then chairman and chief executive, as interim CEO of Tinder in 2016. The plaintiffs said this allowed the two companies to “control the valuation of Tinder.”

The plaintiffs claimed that IAC and Match engaged in a “disinformation campaign” to obtain a “bogus” $3 billion valuation for the 2017 date. Some plaintiffs who had left the company were contractually forced to exercise their options using that valuation, according to the lawsuit, while other plaintiffs kept their options.

However, IAC and Match then merged Tinder into Match without the consent of Tinder’s board of directors and canceled the future dates for exercising options, the lawsuit said.

“Mr. Rad has a rich history of outlandish public statements, and this lawsuit contains just another series of them,” IAC and Match Group said in a joint statement.

Samsung launches Galaxy Note 9 phablet

By Business Desk,

Samsung Electronics Co Ltd (005930.KS) launched the Galaxy Note 9 “phablet” in New York on Thursday, promising better battery life and quick cooling to attract gamers and revive flagging sales.

The focus on gamer-friendly features appears to be a shift away from Samsung’s previous positioning of the Note as a productivity-boosting device, and is an attempt to lure younger customers as the company’s smartphone sales falter.

U.S. carrier Verizon Communications Inc said the new device will be available for pre-order from August 10, with the 128 gigabyte model priced at $999.99 for the and 512GB model at $1,249.99.

Sprint Corp will introduce the smartphone on August 24 and offer a 50 percent discount as part of a promotional scheme.

Samsung also launched the Galaxy Home speaker, a device that will use its Bixby voice assistant and compete with similar products from Amazon Inc, Apple Inc and Alphabet Inc’s Google.

The company last month posted its slowest quarterly profit growth in more than a year as rivals such as China’s Huawei Technologies nipped at its heels, challenging the market leader with cheaper, feature-packed models.

An industry source said the new Note would be priced similarly to its predecessor Note 8, which sold at around $950. The Note 8 sported dual rear cameras and the biggest screen to date on a Samsung smartphone.

The new Note will support up to 1 terabyte of memory – it will have a 512 GB version that will support an additional 512 GB memory card – the source said, making Samsung the first major smartphone maker to sell a 1TB phone.

Samsung launched the Note 9 at 11 a.m. in New York on Thursday, or Friday midnight in Seoul. The new Note is set to hit stores on Aug. 24, Samsung said.

The launch comes about three weeks earlier than its predecessor’s release date, a move prompted by increased competition in the second half of the year as rivals release new smartphone models.

During the event, the company also unveiled its Samsung Galaxy watch with a wireless pad and charger duo for its watch and Note 9.

Samsung said the Note 9 will be the first Android phone to support Fortnite, a hugely popular video-and-smartphone survival game that was only playable on computers, consoles and Apple products until now. Lovers of the game will get an exclusive Note 9 character skin or alternative appearance for characters.

The phablet – a cross between a smartphone and a tablet – would also be able to cool down quickly during game sessions that typically heat up phones a lot.

Its S Pen stylus is Bluetooth-enabled and designed to act as a remote for controlling YouTube video playback.

For its smart speakers, Samsung has partnered with Spotify Technology SA for music streaming. Spotify shares rose nearly 5 percent to $186.96 after the announcement.

Facebook, Apple cracks down on conspiracy theorist

By News Desk, with Agency Report,

Facebook Inc announced on Monday that it had removed four pages belonging to U.S. conspiracy theorist Alex Jones for “repeatedly posting content over the past several days” that breaks its community standards.

The company said it removed the pages “for glorifying violence, which violates our graphic violence policy, and using dehumanizing language to describe people who are transgender, Muslims and immigrants, which violates our hate speech policies.”

“Facebook bans Infowars. Permanently. Infowars was widely credited with playing a key role in getting Trump elected. This is a co-ordinated move ahead of the mid-terms to help Democrats. This is political censorship. This is culture war,” Infowars editor-at-large Paul Joseph Watson tweeted here.

Neither Jones nor a representative for Infowars was available for comment.

Since founding Infowars in 1999, Jones has built a vast audience. Among the theories he has promoted is that the Sept. 11, 2001, attacks on New York and Washington were staged by the government.

Facebook had earlier suspended the radio and Internet host’s personal profile for 30 days in late July from its site for what the company said was bullying and hate speech.

Most of Jones’s podcasts from his right-wing media platform Infowars have been removed from Apple Inc’s iTunes and podcast apps, the media news website BuzzFeed quoted a company spokesman as saying on Sunday.

Apple told BuzzFeed that it had removed the entire library for five of Jones’s six Infowars podcasts including the shows “War Room” and the daily “The Alex Jones Show.”

Only one program provided by Infowars, “RealNews with David Knight” remained on Apple’s platforms on Sunday, according to news media accounts.

