Benner on Tech: EBay's Mystery, Box's IPO and Microsoft's Goggles

Katie Benner is a Bloomberg View columnist who writes about technology, innovation, and the cult and culture of Silicon Valley. She lives in San Francisco.
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People are Talking About…

EBay’s earnings report gave the market little in the way of surprises. Big news like the PayPal spinoff has long been known. The détente with activist investor Carl Icahn seemed only natural after the company finally agreed to set the payments division free. The board seat that Icahn won was expected, too.

The online auction site also said that it would lay off 7 percent of its workforce across eBay and PayPal, which amounts to about 2,400 positions, and that it would sell its enterprise unit. Taken altogether, the market seemed to like the news and the stock was up about 2.7 percent before this morning’s opening bell.

Things won’t necessarily be easy for eBay or PayPal after the split. Both are mature companies. Startups have started to change their markets – online retail and payments, respectively – in ways that the standalone companies may struggle handle after spinoff. But dealing with the implications of all of that is still a few quarters or so away.

For now things seem to be going smoothly thanks largely to the stewardship of chief executive John Donahoe, who will leave the company once the restructuring is complete. Donahoe joined eBay in 2005 to revive the core marketplace business and over the course of three years revenue and profit for that division doubled. He became the company's CEO in 2008, just before the financial crisis hit. Prior to his stint at eBay he’d worked at Bain & Company for more than two decades, serving as president and CEO starting in 1999.

His tenure at eBay has been a largely successful one. He revamped the management team and executed a tricky turnaround. Eventually he oversaw a split that lots of people believed to be in the best interests of both eBay and PayPal. Now he’s leaving.

Where Donahoe lands next is one of the most interesting eBay mysteries right now. Given just how many old school tech companies could use some turnaround magic, I doubt he’ll be on vacation for too long.

** Unrelated but coming up fast: The Box IPO…

The company currently plans to sell 12.5 million shares for $11 to $13 in its initial public offering, say my Bloomberg colleagues Leslie Picker and Dina Bass. That would value Box at around $2.4 billion, a 33 percent discount to the $2.4 billion it got in its last private funding round. As I’ve pointed out before, that last private round came with a lot of strings attached… strings that could affect Box's true valuation.

Nevertheless, the discount and the stock performance will be watched closely because they could dampen overall enthusiasm for huge late stage rounds. If the stock zooms higher and stays high, all will be well. Putting lots of money into aging startups can still end with a big payday! If the shares tank, then people will scramble to explain why Box’s performance is a one-off fluke.

The stock’s rise or fall will depend mostly on whether investors believe that Box has truly diversified away from cloud storage, a business that giants like Microsoft can give away for free or nearly free. If investors decide Box is a storage company, the shares will eventually perform like the stocks of any company in a rapidly commoditizing business. (That’s not good.) If they think, hey, this is a consulting and apps company, the shares might trade higher. (It’s hard to know because the company doesn’t currently break out revenue for each division.)


Uber Wealth…

** The ride hailing company raised $1.6 billion in convertible debt from Goldman Sachs Group’s wealth management clients. My Bloomberg colleague Serena Saitto got the scoop, and says the company is still talking to hedge funds and strategic investors overseas about putting together an additional $600 million investment.

** Uber has now raised more money than any other private company that has come before it, including Facebook, the Wall Street Journal reports.

Antuit Holdings, a Singaporean big data analytics company, raised $56 million from investors including Goldman Sachs, the Wall Street Journal reports. The money should help the company grow organically and through acquisitions. 

Dropbox acquired the productivity company CloudOn as part of an expansion plan in Israel, the Wall Street Journal reports.

Pinterest said that it bought Kosei as part of an effort to better incorporate machine learning into the company’s work in discovery and monetization.

Vessel, the subscription video site founded by Hulu’s ex-CEO, launched yesterday, Bloomberg Businessweek reports. Users pay $2.99 a month for access to videos up to three days before they’re widely released on other sites.

