Author: Ben Debski

Australian online census attacked

Posted on by Ben Debski

An interrupted service left many Australians unable to complete the national census on the designated night, 9 August, with the Australian Bureau of Statistics (ABS) reporting four denial of service (DoS) attacks prompted its shutdown of the site.

Speaking to ABC NewsRadio, ABS head David Kalisch said the census website was directly targeted, with the ABS eventually needing to shut down the online form due to security concerns. Many Australians still haven’t been able to complete the online questionnaire, and outages continue.

Many were worried a hack could result in a massive amount of personal data leaking out

According to Kalisch, the ABS believes the attack was a deliberate attempt to sabotage the census. While the Australian Signals Directorate is investigating, it will be difficult to identify the attack’s source.

“The first three caused minor disruption, but more than two million forms were successfully submitted and safely stored”, said Kalisch.”The scale of the attack, it was quite clear it was malicious. Steps have been taken during the night to remedy these issues and I can certainly reassure Australians that the data they provided is safe.”

DoS attacks are a common way to interrupt online services, simulating thousands of users attempting to access the same website simultaneously. Servers are unable to handle this load, and real users are prevented from accessing the website as a result.

It’s another blow to the already-contentious 2016 census. This year marks the first time citizens could complete the questionnaire online, and prior to census night many were concerned the ABS’ system couldn’t handle the load.

The national survey has also been dogged by privacy worries. For the first time, the ABS planned to record the names and addresses of people completing the form. In previous years, the public could opt out of this. Many were worried a hack could result in a massive amount of personal data leaking out. Independent senator Nick Xenophon publicly said he would not be putting his name on the form due to these security concerns.

Disney invests $1bn in video streaming group

Posted on by Ben Debski

On 9 August, the Walt Disney Company acquired a 33 percent stake in BAMTech, with a view to securing the digital future of its sports TV network ESPN. Disney will pay the $1bn in two instalments, and has the option further down the line to acquire a majority stake in the company.

“Our investment in BAMTech gives us the technology infrastructure we need to quickly scale and monetise our streaming capabilities at ESPN and across our company”, said Disney CEO Robert Iger in a statement. The move comes amid a transformative period for the media landscape overall, with cable television subscriptions having suffered and streaming operations having gained ground. The decision to invest in BAMTech, therefore, positions the group for growth.

News of the investment arrived in the wake of Disney’s third quarter earnings report, which surpassed analyst expectations

“Bringing a multi-sport service directly to fans is an exciting opportunity that capitalises on BAMTech’s premier digital distribution platform and continues ESPN’s heritage of embracing technology to create new ways to connect fans with sports”, said ESPN President John Skipper. “As WatchESPN continues to grow and add value to the multichannel video subscription, this new service will be an outstanding complement.”

News of the investment arrived in the wake of Disney’s third quarter earnings report, which surpassed analyst expectations on the back of a buoyant period for its movie studio. Operating income for the segment was up 62 percent on the previous quarter, yet revenues and operating income for the group’s cable networks division have stagnated.

The group itself is under pressure to counteract a slowdown in subscriber growth at ESPN, particularly at a time where the cost of obtaining sports rights is spiralling. The focus on streaming, while not a solution in itself, is in keeping with a change in viewing habits, and signals to investors that the group is taking pains to address the key issues at hand.

To read more on how streaming services have taken a bite out of broadcast viewership, check out The New Economy’s special report.

Google buys Orbitera for $100m in a bid to boost its cloud credentials

Posted on by Ben Debski

Orbitera, a cloud commerce marketplace firm that is headquartered in Los Angeles, aims to make the purchase and sale of cloud software more simple, efficient and widespread for various types of companies and consumers. Using a model superior to Google’s own for managing cloud-based software, Orbitera automates numerous processes related to customer support, including pricing optimisation, packaging and billing.

Although Amazon Web Services remains the biggest cloud service operator at present, the once-looming gap between the top players could now be shrinking

With Orbitera on board, Google hopes it can surpass Microsoft Azure as the world’s second biggest cloud computing platform. In a clear counter manoeuvre, the news was announced just a matter of weeks after Microsoft’s launch of AppSource, a marketplace for software and computer services, similar to Orbitera, that combines the Office 365 and Azure platforms.

Although Amazon Web Services remains the biggest cloud service operator at present, the once-looming gap between the top players could now be shrinking.

Despite the level of competition, Google has revealed that Orbitera will remain neutral, allowing customers to sell and buy any type of software on the platform, including products from competitors Microsoft and Amazon.

