Wednesday, January 2, 2019

A quick look back at 2018

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January 2, 2019

Welcome back to Data Sheet. We hope you’re feeling refreshed and reenergized after the holidays. Before we get to what’s new in 2019, here’s a quick look back at some of the newsletter’s highlights from 2018.

While we try to cover all manner of tech news, from moves by industry giants to the launch of interesting startups, you, the readers, might be most interested in the giants. Here are the 10 most read newsletter subject lines from last year—and you’ll notice the predominance of one iPhone maker in particular:

1. “Giving Trump some credit for Apple moves” (Jan. 18)
2. “Raw water is the least of our problems” (Jan. 5)
3. “Apple pulling a Zune” (Aug. 10)
4. “Apple’s big reveal” (Aug. 2)
5. “Tim Cook’s tough day” (Nov. 2)
6. “Google’s mind blowing AI demo” (May 10)
7. “Amazon’s HQ2 outposts” (Nov. 6)
8. “Facebook eviscerated over fake news” (Feb. 13)
9. “Murder in China” (Aug. 29)
10. “Satya’s next big deal” (Sept. 24)

It’s also interesting which links were most popular with readers. Here are the five links from Fortune and five from outside sources that drew the most unique readers from Data Sheet:

1. The End Is Near for the Economic Boom
2. Fortune’s 100 Fastest Growing Companies
3. What the Hell Happened at GE?
4. 25 Ways A.I. Is Changing Business
5. Former Tronc Chairman and Investor Michael Ferro Accused of Inappropriate Advances by Two Women

1. Silicon Valley Is Changing, and Its Lead Over Other Tech Hubs Narrowing (The Economist)
2. Inside the Two Years That Shook Facebook—And the World (Wired)
3. Jeff Bezos Letter to Shareholders (Amazon)
4. Slaughterbots video (YouTube)
5. The People's Republic of Cruelty (New York Times)

Just misses included two of my favorite links of the year:

Meet the 15-Year-Old Who Is the New Champion of Microsoft Excel (Fortune)
Package Thief vs. Glitter Bomb Trap (YouTube)

It turned out later that a few parts of the Glitter Bomb video had been faked. Isn’t that the perfect ending for 2018?

Aaron Pressman
@ampressman
aaron.pressman@fortune.com

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NEWSWORTHY

Netflix and chill. The CFO of Activision Blizzard, Spencer Neumann, joined the video game titan in May 2017 after a successful career at Disney. Now after a short stint, he's jumping to Netflix to take over the same role from departing CFO David Wells. But something may be amuck, as Activision said in a securities filing on Dec. 31 that Neumann was being fired for cause. Neumann may have more cash to count at his new job—Netflix is dropping the ability for customers to sign up through its apps on iPhones and iPads. That could save the company almost $1 billion in payments to Apple, TechCrunch estimates.

Meltdown. The trade war with China claimed a prominent tech industry victim. Bill Gates says his nuclear power startup, TerraPower LLC, can't continue working with the Chinese due to recent U.S. policy changes. The company had been building its first reactor with China, but now must find a new partner. "We're regrouping," CEO Chris Levesque tells the Wall Street Journal. "Maybe we can find another partner." Some U.S. artificial intelligence experts are also starting to worry that export controls may hamper their research.

A wave of my hand, a flick of my wrist. The Federal Communications Commission granted Google a waiver to test its Project Soli, an effort to create gesture-controlled devices using tiny radar arrays.

Not sitting still. Chinese transport app Didi Chuxing is branching out into financial services. The company is offering products including wealth management, credit, and lending. That seems to put Didi in competition with one of its major investors, Alibaba Group.

Fingers in the cookie jar. The European tech lobbying group Privacy International says 20 out of 34 leading apps on Android share various kinds of user data with Facebook without user permission, possibly violating the EU's General Data Protection Regulation. Apps found sharing information included Kayak, TripAdvisor, and MyFitnessPal.

Slow it down. Much hyped and powerfully-backed digital currency startup Bakkt is facing regulatory challenges and delays in launching its bitcoin futures product, crypto news site The Block reports. The startup also announced that it raised $183 million from private investors including Boston Consulting Group, the Intercontinental Exchange, Microsoft's venture capital unit, and the fintech arm of Naspers.

Up, up, and away. China last month launched the first of a planned 156 satellites to create an Internet access service for rural parts of the country. Government-owned China Aerospace Science and Industry Corp says it aims to have its entire constellation of satellites in low Earth orbit by 2022.

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FOOD FOR THOUGHT

It's about a year since prominent venture capitalist Shervin Pishevar left his firm due to sexual harassment allegations, and the state of the industry is improving but still far from fixed. Theodore Schleifer at Recode surveys the make up and hiring practices of Silicon Valley, with a data assist from All Raise, a nonprofit founded by Aileen Lee, which analyzes public hiring announcements. As Lee herself concludes: "There is no one-year-in high-five."

The numbers:

American venture capital firms have added 30 new female senior investing partners in the last ten months, according to All Raise...Firms hired more women in the second quarter of this year than any quarter in at least the previous five years.

That has felt like a lot to observers. But during the same time, the industry added 68 male partners, according to All Raise. So the percentage of women in leadership roles only rose to 9.5% from 8.9%, All Raise says. About three-quarters of U.S. venture capital firms still have zero women partners. Among the 153 firms that do boast a woman partner, it's often singular—not plural: Three-quarters of these firms only have one woman in a senior leadership position. Those are roughly the same figures as ten months ago, All Raise says.

