The Big Story

Executive orders for all!

Last night, President Trump put out two executive orders using almost the exact same words. One says that, as of September 20, "any transaction" with ByteDance is prohibited. The second says the same about Tencent, with specific reference to WeChat.

• "This 45-day delay will give Microsoft and other interested purchasers time to reach a deal with TikTok's owners that adequately addresses the national security concerns posed by the app," the White House told Protocol.
• What the text actually says is that, on September 20, Wilbur Ross will issue more specific rules about what happens next. There are a lot of details missing.
• One thing to notice about the orders: how often they use words like "reportedly" and "potentially." If ever the White House was going to reveal a smoking gun, you'd think this would be the moment, but instead it just rehashes most of what we already know.

The Tencent order is perhaps the more surprising of the two: After all, the ByteDance one is fairly on-brand given what's happened over the last few weeks. (That said, TikTok has threatened to sue the Trump administration over the order, arguing that the administration has "tried to insert itself into negotiations between private businesses.")

If the Tencent order is actually specific to WeChat — and according to the LA Times, it is — it could be brutal for Chinese companies with an international presence, many of whom use WeChat as a primary communication tool. A ban would be like Slack or Teams suddenly not working outside the U.S.

• And while WeChat doesn't have many users in the U.S., a ban would be felt hard by the Chinese diaspora in America who use it to communicate with friends and family in China.

But if the White House goes after Tencent as a whole? Things are going to get messy:

• Here's an incomplete list of things in which Tencent has at least a big stake: Riot Games (which makes League of Legends), Epic Games (which makes Fortnite), Activision Blizzard (Overwatch and Call of Duty), Ubisoft (Assassin's Creed), Snap, Discord, Spotify, Universal Music Group ... I mean I could keep going. Banning Tencent basically explodes the entertainment industry.

Either way, investors are very nervous: Tencent shed 10% of its market value, about $45 billion, in trading overnight.

Executive orders haven't always meant much in this administration. Or anything. But as Emily Birnbaum wrote on Protocol, these might actually have some teeth: One odd side effect of this whole story has been that suddenly CFIUS — the Committee for Foreign Investment in the United States — is on everyone's mind, because it gives the President a weapon in this fight.

At this point, it seems like pretty much all the cards are on the table, and we'll have to wait and see what happens in September. But, like I seem to say every day at the moment, nothing would shock me.

In other TikTok news: Even Mark Zuckerberg is defending the company. Instagram's TikTok rival, Reels, isn't doing so well, and is so far home to a lot of reposted content from … TikTok. That said, Charli D'Amelio, aka the most popular person on TikTok, tweeted that, "I'm going to start posting on my snapchat story more." And Carol F neatly summed up all the responses to yesterday's question about TikTok (which were surprisingly consistent!): "I am an IT professional and I would never use TikTok or any other form of video like it."

Stocks

What the market gets wrong about SaaS

Shakeel Hashim writes: When Wix's stock fell 11% after its earnings report yesterday, CEO Avishai Abrahami was disappointed, but not too concerned. The problem, he said, wasn't with the website-builder company, but with its investors.

"If you don't know Wix well enough, and you don't know SaaS well enough, then it looks like 'Oh my god, they're spending a lot of money,'" Abrahami told Protocol. But he pointed to the 12 month lag between cash collections (when customers pay) and revenues (when that money shows up in the P&L statement) as evidence that there's no need to be concerned.

• "Investors that know the company very well are super excited," Abrahami said. "More casual investors are misreading the results." That seems to be true: In a note to investors, Wedbush Securities' Ygal Arounian said he sees "plenty of positive takeaways."
• Wix President and COO Nir Zohar likened the company's increasing marketing investment to an acquisition — except marketing spend appears on the P&L. "You see the money going out, and it reduces profitability and the free cash flow, but that's only for a short amount of time," he said.

One thing Wix can't blame investors for: confusion over its web app product which is, in Zohar's words, "unfortunately named Corvid." Abrahami agreed: "We're going to have to do something about that name."

WFH

The new back-to-work normal: July 2021

Google did it. Uber did it. Now Facebook's doing it: telling employees that they're not going to have to come back to the office until next July. I suspect more companies, in tech and otherwise, are going to do the same in short order.

• Setting a date that far out lets families make decisions for the entire school year, which is crucial. So much is uncertain right now, that knowing you won't need to be in the office for another year is a big help.
• Here's what Sundar Pichai told Google a couple of weeks ago: "I hope this will offer the flexibility you need to balance work with taking care of yourselves and your loved ones over the next 12 months."

Some people will be allowed to go back to the office sooner, in most cases, and some will have to because of their roles. But it's obvious that the pandemic's not going away soon, and that what people really need is flexibility to figure out how their lives work going forward.

