SOCIAL MEDIA

The TikTok Saga Continues

This weekend, it became clear that TikTok as we know it is coming to an end in the U.S. Treasury Secretary Steve Mnuchin said yesterday there’s a general consensus among American leadership that “TikTok cannot stay in the current format” because of risks over Americans’ personal data. 

• TikTok is owned by Chinese tech company ByteDance, which could be compelled by law to hand over user information to the Chinese government. 

So what happens next? 

There seem to be two options: 1) ban or 2) sell to an American company. 

This weekend, President Trump said he was choosing door number one—banning Tiktok from operating in the U.S. But...he didn’t, which adds further speculation to the idea that his “ban” announcement was a negotiating tactic to extract further concessions from ByteDance in the event of a sale.

So what about a sale? Microsoft, which is as American as subscribing to too many newsletters, confirmed last night it's been talking to ByteDance about acquiring TikTok's service in the U.S., Canada, Australia, and New Zealand. The company said it'll "move quickly" to reach a deal, and will finish up negotiations by Sept. 15 latest. 

What an acquisition would mean for Microsoft 

It’s worth noting Microsoft was the only member of “Big Tech” that was absent from last week’s antitrust hearing. The company has focused on business customers rather than individual customers, and, with a market value of nearly $1.6 trillion, that’s been a pretty successful strategy.

A TikTok acquisition would change that. Yes, Microsoft does have consumer-focused units already, most notably Xbox, which reported 65% sales growth last quarter. But its recent acquisitions—LinkedIn, GitHub, and a crowd of smaller startups to support its cloud business—were a play for the enterprise segment.

• A deal for TikTok would put Microsoft in unfamiliar—but also exciting—territory. TikTok has only just begun to monetize its exploding user base. 

Bottom line: With several Republican senators, including China hawks, comfortable with a sale to an American company, the smart money is on Microsoft pulling this one off. But the decision is President Trump's to make. 

COVID-19

Coronavirus Around the World

The single most important factor for the health of the global economy is how well countries contain the virus. Here’s the latest…

The U.S.: not containing it well. White House coronavirus task force coordinator Dr. Deborah Birx told CNN yesterday the coronavirus is more widespread than before, impacting rural as well as urban areas.  

Australia: Officials in the state of Victoria declared a “state of disaster” yesterday after recording record numbers of new cases over the last week. That means the city of Melbourne will be placed under a curfew from 8pm to 5am for the next six weeks.

Norway: The first company to start up international cruises since they were all canceled reported 36 crew members tested positive for the coronavirus. Nearly 400 guests on two cruises have been asked to self-quarantine.

Vietnam: The country will test all 1.1 million residents of the city of Danang after it was linked to a new outbreak. The number of coronavirus deaths in Vietnam, a country of 95 million people, remains in the single digits.

SPACE

Bob and Doug Yesterday

Bob Behnken and Doug Hurley—the astronauts aboard SpaceX’s Dragon Endeavour capsule—executed the world’s highest cannonball yesterday. They splashed down in the Gulf of Mexico off the coast of Florida after spending the last two-ish months aboard the International Space Station.

It’s a big deal, because rockets, SpaceX, Elon Musk, etc. But it’s also historic: This is the first time in 45 years that astronauts from any nation have returned to Earth via splashdown. 

While any homecoming from space is complicated, SpaceX and NASA had to contend with the additional challenge presented by Tropical Storm Isaias, which was lashing Florida’s east coast around the same time the craft landed.

• But if there’s one good thing about Florida...it’s a peninsula, so the astronauts splashed down on the opposite coast where the weather was much calmer.   

Zoom out: The astronauts’ safe return was the final step in certifying Musk’s SpaceX to begin routine, operational spaceflights to the ISS. He had this to say about it:

Elon Musk's Twitter feed

SPONSORED BY POLICYGENIUS

1,127 Is Our New Favorite Number

Because that's how much moola we could be saving by bundling our home and auto insurance with the mavens of insurance at Policygenius.

They know insurance like the Brew team knows electronically mailed newsletters. Their team of experts makes it easier than ever to compare insurance options to find the right coverage for your home—and your wallet.

They’ve saved their home and auto customers an average of $1,127/year by shopping top-rated insurers in one place. Let us reiterate: That’s $1,127 a year. 

If Policygenius finds you a better rate than what you're currently paying, they'll even do the work to get you switched—at no extra cost. 

All you have to do is answer a few questions about yourself and your property, and their experts will compare your policy against options from top companies—while you sit back, relax, and daydream about what you would do with 1,127 bucks. 

See how much you can save with Policygenius today. 