“This acquisition will not only improve the support of software vendors on Google Cloud Platform, but reinforces Google’s support for the multi-cloud world”, wrote Nan Boden of Global Technology Partners in a blog post published by Google.

The move is an interesting one for Google. The company’s openness to selling the products of its rivals goes a long way towards assuring customers that it offers them flexibility, choice and optimisation when it comes to operating their cloud environments.

Evidently, both Google and Microsoft are taking no prisoners in their respective campaigns to knock Amazon off the top spot and take control in the cloud wars.

Tesla and SolarCity agree $2.6bn deal

Posted on by Ben Debski

Tesla Motors has announced a deal to buy SolarCity for less than the price it had originally proposed, as Chairman Elon Musk begins his plan to combine his electric car and solar energy companies.

Musk’s grand plan would mean the company could offer consumers a single source of hardware to power a low-carbon lifestyle, through solar panels and home battery storage systems.

“This is really all part of solving the sustainable energy problem”, Musk said in a conference call with analysts on Monday, according to The New York Times. “That’s why we’re all doing this – to try to accelerate the advent of a sustainable energy world.”

Acquiring SolarCity offers Tesla promise of profit growth within the electric energy sector

The merger values SolarCity at $2.6bn. Tesla originally made the offer in June, but did not go ahead immediately as SolarCity was in the process of forming a special committee to review the offer.

SolarCity’s shares, which had risen about 26 percent since Tesla made the offer in June, were down 3.75 percent at $25.70 before the deal was reached. Tesla shares were up 0.521 percent at $235.99, and in June, Tesla offered 0.122 to 0.131 of its shares for each SolarCity share, according to CNBC.

Tesla, which will report its second quarter earnings tomorrow, is experiencing a positive transition as a car company – expanding in California and filling more than 300,000 pre-orders for its Model 3 sedan coming out next year. Musk’s push for solar energy could potentially heighten demand even more, proving the merger a progressive move.

For Tesla, acquiring SolarCity offers the promise of profit growth within the electric energy sector, and offers a glimpse into Musk’s clean energy aspirations. However, evidence suggests the adoption of solar energy could take years, maybe even decades, according to analysts; a timeframe investors may not be prepared to wait out.

New public-private transatlantic body aims to boost research into antibiotic resistance

Posted on by Ben Debski

In a bid to combat the global threat of antibiotic resistance, on July 28 the US and the UK formed a new partnership that is dedicated to accelerating global antibacterial innovation. Carb-X, as the association is known, or the Combating Antibiotic-Resistant Bacteria Biopharmaceutical Accelerator in full, comprises both public bodies and private firms that plan to invest millions into research and development over the course of the next five years.

According to the organisation’s website, BARDA, a unit of the US Department of Health and Human Services, will plough $30m into R&D within the first year alone, and up to $250m in the subsequent four.

Likewise, the AMR Centre, a British R&D facility for biomedical research, will invest around $100m during the five-year project. Other partners include London’s Wellcome Trust, Boston University, the California Life Sciences Institute, RTI International, the Broad Institute and Massachusetts-based innovation centre MassBio, with more expected to join.

The transatlantic association will carry out preclinical development for new antibiotic treatments and vaccines

The transatlantic association will carry out preclinical development for new antibiotic treatments and vaccines, as well as diagnostic tools, with the aim that the subsequent work needed will be pushed further by additional investment from both private and public sectors. Given the breadth of technical, scientific and business expertise of the various partners involved, Carb-X hopes to overcome current obstacles in terms of research and trials, while also navigating complex regulatory framework and approval.

Resist no more
According to the Review on Antimicrobial Resistance (AMR), around 700,000 people worldwide die each year as a result of bacterial drug resistance. “If not tackled, by 2050 drug-resistant infections could be claiming 10 million lives each year around the world, at a cumulative cost to global output of $100trn”, said AMR Chairman Lord Jim O’Neill, in a previous interview with The New Economy.

Speaking about the project, Wellcome Director Jeremy Farrar said: “I hope our new transatlantic partnership marks the beginning of a wider global effort to prevent untreatable bacterial infections from claiming millions of lives”, according to the Financial Times.

With so many big players on the case, it would seem that the frightening pandemic of antibiotic resistance is finally starting to receive the attention and funding it desperately needs.

For a closer look at the global threat of antibiotic resistance, see The New Economy’s in-depth report on the topic.

 

Immuno-oncology could be the new frontier in the fight against cancer

Posted on by Ben Debski

Immunology, a branch of medicine and biology concerned with the immune system, is a new class of cancer treatment that holds greater potential than current treatments, according to the Cancer Research Institute.

