Indonesia's Gojek, Tokopedia announce merger in country's biggest deal

SINGAPORE - Indonesian ride-hailing and payments firm Gojek and e-commerce leader Tokopedia announced a merger on Monday in a transaction that would create a technology powerhouse in the country's largest deal.

Sources familiar with the situation had earlier said the companies were seeking a $18 billion merger. Neither firm confirmed a valuation for the merged group.

Alibaba Group Holding and SoftBank Group Corp are among Tokopedia's investors, while Gojek's include Warburg Pincus and Tencent Holdings. 

(Reporting by Anshuman Daga: Editing by Neil Fullick and Kenneth Maxwell)

-reuters-

Softbank to buy $2.8-billion stake in Norway robotics firm

TOKYO - Japanese investment giant SoftBank Group will buy a 40 percent stake in Norwegian robotics company AutoStore in a deal worth $2.8 billion, the two firms said.

The deal is the latest bet by SoftBank, which has spent heavily on some of the tech world's hottest start-ups and biggest names, ranging from artificial intelligence to biotech companies.

The deal values AutoStore, which develops warehouse automation technology, at $7.7 billion, according to a statement released by the pair on Monday.

Known for its cuboid systems that reduce the space needed to store goods, AutoStore says it has deployed 20,000 robots across 35 countries and that its clients include Puma and Siemens.

"We view AutoStore as a foundational technology that enables rapid and cost-effective logistics for companies around the globe," said SoftBank founder Masayoshi Son.

The companies will work together to "aggressively expand across end markets and geographies," he added.

Son has in the past battled critics of his commitment to sometimes troubled start-ups, and brushed aside doubts over a massive asset-sale program.

Karl Johan Lier, Autostore's president and CEO, said his company hoped to grow in the Asia-Pacific market with Softbank's support.

US investment firm Thomas H. Lee Partners will remain the majority shareholder in Autostore even after the Softbank deal, which is expected to be finalized in April.

Agence France-Presse

SoftBank, Line Corp seek to create Japanese internet giant

TOKYO — Two weeks ago, SoftBank Group of Japan announced it had lost billions on soured investments in some of the world’s biggest tech startups. On Monday, it said it was ready to roll the dice again.

The company announced an agreement to merge its Yahoo Japan subsidiary with Line, a dominant messaging app company, to create a Japanese internet goliath that would be able to compete against bigger and better-financed tech firms in the United States and China.

The combination would bring together two prominent Japanese companies that have seen better days. Yahoo Japan, formed in 1996 as a joint venture with Yahoo, offers a range of services including online shopping and news, but has struggled to make the move from desktops to mobile phones.

Line’s chat app has 82 million users in Japan, but has struggled to expand its user base. The company fell into the red last year and has continued to book losses.

Line’s chief executive, Takeshi Idezawa, said at a news conference Monday that the merger would help make Japan more competitive globally in the industries of the future.

The tech world is becoming “winner take all,” said Idezawa, who noted that the leading global companies were developing monopolies on everything from human resources to finance.

Competitors’ “strengths are growing even stronger, and the gap between those companies and the rest is widening,” he said. “As every industry becomes increasingly digital, the effect of that on national power and cultural diversity is an important issue.”

The deal requires approval from shareholders and government regulators, who are likely to give close scrutiny to a linkup of two of Japan’s most powerful internet firms. The companies said they plan to complete the merger by October.

SoftBank and Naver, the South Korean company that owns a majority stake in Line, said Monday that they had reached a memorandum of understanding to take Line private as the first step in a complex financial arrangement that would result in Yahoo Japan and Line being held by Z Holdings, the publicly listed company that operates Yahoo Japan.

Z Holdings and Naver are considering an offer to Line’s minority shareholders of 5,200 yen, or $47.78, per share. At that price, each firm would spend more than $1.5 billion on the transaction.

By adding Line to its portfolio, SoftBank would get access to the messaging service’s users in Japan, and tens of millions more elsewhere in Asia, including Thailand, Taiwan and Indonesia.

In theory, that would allow the companies to merge their various offerings to create a super app that could serve as a gateway to all of their services. With the government pushing to move Japan away from its stubborn attachment to cash, the deal also sets SoftBank up to cement its control over the country’s small but growing mobile payment industry by combining its company PayPay, which leads the market, with Line’s service, Line Pay.

Analysts and investors hailed the deal.

“There are a lot of synergies,” said Mitsunobu Tsuruo, an analyst at Citigroup Global Markets Japan.

“Line is the strongest messaging company, and Yahoo is a strong domestic media company,” he added. “There are very few overlapping areas.”

Those synergies will be critical if the companies hope to stay competitive in their domestic market.

Line had one of the biggest public offerings of 2016, with investors flocking to the company based on its high revenue from advertising and sales of digital cartoon stickers that users can send to their friends.

The illustrations, which cost a little over $2, include Disney characters and Line’s own mascots, which have become popular enough that they have their own shop in Tokyo’s trendy Harajuku neighborhood.

But since then, the company has lost money as it works to promote its mobile payment service.

SoftBank, too, is facing tough times.

Just weeks ago, SoftBank Group posted a $4.6 billion loss from its investment in WeWork, the embattled office space company. WeWork’s value has crumbled after its attempt at a public offering collapsed under scrutiny of the company’s business model and accusations of self-dealing by its founder, Adam Neumann.

SoftBank, which is the world’s largest tech investor, has used its $100 billion Vision Fund to pick winners and losers in the startup world. But its investment model has come under increasing scrutiny over its large and sometimes quixotic bets on loss-making companies like Uber and the on-demand dog walking company Wag.

