The Briefing by Martin Peers, Jessica Lessin and the team at The Information

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The Briefing

By Martin Peers, Jessica Lessin and the team at The Information

Get smarter about the day’s news in tech, media and finance by following Silicon Valley’s most-read executive newsletter.

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Recent Editions

People playing Pokemon Go in New York City this week. Photo by Bloomberg.

My Problem with Pokemon GO

By Jessica E. Lessin · Jul 15, 2016 7:02am PDT · 4 comments

I have a confession to make. I don’t think Pokemon GO is all that awesome. Now, I’m not into games to begin with, so my reaction is hardly surprising. The bigger point is that the game reminds me of the broader problems with augmented reality.Our mobile phones are really crummy for layering digital information onto the real world.... I have a confession to make. I don’t think Pokemon GO is all that awesome. Now, I’m...

WeWork CEO Adam Neumann. Photo by Flickr/TechCrunch.

Property Developers Balk at Co-Living Firms

By Cory Weinberg · Jul 14, 2016 10:01am PDT · 3 comments

It looked like a perfect match: a 235-unit apartment building planned for San Francisco's hot South of Market neighborhood and WeWork's millennial-friendly co-living division, dubbed WeLive. But WeWork's efforts to lease the proposed building last year unraveled for an all-too-familiar reason—a banker got skittish.The... It looked like a perfect match: a 235-unit apartment building planned for San Francisco's...

Hony Capital Chairman Zhao Linghuan. Photo by Hony Capital.

WeWork’s China Challenge

By Yunan Zhang · Jul 14, 2016 7:01am PDT

After six years of disrupting co-working markets in the U.S. and around the world, WeWork may have met its match in China, where local, well-connected players compete fiercely for tenants in an oversaturated market.WeWork is planning to open five locations in China by the end of 2016, said Ole Ruch, managing director and head of operations... After six years of disrupting co-working markets in the U.S. and around the world, WeWork may...

Source: PitchBook; The Information Research

Investors Drive Hard Bargains in Private Tech

By Alfred Lee · Jul 13, 2016 6:54am PDT · 1 comment

Source: PitchBook; The Information Research

Investors Drive Hard Bargains in Private Tech

By Alfred Lee · Jul 13, 2016 6:54am PDT · 1 comment

If you’re looking for proof that the private tech market has chilled, consider this. The number of highly valued private tech firms raising new rounds of financing dropped by 63% to 11 in the first quarter. And average valuations in fundraisings grew only 35%, down sharply from 152% averaged in the fourth quarter.Fundraisings that were... If you’re looking for proof that the private tech market has chilled, consider this. The...

Source: PitchBook; The Information Research

Most Valuable Tech Firms Grant Fewest Investor Protections

By Alfred Lee · Jul 13, 2016 6:53am PDT

Small business lender Kabbage hit a billion-dollar valuation in the fourth quarter of last year, despite a challenging fundraising environment. But it also granted more investor protections than most other high-value private tech companies. That puts Kabbage near the top of The Information’s company rankings by deal terms friendly to... Small business lender Kabbage hit a billion-dollar valuation in the fourth quarter of last year,...

Source: PitchBook; The Information Research

When Tech Investors Can Block the Exits

By Alfred Lee · Jul 13, 2016 6:50am PDT · 2 comments

Investors looking to boost their returns have long attached strings to how private tech companies can sell or go public. But those purse strings can look more like chains as more high-value companies offer investors concessions like the right to block IPOs or accrue dividends paid out in an acquisition. Twenty-four percent of high-value... Investors looking to boost their returns have long attached strings to how private tech companies...

Source: The Information Research

Markdowns Squeeze Employee Stock

By Alfred Lee · Jul 13, 2016 6:49am PDT · 1 comment

It’s no secret that the gap has been steadily narrowing between what mutual funds think some private tech firms are worth and where those firms have issued employee stock options. But in the past couple of quarters the gap has disappeared entirely for some companies.In the past six months, the half-dozen biggest mutual fund investors in... It’s no secret that the gap has been steadily narrowing between what mutual funds think...

Amazon CEO Jeff Bezos. Photo by AP.

Prime Time for Subscriptions on Amazon

By Steve Nellis · Jul 12, 2016 10:02am PDT · 6 comments

Amazon CEO Jeff Bezos. Photo by AP.

Prime Time for Subscriptions on Amazon

By Steve Nellis · Jul 12, 2016 10:02am PDT · 6 comments

Amazon is now selling so many different subscription services that a consumer signing up for every single one would spend $839 a year. And that means subscriptions are an increasingly important part of Amazon’s revenue. The flagship $99-a-year Prime subscription alone could generate up to 7% of Amazon’s U.S. e-commerce revenue,... Amazon is now selling so many different subscription services that a consumer signing up for...

Presumptive Democratic Presidential Nominee Hillary Clinton. Photo by Bloomberg.

Snapchat Misses Out on Big Political Ad Dollars

By Cory Weinberg and Tom Dotan · Jul 12, 2016 7:02am PDT

This year’s election season was declared early on the “Snapchat election,” reflecting how political campaigns were expected to use the app for getting their message out to young people. But that doesn’t appear to extend to political advertising, where Facebook and Google dominate the digital ad spending.Ad buyers and... This year’s election season was declared early on the “Snapchat election,”...

Illustration by Matt Vascellaro.

Where Cars and Drones Collide

By Amir Efrati · Jul 11, 2016 10:01am PDT · 5 comments

If the idea of a drone flying into your backyard and setting down a package from Amazon.com strikes you as something out of “The Jetsons,” how about this alternative. A self-driving car arrives outside your house and a robot rolls out and delivers a package to your front door.As fantastical as either concept might seem, they’re... If the idea of a drone flying into your backyard and setting down a package from Amazon.com...

