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Recent Stories: Grab <--> Lyft; Microsoft Exec on Self-Driving Cars; Venture Capital in Southeast Asia

I’m behind in sharing some of the stories I’ve been working on. Here are a few from last week.

The first, on Grab’s integration with Lyft in the U.S., begins:

The latest step in a global ride-sharing alliance between rivals of Uber Technologies Inc. went into effect Thursday, allowing users of a popular Southeast Asia-focused transportation app to begin making car bookings via Lyft Inc. in the U.S.

Users of the app from GrabTaxi Holdings Pte. Ltd., which operates in 30 cities across six Southeast Asian countries, can now use the service to hail vehicles in more than 200 U.S. cities via Lyft. In December, Lyft said it was teaming up with Grab, as the company is known, after announcing a similar agreement with Chinese startup Didi Chuxing Technology Co. in September, bolstering the competitive field against the much larger Uber.

The second, on Microsoft, which I wrote while in Hong Kong for our Converge tech conference, begins:

Microsoft Corp. isn’t building its own self-driving car, but is bullish on helping others with related technology, a senior executive said.

“We won’t be building our own autonomous vehicle but we would like to enable autonomous vehicles and assisted driving as well,” said Peggy Johnson, who heads business development for the Redmond, Wash., tech titan, speaking at the Converge technology conference hosted by The Wall Street Journal and f.ounders in Hong Kong Friday.

Ms. Johnson said Microsoft has asked various auto makers what kind of technological applications they are looking for, whether it is working with Azure, its cloud-based service for businesses, Office 365, the cloud version of its productivity software suite, or its Windows operating system.

And finally, another from the conference: a look at how investors – such as Facebook co-founder Eduardo Saverin – are increasingly pouring venture capital funds into Southeast Asia:

Venture capitalists and investors attending the Converge technology conference in Hong Kong on Friday expressed optimism about the future of startups in Southeast Asia, despite significant challenges.

“Between Southeast Asia and India there are about two billion people,” said Facebook Inc. co-founder Eduardo Saverin, speaking on a panel about investment opportunities in the region. “It’s arguably the fastest-growing internet market in the world.”

In the first quarter of this year, funding to companies in Singaporethe region’s startup hub–rose sharply to $199 million from $53.1 million a year earlier, according to Hong Kong-based AVCJ Research.

Nick Lemann in The New Yorker on Thiel, Gawker, and press freedom in the U.S.

A passage from the piece worth worth highlighting:

Before the middle decades of the twentieth century, the Supreme Court didn’t find that the First Amendment gave the press extraordinary protection to publish private material about public figures, or secret government documents. As the press moved from its raffish Front Page period into at least trying to behave like a profession, the Court gave it steadily more protection. But today the American press has a profoundly different structure than it did in the Sullivan era. Established, professionalized news organizations make up a far smaller portion of the whole, and most are under economic stress. The roguish part of the press is proliferating. People like Nick Denton love to mock the mainstream media for being preachy and self-regarding, while taking full advantage of the protections that arrived during its brief period of general public esteem. Now the public likes the press less and less, and that invites a sustained reconsideration of the protections.

Read the whole thing.

Digital Media Startups Encounter Financial Troubles

Digial media firms have begun grappling with some difficult financial realities.

At NiemanLab, Ken Doctorow surveys the landscape:

At BuzzFeed, a 32 percent miss in 2015 revenue and a halving of its 2016 revenue target, according to the Financial Times.

At Mashable, a massive layoff after the company failed to sell itself.

At Yahoo, an upcoming sale of its news-producing assets, portending great uncertainty for journalists employed there.

At Medium, a new way forward focused more on curation and licensing its platform for publishers and less on original content creation.

The list of cutbacks — at The Huffington Post, at Gawker, at Al Jazeera, at International Business Times, and at Salon among others — keeps growing. And each round poses new questions for a news business struggling to find a way forward in this millennium. After all, even if the old world of news faded (like its readers) into older age, at least we could point to the cohort of digital-native outlets with a bit of optimism.

