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Well... the fight between Spotify, Google and Apple just heated up with Spotify raising a huge $1 billion - but not from the usual investors and funding methods. It has borrowed $1 billion in convertible debt from TPG, Dragoneer, and clients of Goldman Sachs.
Why is raising debt different than equity? Well, as TechCrunch reports that by "raising debt rather than equity, it doesn't have to worry about poor signaling from a down-round raised at a lower valuation than the $8.5 billion it set in June 2015". Spotify has confirmed the news, with TPG telling TechCrunch: "This financing gives them the strategic resources to further strengthen their leadership position", and that the money will be pumped into growth and marketing.
But what happens if Spotify doesn't do well over the next year or two? Well, this is an aggressive deal with some razor sharp terms - with TPG and Dragoneer to convert the debt to equity at a 20% discount, or whatever share price Spotify sets for its eventual IPO. If the IPO doesn't arrive within the next 12 months, this discount increases by 2.5% every 6 months. Spotify will also have to cough up 5% annual interest on the debt, and 1% more every 6 months up to a total of 10%. Yeah, it's not good at all.
The long-running lawsuit between Oracle and Google over the latter's use of Java in Android just got spicier: Oracle is seeking up to $9.3 billion in damages according to recent court filings. Lawsuit damages aren't typically a worry for the ever-rich Google, but an amount this high is plenty enough to worry even the search giant, which made $4.9 billion in profits last quarter.
The suit began in 2010 and went to trial two years later, where the jury was divided on whether Google was protected under fair use laws. A new trial is set for May 9 with a pre-trial scheduled for April 27; Oracle's Larry Ellison and Google's Eric Schmidt will take the stand, among other faces.
The new figure is about 10 times the original amount Oracle asked for, a reflection of Android's growth and subsequent releases. Google has hired a damages expert, presumably to push the figure way down. While its counter-offer isn't public, another filing indicates at least a portion of the damages are capped at $100 million. With a disparity this large, it's plausible the jury will settle somewhere in the middle (around $4.6 billion in this case, or one quarter's worth of profits for Google as opposed to two).
We know that Yahoo is in trouble and has decided to sell off its core business (seach, mail, and news sites); what we didn't know was Microsoft is allegedly in talks to be a contributor in the acquisition. Someone familiar with the matter relayed as much to Reuters, and added Microsoft wants to preserve the relationship between the two parties, which have long-running search and advertising agreements. It's also said Yahoo approached Microsoft.
Microsoft declined to comment on the reports.
As it stands, Verizon and Time Inc. (which published People and Time) are the other two companies known to be interested in acquiring Yahoo's core business.
Microsoft's CEO at the time Steve Ballmer attempted to acquire Yahoo in 2008 for $45 billion (the same as its total asset worth now).
Pebble isn't having a good time right now, with the indie smartwatch maker having issues - so much so that Pebble CEO Eric Migicovsky told Tech Insider it is cutting 25% of its workforce - or 40 people, this week.
The company has said that money is "pretty tight" right now, with the tap slowly being tightened by Silicon Valley venture capitalists. The company has raised $26 million over the last eight months, but the cash isn't flowing quick enough. Migiovsky reiterated that Pebble is here for the long-term, and they have an idea of where wearable technology is headed in the coming 5-10 years.
By early 2015, Pebble had sold over 1 million smartwatches, the month before the company launched its new Time watches - and just before the big Watch unveiling by Apple. Pebble has to convince both consumers and potential investors that it can not only survive in a now much more crowded smartwatch market, but beat the likes of Apple at its own game.
There's a lot more money to be made from Linux and open-source software than you probably realized: Red Hat just became the first open-source company to make $2 billion. This isn't the first time it's set a record, either: four years ago it became the first Linux company to make $1 billion. All this without relying on venture capitalists, no less.
Red Hat president and CEO Jim Whitehurst says "enterprises increasingly adopting hybrid cloud infrastructures and open source technologies" are largely responsible for the big numbers. In hard terms, Red Hat Enterprise Linux and cloud operating system RHEL are doing better than ever subscription-wise.
The company expects to make between $2.38 and $2.42 billion in the 2016 fiscal year; if this keeps up, they'll set another record in short order.
