Uncover Tech Insights - November 6-10
Weekly market stock moves
Former Amazon Sr. Director working on Twitch shares some valuable insights on Amazon
The main KPI for Twitch changes significantly in 2022. In 2022, the main KPI was Operating Income. In the 2019-2020 period, it was more around daily active viewers and engagement rates.
There was a period of intense competition at the very beginning of Twitch in the 2013 and 2014 period. Since then, it has gone down a lot, but recently, according to the expert, it is picking back up again.
Streaming is a hard business; it’s expensive to run a live video service. In the expert's opinion, only a handful of companies can do it effectively. For everyone else, it is expensive.
The expert thinks the primary goal at Amazon for Twitch is getting more customer data for both retail as well as ad side.
Amazon’s advertising business is the biggest growth area of Amazon's overall business from an operating income perspective.
Former Regional CFO for Latin America at Paypal shares his views on the company and the industry
Paypal was established in Brazil in 2009, but by 2018, they realized that the brand needed to get better traction, and the wallet business needed to grow at a faster pace. Brazil is a very competitive market, with MercadoLibre a strong role there. Because of the need for more pace, they switched strategy from selling PayPal first to selling Braintree first and, after that, cross-selling other products.
The first big case for Braintree in Brazil was getting Uber from Adyen.
In the expert’s opinion, the unbranded business is a low-margin business, and it makes sense only if you can cross-sell other products like fraud and risk control components.
In Brazil, Paypal’s strong fraud and risk models were a significant advantage and helped get new deals.
The expert thinks it’s good for Paypal to have a new CEO with fresh ideas, as the company was not moving fast enough. Paypal in the past was not that strong internally developing things but rather went the M&A route.
The expert thinks the strong points for Paypal are a strong network, quality of employees, and a very strong AI team. Also, the sales team is good and knows how to use Paypal’s assets.
Most impactful news of the week
Meta has introduced a new feature allowing users to link their Facebook and Instagram accounts to Amazon, enabling them to make purchases directly through promotions in their feeds without leaving the social media apps. Customers in the U.S. will be able to shop Amazon's Facebook and Instagram ads and check out with Amazon seamlessly. This move enhances the integration between social media platforms and e-commerce, streamlining the shopping experience for users.
Meta Platforms is reportedly in talks with Tencent to sell a new, lower-priced version of its virtual-reality headset in China. The deal, which is still preliminary, would make Tencent the exclusive seller of Meta's VR headsets in China, providing Meta with an opportunity to tap into the Chinese market, 14 years after Facebook was shut out. The agreement could help Meta boost global demand for its virtual reality products, as China is a significant market for tech products. However, regulatory approval and compliance with Beijing's tightened regulations for digital content could be potential hurdles for the deal.
Chris Young, head of Microsoft's corporate strategy, is leading efforts to translate the hype around artificial intelligence (AI) into tangible sales of Microsoft's AI tools. Young oversees a team working with external partners, including Meta Platforms, to develop products using technologies like augmented reality and generative AI. He is also responsible for Microsoft's venture investment arm, M12, focusing on early-stage startup investments. Microsoft has made significant investments in AI, including a $13 billion backing of OpenAI. Young emphasizes the need for widespread adoption of AI products to fulfill their potential impact across various industries..
Nvidia is reportedly working on a new lineup of AI chips specifically tailored for the Chinese market. This move comes in response to shifting U.S. regulations that have impacted Nvidia's ability to provide certain chips to China. The company is said to have informed distributors in China about the upcoming chips, which are expected to comply with U.S. rules and may become available by the end of the year. Nvidia had previously released modified versions of its AI chips for China last year, following earlier rounds of U.S. restrictions. The new chips aim to navigate regulatory challenges while maintaining access to the significant Chinese market.
Microsoft is teaming up with Inworld AI for a multiyear partnership aimed at developing tools for Xbox that enable developers to create AI-driven characters, stories, and quests. The collaboration will feature an "AI design copilot" system that allows Xbox developers to craft detailed scripts, dialogue trees, quest lines, and more using generative AI models. By leveraging Inworld's expertise, Microsoft's cloud-based AI solutions, and Xbox's commitment to accessible and responsible creator tools, the partnership aims to empower game developers with better tools for creating extraordinary games.