By the way, a fun thing to track: How much money each extended-WFH company gives employees to outfit their home office. Is this a new office perk? Or a semi-raise, almost?

• In the spring, a number of tech companies, including Facebook and Google, gave employees $1,000 to set up their home offices. And Facebook just gave employees another $1,000. In contrast, Uber didn't offer money in the first wave, and only now offered $500. (But however much you got, buy a desk chair. Trust me.)

A MESSAGE FROM QUALTRICS

Qualtrics' Work Different free virtual event, on August 12, will explore how successful organizations like Atlassian, Microsoft, the NBA, and many others are listening to and taking action on the feedback from their customers and employees to create a "new better" for their business. Register now at Qualtrics.com.

People Are Talking

Facebook fundamentally misunderstands the argument about civil rights, Color of Change's Rashad Robinson said:

• "It's almost like each time I talk to them, we end up right back in this same conversation, where they have civil rights as left and right, not right and wrong."

PayPal wants to be the loyalty card of the future, CFO John Rainey said:

• "Even more broadly, if we were to add airlines or rental cars, we provide utility with those loyalty points because our customers can use those as a funding instrument through our wallet, with any of the merchants that we process around the world."

On Protocol: HPE CEO Antonio Neri said the future of the server business is getting closer to the customer:

• "To me, the action is where we live, where we work, in hospitals and manufacturing floors, in cars or autonomous vehicles. It is easier to move the compute to the data, than the data to the compute."

Making Moves

Aaref Hilaly is heading to Bain Capital Ventures. He was previously a partner at Sequoia, and will help Bain Capital expand its footprint on the West Coast.

Thiago Sa Freire is Chorus.ai's new CRO. He joins from Hudl, and joins Chorus.ai after the company raised $45 million. He'll oversee (and expand) its sales and customer success teams.

Chris Alsup is Dell's new head of North American government affairs. He's been at Dell since 2016, and will be leading the company's government dealings both in the U.S. and Canada.

Dara Treseder is Peloton's new head of marketing and comms. She joins from Carbon, and has done stints at GE and Apple. Karina Kogan also got a promotion, and will run product marketing for the company. I just wonder what they both think of the Peloton Girl ad.

Rob Strayer is now the ITIC's global policy lead. He was formerly Deputy Assistant Secretary for Cyber and International Communications and Information Policy in the Bureau of Economic and Business Affairs, which is a truly unbelievable job title.

In Other News

• Facebook reportedly fired an employee who said the company gave preferential treatment to right-wing pages, according to BuzzFeed. The report also describes broader internal discussions about what Facebook will do if Trump undermines the election results.
• Tech job postings were down 36% year-on-year in late July, according to Indeed data, and they're currently down 21%. Ahead of today's jobs report, that's not a great sign.
• Apple said it won't allow game streaming services on the App Store, unless each game is individually submitted for review and included in search and charts. Considering the company doesn't vet everything on Netflix and HBO Max, that's an … interesting stance?
• Epic Games is now valued at $17.3 billion, after a $1.78 billion funding round. Alongside Sony, which we already knew about, the new investors are mostly institutional ones: Baillie Gifford, BlackRock and Fidelity are all in the deal.
• From Protocol: COVID isn't stopping 5G rollouts. Things aren't slowing down nearly as much as expected — seemingly a reflection on just how important the tech is.
• Uber Eats is now a bigger business than Uber ride-hailing. But that's only because ride-hailing has fallen off a cliff: It shrank 75% year-on-year last quarter, with overall revenue down 29%.
• YouTube took down almost 2,600 Chinese channels last quarter, as part of an ongoing investigation into "coordinated influence operations." Meanwhile, Twitter started labeling state-controlled news accounts, and said it would no longer amplify their tweets.
• Google added some audio-specific ad tools, allowing advertisers to buy on a range of channels including Spotify and Pandora. It's piloting podcast advertising, too: Expect fewer podcasters asking you to sign up for Squarespace, and more programmatic ads.
• Intercontinental Exchange bought Ellie Mae, a mortgage tech company, for $11 billion. That's a huge return for seller Thoma Bravo, which paid just $3.7 billion for it last year.

One More Thing

Nothing beats Excel. Not even DNA.

There's a gene in the human genome named MARCH1. Well, there was. Now it's called MARCHF1, for precisely one reason: because Excel rendered MARCH1 as a date, which screwed up all kinds of research. (Up to 20% of studies have been affected by Excel errors!) In fact, 26 other gene identifiers have been changed in the last year for the same reason. It just goes to show: You can change a lot of things, even the human genome, but you better not mess with Excel.

A MESSAGE FROM QUALTRICS

Qualtrics' Work Different free virtual event, on August 12, will explore how successful organizations like Atlassian, Microsoft, the NBA, and many others are listening to and taking action on the feedback from their customers and employees to create a "new better" for their business. Register now at Qualtrics.com.