At a news conference after the announcement of SoftBank’s financial results, the company’s chief executive, Masayoshi Son, said that he regretted some of his decisions involving WeWork, but that he would not change his company’s underlying strategy of placing big wagers on companies that he believed had the potential to transform entire industries.


2019 The New York Times Company

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SoftBank's Yahoo Japan to merge with Line app operator

TOKYO - Japan's Z Holdings, formerly Yahoo Japan, will merge with mobile chat app operator Line, the firms said Monday, in a bid to boost the customer base for their digital services.

Mobile operator SoftBank Corp, the parent of Z Holdings (ZHD), and South Korea's Naver, Line's parent company, agreed the merger of ZHD and Line, SoftBank and Naver said in a joint statement.

Line will be delisted after SoftBank and Naver make a tender offer, with the merger expected to happen in October 2020.

The decision "aims to bring together the business resources of the ZHD Group and the LINE Group, which have overwhelming user bases and abundant assets in Japan, to provide a convenient experience to users in Japan," the statement said.

SoftBank also plans to invest in expanding into new business areas and "aims to be a leading company that is a driving force across Japan, Asia and worldwide."

The merger "will be conducted on an equal basis by ZHD and LINE with the aim of forming a business group that can overcome fierce domestic and global competition" and the newly integrated company will implement "business investment targeting growth in the areas of AI, commerce, Fintech, advertising" among others, it said.

The final price for the tender offer is still under discussion.

SoftBank Corp. a mobile unit of telecom and investment giant SoftBank Group, holds a 44-percent stake in Z Holdings, while Line is controlled by Naver.

Line was launched in 2011 after Japan's quake-tsunami disaster damaged telecoms infrastructure.

It combines features from Facebook, Skype and WhatsApp with games and a mobile payment service.

SoftBank and Line have increasingly competed in fields such as digital payments, while both firms have also been investing in artificial intelligence to improve their services.

Shares in SoftBank Corp were trading down 0.46 percent at 1,501 yen and its parent SoftBank Group was up 0.82 percent at 4,295 yen in early trade.

Shares in ZHD were up 1.43 percent at 423 yen and Line trading up 2.57 percent at 5,179 yen.

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WeWork hit with big loss despite revenue jump: reports

SAN FRANCISCO, United States - WeWork posted third-quarter losses of $1.25 billion despite the beleaguered office space start-up nearly doubling its revenue, US media reports said Wednesday.

The firm has suffered a dramatic reversal in fortunes since its $47 billion valuation at the start of the year.

In the last two months WeWork canceled its IPO and pushed out co-founder Adam Neumann, albeit with a reported severance package of more than $1.5 billion.

The record-high loss was more than double the red ink logged over the same period a year earlier while revenue soared to $934 million, according to the Wall Street Journal, which cited a report to debt holders by parent company We Co.

Japanese conglomerate SoftBank Group will pump a total of $9.5 billion into WeWork and increase its stake in the firm from 29 percent to around 80 percent in an agreement announced last month.

SoftBank Group last week announced an operating loss of $6.4 billion for the third quarter, the worst in its history, as it took a hit from investments in start-ups including WeWork and Uber.

WeWork offers flexible and shared workspace arrangements, with operations in 111 cities across 29 countries.

To cut costs, the firm stopped construction of new buildings and is selling off some business units, according to SoftBank chief executive Masayoshi Son.

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SoftBank Group profit plunges owing to WeWork turmoil

TOKYO - Japanese giant SoftBank Group suffered an operating loss of $6.4 billion in the second quarter, it said Wednesday, as investments in start-ups such as WeWork and Uber took a massive hit.

In the three-month period ending September 30, operating losses hit a whopping 704.4 billion yen ($6.4 billion).

The firm said first-half operating losses from its Vision Fund and Delta Fund came to 572.6 billion yen, largely "due to a decrease in the fair values of investments including Uber and WeWork and its three affiliates".

Net profit in the six months to September sank 49.8 percent to 421.6 billion yen on an operating loss of 15.6 billion yen.

The company did not publish its outlook for the year to March 2020, but uncertain roads lie ahead as shares in its key investments like Uber and Slack continue to slide.

SoftBank's flamboyant founder Masayoshi Son has faced renewed scrutiny of his investment acumen in the wake of WeWork's dramatic fall from grace.

Last month, SoftBank confirmed that it was injecting billions of dollars into WeWork, once hailed as a shining unicorn valued at $47 billion at the start of the year.

The start-up has gone from an investor darling to cancelling its IPO and seeing its co-founder Adam Neumann pushed out, albeit with a reported package of more than $1.5 billion.

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WeWork's new chairman defends payouts to founder, says company will survive

WeWork's new Executive Chairman Marcelo Claure on Wednesday defended huge payouts to the office-sharing company's founder Adam Neumann and said there is now "zero risk of the company going bankrupt," according to an audio recording of a meeting he held with employees that was reviewed by Reuters.

The meeting took place a day after WeWork's largest shareholder, SoftBank Group Corp, provided a $9.5 billion lifeline and took over the company, including payments to Neumann to give up control.

In response to a question from one WeWork employee, Claure said Neumann was like any shareholder of the company who deserved the right to sell his shares.

"There's a level of gratefulness that we're going to have for Adam, because he's the one who built this business," Claure said.

Neumann has the right to sell his stake in the company for as much as $970 million, sources previously told Reuters, as part of a tender offer in which SoftBank will buy up to $3 billion in WeWork shares from investors and employees. He currently owns a little over one fifth of WeWork.

SoftBank has also agreed to extend him a $500 million loan to repay a credit line from JPMorgan Chase & Co, as well as pay him a $185 million fee for a four-year assignment as a consultant to WeWork, one of the sources said.

