Ina Fried

Red Hat CEO says businesses remain confident under Trump

While it saw a brief delay in some government spending late last year, Red Hat says that business has resumed and corporations are continuing to invest heavily.

"There's right now a sense of business confidence that is driving the stock market but also investment plans by companies," CEO James Whitehurst told Axios on Monday. "If anything, it's more positive than its been in years."

Whitehurst's comments came in a phone conversation following the open source software company's better-than-expected quarterly earnings report.

When it comes to when to join tech companies in speaking out against the Trump Administration and other political topics, Whitehurst said he and North Carolina-based Red Hat are trying to strike a tough balance. Whitehurst has been personally outspoken against the travel ban and North Carolina's anti-LGBTQ HB2, aka the "bathroom bill," while the company has been more measured.

As for HB2, which has cost the state billions, Whitehurst said it hasn't hurt Red Hat, but has led some employees to choose to work at other company locations. "I do think it has hurt North Carolina," he said.


Android co-founder Andy Rubin gives glimpse of secret device he's working on

While Andy Rubin's secretive startup Essential has yet to confirm its product plans, the Android co-founder made his intention to build a phone pretty evident on Monday.

Rubin posted a photo with just a sliver of a phone peeking out, revealing little beyond a modern-looking smartphone.

"I'm really excited about how this is shaping up," Rubin said on Twitter. "Eager to get it in more people's hands...."

Last week, Rubin responded to a Wall Street Journal article saying SoftBank had pulled funding from Essential with a tweet of himself hanging out with Softbank chief Masayoshi Son.

Why it matters: Essential is reportedly seeking a $1 billion valuation with hopes of making a significant impact in a mobile market dominated by Apple and Samsung.


Samsung may sell refurbished Galaxy Note 7 phones, but not in US

Ahn Young-joon / AP

Samsung confirmed on Monday that it is considering selling or renting refurbished versions of the Galaxy Note 7 phone it recalled last year over their potential to catch fire. The devices won't be sold in the U.S. and may have a new name. The Korean phone maker will also work to recover and recycle materials from phones not used as refurbished devices.

"To be clear, the objective of introducing refurbished devices is solely to reduce and minimize any environmental impact," a Samsung representative told Axios. "The product details including the name, technical specification and price range will be announced when the device is available."

What it means: Samsung must be pretty certain that its investigation fully uncovered the battery-related issues causing the phones to ignite.

Why bother? Despite the reputation and other risks associated with such a move, Samsung's move could keep more electronic waste out of landfill and salvage a fraction of the lost revenue caused by the massive recall.


Amazon to start collecting sales tax in all states that have one

Paul Sakuma / AP

Amazon plans on April 1 to start collecting sales tax in Hawaii, Idaho, Maine and New Mexico, according to CNBC. Those are the last four states in which Amazon had yet to collect applicable state sales tax.

Retailers had long complained that Amazon and other online retailers maintained an unfair advantage by not adding sales tax to purchases. Many states were also unhappy ,, saying that they were missing out on $23 billion in lost revenue, as of 2012, due to online and catalog retailers not demanding sales tax.

Tax still won't be collected in Alaska, Delaware, Oregon, Montana and New Hampshire, but that's only because those states don't have a sales tax.



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Steve Case on where to find the next wave of innovation (Hint: Not CA or NY)

Rebecca Zisser / Axios

AOL founder and Revolution CEO Steve Case is betting that the next breakthrough companies aren't going to come from the regions that get the most venture capital money — they'll come from "fly-over" country between the coasts that are often overlooked. Below are the highlights of our chat (and you can read more here).

How long will it take to redirect investment to these underserved areas?

Because so much capital goes to so few places —78 percent of venture capital went to just three states last year — California, New York and Massachusetts — and because so little capital goes to these Rise of the Rest cities, it doesn't take much of a shift in dollars to potentially make a significant impact. I think that can and will happen in the next five years, but I think over the next decade we do need to continue to build these regions so we do have a more dispersed and inclusive innovation economy.

What is your message to the Trump administration?

We can't bring back the jobs we lost and, for the most part, we have to create new jobs. I recognize the likely disruption of jobs because of AI, automation, robotics and driverless cars and so forth, but I'm reminded that 200 years ago over 90% of us worked on farms. New technologies came out and now less than 2% of us work on farms, but we thankfully came up with new acts.... We just need to make sure we continue to identify interesting people doing interesting things in interesting places. Some of those will end up surprising us in being the next breakthrough companies and the next great industries.

What should Silicon Valley companies be doing to move into some of these untapped markets?

You're starting to see companies realize that when they look for innovators they should look more broadly, and when you invest in them or acquire them they should let them continue to grow in those places. When Salesforce acquired ExactTarget, it had a little under 1,000 employees in Indianapolis, and now three years later they're coming up on 2,000 employees.... I'm not surprised at all that Uber has bet its future in terms of driverless car operation not in Silicon Valley but in Pittsburgh because of its strength of talent there...Whether that's the message for venture capitalists looking to back startups or big companies looking to acquire successful companies, that's a way for them to help level the playing field.

On the (not-a-)campaign trail with Mark Zuckerberg

Rebecca Zisser / Axios

The questions started as soon as Mark Zuckerberg announced on his Facebook page in early January that his "personal challenge" for the year was to travel the roughly 30 states he'd never visited. Was he launching a political career? Making amends for a year of politically-tinged crisis at the company?