ADVERTISING

Advertisers and Facebook? It’s Complicated

Now that August is here a clearer picture of July’s #StopHateForProfit movement, in which 1,000+ brands including Unilever, The North Face, Heineken, and Chipotle staged a public advertising boycott of Facebook, is coming into focus. 

It's just a flesh wound

On its earnings call Thursday, Facebook said ad revenue grew 10% annually in the first three weeks of July. Zuck said, “some seem to wrongly assume that our business is dependent on a few large advertisers.”

• Some numbers: Throughout most of July in 2019, the top 100 advertisers on FB spent $251.4 million. In 2020, that number was 12% lower, according to data from Pathmatics. 
• Some perspective: Facebook raked in $18.7 billion—with a “B”—in revenue in Q2. The top 100 spenders contributed 16% of those sales. 

Bottom line: The leaders of the boycott said it won’t formally continue past July because of the strain it puts on businesses that rely on the platform for marketing. But the movement as a whole “will get bigger and broader” until they feel Facebook takes meaningful action “to mitigate the damage it causes.”

CALENDAR

The Week Ahead

'Tis the week to finally make Robert Pattinson's quarantine pasta recipe. 

Monday: ISM Manufacturing Index; earnings (Clorox, Tyson Foods, HSBC); 1 year anniversary of mass shooting in an El Paso, TX, Walmart 

Tuesday: Earnings (Disney, Sony, Activision Blizzard, Planet Fitness); new Twilight novel

Wednesday: ADP employment report; Samsung will unveil lots of new hardware at its Unpacked event; earnings (Wayfair, New York Times, Square, Humana, Etsy, Wendy’s)

Thursday: Jobless claims; PGA Championship begins; earnings (Bristol-Myers Squibb, ViacomCBS, Booking Holdings, Uber, Zillow, Adidas, Siemens, Nintendo, Toyota) 

Friday: July jobs report; earnings (Berkshire Hathaway)

WHAT ELSE IS BREWING

• Marathon Petroleum will sell its Speedway convenience store chain to the owner of 7-Eleven for $21 billion. It would be the biggest corporate acquisition since the pandemic began.
• Lord & Taylor, the U.S.' oldest department store, filed for Chapter 11 bankruptcy. 
• Siemens Healthineers (a German medical tech company, not a minor league baseball team) agreed to buy Varian Medical Systems for about $16.4 billion. 
• Eastman Kodak’s executive chairman was granted options for 1.75 million shares last Monday based on a previous “understanding” with the board, Reuters reports. Those options are now worth tens of millions after last week’s stock surge.
• MLB drew much higher ratings for its first week than a year ago. Commissioner Rob Manfred is determined to keep the season alive in spite of some players testing positive for the coronavirus and others ghosting the Mets.

BREW'S BETS

Green may be gettin’ legalized; put some in your wallet. This little-known Canadian company could be in line to generate a whole ’lotta profits off the coming legalization boom. If you want to get in on the green action, sign up for Motley Fool Stock Advisor.*

Donation suggestions: Mackenzie Scott (formerly Bezos) is the fourth-richest woman in the world and has pledged to donate the majority of her wealth. She listed the 116 organizations she’s given back to already. 

Quarantine idea: Build a labyrinth in your backyard. This guy is one of the world’s leading experts, or learn more about the labyrinth community here.

^{*This is sponsored advertising content}

FROM THE CREW

Start Talking

On Mondays, we'll present some of the thorniest business topics of the day, give you a jumping-off point, and encourage you to debate it with friends, family, and coworkers.

This week’s topic: As Democrats and Republicans continue to debate a new round of COVID-19 relief, one point of contention is whether businesses should be held liable if someone contracts COVID-19 on premise. For Senate Majority Leader Mitch McConnell, a relief bill without liability protections is a nonstarter. 

1. What they’re both arguing (Vox)
2. Proving a business acted negligently won’t be that easy (NPR)
3. More employers are requiring COVID-19 liability waivers anyway (Roll Call)
4. How effective are liability waivers? (ABA Journal)
5. The U.S. Chamber of Commerce and nearly 500 business associations say COVID-19 lawsuits could deter businesses from reopening (U.S. Chamber)

Audience participation alert: Got a controversial business topic you want to see covered in Start Talking next week? Reply to this email with the topic and we'll select one from a reader for next Monday's edition. 

CROSSWORD

Crossword lovers, read this: We are now accepting submissions for the Brew Crossword next Monday. The details:

• Keep it to a 15x15 grid and email a PDF to toby@morningbrew.com
• The NYT has some good tips on where to start. And if you want to puzzle like Toby does, this is the program he uses. 
• Submissions will be considered through Friday at noon.

Now onto today's puzzle...sample clue: prickly critter (8 letters). 

Play the crossword.