Good morning. David Meyer here in Berlin, filling in for Alan.
Happy 21st birthday, Google! (The company was incorporated on September 4th rather than 27th, 1998, but today marks the anniversary of its eponymous search service going live.)
Google’s impact cannot be overstated; it utterly changed how we find and consume information. It is true that social media services have since partially shifted those mechanisms again, but Google remains embedded in our everyday lives, powering our navigation through both online and physical environments.
And yet, Google and parent Alphabet cannot rest on their laurels. They remain overly reliant on advertising revenues, and growth in that arena is slowing (though Google did reverse a downward trajectory in the second quarter.)
Antitrust authorities in Europe have already landed heavy blows on Google, and those in the U.S. are preparing to do the same. Meanwhile, Google’s handling of people’s sensitive personal data is being investigated by Irish authorities, who could force fundamental changes on how the entire advertising technology industry operates. Twenty-one years is a remarkable achievement, but serious headwinds loom.
Separately, as it’s Friday, time for some feedback—first, regarding Alan’s Wednesday post about the resignation of WeWork CEO Adam Neumann.
S.J. had this to say:
“First time I read about this dude, Adam Neumann, I immediately thought ‘how could smart people get duped by him?’ He’s a character right out of that show Silicon Valley.”
But G.M. turned the blame back on Fortune:
“Excuse me, Alan, there’s a lot of egg on your face with WeWork…By reporting straight…that SoftBank bought shares at a high valuation and then later bought more shares at an even higher valuation, you contributed significantly to this debacle….We were all witness to SoftBank employing a classic ‘pump and dump’ technique.”
Alan replies: “To be fair, the Fortune team did a good job of poking the holes in the WeWork filing, here, here and here, among other places. But G.M.’s analysis of SoftBank’s role is interesting, especially given reports of a ‘ratchet’ that protects SoftBank if the valuation falls.”
Meanwhile, H.B. took issue with my piece yesterday on Boris Johnson and the U.K.’s democratic mess:
“You excoriate BoJo, but no comment on Corbyn’s refusal to hold an election or even a no confidence vote. Who is being undemocratic? Wouldn’t the British people be better off with an election and a new parliament that has their mandate?”
The opposition’s refusal of the government’s preferred election timetable has been both tactical and the result of a plausible fear that Johnson could use the process to force a no-deal Brexit. They say they will green-light an election if he first makes sure no-deal can’t happen, as the law requires. I find that fair. But either way, polls suggest no party would emerge with a viable mandate for anything.
Enjoy your weekends. News below.
Peloton’s IPO, one of the season’s most keenly watched, didn’t go so great. With an IPO price of $29, the fitness firm’s stock ended yesterday 11.2% lower at $25.76. That’s the second-biggest IPO flop of the year, after SmileDirectClub. No matter, said CEO John Foley. “I will say a lot of these young tech companies get criticized for staying in the private markets too long, and I feel like if we would have waited any longer we might have been painted with the same brush, so it felt like this was the right time.” Fortune
Peloton’s weak IPO appears to have inspired Endeavor Group Holdings to yank its own offering, which was planned for today. That’s the second time the talent agency and mixed martial arts group has abandoned flotation plans this year. Wall Street Journal
Nestle is stepping up its checks on coffee bean imports from Indonesia and Brazil, after finding levels of glyphosate that sail close to regulatory limits. “We are reinforcing our controls working with suppliers to ensure that our green coffee continues to meet regulations all around the world,” Nestle said. Bloomberg
New official estimates put the bill from the collapse of Thomas Cook at over $615 million—to be picked up by the British government and the travel industry’s insurance scheme, ATOL. The financial fallout from the travel firm’s liquidation is hitting everyone from store landlords to lenders and suppliers, with banks such as Barclays, Morgan Stanley and UniCredit facing significant write-downs. Financial Times
AROUND THE WATER COOLER
Wall Street Donors
Who knew? Wall Street’s Democratic donors don’t like Elizabeth Warren, the great wealth-tax proponent, and are saying they will sit out the next election or even back President Trump if the party opts for her as its 2020 candidate. CNBC
Democrats on the House Intelligence Committee seized on the refusal of acting national intelligence chief Joseph Maguire to say whether he spoke with the president about the explosive Ukraine-call whistleblower complaint. They say there’s a cover-up. Maguire says his conversations with Trump are privileged. Fortune
Toyota is raising its stake in Subaru to over 20%, indicating a closer tie-in that could help the companies take on foreign auto rivals as manufacturers race to develop new technologies. Reuters
Diversity and Inclusion
Special Olympics CEO Mary Davis writes for Fortune that companies’ diversity and inclusion efforts need to be more than a box-checking exercise; they require the training of leaders both with and without disability. She writes: “As companies review their practices and policies around diversity and inclusion, unified leadership must be incorporated into the mix.” Fortune