It's premature to say what exactly Zuckerberg and his empire will get out of the year-long junket, and he says he isn't running for president. But a few months into his project, there's an early message: Less Crunchies, more Country Music Association Awards. Zuckerberg has chatted with military spouses in North Carolina and sped around a racetrack with Dale Earnhardt, Jr. He sat down with the coaches of more than one revered southern college sports program and talked about diversity at a historically black university. Once an atheist, he now drops in on church services.

Why it matters: It's been a bruising year for Facebook's public image. The left criticized it for spreading fake news and the right charged that one of its features was rife with bias. How Zuckerberg is positioning himself right now is telling about how the company is moving forward. Check out David McCabe's take of the tour so far.

Uber's woes still the big story

Uber's problems remain the talk of Silicon Valley and last week brought another spate of bad news. On Friday alone, the following things all came out:

The tweet and screenshot above says it all.

The key question is when — or if — the company decides it needs more systemic change than just a new No. 2 for Kalanick.

And yet, Lyft still can't seem to capitalize

With all that's going wrong at Uber, you'd think chief rival Lyft would be sitting pretty. For the most part, though, the company appears not to have gotten much of a ... boost. (And you thought I was going to say lift.) Uber says its US ridership has been at record levels and Lyft's bid to form an international coalition to rival Uber quietly fell apart in January.

At long last, it appears Lyft isn't going to totally let opportunity pass it by. On Sunday, Lyft took out a full page ad encouraging riders to view their choice of services as an opportunity to "sit for something." Rather than target Uber by name, the ad announced a new program to encourage charitable donations and talked about Lyft's values, including "treating people better along the way."

Amazon's big, big brick-and-mortar plans

Once upon a time, Kmart was the retail giant. A guy name Sam Walton realized that to unseat the leader, he had to go where they weren't, building stores in areas deemed too small to merit a Kmart. By the time Walmart moved into Kmart's turf, it was too big and powerful to be stopped.

Amazon has taken the Walmart strategy into the digital age. It went from an Internet bookstore, to an e-commerce giant, to one that increasingly fancies itself as the future of all retail. And now, as Amazon moves into physical retail, it would appear too powerful for anyone to stop. The New York Times has a deep look at Amazon's expanding offline efforts.

That said, as The Economist notes, Amazon will have to outpace the growth of any giant company in modern history in order to live up to Wall Street expectations.

Take Note

On Tap: Linux software distributor Red Hat reports earnings after the bell.

Trading Places: Andrew Noyes, who ran PR for Brigade (and previously at Uber and Facebook) has joined Hampton Creek, maker of controversial sandwich spread Just Mayo. Last week, Hampton Creek told employees that government officials have ended a probe into the company.

ICYMI: Enterprise software startup Alteryx saw its shares rise 10.7 percent on its first day of trading on Friday. Amazon said it will collect sales tax in the five remaining states in which it does not already do so. Hollywood studios are considering offering films for home viewing as soon as 45 days after they debut on the Silver Screen, sources told the Wall Street Journal; however, the price tag could be a hefty $30 to $50 per rental.

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Salesforce CEO: Societal shift needed to address AI, climate, other changes

Salesforce CEO Marc Benioff on Friday highlighted all the key societal changes that the Trump Administration either denies are taking place or says are still years off.

Speaking at a World Economic Forum event in San Francisco, Benioff said that artificial intelligence, climate change and advancements in biotechnology and transportation necessitate prompt changes to education and job training.

"While we are in this incredible shift, this fourth industrial revolution," Benioff said. "It will also come back to be a challenge for equality."

Benioff's comments come after Treasury Secretary Steve Mnuchin said AI isn't really on the Trump Administration's radar because it is 50-100 years off.

Mnuchin's comments were quickly panned by many in the technology world as it flies in the face of the conventional wisdom that automation and artificial intelligence could eliminate a significant number of jobs in the not-so-distrant future.


Apple says flaws in latest WikiLeaks disclosure are all old

Mike Deerkoski / Flickr cc

Although much was made about a new batch of iPhone and MacBook flaws disclosed by WikiLeaks on Thursday, Apple says the issues appear to all be old, since-fixed vulnerabilities.

"We have preliminarily assessed the Wikileaks disclosures from this morning," Apple said in a statement to Axios. "Based on our initial analysis, the alleged iPhone vulnerability affected iPhone 3G only and was fixed in 2009 when iPhone 3GS was released. Additionally, our preliminary assessment shows the alleged Mac vulnerabilities were previously fixed in all Macs launched after 2013."
Apple added that it has "not negotiated with Wikileaks for any information."

We have given them instructions to submit any information they wish through our normal process under our standard terms. Thus far, we have not received any information from them that isn't in the public domain. We are tireless defenders of our users' security and privacy, but we do not condone theft or coordinate with those that threaten to harm our users.

Marketo apologizes after video promo for its conference panned as sexist

Marketo, which specializes in helping companies promote themselves, apologized Thursday after one of its own promotions fell flat.

The ad, promoting an upcoming Marketo conference, featured a ditzy female newscaster and the company's male CEO, Steve Lucas. Marketo told Axios the ad, which was roundly criticized on Twitter, has been pulled down.

We sincerely apologize for the offense we caused with what was intended to be a light-hearted promotion for Marketing Nation Summit. The video was created to promote the conference, playing off our theme of engagement. Marketo has always had a steadfast commitment to championing diversity and empowering female leaders in technology and beyond.