U.S. House Antitrust Chairman Calls Unwinding Facebook’s Instagram Buy ‘The Right Answer’ | Technology News
WASHINGTON (Reuters) – U.S. Representative David Cicilline, the chairman of the House Judiciary Committee’s antitrust subcommittee, said on Wednesday he would be “comfortable with unwinding” Facebook Inc’s acquisition of Instagram.
The antitrust subcommittee on Tuesday released a report on Big Tech’s abuses of market power but stopped short of naming specific companies or acquisitions that must be broken up.
Cicilline, a Democrat from Rhode Island, told Reuters in an interview that Facebook should not have been allowed to buy Instagram, a deal that the Federal Trade Commission approved in 2012.
“I would be comfortable with unwinding that. I think that’s the right answer,” he said.
Facebook did not immediately respond to a request for comment. It has said previously that Instagram was insignificant at the time it was purchased and that Facebook built it into the success it has become.
Any effort to unwind the deal would entail the government filing a lawsuit and asking a judge to order the divestiture.
The congressional report released on Tuesday said that Instagram was small at the time it was purchased, but that Facebook CEO Mark Zuckerberg saw its potential and noted it was “building networks that are competitive with our own” and “could be very disruptive to us.”
According to the House panel’s report on Tuesday, the committee received an email from an unnamed former Instagram employee on Sunday that disputed Facebook’s contention that the two apps could not easily be separated.
“They can just roll back the changes they’ve been making over the past year and you’d have two different apps again,” the person wrote. “It’s turning something on and off.”
(Reporting by Nandita Bose and Diane Bartz in Washington; Editing by Chris Reese and Matthew Lewis)
Copyright 2020 Thomson Reuters.
Out on Wall Street, Alteryx (AYX) kicked off the week of trading with a bang. On Monday, the data analytics software company hiked up its revenue guidance for the third quarter and changed up its management team. In reaction, investors sent AYX stock up nearly 28% in Tuesday’s trading session.
The company is now guiding for between $126-$128 million in quarterly revenue, which would reflect a 22%-24% year-over-year increase. This new guidance is significantly higher than AYX’s original $111-$115 million forecast, and above the Street’s $114 million call.
Weighing in on the development for Wedbush, 5-star analyst Daniel Ives told clients, “This was an eye-popping Stanton-like performance and a major bounce back from a soft Q2 and puts AYX back on track heading into FY21 with improved execution a sigh of relief for the bulls.”
Based on Ives’ calculations, the new guidance would put Q3 EPS at $0.18-$0.19, above his and the consensus estimate of $0.12. It would also provide relief for shares after Q2 saw revenue growth decelerate to 17% year-over-year, from 43% year-over-year in Q1, as a result of a significant COVID-19-related slowdown that affected expansion activity with Enterprise and Global 2K customers, in the analyst’s opinion.
On top of this, AYX unveiled the new CEO, appointing industry veteran and current board member Mark Anderson, who will succeed Co-founder and Chairman Dean Stoecker. Stoecker was appointed as Executive Chairman and will continue serving as Chairman of the Board. In response to both news items, shares surged 30% in after-hours trading.
According to Ives, this move “should reassure AYX bulls as Anderson’s expertise and track record with scaling enterprise software organizations, most recently with Palo Alto Networks, keeps the company in good hands on its march towards $1 billion in revenue.”
Expounding on this, the analyst stated,
Microsoft is one of the favorites to buy networking and cell phone company, Nokia, according to a leading mobile analyst firm.
CCS Insight’s predictions for 2021 include the claim that Nokia will be bought by a major U.S. tech company next year, with both Microsoft and Intel named as likely buyers.
Microsoft and Nokia, of course, have history. In 2013, Microsoft paid over $7 billion for Nokia’s handset business in an ill-fated attempt to provide a third alternative to iPhone and Android handsets with Windows Phone. It failed miserably, with the purchased assets from Nokia written off in 2015, resulting in thousands of job losses.
