Microsoft’s CFO is keeping an eye on gaming now that it does $10 billion in annual revenue

Mark Zuckerberg, chief executive officer and founder of Facebook Inc., listens during the Viva Technology conference in Paris, France, on Thursday, May 24, 2018. 

Marlene Awaad | Bloomberg | Getty Images
Mark Zuckerberg, chief executive officer and founder of Facebook Inc., listens during the Viva Technology conference in Paris, France, on Thursday, May 24, 2018.

Stifel on Wednesday published a note saying it has lowered its rating for Facebook shares from “Buy” to “Hold,” saying political and regulatory blowback could restrict how the company operates in the long term.

“Facebook’s management team has created too many adversaries — politicians/ regulators, tech leaders, consumers, and employees — to not experience long-term negative ramifications on its business,” the firm said in a note.

The lower rating comes after a rough year in which Facebook has experienced numerous scandals, a 30-million user data breach, declining and stalling growth in key markets, an executive exodus and its worst stock performance since going public in 2012.

Stifel also published the latest results from an on-going survey of Facebook users.

The results showed 79 percent of those surveyed now believe Facebook’s impact on society is neutral or negative, compared to 73 percent in survey results published by the firm in January. The survey also found that 60 percent of respondents said they rarely or never used Facebook Stories, Marketplace or video, which are some of the company’s key new products.

Stifel said there is no downside to holding Facebook shares, but the firm no longer believes the company’s upside is what it once was.

“We believe Facebook will struggle to return to the company that it once was or that investors expected it to be in the long run,” the note reads. “We prefer Amazon, Alphabet, and Netflix, as U.S.-based mega caps with similar thematic trends and more stable operating environments.”

Facebook board: Sandberg's request to probe Soros 'entirely appropriate'

Microsoft’s CFO is keeping an eye on gaming now that it does $10 billion in annual revenue

Microsoft Chief Financial Officer Amy Hood speaks at the annual Microsoft shareholder meeting in Bellevue, Wash., on Nov. 29, 2017.

Jason Redmond | AFP | Getty Images
Microsoft Chief Financial Officer Amy Hood speaks at the annual Microsoft shareholder meeting in Bellevue, Wash., on Nov. 29, 2017.

Microsoft has been in the gaming business since the turn of the century. Finally it matters to the company from a financial standpoint.

“Amy Hood, our CFO, she likes to tell me I’ve made the spreadsheet now, and she says that can be a good thing, and I’m on the spreadsheet. So she’s going to pay attention,” Microsoft’s executive vice president for gaming, Phil Spencer, said on stage at the Barclays Global Technology, Media and Telecommunications Conference in San Francisco on Wednesday.

Today Microsoft is one of the top public companies by market capitalization, alongside Amazon and Apple. Sales of Xbox consoles and online services means Microsoft is less dependent on revenue from other products, like Windows, Office and enterprise software. In its 2018 fiscal year, which ended on June 30, Microsoft surpassed $10 billion in gaming revenue for the first time.

Spencer, who joined Microsoft’s senior leadership team alongside Hood and CEO Satya Nadella last year, pointed to several investments the company has made in gaming recently, building on earlier moves like the $2.5 billion Mojang acquisition. and its purchase of game-streaming company Beam, which has since been rebranded to Mixer.

“We’ve acquired and started seven new first-party studios in the last year. We obviously don’t do that without tremendous support from Satya and Amy,” Spencer said. “We understand content is a critical component of what we’re trying to go build and the support from the company has been tremendous.”

One of Microsoft’s stated growth opportunities in the future is cloud-based gaming, which could make the technical limitations of consumers’ devices less important and expose Microsoft’s gaming content for wider consumption. Spencer talked loosely about its cloud gaming initiative, called, Project xCloud, on Wednesday.

“We focus first on an Android phone because there’s over a billion Android phones on the planet and it’s a place that the content that we’ve natively built up over the past decades on our platform hasn’t been able to reach,” Spencer said.

This strategy builds on Microsoft’s past efforts to bring richer capabilities to Android. But Google, the company behind Android, has started working on cloud gaming with its Project Stream initiative, Spencer said. And meanwhile Amazon, which is the leader of the cloud infrastructure market, has its own gaming division, he said.

“We’ll have multiple business models that will work with streaming, but the connection of streaming with the subscription model makes a ton of sense,” Spencer said. “You see it in music. You see it in video. So you can look at Project xCloud and you can look at something like Game Pass, and you can see there’s natural synergies.”

On stage, Barclays asked Spencer how Microsoft differentiates from gaming subscription offerings from EA and Sony.

“For us, it’s all about how we reach 2 billion gamers,” Spencer said.

