Beware bankers talking TikTok

The next few weeks are going to be critical for ByteDance-owned TikTok. The company is weeks away from a ban signed by President Trump, and while the company is expected to sue the U.S. federal government this week to block it, clearly the company’s future has at least storm clouds on the horizon.

Trump signs orders banning US business with TikTok owner ByteDance and Tencent’s WeChat

That has led to massive speculation about who might purchase TikTok and save it from its precarious situation. The leading contender so far in media reporting has been Microsoft, with multiple press reports indicating that Microsoft CEO Satya Nadella has talked with President Trump about an outline of how a deal could be consummated. Trump has indicated he wants the buyer to pay some sort of tithe to the federal government, an argument that might even make sense for a suitor like Microsoft in the right circumstances.

What Microsoft should demand in exchange for its ‘payment’ to the US government for TikTok

Over the past week and weekend though, we are starting to get more and more names outside of Microsoft that are supposedly interested. We’ve heard Apple mentioned, and Twitter has been discussed heavily. SoftBank (which owns part of ByteDance in the Vision Fund) has been rumored to be a contender. Google was formerly in talks about potentially buying the app late last year, and presumably could stay in the mix. And private equity firms are also supposedly sniffing around the opportunity.

Here’s the deal though: All of this — outside of Microsoft’s potential deal — seems completely like smoke.

Apple has actively denied any interest in buying the company, which shouldn’t be surprising, as it makes no strategic sense whatsoever. Other supposed suitors have been more lukewarm with the typical PR blandishments that their companies “consider all strategic opportunities.”

What’s going on is that TikTok is an extremely valuable property, potentially worth tens of billions of dollars. But it is only worth that value if the company can find a number of deep-pocketed buyers who are willing to bid the price up. If Microsoft is the only suitor, then TikTok’s price may well be shockingly low.

So what do the investment bankers at the heart of the deal do? They run the deal around to every corporate development department in the country, and they leak the information to reporters to try to drum up FOMO in other departments, all in the hope that a board member somewhere starts asking, “Hey, why aren’t we taking a deep look at this?” Heck, I’m sure even Oracle is taking a look — they have data centers and “synergy” potential, and its CEO Safra Catz is a major Trump supporter as well, and could navigate the coming policy shenanigans.

Yet, the reality of the deal is the same: There just aren’t that many companies that can even consider an acquisition. Facebook is out on antitrust. Japan-headquartered SoftBank is out on foreign company concerns (the very reason why TikTok is in this position in the first place). Apple isn’t interested, and even companies like Twitter, popular and strategic as they are, don’t have the cash. Twitter is worth less than $30 billion in market cap today — can they really afford to spend, say, half the company on an acquisition? How much of a writedown would ByteDance have to take to make Twitter a logical fit?

Most of this smoke about interest is designed to push Microsoft to make a fair deal. It’s designed to encourage them to sweeten their offer, lest one of these other “suitors” potentially becomes interested. Yet, the timing of a deal (it needs to be done in a matter of weeks right now) and the scope of the price effectively precludes all but one buyer today.

So, beware bankers talking TikTok. We’re going to get a bunch of names of potential acquirers. Unless there is hard evidence of deep interest, I am going to remain skeptical of all the rumors.

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Equity Monday: The TikTok saga rolls on as earnings season starts to wrap

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This is Equity Monday, our weekly kickoff that tracks the latest big news, chats about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here, and myself here, and don’t forget to check out last Friday’s episode.

This morning was a bit of a grab-bag of news, but of course we had to start off with the biggest story from the past few weeks:

• It’s TikTok around the clock: News broke recently that Twitter could be interested in TikTok after Apple came and somewhat went as a possible suitor. What matters is that Microsoft is not a full-lock on TikTok’s exit. No word lately on whether the Trump administration’s decision to try to extort a chunk of the sale price will go through. (It won’t.)
• TikTok may sue the Trump administration as early as this week over its possible forced sale.
• Do startup culture, venture capital and mental health mix well?
• Amazon is talking about turning some malls into fulfillment centers; TechCrunch has more.
• The huge wealth of major tech companies is only growing, meaning that a rising share of the public market run is based on a handful of big-tech results.
• Flipkart is building an accelerator.
• Expert System has raised $29.4 million, while Palmetto has raised $29 million, and Silverfort put together a $30 million round. How’s that for three rounds of the same size?

All that and earnings season is largely behind us, leaving tech companies generally unscathed. So, the good times will persist for a while yet. Have a great week!

