Benner on Tech: Apple Watch Buzz and Zynga Shares Plunge
People are Talking About…
Marc Pincus is in. Don Mattrick is out.
Wall Street never took to Mattrick, a former Electronic Arts executive. The stock steadily lost value during the nearly two years that he was Zynga’s chief executive. Revenue fell by nearly half and net losses crept higher. But it was the idea of Pincus in charge that sparked the huge selloff.
I get it. The change was abrupt. And no one is sure that Pincus can make Zynga a great mobile-first game company.
But Pincus has always had the power to control Zynga, even after he stepped down as CEO. Thanks to a dual-class share structure -- the kind that lots of tech companies embrace when they go public -- he’s had the majority of the voting power ever since his company’s IPO in 2011. Investors can act shocked and dismayed by how badly the company has drifted, and they can get mad that a polarizing executive is back. But this is what they bought when they eagerly piled into the IPO for Zynga -- a company where Pincus would always be in charge.
** Here’s a quick look at Zynga's deteriorating value over the years. Zynga was very highly valued before it went public. CNN Money says the company’s stock was granted to investors at $17.20 a share just before the IPO. The company’s consultants valued it at $14 billion. The company priced its IPO at $10 a share and was valued at around $7 billion. The shares closed yesterday at $2.90 and the market cap was at $2.6 billion, and they were hovering at $2.60 before the opening bell this morning.
** Reid Hoffman writes that Pincus will revitalize Zynga because he has special powers as the founder.
Apple Watch is here, and your life will never be the same.
The reviews are in. Several publications spent many thousands of words extolling the product. It’s “more than just another screen.” “The looks are just the beginning. It’s loaded with cutting-edge technology.” “It is unbelievably high tech and a little bit silly, a masterpiece of engineering with a Mickey Mouse face. It is quintessentially Apple.”
The Verge review runs at nearly 7,000 words. It comes with very cool videos that will make you wish you lived in New York City. By way of comparison, the Book of Matthew, which heralds the coming of Christ, runs at about 18,500 words; but only the first four of 28 chapters deal with the actual birth of Jesus. It has no video. This watch is a big deal.
But buried deep inside of every review, everyone agrees that the watch is slow and buggy. The New York Times said it was hard to learn how to use the thing. Bloomberg said that it actually made life more distracting. The Verge reviewer looked at the watch so often that he was unable to sustain a conversation. (But everyone loved the way that Apple Pay worked on the watch.) As Alexis Madrigal over at Fusion says, three themes emerge:
The watch’s build quality, its look-and-feel, and all of the other industrial design details are as good as any device on the market. Two, this is the best smartwatch available today. Three: man, is this thing a first-generation product.
Kik, the messaging app for teens, hired Qatalyst Partners so that it could find a way to sell itself. (Bloomberg)
Operator is an on-demand services app that came out of Uber co-founder Garrett Camp’s startup studio Expa. The company is still in stealth mode, but details about the service were leaked to TechCrunch.
Oyster, the Netflix for books, is a subscription service that’s teamed up with the big publishing companies to take on Amazon. (Wired)
Sprinklr is a unicorn now. It’s also “helping brands reimagining their front offices for today’s connected and empowered customer.”
Uber driver Maxime Fohounhedo has had all charges against him dropped thanks to the audio recording that he made of his conversation with the passenger who accused him of sexual assault. (the Associated Press)
Xiaomi’s efforts to make phone owners feel like they’re part of an exclusive clique have fueled the company’s success in China. (the Wall Street Journal)
Invisible apps, or those that don’t have an interface, are huge. Think on-demand services like Magic (or possibly Operator) and personal assistant tools. Product Hunt founder Ryan Hoover made a collection of the top ones.
People and Personnel Moves
Stephanie Hannon, Google's director of product management for civic innovation and social impact, was tapped to be Hillary Clinton’s chief technology officer. (the Washington Post)
Marvin Futch, a relatively low-level employee at Vivint Solar, got to sit in on a high-level meeting with U.S. President Barack Obama because his company thought it was just sending a guy to listen to a boring speech. (Business Insider)
Google could roll out an ad-free subscription service for YouTube as early as this year. It will offer offline viewing and could cost about $10 a month. Some see it as a possible challenge to Netflix. (Bloomberg)
Tesla’s latest battery upgrade was probably designed to increase margins on the company’s cars. (Bloomberg)
The FCC fined AT&T $25 million for failure to protect customer data. (the New York Times)
Human Rights Watch sued the Drug Enforcement Administration for illegally collecting phone call records made by Americans to foreign countries. (Electronic Frontier Foundation)
The Baltimore Police Department tracked cell phones, and the FBI told the department to withhold information about it. (the Baltimore Sun)
Technology such as phone cameras are becoming powerful tools in the fight against police brutality. (the New York Times)
Wall Street is being pressured to make its partners take cybersecurity more seriously. (the New York Times)
News and Notes
Craig Newmark wants to know what can be done to change the fact that only 7 percent of investor money goes to women-led startups.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
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Maria Lamagna at email@example.com