“If you build the market around a couple hundred million people that are going to own a game console or a high-end gaming PC, then your business model diversity can actually narrow because your customers are narrow. But when you think about reaching a customer with this content where their only compute device could be an Android phone, you think about, well, what are all the ways that that person pays for content if they do at all today?”

Microsoft will bring its Game Pass subscription service to PCs, and eventually it will be available on every device, Spencer said.


Walgreens launches next-day prescription delivery with FedEx to compete with Amazon

Pedestrians walk past a Walgreens store in New York. 

Michael Nagle | Bloomberg | Getty Images
Pedestrians walk past a Walgreens store in New York.

Walgreens is working with FedEx to launch a nationwide next-day delivery service for prescription drugs as the top pharmacy chains gear up to compete with Amazon.

Amazon bought online pharmacy PillPack in June, but the deal has not closed yet, giving Walgreens and its rivals the chance to head off a possible disruption in the pharmacy space.

Even before the e-commerce giant announced the acquisition, pharmacies had anticipated that Amazon would branch out into delivering prescription drugs. Competitor CVS rolled out its own delivery service for prescription drugs in June, just days before the deal.

Walgreens already offers same-day delivery in select markets, and the pharmacy chain will continue to expand that program next year.

The delivery service is part of Walgreens Express, which also lets customers preview the cost of their prescriptions and prepay for those that are eligible. Patients can pay $4.99 to have their qualifying prescription drug delivered as early as the next day or choose to pick it up in stores, checking out in a special express line.

“Next-day prescription home delivery is another convenience-driver, alongside our industry-leading number of extended hours pharmacies and one of the most downloaded digital apps in the category, designed to put care in the hands of our patients,” Richard Ashworth, president of operations for Walgreens, said in a statement.

Walgreens and FedEx have already partnered to let customers pick up and drop off packages at almost 8,000 pharmacies nationwide.


Google is shutting down chat app Allo

Google plans to kill chat app Allo by the middle of next year, the company said in a blog post, confirming a report earlier on Wednesday about the product’s imminent demise.

Despite owning the world’s dominant smartphone operating system in Android, Google has never been able to create a chat experience to rival Apple’s iMessage or Facebook’s Messenger and WhatsApp.

Allo, which launched two years ago to much fanfare, will only work until March 2019, at which point users will have to download any conversations they want to save. Meanwhile, Google will focus fully on the development of Messages, its other chat app for Android phones. Earlier this year, Google announced that it was working with mobile carriers on a new Rich Communication Services (RCS) standard, an upgrade to classic SMS texting, to make messaging work better across Android devices, and bring users features like read receipts and seamless group chats.

That initiative was the beginning of the end for Allo, which saw its product lead defect to Facebook earlier this year.

Google also said in its blog post that it plans to support another one of its chat apps, Hangouts, until it makes two of its enterprise apps, Hangouts Chat and Meet, available for non-paying users.

A Google employee tweeted earlier on Thursday that Meet and Chat would launch for regular consumers next year:


European markets close at 2-year low; Stoxx 600 slips 3.3 percent

European stocks cratered on Thursday, amid fears of slowing growth, falling oil prices and a fresh flare-up in tensions between the world’s two largest economies.

The pan-European Stoxx 600 fell more than 3.3 percent with all and major bourses sectors in negative territory. The index clsoed at 342 points, marking a two year low. It was the worst daily percentage drop for the STOXX 600 since Brexit.

Germany’s Dax market, when measured on an intra-day basis has closed in bear market territory. 21 percent lower than its high in late January.

FTSE FTSE 100 6704.05
-217.79 -3.15% 1061628447
DAX DAX 10810.98
UNCH 0% 0
CAC CAC 4780.46
UNCH 0% 144862545

Market focus is largely attuned to the arrest of a top executive at Chinese tech giant Huawei, amid investor concern that the news could derail progress in U.S.-Sino trade talks.

Europe’s basic resources stocks — with their heavy exposure to China — tumbled 4.2 percent during the session. Britain’s FTSE 100 index slumped 3.6 percent Thursday, as mining stocks plummeted. London-listed Antofagasta led the sectoral losses, down more than 7 percent.

Meanwhile, autos stocks — seen as a trade war proxy because of the sector’s export-heavy constituent’s — were also among the worst performers, down more than 4.5 percent. Faurecia and Daimler both dropped more than 6 percent.

Tech stocks were also down more than 3 percent on Thursday, following the arrest of Huawei’s global chief financial officer in Vancouver on Wednesday. Meng Wanzhou, the daughter of Huawei’s founder, was arrested by Canadian authorities on December 1, reportedly over the possible violation of sanctions against Iran. She now faces extradition to the United States.

