12-02-2018

22
BUSINESS A.M. FEBRUARY, MONDAY 12 - SUNDAY 18, 2018
TECHNOLOGY&INNOVATION
Google-Nest merger
raises privacy issues
Business a.m.
TECH GIANT ALPHABET
is merging its Google and
Nest divisions together.
Nest was initially a start-up
before being acquired by
Google’s parent company
The firm suggests the move will
aid its efforts to build hardware and
software to “create a more thoughtful
home”.
Nest had run as a standalone unit
since its $3.2bn (£2.3bn) takeover in
2014. Its smart home products benefit
from gathering data about its users.
Nest previously pledged the data
would be kept separate from Google’s
other operations. Privacy campaigners
have raised concerns at the reorganisation.
But Google has said it will be
“transparent” about any changes that
might be made.
‘Consumer choice’
Nests’s products include:
internet-connected security cameras
for inside and outside the home
thermostats that use motiondetecting
sensors to detect when the
owners are about
a camera-equipped doorbell
a movement-detecting alarm system
and smoke detector
In addition, the division’s app can
be set to gather data from other products
- including cars, ovens, fitness
trackers and even sensor-equipped
beds - to help “save energy... and
stay safe”.
Nest’s latest products include an
alarm system that registers when
users leave and return to their home
In July 2015, Tony Fadell - the
co-founder and former chief of Nest
- told the BBC that consumers could
be reassured that efforts had been
made to ringfence this data and prevent
it being mixed with all the other
information Google gathered about
the public.
“When you work with Nest and use
Nest products, that data does not go
into the greater Google or any of [its]
other business units,” he explained.
“We have a certain set of terms and
policies and things that are governed.
“So, just when you say we may be
owned by Google, it doesn’t mean that
the data is open to everyone inside the
company or even any other business
group - and vice versa.
“We have to be very clear on that.”
When the BBC asked Google if
that promise would be respected in
the future it provided the following
statement:
“Nest users’ data will continue to
be used for the limited purposes described
in our privacy statement like
providing, developing, and improving
Nest services and products,” it said.
“As we develop future plans and
future product integrations, we will
be transparent with users about the
benefits of those integrations, any
changes to the handling of data, and
the choices available to consumers in
connection with those changes.”
The firm also provided a link to
its current privacy statement, which
states that it will provide notice of any
changes on its website or by contacting
customers’ directly.
‘Data harvesting’
The Big Brother Watch campaign
group said it was concerned by the
development.
“Google already harvests an incredible
amount of detailed information
about millions of Internet users
around the globe,” said director Silkie
Carlo.
“Now, Google is becoming embedded
in the home, through ‘smart’ soft
surveillance products.
“Adding data from Nest’s home
sensors and security cameras will significantly
expand Google’s monopoly
on personal data. Many customers
will be justifiably anxious about
Google’s growing, centralised trove,
especially given that its business
model relies on data exploitation.”
Another company watcher said
there could be benefits from allowing
Google engineers working
on the Home smart speaker and
other Assistant-enabled hardware
to work alongside their Nest counterparts.
But he acknowledged that some
device owners would still be concerned.
“It would be naive to expect that
as Nest is folded into the bigger
Google entity, that there aren’t efforts
to bring its platforms and all
of the intelligence together,” commented
Ben Wood from the CCS
Insight consultancy.
“It will be positioned as enhancing
the products, but for some customers
that may be something that they feel
uncomfortable about.”
Snap trying to
lure Instagram
advertisers by
offering them free
ads
Remilekun Davies
Snap wants to attract new
advertisers — specifically, it
wants to attract advertisers
who are spending money
with its biggest competitor,
Instagram.
To lure them over, Snap is reaching
out to those advertisers that are buying
vertical video ads on Instagram
and other competitors, and offering
them free advertising credits to give
Snapchat a try.
A Snapchat spokesperson confirmed
that the company has indeed
started reaching out to advertisers
who are spending money on competing
services.
Snap is directing advertisers to an
online application, which requires
them to upload a proof of purchase
that they bought ads on a Snapchat
competitor “sometime within the
past three months.”
Snap is then offering those advertisers
credits in the range of “several
hundred dollars,” according to a
source.
Snap hasn’t been shy about its
need to increase its pool of advertisers.
The company sells almost all of its
vertical video ads through a process
called programmatic ad buying — in
other words, automated software programs
that auction off ad spots to the
highest bidder. The problem for Snap
thus far has been that many of its auctions
don’t have much competition,
meaning that there aren’t enough
advertisers bidding for the ads, and
those that are using the service are
getting the ads on the cheap, since
few other advertisers (or no other advertisers)
are bidding against them.
More advertisers would mean
more competition, and theoretically,
higher ad prices and more revenue
for the company. On Snap’s last earnings
call, when the company reported
better-than-expected results, CFO
Andrew Vollero called Snapchat’s ad
auction “the engine that drove the
growth in the fourth quarter.”
It’s also impossible to ignore the
thinly veiled swipe at Instagram,
which is without a doubt Snapchat’s
biggest competitor.
Broadcom fails in second attempt to buyout Qualcomm with revised $121bn offer
Edidi Abdulrafiu
THE DOMINANT
PHONE chips maker
said the proposal to
acquire all outstanding
shares for $82 per
share “materially undervalues”
Qualcomm and contains “serious
deficiencies in value.” The new
proposal doesn’t adequately address
the risk that the transaction
could fail because of antitrust concerns.
After rejecting the revised $121
billion buyout offer from Broadcom
on Thursday, Qualcomm
Inc. suggested the two companies
meet to address what it called the
proposal’s “serious deficiencies in
value and certainty.”
Broadcom originally launched
an unsolicited bid for Qualcomm,
the world’s largest maker of chips
and processors for phones in November
2017, for $70 per share or
$105 billion. If the acquisition was
successful, the move would have
been the biggest in tech history,
surpassing AOL’s purchase of Time
Warner in 2001.
A combination of the two companies
would create a chip giant
supplying components to a wide
array of electronic gadgets found
in your home or pocket.
A deal would also mark a surprising
turnaround from nearly a
decade ago, when the companies
were bitter courtroom rivals.
In a letter to Broadcom CEO
Hock Tan, Qualcomm Chairman
Paul Jacobs addressed concerns
about a deal falling through, saying,
“If you are not willing to agree
to do whatever is necessary to ensure
a transaction closes,” Jacobs
wrote, “we will need you to be extremely
clear and specific about
exactly what actions you would refuse
to take, so that we can properly
evaluate the risk to Qualcomm’s
shareholders.”