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Tesla Offers $2.79b for SolarCity & Shares Drop

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Elon Musk called the proposed marriage of Tesla Motors Inc. and SolarCity Corp. a “no brainer,” saying his $2.86 billion plan to combine the companies would benefit both.  Tesla investors didn’t seem so sure. While SolarCity shares rose as much as 29 percent in extended trading, Tesla fell as much as 14 percent.

Oppenheimer & Co. analysts including Colin Rusch downgraded Tesla to perform from outperform in a research note published late Tuesday, saying they expect “a robust shareholder fight over this acquisition centered on corporate governance.”

“We believe investors are likely to view this transaction as a bailout for SCTY and a distraction to Tesla’s own production hurdles,” said Rusch in the note.

Credit Suisse Group AG analysts including Patrick Jobin said in a separate note that they expect “resistance from Tesla shareholders” and warned of “many corporate governance challenges.”

“Investors expect Tesla to keep all its focus on completing the gigafactory and on quickly ramping up production of Model 3 in 2018,” said Salim Morsy, an analyst with Bloomberg New Energy Finance. “Both of these goals are existential for Tesla. A SolarCity acquisition doesn’t help execute these critical milestones.”

Musk -- who is chief executive officer of Tesla, chairman of solar-panel maker SolarCity and the largest shareholder of each -- was upbeat. “In my personal opinion, this is obviously something that should happen,” the billionaire said on a conference call Tuesday.

Tesla plans to hold a conference at 7:30 a.m. New York time to discuss the rationale surrounding the offer to acquire SolarCity.

Tesla announced its bid for SolarCity in a blog post, saying the acquisition would “complete the picture.” The move comes as Tesla prepares for production of the Model 3, its more affordable electric car late next year and completes construction of its battery-manufacturing gigafactory east of Reno, Nevada.

If the deal is approved, SolarCity would become a part of Tesla. It’s already part of the family: SolarCity CEO Lyndon Rive and co-founder and Chief Technology Officer Peter Rive are Musk’s first cousins. The idea for SolarCity was hatched during a trip the three made to the Burning Man arts festival in the Nevada desert over a decade ago.

According to Tesla, the all-stock deal is worth $26.50 to $28.50 for each SolarCity share. That calculates to a premium of as much as 35 percent from Tuesday’s closing price. The average 12-month price target among analysts surveyed by Bloomberg is $29.82.

‘Room for a Deal’

“It’s clearly not a ‘done deal,’ but rather just an offer for now,” said Pavel Molchanov, an analyst at Raymond James. “I think there is room for a deal, but likely at a higher level, maybe in the $30s.”

With 100.2 million SolarCity shares outstanding, the proposal is worth as much as $2.86 billion.

Musk said he and Antonio Gracias -- a member of both boards -- would recuse themselves from voting on the takeover offer. JB Straubel, Tesla’s CTO, is also a SolarCity director.

Tesla shareholders will likely look askance at taking on more debt by combining the money-losing companies, said Morsy, the BNEF analyst.

“The company just raised $1.4 billion from an equity issuance in May to finance an accelerated production ramp of Model 3,” he said in an e-mail. “Investors will have trouble looking past the $3.2 billion in debt that Tesla moves on to its own balance sheet for a SolarCity enterprise value of just $5.8 billion.”

Musk owns 22 percent of SolarCity and 21 percent of Tesla, the youngest and smallest publicly held U.S. automaker. The two companies work closely together: SolarCity picked batteries made by Tesla to provide 13 megawatts of electric storage for an array of solar panels to be built on the Hawaiian island of Kauai.

“Tesla customers can drive clean cars and they can use our battery packs to help consume energy more efficiently, but they still need access to the most sustainable energy source that’s available: the sun,” Musk said in the blog post.

“Most of our customers have an interest in solar,” he said on the conference call. “But a small percentage actually have it.”

Read Article (Dana Hull | Bloomberg.com | 06/21/2016)

Merging these two seems to be a very logical move. Everyone will benefit, including technology. We are still looking for that leap in energy storage and this may signal something big on the horizon.

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How Brexit Affects Global Technology Industry

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Brexit has officially happened, and the implications of the vote to leave the European Union has raised many questions for the global technology industry.