Looking at individual stocks, Italy’s DiaSorin tumbled toward the bottom of the European benchmark Thursday morning, after Kepler Cheuvreux cut its stock recommendation to “hold” from “buy.” Shares of the Milan-listed company fell more than 7 percent on the news.

Trade tensions

Wanzhou’s arrest has sparked concern of a major collision between the U.S. and China, at a time when both economic powers were set to begin three months of negotiations aimed at de-escalating their global trade war.

The U.S. and China had agreed to temporarily hold off on imposing additional charges against each other’s goods over the weekend. President Donald Trump and President Xi Jinping’s trade truce prompted global stocks to surge higher at the start of the trading week, but fading optimism over the political deal has since pared equity market gains.

U.S. stocks fell sharply on Thursday as continuing fears over U.S.-China trade relations and concern over a possible global economic slowdown kept investors on edge.

At the European closing bell, the Dow Jones Industrial Average had dropped 758 points, bringing its two-day losses to 1,500 points as Apple shares fell. The S&P 500 fell 2.8 percent, led by a decline in bank shares like J.P. Morgan Chase, while the Nasdaq Composite also dropped 2.4 percent. The S&P 500 fell back into correction territory, down 10 percent from its 52-week high.

Oil slump

Back in Europe, market participants closely monitored a much-anticipated meeting between OPEC and non-OPEC members in Vienna, Austria on Thursday and Friday. The 15-member group and its allied partners reportedly agreed to cut oil production, but the cartel is not releasing details of the deal until it reaches an agreement with allied producers including Russia.

Oil prices tumbled more than 3 percent on Thursday as OPEC reportedly agreed to cut production, but ended its closely-watched meeting without a decision on how much crude the cartel will take off the market.

International benchmark Brent crude fell $1.66, or 2.7 percent, at $59.90 a barrel around 11:03 a.m. ET (1603 GMT), after falling to a session low at $58.36. U.S. West Texas Intermediate crude was down $1.79, or 3.4 percent, at $51.10, falling back towards the session low of $50.23.


Newcastle United could be the latest Premier League soccer team to have American owners in $382 million takeover

The owner of English Premier League team Newcastle United, Mike Ashley, is reportedly in talks with an American financial investment firm over a potential sale of the club.

A successful deal would bring his tumultuous 11 years in charge at the club to an end. Ashley is also the majority shareholder in U.K.-based sporting goods chain Sports Direct and gave an interview to Sky News earlier this week saying discussions over a sale “are at a more progressed stage than they have ever been.”

Fabian Schar of Newcastle United battles for possession with Bernard of Everton during a Premier League match on December 5, 2018 in Liverpool, United Kingdom. 

Jan Kruger | Getty Images Sport | Getty Images
Fabian Schar of Newcastle United battles for possession with Bernard of Everton during a Premier League match on December 5, 2018 in Liverpool, United Kingdom.

It’s now believed the bid he was referring to is from the financial advisory company Rockefeller Capital Management. Rockefeller is thought to be working with former Manchester United and Chelsea Chief Executive Peter Kenyon as part of a consortium, but it’s not known if a formal bid has been lodged yet.

Ashley could be considering as many as three other offers from interested parties — all thought to be around his £300 million ($382 million) valuation.

“I am hopeful — for the Newcastle fans, for the club, for everybody, that I will be able to step aside and we will be able to get an owner in that will please everybody,” Ashley said Monday, adding that he was not in exclusive talks with any party.

Ashley bought a controlling stake in the club in 2007 for around £134 million. He has a reported net worth of $3.8 billion and has often been criticized for a lack of investment in the playing squad at Newcastle. He added that any potential buyer must be able to provide transfer funds.

“I’m very keen to sell it to the right buyer so that everybody’s happy,” he added. “That would be good news.”

The club based in the north east of England has officially been up for sale for a year, but according to Ashley recent bids were all deemed to be unsuitable.

In order to complete any takeover, all bids are subject to the Premier League’s fit and proper person’s test, which could take as long as two weeks to complete. This would make Ashley’s estimation of a finalized deal by January 1 seem ambitious at this stage.


Untuckit, the company known for its untucked shirts, is looking to raise money at a valuation greater than $600 million

Shoppers browse clothing inside an Untuckit LLC store at the King of Prussia mall in King of Prussia, Pennsylvania,  Oct. 20, 2018. 

Jeenah Moon | Bloomberg | Getty Images
Shoppers browse clothing inside an Untuckit LLC store at the King of Prussia mall in King of Prussia, Pennsylvania,  Oct. 20, 2018.

