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Brian McCullough
Welcome to the TechMean Brain Home for Tuesday, January 14th, 2025. I'm Brian McCullough. Today, break out your 2025 headline bingo cards. Did you have Elon Musk maybe buying TikTok on there? You're a better bingo player than I am. Is the EU going to back off tech in the Trump era? More layoffs come to meta the big streaming sports play. That isn't going to happen now. And why is Barcelona a hub for spyware companies? Here's what you missed today in the world of tech. I guess I shouldn't have been surprised by this because if you think about it, this makes logical sense for all the parties involved. What if Elon bought TikTok? According to Bloomberg, Chinese officials are evaluating an option involving elon Musk acquiring TikTok US. X would take control of TikTok US and run the business concurrently, quote Beijing officials strongly prefer that TikTok remains under the ownership of parent ByteDance, the people say, and the company is contesting the impending ban with an appeal to the US Supreme Court. But the justices signaled during arguments on January 10 that they are likely to uphold the law. Senior Chinese officials had already begun to debate contingency plans for TikTok as part of an expansive discussion on how to work with Donald Trump's administration, one of which involves Musk, said the people, asking not to be identified, revealing confidential discussions. A potential high profile deal with one of Trump's closest allies holds some appeal for the Chinese government, which is expected to have some say over whether TikTok is ultimately sold, said the people. Musk spent more than 250 million doll million supporting Trump's reelection and has been tapped for a prominent role in improving government efficiency after the Republican takes office. Under one scenario that's been discussed by the Chinese government, Musk's ex, the former Twitter, would take control of TikTok US and run the business together, the people said. With more than 170 million users in the U.S. tikTok could bolster X's efforts to attract advertisers. Musk also founded a separate artificial intelligence company, xai, that could benefit from the huge amounts of data generated from TikTok. Chinese officials have yet to reach any firm consensus about how to proceed, and their deliberations are still preliminary, the people said. It's not clear how much bytedance knows about the Chinese government discussions or whether TikTok and Musk have been involved. It's also unclear whether Musk, TikTok and ByteDance have held any talks about the terms of any possible deal. Musk and his representatives did not respond to a request for comment. Musk posted in April that he thinks TikTok should remain available in the US quote In my opinion, TikTok should not be banned in the USA, even though such a ban may benefit the X platform, he wrote. On X, Doing so would be contrary to freedom of speech and expression. It is not what American stands for, end quote. Now, for its part, TikTok is denying all this, calling it pure fiction. But I don't know, we can't be expected to comment on pure fiction, a TikTok rep said in a reply to Variety's request for comment. Beijing based ByteDance has not indicated that it is exploring the sale of its approximately 40% stake in TikTok to an entity or investor group that would meet with US approval. Meanwhile, Chinese officials previously indicated that if ByteDance did try to sell the stakeholders in TikTok, such a move would be blocked because it would represent a technology export, end quote. As Alex Heath pointed out on X in Elon Musk's very first meeting with then Twitter employees, he told them he wanted this app to be a lot more like TikTok, end quote. Meanwhile, sources are telling the Financial Times that the EU is reviewing its DMA probes into US Tech giants, which began from March of last year, as US groups urge Trump to intervene in these regulatory interventions. The EU says, quote, there is no such review, but again, I can see the angles here. Brussels is reassessing its investigations of tech groups including Apple, Meta and Google, just as the US Companies urge President Elect Donald Trump to intervene against what they characterize as overzealous EU enforcement. The review, which could lead to the European Commission scaling back or changing the remit of the probes, will cover all cases launched since March last year under the EU's Digital Markets Regulations, according to two people briefed on the move. It comes as the Brussels body begins a new five year term amid mounting pressure over its handling of the landmark cases and as Trump prepares to return to the White House next week. It's going to be a whole new ballgame with these tech oligarchs so close to Trump and using that to pressure us, said a senior EU diplomat briefed on the review. So much is up in the air right now, end quote. All decisions and potential fines will be paused while the review is completed, but technical work on the cases will continue, the official said. While some of the investigations under review are at an early stage, others are more advanced charges in a probe into Google's alleged favoring of its App Store had been expected last year. Two other EU officials said Brussels regulators were now waiting for political direction to take final decisions on the Google, Apple and Meta cases. The review comes as EU lawmakers call for the commission to hold its nerve against US Pressure while Silicon Valley chiefs hail Trump's return as the start of an era of lighter tech regulation. Mark Zuckerberg, Meta's chief executive, on Friday called on the president elect to stop Brussels fining U.S. tech companies, complaining that EU regulators had forced them to pay, quote, more than $30 billion in penalties over the past 20 years. Zuckerberg, who recently announced plans to abolish fact checking on Facebook and Instagram potentially running foul of EU rules, said he was confident the incoming Trump administration wanted to defend American interests abroad. End quote Looks like that year of efficiency is bleeding into New Year's. Meta plans to cut around 5% of its lowest performers this year, including those