Equity drops every Monday at 7:00 a.m. PT and Friday at 6:00 a.m. PT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

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Daily Crunch: Trying on Apple’s watchOS 7

The public beta of watchOS 7 is here, Amazon may be looking to turn malls into distribution centers and Skillshare raises $66 million. This is your Daily Crunch for August 10, 2020.

The big story: Trying on Apple’s watchOS 7

Brian Heater walks us through all the changes coming in watchOS 7. It sounds like the operating system isn’t getting a dramatic upgrade — particularly in comparison to MacOS — but there are still some important changes that should help Apple stay at the top of the smartwatch industry:

Updates include the new hand-washing featuring, cycling directions, new workouts and, most importantly, a number of sleep-tracking features. The last bit is, without question, the most requested addition to the watch — and equally important to Apple’s bottom line, a category the company had fallen behind on relative to the competition … The sleep tracking here works with the sensors already on-board existing devices and joins a number of third-party solutions.

The tech giants

Abandoned mall department stores may become Amazon’s next fulfillment centers — One of the largest owners of shopping mall real estate in the United Stages has been talking to Amazon about transforming its anchor department stores into distribution hubs, according to The Wall Street Journal.

iOS 14 redirects web links from News+ publishers directly to the Apple News app — If you click on a link to a paywalled story published by a News+ partner, iOS 14, iPadOS 14 and macOS Big Sur will take you straight to the article page in the News+ app, even when the link ostensibly points to the publisher’s own website.

Amazon relaunches Twitch Prime as Prime Gaming — In both its old and new incarnations, Twitch Prime/Prime Gaming offers free games, game content (like weapons and skins) and a free Twitch channel subscription, all as part of a standard Prime membership.

Startups, funding and venture capital

ByteDance valuation under huge pressure as TikTok sale nears — The company’s price tag is under tremendous pressure as it’s set to shed its prized asset TikTok, several investors told TechCrunch.

With a renewed focus on creative skills, online learning company Skillshare raises $66M — Skillshare CEO Matt Cooper said 2020 has been a year of rapid growth, even before the pandemic forced large swaths of the population to stay home and turn to online learning for entertainment and enrichment.

A Faraday Future prototype hits the auction block — Although Faraday Future never produced a production vehicle, the company managed to create several prototypes, and one of them will be available for sale soon.

Advice and analysis from Extra Crunch

Seed funding tips and tricks from Uncork Capital founder Jeff Clavier — Clavier said that at the end of 2019, it was estimated there were more than 1,000 firms focusing on seed investing in the market, but by the end of this year, there will be about 2,000.

Unpacking Duck Creek Technologies’ IPO and hoped-for $2.7B valuation — Duck Creek Technologies is looking to go public on the back of growing SaaS revenues.

Three growth marketing experts share their best tools and strategies for 2020 — Recapping observations from our Early Stage virtual event from Graphite’s Ethan Smith, Sound Ventures’ Susan Su and Got Users’ Asher King-Abramson.

(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Trump administration announces major midband spectrum auction for 5G — Today, the midband of U.S. spectrum is heavily utilized by government services like the military.

Original Content podcast: ‘The Umbrella Academy’ returns for a messy-but-delightful second season — Not only did I cry during the finale, I also got sniffly while just describing the finale.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

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iOS 14 redirects web links from News+ publishers directly to the Apple News app

Apple’s still-in-beta operating systems will automatically redirect News+ subscribers to the Apple News app when they click on links from a News+ publisher.

In other words, if you click or tap on a link to a paywalled story published by a News+ partner — including stories from our own Extra Crunch membership program — iOS 14, iPadOS 14 and macOS Big Sur will take you straight to the article page in the News+ app, even when the link ostensibly points to the publisher’s own website.

Tony Haile (who founded the ad-free subscription news service Scroll)  tweeted about the change this morning, and I’ve been able to replicate it myself.

The experience should be familiar to (for example) New York Times app readers who, when they click on a web link, are taken straight to the article page in the NY Times app. (In TechCrunch’s case, I noticed that Apple even prompts users to open the News app when they click on stories that aren’t paywalled.)

Woah, I wonder how many publishers in Apple News+ realize that the new iOS14 and MacOS Big Sur are by default intercepting traffic to their sites and sending it to the Apple News app instead. pic.twitter.com/k4PQG9mE7M

— Tony Haile (@arctictony) August 10, 2020

This addresses one of the more frustrating elements of being a News+ subscriber: Although your $9.99 monthly subscription gets you access to paywalled stories from publishers like The New Yorker and the Wall Street Journal, you only get access via the News app — not the publishers’ websites. So I’ve often seen something I want to read on Google or Twitter, but instead of clicking the link, I have to open the News app and track down the story.

