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Microsoft closes its $7.5B purchase of code-sharing platform GitHub
After getting EU approval a week ago, today Microsoft’s acquisition of GitHub, the Git-based code sharing and collaboration service with 31 million developers, has officially closed. The Redmond, WA-based software behemoth first said it would acquire GitHub for $7.5 billion in stock in June of this year, and after the acquisition closed it would continue to run it as an independent platform and business.
The acquisition is yet another sign of how Microsoft has been doubling down on courting developers and presenting itself as a neutral partner to help them with their projects.
That is because, despite its own very profitable proprietary software business, Microsoft also has a number of other businesses — for example, Azure, which competes with AWS and Google Cloud — that rely heavily on it being unbiased towards one platform or another. And GitHub, Microsoft hopes, will be another signal to the community of that position.
In that regard, it will be an interesting credibility test for the companies.
As previously announced, Nat Friedman, who had been the CEO of Xamarin (another developer-focused startup acquired by Microsoft, in 2016), will be CEO of the company, while GitHub founder and former CEO Chris Wanstrath will become a Microsoft technical fellow to work on strategic software initiatives. (Wanstrath had come back to his CEO role after his co-founder Tom Preston-Werner resigned following a harassment investigation in 2014.)
Friedman, in a short note, said that he will be taking over on Monday, and he also repeated what Microsoft said at the time of the deal: GitHub will be run as an independent platform and business.
This is a key point because there has been a lot of developer backlash over the deal, with many asking if GitHub would become partial or focused more around Microsoft-based projects or products.
“We will always support developers in their choice of any language, license, tool, platform, or cloud,” he writes, noting that there will be more tools to come. “We will continue to build tasteful, snappy, polished tools that developers love,” he added.
One of those, he noted, will be further development and investment in Paper Cuts, a project it launched in August that it hopes will help address some of the gripes that its developer-users might have with how GitHub works that the company itself hadn’t been planning to address in bigger product upgrades. The idea here is that GitHub can either help find workarounds, or this will become a feedback forum of its own to help figure out what it should be upgrading next on the site.
Of course, the need to remain neutral is not just to keep hold of its 31 million developers (up by 3 million since the deal was first announced), but to keep them from jumping to GitHub competitors, which include GitLab and Bitbucket.
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Quizlet hits 50M monthly users
Most students in the U.S. have used or at least heard of Quizlet, the website for creating digital flashcards.
The company leverages machine learning to predict in which areas its users need the most help and provides 300 million user-generated study decks, maps, charts and other tools for learning.
Roughly eight months after closing a $20 million financing, Quizlet chief executive officer Matthew Glotzbach has disclosed some notable feats for the emerging edtech: it’s reached 50 million monthly active users, up from 30 million one year ago, and though it’s not profitable yet, its revenue is growing 100 percent YoY.
As a result of its recent growth, the company is opening its first office outside of Silicon Valley, in Denver.
“We by no means feel like our work is done; 50 million is a very small fraction of the 1.4 billion students on the planet,” Glotzbach told TechCrunch. “Our focus is growing the platform. If we continue to be successful in that mission, we will be the largest study and learning brand.”
The company has been around for a while. Founded in 2005 by then 15-year-old Andrew Sutherland, Quizlet was fully bootstrapped until 2015.
Its growth really began when Glotzbach, a seasoned executive most recently at YouTube, took the reigns in 2016. The $20 million round earlier this year, its largest yet, has allowed the company to blossom, too. Led by Icon Ventures, with participation from Union Square Ventures, Costanoa Ventures and others, it brought Quizlet’s total raised to just over $30 million.
Part of its growth, according to Glotzbach, has to do with its recent focus on its international users. The site has always been accessible around the world, but not until late 2016 did Quizlet begin offering the tool in other languages. Today, it’s available in more than 15 languages, a number the company is actively working to expand.
Newly added capabilities have also contributed to recent spikes in MAUs. Students can now access diagram-based content, which is helpful for STEM subjects, an area the company has historically been less helpful with.