Men have worn untucked shirts for years. When a company came along to sell only shirts that are designed to be untucked – not surprisingly that market turned out to be pretty lucrative.

That company, known as Untuckit, has hired a prominent investment bank to raise money and help fuel its growth, according to people familiar with the situation. Untuckit is seeking a deal that will value it at more than $600 million and has Morgan Stanley out looking for the funds.

In doing so, it follows a similar path forged by other brands like sustainable sneaker brand AllBirds, which in October raised $50 million from T. Rowe Price, Fidelity and Tiger Global.

Untuckit has roughly $150 million in sales and is profitable, the people said. It raised $30 million from venture firm Kleiner Perkins last June, reportedly valuing it at more than $200 million.

The people asked not to be named because the information is confidential. Untuckit and Morgan Stanley declined to comment.

Untuckit is the brainchild of Executive Chairman Chris Riccobono and CEO Aaron Sanandres. Riccobono had been struggling to find a dress shirt that wasn’t too big or too baggy. He worked to develop a professional solution with his fellow Columbia Business School classmate.

The two launched the brand online in 2011. Four years later, they opened its first brick-and-mortar store in New York’s SoHo district. The co-founders were early believers in the idea that e-commerce companies can benefit from storefronts, which can help to alleviate marketing and delivery costs.

Untuckit now has 50 stores nationwide and has said it aims to open 100 stores over the next five years.

The brand has also expanded beyond men who want to go untucked. It now sells shirts, dresses, tees and jackets for women, as well as shirts and bottoms for boys.


Apple is in talks to buy a violent Israeli TV show and sign Richard Gere as lead, dispelling the myth that it wants only family-friendly video

Actor Richard Gere filming on location for 'Arbitrage' on the streets of Manhattan on April 11, 2011 in New York City.

Bobby Bank | WireImage | Getty Images
Actor Richard Gere filming on location for ‘Arbitrage’ on the streets of Manhattan on April 11, 2011 in New York City.

Apple is in advanced talks to buy rights to a gritty Israeli TV show called “Nevelot” (English translation: “Bastards”) and adapt it for the U.S., beating out bids from competitors including Showtime, FX and Amazon, according to several people with knowledge of the deal. The show’s plot involves two military veterans who go on a youth-focused killing spree because they believe today’s kids don’t understand the sacrifices of their generation.

While the details are still being worked out, show-runners Howard Gordon and Warren Leight are in negotiations to reformat it for the American market, perhaps under a different name, according to people familiar. Both have had critical success as TV show-runners, with Gordon co-helming “24” and “Homeland” and Leight behind “In Treatment,” “Law and Order: SVU” and “Law and Order: Criminal Intent.”

Richard Gere is also in talks to star in the series. Apple and 21st Century Fox will be co-producing. The project was previously in development at HBO.

All sides are still talking, and the deal is not yet finalized. It could fall though, the people said, if certain agreements were not reached, including budget.

Apple, Gordon and Gere declined to comment. Leight did not immediately respond to requests for comment. Fox said no deal is done and declined to discuss details.

The purchase of a violent show seems in contrast to Apple’s traditionally prudish standards for apps it sells in the App Store. In that vein, the Wall Street Journal reported in September that Apple did not want shows that included violence, politics or rude language.

But multiple people who have spoken to Apple and have knowledge of their thinking in recent months say that’s simply not true, and TV-MA content is fair game.

Apple’s heads of programming, Zach Van Amburg and Jamie Erlicht, who started in June, have been working overtime to dispel the myth that Apple is interested only in family-friendly material.

In general, Apple wants high-impact content based on things people have heard of, like books, franchises or ideas that have resonance, according to people who have spoken to the company. It’s not wedded to existing formats that need commercial breaks, emphasizing unusual formats like anthologies and content that doesn’t fit within the traditional 30-minute and 60-minute time slots. The company is emphasizing it’s looking for “different” content, as long as it has substance and isn’t gratuitous.

The push is pitting them directly against deep-pocketed distributors like Netflix and Amazon, who also are hungry for content that is likely to get acclaim. Apple has indicated it is willing to pay premium prices for shows that have awards potential.

Looking for Apple’s ‘Breaking Bad’

Van Amburg and Erlicht, who were previously presidents of Sony Pictures Television, are highly respected in the entertainment industry. One of their biggest successes was bringing “Breaking Bad” and its showrunner Vince Gilligan to Sony.

The duo has made it very clear they are now looking for Apple’s version of the series, which revolved around an high school teacher turned meth dealer.

