Benner on Tech: Bells Toll for the Comcast Deal
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It seems the Federal Communications Commission is going to kill Comcast’s $45.2 billion takeover of Time Warner Cable by burying it under a mountain of bureaucracy. The Wall Street Journal says the commission’s staff wants to issue a “hearing designation order.” This long, drawn-out process would probably sink the deal. The newspaper notes that a similar move helped put an end to the planned AT&T and T-Mobile USA merger.
The implication here is that regulators don’t think consumers would benefit if the two companies were combined, and that they might even be harmed. But they don’t want to come right out and say it. I wonder why not. The deal not only creates a huge, powerful entity that could drive a hard bargain with content companies, it would also give Comcast control over more than half of the high-speed Internet market. (I looked at the broadband point in February when I wrote that regulators would kill the deal.)
So what if the deal doesn’t go through? There’s a good chance that we see Charter bid for Time Warner Cable. (Indeed, the specter of a Charter bid has probably helped prop up TWC shares when it looked like the Comcast deal might crumble.) And there’s a chance that, as the Journal notes, Comcast regroups and invests in fast-growing companies overseas. This probably won’t be limited to other cable businesses. Assets in Europe are relatively cheap, and low rates favor risk-taking.
AT&T reported quarterly profit that beat analysts’ estimates. (Bloomberg)
EBay’s quarterly profit results before certain items beat analysts’ estimates, and the company has a better-than-expected forecast for the current quarter. (Bloomberg) PayPal, which is splitting from EBay, drove revenue growth. (the New York Times)
Facebook’s quarterly profit, before expenses like taxes and amortization, came in at 42 cents per share versus estimates for 40 cents a share; but revenue hit $3.54 billion versus estimates for $3.56 billion. A huge 73 percent of its ad revenue comes from mobile devices. (Re/code) The company’s headcount increased by 48 percent last quarter, and now it has more than 10,000 employees. (Bloomberg) The company is clearly changing from a social media company with a lot of different ways to connect with friends to an entity that holds several large communications and content businesses such as messaging, video, collaboration and traditional social networking. (BuzzFeed)
Qualcomm reported quarterly sales of $6.89 billion, versus estimates for $6.82 billion. Excluding certain costs, profit was $1.40 a share, versus analyst forecasts for $1.34 a share. The company said sales and profit for the current quarter could miss Wall Street estimates as its customers use alternative chips. (Bloomberg)
Reporting today: Brace yourselves. Amazon, Google, Microsoft, Netsuite and Pandora are all presenting financial results.
Funding Circle, an online lending platform for small businesses, raised $150 million and is now valued at $1 billion. (VentureBeat)
Jet.com hasn’t yet kicked off, but the company’s Chief Revenue Officer Scott Hilton said more than 1 million customers will pay $50 a year to use the site by the end of this year, and 15 million will pay that fee in five years. (the Wall Street Journal)
Uber caught a break in Brussels. The city is drafting legislation that would make it legal to drive for Uber if working for the service is a second source of income. (Politico)
Zenefits is trying to raise a huge funding round that would value the company at more than $3 billion. (TechCrunch)
People and Personnel Moves
Brandon McCormick is joining Lyft’s PR Team after working at Facebook for six years, where he led communications for WhatsApp.
Lisel Welden is now vice president of brand marketing at Lyft after working at Nike for more than a decade. (Bloomberg)
Megan Smith’s official title is chief technology officer of the United States, but Wired says we should think of her as “tech’s chief evangelist in government.”
Shannon Liss-Riordan is the lawyer who’s going after the on-demand economy’s contract worker-based business model. She honed her prosecutorial skills suing strip clubs that classified dancers as 1099 workers. (Matter)
Amazon is testing a service that delivers packages to the trunks of people’s cars, even when they’re not there. (the Wall Street Journal) Before the company (finally) breaks out financial results for its Amazon Web Services, read about how Amazon is shooting for global domination in cloud services. (Bloomberg)
Apple iPhone and iPad apps made by companies such as Alibaba and Citrix could let hackers steal passwords or payment information. (the Wall Street Journal) The all-gold Apple Watch band is for Beyonce and Karl Lagerfeld, but not for you. (USA Today) Those Apple Watch delays were overstated, and the products will ship soon. (BuzzFeed) The watch will also be stocked in select luxury retailers. (the New York Times)
For a clue about how Facebook Newsfeed algorithms could affect publishers, we should remember what happened to Zynga. (Fortune) The company’s new (Android only) app, Hello, matches incoming phone numbers with Facebook profiles so that you always know who’s calling.
Google is rolling out its mobile phone service with a surprisingly full coverage map. (Bloomberg) Here’s a roundup of the 10 most important things to know about the company’s wireless phone service. (Bloomberg) YouTube is using NFL ads to lock marketers into spending on non-football content. (the Wall Street Journal)
Tesla is quietly making a huge push into the battery business and is signing up big customers like Wal-Mart and Cargill. (Bloomberg)
The House passed a cybersecurity bill, the Protecting Cyber Networks Act (PCNA), that protects companies that share threat information with the government. (the Hill)
Google and Twitter vowed to work with French police to fight online terrorism. (the Wall Street Journal)
Tidal is letting independent artists upload their music directly to the service instead of going through third parties with a not-yet-launched service called Tidal Discovery. Artists will also get access to listener data. (the Verge)
Why the next great sports franchise will be built on e-sports. (REDEF)
News and Notes
Drones are delivering illegal mail to prisoners. (the New York Times)
The European Commission wants to create a single digital market for digital goods across all 28 EU member states. (the Wall Street Journal)
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Maria Lamagna at email@example.com