I feared this day would come — the new digital news companies bumping into a wall.

Read the whole thing.

Meanwhile, here’s Shira Ovide’s take at Bloomberg:

Let the events of the past week serve as the 4,271st iteration of the same lesson: Digital media is hard. Every six months or so, companies that seemed to have cracked the formula for success in digital information and entertainment hit a wall. Names like Demand Media, Gawker, Mashable, Upworthy and BuzzFeed figure out how to get people to click, surf and share – and expectations go up. Then because of changes in tastes, technology and advertiser habits, it becomes more difficult to get people to click, surf and share. Business models that had traction for a while stop working as well or can’t live up to high hopes.

Interesting times indeed.

By Me and a Colleague: Video on Socially Minded Venture Capital Investing in Vietnam

Embedded above on YouTube and on WSJ.com: a video a colleague and I put together profiling a San Francisco-based venture capital firm that invests in Vietnam startups.

Their goal: to make money, and to do social good.

By Me and a Colleague Wed.: Alibaba to Invest $1 billion in Southeast Asia-Focused E-Commerce Startup Lazada

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The story begins:

Chinese Internet giant Alibaba Group Holding Ltd., in its biggest overseas acquisition to date, said Tuesday it would pay about $1 billion for a controlling stake in Singapore e-commerce startup Lazada Group, betting on growth in populous Southeast Asia.

The acquisition of Lazada—which sells everything from rice cookers to smartphones and operates e-commerce platforms throughout Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam—comes as Alibaba has been using its $3.7 billion in free cash flow to expand into e-commerce, logistics and media, as well as entertainment both at home and abroad.

You may recall back in 2014 I wrote about Lazada’s operations in Indonesia, Southeast Asia’s largest market. (I snapped the image above at a Lazada warehouse outside Jakarta.) The nut graf:

Challenges are par for the course at Lazada Indonesia, founded in Jakarta in 2012 and partly funded by Rocket Internet AG, a Berlin-based tech incubator that went public last month. Indonesia’s e-commerce market is still small, and Lazada had to build a lot of what it needed from scratch. But the company is plowing ahead so it can get a head start in the country over international giants like Amazon.com Inc., Alibaba Group Holding Ltd. and eBay Inc.

Lazada already gets more visitors than any other business-to-consumer site in Indonesia, according to data from research firm SimilarWeb. Lazada’s site saw 6.6 million visitors a month, compared with 3.9 million for Alibaba’s marketplace website AliExpress.com and 2.2 million for eBay, according to the most recent data available from brokerage UBS.

 

By Me and a Colleague Yesterday: Blackstone Buying HP Enterprise’s Stake in Indian Outsourcing Firm Mphasis for $825 million

The story begins:

Hewlett Packard Enterprise Co. said on Monday it planned to sell its majority stake in Indian outsourcing firm Mphasis Ltd. for about $825 million to Blackstone Group LP, as the U.S. technology company seeks to shore up capital following a recent decline in revenue.

Blackstone will purchase at least 84% of HP Enterprise’s majority stake in Mphasis for 430 rupees ($6.49) a share, showing the private-equity firm’s optimism in Mphasis’s prospects even as the industry faces technological challenges.

Besides buying HP Enterprise’s stake, Blackstone said Indian takeover laws require it to buy 26% of Mphasis’s shares via a mandatory tender offer to the company’s public shareholders. Depending on the demand for that offer, the private-equity firm said it could end up spending as much as $1.1 billion on its investments in Mphasis.

HP Enterprise said its decision to sell its position in Bangalore, India-based Mphasis aligns with the company’s capital allocation priorities, which it has said include directing investments toward developing new products and services. The company also has said it would pursue more mergers and acquisitions.

By Me Last Week: Tech Talent is Returning to India

2016-03-02RETURNEES

I had a story Wednesday on the front page of our Business & Tech section. You can see it in this image, under the headline “India Welcomes Home Tech Talent.”

