- Toyota and Volkswagen Step Up Investments in Tech Start-Ups: On Tuesday, two of the world’s largest automakers, Toyota and Volkswagen, said they were stepping up to invest in technology start-ups that are working to change the way people travel by car. Toyota said it had formed a partnership with and invested an undisclosed amount in Uber, the biggest ride-hailing company. Gett, the app popular in Europe, said it was working with Volkswagen, and the automaker was investing $300 million in the start-up. The alliances are the latest in a string of pairings between technology companies and traditional automakers that are scrambling to reposition themselves. For decades, automakers had abided by the well-worn formula of making bigger and more powerful cars to fuel their growth. But start-ups like Uber and Lyft and technology companies like Google and Tesla have disrupted that cadence. These companies, mostly located in Silicon Valley, have in the last few years sped the development of self-driving cars, electric vehicles and ride services. Automakers have become increasingly concerned about those technologies and their potential to help people travel easily and cheaply without owning a car — or even without knowing how to drive. In January, General Motors invested $500 million in Lyft, the ride-hailing app popular with American users, with a focus on developing networks of autonomous vehicles. Ford Motor is making over its Dearborn, Mich., headquarters into a Silicon Valley-like campus of green buildings connected by self-driving shuttles. And a few weeks ago, Fiat Chrysler and Google agreed to produce a test fleet of driverless minivans. Both BMW and Mercedes-Benz have started to pilot ride services. Even other technology companies only tangentially related to automobiles are becoming more involved in ride services. Apple, which is working on its own autos project, said this month it had invested $1 billion in Didi Chuxing, a Chinese ride-hailing company that competes fiercely with Uber.
- French Tax Investigators Swoop on Google’s Paris Offices: French police and prosecutors swooped on Google’s Paris offices on Tuesday, intensifying a tax-fraud probe amid accusations across Europe that the Internet giant fails to pay its fair share. The raids are part of preliminary criminal investigation opened in June 2015 after French tax authorities lodged a complaint, according to a statement from the nation’s financial prosecutor. The probe is seeking to verify whether Google’s Irish unit has permanent establishment in France and whether the firm failed to declare part of its revenues in France. Prosecutors will probably go after Google’s management in Ireland, according to Alain Frenkel, a tax lawyer in Paris. “That doesn’t mean Google won’t also face a recovery order from France’s tax authorities,” he said in a phone interview. The raids come as Google, which is part of parent company Alphabet Inc., faces outrage in Europe over the small amount of tax it pays in the region. France has called on the company to pay back taxes of about 1.6 billion euros ($1.8 billion). While no one has been charged of any wrongdoing, French penalties for aggravated tax fraud have recently been ramped up. Convicted managers can potentially face as long as 7 years in jail and a 2 million-euro fine.
- Hewlett Packard Enterprise will spin off its troubled services business in an $8.5 billion deal: Six months after the Silicon Valley stalwart Hewlett-Packard split into two companies, one half announced a surprise plan to split yet again. Hewlett Packard Enterprise said it will spin off its long-troubled services unit and merge it with the IT services firm CSC in a deal worth about $8.5 billion. The complex deal, in which HPE will combine its $20 billion Enterprise Services unit — accounting for more than one third of HPE's 2015 revenue — with CSC into a combined company of which HPE shareholders will end up owning about half. The total consideration of the deal includes the creation of $4.5 billion of new shares, a cash dividend worth $1.5 billion, and the transfer of about $2.5 billion in debt and other liabilities off HPE's books and into the new company. HPE also expects to trim its operating costs by about $1 billion as a result of the spinoff. What will remain at HPE is a leaner $32 billion company that leads the world in sales of servers, the computers that are stacked together in data center racks that power the Internet. It competes with networking giant Cisco Systems in selling gear for corporate networks, with EMC in data storage gear, and also sports a small software business that did about $3.6 billion in sales last year. The new company — HPE and CSC are calling it Spinco for now — will be a pure player in the low-margin, IT outsourcing market that had been a shrinking, expensive weight around the old HP's neck during the time it was struggling to bounce back. Revenue in the unit has declined for several years, during years that its customers went through wrenching changes in how they purchase and consume technology. The move will also unwind what in hindsight has turned out to be one of the worst acquisitions in the old HP's history, the $14 billion acquisition of the IT services firm EDS, consummated in 2008 under yet another prior HP CEO, Mark Hurd, now the CEO of Oracle.