In Britain, a majority of tech firms were against leaving the E.U. A technology industry group survey found that 87 percent of British technology firms wanted to stay in the European Union, and that 70 percent of them worried a vote to leave would damage London’s reputation as a technology hub. Global companies with offices in Britain, such as Microsoft, also campaigned against the move.

Now that the votes have been cast, here are some major issues facing the tech industry in Britain and abroad, in light of the decision.

Data flow and data privacy: The U.S. and the E.U. are in the process of making the final adjustments to their latest data privacy agreement, which governs the flow of data between U.S. and Europe. With a major player in the E.U. now backing out of the coalition, there are obviously some questions about what happens to data flowing in and out of Britain from the U.S. and elsewhere.

Despite the referendum results, however, things in this area will remain with the status quo — for now.

“The Data Protection Act remains the law of the land irrespective of the referendum result,” confirmed the U.K.’s Information Commissioner’s Office, but added that the Brexit does mean that the U.K. will not be subject to upcoming reforms the E.U. is planning to make around data protection.

However, Britain is unlikely to deviate from the policies of the E.U. in this particular area, simply because E.U. standards have become basically standard around the world. Should Britain shy away from those regulations, experts said, it would face dire consequences.

“It will be left out of the group of progressive and forward looking countries with suitable safeguards for personal data,” wrote privacy law expert Eduardo Ustaran ahead of the vote.

That doesn’t mean, however, that the Brexit will have no effect on the world’s data economy. There is also a sense, now that Britain has voted to leave the E.U., that the counterweight it provided against privacy-heavy countries such as Germany and France will also disappear. Germany and France have been leading the charge against major American tech firms -- notably Google, with the “right to be forgotten” ruling.

“This will help strengthen calls from the E.U. member states more concerned about protecting privacy rights,” said privacy advocate Jeff Chester, director of the Center for Digital Democracy.

Some are optimistic that, with fewer E.U. regulations, British companies would thrive. But the uncertainty in the immediate aftermath of the vote makes some uneasy.

“Europe is such an important economy, it would be a shame if this and some existing policy proposals by some in the E.U. came into effect in a way that dampened the ability to use technology and grow their economies,” said Ed Black, president of the Computer and Communications Industry Association.

Funding: One of the key reasons that many British technology firms said they were against a British exit from the E.U. was that it would be more difficult for them to secure funding for start-ups. London’s technology industry has been on the rise for the past several years.

Britain benefits in large part from funds such as the European Investment Fund, which backs an estimated 41 percent of venture capital investments in Europe. Its majority investor is the European Investment Bank.

But if Britain is no longer a part of Europe, that dries up a source of funding just as questions about how a U.K. shorn of its E.U. ties will regulate health tech, financial tech and other technology industries.

For its part, the EIF has said that it will continue business as usual for the time being. But the vote has injected a note of uncertainty into the start-up market, as Britain will now have to make its own negotiations with the fund.

“The European Investment Fund takes note, with regret, of the vote of the British people to leave the European Union,” the group said in a statement. “EIF will actively engage with the EIB and relevant European institutions to define the EIF’s activity in the UK as part of the broader discussions to determine the future relationship of the UK with Europe and European bodies."

Others also have financial concerns. For example, the video game industry in particular has said that it's worried that the new tax environment won't be as favorable to it as the E.U.'s has been.

Immigration: British tech firms — and technology firms from around the globe with offices there — have also raised concerns that the Brexit will fundamentally harm the tech industry’s ability to fill positions for highly skilled workers. Without the E.U.’s allowances to let workers move freely between countries, British companies are now worried about a shortage of qualified workers. That might be something that gets ironed out in a later agreement. But right now, there are plenty of expat workers in and outside of Britain that are raising questions about how Brexit affects their lives.

The concerns echo the talking points of the tech industry’s calls for immigration reform in the U.S. right now. The tech industry has repeatedly said that it needs to be able to recruit highly skilled foreign-born workers from across the globe in order to meet its labor demands.

Todd Schulte, president of the U.S. immigration group FWD.us, said that while the situations between the U.S. and Britain are obviously different, the need for support for a foreign-born workforce is not.

“In a globalized economy, when you’re trying to sell to the world, a diverse workforce is an asset,” he said.

There are also worries that companies that looked to London as an ideal place to start a company will now look elsewhere. Some start-ups have already begun to evaluate whether London is still the right place for their offices.

