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

Goldman Sachs President and COO Gary Cohn in San Francisco this week. Photo by Bloomberg.

What’s Going on With the Economy?

By Jessica E. Lessin · Feb 12, 2016 7:00am PST · 3 comments

Dear Subscribers,The market rout continues—worsens, even. And the tech sector is taking its punches. So the questions on my mind this week were how bad is it, how long are we going to be here and what signposts should we follow?I picked the brain of Goldman Sachs President Gary Cohn on these topics Tuesday, a day before Fed head... Dear Subscribers,The market rout continues—worsens, even. And the tech sector is taking its...

Twitter CEO Jack Dorsey. Photo by Bloomberg.

Why Twitter is Hard to Buy

By Amir Efrati · Feb 11, 2016 3:17pm PST · 2 comments

Twitter shares fell 4.5% today following a disappointing fourth-quarter earnings announcement on Wednesday. Wall Street is valuing the company at a little more than $6 billion, excluding its cash reserves. That’s five times less than it was worth a year ago. That’s why Twitter has drawn some interest from private equity firms and... Twitter shares fell 4.5% today following a disappointing fourth-quarter earnings announcement on...

Travis Kalanick, CEO of Uber, whose shares have been valued differently by different mutual funds. Photo by Bloomberg.

Inside How Mutual Funds Value Private Tech

By Alfred Lee · Feb 11, 2016 7:00am PST · 1 comment

The sudden and sizable valuation markdowns of high-flying private companies like Snapchat, Dropbox and Zenefits by mutual fund investors has been one of the biggest stories in tech, sowing fears that the market is deflating. They’ve also caused consternation among founders, who have had to defend their companies’ earlier valuations... The sudden and sizable valuation markdowns of high-flying private companies like Snapchat,...

Ted Livingston, Kik’s co-founder and CEO. Art by Matt Vascellaro.

Kik and the Coming Bot ‘Gold Rush’

By Cory Weinberg · Feb 10, 2016 10:30am PST · 5 comments

Ted Livingston, Kik’s co-founder and CEO. Art by Matt Vascellaro.

The Big Interview

Kik and the Coming Bot ‘Gold Rush’

By Cory Weinberg · Feb 10, 2016 10:30am PST · 5 comments

Eighteen months ago, teen-centric messaging app Kik partnered with companies like Vans and Comedy Central so that they could pay to blast out promotions about products or videos. It was Kik’s early foray into bots, as brands could ask questions or send canned responses depending on what keywords people used in messages.The idea flopped,... Eighteen months ago, teen-centric messaging app Kik partnered with companies like Vans and Comedy...

Snapchat CEO Evan Spiegel speaks to journalist Ken Auletta. Photo by Larry Busacca/Getty Image.

Snapchat’s Push Against Branded Content

By Tom Dotan · Feb 10, 2016 7:01am PST · 6 comments

Last summer, when Bacardi wanted to do a social media campaign for its liqueur brand St-Germain, the company first turned to Snapchat.Bacardi’s media agency, Possible Worldwide, presented the idea of a series of Live Stories videos in the style of a peep show that featured “New Girl” actress Hannah Simone interacting with... Last summer, when Bacardi wanted to do a social media campaign for its liqueur brand St-Germain,...

Source: Company Filings

Amazon’s Exploding Employee Base

By Steve Nellis and Peter Schulz · Feb 9, 2016 11:12am PST

Amazon often gets lumped in with other big tech companies like Google, Apple or Microsoft. But there’s one way it diverges from its peers: Its workforce is exploding, growing by 50 percent over the past year to nearly double the size of its nearest headcount competitor, Microsoft. (See accompanying chart.)More people are buying more stuff... Amazon often gets lumped in with other big tech companies like Google, Apple or Microsoft. But...

Honest Co. co-founder Jessica Alba. Photo by Bloomberg.