'SURREAL TO CRAZY'

WeWork cofounder Miguel McKelvey had kicked off the meeting by introducing Claure to the staff at the company's New York headquarters and addressed the tumultuous few weeks WeWork had experienced.

"I think I've run out of words to describe what's been going on from surreal to crazy to unbelievable to...bonkers," McKelvey said.

In August, WeWork filed for a splashy initial public offering. This week, it was struggling for survival as it has been quickly burning through the cash on its balance sheet.

The IPO was abandoned in September as investors balked at sky-high valuations - a deal in January had tagged its worth at $47 billion. The rescue by SoftBank now values it at just $8 billion.

Investors also questioned both whether its business model was sustainable given big losses it was suffering and the way that Neumann was running the company, triggering his resignation as CEO.

Claure, who was previously CEO of U.S. wireless carrier Sprint Corp, set an upbeat tone during the hour-long meeting at which he encouraged questions.

"My goal is to be part of one of the most amazing comebacks in history and to build jointly with you guys," said Claure, who is also the chief operating officer at SoftBank.

Claure said that the new cash injection meant WeWork was not going to struggle to survive.

However, it was going to focus very differently, he said. "Make no mistake, the world has changed. The growth stories don't sell any more," he said. Adding that the challenge was to "build a company that has an amazing product, that delights our customers, but also makes money."

And that meant deciding which of the markets around the world "makes sense for us to be in, which market doesn't," he said. According to its website, WeWork has 856 office sites in 123 cities that are open or about to open.

Claure said he did not know how many layoffs would take place as WeWork looks to "go back to basics." Sources close to the company have mentioned a range of figures for possible layoffs in recent weeks, from as few as 2,000 to as many as 5,000 out of its 12,500 employees.

Claure said that despite the turmoil, WeWork's landlords were "eager to find different models of working with us."

WeWork had $18 billion in long-term lease obligations as of the end of June, according to its most recent public financial disclosure. It also had $1.3 billion in net debt.

The company is closing or selling a number of businesses outside of the main office-sharing operations. It recently announced it would close the WeGrow private school in New York City after the current school year.

WeWork did not respond to requests for comment. (Reporting by Sheila Dang and Carrie Monahan; Additional reporting by Joshua Franklin Edited by Martin Howell and Bill Berkrot)

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SoftBank in talks to take control of WeWork

NEW YORK — Japan-based SoftBank is ready to buy a controlling stake in WeWork, providing the shared office space startup desperately needed funding at a slashed valuation, a source told AFP on Monday.

Softbank is ready to invest an additional $4 billion to $5 billion in WeWork, taking a majority stake in the New York company while valuing it at $8 billion overall, the source said, asking not to be identified.

WeWork -- which declined to comment on the issue -- had been valued at more than $47 billion earlier this year.

The SoftBank proposal includes offering to buy more than a billion dollars in shares of WeWork from existing investors and employees, among them co-founder Adam Neumann.

Investment bank JPMorgan Chase, which already has an interest in WeWork, was expected to have a debt financing plan for the startup board of directors to consider at a meeting on Tuesday, according to the source.

WeWork needs to raise at least $3 billion to cover its financing needs through the end of the year, according to sources.

If WeWork opts for the SoftBank offer, the Japanese conglomerate headed by billionaire Masayoshi Son will own more than 80 percent of the startup.

The deal would also limit the influence of former chief executive and co-founder Neumann.

Neumann stepped down as chief executive in September amid questions over perceived self-dealing between his personal assets and WeWork, and over unconventional personal conduct, including drug use.

The company also scotched a plan to go public for the foreseeable future, ending one key financing route.

Ratings agencies have downgraded WeWork's bonds to "junk" status due to a cash crunch. The company reported $1.9 billion in losses in 2018 as it expanded rapidly.

The startup, which launched in 2010, has touted itself as revolutionizing commercial real estate by offering shared, flexible workspace arrangements, and has operations in 111 cities in 29 countries.

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WeWork throws in the towel on its ill-fated IPO

WeWork's parent The We Company said on Monday it will file to withdraw its initial public offering, a week after the SoftBank-backed office-sharing startup ousted founder Adam Neumann as its chief executive officer.

The withdrawal of its IPO prospectus formalizes the end of the New York-based company's pursuit of a near-term listing and allows Neumann's successors to proceed with the company's financial turnaround without disclosing as much information publicly.

The decision to abandon the IPO marks the conclusion of a tumultuous few weeks for the office-sharing firm, which failed to excite investors who raised concerns about its burgeoning losses and a business model that involves taking long-term leases and renting out spaces for a short term.

Furthermore, experts pointed out that removing Neumann from the CEO role and addressing governance issues was not enough, and that such a business model was unlikely to thrive during an economic downturn.

According to the IPO prospectus it filed earlier in September, We Company had cash and cash equivalents of roughly $2.5 billion as of June 30. However, while revenue doubled to nearly $1.8 billion in 2018, its losses also more than doubled to $1.9 billion.

The decision to scrap the public share sale will also put pressure on WeWork to secure alternative funding, given that a $6 billion loan deal with banks, agreed last month, hinged on a successful share sale of at least $3 billion. Analysts have projected that WeWork will burn through several billion dollars over the next few years and thus needs to keep on raising fresh funds at favorable valuations.

According to two sources familiar with the matter, the company is currently looking to trim its workforce and slow down its expansion in order to burn through less cash and be less dependent on fresh funding.

The company is in talks to raise fresh funding from investors, including SoftBank Corp, the sources added.

SoftBank, which had been pushing WeWork to postpone its IPO and is currently attempting to raise its second $100 billion-plus Vision Fund, is under pressure to assuage key backers of the fund who have raised concerns over the long-term viability of the investment fund.

