Good morning! Remember the Olympic flag bearer that the Internet swooned over last year? His country, Tonga, of just over 10,000 close to New Zealand, is going dark. There will be no Internet connectivity in the island nation for two weeks. It is connected to the world via undersea fibre optic cables. And the underwater volcanic eruption has caused a fault line in those cables. So, a ship has to go into the sea, find the fault, and fix it.

In the latest edition of The Signal Daily, brought to you by PlumLite, we discuss Walmart’s entry into the growing metaverse craze. We also delve a little deeper into the United Kingdom and its successive attempts at weakening or removing end-to-end encryption in messaging apps such as WhatsApp, with a recent move to mobilise public opinion against the feature.

UK Prefers Surveillance Over Data Privacy By The Signal Podcast episode

Subscribe to The Signal Daily

The Market Signal*

Stocks: The weakness that was gradually creeping into the broader market in the past few sessions reflected in the indices on Tuesday. Of the Nifty stocks, 42 ended in the red while only seven stocks on the Sensex gained. The markets were also concerned about rising oil prices.

Cryptocurrency:  Imminent central bank tightening is weighing on the cryptocurrency markets. Typical of form, retail investors are also showing signs of fatigue on social media. 

Microsoft Answers Call of Duty

No Discord? No problem. Microsoft’s gaming (and Metaverse) ambitions took a near $70 billion leap on Tuesday, with its acquisition of Activision Blizzard. The deal will also make Microsoft the world’s third-largest gaming company by revenue, behind Tencent and console-rival Sony.

Satya Nadella @satyanadella

Together with @ATVI_AB, we will usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive, and accessible to all. Microsoft to acquire Activision Blizzard to bring the joy and community of gaming to everyone, across every device - StoriesLegendary games, immersive interactive entertainment and publishing expertise accelerate growth in Microsoft’s Gaming business across mobile, PC, console and cloud. REDMOND, Wash. and Santa Monica, Calif. – Jan. 18, 2022 – With three billion people actively playing games today, and fueled by a new g…news.microsoft.com

January 18th 2022

1,430 Retweets7,579 Likes

The BFD: Activision’s franchises will be integral to Microsoft’s vision of the metaverse, while also giving it a substantial fillip to take on traditional gaming rivals such as Sony in the console space. The deal could also fire up Microsoft in its now-intense ecosystem battle with newfound rivals like Meta’s Oculus. Then, there’s access to talent and technology, and Activision’s 400 million monthly active users who could help boost Microsoft’s Xbox Game Pass subscription business.

At what cost? But this isn’t a good look for Microsoft. Activision Blizzard has been under the scanner for sexual harassment and a toxic workplace. Lego is reviewing its partnership with the beleaguered company. Making matters worse is Microsoft’s own hypocrisy: XBox chief Phil Spencer had denounced the “horrific events and actions'' at Activision. 

Oh, and Lina Khan’s FTC awaits.

TRACKING THE THIRD WAVE

No Sugarcoating The Antibiotic Pill 

As India nears 9,000 active Omicron cases, Dr Angelique Coetzee has warned against antibiotic misuse to treat manageable symptoms. Coetzee, who chairs the South African Medical Association, was the physician who first raised the alarm on the Omicron variant in 2021.

Omicron is no child’s play: The US and Europe are witnessing record numbers of child COVID hospitalisations. The good news is that a majority of kids affected by Omicron have mild symptoms.

China Canada pow-wow? Meanwhile, Canadian health minister Jean-Yves Duclos rubbished China’s claim that its first Omicron case surfaced after a man handled mail originating from Canada. Xi Jinping’s government is doing everything from disinfecting overseas packages to curbing Winter Olympics ticket sales in order to prevent more COVID-19 outbreaks.

Numbers don’t lie: Cases spiked in most states on Tuesday. A separate report showed that many states paid compensation claims that were several times the official death toll.

Meta Plumbs The Depths Of A Biometric Goldmine

It’s official. The metaverse, or rather, Meta’s version of it, will be a personalised advertising engine on steroids. And it’s not just your biometric data, but also your involuntary biological responses that will oil the cogs of this Huxleyan machine.

Patent applications reviewed by the Financial Times reveal how Meta will harvest users’ poses, skin tones, and facial expressions—right down to pupil activity—for hypertargeted content. While this data will shape realistic experiences in the metaverse, it will also give advertisers information about user engagement in a way web-based services cannot. Such biometric data could power third-party bidding for object placement in virtual stores.