Although Nokia has since re-entered the cell phone business, it’s not that arm of the business that would prove attractive to the potential buyers. Instead, it’s Nokia networking arm that would interest the American giants, according to CCS, with the U.S. government banning telecoms providers from using equipment from Chinese suppliers such as Huawei.
Nokia last week clinched a deal to become the largest equipment supplier to the U.K.’s biggest telecoms provider, BT. That won’t have failed to attract attention on the other side of the Atlantic, according to CCS Insight’s director of consumer and connectivity, Kester Mann.
“We feel that Nokia could be slightly vulnerable to an acquisition,” said Mann.
“Microsoft has taken a real interest in the telecoms space. Already we’ve seen two acquisitions by them this year [Metaswitch and Affirmed Networks]… which is all about getting some expertise in the 5G and telco space and some contacts within industry. We believe Nokia could be a potential target for someone like Microsoft.”
The backlash against Chinese suppliers would also make an acquisition of the Scandinavian firm more attractive to Microsoft and other U.S.
Adds context, background
TOKYO, Oct 5 (Reuters) – Japan’s NEC Corp 6701.T said on Monday it had agreed to buy Swiss financial software company Avaloq Group AG for 2.05 billion Swiss francs ($2.2 billion), a move that will spearhead its entry globally into digital finance software.
The deal is expected to be completed by April 2021 after necessary approvals, NEC said in a statement. Source text for Eikon:
Privately-held Avaloq, the top provider in Europe of financial asset management software, reported sales of 610 million Swiss francs ($664 million) last year, 70% of which came from Europe.
NEC has spent the last decade restructuring unprofitable units that lost business to price-competitive Asian rivals, selling its semiconductor, personal computer and smartphone units.
The company has since focused on providing governments and businesses with solutions services using its technologies in biometrics, healthcare, data analyses and telecommunications.
It recently received a 64.5 billion yen ($560 million) investment from Japanese telecoms company Nippon Telegraph and Telephone (NTT) 9432.Tto beef up its efforts to develop fifth-generation (5G) wireless technologies.
($1 = 0.9184 Swiss francs)
(Reporting by Chris Gallagher and Makiko Yamazaki; Editing by Muralikumar Anantharaman and Jane Wardell)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
TOKYO (Reuters) – Japan’s NEC Corp 6701.T said on Monday it will buy Swiss financial software company Avaloq Group AG for 2.05 billion Swiss francs ($2.2 billion), a move that will spearhead its entry globally into finance software.
NEC will acquire unlisted Avaloq, Europe’s top provider of financial asset management software, from Avaloq’s founder and employees and private equity firm Warburg Pincus, which has a 45% stake and engineered the sale.
Avaloq, whose customers include Deutsche Bank DBKGn.DE and HSBC HSBA.L, reported sales of 610 million Swiss francs ($664 million) last year, 70% of which came from Europe.
The deal will allow NEC to offer cloud services acquired through the merger combined with its own biometrics and data analysis products to financial institutions and governments as digitalisation gathers pace.
It has spent the last decade restructuring unprofitable units that lost business to price-competitive Asian rivals, selling its semiconductor, personal computer and smartphone units.
NEC said it will target Japan, where financial institutions have been slow to move online and new Prime Minister Yoshihide Suga has pledged to modernise outdated government systems.
“Japan is lagging in financial digitalisation and this will be a big trend,” Chief Executive Takashi Niino told a news briefing.
The deal follows NEC’s 2018 acquisition of British IT services company Northgate Public Services, whose customers include London’s Metropolitan Police, and 2019 purchase of Danish e-government services firm KMD for more than $1 billion.
NEC “share my ambition for Avaloq to continue to shape the future of the financial industry by continuing to invest heavily in R&D,” Avaloq founder Francisco Fernandez said in a statement.
Warburg Pincus had been targeting a 2020 sale or listing of Avaloq, Reuters reported last year.
NEC recently received a 64.5 billion yen ($560 million) investment from