The Week's Top Stories: Google on the Hill, and Tencent Music IPO

December 14, 2018

From Wall Street to Silicon Valley, these are the top stories that moved markets and had investors, business leaders, and entrepreneurs talking this week on Cheddar.

  • Google on the Hill: Google CEO Sundar Pichai faced the now-ritualized hazing of big tech CEOs by U.S. lawmakers on Tuesday, making his first trip to Capitol Hill to testify in front of the House Judiciary Committee. The hearing was ostensibly to learn more about Google's ($GOOGL) massive data collection practices and efforts to stop the spread of hate speech, fake news, and misinformation, though it failed to shed much new light on anything. Pichai defended Google and explained how the search algorithm works after some lawmakers accused Google of intentional political bias. Pichai held his own, but was notably evasive when asked about Google's plans in China. The most memorable moment came when Republican Rep. Steve King of Iowa used the forum as his own personal IT help desk session, asking Pichai why his granddaughter's iPhone was displaying a certain notification ー prompting Pichai to remind him that "the iPhone is made by another company." Read more here.

  • Apple in Austin: Apple announced on Thursday it would spend $1 billion on an expanded office campus in Austin, Tex., as part of a broader investment in and expansion of its U.S. workforce. Apple ($AAPL) said it would build capacity for 15,000 workers in Austin, which would make it the largest private employer in the city. In addition, Apple is expanding its footprint in San Diego, Seattle, and Culver City, Calif.ー with the plan to add over 1,000 workers in each locationー while also growing its offices in New York, Pittsburgh, Boston, Portland, Ore., and Boulder, Colo. The company has gotten flak from President Trump for manufacturing the majority of its products overseas. However, these new U.S. jobs will primarily be white-collar, rather than manufacturing. The way in which Apple made the announcement ー in an early-morning press release ー was a sharp contrast to Amazon's ($AMZN) year-long, highly-publicized HQ2 hunt. Read more here.

  • Tencent Music IPO: The music-streaming arm of Chinese tech giant Tencent made its U.S. market debut on Wednesday after putting off the float in October due to market volatility. Tencent Music ($TME) shares rose 9 percent on the first day of trading, after pricing at the bottom end of their range at $13 apiece. Chinese IPOs are facing headwinds in the U.S. due to uncertainty over the ongoing trade war and a slowing Chinese economy, and Tencent spin-offs in particular have had a tough road to hoe in American IPOs, as Tencent's backing leads to lofty short-term expectations. Tencent Music controls about three-quarters of the Chinese streaming market and counts 800 million monthly active users. The company generates the bulk of its revenue from its paid users, much like Spotify, which owns a large stake in Tencent Music.

  • Google and Lime: If you live in one of the 13 cities where Lime electric scooters or bikes have been deployed, you can now find them as a transit option on Google Maps. The integration is the latest way scooters are being used to help solve "last-mile" transportation problems in cities. The partnership acts similarly to the Uber integration on Google Maps ー by showing commuters who are nearby Lime scooters or bikes what their transit times would be and offering cost estimates. But they will still need to use the Lime app to start the trip. Google's VC arm was part of a $335 million funding round in Lime over the summer. Read more here.

  • Auto Tariffs: China blinked in the trade war with the U.S. on Friday, saying it would temporarily suspend the latest round of tariffs on American automobiles and parts. In an easing of the tit-for-tat, the Chinese Finance Ministry said it would kill the 25 percent additional tariff on car imports for three months, starting in the new year. That would bring the tariff from 40 to 15 percent, the level from July before the trade war escalated. Presidents Trump and Xi Jinping negotiated the deal last month in Argentina as part of a way to ease tensions on trade, though this was the first time China confirmed that lifting this tariff was part of those negotiations. At the same time, new statistics show that China's economy is cooling at a faster clip because of the trade war. President Trump tweeted his approval of the deescalation, saying, "China wants to make a big and very comprehensive deal. It could happen, and rather soon!" Read more here.

- Carlo Versano