So this seems like it should significantly improve the reader experience, even if it might be a little disconcerting at first. And it only applies to News+ subscribers, who are opted-in but will have the option to turn off the “Open Web Links in News” feature in their News settings.

But as Haile noted, publishers may be less excited about the change: “Any strategic rationale that Apple News+ represents a separate  channel/audience is now gone. This directly cannibalizes a publishers’ core subscription audience.”

Although Apple has not released News+ subscriber numbers, there have been several reports — including a November 2019 story from CNBC —suggesting that the service has struggled to attract new subscribers after signing on 200,000 users in the first 48 hours after launch. And Digiday reported that publishers have been underwhelmed with revenue.

macOS 11.0 Big Sur preview

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Apple watchOS 7 preview

Of the big three Apple operating systems, watchOS arguably gets the least love. That goes double in a year that sees macOS getting its biggest overhaul in recent memory. On the whole, the Apple Watch’s software is often overlooked, as smartwatch users tend to focus attention on the addition of new hardware sensors and the like. Still, watchOS 7, out today in public beta, brings a number of key additions, as Apple looks to keep from getting too complacent in its spot high atop the list of smartwatch manufacturers.

After all, the company has seen increased competition, particularly overseas from the likes of Huawei and Samsung. Likely software updates alone aren’t enough to drive the smartwatch skeptics to finally take the dive, but coupled with hardware updates and a focus on keeping lower-cost models on the market, it should help the company maintain comfortable positioning.

iOS 13 brings many much needed quality-of-life improvements

Updates include the new hand-washing featuring, cycling directions, new workouts and, most importantly, a number of sleep-tracking features. The last bit is, without question, the most requested addition to the watch — and equally important to Apple’s bottom line, a category the company had fallen behind on relative to the competition. That’s not for lack of available technology, however. The sleep tracking here works with the sensors already on-board existing devices and joins a number of third-party solutions.

Image Credits: Brian Heater

That’s not to say that the company won’t be introducing additional sleep-tracking hardware on the Watch 6 later this year (in fact, that seems fairly likely), but it does mean that the much-requested feature will be available for the Watch Series 5, 4 and 3, which debuted back in late-2017 and is still kicking around the market, priced at $200.

The Sleep feature is multi-faceted. At its core, of course, is standard tracking, using the accelerometer to determine when you’ve fallen asleep, based on movement, including subtler cues like changes in breathing rate, which slows down as you enter non-REM sleep. Stats aren’t super deep yet, but do include key information like sleep times and heart rate, all saved in Apple’s Health app.

macOS 11.0 Big Sur preview

One of the more salient pieces of the puzzle is Sleep Mode, in which the watch enters Do Not Disturb, shutting off all notification and pausing the wake function when the wrist is lifted. You can turn it off by turning the digital crown and it will re-enter the mode when you fall back asleep.

Among other things, it should help save on battery life — that’s going to be a key issue as the company gets serious about sleep. The Watch is currently rated at 18 hours, by Apple’s account, which is an issue if you plan to use it for tracking both day and night. Extended battery is another feature to keep an eye out for with the arrival of the Series 6, but in the meantime, a new Charging reminder will pop up when you wake up, reminding you to charge the watch before you get going. It will also alert you if the level falls below 30% prior to sleeping.

Apple began work on the Watch’s handwashing feature years before COVID-19

The other big element is Sleep Schedule, which sets a goal and a sleep and wake time. By default, it’s set to eight hours — which feels overly optimistic in my own experience, but that’s the point of goals, I guess. Wind Down creates a window of time for pre-sleep activities, like meditation apps and soundscapes, designed to get you off your devices and ready for bed. Wake Up, meanwhile, borrows sounds from iOS’s Bedtime app and uses haptic feedback as an alarm. If you’re moving half-an-hour before your set wake time (the worst), it will ask you if you’d like to shut off the alarm and just start your day.

Image Credits: Brian Heater

Hand washing is a serendipitous addition here. As I noted in an earlier feature, it’s something the company has been working on for years now, and happened to arrive when everyone is hyper-focused on keeping their hands clean. The feature is off by default and needs to be enabled by the user. Once on, it starts a 20-second count with animated bubble numbers and gives you a little congratulatory buzz when you’ve washed them the whole time.

It’s designed to automatically trigger when hand washing is detected through a combination of movement sensed by the accelerometer and the on-board microphone, which is listening for the sound of running water and soap. Apparently detecting hand washing is surprisingly complicated, but the feature does a pretty decent job in this version of the beta — though I did still get a few false positives while washing the dishes.

The other key addition is hand-washing reminders, which can be set to pop up when you arrive at home. Again, a nice addition in an error with a super contagious, air and surface-borne virus currently rampaging across the globe. Hand washing doesn’t have its own standalone app at the moment, but metrics for the feature are built directly into the health app, showing your activity over time.