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IN CASE YOU MISSED IT

From Meghan Markle to Mega Millions, These Were 2018's Top Google Searches By Jenna Schnuer

People Are Freaking Out About an Accidental Instagram Update By Erin Corbett

Apple's High-End iPhone Production Might Move to India By Don Reisinger

T-Mobile CEO Warns Cable Industry to Prepare for Competition By Aaron Pressman

Jack Black Wants to Be the Most Popular YouTube Gamer in the World By Laura Stampler

FCC Investigating Link Between 911 Lines Going Down Nationwide and CenturyLink's Internet Outages By Chris Morris

Advancing Both A.I. and Privacy Is Not a Zero-Sum Game By Casimir Wierzynski and Abigail Hing Wen

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BEFORE YOU GO

One of the early pioneers of computers networks and the Internet, Lawrence Roberts, died at age 81 last week. Roberts designed the Internet's precursor, Arpanet, while he worked at the Pentagon's Advanced Research Projects Agency in the 1960s. "Larry led us to uncover potential that we never would have seen," Vint Cerf, Google's chief internet evangelist and another key Internet pioneer, said.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.

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Will Recession Hit In 2019?

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January 2, 2019

Good morning.

Will a recession hit in 2019? Sorry to start the New Year on a downer, but there are more than enough reasons to think it will — a sinking stock market, a flattening yield curve, declining profits, waning fiscal and monetary stimulus, a slowing Chinese economy, a trade war, etc… As we reported shortly before Christmas, the majority of economists still think we'll avoid a downturn this year and more likely face one in 2020. Typical is this new report from Goldman Sachs , shaving its growth prediction for 2019 to 2% from 2.4%. But if there is one thing we know for certain, it is this: economists have a uniformly lousy record of predicting recessions. That's because recessions are usually precipitated by the unpredictable. In any event, I'm more inclined to agree with the Term Sheet readers who responded to Polina Marinova's survey on the 2019 outlook.

But that pessimism is for the short term only. The most far-sighted business leaders I talk with these days are preparing for an explosion of new business possibilities from the application of data-and-machine-learning-powered technologies, that will goose economic growth for the next decade and more. If a recession hits, it may only be an opportunity for the haves — those businesses who have begun preparing aggressively for the revolution — to widen their lead over the haven'ts.

At Fortune, we'll spend the year shining a spotlight on these technologies and staffing up to improve that coverage. We'll also continue to convene communities of business leaders to give them opportunities for sharing best practices. You can find the full rundown of our 2019 events here, but let me highlight a couple of new ones: Brainstorm Finance, focusing on the technological revolution that's upending the finance world, will be held for the first time June 19-20 in Montauk, N.Y. And the Fortune Global Sustainability Forum will be held September 4-6 at the indescribably beautiful Fuxian Lake in Yunnan Province, China. These are invite-only events, but we make extra effort to accommodate CEO Daily readers, so let me know if you are interested.

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com
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Top News

Bad Start

After their worst performance in a decade last year, Chinese markets began 2019 on another bleak note. A report about contraction in Chinese manufacturing led to significant falls in the Shanghai Composite (1.2%) and Hang Seng (2.8%). Stock markets in Australia and South Korea fell by 1.6% and 1.7% respectively. Europe's Stoxx 600 index reflected a 1.6% fall at the start of the day. U.S. futures are in the same ballpark. Bloomberg

Shutdown Talks

President Trump has invited Democrats to meet with him at the White House today, to discuss a possible deal over the continuing partial government shutdown. The Democrats, who take over the House tomorrow, have come up with a proposal that would end the shutdown without bowing to Trump's demand for wall funding. Trump doesn't like that, so it doesn't seem that either side is willing to give ground. The Hill

Saudi Netflix

Netflix took down in Saudi Arabia an episode of comedian Hasan Minhaj's satirical show, in which he mocked the Saudi government for its evolving attempts to explain the disappearance of journalist Jamal Khashoggi last year. The move took place following a request from the Saudi government—Netflix says it was just complying with the law there, but human rights activists are outraged. Guardian

Bolsonaro Inauguration

Jair Bolsonaro has been inaugurated as Brazil's new president. The hard-right leader, who has expressed admiration for the country's former military dictatorship, swore to adhere to democratic norms while effecting "Brazil's liberation from socialism, political correctness and a bloated state." Bolsonaro is likely to embark on a massive privatization drive, in order to improve government finances. Reuters

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Around the Water Cooler

Romney on Trump

Incoming senator and former presidential hopeful Mitt Romney has attacked Trump in a Washington Post op-ed that says "the president has not risen to the mantle of the office." Romney is fine with Trump's tax reforms, Chinese trade war and appointment of conservative judges, but not so much with his treatment of allies, nor his general character. WaPo

Chinese Property

The Chinese government is keen to slow the pace of property development in its cities, in order to make prices more realistic and to boost investment in industry instead of real estate. Commentary in state media: "All areas should focus on their own urbanisation processes, develop their own pillar industries according to population mobility and resources, and form new points of growth to avoid the old road of relying on real estate to drive the economy." Reuters

Brexit Pressure

A whopping 72% of supporters of the U.K.'s opposition Labour Party want its leader, Jeremy Corbyn, to fully support a second referendum on the country's withdrawal from the EU. Corbyn has so far expressed no keenness for any "People's Vote" that could stop Brexit—he is widely believed to believe that membership of the EU would hamper socialist reforms should Labour come to power again. Evening Standard

Air Unfare

Cathay Pacific accidentally sold first-class and business-class seats for $675 when they should have cost more like $16,000. The carrier pulled the fares, from Vietnam to New York, after travel bloggers flagged them up. However, it said it will honor those it already sold. BBC

This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.

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