U-turn

MARKETS

• White House diaries: Footage of a wild Oval Office meeting caused investors' (and everyone else's) jaws to drop. President Trump told two Democratic leaders that he'd be "proud" to shut down the government over border security.
• U.S. markets: Just like the term paper you haven't started yet, volatility isn't going anywhere. Stocks swung in both directions yesterday before finally closing with mixed results.

TECH

Mr. Pichai Goes to Washington

Hard to believe it's been eight months since Mark Zuckerberg testified on Capitol Hill. Who could forget his, uh, unique water-sipping technique and the famous zinger, "Senator, we run ads"?

But Zuck got the day off yesterday. And for the first time, Google CEO Sundar Pichai found himself answering questions from concerned lawmakers.

Before we dive in, let's talk Google's last few months

Google tried to hunker down through a hurricane of Big Tech criticism after Russian election interference and Facebook's Cambridge Analytica scandal came to light. But it couldn't totally escape the storm:

• Employees have protested workplace issues related to sexual harassment, and many have also spoken out against a potential censored search engine for the Chinese market.
• Lawmakers on both sides of the aisle have their own issues, including monopoly power, data privacy, and alleged political bias.

So what went down?

On perceived anti-conservative bias: Pichai told GOP reps, "We use a robust methodology to reflect what is being said about any given topic at any given time...I can assure you we do it without regards to political ideology." Keep in mind, many Google employees do lean to the left, but there's no credible evidence showing employees have tampered with Google's algorithms in a political manner.

On Google's Chinese search engine: "Right now, we have no plans to launch in China," but...at one point, over 100 people were working on such a project because "we always think it's in our duty to explore possibilities."

On user privacy and antitrust: Pichai dodged a bullet, as GOP lawmakers focused more on questions of political bias. But Dem lawmakers will probably want to hear more on the subject when they take power in January.

Zoom out, courtesy of House Majority Leader Kevin McCarthy: "It was necessary to convene this hearing because of the widening gap of distrust between technology companies and the American people."

BIZ STRATEGY

So You Want to Turn Around Your Company?

You heard it here first: That lemonade stand has unicorn potential. So roll up your sleeves and take notes from these two giants.

Over at Verizon...

The wireless carrier decided its internet-company-buying-spree over the last few years will not be the hill it dies on.

Verizon (+1.00%) has cut the value of its Oath media business—a pastiche of recently acquired firms including AOL and Yahoo—by $4.6 billion (almost half its value).

And there's no time to waste. Verizon wants to save $10 billion in cash by 2021. That means CEO Hans Vestberg is getting serious about cost-cutting, from an Oath write-down to buying out 10,400 employees.

And at WPP...

The world's largest advertising company will cut 3,500 jobs (~2.5% of its workforce) to focus on its creative and technology chops instead of headline-grabbing agency mergers. Remember, legacy ad brands have struggled to keep clients who increasingly ask for digital/data services.

WPP (+2.44%) said it wants to snag 15% margins and save about $348 million per year by the end of 2021 to stick "in line with its peers."

Because we know you're going to look it up later: "Pastiche" essentially means "hodgepodge." We're counting on you to unleash it at least twice today.

TRADE

How China's Move to Drop Tariffs on the U.S. Is Good for German Automakers

Hear us out.

China has reportedly agreed to reduce tariffs on U.S.-made vehicles to 15%, down from the current 40%.

How'd the tariffs get so high? China upped the auto tariff to 40% in July to retaliate against the U.S.' own tariffs. That definitely ticked off the U.S., since China taxes other countries' cars at a 15% rate. Guess that's why they call it a trade war.

The news sent automaker shares higher across the board. But who's especially glad to read that headline? German luxury brands, which are more popular in China than the likes of Ford or GM...and which have plants right here in the U.S.

• BMW (+0.84%), which exports German-designed/U.S.-made SUVs to China, previously said tariffs would cost it $340 million...this year alone.
• And Daimler (+1.38%) was the first major carmaker to predict its profit would take a hit because of the trade war.

Bottom line: Making it cheaper to get U.S.-made cars to China is good news for global automakers and anyone hoping a trade deal is on the horizon.

STARTUP

If You Google ‘Plaid’...

You'll get more than just Kate Middleton's recent winter wear choices. For example, you might read the recent news about San Francisco-based fintech startup Plaid, which just closed a $250 million funding round at a $2.65 billion valuation.

So what does Plaid do? It runs the API software that links your bank account to enterprises that love to have links to your bank account, from Venmo to Robinhood to Coinbase.

• Plaid says as of December, 25% of people in the U.S. with bank accounts have connected to Plaid through an app. That's up 13% in a year.
• It has integrations with 10,000+ banks and connects to roughly 20 million consumer accounts.

Plaid's most recent fundraise (a Series C) upped its valuation from just $225 million, per Pitchbook. Revered VC Mary Meeker led the round—you know Meeker for her annual internet trends report, which is as close to required summer reading as Silicon Valley offers.

What does Meeker see in Plaid? As Axios's Kia Kokalitcheva writes, "Plaid is to finance apps what Stripe is to e-commerce." And Stripe is valued at $20 billion.

MUSIC

Bohemian Rhapsody: By the Numbers

• Number of extra incisors Freddie Mercury had? Four.
• Number of Queen albums sold? Over 300 million.
• And now, number of times Queen hit "Bohemian Rhapsody" has been streamed across platforms? 1.6 billion, according to Universal Music Group.

That makes your college a cappella friend's go-to karaoke choice the most streamed song from the 20th century, topping Nirvana's "Smells Like Teen Spirit."

43-year-old "Bohemian Rhapsody" is as popular as it's been in a generation thanks to the Freddie Mercury biopic of the same name released last month (which has raked in nearly $600 million globally).

+ There's more to the six-minute mega-hit than a few nifty key changes. Its accompanying video is generally considered the first promotional music video ever aired—meaning you can thank Scaramouche for those after-school MTV binges.

WHAT ELSE IS BREWING

• Tencent Music priced its IPO at $13 per share, on the lower end of its range. It'll still be one of the biggest traditional IPOs in the U.S. in years.
• Uber has reportedly selected Morgan Stanley to underwrite its 2019 IPO, according to Bloomberg.
• Huawei CFO Meng Wanzhou was granted bail by a Canadian court as she awaits possible extradition to the U.S.
• Supermicro said a third party auditor found no evidence of Chinese spies planting chips in its products—about two months after a Bloomberg report alleged otherwise.
• Tesla (+0.44%) is seeking $167 million in damages from the former employee Elon Musk accused of sabotage.
• Time Magazine named murdered journalist Jamal Khashoggi and other reporters in dangerous situations as its "Person of the Year."

BREAKROOM

Guess the Logo
Here's a thought: You may look at something every single day, but you never really "see" it. Let's put that hypothesis to the test, shall we? Given this all-black Google logo, determine which color should fill in each letter.

(Answer located at bottom of newsletter)

Breakroom Answers