- Amazon Plans Big Push to Expand Prime Now Fast Delivery: Amazon.com Inc. plans to broaden the reach of its fast delivery service Prime Now, and is selling major brands promotional deals connected to the expansion, a sign the world’s largest Internet retailer is satisfied with early results from the nascent offering. The service -- now only available through the Prime Now app on smartphones -- will be run on Amazon’s website starting in May, according to documents reviewed by Bloomberg. Getting Prime Now on the Web puts the service in front of a larger audience, many of whom may not have downloaded the app on their phones. While shopping on mobile devices is expected to reach $96.2 billion in the U.S. this year, that represents a quarter of all e-commerce, according to the research firm EMarketer. Amazon is trying to sell advertising space to major brands for the Web launch, promising them visibility with tens of millions of Amazon shoppers. The premium "Launch Hero Package" would cost $500,000 for about two weeks of placement on Amazon’s website associated with the rollout. That price includes e-mail promotions sent to Amazon customers, which Amazon said have a stand-alone value of $100,000, according to the documents reviewed by Bloomberg.
- Salesforce.com Acquires Deep Learning Startup MetaMind: Cloud business software company Salesforce.com has acquired MetaMind, a startup focused on artificial learning that had been funded by Salesforce CEO Marc Benioff and venture capital firm Khosla Ventures. Terms were not disclosed, but it has all the markings of an “acqhire” sort of deal. Founder and CTO Richard Socher announced the deal in a post on the MetaMind website. Socher says on his personal website that his new title is Chief Scientist at Salesforce. MetaMind’s area of expertise is deep learning, the subset of artificial intelligence focused on data processing that is en vogue with Google, Facebook and other tech companies. The startup’s specialty is natural language processing — allowing computers to analyze relationships between words. Some of its capabilities disclosed in published researchdescribe advancements in the field that outrank those of some of the larger tech giants. Socher, a Stanford PhD, has said MetaMind’s plan was to sell this technology as a service to other companies. At MetaMind, he led a tiny group of researchers who gained a reputation for some rapid breakthroughs in the area of artificial intelligence. A Re/codereport from 2014 described how after only four months, the team came in only slightly behind Google in the ImageNet competition, in which companies compete to build systems that can recognize images.
- Toyota expands Microsoft partnership in connected vehicle services: Toyota Motor Corp is expanding a five-year-old partnership with Microsoft Corp to develop new internet-connected vehicle services for owners and dealers, Toyota said on Monday. The automaker has established Toyota Connected at its U.S. headquarters in Plano, Texas, to consolidate its existing connectivity services and serve as the company's "data science" hub. Microsoft has a 5 percent stake in the venture. Among the services to be developed or expanded under Toyota Connected are insurance coverage and rates based on owners' actual driving patterns; connected vehicle networks that can share information on traffic and weather conditions, such as icy roads; and information services tailored to a driver's habits and preferences, including monitoring heart rate, glucose level and other personal health data. The new wireless services will use Microsoft's cloud-based Azure platform. Toyota launched its initial partnership with Microsoft in 2011. Ford Motor Co introduced a similar program with Microsoft a year ago, and BMW AG and Nissan Motor Co announced Azure-based services earlier this year. Toyota Connected will use Microsoft's cloud technology to develop "predictive, contextual and intuitive services" to "humanize the driving experience while pushing the technology into the background," Toyota said. Toyota Connected also will consolidate the automaker's current initiatives in data analytics, data management and data services for dealers and fleet customers. In addition, the new organization will provide support for Toyota's ongoing research in robotics and artificial intelligence, as well as development of self-driving cars.
- Microsoft’s mobile problem may not be a problem at all: When Microsoft announced its Windows 10 strategy last year, the thinking was that the unified platform would drive Windows Mobile and finally bring the Windows phone out of the doldrums where it’s been virtually forever. The idea was you could develop once for Windows 10 desktop and easily share that code on any device, making it impossibly attractive for developers, which would finally drive Windows Mobile popularity in a beautiful virtuous development cycle. Unfortunately, it hasn’t worked out that way, and Microsoft finds itself in an unusual position, developing software for iOS and Android because it simply doesn’t have a viable Windows mobile ecosystem. The question remains; can Microsoft succeed without a strong Windows mobile position? From the looks of things, they don’t seem to have much choice. Nadella appears to be staking his position in the cloud, which is a perfectly reasonable way to play it, while opening up his company’s tools to iOS and Android in the absence of any meaningful Windows phone adoption. When you look at the beauty of the mobile-cloud connection, it’s understandable Microsoft would want to be there with Windows, but perhaps Nadella is beginning to understand that Windows is not necessarily the future of the company — Azure and Office 365 are — and that could explain why the company stayed firmly focused on these two areas at Build. When you combine that with the idea of bots created by Microsoft, including Cortana (Microsoft’s talking virtual assistant), that can run in Microsoft’s tools or external platforms like Slack and LINE, you start to see a vision where Microsoft thrives even without an in-house mobile platform. As the world moves swiftly to that mobile-cloud intersection, perhaps the underlying OS becomes less important. If that’s the case — if Microsoft can have a piece of the underlying cloud-mobile plumbing and have apps and bots created in its ecosystem, run anywhere on any device — it renders the Windows phone gap irrelevant.
