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  • Date of publication: 31 August 2020
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  • Uber, Faraday Future, Twitter and others - which companies will die in 2018

    Synopsis

    Ars Technica publishes an annual list of companies and brands that are likely to die in the coming year. It includes projects that are threatened for a variety of reasons - economic, cultural or technological. The editors emphasize that the companies do n

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Description

The list includes companies that experience at least one of the following problems:

  • the company for a long time loses its market share;
  • experiencing financial difficulties or losing revenue;
  • faced with management problems, does not have a reliable business model or a long-term strategy.

In 2017, Ars Technica Deathwatch included Yahoo, the anonymous messenger Yik Yak, Twitter, the medical company Theranos, HTC, the Gearbox Software gaming studio and the Blackberry smartphone maker.

Yahoo's company in 2017 actually sold its main business and actually ceased to exist, having turned into Altaba, and the messenger Yik Yak announced the closure. Blackberry and Gearbox Software spent a year "quietly" and without high-profile news, and Twitter and HTC are again included in the list of publications. In 2018, the editorial board included six companies.

Uber

"Just one year ago, Uber's prospects looked normal. The company dominated the transportation market in the US and held strong positions around the world. She recently absorbed a startup to develop self-managing cars Otto and even engaged in the creation of flying cars, "writes Ars Technica.

In 2017, everything changed for the company - it was implicated in a number of scandals: Waymbo's Alphabet company filed a lawsuit against Uber and accused the service management of stealing unmanned vehicles. The New York Times reportedon the internal tool Greyball, which helps Uber mislead authorities and police in cities and countries where the service is officially banned.

Former employee of Uber Susan Fowler published a note describing the atmosphere of sexism in the company, provoking an internal investigation in the startup. In June, the post of general director of Uber left Travis Kalanik. His post was received by the former general director of the tourist service Expedia Dara Khosrovshahi.

At the same time, continues Ars Technica, Uber continues to receive billion losses from year to year - only in the third quarter of 2017, the net loss of the company, according to Reuters, was $ 1.46 billion. In 2016, Uber's loss amounted to $ 2.8 billion, and in 2018, according to analysts' forecasts, this indicator will only grow. In mid-2017, the company accounted for about $ 6.6 billion in funds - this, Ars Technica believes, is not enough for a long time, even considering the investments from Softbank in December.

In 2018, Uber faces two major challenges: to find a way to reduce losses and reach profitability - and to finish the development of an unmanned vehicle as soon as possible, which will significantly reduce the cost of travel. "The company's management apparatus is almost destroyed, the court proceedings with Waymo are still not over - it will not be so easy," the editorial office of the newspaper writes.

Twitter

In 2017, the microblogging service Twitter also got on the list from Ars Technica. "By the end of 2017, Twitter will not disappear anywhere, be sure. But the social network, as we know it, will come to an end. And we are not talking about a minor change in the interface or the introduction of new functions, "- then wrote the publication.

By early 2017, Twitter was rapidly losing investors' funds, and although in 2017 the pace slowed somewhat, the service still brings losses. For the year the company burns a third of its funds, but there is no talk of profitability yet, notes Ars Technica.

The social network has started an active fight against toxic users and comments, but in this direction, the editorial board believes, the company can never succeed. With similar problems, Facebook, Instagram and other social networks are struggling. And Facebook, the editorial board believes, is doing better than Twitter, one of the most significant changes in 2017, which was the increase in the number of characters in the tweet.

Faraday Future

"The history of Faraday Future is a clear lesson about the dangers of arrogance and excess," writes Ars Technica. The project was called "Tesla killer", he managed to lure the design team leader from BMW and the head of the Ferrari team in "Formula 1".

For the first time, Faraday Future showed the concept of its own car at CES in early 2016. "If you promise to show the" killer Tesla "- and these are the words of the company's management, not ours, - show the working car better," Ars Technica writes. Then followed a few other high-profile announcements that had nothing to do with cars: the construction of a factory in Nevada, San Francisco, and the conclusion of a partnership with the racing team at the Formula E events.