Quizlet operates a freemium model but has three subscription products for power users. At $12 per year, Quizlet Go has no ads and provides an offline studying option on mobile. Quizlet Plus, at $20 per year, also provides an ad-free study experience, as well as image uploading and voice recording capabilities. Finally, Quizlet for Teachers offers educators a $35 per year option that lets them create their own decks for students and access to additional data, analytics and reporting.
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NBA All-Star Michael Jordan leads a $26 million round for esports group aXiomatic
NBA legend Michael Jordan is playing the esports game now, leading a $26 million round of funding for the ownership group aXiomatic.
For Jordan and new co-investor Declaration Capital — the family office investing the personal wealth of David Rubenstein, who co-founded and serves as co-executive chairman of the multi-billion-dollar private equity firm, The Carlyle Group — investing in esports looks like a slam dunk.
The company announced the investment from Jordan, Declaration Capital and Curtis Polk, the managing partner and alternate governor of Hornets Sports & Entertainment, and manager of the financial and business affairs of Michael Jordan and his related companies, earlier today. Bloomberg reported the $26 million figure.
As owners of the TeamLiquid esports franchise, which Forbes estimates as the second most valuable gaming team in the industry, aXiomatic has a solid base in the budding world of esports — an increasingly lucrative market.
Indeed, the most successful esports company, Cloud9, just raised $53.6 million in a new round of funding, according to documents filed with the Securities and Exchange Commission.
“I’m excited to expand my sports equity portfolio through my investment in aXiomatic. Esports is a fast-growing, international industry and I’m glad to partner with this great group of investors,” said Jordan, in a statement.
Athletes and owners of professional sports teams have flooded into the esports industry, plunking down $20 million to own teams in the officially sanctioned Overwatch League and placing similar-sized and smaller bets on companies developing services for the esports ecosystem.
The Philadelphia 76ers were among the first NBA teams to dip their toe in the esports waters when they acquired Team Dignitas in a deal that was rumored to be worth up to $15 million at the time. Earlier this year, Dignitas brought home a world championship in RocketLeague for the Sixers.
Now, the Golden State Warriors, Cleveland Cavaliers and Houston Rockets are all backing esports teams in Riot Games’ League of Legends tournaments, according to a recent report in Bloomberg.
“The next generation of sports fans are esports fans,” said Ted Leonsis, co-executive chairman of aXiomatic and the founder, chairman, chief executive and majority owner of Monumental Sports & Entertainment (which owns the Washington Wizards, Capitals and the WNBA Mystics franchise), in a statement. “Esports is the fastest-growing sector in sports and entertainment, and aXiomatic is at the forefront of that growth. We are thrilled to welcome Michael and Declaration Capital to aXiomatic and look forward to working together on some truly cutting-edge opportunities.”
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Snapchat loses 2M more users in Q3 as shares sink to new low
Snapchat continued to shrink in Q3 2018 but its business is steadily improving. Snapchat’s daily active user count dropped again, this time by 1 percent to 186 million, down from 188M and a negative 1.5 percent growth rate in Q2. User count is still up 5 percent year-over-year, though. Snapchat earned $298 million in revenue with an EPS loss of $0.12, beating Wall Street’s expectations of $283 million in revenue and EPS loss of $0.14, plus a loss of a half a million users.
Snap entered earnings with a $6.99 share price, close to its $6.46 all-time low and way down from its $24 IPO opening price. Snap lost $325 million this quarter compared to $353 million in Q2, so it’s making some progress with its cost cutting. That briefly emboldened Wall Street, which pushed the share price up 8.3 percent to around $7.57 right after earnings were announced.
But then Snap’s share price came crashing down to -9.3 percent to $6.31 in after-hours trading. The stock had been so heavily shorted by investors that it only needed modest growth in its business for shares to perk up, but the fear that Snap might shrink into nothing has investors weary. Projections that Snap will lose users again next quarter further scared off investors.