But so far, the projects Apple has announced aren’t rocking the boat. “Amazing Stories” has been described as a softer version of Netflix’s “Black Mirror,” while “Top of the Morning” is a broadcast news drama — basically a safer version of HBO’s “Newsroom,” as one person characterized it.

Despite the push for its “Breaking Bad,” Apple is not only interested in adult content. It’s also in the market for kids’ programming, focusing on buying shows for preschoolers this year. Starting next year, the company will start looking at shows for school-aged children. It is expected Apple will have parental controls to help parents shield children from watching inappropriate content.

The immediate goal is to build a content library for an upcoming media service, several people said. At some point next year, Apple will announce the product and offer the content for free on its devices. The first slate of shows have a tentative deadline of spring 2019, and the company is expected to spend $4.2 billion on content through 2022 per Variety.

But in conversations with TV show creators and agents Van Amburg and Erlicht have also painted a long-term vision of more advanced interactive and immersive content. These plans are not imminent and are not driving which shows they’re aiming to buy, but are rather an example of the kind of advantages Apple could bring to the table.

Some industry executives have questioned if Apple has a chance to steal eyeballs away from Netflix, Amazon and other industry leaders considering the already competitive landscape. WarnerMedia has indicated it too is willing to invest heavily into new shows and movies.

Still if the money is there, there’s no reason for show makers to turn it down. More services mean more players to bid up prices. As one executive noted, everyone is more than happy to take Apple’s money until it ends.


Indian IT firm Infosys continues push into US

Fiat Chrysler Automobiles assembly workers build 2019 Ram pickup trucks at the FCA Sterling Heights Assembly Plant in Sterling Heights, Michigan, October 22, 2018. 

Rebecca Cook | Reuters
Fiat Chrysler Automobiles assembly workers build 2019 Ram pickup trucks at the FCA Sterling Heights Assembly Plant in Sterling Heights, Michigan, October 22, 2018.

Fiat Chrysler, riding a wave of strong truck and SUV sales, is planning to build a new final assembly plant in Detroit even as other American automakers scale back operations in the U.S., according to people familiar with the plan.

The assembly plant, an old Mack II Engine Plant that closed in 2012, will build a new three-row, Jeep Grand Cherokee SUV starting in 2020 as the automaker moves to keep up with strong demand for utility vehicles, the people said. A spokesperson for Fiat Chrysler would not comment on the report, nor confirm the automaker’s plans.

The move comes as the industry faces pressure from President Donald Trump to keep manufacturing jobs in the U.S. and stands in stark contrast to the recent decision by General Motors to stop production and idle five plants in North America including four in the United States.

Daimler CEO arrives at White House for auto meeting

Daimler CEO arrives at White House for auto meeting   11:43 AM ET Tue, 4 Dec 2018 | 02:01

GM has come under fire after announcing last week that it plans to cut 14,000 jobs in the U.S. and Canada, citing a weakening economy, the escalating trade war and a desire to reposition itself as a smaller, more nimble company. Ford is also scaling back, saying last week that it planned to cut a shift at two of its U.S. plants in an attempt to avoid more onerous layoffs.

Detroit will lose two GM facilities altogether. Both were performing well under capacity and contributing to a dismal capacity utilization rate of just 76 percent across the United States, far below Fiat Chrysler’s rate of 90 percent.

Fiat Chrysler’s plants are running at close to capacity due to continued strong demand for trucks and SUV’s. Overall, Fiat Chrysler’s sales in the U.S. are up 8 percent this year, easily outpacing the industry less than one percent according to the market research firm Autodata.


Watch: Ivanka Trump, Walmart CEO Doug McMillon and IBM CEO Ginni Rometty speak at Business Roundtable summit

[The stream is slated to start at 2:00 p.m. ET. Please refresh the page if you do not see a player above at that time.]

Subscribe to CNBC on YouTube.

Ivanka Trump is slated to speak with Jamie Dimon, chairman and CEO of JP Morgan Chase, on Thursday at the Business Roundtable CEO Innovation Summit.

The lobbying group is looking to influence policy during the second half of President Donald Trump’s term. Under Dimon, the Roundtable has tried to attain more influence in Washington as a whole, and has pushed for Trump’s package of tax reductions. Dimon also plans to help lead efforts to navigate growing tensions between the CEOs and Trump’s tariff-centered approach to trade, as well as immigration issues and company layoffs.

Arne Sorenson, president and CEO of Marriott; Larry Merlo, president and CEO of CVS; and Randall Stephenson, chairman and CEO of AT&T are also expected to attend, among others.

Company leaders and government officials alike are also expected to discuss a national innovation agenda to ensure that the United States remains a global leader as well as national privacy legislation which will ask the United States to adopt a national privacy law, that would provide consumers with more control of their data.