House Majority Leader Kevin McCarthy. Photo by Bloomberg.

Hope for Tax Break on Private Tech Options

By Reed Albergotti · Jul 11, 2016 7:01am PDT

One of the biggest drawbacks for startup employees who receive stock as part of their compensation can be taxes. When employees’ restricted stock vests or they exercise options, they have to pay taxes on any built-in gains, even if they can’t sell the stock. A congressional bill expected to be introduced early this week aims to... One of the biggest drawbacks for startup employees who receive stock as part of their...

The Information You Missed This Week

By The Information Staff · Jul 9, 2016 8:01am PDT

The Weekly Digest

The Information You Missed This Week

By The Information Staff · Jul 9, 2016 8:01am PDT

Good Morning! It has been a week of saddening news in America. Let’s get right to our stories. Good Morning! It has been a week of saddening news in America. Let’s get right to our...

The Information’s 411 — Fully Vested

By Steve Nellis · Jul 8, 2016 2:34pm PDT

In this week’s podcast, Zara talks about her exclusive interview with Didi Chuxing’s first angel investor. Tom and Amir share what they’ve learned at Allen & Co’s annual media and tech retreat in Sun Valley, where the fleece vests and deal talk were abundant. In this week’s podcast, Zara talks about her exclusive interview with Didi Chuxing’s...

Top Comments of the Week

By The Information Staff · Jul 8, 2016 12:12pm PDT

Here are this week’s top comments as selected by our reporters and editors. Here are this week’s top comments as selected by our reporters and editors.

Verizon CEO Lowell McAdam at Sun Valley this week. Photo by Bloomberg.

Changes Likely Afoot for Ownership of AwesomenessTV

By Tom Dotan and Amir Efrati · Jul 8, 2016 8:47am PDT

SUN VALLEY, ID—Pay TV rivals Verizon and Comcast will soon find themselves unlikely partners in AwesomenessTV, perhaps the most successful digital media studio in recent years. But Verizon CEO Lowell McAdam on Thursday dropped a hint that this state of affairs wouldn’t last.That raises the possibility that Verizon will move to buy... SUN VALLEY, ID—Pay TV rivals Verizon and Comcast will soon find themselves unlikely...

Zynga CEO Mark Pincus, Facebook CFO David Wehner and Facebook CEO at Mark Zuckerberg at Sun Valley this week. Photo by Bloomberg.

What We Learned at Sun Valley

By Amir Efrati and Tom Dotan · Jul 8, 2016 7:02am PDT

Zynga CEO Mark Pincus, Facebook CFO David Wehner and Facebook CEO at Mark Zuckerberg at Sun Valley this week. Photo by Bloomberg.

What We Learned at Sun Valley

By Amir Efrati and Tom Dotan · Jul 8, 2016 7:02am PDT

This week’s column comes from Amir Efrati and Tom Dotan, reporting from Allen & Co.’s annual Sun Valley conference this week. The gathering began more than 30 years ago as a forum for traditional media companies. But the power long ago shifted to tech companies. That’s reflected in the attendee list and much of what goes on... This week’s column comes from Amir Efrati and Tom Dotan, reporting from Allen &...

Walt Disney CEO Bob Iger. Photo by Bloomberg.

ESPN Takes a Baby Step Outside the Bundle

By Amir Efrati and Tom Dotan · Jul 7, 2016 7:05pm PDT

Walt Disney’s ESPN sports network plans to unveil a package of live programming it will offer directly to consumers on the Web, said a person with knowledge of the plans. The move is a baby step towards ESPN becoming a direct-to-consumer service.ESPN’s new offering won’t include high-value content like professional football or... Walt Disney’s ESPN sports network plans to unveil a package of live programming it will...

Chinese angel investor Wang Gang. Photo by Zhang Yong.

The Angel Investor Behind Didi Chuxing

By Zara Zhang · Jul 7, 2016 7:02am PDT

In 2012, two executives at Alibaba pooled money to launch an app to help Chinese people hail taxis. The startup became Didi Chuxing, most recently valued at $28 billion. One of the co-founders, Cheng Wei, became CEO. The other, Wang Gang, has made so much money from Didi and an earlier stake in Alibaba that he is now one of China’s most... In 2012, two executives at Alibaba pooled money to launch an app to help Chinese people hail...

Red Hat CEO Jim Whitehurst. Photo by Flickr/Red Hat.

The Big Interview

The Only Guy Making Money Off Free Software

By Steve Nellis · Jul 6, 2016 10:01am PDT

There are now scores of venture-backed startups pushing open-source software. Some, like Cloudera, MongoDB and Docker, claim to be worth $1 billion or more. Each has a slightly different spin on the same question: How do you make money off free code?They’ve got a range of different answers, like selling tools on top of an “open... There are now scores of venture-backed startups pushing open-source software. Some, like...

Zenefits CEO David Sacks. Photo by Bloomberg.

Early Zenefits Investors Still Sitting Pretty

By Alfred Lee · Jul 6, 2016 7:01am PDT · 3 comments

Zenefits CEO David Sacks. Photo by Bloomberg.

Early Zenefits Investors Still Sitting Pretty

By Alfred Lee · Jul 6, 2016 7:01am PDT · 3 comments

Zenefits’ decision to slash its valuation by more than half has been portrayed as hurting VCs who invested early much more than recent investors and employees. But a closer look at the details suggests that series A investors will still be sitting on a paper return of 1,800% after the revaluation. And despite a previously unreported... Zenefits’ decision to slash its valuation by more than half has been portrayed as hurting...