Snap Originals: Brilliant Move or Money Pit?

TL;DR

Snap faces investor skepticism over cash burn and lackluster growth, while Facebook and Google grapple with antitrust scrutiny and calls for better corporate governance.

Transcript

Dylan Lewis: Welcome to Industry Focus, the podcast that dives into a different sector of the stock market every day. It's Friday, October 19th, and we're catching up on some big tech news. I'm your host, Dylan Lewis, and I'm joined on Skype by senior tech specialist, Evan Niu. Evan, we've been paying attention to some of these big new issuances la... Read More

Key Insights

• 🤨 Snap Inc. is struggling with cash burn and growth, and its push into original content raises doubts about its ability to monetize effectively.
• 🥺 Google's $5 billion fine from the European Commission highlights the anti-competitive practices related to its Android platform. Charging licensing fees could lead to higher prices for consumers.
• 😀 Facebook faces calls for better corporate governance, but CEO Mark Zuckerberg's voting power could hinder any significant change.

Questions & Answers

Q: What are analysts concerned about when it comes to Snap Inc.?

Analysts are skeptical of the company's ability to achieve full-year profitability given its cash burn and struggles to grow its ad business. Snap's push into original content shows also raises doubts about its ability to monetize effectively.

Q: Why has Google been fined by the European Commission?

The European Commission found that Google's practices with Android, including paying manufacturers to pre-install its apps and services, were anti-competitive. The company plans to start charging manufacturers licensing fees for its app suite, potentially leading to higher prices for consumers.

Q: What are institutional investors calling for at Facebook?

Institutional investors, including Trillium Asset Management, are pushing for the separation of the CEO and chairman roles at Facebook to improve corporate governance. However, CEO Mark Zuckerberg's majority voting power could prevent any significant change.

Q: Why are privacy concerns raised about Facebook's Portal device?

Facebook's recent history of privacy controversies has raised concerns about the Portal device, which includes a camera. The company initially stated that the device would not be used for ad targeting, but later reversed that stance. This has undermined trust in the company's data practices.

Summary & Key Takeaways

• Snap Inc. is facing concerns from analysts over its cash burn and inability to grow its ad business. The company's push into original content shows raises questions about its ability to monetize and drive engagement.

• Google has been hit with a $5 billion fine by the European Commission for anti-competitive practices related to its Android platform. The company plans to start charging manufacturers licensing fees for its suite of apps and services, potentially leading to higher prices for consumers.

• Facebook is under pressure from institutional investors to separate the roles of CEO and chairman to improve corporate governance. However, CEO Mark Zuckerberg's 60% voting power could prevent any significant change.