The decision to withdraw the IPO was no surprise, though. It was widely expected after the company postponed the share sale earlier in September, following push-back from prospective stock market investors over its widening losses and Neumann's unusually firm grip on the company.

"We have decided to postpone our IPO to focus on our core business, the fundamentals of which remain strong," WeWork's newly appointed co-CEOs Artie Minson and Sebastian Gunningham said on Monday.

"We have every intention to operate WeWork as a public company and look forward to revisiting the public equity markets in the future," Minson and Gunningham added.

SoftBank, which owns nearly a third of We Company, invested in the startup at a $47 billion valuation in January. But investor skepticism led to it earlier this month considering a potential IPO valuation of as low as $10 billion, Reuters reported.

We Company had vowed to pursue the IPO and complete the share sale by the end of the year after Neumann stepped down as CEO. However, sources had told Reuters last week that the IPO was unlikely to be completed this year.

WeWork's doomed IPO marks a rough period for startups that have been going public in recent weeks. Last week, US entertainment and talent agency company Endeavor Group Holdings pulled its IPO, while shares of Peloton Interactive Inc, the fitness startup known for on-demand workout programs on its exercise bikes, slid as much as 7 percent in their market debut.

Earlier in September, teeth alignment firm SmileDirectClub Inc opened to an underwhelming debut.

Ride-hailing companies Uber Technologies Inc and Lyft Inc also went public earlier this year with high expectations, but their shares have tumbled since then after investor concerns over their steep losses.

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WeWork founder Neumann: an unconventional leader steps aside

NEW YORK - WeWork co-founder Adam Neumann, whose unconventional approach to business and governance pushed boundaries on Wall Street and Silicon Valley, stepped down as chief executive on Tuesday.

Under pressure from some board members, Neumann will exit the corner office as the company tries to reposition an initial public offering campaign that has sputtered over the last month.

Neumann, who will stay on as chairman, has also faced questions over his perceived self-dealing, as well as the ability of his fast-growing company to become profitable.

Neumann's setback marks a shift in fortune for a charismatic figure who has been embraced by investors even as he has employed unusual imagery to describe the business's meteoric growth since its founding in 2010. 

The company's IPO prospectus says "its mission is to elevate the world’s consciousness."

Neumann's audacious approach to business won support from key investors, including the Japanese group SoftBank.

But his loose approach to corporate governance and conflicts of interest garnered scrutiny, as did a Wall Street Journal expose detailing drug and alcohol use and Neumann's aspirations to become the world's first trillionaire.

Known for long hair and a wardrobe that favors T-shirts, Neumann, 40, is also known as a serial entrepreneur.

BIG AMBITIONS 

Born in Israel, he has described a difficult childhood that included the divorce of his parents and frequent moves.

After serving in the Israeli army for five years, he moved in 2001 to New York. He has lived in the city ever since and it is now WeWork's headquarters.

Neumann initially studied business at Baruch College in the City University of New York but abandoned formal studies to launch his first fledgling business, producing a woman's shoe with a collapsible heel.

A second venture marketed baby clothes with knee and elbow pads, but he told Baruch students at a 2017 graduation ceremony that the venture notched just $2 million in sales compared with $3 million in expenses.

During that period, Neumann also met the woman who became his wife, Rebekah, a cousin of actress Gwyneth Paltrow. The couple now have 5 children.

"The first moment I met my husband, even though he was broke.... I could see that together we were going to create something that was going to be large scale for the planet," Rebekah Neumann said in a November 2018 podcast.

"I just knew he was going to be the man that was hopefully going to help save the world."

Neumann, along with his friend Miguel McKelvey, moved into the shared-office business in 2008.

The company, called Green Desk, was based on "coworking," an old concept but one that was refreshed with new technologies as the financial crisis led to more freelancing and startup ventures, some involving people from finance who lost their jobs.

Neumann describes renters as "members" and built WeWork to be "a community that helped people live life with purpose," according to a blog post earlier this year.

The company today manages more than 500 sites in 30 countries and employs 12,500 people.

But WeWork has struggled with its bottom line, losing almost $2 billion in 2018.

On the jobs site Glassdoor, former WeWork employees praise Neumann's charisma and boundless energy, while others have criticized a cult-like atmosphere.

On Tuesday, Neumann said he was stepping down as CEO, declaring that he was "so proud" of the company's growth.

"While our business has never been stronger, in recent weeks, the scrutiny directed toward me has become a significant distraction and I have decided that it is in the best interest of the company to step down as chief executive," he said.

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SoftBank Group announces new $108-billion investment fund

TOKYO -- Japan's SoftBank Group on Friday announced the successor to its blockbuster Vision Fund, a new $108-billion vehicle with backing from banks and tech firms that it said would accelerate the "AI revolution".

SoftBank Group itself will plough $38 billion into the fund, which will also include investments from Apple, Microsoft, Foxconn, a range of Japanese banks, Standard Chartered, and the National Bank of Kazakstan.

In a statement, SoftBank Group said Vision Fund 2 would "facilitate the continued acceleration of the AI (artificial intelligence) revolution though investment in market-leading, tech-enabled growth companies".

Originally a software giant, SoftBank has increasingly become an investment firm, taking stakes in leading tech start-ups from Uber to WeWork through its first Vision Fund, which was largely backed by Saudi Arabia.

The announcement of Vision Fund 2 made no mention of Saudi Arabia among the investors, though reports ahead of the announcement suggested Riyadh was in negotiations to put money into the fund.

The Japanese firm's strong ties with the kingdom came under scrutiny after the murder of Saudi journalist Jamal Khashoggi in the Saudi consulate in Istanbul.