Worringly, Snapchat’s average revenue per user dropped 12.5 percent in the developing world this quarter. But strong gains in the US and Europe markets grew global ARPU by 14 percent. Snap projects $355 million to $380 million in holiday Q4 revenue, in line with analyst estimates.
In his prepared remarks, CEO Evan Spiegel admitted that “While we have incredible reach among our core demographic of 13- to 34-year-olds in the US and Europe, there are billions of people worldwide who do not yet use Snapchat.” He explained that the 2 million user loss was mostly on Android where Snapchat doesn’t run as well as on iOS. Noticibly absent was an update on monthly active users in the US and Canada. Snap said that was over 100 million monthly users last quarter, probably in an effort to distract from the daily user shrinkage. The company didn’t update that stat, but did say the “over 100 million” stat was still accurate.
Snap CEO Evan Spiegel
Spiegel had said in a memo that his stretch goal was break-even this year and full-year profitability in 2019. But CFO Tim Stone said that “Looking forward to 2019, our internal stretch output goal will be an acceleration of revenue growth and full year free cash flow and profitability. Bear in mind that an internal stretch goal is not a forecast, and it’s not guidance.”
During the call, Spiegel responded to questions about the Android overhaul’s schedule saying, “Quality takes time. We’re going wait until we get it right”. But analysts piled on with inquiries about how Snap would turn things around in 2019. He admitted Snaps created per day had dropped from 3.5 billion to 3 billion per day, but tried to reassure investors by saying over 60% of our users are still creating snaps every day.
Spiegel said that expanding beyond the 13 to 34-year-old age group in the US and Europe, plus scoring more users in the developing world via the improved Android app would be how it restores momentum. But the problem is that courting older users could sour the perception of its younger users who don’t want their parents, teachers, or bosses on the app.
Now down to $1.4 billion in cash and securities, Snap will need to start reaching more of those international users or improving monetization of those it still has to keep afloat without outside capital.
An Uphill Battle
Q3 saw Snapchat’s launch its first in-house augmented reality Snappable games, while plans for an third-party gaming platform leak. The Snappable Tic-Tac-Toe game saw 80 million unique users, suggesting gaming could be the right direction for Snap to move towards.
It launched Lens Explorer to draw more attention to developer and creator-built augmented reality experiences, plus its Storyteller program to connect social media stars to brands to earn sponsorship money. It also shut down its Venmo-like Snapcash feature. But the biggest news came from its Q2 earnings report where it announced it’d lost 3 million users. That scored it a short-lived stock price pop, but competition and user shrinkage has pushed Snap’s shares to new lows.
Snapchat is depending on the Project Mushroom engineering overhaul of its Android app to speed up performance, and thereby accelerate user growth and retention. Snap neglected the developing world’s Android market for years as it focused on iPhone-toting US teens. Given Snapchat is all about quick videos, slow load times made it nearly unusable, especially in markets with slower network connections and older phones.
Looking at the competitive landscape, WhatsApp’s Snapchat Stories clone Status has grown to 450 million daily users while Instagram Stories has reached 400 million dailies — much of that coming in the developing world, thereby blocking Snap’s growth abroad as I predicted when Insta Stories launched.. Snap Map hasn’t become ubiquitous, Snap’s Original Shows still aren’t premium enough to drag in tons of new users, Discover is a clickbait-overloaded mess, and Instagram has already copied the best parts of its ephemeral messaging. Snap could be vulnerable in the developing world if WhatsApp similarly copies its disappearing chats.
At this rate, Snap will run out of money before it’s projected to become profitable in 2020 or 2021. That means the company will likely need to sell new shares in exchange for outside investment or get acquired to survive.
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White House belatedly begins planning for 5G with memo asking for policy recommendations
The White House has issued a memorandum outlining the need for a new national wireless connectivity strategy; the document doesn’t really establish anything new, but does request lots of reports on how things are going. Strangely, what it proposes sounds a lot like what the FCC already does.
