Quotable (#217)

Mighty WeChat:

WeChat’s ability to create a bustling payments economy echoes the general success of its parent company. In September, Tencent became China’s largest company by value, surpassing state-owned China Mobile, when it reported its third-quarter revenue: $6 billion, up 52% year over year. How much of that can be attributed to Wallet and WePay was not specified: WeChat, China’s most popular messaging app, makes money largely from online gaming, advertising, and selling sticker packs. But Tencent — which began with the instant messaging app QQ and is now pursuing artificial intelligence and electric cars alongside investments in a range of companies, including China’s dominant ride-sharing operation, Didi Chuxing — did cite WePay as a major reason for its “other” businesses’ growth, which increased $726 million in the third quarter, or 348% over the same period last year. According to estimates by HSBC, based on current tech company valuations, WeChat could already be worth more than $80 billion, about half of Tencent’s market capitalization.


Further down, there’s an excellent quote from Connie Chan (of Andreessen Horowitz) on WeChat’s electronic red envelopes: “This was money as a message.”


Klint Finley thinks through Apple’s crypto stance as business strategy:

You may see Tim Cook as a champion of privacy or as an enabler of terrorism. Either way, it makes good business sense for Apple to stand up to the FBI.

Apple has been trying to position itself as a protector of privacy, a kind of anti-Google, since long before the FBI’s court order. In 2014, Tim Cook claimed on Charlie Rose that Apple has no way to decrypt messages sent through iMessage (at least as long as you don’t back them up to iCloud). And at last year’s Worldwide Developers Conference, the company’s speakers repeatedly emphasized that although apps like Siri store your data, that data stays on your device and isn’t shared with Apple.

That positioning stands in stark contrast to Google, which is heavily dependent on advertising revenue and has an incentive to gather as much user data as possible. Yes, Apple runs the iAds network, so there’s a bit of spin involved in the Cupertino company’s positioning, but it’s true that Google and Apple have very different business models overall. That, combined with the way Apple makes it dead simple to encrypt the data stored on your iPhone or Macbook, has given Apple products a reputation of being secure yet easy to use. Complying with the FBI’s request would jeopardize the company’s image as the paragon of easy security.

Of course there’s also a risk in taking on the FBI. …

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Silver Linings

In crisis, opportunity:

The stocks of America’s top weapons manufacturers are climbing as France and the US have renewed their determination to snuff out ISIS. As journalist Aaron Cantu tweeted this morning, Raytheon, Northrop Grumman, Lockheed Martin, and General Dynamics — 4 of the biggest defense contractors in the world — are expecting to have a big day on Wall Street in the aftermath of the terrorist attack in Paris, as Wall Street Journal’s Marketwatch has labeled all 4 on the far end of the “bullish” scale. …

Quotable (#81)

Hollywood brings its signature brand of coke-fueled opportunistic delirium to China watching:

But with great opportunity, comes great cost. Assessing the upside of doing business in China and its risks, [Relativity founder and CEO Ryan] Kavanaugh said: “China is the most capitalist place I’ve ever seen. It’s as capitalistic if not more capitalistic than the U.S. It doesn’t happen to be a freedom of speech society. It’s a communist society, and you have to live by their rules. … It is the single most capitalist place there is. There is more venture capital, more investment, more real estate growth — you name the industry and there are people just clamoring to grow with it. The government doesn’t want it to stop. They want to see growth, they want to see capitalism occur. They just divided capitalism and freedom of speech. Or capitalism and communism. They’re not tied.”

(What do those last two sentences even remotely mean?)

Go Amazon!

The battle to disrupt and disintermediate the stagnant paper-locked publishing and book-trade industries continues. Taking sides in the fight is a no-brainer for this blog. If you want to raise the temperature for the Old Guild, Amazon provides an address:
Hachette CEO, Michael Pietsch: Michael.Pietsch@hbgusa.com

(I hope it goes without saying that anyone wanting to amplify the revolutionary transformative e-publishing message should be polite. It’s unpleasant enough being a dinosaur in the dawning Tertiary Epoch already.)

Soft War

A fascinating insider-view history of Microsoft competitive strategy by David Auerbach:

One interesting thing did emerge (at least for me, as an employee of the company) in the antitrust discovery process: I learned that before I arrived, a war over the future took place at the highest levels of Microsoft, between the “doves” and the “hawks.” The “doves” wanted to embrace other internet companies, like Netscape (which had the best early browser) and even AOL to an extent, and share power with them; the “hawks” wanted to clamp down and try to make Microsoft the provider of internet services. The real bone of contention was Windows: here was the most profitable thing in the history of computers. But a truly aggressive internet strategy would have meant thinking about a world without Windows. This was too difficult. “I don’t want to be remembered as the guy who destroyed one of the most amazing businesses in history,” one senior executive wrote of Windows during this argument. In the end the hawks won and most of the doves left Microsoft. Then the hawks lost. …