Although expensive, the institute believes the reason the treatment is so successful is because it is universal and can be applied to nearly all types of cancer. Some researchers even believe it has the potential to eventually cure all forms of cancer.

Widespread investment
The business and venture market for immunology is receiving a lot of attention from investors. Last year, more than $10.9bn was spent on immuno-oncology deals and partnerships.

In the US, President Obama recently announced a “moonshot” for cancer treatment: “Let’s make America the country that cures cancer once and for all”, he said in his State of the Union address.

Last year, more than $10.9bn was spent on immuno-oncology deals and partnerships

The suggested programme is a $1bn injection of cash intended to bring a decade’s worth of advances in just five years, specifically focusing on the development of immunology. Vice President Joe Biden, who lost his son to brain cancer, is leading the campaign.

Other investors who have joined the push include Michael Bloomberg and Sidney Kimmel, who have pledged to create a new immuno-oncology-focused cancer institute.

The Bloomberg-Kimmel Institute for Cancer Immunotherapy was founded with two $50m gifts. A further $25m was donated to the centre – contributed by a multitude of other supporters.

Johns Hopkins Medicine launched the institute, which is devoted to the study of new and promising approaches to cancer treatment, such as research-backed immunology treatments, embracing the Obama administration’s initiative.

Additionally, music software company Napster has invested $250m to create the Parker Institute for Cancer Immunotherapy, which “enables real collaboration and accelerates the most ambitious research to deliver new immunotherapies”.

Sean Parker, co-founder of Napster, wants to speed up development of more effective cancer treatments by fostering collaboration among leading researchers in the field. The institute will include over 40 laboratories and more than 300 researchers from six leading US cancer centres.

Many more recognised politicians and businessmen are thought to be planning macro-investments into the immunology industry, as the treatment continues to prove effective for hundreds of patients.

Start starting up
Innovative start-up companies are also beginning to join the expanding market, collaborating with large corporations that specialise in immunology and encouraging them to invest in their businesses.

UK-based start-up Jounce Therapeutics recently announced its collaboration with Celgene to develop next-generation immuno-oncology therapies.

Jounce will receive a staggering upfront payment of $255m, a $36m equity investment and up to $23bn in future “milestone payments” across all programmes, according to Biospace.

Jounce will receive a staggering upfront payment of $255m

Partnerships between start-ups and larger companies work as a two-way street; Celgene will have the opportunity to collaboratively develop and commercialise Jounce’s lead product candidate, a drug named JTX-2011, while Jounce will have the support and funding of a huge biotech corporation.

“Celgene is the ideal partner to collaborate with Jounce – to bring potentially transformational treatments to patients with cancer”, said Murray. “This partnership is of significant strategic value for Jounce. With Celgene as our partner, we can broaden our platform, advance our discovery programmes and execute comprehensive clinical strategies, all in the context of our approach to bring the right immunotherapies to the right patient populations.”

If successful and the partnership between the two companies is progressive, Celgene and Jounce could lead a wider trend among those contributing to the immunology industry – encouraging innovate start-ups to work alongside established corporations.

iPhone sales very slightly defy predictions

Posted on by Ben Debski

US tech giant Apple said it sold 40.4m iPhones in the third quarter of 2016, down 15 percent from the previous year, but slightly more than the forecast 40.02m.

According to the BBC, Apple CEO Tim Cook said the results reflected “stronger customer demand… than we anticipated”.

The decline in iPhone demand, a product that accounts for two-thirds of Apple’s sales and even more of its profits, could be down to economic uncertainty in China

The results are reassuring for investors and buyers, who had started to fear that demand for the company’s best-selling product was slowing to a crawl. iPhone sales are still on the decline, however, despite improvements. Overall sales dropped for the second straight quarter, pushing down Apple’s total revenue 14.6 percent.

The firm said it expected sales to fall again in the fourth quarter to between $45.5bn and $47.5bn.

The decline in iPhone demand, a product that accounts for two-thirds of Apple’s sales and even more of its profits, could be down to economic uncertainty in China, where Apple’s revenue declined 33 percent.

With its growing customer base, China is seen as Apple’s greatest chance at growth as iPhone sales deteriorate in more mature markets such as the US.

“China was a major letdown”, Patrick Moorhead, an analyst at Moor Insights & Strategy, told Reuters.

“Samsung and Huawei are much more competitive now than a year ago and the Chinese economy is not doing well at all.”