The memorandum, heralded by a separate post announcing that “America Will Win the Global Race to 5G,” is not exactly a statement of policy, though it does put a few things out there. It’s actually more of a request for information on which to base a future policy — apparently one that will win us a global race that began years ago.
In fact, the U.S. has been pursuing a broad 5G policy for quite a while now, and under President Obama we were the first country to allocate spectrum to the nascent standard. But since then progress has stalled and we have been overtaken by the likes of South Korea and Spain in policy steps like spectrum auctions.
After some talk about the “insatiable demand” for wireless spectrum and the economic importance of wireless communications, the memo gets to business. Reports are requested within 180 days from various Executive branch departments and agencies on “their anticipated future spectrum requirements,” as well as reviews of their current spectrum usage.
The Office of Science and Technology Policy is asked to report in the same time period on how emerging tech (smart homes and grids, for instance) could affect spectrum demand, and how research and development spending should be guided to improve spectrum access.
Another report from the Secretary of Commerce will explain “existing efforts and planned near- to mid-term spectrum repurposing initiatives.”
Then, 270 days from today the various entities involved here, including the National Telecommunications and Information Administration and the FCC, will deliver a “long-term National Spectrum Strategy” that hits a number of targets:
- Increase spectrum access, security and transparency
- Create flexible spectrum management models, including standards, incentives and enforcement mechanisms
- “Develop advanced technologies” to improve spectrum access and sharing
- Improve the global competitiveness of U.S. “terrestrial and space-related industries” (which seems to encompass all of them)
It’s not exactly ambitious; the terms are vague enough that one would expect any new legislation or rules to accomplish or accommodate these things. One would hardly want a spectrum policy that decreased access and transparency. In fact, the previous administration issued spectrum memos much like these, years ago.
Meanwhile, this fresh start may frustrate those in government who are already doing this work. The FCC has been pursuing 5G and new spectrum policy for years, and it’s been a particular focus of Chairman Ajit Pai. He proposed a bunch of rules months ago, and just yesterday there was a proposal to bring Wi-Fi up to a more compatible and future-proof state.
It’s entirely possible that the agency may have to justify and re-propose things it’s already doing, or see those actions and rules questioned or altered by committees over the next year. From what I heard this whole effort from the White House was pursued without much participation from the FCC. I’ve contacted the Chairman’s office for details (he’s out of the country presently and had no prepared statement, which may give you an idea of his level of involvement).
FCC Commissioner Jessica Rosenworcel was not enthusiastic about the memo.
“We are ripping up what came before and starting with a new wireless policy sometime late next year. But the world isn’t going to wait for us,” she said in a statement provided to TechCrunch. “Other nations are moving ahead with strategies they are implementing now while we’re headed to study hall — and in the interim we’re slapping big tariffs on the most essential elements of 5G networks. If you stand back and survey what is happening, you see that we’re not expediting our 5G wireless leadership, we’re making choices that slow us down.”
Whether this new effort will yield worthwhile results, we’ll know in 270 days. Until then the authorities already attempting to make the U.S. the leader in 5G will continue doing what they’re doing.
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Daily Crunch: Tesla is profitable again
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here:
1. Tesla earns its first profit in two years
Tesla reported a profit in the third quarter, reversing seven consecutive quarters of losses. This is only the third time in the company’s history that it has achieved this milestone.
The turnaround was driven by sales of the Model 3. The company said customers are trading up their relatively cheaper vehicles to buy a Model 3, even though there is not yet a leasing option and the starting price was $49,000.
2. Trump has two ‘secure’ iPhones, but the Chinese are still listening
A new report by The New York Times puts a spotlight on the president’s array of devices and how he uses them. However, both Trump and a spokesperson for China’s foreign ministry have denied the story.
(BRENDAN SMIALOWSKI/AFP/Getty Images)
3. Red Dead Redemption 2 sets the bar high for the next generation of open world games
Tomorrow, Red Dead Redemption 2 goes live after months of breathless speculation. And according to Devin Coldewey and Jordan Crook, it’s as good as you’ve been hoping.