But SoftBank CEO Masayoshi Son made clear after the murder that he would continue working with Riyadh, saying he was "deeply saddened" by Khashoggi's death but adding: "we cannot turn our backs on the Saudi people."

Saudi Arabia is believed to have put around $45 billion into the first Vision Fund, which was announced in October 2016 and has gone on to invest in some of the tech world's hottest firms, including Slack and Nvidia.

In May, Son told a press conference that the Fund was "the most important management engine" for his firm.

He said all the unicorns -- venture-backed firms worth at least $1 billion -- listed on Wall Street that his fund has invested in are "number-one firms in their own fields".

"I don't want to be number two... I have not been able to accept that ever since I was a child," said the flamboyant tycoon.

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Uber's messy data breach collides with launch of SoftBank deal

TORONTO/SAN FRANCISCO - A newspaper advertisement for an Uber Technologies Inc stock sale was juxtaposed on Wednesday with a report that the ride-service provider had covered up a data hack - something of a metaphor for Uber, a company with boundless investor interest, but whose penchant for rule-breaking has led to a series of scandals.

The stock sale advertised in the New York Times will enable Uber investors to sell their shares to Japanese investor SoftBank, a critical deal for the company whose problems included building software to spy on competitors and to evade regulators and being investigated in Asia for paying bribes.

Uber on Tuesday said that it had paid hackers $100,000 to destroy data on more than 57 million customers and drivers that was stolen from the company - and decided under the previous CEO Travis Kalanick not to report the matter to victims or authorities. Uber was first hacked in October 2016 and discovered the data breach the following month.

Chief Executive Dara Khosrowshahi, who took the helm in August with the mission of turning around the company and overhauling its culture, acknowledged in a blog that Uber had erred in its handling of the breach.

The timing of the disclosure could hardly have been worse.

The company is trying to complete a deal with SoftBank Group Corp in which the Japanese firm would invest as much as $10 billion for at least 14 percent of the company, mostly by buying out existing shareholders. SoftBank is advertising to find shareholders who want to sell.

Uber last month announced a preliminary deal for the SoftBank investment.

One question is whether SoftBank will now try to alter the price of the deal. One source familiar with the matter said SoftBank is planning to stick to its agreement to invest in Uber but may seek better terms. SoftBank has not yet made a final decision on whether to renegotiate, the source said.

Another question is the future of Kalanick, the co-founder who led Uber to becoming a global powerhouse but did so with aggressive and controversial tactics. He was forced out by investors in June who feared his leadership style would damage the company, although he stayed on the board and remains a significant shareholder.

A bitter battle among investors over how to resolve Uber's problems led to a lawsuit by early investor Benchmark, which sought to oust Kalanick from any role. But a settlement was reached earlier this month to pave the way for the SoftBank deal, with Kalanick retaining his board seat and other rights.

Kalanick was made aware of the hack last November and was aware of the $100,000 payment, according to a person close to the matter. Kalanick has declined to comment. Uber did not respond to questions from Reuters on Wednesday.

MULTIPLE INVESTIGATIONS, LAWSUITS

The scope of the repercussions Uber will face for the October 2016 data breach began to take shape Wednesday with governments around the world opening investigations.

Authorities in Britain, Australia and the Philippines said they would investigate Uber's response to the data breach. London's transport regulator, which has been in discussions with Uber after stripping it of its license to operate, said it was pressing Uber for details.

Canada's privacy watchdog said that it had asked Uber for details on the breach, though it had not launched a formal investigation.

Attorneys general offices in at least six U.S. states along with the Federal Trade Commission (FTC) have announced they are looking into the matter. Some states are likely to go after Uber for breaking laws on data breach notification within a reasonable period of time.

At least 2 class action lawsuits have been filed against the company in the United States for failing to disclose the data breaches and causing potential harm to consumers.

Uber said that it has been in touch with the FTC and several states to discuss a hack and pledged to cooperate.

Legal experts said the company is likely to face limited financial fallout from data-breach lawsuits. Uber might succeed in squelching them outright because its agreements with both customers and drivers call for mandatory arbitration of disputes.

Uber fired its chief security officer, Joe Sullivan, and a deputy, Craig Clark, over their role in handling the hack.

The board of directors had commissioned an investigation into Sullivan and his team, which is how the breach was discovered. The board committee concluded that neither Kalanick nor Salle Yoo, who was general counsel at the time, had been consulted in the company's response to the breach, according to a second person familiar with the matter.

It is unclear what the board of directors knew, if anything.

Multiple board members did not respond to requests for comment.

"The scope of this breach is something the Uber board should have been briefed about and consulted on at the very least," said Cynthia Clark, an associate professor of management at Bentley University. "It's a monitoring issue and one of strategy and reputation."

Clark said that these sorts of risks could affect Uber's IPO, which the board has agreed will take place in 2019.

The company has begun overhauling its security practices with help from Matt Olsen, former general counsel of the U.S. National Security Agency and director of the National Counterterrorism Center, CEO Khosrwoshahi said.

Uber in August settled with the FTC after the regulator found the company failed to protect the personal information of passengers and drivers, an agreement that requires 20 years of regular auditing of Uber's data.

After this week's disclosures, Uber can expect "more audits and more people inside of the company" from regulators, said cyber security attorney Steven Rubin.

source: news.abs-cbn.com

Uber gives green light for sale of stake to Japan's SoftBank

NEW YORK - Scandal hit ride-sharing company Uber on Sunday announced a deal to sell a stake to Japan's SoftBank, as the firm looks to turn a new page ahead of its planned IPO by 2019.

The move was unveiled shortly after reports emerged that its former CEO Travis Kalanick and an influential investor had buried the hatchet in a long feud that paved the way for the acquisition.

