January 11, 2022
Congrats to (insert name of SEC school) for winning this year's college football championship.
- Update: Georgia.
Situational awareness: South Korea's telecommunications regulator said Tuesday that Apple will allow alternative payment structures to its App Store for the first time in the country. (Korea Herald)
Today's newsletter is 1,123 words, a 4-minute read.
1 big thing: Online risks abound for Beijing athletes
The Chinese government has promised Olympic athletes free access to social media platforms and other websites but internet use in Beijing may still be fraught with restrictions and risks, Axios' Ashley Gold, Bethany Allen-Ebrahimian and I report.
Why it matters: China's aim in temporarily opening its "great firewall" is simply to boost its global reputation ahead of the Games, not to champion an open internet, experts say. And they expect heavy surveillance of online activity to continue, even for visitors who are allowed to access sites that would otherwise be blocked.
- "It's a way for China to easily spread positive narratives about the Beijing Olympics, in the midst of all of their human rights criticisms," said Kenton Thibaut, resident China Fellow at the Atlantic Council's Digital Forensic Research Lab.
What to watch: "Even though they allow access to social media, I don't think any athlete is going to tweet out something about Hong Kong or Taiwan," Victor Cha, senior vice president at the Center for Strategic and International Studies, said.
The state of play: Chinese authorities have said Olympic participants and foreign media will have uncensored access to the internet through special SIM cards.
- The U.S. Olympic organizing committee is warning athletes and officials that "performing mission critical business and personal communications will be difficult at best while operating in China," according to a technology advisory being shared with athletes and national sport organizing bodies.
- "[I]t should be assumed that all data and communications in China can be monitored, compromised or blocked," the document states.
As for what athletes can say on the internet from Beijing, that's another matter.
- The International Olympic Committee has touted athletes' right to free online speech as long as they don't violate local laws, but Chinese law gives authorities the flexibility to prohibit whatever online speech they deem to be illegal.
- Chinese athletes will face intense scrutiny; Chinese authorities have arrested dozens of Chinese citizens for content they posted on foreign social media. But it's not clear how authorities view non-Chinese citizens posting freely on foreign websites.
Context: Numerous governments, including the U.S., have announced a diplomatic boycott of the 2022 Beijing Winter Olympics games due to the Chinese government's ongoing genocide against the Uyghur population in the northwest region of Xinjiang.
- Activists and rights groups have urged corporate sponsors to push Beijing on its Xinjiang policies and withdraw their sponsorship.
Also, just because athletes can get online in China, doesn't mean they shouldn't take precautions.
- "If [athletes] are using their supplied WiFi, they would just have to assume that everything they're doing is being monitored," Thibaut said.
- Security experts recommend using a separate phone, a virtual private network, SIM cards not provided by China, and avoiding logging into services or sharing other sensitive information.
What they're saying: Some athletes anonymously told the New York Times in December that they are afraid to criticize the Chinese government publicly for fear of reprisal.
- But some are speaking out anyway. "To be silent is to be complicit," Clare Egan, a biathlete from Maine, told the Times.
- U.S. pairs skater Timothy LeDuc said on Sunday that Uyghurs in China faced a "horrifying" situation. "I read somewhere the other day that it's the largest number of people held in internment and labor camps since World War II," LeDuc said.
2. Take-Two Interactive acquires Zynga for $12.7B
Take-Two Interactive, publisher of games like Grand Theft Auto and NBA 2K, agreed to buy Zynga for $12.7 billion in cash and stock, Axios' Dan Primack and Stephen Totilo report.
Why it matters: This reflects how traditional game publishers are spending big on mobile, where Zynga has had success with both its legacy hits (e.g., Farmville, Words with Friends) and so-called games like Hair Challenge.
By the numbers: Take-Two is paying the equivalent of $9.86 per share, a 64% premium over Zynga's closing price on Friday, but below where it traded for most of the period between December 2020 and July 2021.
- Take-Two predicts the deal will make mobile 50% of its business in the next year, up from 10%.
Be smart: The deal is more than just Grand Theft Auto + FarmVille.
- Zynga gives Take-Two a robust mobile gaming advertising platform and an emerging blockchain/NFT gaming division.
- Take-Two also gets a "Star Wars" game (rivals Ubisoft and EA already have some) and publisher Rollic Games' scores of "hypercasual" games like Hair Challenge that are often targeted at women.
3. WhatsApp co-founder named interim Signal CEO
Brian Acton, co-founder of Meta-owned WhatsApp, has been named interim CEO of encrypted messaging app Signal, with longtime CEO Moxie Marlinspike stepping aside, Axios' Ashley Gold reports.
Driving the news: Marlinspike, who's been at Signal for almost a decade, said in a blog post he feels comfortable replacing himself as CEO now, based on Signal's growing team and success.
- Acton, who is currently on the Signal Foundation Board, volunteered to be CEO while the company searches for a permanent replacement, according to Marlinspike's post.
Why it matters: Signal has come far from its early days and is now a go-to app for journalists, activists and anyone looking to have secure, private communications.
- Acton left what is now Meta in 2017 after disagreements with CEO Mark Zuckerberg over how to monetize WhatsApp.
4. Charted: The ad tech industry's record rebound
A record number of advertising and marketing technology companies went public last year, according to a new report from LUMA Partners, a leading media and marketing investment firm. Meanwhile, Deal volume among ad tech, marketing tech and digital media companies soared 82% year-over-year, Axios' Sara Fischer reports.
Why it matters: It wasn't long ago that investors were pulling back from the ad tech industry, fearing it would crumble as the sector moved away from tracking cookies and towards privacy-focused targeting solutions.
- But optimism surrounding the country’s economic recovery, inflated public market valuations and growth in streaming, gaming and e-commerce has investors much more excited about ad tech today than ever before.
5. Take note
- Intel has hired former Micron CFO David Zinsner to be its next financial chief. Meanwhile Gregory Bryant, who led the company's PC chip unit, is leaving the company at the end of the month, to be replaced by longtime Intel executive Michelle Johnston Holthaus.
- Hilary Rosen notified colleagues on Monday that she is stepping down in March as vice chairman of SKDKnickerbocker.
- Patrick Lenihan is taking on a new role as head of communications for gay dating app Grindr.
- The Government Accountability Office released a report on Monday noting that virtual currencies are increasingly being used to facilitate human and drug trafficking.
- The Wall Street Journal has an interesting look at the struggles China has had in building its own chip companies despite massive investment.
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