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Situational awareness: Enterprise collaboration platform Slack has raised $427 million in new Series H funding at a valuation north of $7.1 billion. Axios' Dan Primack explains that it's a big deal because while Slack is massive and has subsumed some rivals, this new money reflects how competition is intensifying from deep-pocketed incumbents like Facebook and Microsoft.
1 big thing: Subscription tide not lifting all boats
Subscriptions are the wave of the future for the mobile software industry, but they are by no means a panacea.
Case in point: FiftyThree, which is the well-regarded maker of apps like Paper and Paste, shifted to a subscription model but nonetheless couldn't turn the corner as an independent company. The company announced today it has sold its assets to WeTransfer, a 10-year-old company specializing in online file transfers.
Why it matters: Subscriptions to mobile apps offer developers a more predictable flow of revenue, and even the possibility of more total revenue over time. However, users remain wary of paying for consumer software, especially mobile titles, and even those who are comfortable with them may feel subscription overload as they pile up.
The details: It's not clear how much FiftyThree investors are getting. Terms were not disclosed and FiftyThree CEO Georg Petschnigg declined to say whether the assets were valued higher or lower than in the company's last investment round. FiftyThree has raised more than $45 million in venture funding, per Crunchbase.
- By combining, the companies hope to build a more compelling collection of services for creative types that can thrive in both subscription and ad-supported forms.
- As part of the deal, Petschnigg and co-founder Andrew Allen will join WeTransfer, which will acquire all of the company's intellectual property and the vast majority of its workforce. WeTransfer will continue to invest in Paper and Paste.
- WeTransfer CEO Gordon Willoughby said that when he came in 18 months ago, he declared his goal was to move from a company centered around a single file transfer program "to one that really covered far more of the creative workflow." Acquiring Paper and Paste is part of that effort, he said.
The big picture: In general, subscriptions can help developers better plan the lifecycle of products and what features to add.
"Predictability of revenue is certainly a big driver for subscriptions."— Carolina Milanesi, analyst, Creative Strategies
However, some categories seem to be more lucrative than others. "I have seen apps in health and fitness and education/learning use subscriptions quite successfully," Milanesi tells Axios, pointing to areas like language courses as well as apps for drawing/painting, cooking, exercise, weight loss or those for learning an instrument.
Creative Strategies recently asked consumers what would make them subscribe to an app. Here's what they found:
The bottom line: Software producers face the same cruel economics of abundance that media producers have been coping with since the advent of digital distribution. When there's plenty of "good enough" products available for free, it's hard to get people to pony up money, even for superior offerings.
- Plus, while Apple touts subscriptions as a fast-growing segment of the app economy, it still takes 30% of the initial revenue, it still takes 30% of the initial revenue from every sale in its App Store, further putting the squeeze on small developers.
2. Russian phishing effort targeted conservatives
Russian hackers continue to take aim at U.S. politics. Among the targets this time were conservative think tanks that have broken ranks with President Trump and promoted democracy in Russia, according to the New York Times.
Driving the news: Microsoft recently seized 6 potential phishing domains associated with the Kremlin-backed hackers Fancy Bear, which had tampered with the 2016 election and likely intended to target 2 conservative groups and the U.S. Senate. It appears Microsoft shut down the domains before they were ever actively used.
Why it matters: Spies have infiltrated legislative bodies and political groups from time immemorial, usually for boring reasons, like getting an edge in trade negotiations. But Russia's mass public dumping of stolen documents in 2016 broke the norms of espionage.
- Whatever the motivation for Russian attempts to hack influential political figures' emails in 2018, the current climate will lead people to assume the worst.
Be smart: The targeting of conservatives shows that Russia remains interested in gathering information on all sides. Prior to the 2016 elections, Russia hacked both Democrats and Republicans, yet only released files that harmed Democrats. Microsoft's moves suggest that Russia continues to hack both sides of the aisle.
Go deeper: Axios' Joe Uchill has more here.
3. CoinDesk's media business is quietly profitable
CoinDesk is the hottest digital media startup that most people haven't heard of, generating around $20 million in revenue through the first seven months of 2018. It's also profitable, Axios' Kia Kokalitcheva reports.
The bottom line: Three years ago the business was sold for just $500,000, but that was before cryptocurrencies and blockchain went mainstream. Its revenue has since grown tenfold, with a significant portion coming from an expanding events business. Its annual Consensus conference had 8,500 attendees in 2018, up from 625 in its 2015 debut.
CoinDesk was born in May 2013 as the brainchild of entrepreneur and investor Shakil Khan, who had been interested in bitcoin and wanted a simple site to track news and pricing data about the cryptocurrency.
“When we first launched CoinDesk, the goal was simply to supply the market with accurate and reliable information on digital currency,” Khan tells Axios. “As the community increasingly looked to us for the latest industry developments and our perspective on them, building a media business around that based also on data and events felt very organic.”
Yes, but: CoinDesk remains exposed to cryptocurrency's volatile cycles, including the recent fall in bitcoin prices.
Go deeper: Kia has more here.
4. Google and Apple ditch college requirements
More than a dozen companies, including Google, Apple and IBM, are no longer requiring applicants to have college degrees, CNBC reports.
Why it matters: Many jobs have historically required employees to hold college degrees even if they're not relevant or needed. This is connected to an effort to improve diversity and make it easier for those who attend coding boot camps or pursue other non-traditional college paths to be hired.
5. Take Note
- Y Combinator's Summer Demo Day continues in Mountain View, Calif.
- Amazon has hired star cardiologist Maulik Majmudar as part of a broader push into the health care business, though Amazon won't say what he will be doing. (CNBC)
- In Monday's Login, I said that Celtics player Jaylen Brown graduated from Cal. He played for Cal in 2015, but joined the NBA after his freshman season.
- Industrial-scale creators of fake news are becoming increasingly savvy in their efforts to avoid new web platform rules, defensive artificial intelligence, and readers on guard for propaganda. (Axios)
- Speaking of fake news, the Indian state of Kerala is holding classes to help educate citizens about the problem. The move follows deadly mob violence stemming from false reports that went viral on WhatsApp. (BBC, Axios)
- Venture capitalist Mike Rothenberg settled SEC charges that he funneled money from his investors to, among other places, his personal VR production company. He neither admitted nor denied the charges. (Axios)
- Google has canceled a VR camera project with Imax. The large-screen theater company was already reportedly re-evaluating its fledgling effort in destination VR. (Variety)
- The acquisition of new U.S.-based customers for some streaming services is slowing considerably due to increased competition, according to estimates from broadcast research firm Frank Magid & Associates. (Axios)