"We've entered into an agreement with a consortium led by SoftBank and Dragoneer on a potential investment," a company statement said in a statement Sunday evening.

"We believe this agreement is a strong vote of confidence in Uber's long-term potential," it added.

"Upon closing, it will help fuel our investments in technology and our continued expansion at home and abroad, while strengthening our corporate governance."

But SoftBank refused to confirm the news when contacted by AFP and said it was not planning to issue any statement on Sunday.

The Japanese group, founded by billionaire Masayoshi Son, expressed an interest several months ago in investing around $1 billion in Uber for a stake of at least 14 percent.

But the deal was threatened by conflict between Kalanick and US venture capital firm Benchmark.

The latter filed a lawsuit against Kalanick, accusing him of fraud, breach of contract and of plotting to manipulate the board of directors to allow him to return as CEO following his resignation in June.

The two parties reportedly reached an agreement on control of board seats, which included Benchmark putting its lawsuit on hold -- while Kalanick will allow directors to vote on his future appointments to the three seats he oversees.

A deal would be positive for Uber, which is looking ahead to the future in the wake of recent repeated scandals, among them workplace sexual harassment allegations.

'GORILLA' INVESTOR

Meanwhile, SoftBank has been diversifying through investment for several years, and has ventured into sectors outside its core mobile technology business -- completing deals with the likes of French robotics firm Aldebaran and e-commerce with Chinese giant Alibaba.

It is sending tremors through the tech world with a its massive new Vision Fund -- a venture capital fund with $100 billion coffers intended for startups and expected to dominate the industry so thoroughly it's playfully referred to as a "gorilla."

"SoftBank shows a remarkable amount of bravery, confidence and optimism to look to apply this much money in technology," said Bill Maris, who started Google Ventures nearly a decade ago and runs his own California-based investment firm Section 32.

"I can't say it's a wrong bet, if you think the trends in tech will continue in the future. I would be much more worried if SoftBank was saying tech is dead."

Some investors worry that the Vision Fund will buy into startups at high prices, overinflating the market, while crowding out other investors and prolonging the time it takes for young companies to go public.

SoftBank has outlined plans to focus on late-stage investments when startups are more established, and on investments of at least $100 million.

source: news.abs-cbn.com

Colossal SoftBank fund could shake up tech world

SAN FRANCISCO - Japan-based SoftBank is sending tremors through the tech world with a massive new venture capital fund for investing in startups that's expected to dominate the industry so thoroughly it's playfully referred to as a "gorilla."

The Vision Fund's $100 billion coffers nearly equals the total amount pumped into venture capital-backed companies last year, according to market intelligence firm CB Insights, and some say it may be a game-changer for Silicon Valley.

"SoftBank shows a remarkable amount of bravery, confidence and optimism to look to apply this much money in technology," said Bill Maris, who started Google Ventures nearly a decade ago and runs his own California-based investment firm Section 32.

"I can't say it's a wrong bet, if you think the trends in tech will continue in the future. I would be much more worried if SoftBank was saying tech is dead."

Last year, VC-backed firms received $100.8 billion across 8,372 deals around the world, according to CB Insights data.

The huge amount of cash could accelerate the trend where fast-growing startups remain private -- without the scrutiny and transparency of a stock market debut.

Some investors worry that the Vision Fund will buy into startups at high prices, overinflating the market, while crowding out other investors and prolonging the time it takes for young companies to go public.

SoftBank has outlined plans to focus on late-stage investments when startups are more established, and on investments of at least $100 million.

MATCHMAKING

The SoftBank fund is widely expected to pump some $10 billion into ride-sharing giant Uber, which has a whopping valuation near $70 billion. Such a deal would boost the profile of the Japanese group in Silicon Valley.

Maris predicted the venture capital market would adapt to the Vision Fund, and in the end there would be more money available for entrepreneurs.

"I always think more dollars available to innovators and inventors is a good thing," Maris said.

"If it does shake up the market, maybe things do need to be shaken up a little bit."

SoftBank chief executive Masayoshi Son has demonstrated a strategic appreciation for bringing together startups with the potential to benefit one another, according to analyst Patrick Moorhead of Moor Insights & Strategy.

Moorhead added that he was expecting either spectacular wins or failures from the Vision Fund, nothing in between.

"It is looking for mega-investments," he said.

CONSOLIDATION GOALS

SoftBank's early, lucrative, investment in Alibaba was part of a strategy focused on booming e-commerce in China, according to GGV Capital managing partner Hans Tung.

SoftBank's recent investments in ride-sharing firms in various countries fits a pattern of seeking money-making synergies by bringing competitors together to share technology, learnings and more.

"Masayoshi Son understands the value of consolidation," said Tung.

"It is affecting the way society moves from less efficient to more efficient, and the amount of innovation that could happen."

"If consolidation is somewhat expedited with SoftBank money, that is not necessarily a bad thing," Tung said.

He added the caveat that the kind of power that comes with such a large fund could be abused.

"If that money is used correctly, he should do well and do better for society," Tung said of Son.

"We don't need five ride-share companies battling each other."

For example, making industries, financial institutions, and health care more efficient with big investments might be welcomed.

Analyst Moorhead likened Son's style of investing to "matchmaking," targeting diverse companies that could help one another in the future.

Targets for the Vision Fund were expected to include e-commerce, ride-sharing, robotics and machine learning.

SoftBank has shown preference for technology trends with the potential to spread across borders and have significant impact on society, according to those who have tracked the company.

And with all the data collected by ride-sharing, e-commerce and other platforms, investing in artificial intelligence to mine insights from mountains of information makes sense.

"I don't see it impacting the entrepreneurs in the garage; those are typically smaller seed rounds," Moorhead said of the Vision Fund.