OpenAI's ChatGPT, a widely used chatbot, experienced outages due to a targeted attack, according to an OpenAI spokesperson. The disruptions were attributed to an abnormal traffic pattern indicative of a Distributed Denial of Service (DDoS) attack. OpenAI reassured users that customer information remained uncompromised. The outage followed disruptions on Wednesday across OpenAI's tools and services, affecting the API used by over two million developers. While initial fixes restored normalcy, subsequent issues persisted. OpenAI is actively working to mitigate the impact of the attack on ChatGPT.
Google is expanding its Search Generative Experience (SGE) to over 120 new countries, including Mexico, Brazil, South Korea, Indonesia, Nigeria, Kenya, and South Africa. SGE will also support four additional languages: Spanish, Portuguese, Korean, and Indonesian, in addition to its existing support for English, Hindi, and Japanese. To use SGE, users need to opt in via Google's Search Labs program, and it's accessible on Chrome on desktop or the Google app on Android and iOS. The expansion aims to make SGE available to a wider audience, allowing more people to explore this generative experience.
Unity, the game development software company, has announced that it will likely implement layoffs as part of broader cost-saving measures. The company is assessing its product portfolio to focus on the most valuable offerings and is evaluating the right cost structure. Changes are expected to be made in the fourth quarter and may include discontinuing certain product offerings, reducing the workforce, and decreasing office footprint. Unity aims to complete these changes before the end of Q1 2024.
TikTok's $1 billion creator fund is set to end on December 16th, 2023. Creators in the US, UK, Germany, and France will no longer be able to monetize their content through the original fund. The creator fund, introduced in 2020, aimed to pay out $1 billion over three years to content creators, but some influencers noted low payouts, making it challenging to earn a living through the fund alone. TikTok did not clarify whether it had paid out the full $1 billion. Creators in Italy and Spain are not affected by the fund's discontinuation.
In its fiscal fourth quarter, Disney reported a reduction in streaming losses to $387 million, down from $1.47 billion in the same period last year. The company's direct-to-consumer streaming business, including Disney+, Hulu, and ESPN+, generated nearly $5.6 billion in revenue during the quarter. Disney CEO Bob Iger mentioned plans to cut an additional $2 billion in costs, following a reorganization earlier in the year aimed at reducing costs by $5.5 billion. The company still expects its streaming business to be profitable by the next year.
WhatsApp head Will Cathcart mentioned in an interview that the platform might introduce ads within the app's Instagram Stories-like Status feature. Cathcart clarified that ads would not appear within the inbox or the "messaging experience," but they could be incorporated in various places, including the Channels feature and statuses. However, no specific timeline was provided for the potential introduction of ads in WhatsApp. Cathcart also suggested that Channels could offer subscription-based models, and owners might have the option to promote ads within their channels.
Amazon is offering its Amazon Prime subscribers a discounted annual membership to One Medical, the primary-care business it acquired for $3.9 billion. Prime members can now join One Medical for $9 a month or $99 a year, significantly less than the regular cost of $199 annually. This move is part of Amazon's ongoing efforts to expand its presence in the healthcare industry, particularly in areas like primary care, pharmacy, and medical-drone deliveries. Amazon sees healthcare as a strategic area for growth and aims to leverage its capabilities to create new paths for customers to access primary care services.
OpenAI is reportedly intensifying its recruitment efforts to attract top artificial intelligence talent from Google. OpenAI is currently conducting an employee share sale that could increase its valuation to over $80 billion. To entice Google employees, OpenAI recruiters are offering significant financial incentives and emphasizing the opportunity to lock in a stock package at the current valuation of $27 billion. The pitch includes claims of greater access to computing resources, including specialized chips for AI research. However, some employees remain skeptical, noting Google's advantages in terms of data center investments and proprietary AI chips. OpenAI relies on Microsoft for access to specialized chips as part of their partnership.
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Source: the expert interviews are found on Alphasense, a platform specialized for expert interviews and other investment data.
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