Private Tech Database

Honest Company’s Investor ‘Ratchets’

By Alfred Lee · Feb 9, 2016 7:02am PST

The Honest Company is reportedly preparing for an initial public offering in the face of a tumultuous public market. But even if the IPO struggles, many of the retailer’s investors would be cushioned against losses. That’s because they have so-called “ratchet” protections that grant them more shares to make up for drops... The Honest Company is reportedly preparing for an initial public offering in the face of a...

Former Zenefits CEO Parker Conrad at The Information Subscriber Summit in San Francisco in October.

A Lesson for Founders from Parker Conrad

By Jessica E. Lessin · Feb 8, 2016 7:12pm PST · 10 comments

Former Zenefits CEO Parker Conrad at The Information Subscriber Summit in San Francisco in October.

A Lesson for Founders from Parker Conrad

By Jessica E. Lessin · Feb 8, 2016 7:12pm PST · 10 comments

Silicon Valley is rattled tonight by the sudden resignation of Zenefits CEO Parker Conrad, an outspoken, rough-around-the-edges founder who had been under attack from multiple corners. The company, which racked up a $4.5 billion valuation by helping small businesses handle benefits and insurance, had missed its revenue projections and gotten... Silicon Valley is rattled tonight by the sudden resignation of Zenefits CEO Parker Conrad, an...

Graphic by Sam Lessin.

Modest Proposals

Why Startups Are Doomed, Part Two

By Sam Lessin · Feb 8, 2016 10:01am PST · 13 comments

Jessica’s Friday column “End of Tech Startups” argued that today’s big technology companies are nimble, smart, and well run—and that until there is another fundamental technology disruption, the window of opportunity for startups is limited to more traditional markets with less competitive players.I agree with... Jessica’s Friday column “End of Tech Startups” argued that today’s big...

Google office photo by Bloomberg.

Startup Recruiting Woes Benefit Big Tech

By Reed Albergotti and Cory Weinberg · Feb 8, 2016 7:01am PST · 5 comments

After spending her entire career at tech startups, Jennifer Maiorana took a sabbatical during much of last year. When the 34-year-old returned, the outlook for private tech companies had changed.She considered re-joining Dstillery, an ad tech company where she had worked in sales, but the public markets foreshadowed a bumpy road ahead for... After spending her entire career at tech startups, Jennifer Maiorana took a sabbatical during...

The Weekly Digest

The Information You Missed This Week

By The Information Staff · Feb 6, 2016 8:01am PST

Good Morning!Happy Super Bowl weekend. And to San Francisco residents tired of the traffic snarls caused by the hubbub, hang in there—we’re almost through. On to the news... Good Morning!Happy Super Bowl weekend. And to San Francisco residents tired of the traffic snarls...

The Information’s 411 — Enviable Titles

By Tom Dotan · Feb 5, 2016 11:30am PST

The Information's 411

The Information’s 411 — Enviable Titles

By Tom Dotan · Feb 5, 2016 11:30am PST

Twitter’s earnings next week are bound to draw attention as the instability at the company continues.On this week’s podcast, Amir elaborated on his story previewing Twitter’s revenue and user growth. It’s not all bad news for the company, as brand ads are outperforming expectations. But direct response ads are starting to... Twitter’s earnings next week are bound to draw attention as the instability at the company...

The End of Tech Startups

By Jessica E. Lessin · Feb 5, 2016 7:01am PST · 14 comments

There’s no doubt we’ve been through an unprecedented startup boom over the past decade or so, for one obvious reason. Technologies like cloud computing, collaboration tools and distribution platforms (app stores, social media) have fundamentally driven down the cost of starting a company. This is true across industries. It’s... There’s no doubt we’ve been through an unprecedented startup boom over the past...

Hortonworks CEO Rob Bearden. Photo by Hortonworks.

Overhang on Hortonworks Stock: Yahoo

By Steve Nellis · Feb 4, 2016 11:15am PST · 1 comment

Big-data firm Hortonworks’ stock price has dropped by half recently, ahead of the company’s sale of stock. But the shares could come under more pressure if Yahoo sells its big chunk of Hortonworks shares.Yahoo owns 13.8% of Hortonworks, whose technology was invented by a group of Yahoo engineers. Yahoo invested when they formed... Big-data firm Hortonworks’ stock price has dropped by half recently, ahead of the...