Since SoftBank has indicated it will make late-stage investments, its moves could become signals startups are planning to go public.

That strategy also leaves early funding of entrepreneurs to others, but could squeeze the profits of those investors when SoftBank negotiates from a position of strength to buy them out down the road.

"I admire the fact he is doing something visionary, I imagine that is why they call it the Vision Fund," Maris said.

"It is about investing in other people's dreams instead of squirreling the money away for yourself. Someone is making a really optimistic bet on the future."

source: news.abs-cbn.com

US mobile carriers Sprint, T-Mobile to merge: report

Japan's SoftBank has reached a broad accord to merge its US subsidiary Sprint with T-Mobile to create a rival to America's top two wireless carriers, a newspaper said Saturday.

SoftBank and German group Deutsche Telekom, which holds 64 percent of T-Mobile, are considering a stock swap for the deal, which could be announced as early as this month, the Nikkei daily said.

The two will also discuss details of the planned merger, including ownership ratios, the business daily said.


The Japanese telecom giant is also planning to begin procedures for the approval of the US Federal Communications Commission and the US Department of Justice, the report said.

Immediate confirmation of the news report was not available.

T-Mobile ranks third among US wireless carriers by subscribers, followed by Sprint in fourth place, the Nikkei said.

Together, the pair would have 131 million subscribers, which would see them virtually match second-ranked AT&T and pose stiff competition to market leader Verizon Communications, it said.

SoftBank has long sought to combine the two firms but appeared to abandon the plan due to likely opposition from US regulators.

But the prospects for consolidation among US carriers have brightened with the pro-deregulation stance of President Donald Trump, the Nikkei said.

SoftBank chief executive Masayoshi Son was among the first businessmen to meet Trump after his election victory last year.

SoftBank's founder pledged to invest $50 billion in business and job-creation in the United States, winning praise from Trump.

source: news.abs-cbn.com

Softbank-Saudi tech fund becomes world's biggest with $93 billion of capital

RIYADH - The world's largest private equity fund, backed by Japan's Softbank Group and Saudi Arabia's main sovereign wealth fund, said on Saturday it had raised over $93 billion to invest in technology sectors such as artificial intelligence and robotics.

"The next stage of the Information Revolution is under way, and building the businesses that will make this possible will require unprecedented large-scale, long-term investment," the Softbank Vision Fund said in a statement.

Japanese billionaire Masayoshi Son, chairman of Softbank, a telecommunications and tech investment group, revealed plans for the fund last October and since then it has obtained commitments from some of the world's most deep-pocketed investors.

In addition to Softbank and Saudi Arabia's Public Investment Fund (PIF), the new fund's investors include Abu Dhabi's Mubadala Investment, which has committed $15 billion, Apple Inc, Qualcomm, Taiwan's Foxconn Technology and Japan's Sharp Corp.

The new fund made its announcement during the visit of President Donald Trump to Riyadh and the signing of tens of billions of dollars worth of business deals between U.S. and Saudi companies. Son was also in Riyadh on Saturday.

After meeting with Trump last December, Son pledged $50 billion of investment in the United States that would create 50,000 jobs, a promise Trump claimed was a direct result of his election win.

The fund may also serve the interests of Saudi Arabia by helping Riyadh obtain access to foreign technology. The Saudi economy has been severely damaged by low oil prices, and policymakers are trying to diversify into new industries.

The PIF signaled an interest in the tech sector last year by investing $3.5 billion in U.S. ride-hailing firm Uber. Saturday's statement did not say how much the PIF had committed to the fund, but previously it has said it would invest up to $45 billion over five years. Softbank is investing $28 billion.

The new fund said it would seek to buy minority and majority interests in both private and public companies, from emerging businesses to established, multi-billion-dollar firms. It expects to obtain preferred access to long-term investment opportunities worth $100 million or more.

Other sectors in which the fund may invest include mobile computing, communications infrastructure, computational biology, consumer internet businesses and financial technology.

The fund aims for $100 billion of committed capital and expects to complete its money-raising in six months, it added.

(Reporting by Andrew Torchia; Editing by Dale Hudson)

source: news.abs-cbn.com

This robot sells coffee machines in Japan

TOKYO - Move over George Clooney -- Nestle has employed a fleet of chirpy robots to sell its coffee machines in Japanese stores. The Hollywood heart-throb, who has become the global face of the Nespresso brand, has been given the elbow in favour of Pepper, a cheeky and chatty android, which its makers claim can answer customers' questions. "How do you enjoy coffee? Number one: An eye-opener coffee; Number two: A post-meal cup of coffee," Pepper asked a TV personality at a promotion event Monday. The 120-centimetre (four-foot) tall robot has a human-like face perched on top of a white plastic body, with rollers and what looks like a tablet computer on its chest. The gimmick will eventually see 1,000 stores across Japan with their own Pepper, which makers say can understand up to 80 percent of conversations. The robots will "help us discover consumer needs through conversations between our customers and Pepper," said a joint statement from Nestle and SoftBank, whose French arm Aldebaran developed the technology. Pepper, which was unveiled in June by SoftBank president Masayoshi Son, already sells mobile phones at SoftBank's 74 Japanese stores, where it has been used to collect customers' opinions. Engineers claim the robot's artificial intelligence has allowed it to expand its conversational ability by listening to what customers say. The robot will go on sale to the public in February, with a price tag of 198,000 yen ($1,670) plus monthly fees. George Clooney, meanwhile, will not. © 1994-2014 Agence France-Presse

source: www.abs-cbnnews.com

Japan androids take us closer to 'Blade Runner' future

TOKYO -- A future in which it is difficult to tell man and machine apart could soon become reality, scientists say, after recent robotic breakthroughs in Japan.

