This week, cloud server-hosting business DigitalOcean terminated as much as 10% of its workforce. A spokesperson for the company made a statement to The Register saying DigitalOcean is undergoing a “restructuring” to organize teams that will better serve its “go-forward growth strategy”. Co-founder Moisey Uretsky gave more insight saying the cuts were attributed to disorganization and leadership changes including two CEO changes in the past 18 months. On HackerNews, Uretsky made a comment denying allegations the company was being prepped for sale and stated the lay-offs are not related to any sort of “cost-cutting” nor does the company have an “immediate need to raise capital”. Despite this, the company is currently not profitable and is struggling to compete with cloud server giants such as AWS.
Google CEO Sundar Pichai made a statement calling for Artificial intelligence to be regulated. The CEO reported to the Financial Times this week that it is “too important not to” establish regulation for artificial intelligence technology. Last week, the EU proposed a five-year ban on facial recognition use in public areas in order to assess the impact and potential risks and implement rules regarding privacy and data rights. The White House also proposed AI regulation guidelines earlier this year, but noted the EU should “avoid heavy-handed innovation-killing models.” In Pichai’s statement, he argues for a “sensible approach” to AI regulation as there are major threats with abuse of this technology including deepfakes, which are doctored videos and audio clips intended to look real. Pichai reiterated his stance on AI regulation in a speech delivered at Davos on Wednesday.
Elsewhere at Davos on Wednesday, French Finance Minister Bruno Le Maire negotiated a tax truce with U.S. Treasury chief Steven Mnuchin. The truce ensures the United States will put a hold on retaliatory tariffs in exchange for France’s agreement to delay the tax on major tech companies including Google and Facebook, until after the U.S presidential election takes place. Britain, which is set to exit the EU on January 31st, may be faced with retaliatory tariffs from the United States if they choose to impose their own tax on big tech companies. Britain’s Treasury chief stated they are moving forward with a 2% tax levy on the “digital business of firms making 500 million pounds ($640 million) a year in global revenues from April.” According to Britain’s Treasury chief, the temporary tax will “fall away when there is an international agreement.”
New in FE exclusive listings, this week we have an Affiliate business in the Cell, Cable & Internet Reviews niche listed at $140,000. This site has c.110 articles providing detailed product reviews for a wide range of telecom providers and products in the U.S. This growing content business has an impressive traffic profile with over 388,000 visitors in the LTM and offers a strong SEO foundation with rankings for c.68,000 keywords. With over 18 years of operational history and simple business operations requiring low owner involvement, this listing presents a great acquisition opportunity for a new owner. If you are interested in this business, please visit the link above to request a prospectus.s.
In events news, FE International Founder Thomas Smale will be attending Affiliate Summit West in Las Vegas to meet with other founders and entrepreneurs next week from the 27th to the 29th. Also, coming up on February 1st, Thomas will be in Brisbane, Australia to speak at the eBusiness Institute’s Live Digital Training event. If you will be attending either of these events, please feel free to reach out to set up a meeting with Thomas.
We would like to thank everyone who attended our panel event on Jan. 15 in London, “How To: Raise Capital for Your Technology Business.” Our expert panelists opened their playbooks and shared valuable insights into raising capital, see photos from the event here! Our next meetup will be held in London on March 19th, visit our Meetup page and RSVP for “How To: Avoid Common Scaling Mistakes“!
Our 2020 Market Report will be released soon so keep an eye out and be sure to request your copy of the SaaS founder’s Blueprint to get your free copy of our guide to profitable exit planning.
Continue reading below for more on Google, Davos, DigitalOcean and more!
- Growing content business in an evergreen niche with 18 years of operational history
- Steady traffic profile with over 388,000 visitors over the L12M
- Dominant SEO presence with keyword rankings for c.68,000 keywords
- Simple business operations requiring minimal owner involvement
Yearly net profit: $55,000
Asking price: $140,000
- Established business in the Kitchen Appliances and Accessories niche
- Impressive CMGR of c.16% over the LTM
- High quality content with over 1,000 words per page attracting c.52,000 visitors over the LTM
- Lean operating model and minimal owner involvement
Yearly net profit: $24,200
Asking price: $80,000
In the News…
DigitalOcean Lays off Nearly 10% of Workforce
DigitalOcean has layed-off as much as 10% of its workforce, an estimated 35-50 people its 450 employees. In a move the company describes as a “restructuring,” an unknown number of workers for the cloud-server hosting business lost their jobs for a number of vague reasons. According to Co-founder Moisey Uretsky, DigitalOcean is not being prepared for sale and is not terminating employees so cut costs despite being currently unprofitable. In reports to The Register, Uretsky stated the change is due to major shifts in leadership (two CEO changes in the past 18 months) that “created competing directions in the business” which the current CEO Yancey Spruill is now correcting. According to The Register, “DigitalOcean continues to be a high-growth business with $275m in ARR and more than 500,000 customers globally.”
Google CEO Calls for AI Regulation
In a report to the Financial Times, Google and parent company Alphabet CEO Sundar Pichai made an official statement regarding the need for Artificial Intelligence to be regulated by the government. In his statement, Pichai notes technological advancements such as health tech and self-driving cars need to tailor-made rules. The question at hand is how can AI be regulated in a way that doesn’t hinder innovation. Major threats with AI that regulation could help prevent include deepfakes, which are computer-generated video and audio clips. Both the EU and US have proposed AI regulation initiatives.
Tax Truce Between US and France Made at Davos
At Davos this week, French Finance Minister Bruno Le Maire and US Treasury chief Steven Mnuchin negotiated a deal wherein the US will hold on retaliatory tariffs and France will postpone its tech tax on major tech companies including Facebook and Google. France’s tax collection will be delayed until December, after the next US presidential election. The deal was made after President Doald Trump threatened the European Union with increased tariffs. Tensions between the two entities rose last July when the 3% tax on revenues for giant internet institutions was introduced sparking retaliation from the US in the form of tariffs on French products. The truce made at Davos is a positive step towards decreasing rising trade tensions.