who have been with Meta for a long time. What does that mean? Quoting Bloomberg I've decided to raise the bar on performance management and move out low performers faster, chief Executive Officer Mark Zuckerberg said in the memo. We typically manage out people who aren't meeting expectations over the course of a year, but now we're going to do more extensive performance based cuts during this cycle, end quote. The company expects to reach 10% of non regrettable attrition by the end of the current performance cycle, which includes roughly 5% non regrettable attrition from 2024. MEMO shows quote this means we are aiming to exit approximately another 5% of our current employees who have been with the company long enough to receive a performance rating, the company said. Zuckerberg noted that the company would, quote, provide generous severance, end quote. What was I just saying about big private startups so flush with cash they may not need to IPO right away? Well, this is kind of that. Sources say Databricks secured more than $5 billion in its largest debt raised to date from lenders including Blackstone and Apollo after raising $10 billion in equity just in December. Quoting Bloomberg the tech firm, which is one of the world's most valuable closely held companies, tapped JPMorgan Chase to arrange the financing last year and plans to use the proceeds to offset tax burdens associated with stock sales from staffers, Bloomberg reported. The debt deal comes alongside a $10 billion equity funding round Databricks announced at the end of last year that lifted its valuation to 62 billion do direct lenders are providing a 2.25 billion term loan as well as a $500 million delay draw tranche that databricks can tap later, said the people, who asked not to be identified because the details of the transaction are private. The debt, which has a structure tied to the company's annual recurring revenue, pays 4.5 percentage points over the secured overnight financing rate, they said. ARR loans have become a popular avenue for private credit firms to extend loans to fast growing software companies that are yet to turn a profit. In ARR loans, creditor safeguards are set on measures of a company's recurring revenue, which is typically based on long term contracts instead of earnings. Databricks said. In December it expects to cross $3 billion in annualized revenue and to generate positive free cash flow in its fourth quarter, which ends January 31st. Sales increased more than 60% in the prior three month period, a rapid pace of expansion at a time when many software makers are struggling with growth. The company said it will use proceeds from its $10 billion equity raise for new AI products, acquisitions and a significant expansion of its international go to market operations, as well as to buy shares owned by current and former employees. Thrive Capital led that funding round alongside firms including Andreessen, Horowitz and dst. Global databricks make software to ingest, analyze and build artificial intelligence apps with complicated data from a variety of sources. Snowflake and some of the services offered by cloud infrastructure vendors like Microsoft's Fabric are generally considered its main competitors. End quote Growing your small business in 2025 all comes down to how well you can hire better hires. Start With Smarter Insights LinkedIn has the strongest hiring data and insights to help you identify the right candidates so you can make the best hiring decisions. 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Start with Smarter insights and LinkedIn has the strongest hiring data and insights to help you identify the right candidates so you can make the best hiring decisions. Start the new year off hiring smarter with LinkedIn. LinkedIn pairs you with the best candidates using data you won't find anywhere else, from unique skills and interests to the connections you have in common. No wonder that based on LinkedIn data, 72% of small and medium businesses using LinkedIn say that LinkedIn helps them find high quality candidates. LinkedIn also lets you go beyond candidates who are actively applying in a given week on LinkedIn, 171 million LinkedIn members aren't actively seeking jobs, but are open to new opportunities. That's a big pool to miss out on if you're not hiring with LinkedIn. So hire smarter in the new year with the only hiring tool I've ever used for my businesses. Post your job for free@LinkedIn.com ride that's LinkedIn.com ride to post your job for free. Terms and conditions apply. Can I catch you up on something that we missed? It's a couple days old now, but it's worth making note of Disney, Fox and Warner Bros. Discovery all decided to walk away from their venue sports streaming joint venture and will focus instead on existing products and distribution channels. This was a big deal because basically, what if Netflix but just for sports, right? Netflix is new to live events full stop, and sports generally, but the big studios have long relationships with leagues and existing rights deals, so it seemed like, you know, an interesting thing to try. But quoting the Hollywood Reporter, the decision to discontinue venue comes at the end of an eventful week for the companies with dealmaking looking to revive the service's fortunes before a fresh legal threat appeared to put it in limbo once more. On Monday, in a shocking move, Disney announced a deal to merge its Hulu plus live TV service with competitor Fubo. The combined venture would be the second biggest streaming NVPD after YouTube TV and would be run by Fubo's executive team. Even with Disney maintaining majority ownership in connection with the deal, Fubo agreed to end its antitrust case against venue. A couple days later, the Two major satellite TV firms, DirecTV and EchoStar, argued that the court should reconsider any request to lift an injunction previously issued in the case, suggesting that they may take action. A source familiar with the decision says that the move to unwind venue was made in the past few days and that the legal limbo contemplated by the satellite companies played a role. Disney, Fox and WBD announced their plan to launch a joint streaming service nearly a year ago. The