NEW YORK/SAN FRANCISCO (Reuters Breakingviews) - Jeff Bezos’s first letter to Amazon.com shareholders in 1998 said that “it’s all about the long game.” With revenue of $60 billion over the last three months alone – roughly 100 times what it was in the year Bezos penned that missive – the challenges have changed. To ensure the e-commerce giant’s future, Bezos’s best weapons aren’t sales growth, but sprawl and usefulness.
SAN FRANCISCO (Reuters Breakingviews) - Instagram is becoming Facebook’s sugar daddy. The $521 billion social network’s image-sharing unit is a big reason for the company’s strong first-quarter top-line growth. There’s room to wedge more revenue-earning ads into users’ feeds. The risk, though, is the distractions and dodgy content that hamper the “old” Facebook spread to Instagram.
SAN FRANCISCO (Reuters Breakingviews) - Silicon Valley has a millennials problem. Recent surveys show young adults want to leave the San Francisco area. Of the seemingly intractable issues they cited as reasons, few are new. But they’re now threatening the region’s ability to attract and keep talent.
SAN FRANCISCO/NEW YORK (Reuters Breakingviews) - A $100 billion price tag is still in Uber Technologies' driving range. The ride-hailing app just released the prospectus for its initial public offering, which could value it at about nine times 2018 revenue. At least that’s less than the multiple at which faster-growing Lyft went public. Both cash-burning firms face an uncertain road to profitability. Uber’s diversification may help it survive the long journey.
LONDON, SAN FRANCISCO (Reuters Breakingviews) - Uber Technologies’ $3.1 billion acquisition of Middle East rival Careem Networks should give its IPO a boost. It shows the group which is burning cash is still willing to spend to grow. And, by reducing competition in the fast-growing region, it gives potential investors one less thing to worry about.
SAN FRANCISCO (Reuters Breakingviews) - Pinterest’s future relies on pegging global sales growth. The social scrapbooking app has a healthier balance sheet than other startups going public. Revenue growth has outpaced expenses, shrinking its net loss by 65 percent over two years to $63 million. Most of its user expansion, though, comes from overseas enthusiasts, still far less lucrative than those at home.
SAN FRANCISCO (Reuters Breakingviews) - Recent U.S. floods are adding new twists to the 2020 elections. Several midwestern states have suffered some of their worst deluges on record, raising more climate-change fears. That could influence voters in Iowa, a key state in the U.S. presidential-election process. And the floods’ financial toll may prompt underwater farmers to dump President Donald Trump.
NEW YORK/SAN FRANCISCO (Reuters Breakingviews) - Mark Zuckerberg’s inner circle just got smaller. Chris Cox, the Facebook chief executive's long-time lieutenant and chief product officer, is quitting after Zuckerberg last week outlined a new direction for the $470 billion social network. It’s hard to overstate how instrumental Cox has been. His departure is a wake-up call for investors.
NEW YORK/SAN FRANCISCO (Reuters Breakingviews) - Facebook's presidential foes are also its customers. Elizabeth Warren and other Democrats running for the White House have turned Silicon Valley into a political punching bag, but their campaigns are big users of Facebook and other online platforms. It reflects the power of tech giants and suggests bashing them may not persuade voters.
SAN FRANCISCO/NEW YORK (Reuters Breakingviews) - Silicon Valley’s biggest companies should get in the tent with U.S. regulators. Lawmakers and politicians keen to run for president are considering ways to break up Amazon.com, Facebook, Alphabet's Google and even Apple. Companies fighting constraints rather than trying to shape them may regret it.