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📉 Unexpected Production Halt Dips Tesla's Q3 Deliveries Below Estimates

Today: Ad-Free Instagram: $14 | ByteDance's $6Bn Slowdown | Spotify's 150k Audiobooks

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Hello folks!

It’s Wednesday, October 4, 2023 - A day buzzing with technology news that's set to shape the future. In today's roundup:

  • Bing vs. Google: What the Microsoft CEO is saying

  • Spotify's Audiobook Gamble: A whopping 150k titles at your fingertips

  • The New Face of Instagram: Ad-free at $14? Yes, it's coming!

  • ...and more on Google's strategic shifts, ByteDance's financial dance, Google Bard's latest, and Tesla's Q3 hiccup.

Let’s dive in!

Spotlight*

Read The Information first…or them later

The Information’s journalists get the news that other newsrooms envy. That’s why their reporting on tech, media and finance has been followed by the New York Times, Bloomberg, the Wall Street Journal and dozens of other outlets more than 400 times in the last year.

*Sponsored

Tech Companies

Microsoft CEO, Satya Nadella, testified at the US Department of Justice's antitrust trial against Google, stating that Google's domination of the search market is inhibiting Bing's competitiveness, even with advancements in AI. Despite Microsoft's heavy investment in AI and the release of an AI-powered Bing, the search engine holds a mere 3.03% of the online search market compared to Google's 91.56%.

Spotify's Premium subscribers will soon have access to a selection of 150,000 audiobooks at no extra cost, starting in the U.K. and Australia before expanding to other markets. The move is anticipated to boost user engagement and address issues in the audiobook market's distribution and discoverability.

💡 Why does this matter?

This innovative move by Spotify addresses the unmet demand in the audiobook market and offers significant potential for expanding the industry.

The global audiobook market size was valued at USD 5,364.9 million in 2022 and is expected to expand at a CAGR of 26.3% from 2023 to 2030.

K.L - Business Edge

Meta plans to charge EU users a monthly fee for ad-free Instagram and Facebook access, following discussions with regulators about user data monetization.

💡 Why does this matter?

The plan to charge EU users for ad-free access to Meta's Facebook and Instagram could reshape business models in the social media industry. This move could potentially affect tech companies' revenues and change how they engage with ad and privacy regulations. It may also pave the way for subscription-based services across other platforms, creating new business and investment opportunities.

K.L - Business Edge

An antitrust case reveals that Google alters user search queries to ones that provide the company with more commercial results, without offering an opt-out option.

💡 What can we learn from this?

The antitrust case against Google has unveiled that their search engine secretly alters query terms to bring up more commercial results. Businesses in the tech industry, especially ad-driven ones, need to be aware of this unescapable, profit-driven practice and attune their strategies accordingly.

K.L - Business Edge

ByteDance, the parent company of TikTok, recorded a $6 billion operating profit in Q1, marking a turnaround from its $7 billion operating loss in 2021. The revenue rose 34% to $24.5 billion in the first quarter of 2023, meaning a current Revenue run-rate (4xQ1’23) of $98 billion.

2022 revenue increased by 38% to $85.2 billion in 2022, however, it showed a significant slowdown from the 80% growth reported in 2021. Plans for e-commerce suffered a setback in Indonesia, where direct payments via social media for online purchases are now restricted.

Apple, Google, and Amazon are under an Australian Senate probe investigating Big Tech's influence over marketplaces and democratic processes. The inquiry reviews their strategies on online misinformation, data privacy, and economic contributions.

Meta is expected to lay off employees within its Reality Labs, a unit dedicated to custom silicon development for its metaverse, with notifications due by Thursday.

Startup Scene

Greylock Partners introduces a $1 billion early-stage fund and Greylock Edge, a program to help early-stage founders. The new fund will focus on AI, enterprise and consumer software sectors with the Greylock Edge program providing brainstorming feedback on product-market fit."

AI Corner

OpenAI has released Dall-E 3, the latest iteration of its AI image generation system, with easy access via Bing Image Creator for free trials. The upgraded AI tool features superior capabilities and efficient embedding of text within images compared to its predecessor. Bing makes image generation free with Boosts for quicker processing, although generating images without Boosts takes longer.

Google is developing a privacy-focused Memory feature for its Google Bard AI to provide better, personalized user experiences without sharing the data with Google.

Markets & Money

Tesla's Q3 figures fell short due to production pauses, causing the first sequential drop in deliveries since Q2 2022. However, its 2023 vehicle target remains unchanged.

Insights & Analysis

Startups need to adapt to higher interest rates in Q4 2023 by optimizing their balance sheets. Decisions on capital efficiency should factor in after achieving product-market fit. Scaling companies with substantive capital can increase profit by deploying to risk-free, government-backed securities yielding 3% to 6%. Short-term cash flow imbalances can be mitigated by managing working capital effectively.

💡 What can we learn from this?

Increasing interest rates call for startups to reconsider their capital strategy with an eye on efficiency. Valuable for companies with meaningful capital, strategic deployment into risk-free, government-backed securities can yield the company returns of 3% to 6%. Utilizing working capital beneficially to ease cash flow imbalances also plays a critical role. These money management strategies can support startups to maintain sustainability in a time of rising interest rates.

K.L - Business Edge

Apps & Gadgets

Microsoft is unveiling the third generation of OneDrive, integrating AI-powered Copilot and a Fluent design upgrade, enhancing business-oriented file sharing and use. The updated OneDrive offers improved search, AI file recommendations, offline support, and integration within Microsoft Teams and Outlook.

Google unveils Chromebooks Plus, productivity-focused laptops starting at $399, with advanced specs and AI-powered features. Made by Acer, Asus, HP, and Lenovo, they hit the market on October 8.

Quick Links

Netflix is set to raise the cost of its ad-free subscription after the actors' strike concludes, with the price increase starting in the U.S. and Canada, and potentially ranging from $1 to $2 a month.

Apple is enforcing stricter controls on its Chinese iPhone App Store, in compliance with China's updated online software rules. This move effectively ends VPN access to government-blocked apps.

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