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1 big thing: Microsoft's GitHub attracts spotlight, controversy
As tech companies expand their power and impact on society, even outfits whose work lies mostly behind the technical scenes are finding themselves in an unfamiliar spotlight.
Wednesday's case in point: Microsoft's GitHub unit, a key asset for software developers but hardly a household name, was in the news for all manner of things — from protests over its work with U.S. immigration authorities, to new product releases, to an effort to ensure that humanity's greatest code achievements can outlast humanity.
Why it matters: A big part of GitHub's value to Microsoft is the fact that it is widely used by a broad range of developers. That's why Microsoft paid $7.5 billion for the company last year, and why GitHub is desperately (and unsuccessfully) trying to steer clear of controversies.
History lesson: GitHub is a service that allows individuals and companies working on software projects to create repositories of their code. It's especially popular in the open source community and part of Microsoft's effort to stay central even to developers who aren't focused on Windows.
Driving the news:
- Protesters showed up outside of the GitHub Universe conference in San Francisco on Wednesday to denounce the company for continuing its $200,000 contract with ICE. (This has been a major source of tension within and outside the company.) A number of speakers also dropped out.
- A worker publicly resigned, citing the issues with ICE as just the latest area of concern. According to Vice, at least 5 employees have resigned over the issue.
- Meanwhile, CEO Nat Friedman was on the cover off Bloomberg Businessweek discussing the company's move to store important computer code projects in the Arctic World Archive in Svalbard. That frigid stockroom now holds the entire code-bases of projects like Linux and Android so they can be rebooted post-apocalypse (if you can find the hardware).
- Also: GitHub released a bunch of product news at GitHub Universe, including its first mobile apps for iOS and Android.
The big picture: With an increasingly activist tech workforce, it's not only the industry's giants that have to navigate political controversy and ethical dilemmas. Lots of companies, even those that aren't particularly consumer facing, are being called out by their workers to explain U.S. government and military work, ties to China and other issues.
2. Impeachment's dueling echo chambers
The story of the first day of public impeachment hearings varied dramatically Wednesday based on where consumers get their news, Axios' Sara Fischer, Neal Rothschild and Scott Rosenberg write.
Why it matters: The absence of shared facts and narratives on TV and online will make it hard for either party to make its case stick.
On the right, conservative media doubled down on the narrative that Republican questioners like Reps. Jim Jordan and Devin Nunes crushed Democrats' main arguments.
- On Fox News, Sean Hannity opened his 9pm hour saying it was a "Great day for the United States, for the President and the country and a lousy day for the corrupt, do-nothing-for-three-years, radical extreme socialist Democrats and their top allies known as the media mob."
- Online, the top story on TownHall just after the impeachment hearings concluded read: "It Looks Like the Star Witnesses in Trump-Ukraine Impeachment Effort Just Torched The Democrats' Narrative." Breitbart's home page Wednesday evening shouted "DEMOCRAT DUD" in red.
- On social media, the most popular posts from right-leaning outlets also highlighted this dynamic, according to social analytics company NewsWhip.
On the left, Democrats focused on messaging that Ambassador Bill Taylor's testimony was damning for President Trump and concentrated on his new information about a cell-phone call between Trump and EU Ambassador Gordon Sondland.
- On MSNBC, Rachel Maddow opened her 9pm hour saying that Taylor's testimony offered "new, detailed revelations ... about the actions of the President and him directing this scheme personally."
- Online, the top story on Vox.com for most of the afternoon read "Bill Taylor dropped a bombshell in his impeachment hearing opening statement." On HuffPost the banner story read: "TAYLOR BOMBSHELL: DAMNING TRUMP CALL."
- On social media, the most popular story from the left-leaning news aggregator News and Guts was titled "Ambassador Taylor Delivers Damaging New Evidence Against Trump."
Be smart: The echo chambers on social media are ones users build for themselves by choosing who to follow and befriend online. The echo chambers on TV are prefabricated by cable networks trying to amass ratings. Together, they lock in partisan narratives and lock out conflicting information.
