Uncover Tech Insights - September 18-22
Weekly market stock moves
Most impactful news of the week
Amazon is gearing up for the holiday shopping season by planning to hire 250,000 logistics workers, a move that reflects the company's optimism in what is expected to be a relatively uneventful shopping season. These new hires will encompass full-time, part-time, and seasonal workers. Depending on the location, they will be offered hourly rates ranging from $17 to $28 per hour. Additionally, some of these new employees may qualify for bonuses ranging from $1,000 to $3,000. To address labor shortages and attract and retain talent, Amazon has also stated that it will increase the average pay for its logistics personnel to approximately $20.50 per hour. This move underscores the company's commitment to ensuring it has an ample workforce to handle the increased demand during the holiday season.
Google has revealed its latest strategic move in the race to lead in generative artificial intelligence by integrating the technology directly into several of its most popular products. The company announced that it will incorporate its Bard chatbot into services such as Gmail, Maps, Docs, and YouTube. First released in February, Google’s Bard has lagged behind OpenAI’s ChatGPT. Google's approach to AI has been cautious, with executives emphasizing that they won't rush to release AI services, especially in light of increased scrutiny from regulators worldwide. In their announcement, Google mentioned that these new features will allow users to access flight information, map routes, and watch relevant videos, all within an ongoing chat with Bard. This integration aims to enhance user experience and provide a more seamless and versatile AI-powered interaction across various Google services.
OpenAI has introduced the third iteration of its generative AI visual art platform, DALL-E. This latest version incorporates several improvements, including enhanced contextual understanding and more safety options. DALL-E's primary function is to convert text prompts into corresponding images, but previous versions, such as DALL-E 2, occasionally struggled with interpreting specific wording accurately. One notable feature of DALL-E 3 is its integration with ChatGPT. Users can now leverage ChatGPT to create prompts for DALL-E 3, eliminating the need to formulate detailed prompts themselves. Instead, they can ask ChatGPT to generate a paragraph (DALL-E performs better with longer sentences) that serves as guidance for DALL-E 3. However, users still have the option to provide their own prompts if they have specific ideas in mind for DALL-E. This integration streamlines the creative process and enhances the user experience.
Microsoft has cleared a significant regulatory obstacle in its $75 billion acquisition of Activision Blizzard. The U.K. Competition and Markets Authority (CMA) issued a preliminary decision stating that the modified deal for the gaming giant has largely addressed its antitrust concerns. The CMA noted that the new agreement submitted by Microsoft is expected to reduce potential harm to competition in the cloud gaming sector. The CMA now plans to seek feedback from other companies in the market regarding the proposal before making a final decision. Initially, the regulator had rejected the deal, representing a major challenge to the merger.
Amazon is continuing its presence in the hardware business, as demonstrated by its recent annual device event. This event, which took place about 10 months after The Wall Street Journal reported that Amazon was scrutinizing its hardware business for cost-cutting opportunities, unveiled at least 10 new devices. These new offerings include Amazon's first soundbar under the Fire TV brand and a new product category known as the Echo Hub, designed as a wall-mounted control panel for smart home devices. The most significant development, however, involves integrating generative artificial intelligence into Alexa, the voice assistant that has played a central role in Amazon's products since the introduction of its first smart speaker in 2014. Amazon's ongoing investment in hardware reflects its commitment to advancing technology and expanding its ecosystem of smart devices and services.
During a recent five-day tour of India, Nvidia Corp.'s CEO, Jensen Huang, engaged in a packed itinerary. He visited four cities, met with tech executives and researchers, took selfies, and held a one-on-one discussion with Prime Minister Narendra Modi concerning the AI sector. In a meeting with prominent researchers in Delhi, Huang discussed the idea of retraining significant portions of India's workforce and building future AI models using Indian data and talent. He also expressed a strong belief in India's engineering talent, particularly graduates from prestigious institutions like the Indian Institutes of Technology (IITs). This visit highlights Nvidia's interest in India's AI potential and the role it could play in the company's future endeavors.
Amazon Prime Video is set to introduce advertising during its shows and movies from early next year, following the trend of other streaming services that offer various subscription tiers. Amazon Prime members will have the option to pay an additional $2.99 per month in the U.S. to enjoy an ad-free experience. The rollout of ads within Prime Video content will commence in the U.S., U.K., Germany, and Canada in early 2024, followed by a later expansion to France, Italy, Spain, Mexico, and Australia later in the year. This move aims to diversify Amazon's revenue streams and offer users a choice in their streaming experience.
Google has resurrected its "Get The Message" campaign, launched last year, to encourage Apple to adopt the Rich Communication Services (RCS) messaging protocol. The latest iteration of the campaign includes new content and features a humorous video promoting a fictitious "iPager" device, poking fun at Apple for converting iMessages sent to Android devices into traditional SMS and MMS messages. “iPager isn’t real, but the problems that Apple causes by using SMS are,” said Google in the video description on YouTube.
Just over a week after revealing an unfavorable new pricing model that angered developers, Unity has unveiled its revised version. This new plan significantly deviates from the initial announcement. Specifically, users subscribed to the Unity Personal plan will no longer face the new fee. Unity will raise the revenue cap for games created with that plan to $200,000. Any game developed using Unity that generates less than $1 million in 12 months will not be subject to the fee. Furthermore, the company is altering the criteria for assessing which games will be impacted by the new fee.