service would be structured like other VMVPDs like, say, YouTube TV or Fubo, but with a dramatically smaller lineup of channels. Fox, for example, would provide the Fox broadcast networks and FS1, but not Fox News, while Disney would provide ABC and the ESPN networks, but not FX or Disney Channel. Fubo sued shortly after the announcement, arguing that Venue violated antitrust rul. Fubo, after all, considered itself a sports focused streaming service, but was unable to cut a deal with the companies to offer the same limited set of channels they were giving to their own platform. More on why this fell Apart from CNBC together, Disney, Fox and WBD control more than 50% of all U.S. sports media rights and at least 60% of all nationally broadcast U.S. sports rights, according to the judge in the antitrust case. The news that it would not launch came as a shock to Venue employees who found out late Thursday night, according to people familiar with the matter who spoke anonymously to discuss internal matters. They believed they had a pathway forward to launch the service after Disney agreed earlier this week to merge its Hulu Live TV with Fubo, settling all litigation over venue. But the judge's response in Fubo's lawsuit questioned the legality of cable bundling in general, prompting Disney to strike the deal with Fubo, through which Disney would take 70% control of the resulting company. And two days ago, satellite providers DirecTV and Dish sent letters to federal court arguing that the legal questions brought up by the judge remained unanswered. Rather than risk an extended lawsuit that could jeopardize bundling in general, including Disney's efforts to bundle its own streaming entities, espn, Hulu and Disney plus, the three companies decided to pull the plug on Venue, according to the people familiar, Warner Brothers Discovery's business model relies heavily on negotiating bundled carriage agreements for its many cable networks, including cnn, tnt, HGTV and Food Network, Disney is targeting a debut of ESPN Flagship, an all inclusive ESPN streaming service, for August 2025. The still unnamed ESPN stream will include everything that airs on ESPN's linear network. Unlike ESPN, Disney's deal with Fubo, along with the company's recent carriage renewal with DirecTV, also gives the company new ways to package so called skinny bundles, narrower selections of channels for less money. This was the idea behind Venu, selling a smaller number of linear channels for less money than traditional cable tv. Finally today, this is a weird one. Sources and business records TechCrunch has seen detail how Barcelona has emerged as an unlikely hub for spyware companies raising concerns from digital rights groups Apart from Palm Beach Networks, as it was known at the time, Barcelona is home to several exploit and spyware makers that are making the most of the city's sunny, temperate weather, fresh seafood and vibrant expat community. Among them are Paradigm Shift, which was founded by former employees of Varistan in the aftermath of that company's collapse last year, and Epsilon, which is led by Jeremy Fethuvao, an industry veteran who used to work for a division within US defense giant L3Harris that was created after the company acquired the Australian startup Azimuth. Fetevu did not return a request for comment. The city is said to also be home to an unnamed group of Israeli researchers who moved to Barcelona from Singapore to work on developing zero day exploits. The existence of this unnamed team, as well as Epsilon's presence in Barcelona, was first reported by Israeli newspapers, who sparked coverage in local newspapers and news websites. Other cybersecurity companies have a presence in Barcelona, even if they are not headquartered there. Andreja Secolark, the chief executive of Austrian cybersecurity company Safa, lives in the city, according to her public LinkedIn profile. Safa has sponsored offensive cybersecurity conferences, including OffensiveCon and Hexacon, and employs at least two security researchers with past experience at spyware companies, according to their public LinkedIn profiles. Secularik did not respond to requests for comment. The Zero Day and spyware companies are part of a broader cybersecurity and startup ecosystem in Barcelona. As of last year, according to the Catalan regional government, there were more than 10,000 people working for more than 500 cybersecurity companies in Barcelona, or around 50% more workers than five years earlier. Barcelona isn't just a hotbed for surveillance techmakers, but startups in general, with some ranking the city among the top startup hubs in Europe. The city is the founding home for food delivery startup Glovo, which competitor Delivery hero valued at 2.3 billion euro in 2021, winning when it acquired a majority stake in the Catalan company orthodontics startup impress, which raised $125 million in 2022 and $114 million last year, and business travel management platform TravelPerk, which raised 105 million in 2024among more than 2,200 other startups, according to the Barcelona and Catalonia Startup Hub, a local government project that tracks the startup ecosystem in the region. The city is attractive to workers because its cost of living is cheaper than other European startup hubs like London, Amsterdam and Berlin. Then there's the perhaps more obvious reasons, at least for anyone who's been to Barcelona. The city has nice beaches similar to Tel Aviv, Cyprus and Greece, places that are or were home to spyware companies like NSO Group Circles and Intelxa. Having Barcelona become a crucial regional outpost for offensive cybersecurity companies puts the spyware problem squarely on the doorstep of Europe, which has a fractious relationship with surveillance tech due to scandals in Cyprus, Greece, Hungary and Poland, all involving Israeli spyware makers. It is a concerning development if a major city in Europe becomes a hub for spyware makers, natalia Krapieva, the legal counsel at nonprofit AccessNow, which specializes in investigating and researching spyware, told TechCrunch. Grapiva said that the spyware business goes hand in hand with corruption and abuse of power. Nothing more for you today. Talk to you tomorrow.