IT’S 4:00AM AND STILL NO AGREEMENT: I’m not kidding, there’s a minute by minute deathbed watch for iHeart right now. When we left things off iHeart and its lenders had agreed to a second forbearance agreement (aka time extension to continue negotiating bankruptcy terms), which expired at midnight last night. So as you’re waking up this morning you’d expect to hear some news one way or another. But as reported by Radio Ink, apparently everyone went to bed without a deal because it’s crickets today. Maybe they just can’t find Bob Pittman for a signature because he’s hiding out on iHeart’s Cannes yacht or Burning Man yurt? Regardless of his whereabouts something (anything) has gotta happen with this situation. Rest assured I’ll let you know when it does.
DISSECTING FACEBOOK’S DECLINE: Let’s begin with some hard stats. As you can see in the image below from Edison’s latest Infinite Dial report Facebook use is down in the US. Overall weekly FB usage dropped 5% YoY from 67% to 62%, with the 12-34 yo decrease being the most pronounced. Part of this drop is due to younger tech-forward users shifting to the next coolest social platform, which usually happens on the same day grandma sends them a FB friend request. But there’s likely an even more fundamental problem for FB which AdAge simply terms Oversharing. FB’s Newsfeed has become a non-stop babble of useless taco salad pictures and headlines which look interesting but have little substance behind them. So users just aren’t getting as much for their time and attention as they used to. Of course FB’s “network effect” (everyone is on the platform so I must be too), still generates a powerful FOMO pull. But more and more users are finding out there is real life after they kick their Facebook habit.
MICROPROCESSOR MELEE: I usually don’t spend time on the microprocessor side of tech, but there’s a really interesting showdown looming in the chip space. First, some background. Last month mobile chip giant Qualcom and chip + data center leader Broadcom announced plans to merge in a deal valued at $117B – which would be the largest tech M&A play ever. This got the attention of Intel, who dominates with PC chips but is a relatively small player in the mobile chip market. As described by WSJ, Intel is considering making their own bid for Broadcom because a Qual-Broad tie up would put them further behind in mobile chips and the build out of what will eventually become the lucrative 5G LTE market. You can see each companies’ current share of the mobile microprocessor market in the image below. There’s also a concern about the strategic advantage a Qual-Broad could render if they start using their own chips to build mega server farms (which is the backbone of cloud computing). As a result of this threat late yesterday the Trump administration moved to block the Qual-Broad merger, sighting national security concerns over too much microprocessor manufacturing being held by a foreign company. Obviously this wouldn’t be an issue for Intel since they’re American, so Trump’s move may open the door even further for an Intel acquisition of Broadcom. Even though these brands aren’t consumer or marketing facing, the implications of who wins the microprocessor jump ball will be felt in the entire tech world for a generation to come.
Have a great Tuesday guys!
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