At CES in 2017, the company showed its first production car FF91, and he also disappointed many journalists. Then in the media there were news about the difficult situation in the company and the lack of funds.

"By the end of the year, Faraday Future had approached in a difficult situation: plans to build the factory had to be curtailed, employees began to leave the company, and agreements with the" Formula E "team no longer exist. In just a few weeks, the CES exhibition will start, and the startup has nothing to surprise the public. But the company, of course, will not die quietly - in mid-December the team said that it had found another $ 1 billion for its development. "

LeEco

The companies of LeEco and Faraday Future are owned by the Chinese businessman Jia Yuehtin. "And LeEco is another loud failure of 2017. The electronics maker was trying to enter the US market and poured all sorts of promises, most of which were never implemented. It seems that this is already a regularity, "writes Ars Technica.

The device LeEco in many ways resembles the structure of the holding company Alphabet, continues the revision. The holding has the main business - the largest in China video-streaming service Le.com , "Chinese Netflix". The group of companies also includes LeTV video service, LeVision Pictures film studio, LeMusic music company, LeRan Investment Management investment fund, VR-technologies development fund LeVR, LeMall online store and many other divisions.

LeEco is a subdivision of the holding that produces electronics: smartphones, televisions and other devices.

In 2016, LeEco began to make attempts to enter the US market. She announced a partnership with the manufacturer of Vizio TVs, bought land for her own headquarters from Yahoo for $ 250 million, and said she plans to build on her some EcoCity for 12,000 employees. In October 2016, the company held an event in San Francisco, where it announced its entry into the market and showed its novelties.

A few days after the event, it turned out that the company has problems. In an internal letter to the staff, CEO Jia Yuethin said that LeEco has built too ambitious plans, and its resources are severely limited. The deal with Vizio was canceled, and LeEco itself refused to pay a $ 100 million penalty, which entailed litigation. The company also had to sell the acquired land in San Francisco and reduce 85% of the state in the US.

In late December, a court in China arrested more than 1.3 million yuan ($ 200,000) in Yuethin's bank accounts and other assets, including real estate. The American website LeEco stopped working. In the American division of the company it is necessary to work about 60 people, writes Ars Technica. "And if the fate of the whole holding has not yet been determined, with plans to enter the US market, LeEco can definitely say goodbye."

HTC

HTC was listed by Ars Technica in both 2017 and 2016. In 2017, the company sold part of its business to Google for $ 1.1 billion. The proceeds from the sale can be enough for the company for approximately 3.5 years, Ars Technica estimates.

However, the transaction means for HTC not only the receipt of funds, but also the loss of Google as a customer, continues the publication. The company claims that it will continue to produce smartphones, but the loss of a unit of 2,000 people, says Ars Technica, can not but affect the business.

HTC also has a VR unit that develops branded HTC virtual reality helmets Vive - in conjunction with the Valve gaming company. "However, it seems, in fact, HTC does not own Vive technologies, although it calls the production of the helmet" a collaboration "with Valve." Valve provides free access to some of the technologies, displays and lenses inside the helmets created by Valve and Samsung.

In addition, Valve is developing its own SteamVR platform, which will make it less dependent on HTC. And competitors at this time develop their own VR-solutions - for example, Facebook-owned project Oculus.

In August 2017, Bloomberg reported that HTC was considering the sale of the Vive division. "Well, maybe HTC has the means to continue to exist, but is it possible to build a meaningful company with Google's means?" Concludes Ars Technica.

SoundCloud

In July 2017, the music service SoundCloud announced a reduction of 40% of staff. The project management could not find a business model that would help it to earn money. But at the beginning of August the company told about attraction of a new round of investments and change of the general director - the former head of Vimeo Kerry Traynor became the new head of the company.

Traynor plans to take SoundCloud away from the streaming model and focus on creating tools for performers. The main issue, according to Ars Technica, is whether the company will have time to start earning money before it runs out of money.

 

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