4. Facebook is building Lasso, a video music app to steal TikTok’s teens
Facebook is building a standalone product where users can record and share videos of themselves lip syncing or dancing to popular songs, according to information from current and former employees.
5. One-year-old Ribbon raises $225m to remove the biggest stress of home buying
The startup wants to replace the incredible stress of securing a mortgage during the home-buying process with a Ribbon Offer: If a buyer can’t secure a mortgage in time for close, Ribbon will pay for the house itself and give the buyer extra time to get financing.
6. Twitter beats Wall St Q3 estimates with $758M in revenue
Twitter reported a 29 percent increase in ad revenue to $650 million, and the company says total ad engagements increased 50 percent year over year. However, user growth didn’t quite match expectations.
7. Confirmed: ShopRunner acquires Spring, raises $40M
ShopRunner is announcing its first infusion of venture funding under CEO Sam Yagan, plus an acquisition of the shopping app Spring. Sources also say it’s readying a major overhaul of its mobile app.
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Red Dead Redemption 2 will let you use your tablet as a map, no pausing required
The bigger these massive GTA-style sandbox games get, the harder it becomes to remember where the hell everything is. Even with Spider-Man, a game set in a loose recreation of a city I’ve been to a bunch of times, I found myself pausing to see the map and reorient myself every other mission.
Rockstar doesn’t want you having to pause Red Dead Redemption 2, its massively awaited title that’ll finally land later this week. Hell, they’re happy to let you turn the on-screen map and HUD off entirely, if you think it’s killing the immersion.
That’s why the company just announced the aptly named “Red Dead Redemption 2 Companion App.” Download the app to your iOS or Android device, link up your PS4/Xbox, and your smartphone/tablet becomes your map. It’ll let you view your current in-game position, swipe/zoom around to see what’s nearby and set waypoints that’ll show up back in the game to lead the way.
Now, RDR2 isn’t the first game to chart out the companion app territory. EA released companion apps for a few recent titles (Mirrors Edge, FIFA, etc), and Bethesda built a super in-depth Pip-Boy companion app back in 2015 for Fallout 4. Rockstar itself was tinkering with companion apps with Grand Theft Auto 5 way back in 2013. But as an obsessive map checker, I’m loving this one all the same.
In addition to the map, the RDR companion app will also show you your character’s running stats and vitals, and let you view his in-game journal to recap the story so far. The app will ship on October 26th, the same day the game itself goes live.
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Facebook launches Candidate Info where politicians pitch on camera
Facebook wants to make YouTube-style monologue videos the new way for politicians to talk straight with their constituency. Today, Facebook launches Candidate Info, featuring thousands of direct-to-camera vertical videos where federal, state and local candidates introduce themselves and explain their top policy priority, qualifications and biggest goal if they win office. Elizabeth Warren (D – MA Senate), Scott Walker (R – WI Governor) and Beto O’Rourke (D – TX Senate) have already posted, and Facebook expects more candidates to jump in shortly.
These videos will soon be available as part of an Election 2018 bookmark in the Facebook mobile app’s navigation drawer. And starting next week, the clips will begin appearing to potential constituents in the News Feed.
Facebook tells me these videos will make it easier for people to learn about and compare different candidates. The effort extends the Town Hall feature Facebook launched in 2017 that offers a personalized directory of candidates they could vote for. Candidate Info will similarly only show videos from politicians running in elections relevant to a given user, so if you’re in California you won’t see videos from the Texas senate race between O’Rourke and Ted Cruz. But you can still find their videos on their Facebook Pages.
With the mid-terms fast approaching, Facebook is trying to do everything it can to protect against election interference by foreign and domestic attackers, offer transparency about who bought campaign ads, connect users to candidates and encourage people to register and vote. With fake news that spread through the social network thought to have influenced the 2016 election, and ill-gotten Facebook user data from Cambridge Analytica applied to Donald Trump’s campaign ad targeting, Facebook is hoping to avoid similar problematic narratives this time around.
