Benner on Tech: Marissa Explains It All and Silicon Valley Swings

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…

And now, the Yahoo moment we’ve all been waiting for!

Chief executive Marissa Mayer and finance chief Ken Goldberg are expected to use today’s earning call to tell shareholders how they plan to sell the company’s Alibaba shares in a tax efficient way.  A lot of ink has been spilled on the best ways for Yahoo to do a deal, including a good write up by my Bloomberg colleague Jesse Drucker, so I’ll not go over the possible options again.

As far as today is concerned, the most important thing is that the executive team does present a plan for the Alibaba stock – pretty much any plan that doesn’t involve paying boatloads of taxes. If Mayer and Goldberg demur, we may see a sell-off in Yahoo shares. 

Investors will have the next few months to decide whether or not they like the plan that’s (hopefully) presented today, since Yahoo can’t sell its Alibaba shares until the lock-up agreement related to the Chinese Internet company’s public offering expires this fall. Between now and then, Yahoo will spend the its next few months dealing with a handful of key issues:

  • Will the company stay public? A post-Alibaba Yahoo becomes a much smaller Yahoo, and thus a possible target for private equity or strategic buyers.
  • Will the activist investors go away? I sure hope so because the Yahoo-AOL merger idea is terrible.
  • Does Mayer stay on as CEO? This depends a lot on how questions one and two play out. When private equity firms take over, they generally have a lot of say over the executive team and, to some degree, the strategy. If the company stays public, Mayer will face heightened scrutiny without a hugely valuable asset to give her cover.
  • What kind of acquisition will Yahoo make with the money? If the company remains public it’s inevitable that Mayer will use some of the proceeds to (hopefully) buy her way into a healthier company. 

** Unrelated Silicon Valley swingers’ party news from CNN/Money:

These types of events are nothing new, but what makes this one different is its high-tech nature. Ben Fuller, who started throwing the Bronze Party in 2011, is a former tech entrepreneur who sold his first company in 2000 for just less than $5 million...

"We are in Silicon Valley," says Stella, an engineer who attends. "People here don't have a very high tolerance for bad websites."

Ventureland

Dropbox acquired Pixelapse, a maker of cloud-based collaboration tools for designers.

Snapchat is set to debut its “Discover” feature, which sells ads against content from media companies such as ESPN, CNN, Vice and Warner Music that users can see, the New York Post reports. The plan is to share ad revenue with publishers.

Uber capped surge pricing during the east coast megastorm, Bloomberg reports.

Kleiner Perkins tried and failed to buy Social+Capital Partnership, the venture firm founded by former Facebook executive Chamath Palihapitiya, according to Fortune’s Dan Primack.

People and Personnel Moves

Robert LeBlanc, was picked this month to lead IBM’s new dedicated cloud unit and the Wall Street Journal profiled the 33-year company veteran who must fight to make Big Blue a top cloud services provider.

Mark Hurd, the co-CEO of Oracle, opens up to Business Insider about his public ups and downs, his tennis prowess and his co-chief Safra Katz.

Companies

Apple…

** The company is threatening Samsung’s position as the world’s top smartphone seller, the Wall Street Journal reports.

** Analysts expect a blowout earnings report today after the bell, reports CNBC.

** Macworld’s Kirk McElhearn argues that Apple should get into the mobile network business too.

Comcast…

The company ghost wrote letters for politicians in support of Comcast’s deal to buy Time Warner Cable, according to the Verge.

Facebook…

** Just weeks after decrying censorship related to the Charlie Hebdo attacks, the social network has blocked access to images deemed insulting to the Prophet Muhammad to avoid being banned in Turkey, the New York Times reports.

** The company is trying to pitch its personalized, targeted video ads as more effective than their TV counterparts, reports the Financial Times.

** Oculus has a team to work on virtual reality movies that work out of the Oculus Story Studio, the Verge reports.

** Snowmageddon knocked out Facebook and Instgram, reports GigaOm.

Google…

** The company’s mobile traffic app Waze is under fire from law enforcement officials who say that users could use it to hunt down police officers, the Associated Press reports.

** Google Fiber could soon come to Nashville, Charlotte and Raleigh-Durham, Engadget reports.

Hewlett-Packard…

Meg Whitman will be the CEO of Hewlett-Packard Enterprise and Dion Weisler will be the CEO of HP Inc., reports Re/code, which has a full list of where different executives will land after the split.

Microsoft…

** The stock dropped after the company said that slowing demand for Windows software weighed on profits, despite the fact that sales of cloud computing software, Surface tablets and the Xbox were all up, Bloomberg reports

** Silicon Valley CEOs talked to Mashable’s JP Mangalindan about Satya Nadella’s recent attempts to make the company cool and relevant. Says Dropbox CEO Drew Houston, "It’s great to see Satya get back to Microsoft’s roots and focus on making users happy. I think it [the HoloLens] is more of a science project than an actual product."

Samsung…

The Korean conglomerate will provide about 75 percent of the chips for Apple’s next iPhone, CNET reports.

Cybersecurity Blotter

The U.S. government created a way to track domestic vehicles in real time using a secret intelligence-gathering program, the Wall Street Journal reports.

Media Files

Condé Nast unveiled a branded content studio run by magazine editors called “23 Stories by Condé Nast,the Wall Street Journal reports. The editorial department usually isn’t involved in the creation of native ads.

News and Notes

JD.com is here to make sure that Alibaba isn’t the only Chinese retail game in town, the New York Times reports.

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 tobrien46@bloomberg.net