But as the once-fantastical idea of wise-cracking android sidekicks takes form in laboratories -- and the gap between humans and robots narrows -- society faces ethical and legal complications as yet undreamed of, they warn.

"Already computers have surpassed human ability," leading Japanese roboticist Hiroshi Ishiguro told AFP. "Robots will be very clever soon."

Science fiction's rapid slide towards science fact owes much to the likes of Ishiguro, who has an android copy of himself that he sends on overseas business trips in his place.

"It saves me time," he smiled. "The upper torso and lower torso you can pack in two big suitcases. The head is very fragile -- it goes as carry-on baggage."

Robots already perform a wide variety of tasks in Japan: they cook noodles, help patients undergo physiotherapy and have been used in the clean-up after the 2011 nuclear meltdown at Fukushima.

South Korea deploys jellyfish-terminating robots, while a robot with artificial intelligence able to analyse market trends has become a company director in Hong Kong.

One day, predict future-gazers, robots will perform all kinds of household chores, monitor the sick, and even serve up cappuccinos.

Replicants

But will they look like us?

Ishiguro created his doppelgänger from powerful electronics, complex moving parts, silicone rubber and hair from his own scalp.

"If we have enough knowledge about humans, we can create more human-like robots," he said after unveiling last month what he claimed was the world's first news-reading android in Tokyo. "That knowledge usually comes from neuroscience or cognitive science.

"More important is robots and androids as a mirror to reflect humanity. Once we become friends, the boundary between human and robot disappears," added Ishiguro, a professor at Osaka University.

The blurring of that line has long been a source of worry for humanity, as often depicted in popular culture.

The 1982 Hollywood cult film "Blade Runner," which is set in 2019, features genetically engineered robots called 'replicants' which are visually indistinguishable from humans, but physically superior and able to withstand pain.

The film's protagonist, played by Harrison Ford, is given the task of tracking down and killing replicants that have escaped and are living among us. His problem is knowing the difference.

More recently, Hollywood broached the possibility of falling in love with technology in the critically acclaimed movie "Her." Released in 2013 and set in the not too distant future, the film tells the story of an introverted loner, played by Joaquin Phoenix, who falls for an intelligent operating system that exists only as a female voice on his computer and mobile devices.

Today robots are still discernably robots, with many designed deliberately to look artificial -- Honda's ASIMO was introduced to much fanfare in 2000 as a multi-functional mobile assistant which resembles a shrunken spaceman.

A chatty humanoid called Pepper was unveiled recently by Japanese mobile carrier SoftBank, which claims it can understand people's emotions and "70-80 percent of spontaneous conversations."

Pepper, which will go on sale to the general public in February for $2,000, has humanoid features -- like a head and two arms -- but its white plastic body deliberately points up its artificiality.

Uncanny valley

Japanese roboticist Masahiro Mori suggested that the more robots look like people, the more we find them creepy, a phenomenon he called the "uncanny valley."

Ishiguro's initial human android, based on his own daughter, reduced her to tears, but he insisted Mori's phenomenon no longer applied after perfecting the template.

"The first android's movement was jerky, like a zombie," said Ishiguro. "But we have overcome the uncanny valley."

Research by Japan's National Institute of Advanced Industrial Science and Technology (AIST) bears that out. They tested reactions to androids in hospitals with largely positive results.

"We used androids in sessions with children suffering from ASD (autism spectrum disorder)," said Yoshio Matsumoto, research leader in service robots at AIST. "Of 85 subjects, four said they thought the robots were scary."

Ishiguro foresees that just as younger people today are attached to their mobile phones -- in reality powerful computers that mediate much of their lives -- androids will one day become an indivisible part of our landscape.

"Everyone is going to have an android," he predicted. "Handicapped people need another body. We are going to have more choices."

He also believes the floodgates to deepening relationships with robots will open once Pepper goes on sale and people take 'him' into their hearts.

But, he says, that is where the moral problems will arise.

"As we become closer to androids, we could hesitate to pull the switch," he said. "Suppose you lost your daughter in a traffic accident, and I create her android. You will probably love the android, and accept it as a human.

"Suppose someone burgles your house and you kill them to protect the robot. What kind of discussion will the lawyers have in court?"

source: www.abs-cbnnews.com

Softbank to sell eAccess stakes to Samsung, others - reports

TOKYO - Japanese telecommunications firm Softbank has decided to sell a two-thirds stake in eAccess, a smaller mobile service provider, to Samsung Electronics and 10 other companies reports said Saturday.

Softbank, which last year signed a $20 billion takeover of US firm Sprint Nextel, is in talks with 11 possible buyers, including Ericsson and Nokia Siemens Networks as well as Japanese firms, the Nikkei newspaper said.

Cutting its eAccess stake to below one-third will enable Softbank to skirt the government policy on spectrum allocation to telecom service providers, the Nikkei said.



Softbank turned eAccess into a wholly owned subsidiary on January 1, and will remain its top shareholder with a 33-percent stake, major media said.

But the communications ministry has viewed the purchase as running counter to the policy of allocating frequency bands fairly to cellphone carriers, Kyodo News said.

Softbank is working toward selling a roughly six percent interest to each of the 11 companies by the end of this month, the Nikkei said.

The company hopes that the sales could also facilitate better development and upgrades of its telecommunications network by strengthening ties with major foreign firms, the Nikkei said.

Softbank also wants to tap the foreign partners' know-how to improve its services, the Nikkei said.

To prevent any impact on its American operations, Softbank has opted not to let any Chinese companies buy the eAccess shares, the Nikkei said.

The US Congress has expressed concerns about the use of Chinese communications equipment in the country.

source: abs-cbnnews.com