GitHub product chief Kakul Srivastava. Photo by Flickr/Yahoo.

What Happened at GitHub

By Steve Nellis · Feb 4, 2016 7:01am PST · 1 comment

Underlying the exodus of several GitHub executives over the past few months has been a key strategic debate: whether the company should focus on the needs of its millions of users or a small group of companies that write big checks, say several people with knowledge of GitHub’s inner workings.It’s a debate with echoes in the... Underlying the exodus of several GitHub executives over the past few months has been a key...

Twitter COO Adam Bain. Photo by Flickr/Sportsfile.

The Good and Bad In Twitter’s Ad Business

By Amir Efrati · Feb 3, 2016 7:01am PST · 3 comments

Twitter COO Adam Bain. Photo by Flickr/Sportsfile.

The Good and Bad In Twitter’s Ad Business

By Amir Efrati · Feb 3, 2016 7:01am PST · 3 comments

Twitter’s active user growth in the fourth quarter of last year was disappointing to people inside the company, according to one person briefed on the figures. That suggests next week’s earnings aren’t likely to change gloomy investor attitudes toward the company.But Twitter’s advertising business isn’t a monolith.... Twitter’s active user growth in the fourth quarter of last year was disappointing to people...

Salesforce COO Keith Block, left, with Michael Dell at the World Economic Forum in Davos last year. Photo by Bloomberg.

The Meaning Behind Salesforce’s Executive Moves

By Steve Nellis · Feb 2, 2016 9:32am PST

With the promotion of Salesforce.com’s Keith Block to chief operating officer, announced Tuesday, the company gains a potential successor to CEO Marc Benioff who can take on more of the Salesforce founder’s responsibilities with customers and within the company.Salesforce’s previous chief operating officer, George Hu, was more... With the promotion of Salesforce.com’s Keith Block to chief operating officer, announced...

Sources: RBC Capital Markets; Company Filings; The Information Research

How Twitter Stacks Up Against Rivals

By Tom Dotan and Peter Schulz · Feb 2, 2016 7:01am PST · 1 comment

Anyone wondering why Twitter might be of interest to a potential acquirer should look at the accompanying chart. It shows just how much revenue per user Twitter generates compared with its more highly valued social media rivals.Twitter’s estimated revenue per user for 2015 is two thirds of Facebook’s and many multiples of Snapchat.... Anyone wondering why Twitter might be of interest to a potential acquirer should look at the...

Facebook COO Sheryl Sandberg. Photo by Bloomberg.

Instagram’s Next Test

By Cory Weinberg · Feb 1, 2016 10:01am PST

When it wanted to promote the Los Angeles Marathon to younger runners, the race operator Conqur Endurance Group decided to try advertising on Instagram. The photo-sharing app was cheaper than Facebook, where Conqur already spent money, according to Ryan Cavinder, the race company’s marketing manager. The experience worked well enough that... When it wanted to promote the Los Angeles Marathon to younger runners, the race operator Conqur...

Google CEO Sundar Pichai. Photo by Bloomberg.

Google Signals Apple-like Direction for Nexus Phones

By Amir Efrati · Feb 1, 2016 7:01am PST · 1 comment

Google CEO Sundar Pichai. Photo by Bloomberg.

Google Signals Apple-like Direction for Nexus Phones

By Amir Efrati · Feb 1, 2016 7:01am PST · 1 comment

Google CEO Sundar Pichai and his lieutenants have signaled to colleagues and outsiders that the company wants to take greater control over its program for making “Nexus” smartphones, which are powered by Google’s Android software. The change would effectively reduce the level of involvement of hardware partners that make the... Google CEO Sundar Pichai and his lieutenants have signaled to colleagues and outsiders that the...