Is Wavelength just Aereo all over again? Hollywood doesn’t like the free web service, which lets people watch movies that other people own. For free. Less than two weeks after its launch, founder Spencer Wang told Re/code: “We are for the time being closing the beta as we speak with key industry constituents to showcase that is a great thing for consumers and the film business.”

Bitcoin was never meant to be an investment-grade financial asset, argues my Bloomberg View colleague Noah Smith. “It’s supposed to be a medium of exchange. Surprisingly few people understand the difference.”

Confused about the difference between seed and Series A rounds? Angel investor Jason Calacanis defines them and explains how they’ve changed over time.

Seed investments fell by 40 percent in 2014, the Wall Street Journal reports, totaling 264 deals.

People and Personnel Moves

Christopher "Moot" Poole, the founder of 4chan, is leaving the message board and handing control over to volunteers, reports the Verge.



** The online retailer is shutting down its Amazon Wallet division just six months after it launched, CNET reports.

** The company is also pulling its own brand of diapers from the website because they just weren’t up to snuff, reports Fast Company.


** A new law could give school administrators in Illinois the authority to ask students for their Facebook passwords if they're suspected of cyberbullying or breaking other school rules, Motherboard reports.

** There’s a web browser version of WhatsApp.


The company is going to sell mobile phone plans directly to consumers and run the new service over Sprint and T-Mobile’s networks, reports the Information’s Amir Efrati. The company is working on wholesale deals with those carriers for access to their mobile voice and data networks.


** The company's Windows 10 event turned out to be so much more than a sneak peek at a new version of some old software. As Bloomberg reports, the company also unveiled Cortana, the Siri-like, voice-activated assistant. It showed off touch-enabled Office applications, as well as the browser that will eventually replace Internet Explorer. By far the most buzzy announcement was news of Microsoft’s new holographic goggles.

 Wired's Jessi Hempel spent a lot of time with the device and its inventor Alex Kipman. She also wrote an all-access, in-depth story about Microsoft in the age of Satya Nadella.

** The company's Vice President of Operating Systems Terry Myerson says Windows 10 has security features that could thwart the cyberattack techniques used in "recent headline making attacks," reports the Daily Dot.

** Random item: Turkey’s largest private lender made an app that lets Xbox users manage their finances through video game console, Bloomberg reports.


The company says it will cut the price of its data center hardware strategy so that more companies will use its software, reports Bloomberg.


The company introduced a “while you’re away” feature that recaps the top tweets in a user’s timeline.


The New York Times’ Farhad Manjoo offers up a full-throated defense of CEO Marissa Mayer:

It took Lou Gerstner, IBM’s legendary turnaround artist, nearly a decade to remake that giant. Apple’s revenue was mostly flat for about six years after Mr. Jobs returned in the late 1990s. If Ms. Mayer is to follow in their footsteps, she ought to at least be given enough time to try on the sneakers.

Cybercrime Blotter

Go deep inside a hack investigation with Fortune’s Robert Hackett and learn why these crimes are so hard to solve.

Brian Farrell confessed to being Silk Road 2.0’s “DoctorClu” when he was arrested by federal authorities in Seattle, Ars Technica reports.

Media Files

Iggy Azalea has some thoughts about online media. Azalea writes: "Every magazines online Twitter feed reads like something I'd expect to see on a tabloid. That's a problem."

This was one of the least watched State of the Unions in years, with about 3.2 million viewers, the Wall Street Journal reports. But that doesn’t include the additional 1.2 million people who live streamed the speech.

News and Notes

This drone delights these Congressmen. Video courtesy of C-SPAN.

When Survivor returns in February root for this Yahoo executive who previously worked on Google Calendar, loves Larry David and isn’t afraid to “vote people out” IRL.

Remember when tinkerers ruled tech? CNN/Money’s former managing editor Chris Peacock eulogizes Radio Shack and the culture of invention it supported.

One could easily suppose that over nine decades RadioShack helped create that disruptive business culture. Its electronic tinkerer customers probably spawned thousands of inventors and entrepreneurs. Some of them maybe became technologists who built the software platforms that doom RadioShack to the fate of record, video and book stores.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the editor on this story:
Timothy L. O'Brien at