Microsoft has just wrapped up its September event, where it made several major announcements. Not only did we see some new Surface devices, but Microsoft also shared some updates about the new AI features coming to its products. A more powerful Surface Laptop Studio 2. The lightweight Surface Laptop Go 3 gets a spec bump. Windows 11’s next update comes with Copilot and more. A single Copilot across Microsoft’s services and apps. Bing Chat is getting DALL-E 3 and Personalized Answers. Microsoft 365 with Copilot comes out in November.
Alphabet Inc.'s Google, although a dominant force in the digital advertising market, is expressing concerns about maintaining its competitive advantage. Jerry Dischler, Vice President for Google's advertising products, testified during the federal antitrust trial against the company, stating, "I would not say Google search ads are a must-have for any advertiser." He acknowledged that Google is losing market share to new entrants like TikTok and Amazon.com Inc.
Meta Platforms Inc. is extending its WhatsApp payment feature to India, enabling users to buy products and services directly from local businesses through chat. This expansion follows the introduction of the service in Brazil and Singapore. It targets a market with over 400 million WhatsApp users. CEO Mark Zuckerberg revealed this initiative during an event held in Mumbai on Wednesday.
Amazon is bringing in Panos Panay, formerly Microsoft Corp.'s product chief, to head the division overseeing the voice-activated Alexa assistant and Echo smart speakers. Panos Panay, a nearly 20-year veteran at Microsoft, previously led the company's Windows team and played a pivotal role in Microsoft's hardware endeavors, including the Surface computers. This move comes as Dave Limp, Amazon's longtime hardware chief, announced last month that he would retire before the end of the year.
Meta has revealed its expansion of the Meta Verified program to include businesses, following its initial launch for creators in March. The verification program is currently in testing on Facebook and Instagram, focusing on select geographic regions. Meta plans to extend this program to businesses on WhatsApp at a later stage. Businesses have the option to subscribe to Meta Verified at $21.99 per month per Facebook page or Instagram account, or they can opt for both at $34.99 per month. Pricing for verification on WhatsApp has not been disclosed.
Snap Inc. has gained more than 5 million subscribers for its paid service. This offering gives users early access to new features like an AI-generated selfie maker for $3.99 a month. Snapchat+, the subscription product, is part of a broader strategy shift the company made last year to help generate new moneymaking opportunities. Adding a paid option for the video-sharing app was a notable move in a social media industry where apps have historically been free. Snap’s bet seems to be working, with the latest subscriber number jumping from the 3 million figure disclosed in April.
Former Manager at Paypal talks about the future of Paypal interview:
Explains the motivations of the Amazon - Venmo deal. The deal is advantageous for Amazon from a pricing perspective. The expert also highlights an interesting pattern: Venmo users are often more inclined to spend their money (as they treat it more as “play money”).
The employee culture at the firm is good. Lately, there is a lot of outsourcing going on, for example, Venmo customer service, which makes sense from a financial perspective but can sometimes make less sense from a quality perspective. Also, organization-wise, things could improve in the expert's opinion.
The expert thinks Paypal has all that it needs to succeed and have advantages over the competition: legacy trust, partnerships, reputation, huge user base, etc. The thing that would really need to change is taking business risks and being more bold and innovative. A very telling statement about the leadership team: “They're trying to maintain the success that they've had. They're not trying to do the next big thing if that makes sense” (this might change with the new CEO)
Venmo's goal was first to grow and profitize it before expanding internationally. The other thing when it comes to expansion in Europe is the competitor Revolut. Revolut has already established a strong base in Europe.
The difference between PayPal and Venmo is more in the demographic and the social component of Venmo. Venmo has the potential to become the “super app."
PayPal's legacy can help it sometimes get deals for Venmo, like with Amex. Also, merchants still like to put PayPal on their sites because it still represents trust to the buyers.
Former Google employee and ad industry expert quantifies in detail the effects of AI that he sees on the ad tech and social media space
In 3-5 years, AI will improve the creative side of ad generation, which he estimates will lead to a CPM tailwind of 6% CAGR for the next 4 years. Within that, he sees the biggest benefit going to smaller advertisers who already don't have big teams making a sizeable number of versions of creatives for one campaign – Generative AI changes that now.
The second thing is OpEx savings from AI. Advertisers won’t have to allocate that much budget to financing the team or outside agencies and, with it, create savings that will, in his opinion, a lot go to increase the ad budgets. The expert sees that as another 2-3% CAGR to CPM in the next 3-5 years.
The expert sees a big opportunity for ad tech companies to harness chat apps now with Generative AI. The benefits of taking share from a $500B global call center industry and channeling some of that savings to ads present a big opportunity, especially for companies like Meta, Snap.
Thanks for reading Uncover Tech Insights! Subscribe for free to receive new posts and support my work.
Thank you for reading our second edition of the weekly newsletter. We would really appreciate it if you could share it with someone you know who would be interested in tech investing news. Organic, and especially word of mouth, is the main way our newsletter will grow. We will always put quality before quantity.
Source: the expert interviews are found on Alphasense, a platform specialized for expert interviews and other investment data.
Nothing contained in this website and newsletter should be understood as investment or financial advice. All investment strategies and investments involve the risk of loss. Past performance does not guarantee future results. Everything written and expressed in this newsletter is only the writer's opinion and should not be considered investment advice. Before investing in anything, know your risk profile and if needed, consult a professional. Nothing on this site should ever be considered advice, research, or an invitation to buy or sell any securities.