The big picture: The divide is so complete that the event itself cleaved in two. You could assemble one version of the hearing from the left, with all the Democrats' questions spliced together, and then another reel from the right, with the GOP representatives' questions spliced together, and end up with two completely different events.
Our thought bubble: Members of Congress understand this dynamic, and play to it during public hearings to win coverage.
3. WeWork posts $1.25 billion quarterly loss
WeWork reported a $1.25 billion net loss for the third quarter during a call on Wednesday with the embattled company's bondholders, more than doubling its year-earlier number, Axios' Dan Primack reports.
Why it matters: These results represent WeWork's final quarter under the leadership of Adam Neumann, who was ousted after a failed IPO.
Axios obtained a copy of the slide deck presentation. Some highlights:
- Annual revenue run rate is nearly $4.2 billion. That's up 24.6% from Q2, and just more than double the $2 billion figure from Q3 2018.
- Net loss increased from $497 million in Q3 2018 to $1.25 billion in Q3 2019, bringing the year-to-date loss to $2.16 billion. Quarterly adjusted EBITDA loss grew from $306 million to $651 million.
- Total desks are now at 719,000, which is an increase of 115,000 in the quarter and a 109% increase over Q3 2018.
- Total locations now stands at 625, representing 127 cities in 33 countries.
- Occupancy fell slightly from its early 2018 peak, and went down from 91% to 88% for "mature" locations.
- Enterprise membership as a percentage of total membership rose to 43%, compared to 40% in the prior quarter and 34% in the year-earlier period. Total membership is now 264,000.
What they're saying: WeWork did not provide any forward-looking guidance on layoffs or senior management changes.
The bottom line: The real reporting challenge will come in three months, when WeWork's quarterly results will reflect its new, slower-growth strategy.
4. Disney+ gets 10 million signups on first day
The Walt Disney Company said Wednesday that its new streaming service Disney+ had 10 million sign-ups since it launched Tuesday at midnight.
Why it matters: Disney wouldn't release the number if the company didn't think it represented a major milestone, Sara reports. Disney told investors in the spring that it hopes to reach 60 million to 90 million subscribers by 2024.
Yes, but: Verizon is giving unlimited mobile subscribers a free year of the service while Disney+ offers everyone a 7-day trial. Retention will be key.
- The launch was also not without its hiccups, with many people having trouble accessing the service on launch day.
The big picture: Analysts anticipated strong consumer interest prior to the launch of the new service.
- Polling suggests that consumers were interested in the service at launch because of the access to Disney's movie catalog, as well as its new "Star Wars"-related show, "The Mandalorian."
Our thought bubble, via Sara: Disney threw a ton of marketing dollars behind its launch. A better measure of its success will be whether it can continue to grow as other rival streaming services launch with new programming.
What's next: Disney says it doesn't plan to release Disney+ subscriber data outside of the company's quarterly earnings calls.
5. Take Note
- Nvidia is set to report earnings after the markets close.
- Harry Shum, who has spent more than two decades at Microsoft, most recently as head of research and AI, is leaving the company. CTO Kevin Scott will add Shum's responsibilities to his portfolio, per ZDNet, while Shum will remain with Microsoft through Feb. 1 as an adviser to CEO Satya Nadella and co-founder Bill Gates.
- John Carmack is stepping down from his post as full-time CTO of Facebook-owned Oculus. Per Variety, Carmack told colleagues he will be a "consulting CTO," spending most of his time on personal projects.
- Podium, a SaaS company aimed at small businesses, named Rick Hasselman as its first CFO and Chance Olson as EVP of strategy and business operations.
- TechNet hired Tyler Diers as executive director for Illinois and the Midwest.
- Google plans to get into the banking business, making it the latest tech giant to venture into finance. (WSJ)
- Cisco reported disappointing quarterly earnings and a weaker forecast amid what it sees as a broader slowdown. (Marketwatch)
- As it announced the 16-inch MacBook Pro on Wednesday, Apple confirmed it still plans to release the Mac Pro and a companion display next month. (The Verge)
- Motorola unveiled the pricey remake of the RAZR, a $1,499 foldable Android smartphone. (The Verge)
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