Aug 1, 2019

Axios Login

By Ina Fried
Ina Fried

I'm feeling a little under the weather. I washed my hands before I sent the e-mail, but you might want to make sure you have antivirus software just in case.

Today's Smart Brevity: 1,066 words (4 minutes)

1 big thing: Tech giants battle for the home

Google Home, Amazon Echo and Apple HomePod. Photo: John Brecher for The Washington Post via Getty Images

Eager for a place in the home, tech giants are beefing up their smart speaker products, hoping to find just the right combination of screens, speakers and features that will stick with consumers.

Why it matters: There's a lot of potential in the smart speaker market, especially for the big companies like Google and Facebook whose traditional advertising streams face slowed growth projections. But balancing privacy concerns with enough functionality to attract users is proving to be tricky, as Axios' Sara Fischer and I report.

Driving the news: "Facebook has approached Netflix, Disney and other media companies about putting their streaming services on a new Facebook device for making video calls from televisions," The Information reports.

  • The device, due to launch this fall, would use the same video-calling technology that Facebook uses in its video camera smart speaker, Portal.
  • Facebook teased during Recode's Code Conference earlier this year that it aimed to expand the Portal line to include products with more features.

Meanwhile, Google's latest product, the Nest Hub Max, is just hitting the market. After forgoing a camera in the Home Hub that debuted last year, the new model adds one to enable home security and video chat.

  • At the same time, Amazon is exploring ways to put Alexa into even more devices, reportedly including a home robot.

Between the lines: So-called ambient computing — a computing connection that is a voice command away wherever you are — is often billed as the next big thing.

  • To the degree that searches move away from phones and computers, it's imperative for Google to be there, with Facebook and Amazon also seeing a benefit in owning whatever that next device is at the center of consumers' lives.

Yes, but: There's no evidence yet that Facebook's Portal has been a hot market item. And Google seems to be eager to increase usage of its line, giving away Home Minis to everyone from Golden State Warriors fans to those living with paralysis.

  • Amazon was first to the market with the Echo, and Alexa has dominated, capturing 35% of global smart speaker sales, which is projected to reach $23 billion by 2025, according to Allied Market Research.

What's next: Expect more hardware products and new categories from the tech giants, but also look for Amazon and Google to continue to encourage other hardware makers to incorporate their voice assistants into their products.

Be smart: It's unclear if what's holding consumers back from some of the more expensive, video-based smart speaker items is privacy concerns, price or just a lack of need. But for now, it seems that most consumer adoption has come from traditional speakers without fancy cameras or chat devices.

Expand chart
Data: Axios research; Chart: Axios Visuals

Go deeper: How Amazon will take over your house

2. How IBM plans to make its $34 billion Red Hat deal pay off

IBM senior vice president Arvind Krishna. Photo: IBM

IBM is announcing a series of moves Thursday designed to start recouping some of the $34 billion it just spent to buy open source specialist Red Hat.

Most notably, it is optimizing Red Hat's software to run on IBM's cloud and servers, and it's aiming to use Red Hat as a means to take IBM's other software into private clouds as well as rival cloud platforms from Microsoft, Google and Amazon.

Why it matters: IBM sees a $1.2 trillion opportunity in enterprise software, services and infrastructure by 2022. But competing effectively means being able to meet customers where they are at, says IBM senior vice president Arvind Krishna.

Customers, he said, are looking for the flexibility to host their own software one day, move that same setup to a cloud provider the next and still have the flexibility to change cloud providers down the road.

  • "We strongly believe there is a massive opportunity to create a common platform that goes across these clouds," Krishna said in an interview.

Yes, but: The Red Hat deal closed only 3 weeks ago. Much of what IBM is announcing is actually the result of a partnership announced last year.

Separately: IBM has cut as many as 100,000 jobs over the last few years, Bloomberg reports, citing court documents.

3. Why Zynga sold its home to fund its future

Image: Zynga

Although it's certainly a luxury to own a home in the Bay Area, Zynga CEO Frank Gibeau said it was better for the casual-game maker to sell its prime San Francisco headquarters and use the money to fund acquisitions.

"We are a games company, not a real estate company," Gibeau said in an interview in conjunction with the company's quarterly earnings report on Wednesday. "It was a wonderful asset and it had appreciated a lot."

Why it matters: The money raised from the sale, combined with the proceeds of a convertible bond offering, gives the company $1.4 billion in cash.

"We didn't have a company we are going to buy next Tuesday that we needed the money for," Gibeau said. But acquisitions will eventually let the company expand into new markets and onto new devices, and get more game titles running on its engine.

Go deeper: Zynga CEO on going from offense to defense

4. Knight Foundation to invest $6 million in tech policy research

Three U.S. nonprofits are getting a combined $6 million to explore the future of technology policy, including how best to regulate the tech industry.

The Knight Foundation is awarding grants to:

  • The Center for Democracy & Technology: The organization is getting $3 million to support research on the future of digital discourse, with a focus on how online platforms should moderate content and how technology impacts our democracy.
  • Open Markets Institute: Its Center for Liberty and Journalism will get $2 million to research "the impact of corporate concentration by internet companies on journalism and media," and how to mitigate the negative effects of that concentration.
  • R Street Institute: The free-market-oriented group will get $1 million to explore how best to manage online content in a way "that balances concerns of consumers with those of corporations."

What they're saying: “We’re in the middle of the largest debate of our time on how to enjoy the benefits of technology while mitigating the increasingly apparent costs,” Knight Foundation VP Sam Gill said in a statement. "Yet so far the discussion is more heat than light."

5. Take note

On tap

  • Earnings reports include Pinterest and Square.
  • A hearing is scheduled in an attempt by more than a dozen states to block T-Mobile's purchase of Sprint. The states have asked that a trial be delayed until December now that the terms of the deal have changed.

Trading places

  • Longtime Amazon executive Jeff Blackburn, who is currently senior VP of business development, is taking a yearlong sabbatical, per GeekWire.


6. After you Login

Making art is hard work, especially if you have to run miles to do it.

Ina Fried