You can see some examples of Candidate Info videos below from O’Rourke and Wisconsin Governor Scott Walker.
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Voting is a social experience
If your Instagram followers aren’t aware that you’ve voted, did you really even vote?
In 2018, the act of voting is great social media fodder. People want their friends to know they’ve registered to vote, or that they’ve just mailed in their absentee ballot or even that they’ve bought some sort of “look, I voted” t-shirt. These announcements are being shared across social platforms like it’s a required part of the voting process.
Whether or not those people only voted for the likes doesn’t really matter, the important thing is that they voted. Social media, because of the unprecedented access it grants people to the lives of their peers and influencers, is an effective strategy of pushing eligible voters to the polls. Why? Because people care about their friends and often even more about what their friends think of them. No one wants to be that friend that didn’t vote.
Vote.org and Outvote, a texting app for political campaigns, have taken note. The nonprofit platform for voter registration, information and advocacy has teamed up with the Y Combinator graduate to launch a new nonpartisan social media app that syncs with a user’s address book to help them quickly and efficiently remind their friends to check their registration status, find their polling place location and vote.
According to Outvote’s research, one text message from a known contact made people 10 percent more likely to vote versus 8 percent from a typical conversation with a political canvasser. Using the app, you can essentially perform 2 hours of canvassing in 5 minutes, from the comfort of your own bed.
“This November, reminding your friends is your new civic duty,” Outvote co-founder Naseem Makiya said in a statement.
Outvote’s flagship app is tailored for Democrats and is meant to inspire and personalize grassroots-style campaigning. Using that app, you can send messages to your friends using Facebook Messenger, too, though the app doesn’t sync with any contacts outside of your phone’s address book.
In addition to YC backing, Outvote has raised $300,000 in seed funding. The startup was founded by Makiya, formerly of startups Moovweb and DataCamp, as well as Nadeem Mazen, the former chief executive officer of a creative agency called Nimblebot.
EARLY VOTING
You can check out your state’s early voting dates at the link in my bioAxios reported earlier today that while TV and email campaigns are still used by political campaigns, text messaging has proven to be a whole lot more successful. Per Opn Sesame, 90 percent of text messages are read within 5 minutes: “That intimate delivery, and the ability to target and personalize messages, is what makes them so effective for campaigns — but also annoying for many voters who didn’t sign up for them,” Axios’ Kim Hart wrote.
Social media companies, other avenues for targeted and personalized messaging, have stepped up their voter education efforts ahead of the midterm elections.
Snap announced yesterday that after adding a vote button to its app, more than 400,000 of its users registered to vote via TurboVote. Meanwhile, Facebook and Twitter have added small reminders to their feeds, as have Reddit, Tinder, Bumble, Lyft and several other big tech companies.
Instagram, for its part, has Taylor Swift. Her recent social media campaign, beginning with a post earlier this month prodding her fans to vote, caused a big spike in voter registrations. According to Vote.org, 65,000 people registered to vote in the 24-hour period that followed her first-ever politically fueled gram.
Since then, Swift has been sharing on her Instagram story images of her fans who voted. It’s her reward to those who followed her advice to express their political opinions.
So vote, and you may be featured on a pop star’s Instagram. That’s 2018 for you.
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A closer look at Mirror
At Disrupt SF, CEO Brynn Putnam demoed and launched Mirror, a smart gadget that sits on your wall and offers virtual fitness classes.
The $1500 device can be paired with a monthly subscription to let the user browse fitness classes, mark their progress, and follow along with other Mirror users. The idea here is that people spend thousands of dollars on gym memberships and/or huge fitness machines like the Peloton, but that Mirror offers a way to get a similar experience at home without taking up all that space.
We caught up with Putnam at the Mirror offices in NYC to check out the product and get more info.
Enjoy the video!
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