Everything You Need To Know About Google’s Life-Science Arm Called Verily, Plus Amazon Is 20 Years Old

By 05.18.17

morning brew

Here’s your hand-crafted Brew for May 18th.

QUOTE OF THE DAY

“We didn’t like each other.” — Fred Wilson, head of Union Square Ventures, on how his first meeting with Uber CEO Travis Kalanick went. (Surprise: USV passed on the investment).

Market Snapshot

Move Over Fitbit

Alphabet’s (-2.33%) life-science arm (called Verily) just made a key hire as it races to “create a map of human health.”

Robert Califf (whose name is strikingly similar to another favorite executive) was in charge of the FDA under President Obama and is the top cardiologist at Duke University.

Now, he’ll head one of the biggest health studies ever conducted.
It’s called Project Baseline.

So far, the 500-employee company has invented contacts that monitor glucose levels, spoons for people with tremors and surgical robots. But, Project Baseline has nothing to do with tech—and everything to do with data.

Verily will give its shiny new health tracking bracelet to 10,000 people. They’ll wear it for at least four years as it tracks their every heartbeat, breath, activity and genome. Up close, and personal.

It’s going to produce a ton of data. Luckily, if anyone knows how to crunch data this big, it’s Google.

Verily hopes that this information can help spot early warnings of diseases. Essentially, doctors won’t have to go in blind anymore—they’ll have an incredibly detailed chart going back years. Goodbye manila folders.
So what’s the FDA have to do with all of this?

Tech companies and regulators don’t always get along (looking at you, Uber), but for ventures like Verily, it will be the most important step of the process.

Remember Theranos? The blood-testing startup was fined by the FDA last year and suspended from similar ventures for two whole years for lying about its tests’ accuracy. Ouch.

Verily will definitely need Califf’s expertise from inside the agency if it wants to use all this data in drug trials, medical devices or anywhere else. Brings a whole new meaning to WebMD, huh?

Target’s on Track

In a quarter full of disappointing retail results, Target (+0.99) is no exception. Same-store sales at the Minneapolis-based chain were down 1.3%. Luckily for Target, Wall Street expected much worse, and shares spiked as much as 4.3% Wednesday.

New, smaller stores are working well for Target. CEO Brian Cornell said these locations produce double the revenue per-square foot of Target’s larger stores. Looking to capitalize on this, Target is opening 30 more new stores this year and remodeling 100 others.

Wal-Mart (+0.01%) (you knew we had to mention the largest competitor) will report earnings this morning—its…target…is clear.

WeChat Is Killing It

China’s Tencent posted a 58% jump in first quarter profits yesterday as its flagship product quickly catches up to its competitors.

At 983 million users, Tencent’s WeChat (which is really more like a combo of Venmo, Apple Pay, Gamecenter, Netflix (-3.90%) and Facebook (-3.29%)…so everything) is on track to catch WhatsApp’s 1 billion and Facebook Messenger’s 1.2 billion users.

Tencent isn’t just the largest company in China, with quarterly revenue of over $2.1 billion, it’s also the world’s largest video game publisher. Revenues from popular new games like “Clash of Clans” and ads in chat fueled the staggering growth. Look out Facebook, if you can. It’s blocked in China after all.

NYSE Hits a Speedbump

This time, on purpose. On its 225th birthday yesterday, the New York Stock Exchange introduced a new rule to slow down trading of its smaller stocks.

You read that right—decades of tech innovation (algorithms, lasers, you name it) only for a 350-microsecond delay to come about. But why?

Traders are fed up with computers doing their jobs quicker (and better). A new stock exchange, IEX, which opened last year, is banking on the idea of slower trading. Now, NYSE is following its lead in an attempt to slow down high-frequency trading firms.

What Else Is Happening…

Economic Calendar


Water Cooler

Amazon Hits the Big 2-0

This week is the twentieth anniversary of Amazon’s (-2.23%) IPO. “Hypnotize” by The Notorious B.I.G. was the number 1 song in America that week in 1997, and Wal-Mart had, by far, the highest market cap of any retailer.

Fast forward to today, Amazon has nearly doubled the market cap of Wal-Mart (+0.01%) and has the fourth highest market cap in the S&P 500. Here are the numbers:

  • If you had invested $10,000 in Amazon back then (when it was just small digital bookstore), that would now be worth $4.9 million.
  • Other retailers haven’t fared as well. Amazon’s projected revenue this year is $40 billion more than the projected sales of Barnes & Noble (-3.90%), Best Buy (-2.34%), Macy’s (+0.83%), and Target (+0.94%). Combined.
  • Speaking of Jeff, his wealth has obviously skyrocketed since the IPO. With a current net worth of $82 billion, he is the 2nd richest person in the world. Bezos also owns the Washington Post and was an early investor in Google in 1998.
  • At half the revenue and a fifth of net income, Amazon still has a long way to go to catch Wal-mart.

The Breakroom

Interview Question of the Day

Complete the integer sequence:

1 11 21 1211 111221 ______ ________ __________

(Answer)

Startup of the Day

Have you thought about how your body should be memorialized when you pass? We certainly hadn’t…until this morning.

Elysium Space, a Silicon Valley startup full of ex-NASA scientists and undertakers, wants to send your corpse to space in Elon Musk’s SpaceX rockets for the cool price of $2,490.

100 people have taken them up on the offer so far, though no flights have yet to take off. We’d rather go to space on a flight we’ll remember.

Stat of the Day

$12.73 trillion—Collective debt held by all American households. It’s a new record that’s even higher than in the depths of 2008’s financial crisis. Before you freak out, the New York Fed says it’s not cause for alarm, but it does “provide an opportune moment to consider debt performance.”


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