Hey Snackers,
Biggest double-take headline of the week: "William Shakespeare receives Pfizer Covid vaccine."
The Nasdaq index plunged yesterday, dragged down by Big Tech stocks. Also: the White House made an offer to Democrats for a $916B Covid relief bill.
Facebook might have to break up with Insta and WhatsApp— we break down the numbers
Blowing up the fambam chat... Facebook's precious "family of apps" might have to split up. The FTC and 46 states just served up some major lawsuits, accusing FB of illegally crushing competition by buying rising rivals. It's one of the biggest tech antitrust cases in decades.
- 2012: The term #influencer was barely a thing when the FTC approved Facebook's purchase of Instagram for $1B.
- 2014: The FTC greenlit Facebook's $19B splurge on WhatsApp, your go-to for sending memes to your foreign cousin.
- 2020: The FTC, whose life goal is to target and destroy unfair business practices, wants FB to separate from Insta and WhatsApp.
Losing the plug... While these lawsuits could take years to resolve, losing precious Instagram and WhatsApp could be an existential crisis for Facebook (Zuck's words). Partly, that's because WhatsApp and Insta users are growing faster than Facebook and Messenger users. Here's what we dug up from FB's September earnings report:
- Finding: Daily users on FB and Messenger grew 12% to 1.8B people. But the "Family" of apps' total daily users, including Insta and WhatsApp, grew 15% to 2.5B.
- Conclusion: WhatsApp and Instagram clearly boosted overall user growth. Also: around 700M people use WhatsApp and/or Insta daily without touching Facebook.
This is partly why FB wants a mega app... Facebook has been pushing hard to integrate messaging and payments across its apps. The goal: create a connected WhatsInstaBook experience. The side-goal: make it way harder for regulators to break it up. Now those plans could be stalled — or aggressively fast-tracked.
McDonald's starts a turf war with franchisees over Happy Meals
"We got the Big Mick"... As Eddie Murphy learned in Coming to America: McDonald's may look corporate on the outside, but it's family on the inside. 93% of its 39K locations are franchised, aka: owned by independent people. Mickey D's sells the rights to use its brand and open shop — as long as the McFlurrys are frosty, no one knows who owns it.
- Franchisees are UnHappy, after McDonald's said it's ending the $300/month Happy Meal toy rebate it pays to its 14K US restaurants.
- Expect pricier Happy Meals. Some franchisees said they'd raise prices because they'll have to cover toy costs themselves.
When you get the Minion... but you wanted the mini Hot Wheels. Franchise owners have to pay McDonald's a percentage of their sales and buy ingredients and merch straight from corporate. But McDonald's wants to spend that toy money on tech, instead. And it wants franchisees to do the same.
Aggressive tech prioritization = pandemic pattern... Food chains have been ruthlessly prioritizing tech investments. McDonald's says its new "smart" drive-throughs are boosting sales, so it's charging franchisees higher tech fees. Chipotle doubled down on its digital-order Chipotlanes. And Starbucks just announced it's investing in digital order "walk-through" stores.
What else we’re Snackin’
- Dashing: DoorDash shares soared 85% from their IPO on their first day trading on the NYSE, giving it a tasty $60B valuation.
- Vax: The US plans to distribute 2.9M Covid-19 vaccine doses immediately after Pfizer's vax gets greenlit by the FDA.
- Leading: Starbucks names Ariel Investments co-CEO Mellody Hobson as its next chairwoman.
- Carbs: Apple will require apps to add privacy "nutrition labels" starting December 8th (TikTok = ice cream sundae).
- Texelon: Elon Musk has apparently moved to Texas, taking a jab at Silicon Valley and California lawmakers (one word: taxes).
- Ubs: Uber adds 2.4K US locations to Uber Connect, the package delivery service no one's ever heard of.
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