One of the three founders of Intel, Andrew Grove, has died at 79. Grove served as company president in 1979 and became CEO in 1987; he served as Chairman of the Board from 1997 through 2005. He is remembered as a hugely influential figure in the world of technology, an excellent manager, and as an author, public advocate for Parkinson's disease research, and philanthropist (he once donated $26 million to establish the Grove School of Engineering in New York, to name one venture).
"We are deeply saddened by the passing of former Intel Chairman and CEO Andy Grove," said Intel CEO Brian Krzanich. "Andy made the impossible happen, time and again, and inspired generations of technologists, entrepreneurs, and business leaders."
Tencent is really pulling down some coin, with the Chinese giant making nearly $16 billion last year - with over $3 billion of that coming in from smartphone game revenue.
The $3 billion from smartphone game revenue is something to note, as it's an increase of over 50% from 2014. Throughout calendar 2015, Tencent posted $3.3 billion in revenue, an increase of 53% over the same period of 2014. PC client game revenue saw "low double-digit" revenue growth year-on-year, but the company didn't elaborate on those numbers.
Over the course of 2015, Tencent earned $15.8 billion, an increase of 30% over the previous year. Net profit reached $4.5 billion, up 22%, too. For 2016, the company will develop "new and emerging smartphone game genres, via leveraging our PC game experiences, smartphone game player communities, and relationships with leading game developers".
The Bank of Korea wants to follow in Iceland's footsteps and achieve a cashless society by 2020, replacing paper entirely with credit cards and other means of payment like Samsung Pay.
It's well on its way as more Koreans than ever are choosing non-cash options for purchases than ever: 40 percent say they use credit cards more than anything else, up from last year's 30 percent; Koreans carry an average 74,000 ₩ this year versus last year's 77,000, and the central bank is issuing 12.3 percent fewer 10,000 ₩ banknotes, 5.9 percent fewer 5,000 ₩ notes, and 3.7 percent fewer 1,000 ₩ notes this year.
Lee Hyo-chan, the head of the research center at the Credit Finance Institute believes ditching paper will cut costs by somewhere between 0.1 and 1.1 percent of GDP (1.305 trillion USD in 2013). Lee notes the value of transparency, too: having a greater understanding of the underground economy gives the government and banks much better economic data to work with. Additionally, he touts decreased cash-related crime and the adoption of monetary policies like a minus interest rate to stimulate the economy, forcing citizens to spend more if they want to avoid interest.
Microsoft was one of the first major companies to accept a digital cryptocurrency as a valid payment method for their wares on the Windows app store. Though it wasn't a mainstream currency, they saw the growth potential, and wanted to give customers a wealth of choices. But they've recently decided to remove Bitcoin from their list of payment methods that are accepted.
If you happen to have a balance of Bitcoin in your wallet already, you can use those at the Microsoft Store or App store, though you can't refill the internal wallet with more Bitcoin nor can you get a refund if you wanted to get those out. That seems to indicate that the infrastructure used to process Bitcoin no longer happen to be in place. You were able to use them for any Microsoft branded store.
This is another bold move considering they were advocates of choice in 2014, and this escape from the market is quite the shock. Though there are probably practical reasons as to why they did so. Microsoft hasn't announced why they made the decision though we've reached out for comment.
I don't know why I'm writing about Kim Kardashian of all things, but her latest mobile game 'Kim Kardashian: Hollywood' has made so much money, I had to write about it.
Glu Mobile's Kim Kardashian: Hollywood made an insane $80 million, a figure that Mrs Kardashian West took to Twitter to brag about. In a tweet, Kardashian said: "sorry I'm late to the party guys I was busy cashing my 80 million video game check & transferring 53 million into our joint account". We can only guess that Kim Kardashian: Hollywood made that money throughout 2015, as the mobile game earned $13.4 million in Q4, or 24% of Glu Mobile's total revenue for the quarter.
Throughout the entire of 2015, Kim Kardashian: Hollywood made $71.8 million, or 30% of Glu Mobile's total revenue. The game is of huge importance to the company, but the earning power of the game has declined since its launch in 2014, where it made $43.4 million in revenue in Q3 alone. In the same quarter of 2015, this revenue dropped to $18.8 million. Not too bad for a game... about Kim Kardashian.
Now remember Kanye is struggling with money, begging Facebook founder Mark Zuckerberg for a loan. I'm sure this $80 million injection into their joint account will help, won't it Yeezy?