The moves by Apple and Facebook are the most sweeping of a recent crackdown on Jones’s programs by online sites that have suspended or removed some of his conspiracy-driven content. An Apple spokeswoman said in a statement that the company “does not tolerate hate speech” and publishes guidelines that developers and publishers must follow.

“Podcasts that violate these guidelines are removed from our directory making them no longer searchable or available for download or streaming,” Apple said in a statement. “We believe in representing a wide range of views, so long as people are respectful to those with differing opinions.”

Also, Spotify, a music and podcast streaming company, said on Monday that it had now removed all of Jones’s Infowars programs from its platform. Last week it removed just some specific programs.

“We take reports of hate content seriously and review any podcast episode or song that is flagged by our community,” a representative said Monday.

“Due to repeated violations of Spotify’s prohibited content policies, The Alex Jones Show has lost access to the Spotify platform,” the representative said.

 Jones has also promoted a theory that the 2012 Sandy Hook school massacre was faked by left-wing forces to promote gun control. The shooting left 26 children and adults dead at a Connecticut elementary school.

He is being sued in Texas by two Sandy Hook parents, seeking at least $1 million, claiming that they have been the subject of harassment driven by his programs.

EU fine Google $5b over Android dominance

By News Desk,

The EU has hit Google with its biggest ever fine, imposing a 4.34 billion euro ($5 billion) penalty on the US tech giant for illegally abusing the dominance of its operating system for mobile devices.

Brussels on Wednesday accused Google of using the Android system’s near-stranglehold on smartphones and tablets to promote the use of its own Google search engine and shut out rivals.

The decision, which follows a three-year EU investigation, comes as fears of a transatlantic trade war mount because of President Donald Trump’s decision to impose tariffs on European steel and aluminium exports.

“Google has engaged in illegal practices to cement its dominant market position in internet search,” EU Competition Commissioner Margrethe Vestager said as she announced the huge fine.

The new sanction nearly doubles the previous record EU antitrust fine of 2.4 billion euros, which also targeted Google, in that case for the Silicon Valley titan’s shopping comparison service in 2017.

Denmark’s Vestager ordered Google to “put an effective end to this conduct within 90 days or face penalty payments” of up to five percent of its average daily turnover.

The Google decision comes just one week before European Commission chief Jean-Claude Juncker is due to travel to the United States for crucial talks with US President Donald Trump on the tariffs dispute and other issues.

But Vestager — who was reportedly dubbed by Trump the “tax lady” who “hates the US” after she took on a string of Silicon Valley giants — insisted that she was not anti-American.

“I very much like the US… but the fact is that this (case) has nothing to do with how I feel,” she said.

Google chief Sundar Pichai immediately said the firm would appeal.

“Today’s decision rejects the business model that supports Android, which has created more choice for everyone, not less. We intend to appeal,” Pichai said in a blog post.

Google provides Android free to smartphone manufacturers and generates most of its revenue from selling advertisements that appear along with search results.

The EU says Android is used on around 80 percent of mobile devices, both in Europe and worldwide.

China auto firms to set up ride-sharing platform

By Business Desk,

Chinese firms FAW Group, Dongfeng Automobile and Chongqing Changan Automobile have set up a venture to establish a ride-sharing platform, Changan said on Saturday, creating the kind of service pioneered by Uber.

“The three major car companies have joined forces to enter the field of shared travel, which provides an opportunity to transform traditional car enterprises,” a notice posted by Changan on its Wechat social media account said.

The new venture, called T3 Mobile Travel Services, would introduce partners from other industries to build the service and seek to make use of the development of driverless cars to offer safer and more efficient travel services to customers.

The three firms signed a cooperation agreement in December.

China’s ride sharing market is now dominated by Didi Chuxing, which is valued at $50 billion and counts Japan’s SoftBank Group as one of its major investors.

Facebook shares slip on report of widened probe on data scandal

By News Desk, with Agency Report,

Shares of Facebook Inc fell more than 1 percent in premarket trade on Tuesday, after a report said that a federal probe on the data breach linked to Cambridge Analytica was broadened and will include more government agencies.

Facebook faced intense scrutiny from the embarrassing scandal that affected millions of users whose data was improperly accessed by the political consultancy.

The Federal Bureau of Investigation, the Securities and Exchange Commission and the Federal Trade Commission have joined the Department of Justice in its inquiries about the two companies and the sharing of personal information of 71 million Americans, the Washington Post reported citing five people.

A Facebook spokesperson told Reuters on late Monday that it is cooperating with officials in the U.S., UK and beyond.

“We’ve provided public testimony, answered questions, and pledged to continue our assistance as their work continues,” the spokesperson said.

The emphasis has been on Facebook’s sharing of information square with the underlying facts and whether the company made sufficiently complete and timely disclosures to the public and investors, according to the Washington Post.

Facebook shares were down 1.4 percent at $194.64 in premarket trading on the Nasdaq.

