Hello, I’m Alexei Oreskovic, assets Deputy Tech Editor, replacing Jacob today.
It’s been a strange week in Techland, filled with conflicting and confusing events that feel as inverted as the stock market’s erratic attempts to decide what to think of the recent rate hike.
Downtown San Francisco was swarmed with crowds all week as the Salesforce conference extravaganza known as Dreamforce was back in full force. Traffic chaos, fully booked restaurants and company parties – everything is back. wealth Reporter Kylie Robison reported that there was a palpable energy at the Salesforce event, where lanyard-wearing attendees were practically intoxicated with the realization that they were out in the real world and meeting real people again.
And yet, this week we also learned that Meta is cutting jobs and downsizing to reduce its expenses by at least 10%.
There are also signs of pain at Google parent Alphabet, where CEO Sundar Pichai addressed employee tensions at a recent all-hands meeting.
One of the questions Pichai was asked, according to CNBC, was why the company was “nicking” employees amid “record profits and huge cash reserves” (Alphabet, however, had a whopping $125 billion in cash as of June 30). Net income of $16 billion in the second quarter was actually down 14% from a year ago).
It’s not an unreasonable question, especially given all the mixed data points. Economic growth has slackened over the past two quarters, yet unemployment is incredibly low. Economists warn of a “hard landing” while airlines point to signs of a resurgence in business travel.
And with the last major downturn now more than 12 years old, a significant portion of employees at Alphabet, Meta, and tech startups have no idea what a real recession looks like or feels like. The final economic shock, when the pandemic began in 2020, turned out to be a short jolt that ultimately benefited many tech companies. No wonder many young tech workers are wary of “heavens-is-collapsing” warnings and are urging people to tighten their belts.
The reality is that everyone – from policymakers to stock market investors to corporate CEOs – is processing lots of conflicting and ever-changing information, not to mention hard-to-predict wildcards like the war in Ukraine and future COVID-19 variants.
The next round of tech earnings, starting in October, should offer more clarity on the health of the tech industry and the economy at large. Until then, enjoy the conferences and complimentary drinks.
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The apple peel. Steve Jobs famously mocked Pepsi as “sugar water” when he recruited John Sculley for it apples Managing Director in the 1980s. Now Apple is taking a page out of the Pepsi playbook by replacing the soft drink maker as the sponsor of the NFL Super Bowl halftime show. The deal reported by the Wall Street Journalcould be worth up to $50 million and represents a big change for Apple, which traditionally eschews big marketing hype.
Crypto Threats. The Pentagon is launching a new effort to analyze cryptocurrencies, specifically addressing the potential threats to national security. According to that Washington PostThe effort, led by DARPA, will explore ways in which crypto could be used in warfare, among other things, to attack financial systems.
THINGS TO THINK ABOUT
YouTube vs TikTok, Round 2. The battle for social media dominance is increasingly being fought with influencers — and the short, bite-sized video clips that are becoming popular on TikTok are the latest front. On Tuesday, YouTube attempted to shift the balance of power away from TikTok by launching a new program that would allow influencers to share ad revenue on YouTube’s shorts — its previously launched TikTok clone. Will people actually tolerate ads to watch 60 second videos that aren’t much longer than ads themselves? And will influencers leave TikTok to embrace YouTube’s new revenue stream? assets Alexandra Sternlicht spoke to some of the industry’s top influencers to hear what they think of the new YouTube program.
IN CASE YOU MISSED IT
Health tech startups are booming. These 11 VC investors are behind some of Lucy Brewster’s hottest deals
Oops, Amazon is emailing employees that their compensation was miscalculated, by Colin Lodewick
Microsoft: “Using Technology to Spy on People at Work Isn’t the Solution,” by Jared Spataro
Hyperlane Raises $18.5M in Variant-Led Seed Round to Improve Interchain Communication and Reduce Hacking, by Taylor Locke
Chip shortage claims another victim as Honda cuts 40% of vehicle production in Japan, by Tristan Bove
BEFORE YOU GO
Facebook no-fly zone. Remember the teen with the bot who was chasing Elon Musk’s private jet? Well, he’s back in the news again. Jack Sweeney, now 20 and a student at the University of Central Florida, says Facebook shut down his page for violating the social network’s policies. In an interview with Insider, Sweeney said Facebook didn’t provide any further information about what policies his “Elon Musk’s Jet” page violated. Apparently, Sweeney is tracking Facebook founder Mark Zuckerberg’s jet, although it’s unclear if he’s posting this information on Facebook.
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