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The World
Boris Johnson is facing a growing revolt as Conservative MPs elected in 2019 openly plot to remove him from office over No 10 lockdown parties. More than 20 Tories who won their seats at the last general election met to discuss their concerns about Johnson’s leadership as the party was gripped by infighting. A number are preparing to submit letters of no confidence this afternoon after prime minister’s questions. (The Times)
Russian stocks took its biggest tumble since March 2020, as the Moex index has fallen 13% over past four trading days on fears of Moscow invasion of Ukraine. (Financial Times)
A third of US companies surveyed by the American Chamber of Commerce in Hong Kong said they are struggling to fill senior roles, in another sign of the impact the city’s tough travel restrictions is having on business. About 45% of the 262 companies surveyed said they had lost local Hong Kong staff who had emigrated in wake of the law, as the UK offered a path to future citizenship. (Financial Times)
China's MY2022 Olympics app, mandatory for attendees to report travel and health data, has serious encryption flaws and contains a censorship keyword list. (The Citizen Lab)
Two of the biggest U.S. wireless operators agreed to not turn on some 5G signals near airport runways, a temporary concession to address air-safety concerns that have already prompted international airlines to cancel some U.S.-bound flights. AT&T and Verizon accepted the new limits after a monthslong standoff between the cellular operators and aviation officials, who had promised to limit flights over concerns about the 5G signals’ effect on aircraft instruments. (Wall Street Journal)
Microsoft-Activision is like Disney-Fox. Maybe bigger: Microsoft agreed to buy Activision Blizzard in an all-cash deal valued at about $75 billion, using its largest acquisition by far to grab a videogame heavyweight that has been roiled by claims of workplace misconduct. The deal, if completed, would sharply expand Microsoft’s already sizable videogame operation, adding a stable of popular game franchises including Call of Duty, World of Warcraft and Candy Crush to Microsoft’s Xbox console business and its own games like Minecraft and Doom. Microsoft said the transaction would make it the world’s third-largest gaming company by revenue, behind China’s Tencent Holdings and Japan’s Sony Group. An acquisition also would mark the latest and biggest move by Microsoft CEO Satya Nadella to reshape Microsoft through a string of deals that have helped make the world’s second-highest-valued company a powerhouse in business computing and a rising giant in videogames. (Wall Street Journal, Recode)
The FTC and DOJ’s Antitrust Division kicked off a process to rewrite merger guidelines for businesses, signaling a tougher stance toward large deals. They are seeking public comment on how to “modernize enforcement of the antitrust laws regarding mergers.” Their questions to the public shed light on where they may seek to strengthen the guidelines and in what areas they could take a more forceful approach to antitrust enforcement. That focus could suggest additional scrutiny for large deals in the future, especially big tech deals, which have already been the target of increased scrutiny over the past few years. (CNBC)
Economy
Goldman’s pay raises weigh on its profit: The Wall Street giant’s compensation expenses soared 33% in 2021, contributing to a fourth-quarter earnings decline. JPMorgan and Citigroup also spent more on pay. (Wall Street Journal)
Goldman Sachs’ CEO warned of “wage inflation everywhere” after a big jump in expenses hit 4Q21 profits. David Solomon said that Goldman like other large companies was contending with higher wage demands from its employees. “There’s no question that inflationary pressures around compensation had an impact,” he added. (Financial Times)
BlackRock’s Larry Fink rejects accusations of being ‘woke’, as the head of world’s biggest asset manager defends ‘stakeholder capitalism’ in annual letter to chief executives. “Stakeholder capitalism is not about politics,” Fink said in the letter, entitled The Power of Capitalism. “It is not a social or ideological agenda. It is not ‘woke’. It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers and communities your company relies on to prosper.” Fink added that employers need to listen to keep their staff, and the pandemic revealed a "gap between generational expectations" in the workplace. Along with revealing workplace issues of racial inequality, child care and mental health, the pandemic revealed a "gap between generational expectations" at work as more young employees question pre-pandemic workplace standards. (Financial Times, Protocol)
LinkedIn’s 2022 Global Talent Trends reveals what workers want more than money: We talked to two dozen leading talent professionals around the world and reviewed proprietary LinkedIn data taken from millions of employee engagement surveys and billions of actions on our platform to understand how a caring culture has become the pivotal asset for companies worldwide. Bottom line: Company culture is having a watershed moment that’s redefining the relationship between employers and employees. Keys: (LinkedIn 2022 Global Talent Trends)
Flexibility: The old way of working is history as flex culture takes hold
Well-being: Trade burning the midnight oil for morning yoga
The Great Reshuffle: Employees are saying, ‘We can do better.’ Companies can too.
