Snap Strikes $100 Million Deal With Time Warner

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Snap, the owner of Snapchat, just struck a $100 million deal with Time Warner, the company that owns HBO and Warner Bros, which will see the entertainment company provide the platform with up to 10 original shows annually for the next two years.

Time Warner will produce original programming and advertising, as the newly public social media group tries to get a greater share of the ad dollars earned from marketing to younger audiences.

“This partnership is another exciting step as we continue to branch out into new genres, including scripted dramas, comedies, daily news Shows, documentaries, and beyond,” said Nick Bell, vice president of content for Snap, in a statement.

Gary Ginsberg, Time Warner executive vice-president, said Snap had driven the “evolution of media”.

“We’re confident this partnership will help drive larger audiences to our shows and to the new direct-to-consumer platforms we continue to roll out,” he said.

It is not clear how much of the $100 million deal will be spent on developing the new programs and how will be spent on advertising on the platform. Snap sells video ads that sit within collections of photos known as “stories”, original programming to appear on its Discover section, and sponsored filters and lenses which are visual overlays on people’s snaps. Time Warner will advertise HBO, Turner and Warner Bros. on Snap in the next two years.

Snap typically broadcasts one show a day in its app under a “Shows” header. They all are five to 10 minutes and made in participation with networks like NBC, ABC, BBC, A&E, Discovery, Vice, and others. The shows have collectively drawn “audiences of over 8 million,” Snap CEO Evan Spiegel said during the company’s latest earnings call.

By the end of 2017, Snap aims to have two to three shows air in its app every day.

Snap is one of many internet companies competing to be the future of TV. Facebook is investing in original content to encourage people to watch long-form video on the social network. YouTube launched a subscription service in 2016 as well as YouTube TV, a platform on which consumers can watch live broadcasting, earlier this year.

Shares of Snap are up 1.94% on Monday, to $17.88, after falling back to their IPO price of $17 late last week. It opened at $17.85, with a session high of $18.34 and a session low of $17.03. The stock currently has a market capitalization of $21.75 billion. Meanwhile, Time Warner shares settled at $99.90, up 0.7%.

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Amazon To Buy Whole Foods Market For $13.7 Billion

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Amazon announced on Friday that it would buy Whole Foods Market in a deal valued at $13.7 billion, and pay $42 a share for Texas-based grocery store chain in an all-cash deal that includes the group’s debt.

Whole Foods CEO John Mackey will stay as the CEO of the grocery store chain after the deal closes, and the store, the organic grocer that was founded in 1978, will keep operating under the Whole Foods brand as the deal is expected to be done in the second half year.

“This partnership presents an opportunity to maximize value for Whole Foods Market’s shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers,” Mackey said in a statement.

The deal sent a shocking reaction across both the online and brick-and-mortar industries, uniting two brands that weren’t seen as clear partners. But Whole Foods came under pressure to find a buyer this year after activist investor Jana Partners LLC acquired a stake and started pushing for a deal. Jana’s move annoyed Mackey, who has stated Whole Foods as his “baby.” With Amazon in the play, he gets to keep his job as CEO of the grocery chain.

In Whole Foods, it is acquiring a company that has recently come under pressure from investors for its lagging performance. Whole Foods, whose stores now numbers more than 430 locations, has struggled to appeal more mainstream consumers as Walmart and other large chains have stepped up their sales of natural and organic products.

“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” said Jeff Bezos, Amazon founder and CEO. “Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”

Mackey said the he agreed to the deal because it is “an opportunity to maximize value” for the company’s shareholders.

Moreover, Amazon’s biggest acquisition so far came in 2014, when it agreed to buy video-game service Twitch Interactive Inc. for $970 million in cash. The Seattle-based company had about $21.5 billion of cash and equivalents at the end of March, the data show.

Whole Foods closed at $33.06 on Thursday. It opened at $34.85, with a session high of $34.97 and a session low of $32.97. Shares were halted in pre-market trading. Meanwhile, Amazon opened at $958.7 and closed at $964.17, with a session high of $965.73 and a session low of $950.86. Shares of Amazon rose 1.5% to $978.88 in pre-market trading.

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IBM Teams Up With Cisco To Fight Off Cybercrime

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International Business Machines Corp., or IBM and Cisco Systems Inc. announced on Wednesday they are working together to address and fight off the rising global threat of cybercrime as the two legacy tech giants will work closely together to improve security effectiveness for customers through technology integration, services and threat intelligence collaboration.

As part of a new deal, Cisco® security solutions will integrate with IBM’s QRadar to protect organizations across networks, endpoints and cloud. The apps will be available on IBM’s Security App Exchange, which had 92 third-party apps as of April, and work with Cisco’s security appliances and malware-prevention software and services to probe and respond to threats. Customers will also benefit from the scale of IBM Global Services support of Cisco products in their Managed Security Service Provider (MSSP) offerings.

The San Jose, Calif.-based Cisco and Armonk, N.Y.-based IBM will also add product integrations to connect their portfolios over the course of 2018.The collaboration also establishes a new relationship between the IBM X-Force and Cisco Talos security research teams, who will start working together on threat intelligence research and coordinating on major cybersecurity incidents.

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While partnerships like this are common with smaller players in the cybersecurity space, the news is significant given that the two companies’ collective security businesses amounts to more than $4 billion. As Cybersecurity Ventures expects cybercrime to cost the world some $6 trillion by 2021, the companies stress the need for improved security for cloud-based services.

“Cybercrime is expected to cost the world $6 trillion annually by 2021. This is why IBM has been a proponent of open collaboration and threat sharing in cybersecurity to change the economics for criminals,” said Marc van Zadelhoff, general manager, IBM Security.

“With Cisco joining our immune system of defense, joint customers will greatly expand their ability to enhance their use of cognitive technologies like IBM Watson for Cyber Security. Also, having our IBM X-Force and Cisco Talos teams collaborating is a tremendous advantage for the good guys in the fight against cybercrime.”

He also noted both companies have security businesses producing about $2 billion in annual revenue. Two weeks ago, Cisco reported its security revenue rose 9% annually in the April quarter to $529 million, and that its security deferred revenue balance, boosted by rising subscription software and services revenue,  grew 39%. And CEO Chuck Robbins suggested on the earnings call that Cisco is open to more security M&A. IBM reported its security revenue grew 9% in the first quarter, but didn’t provide a sales number.

Earlier this month, Cisco disappointed with weaker-than-expected current-quarter guidance, cutting 1,110 jobs, and promising to push ahead with its transformation through buyouts, partnerships and other strategic initiatives. As for IBM, the firm has also carried out numerous acquisitions in order to diversify and leverage its unique software and services assets as it faces cloud disruption and heightened competition from players such as Hewlett Packard Enterprise Co., and Microsoft Corp.

The latest deal demonstrates the power of the multinational tech company’s specialized teams, as they seek to partner up with other global leaders across industries and to tap into high-growth markets.

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