Moorhead added, however, that increased services revenue, which includes the App Store and iCloud, was a “very big bright spot for Apple”.

Twitter left behind by stronger social platforms

Posted on by Ben Debski

Twitter reported its eighth straight period of declining growth this quarter, with revenue and user growth particular sore points. The disappointment is an all-too-familiar occurrence for shareholders, and raises fresh questions about the abilities of CEO Jack Dorsey a year on from his return to the helm.

User growth and engagement are key sticking points for Twitter if it has any hopes of competing with rival social media platforms. A failure to address either of these issues means there are doubts about whether marketers are willing to stick with what, for all intents and purposes, looks like a company short of ideas. Facebook, for example, has shown itself to be a fixture of the online advertising landscape, though it seems Twitter is at a loss as to how best to replicate its success.

Dorsey was optimistic in a letter to shareholders, writing: “We are confident in our product roadmap, and we are seeing the direct benefits of our recent product changes in increased engagement and usage.” However, this quarter’s showing is the company’s slowest revenue growth since 2013. Revenue rose 20 percent to $602m, while user growth over the three months was just one percent. As a means for comparison, while Twitter’s user base is up nine million on the year previous, Facebook’s is up more than 164 million over the same period.

User growth and engagement are key sticking points for Twitter if it has any hopes of competing with rival social media platforms

One silver lining for Twitter is the shift away from desktop to mobile, which senior figures say the company is well placed to capitalise on. Whether marketers are willing to look beyond its less-than-impressive performance, however, remains to be seen.

“We continue to believe that, with disciplined execution against our priorities, we can drive sustained engagement and audience growth over time”, said CFO Anthony Noto in a statement. “We’re partnering with the providers of the world’s most popular live content to bring more and more events onto Twitter to provide a unique and compelling consumer experience.”

BP profits down as low oil prices continue to sting

Posted on by Ben Debski

BP has reported that its profits for the second quarter of 2016 have fallen 44 percent to $720m, from the $1.3bn profit recorded in 2015.

CEO Bob Dudley said the slump in underlying replacement cost profit – the benchmark industry measure – was impacted by lower oil and gas prices and significantly lower refining margins, according to ITV. He added this was partly offset by the “benefit of lower cash costs throughout the group”.

In any case, Dudley remained positive about the future: “We are delivering significant improvements to the business that will stick at any oil price. We are now well down the path of transforming our business to compete, whatever the future holds. We now see a much stronger outlook for BP and are focused on growth, both for this decade and beyond.”

BP cash costs over the past four quarters were $5.6bn lower than in 2014

According to its second quarter 2016 results, BP cash costs over the past four quarters were around $5.6bn lower than in 2014, and BP continues to expect these costs for 2017 to be $7bn lower than in 2014.

The energy giant also announced it had “drawn a line” under its liabilities from the 2010 Deepwater Horizon disaster, when a drilling rig exploded in the Gulf of Mexico, killing 11 workers and causing the worst environmental disaster in US history. BP confirmed earlier this month the final bill stands at $61.6bn.

The company’s slump in profits comes in light of 2015 global decline in oil prices, which led to significant revenue shortfalls in many energy-exporting nations.

However, BP continues to be optimistic about the future; in a presentation to the financial community in June, the company set out strategic developments including expectations for growth to the end of this decade and into the next.

Verizon buys Yahoo for $4.8bn

Posted on by Ben Debski

US telecoms giant Verizon has agreed a deal to buy Yahoo for $4.8bn, following talks between the two firms last Friday.

The deal could mean the end of Yahoo CEO Marissa Mayer’s four-year reign, as she is unlikely to join Verizon once the sale is completed.

US search giant Yahoo announced in February that it was looking at “strategic alternatives” for its core internet business.

Over recent years, Yahoo has struggled to keep up with the online transformation of the advertising landscape, and some analysts argue that it has failed to remain relevant in many of its core markets.

Verizon, once it acquires Yahoo, is likely to combine its online business with AOL

“The deal speaks to a clear strategy shift at Verizon”, Craig Moffett, a MoffettNathanson analyst, told Bloomberg. “They are trying to monetise wireless in an entirely new way. Instead of charging customers for traffic, they are turning to charging advertisers for eyeballs.”

Verizon is likely to combine its online business with AOL, which the company bought last year in a $4.4bn deal.

AOL and Yahoo will be competing with leading internet and social media giants such as Facebook and Google, which currently account for over half of the US’ digital ad market, and are the reason behind Yahoo’s struggle to retain profit.