Coinbase is teaming up with Mastercard to make it easier for users to buy NFTs. Coinbase announced three months ago that it planned to make NFTs available to its customers, a big move aimed at a fast-growing market whose value rose to more than $40 billion in 2021. The Mastercard deal aims to make the process of buying an NFT simpler and easier, especially for new customers. (Protocol)
Technology
More on Microsoft/Activision Blizzard:
Microsoft’s Big Activision Bet: Microsoft is spending $68.7 billion in cash to improve the portfolio of games available on its subscription gaming service, Game Pass. That’s a very pricey way of making Game Pass more viable, although, to be fair, Microsoft isn’t the first to have taken this tack. Disney, for instance, paid even more—$69.5 billion—for 21st Century Fox’s entertainment businesses, in large part to give it more horsepower for its video-streaming service, Disney+. Still, this is a high-risk strategy, whoever is doing it. All-you-can-eat subscription streaming services have squeezed the profits that can be made from entertainment, and the same thing is likely to happen in video games. (The Information)
Microsoft’s Xbox Game Pass service now has 25 million subscribers. That’s up from the 18 million Microsoft previously reported in January last year. The Xbox Game Pass all-you-can-eat catalog of downloadable games — or the “Netflix for video games” as it’s often described — continues to attract new subscribers as Microsoft looks to extend the service. (The Verge)
A Race to Dominate the Metaverse: U.S. regulators face a challenge in deciding how to approach the huge deal. Microsoft has expanded its gaming business to surpass $10 billion in annual revenue. In anticipation of a longer review, Microsoft said it did not expect the Activision deal to close until the next fiscal year, which ends in June 2023. (New York Times)
Key Questions: 1) Will Call of Duty become an Xbox exclusive? 2) What will this mean for Xbox Game Pass? Microsoft’s most defining strategic goal for the future of its gaming business is driving subscriptions to Game Pass, which now has 25 million monthly customers. 3) What might Microsoft buy next, and how will regulators react? With the purchase of ZeniMax in 2020 and now Activision Blizzard, this may not be the end of the company’s acquisition ambitions. 4) How will Sony and the rest of the industry respond? (Protocol)
Apple shipped an estimated 22% of global smartphones in Q4 2021, down from 23% in Q4 2020, followed by Samsung at 20%, Xiaomi at 12%, Oppo at 9%, and Vivo at 8%. (Canalys)
The U.S. is reviewing e-commerce giant Alibaba's cloud business to determine whether it poses a risk to national security, as the government ramps up scrutiny of Chinese technology companies' dealings with U.S. firms. The focus of the probe is on how the company stores U.S. clients' data, including personal information and intellectual property, and whether the Chinese government could gain access to it. The potential for Beijing to disrupt access by U.S. users to their information stored on Alibaba cloud is also a concern. (Reuters)
Internal memo: Better[dot]com CEO Vishal Garg resumes full-time duties over a month after taking time off following his controversial firing of ~900 staff on Zoom. (The Daily Beast)
The ongoing rivalry between small tech companies and the industry behemoths they rely on expanded when over 40 companies signed an open letter of support for The American Innovation and Choice Online Act. The Act, introduced by Senators Amy Klobuchar (D-Minn.), Chuck Grassley, would keep large platforms like Apple and Google from excluding competitor products. It prohibits businesses from using a companies’ data to compete against it, biasing search results against competitors, or requiring other companies to buy their own services for preferential placement. It also keeps companies from preventing interoperability. (Protocol)
Smart Links
ExxonMobil aims to cut oil and gas emissions to net zero by 2050. (Financial Times)
British companies invited to join four-day week experiment. (The Times)
Martin Wolf: Business leaders have to play a better political role. (Financial Times)
Peloton is reportedly cutting up to 41% of sales and marketing staff. (Protocol)
SoftBank's China bets gear up for Hong Kong IPOs. (Nikkei Asia Review)
Average number of hours U.S. professionals spend in video conferences per week. (Statista)