The Signal

Meta is a new page in an old (Face)book. The Mark Zuckerberg-led company will undoubtedly use wearables like augmented reality (AR) headsets to catapult its much-maligned advertising model to new heights. This is disconcerting, because there are no legal constraints on how data will be collected and used for the metaverse and even Web3.

The Financial Times report also follows the explosive revelation that Mark Zuckerberg and Google CEO Sundar Pichai personally approved the illegal ‘Jedi Blue’ project, which is the subject of an ongoing antitrust complaint. And while Google is seemingly behind the metaverse pack, its acquisition of AR company North proves otherwise.

Meta’s and Google’s collusion has led to clarion calls for comprehensive legislation. The recently-announced Tech Oversight Project, led by Pierre Omidyar and Facebook co-founder Chris Hughes, will hopefully catalyse Big Tech regulation– now and in the metaverse.

Apple Takes Another Bite In India 

Apple will declare its Holiday quarter performance on January 27, and by the looks of it, investors have a lot to celebrate already. 

App Store bonanza: Developers earned $60 billion in revenue in 2021 through the App Store, the highest ever in a single year. Given the cut Apple takes, a record will be set here. 

Indi-yeah: Apple increased its share of the premium smartphone segment from 50% in 2020 to 70% in 2021, shipping more than 6 million units and doubling sales from the previous year, as per data from Counterpoint Research. This is a record for Apple in India. 

One more bite: India is the fastest-growing smartphone market. Although Apple only has a sliver of that market, it rules the premium segment. It is now targeting lower slabs with the iPhone SE 2, but efforts to ramp up local production, which would help protect profit margins at lower price points, have had challenges.

Netflix’s Growth Playbook: Sport and Korea

Streaming giant Netflix may be on to something. It has joined the growing ‘live sport’ bandwagon. It also plans to ride the Korea (and Asia) wave with more gusto.  

Staying a-live: Thus far, Netflix’s sports programming has comprised docuseries on football, basketball, golf, tennis, Formula One, and closer home, cricket. It now wants to dive into live sports. A Bloomberg report revealed that CEO Reed Hastings may not be opposed to buying global rights to a sport such as Formula One.

Doubling down on Asia: Netflix’s $1 billion+ investment in Korean content might have already paid off with Squid Game’s success, but the company isn't slowing down on K stuff. Instead, it plans to apply learnings from Korea to the rest of Asia.

Record year: Netflix’s content splurge across categories is understandable. Scripted TV shows were back in 2021, and how!

FYI

I, Robot: Reliance Retail has picked up a 54% stake in robotics startup Addverb Technologies, presumably to expand automated warehousing for JioMart.

Dark cloud: The Biden administration is probing Alibaba’s cloud business to determine whether it poses a risk to US national security.

IPO bound: Logistics company Delhivery has received Sebi’s greenlight for a Rs 7,460 crore ($1 billion) IPO. Meanwhile, OYO is awaiting IPO approval for a $9 billion valuation.

Fine line: The EU levied a record €1.1 billion in fines against Big Tech in 2021, a sevenfold increase over 2020.

Flag march: Twitter’s feature to flag misleading content is expanding to more countries; namely, Brazil, Spain, and the Philippines.

Ad and subtract: The UK is following in the footsteps of Spain and Singapore in cracking down on crypto advertisements.

Penalty shot: Novak Djokovic’s Australian Open ban may extend to the French Open after France ruled that only vaccinated athletes can compete in sporting events.

FWIW

ChaWHAT?: Billionaire investor Chamath Palihapitiya received brickbats on social media for saying that he doesn’t care about the plight of China’s Uyghur Muslim minority. While the Golden State Warriors—the basketball team Palihapitiya co-owns—issued a statement to save face, they did not make any mention about the Uyghurs.

MAGAAA: Donald Trump joked about making “America great again again… again” as he soft-launched his 2024 campaign. The former US president has learned nothing from his narrow loss in 2020, as he claimed to have run twice and “won twice”. The message indicates that Trump still believes Joe Biden’s victory was rigged.

Ripe for the killing: Africa’s top avocado-exporting nation is contending with the perils of harvesting green gold. Armed vigilantes are guarding Kenya’s avocado trees following a spate of organised crime that targets farm owners. Reason? The fruit from just one tree can cost $60– enough to fund a child’s secondary education.

Want to advertise with us? We’d love to hear from you.

Write to us here for feedback on The Signal.