Yahoo, which had a market capitalisation of $125bn in its prime in the year 2000, will still retain its estimated $41bn stake in the Chinese e-commerce company Alibaba.

For an in-depth exploration of how Yahoo fell from its previous heights, see The New Economy‘s special report on the topic.

Elon Musk sets out part two of his unifying grand plan

Posted on by Ben Debski

On July 20, Elon Musk revealed an update of the ‘Master Plan’ he wrote a decade ago, aptly named ‘Master Plan – Part Deux’. The initial plan involved developing a “low volume car”, which Musk deemed necessarily expensive. The money made from this activity would then be used to create a medium volume vehicle that could be sold at a lower price. Step three involved using that capital to develop a high volume car, which could be sold at an affordable price for consumers. Finally, point four as written by Musk was: “Provide solar power. No kidding, this has literally been on our website for 10 years.”

In the blog post published on the Tesla website, Musk clarified the necessity of starting with a low volume car, as that was all he could afford from his PayPal payout, while only risking his own money. As he explained in the post, he laid out these points 10 years ago so as to explain the “larger picture” of his actions, which ultimately comes down to achieving sustainable energy. Having attained success from one point of his master plan to the next, Musk has almost reached completion. As such, he has now set out the next parameters of his strategy in order to make a sustainable energy economy a reality – and sooner than we think.

Musk’s new plan involves the creation of solar roofs that have “seamlessly integrated battery storage” and the expansion of Tesla Motor’s electric vehicle portfolio so as to address all key sectors. Then comes the realisation of self-driving capabilities that are ten times safer than manual driving, and, finally, making it possible for cars to earn money when not in use – namely, through car sharing. The last point involves using a smartphone app to add your car to Tesla’s shared fleet, thereby offsetting monthly costs and fully utilising a vehicle that, generally, is only in use five to 10 percent of the day.

Musk’s new plan involves the creation of solar roofs that have “seamlessly integrated battery storage”

Musk, a South-African born engineer, inventor and business tycoon, first began with Zip2, a software company that he created with his brother at the age of 24. After board members refused Musk’s desire to become the CEO, the company was sold to Compaq for $307m in 1999. Using the capital Musk earned from the sale, he went on to found the online financial service firm X.com, which merged with PayPal in 2000.

With eBay’s purchase of PayPal in 2002 for $1.5bn in stock (being the largest shareholder, Musk earned $165m), the unflappable entrepreneur swiftly moved on to create SpaceX, which made history by becoming the first private company to travel to space.

Musk’s latest vision began to take shape when he joined Tesla Motors and later became CEO and product architect in 2008, amid the chaos of the financial crisis. Since taking the helm of the group, Musk has gone on to become something of an icon within the scientific community, and further afield as well. Using both his business and engineering acumen, while paying himself only $1 a year, Musk is positioning himself as visionary who genuinely wants to make the world a better place.

 

 

Yahoo continues to struggle with spiralling losses and no buyer in sight

Posted on by Ben Debski

Yahoo has once again missed its quarterly earnings target, fuelling speculation that the fallen internet search giant is nearing the end of the road. The company’s “seemingly permanent decline”, as it was put by Brian Wieser in a note to investors last year, has many questioning its renewed commitment to product innovation, user experience and advertising revenue.

The company’s latest earnings report is proof that the core business line is still shrinking. Despite a $60m uptick in revenue for the three months to June, buoyed both by its core internet business and mobile services, the company’s losses widened to $440m over the period.

These issues notwithstanding, CEO Marissa Mayer struck a markedly positive note in the firm’s latest earnings report. “With the lowest cost structure and headcount in a decade, we continue to make solid progress against our 2016 plan. Through disciplined expense management and focused execution, we delivered Q2 results that met guidance across the board and in some areas exceeded it”, she said.

Yahoo’s losses widened to $440m over the three months to June

Mayer has embarked on an aggressive cost-cutting exercise in recent times, having slashed the global workforce by 15 percent in February. Her record at the helm, however, has been regularly questioned by analysts, and confidence in her leadership has been shaken by a failure to deliver on promises of a turnaround.

She is one of a handful who remain hopeful in light of what otherwise looks like an irreparable situation for Yahoo. “In addition to our efforts to improve the operating business, our board has made great progress on strategic alternatives. We are relentlessly focused on delivering shareholder value.”

The disappointing results could hardly come at a worse time, as Yahoo continues the search for a prospective buyer. The process, it seems, is nearing an end, and the board is expected to accept any offer north of the $5bn mark.

To read more on the tragic demise of Yahoo, read a new special report on the topic online and in the print edition of The New Economy.