May 27, 2021
Rice Krispie Treats are good. Just saying ... (You'll never guess how I came up with this intro.)
Today's newsletter is 1,288 words, a 5-minute read.
1 big thing: Next episode of the Jeff Bezos show
Jeff Bezos isn't just one of the richest men in the world — he has also become one of the most influential executives across an array of industries beyond online retail, including aerospace, newspapers, and now movies, as Axios' Sara Fischer and Felix Salmon report.
Why it matters: Bezos' splashy and far-reaching investments distinguish him from other tech leaders who are trying to lay low as regulatory pressures mount.
The big picture: Bezos preserved his reputation as a quirky, efficiency-obsessed engineer during the years he spent building Amazon into an empire.
- As he prepares to step down as Amazon's CEO — he'll leave that role on July 5, the company said yesterday — his personal hobbies and penchant for the spotlight are an increasingly visible element of his business ambitions.
Bezos' fondness for red carpet appearances has media insiders questioning whether Amazon's costly MGM Studios acquisition, announced Wednesday, is about bolstering Prime subscriptions or just scratching Bezos' Hollywood itch. MGM is the home to several blockbuster franchises, including James Bond.
- His personal ownership of the Washington Post, one of the biggest news outlets in the country, complicates his relationship with Washington, D.C., at the same time he's seeking special financial carveouts for his space company, Blue Origin, and as Amazon seeks regulatory approval for acquisitions like MGM.
- His high-profile divorce — one of the most expensive in history — was precipitated by the revelation that Bezos had begun secretly dating Lauren Sanchez, a former TV news anchor.
Be smart: Until recently, Amazon had avoided the regulatory spotlight and Bezos was rarely the story himself. But lawmakers have become wary of the tech giant's power and Bezos' own influence.
- The MGM deal doesn’t immediately set off anti-competitive alarm bells for legal observers, but lawmakers from both parties are already voicing concerns, arguing that it gives Amazon too much power over yet another industry.
- Amazon announced the deal just one day after D.C.'s attorney general filed a major antitrust lawsuit against the e-commerce giant, alleging anticompetitive pricing practices in the online retail market.
Yes, but: On Wall Street, these concerns have barely registered to shareholders, who are happy to take risks on Bezos' passion projects or new business lines.
- The $8.5 billion price tag for MGM would raise eyebrows and drive investor skepticism were anybody else to make the offer. But Amazon's announcement didn't try to make a case for the business value of the deal, simply citing the quality of the MGM catalog.
The bottom line: As Bezos enters the next chapter of his life, his appetite for risk and new challenges seem to be broadening. While Wall Street doesn't seem to mind, Washington seems more skeptical.
2. Microsoft CEO wants app stores to cut fees
In additional comments from the exclusive Axios interview we shared yesterday, Microsoft CEO Satya Nadella said app stores should look to cut their commission fees over time — but argued that the Xbox and game consoles are an exception.
The big picture: App store fees are at the center of Apple's legal fight with Epic Games and are under increasing scrutiny from antitrust regulators who view the stores as monopolies.
The catch: Microsoft is on both ends of the debate here. It runs its own app stores on Windows and Xbox but is also looking to sell software on other platforms, including iOS and Android.
Driving the news:
- Microsoft recently cut to 12% the commission it takes on PC games sold through its Windows App Store.
- The company was reportedly planning to cut Xbox commission rates as well, but seems to have decided against it.
Between the lines: Here's how Nadella explained the rationale to me.
- "Wherever there is no subsidized hardware or device, or what have you, we want to make sure that we have the most competitive (prices)," Nadella said.
- "On Xbox, the business model is just a very different business model. Essentially, the box itself is subsidized," with Microsoft taking a loss on the hardware it sells and making up the difference from game sales over time.
Asked whether he thinks commission rates should go down overall, Nadella suggested that would be the result, assuming there was true competition.
- "Everyone should try and do their best job of competing," he said, "and at the end of the day, end users and regulators are the ones who are going to keep us in check."
3. Facebook won't remove posts claiming COVID is human-made
Facebook posts claiming that COVID-19 was "man-made" will no longer be removed, Axios' Rebecca Falconer reports.
Why it matters: The lifting of the ban reflects a reinvigorated debate on the origins of the pandemic in recent days, following a Wall Street Journal report that three researchers at the Wuhan Institute of Virology were hospitalized in November 2019 after falling ill.
- President Biden has asked the U.S. intelligence community to step up efforts to investigate the origins of the coronavirus and provide a report within 90 days that "could bring us closer to a definitive conclusion."
The big picture: Biden administration officials and others criticized an investigation by a team of scientists assembled by the World Health Organization and China's government, that returned inconclusive findings on the pandemic's origins.
- Health and Human Services Secretary Xavier Becerra called for a "transparent, science-based" follow-up investigation during a World Health Assembly meeting on Tuesday.
What they're saying: "In light of ongoing investigations into the origin of COVID-19 and in consultation with public health experts, we will no longer remove the claim that COVID-19 is man-made from our apps," a Facebook spokesperson said in an emailed statement.
Separately: Facebook said Wednesday that it will begin taking tougher action against repeat posters of misinformation, in some cases limiting the distribution of all posts.
4. Russia crackdown puts internet giants in bind
Russia has been putting the screws to Twitter, Facebook and Google to follow newly crafted content restrictions, testing the degree to which the tech giants will bend to the country's will.
Why it matters: The companies have significant business reasons to appease repressive governments like Russia's, but the world is watching. Concessions made to one country one day risk encouraging other countries to make their own demands.
Driving the news:
- Russia on Monday gave Google 24 hours to take down what the government described as prohibited content, or face fines and other penalties.
- Russia has also ordered internet companies to store data on Russian citizens within the country's borders.
- Earlier this month Facebook issued a report noting that government censorship and local shutdowns of the internet are both on the rise around the globe.
The big picture: The ultimate risk here is not just to individual companies as they choose whether to follow local laws that may have ulterior motives. The internet's ability to serve as a truly international network is already beginning to fray, too.
5. Take note
- Waze hired former Hotwire president Neha Parikh as CEO. Noam Bardin had said last year he would step down as CEO of the Google-owned navigation service.
- Verizon named Angie Klein as CEO of Visible, a Verizon-owned digital mobile service brand. She was previously a senior VP of consumer marketing for Verizon.
- Chipmaker Nvidia solidly beat earnings expectations amid strong business in gaming and datacenters. (ZDNet)
6. After you Login
I wanted to pay tribute to Eric Carle, the children's author and illustrator, who died Wednesday at age 91. If the name doesn't ring a bell, try eating one apple. If that still doesn't work, try two pears. If that still doesn't work, you may need to go all the way to one piece of cake, one ice cream cone, one pickle, one slice of Swiss cheese, one slice of salami. If not, then you just need to go here.