It’s about Indian-born entreprenuers who are increasingly returning to their home country to build startups.

The piece, available online here, begins:

BANGALORE, India—Last year, Abhinandan Balasubramanian quit his job at a London-based financial-technology company. The startup scene in his native India was booming, and he wanted in.

The 25-year-old Mr. Balasubramanian moved to Mumbai and in December launched his own business there: Altflo, a global online marketplace for assets such as real estate and shares in investment funds.

Basing Altflo in India was an easy decision, Mr. Balasubramanian said. “The cost of scaling the company is much lower in India,” he said. Office space and talent are “multiples cheaper than in the U.K.”

Lured by a flood of venture-capital funding, relatively inexpensive labor and the size of the potential market in the world’s second-most-populous country, entrepreneurs and technology workers with Indian roots have been coming home in increasing numbers.

My Recent A-hed on James McGowan, the Globe-Trotting McDonald’s Obsessive

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Those of you who follow me on Twitter and/or subscribe to my email newsletter know that the week before last, my first A-hed* ran on the front page of The WSJ.

(In the image above, showing the paper, below the fold, it’s on the bottom right.)

The story — accessible to all online here — is about James McGowan, a guy in Bangkok whose passion is traveling the world, sampling and blogging about regional variations of McDonald’s items. It begins:

SINGAPORE—When James McGowan walked into a McDonald’s Corp. restaurant in downtown Singapore one recent evening, he wasn’t interested in a Big Mac. Instead, he placed an order for a limited-edition hamburger with caramelized onions and cheddar cheese, truffle-flavored french fries and a special red velvet McFlurry frozen drink.

On a scale of one to five, “I’ll probably give a 3 for the burger,” said Mr. McGowan, noting that it lacked sufficient onions. “The fries are better than I expected. They might be a 3.5 or 4.”

Mr. McGowan may well be the chain’s toughest customer. For the past four years, the 28-year-old has crisscrossed the globe to indulge his passion: Sampling and blogging about the various national iterations of McDonald’s dishes. Thus far, he says he has visited about 53 countries, penning 340 detailed reviews.

The story generated a lot of traffic on our site, which I expected. But I was not prepared, I must say, for McGowan to become a global sensation.

After our story ran, his quest was picked up by outlets as wide ranging as Business Insider, The Straits Times, the Toronto Sun, TODAY.com, and Slate in French.

Papers in the UK, especially, gobbled up the story: The Independent, The Mirror, and even The Daily Mail wrote about McGowan.

Other corporate and tech-focused stories I’ve written have been picked up far and wide before, but this was the first time a feature of this kind has received so much attention. Fun stuff, indeed.

*A-heds are WSJ the often humorous, off-beat stories that run at the bottom of our front pages. Here’s more on the history of A-heds; there’s even a book about them.

By Me Last Week: Twitter Outshines Facebook — in Japan

The story begins:

Twitter Inc. is now bigger than its rival Facebook — in Japan, at least.

A week after quarterly earnings fueled investors’ concerns that Twitter’s user growth has stalled, the company for the first time Thursday broke out its user numbers for a country outside the U.S., saying it had 35 million monthly active users in the world’s third-largest economy as of the end of last year.

Facebook, a major competitor for advertising dollars, had 25 million monthly active users in Japan as of the end of 2015, a Facebook spokeswoman said Thursday.

Twitter’s user base has long been compared to Facebook’s, which is much larger globally. Twitter last week said 320 million users signed into the platform at least once a month in the fourth quarter, the same as in the previous three months. Facebook, by comparison, said it had 1.59 billion monthly active users as of the end of last year, up 3% from the previous three months.

It was the first time Twitter’s closely watched user growth flatlined from the previous three-month period. More troubling: the number of users in the U.S. fell to 65 million from 66 million.

Click through to read the rest.

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