The stock lost about 18 percent of its value in the seven trading days after the data scandal broke, but has since gained about 30 percent.

Xiaomi raises $4.72 billion after pricing HK IPO at bottom of range

By Business Desk,

China’s Xiaomi Corp priced its Hong Kong initial public offering (IPO) at the bottom of an indicative range, raising $4.72 billion in the world’s biggest tech float in four years, people close to the transaction said on Friday.

That values the firm at about $54 billion, almost half the valuation industry insiders touted at the beginning of the year.

The pricing comes at a delicate time for Hong Kong’s stock market, with the benchmark Hang Seng index falling 6.5 percent this month and 4.8 percent this year as investors fret over escalating trade tension between the United States and China.

As such, Xiaomi’s share sale is widely seen as a test of market sentiment for what is expected to be a packed second-half of the year for Hong Kong IPOs, with offerings including online food delivery-to-ticketing services platform Meituan Dianping.

China Tower, the world’s largest mobile mast operator, has won approval for a Hong Kong IPO that could raise up to $10 billion. However, its listing timing will depend somewhat on how well Xiaomi’s deal is received, sources have told Reuters.

“Xiaomi’s pricing won’t be good news for market sentiment,” said Hong Hao, chief strategist at BOCOM International. “But other IPO candidates will still flock to the market to list before market conditions become more challenging.”

Xiaomi is selling about 2.18 billion shares at HK$17 each ($2.17), the bottom of a price range of HK$17 to HK$22, two of the people said. That makes the IPO the largest in the technology sector since Alibaba Group Holding Ltd (BABA.N) raised $25 billion in New York in 2014.

Xiaomi declined to comment. The people declined to be identified as the information was not public.

The HK$17 price represents a multiple of 39.6 times 2018 earnings and 22.7 times Xiaomi’s 2019 earnings forecast by its underwriting syndicate. At present, rival Apple Inc (AAPL.O) is trading at 17 times trailing earnings and 14 times forward earnings, showed Thomson Reuters data.

“I’m not surprised at all by its pricing at the bottom,” said Hong. “It claims to be a hardware plus internet services company, but the majority of its revenues come from the smartphone business. It’s still way more expensive than Apple on a price-earnings basis.”

Xiaomi’s price values the firm at $53.9 billion before the exercise of a “greenshoe” or over-allotment option, whereby additional shares are sold depending on demand.

The valuation is far below the $100 billion touted by sources earlier this year as well as the more recent $70 billion-plus target that some analysts and investors saw as aggressive. Xiaomi was valued at $46 billion in its last fundraising in 2014.

Xiaomi’s IPO adds to the $6 billion of new listings so far in 2018 in Hong Kong and is set to be the first under the city’s new exchange rules permitting dual-class shares common in the tech industry in an attempt to attract tech floats.

It was initially expected to raise up to $10 billion, split between Hong Kong and mainland China, but last week shelved the mainland offering until after listing in Hong Kong. Cornerstone investors included U.S. chipmaker Qualcomm Inc (QCOM.O) and telecom service provider China Mobile Ltd.

Set up in 2010, Xiaomi doubled its smartphone shipments in 2017 to become the world’s fourth-largest maker, according to Counterpoint Research, defying a global slowdown in handset sales. It also makes internet-connected home appliances and gadgets, including scooters, air purifiers and rice cookers.

Beijing-based, Cayman-domiciled Xiaomi is due to start trading in Hong Kong on July 9.

Google adjusts applications, other tools for AdSense, AdMob

By Business Desk,

The Google executives has disclosed that it has no plan to change fees or merge any services, just as the company plans to retain the AdSense and AdMob brands for ad sales technologies that were aimed at small websites and mobile app developers, respectively.

As indicated, its basic tool for buying ads now would be named Google Ads, with access to inventory on Google search, its YouTube video service, the Google Play app store and 3 million partner properties. The default interface for Google Ads will be simplified, executives said, with automation powering the design of ads and deciding where they should run.

Brian Wieser, a senior financial analyst following advertising companies for Pivotal Research, said Google’s services generate “a lot of confusion” among people not steeped in the industry.

“It doesn’t help that Google … leaves us guessing on the relative size and trajectory of what are strategically important businesses,” he said.

Sridhar Ramaswamy, Google’s senior vice president for ads, told reporters Tuesday that advertisers have been befuddled when told that they need to go to Google AdWords to buy ads on YouTube. Google Ads should serve as an all-encompassing “front door,” he said.

 AdWords launched in 2000 to place text ads in search. Google acquired DoubleClick advertising software in 2008.

But increased privacy and monopoly concerns in the last year have led Google’s critics in academia and public policy to call on antitrust regulators to split Google’s advertising business, which has a strong toehold on nearly each link of the industry’s supply chain.

Ramaswamy said the three renamed services focus on different user groups and that clients continue to have the option to integrate non-Google tools with the services.