There are four new workout types now tracked by the OS: dance, core training, functional strength training and cool down, which involves stretches and other post-workout activities. The additions are a bit more in the weeds than early tracking features, as Apple works to position the wearable as a more complete fitness tracker. The accompanying iOS app also gets a redesign, consolidating all of the activities into a single view.

As ever, there are a couple of new watch faces. Chronograph Pro adopts a design inspired by a distance-measuring tachymeter. It’s a bit busy for my tastes, but it’s not a bad-looking design. The X-Large takes things in the opposite direction, with just a large digital time and a massive complication right in the center of the screen. Also new on the face front is the ability to share Watch Faces with friends via text message.

Image Credits: Brian Heater

The coolest addition here might very well be one that didn’t get a lot of stage time. Along with the other operating systems, watchOS gets a translate feature. Click into Siri, ask for a translation and then pick from one of the following: Arabic, German, Spanish, French, Italian, Japanese, Korean, Brazilian Portuguese, Russian and Chinese (Mandarin). Speak the words and it will read aloud the translation and show it on the screen. In case of a language like Chinese with a distinct alphabet, the text will be displayed in both Chinese and an English transliteration.

The process requires a few steps, but as someone who spent a lot of time handing his phone back and forth to people during a trip to Asia last year, this could be really useful. Especially during a time when I really have no desire to hand my phone to anyone.

A handful of other features warrant a quick mention:

• Cycling directions for Apple Maps
• Increased Hearing Health/Noise metrics and the ability to control maximum volume on headphones
• Siri Shortcuts imported from the iPhone

The final version of watchOS 7 is due out this fall.

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Google Maps comes to Apple’s watchOS and CarPlay dashboard

Google Maps is now also available on the Apple Watch so you can get your walking, biking and driving directions right on your wrist.

Don’t expect to get a full-blown Maps app on your wrist, though. The new app is mostly focused on giving you directions to know places (think home, work, etc.). To start navigating to other destinations, you still have to start on your phone and then “pick up where you left off on your watch,” Google explains.

A few years ago, Google already offered a version of Maps for Apple’s watch but then dropped support in 2017. The Google Maps app for watchOS will roll out worldwide in the coming weeks.

Image Credits: Google

In addition to the new Maps app on watchOS, Google Maps now features slightly deeper integration with Apple’s CarPlay, thanks to iOS 13.4 now supporting third-party apps on the dashboard. If you’re a regular Google Maps user on CarPlay, you may know the frustration of using the CarPlay dashboard, only to be kicked back to seeing Apple Maps.

Apple originally launched support for third-party navigation apps in CarPlay with the launch of iOS 12. At the time, though, those apps were restricted to full-screen mode. With this update, you can now continue to see your Google Maps directions and still see your media controls or calendar at the same time.

Apple says CarPlay will now support third party navigation and mapping apps

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Minecraft: Education Edition comes to Chromebooks

Microsoft today announced that Minecraft: Education Edition is now available on Chromebooks.

Now, if you were hoping that this means that the standard Minecraft game is now available on Chromebooks, too, I’m afraid I’ll have to disappoint you. The Education Edition not only requires a Microsoft 365 for Education (A3 or A5) license, it’s also meant to more of an educational tool than a game, with lessons that focus on math, science, language arts, history and visual arts.

The company says that it is partnering with the Google Education team to welcome educations on Chromebooks to Minecraft.

The Chromebook version will offer the same set of features as Minecraft: Education Edition on Windows, Mac and iOS, including cross-platform multiplayer support. For now, students will need a Microsoft account to log in, though the company says support for logging in with Google accounts is coming “in the near future.”

Image Credits: Microsoft

“Minecraft: Education Edition is a game-based learning platform that helps build key 21st century skills like coding and creative problem solving,” Microsoft explains in today’s announcement. “Hundreds of free standards-aligned lessons, design challenges, and STEM curriculum are available in-game and online, along with flexible templates for teachers to design their own learning activities. In a time when staying connected to the classroom is of extra importance, Minecraft supports collaboration and meaningful student-led learning.”

The Minecraft: Education Edition is now available in Google’s Play Store for users with the right licenses. Despite a clear warning that it takes an Office 365 Education account to log in, you’ll see plenty of one-star reviews from disappointed players who think it’s the regular Minecraft. With the right Chromebook, though, these players could always play Minecraft for Android on Chrome OS, too.

Minecraft Dungeons has charm and potential, but needs lot more time in the furnace

Minecraft Earth is live, so get tapping

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