"To us, it was obvious to have London as a headquarters for all of Europe," said Allan Martinson, chief operating officer of the delivery startup Starship Technologies. "Today we may need to look for another location if we're working with continental Europeans."

Read Article (Hayley Tsukayama | washingtonpost.com | 06/24/2016)

Leading countries in the digital era have prospered through the sharing of methodologies, agreements and policies. To suddenly stand-apart, exposes one’s self to unknown ramifications.

We can only hope that nothing negative results from this decision.

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Microsoft Moves into the Legal Cannabis Business

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America’s burgeoning weed industry just seems to be climbing higher. Tech giant Microsoft announced Thursday it is partnering with a cannabis industry-focused software company called Kind Financial. The company provides “seed to sale” services for cannabis growers, allowing them to track inventory, navigate laws and handle transactions all through Kind’s software systems. The partnership marks the first major tech company to attach its name to the burgeoning industry of legal marijuana.

While most big tech companies have been shy to get involved, tech start-ups have been flocking to the up-and-coming pot trade, which is fully legal for both recreational and medical purposes in five states. The marijuana industry’s specific needs for data tracking to optimize plant growth and other logistics, as well as its booming market potential, make it well-suited for tech partnerships. “Nobody has really come out of the closet, if you will,” said Matthew A. Karnes, the founder of marijuana data company Green Wave Advisors, to The New York Times. “It’s very telling that a company of this caliber is taking the risk of coming out and engaging with a company that is focused on the cannabis business.”

This hesitancy comes from the still murky legal status of marijuana in most of the country. Marijuana is still illegal nationwide, and the risk of crackdowns where federal and state laws contradict have discouraged many banks from working with marijuana businesses. There are also risks in taking a weed business across state lines where it could have a different legal standing. And there’s always the danger that a change in government leadership, say with a changing presidential administration, could result in a backtracking of relaxed marijuana laws.

Then there is the potentially negative association. “[My company] has stayed away from investing in the cannabis industry because it’s like investing in the porn industry,” said Zach Bogue, a venture capital investor. “I’m sure there's a lot of money to be made, but it’s just not something we want to invest in.”

Allen St. Pierre, executive director of the National Organization for the Reform of Marijuana Laws (NORML), sees marijuana software and Microsoft as a natural pairing. “If you are trying to go big macro strategy at a company like Microsoft, and you want a super diverse portfolio, and you’re located largely in a place where you can visibly see the marijuana commerce happening, and of course maybe your employees and others are engaged in that commerce, why wouldn’t the company invest in it?” he said.

He adds that he believes that Microsoft’s association with legal marijuana will ultimately be helpful in the legalization effort. (Microsoft, based in Redmond, Wash., is in a state that has legalized marijuana for recreational use.) The legitimacy it lends will make it easier for marijuana producers to do business, citing growers who see their ad dollars refused by corporations that don’t want to be associated with the substance. “Having a brand name like Microsoft will definitely catch people’s attentions,” he said.

He also thinks the partnership could affect legislation. “Microsoft has a leviathan [lobbying] effort up here in Washington [D.C.],” he said. “One of the things that has been really interesting to see is how the focus is becoming not so much about legalization per say, that’s almost become a bugaboo word up on the Hill, but just focusing in on these commerce reforms, for example to allow banks to handle this trade ... they lobby hard for that stuff on the Hill right now and to have a Microsoft weigh in saying, we want to be part of that commerce, can only buoy those efforts.”

St. Pierre notes that Kind Financial, which is never directly involved in growing, testing, or selling marijuana, is typical for the kind of companies cropping up around lobbying efforts and gaining financial traction. These ancillary companies that provide services around the actual moving of product are legally much easier to handle.

“The fact that one is engaged in their minds in quite legal commerce, one where lawyers are saying, sure you can set up software to track it, you can set up a web page that shows pretty pictures of marijuana and rate it, or get coupon discounts, etc.,” he said. “Compared to the other side of the issue, where you’re growing it, transporting it, you’re selling it, and you’re actually touching it, the lawyering they get is ... more schizophrenic.” These actual producers, he adds, are the most legally vulnerable.

Still, St. Pierre is thrilled at the partnership. “Ten years ago, 20 years ago, if you were saying, I have a software and I’m hoping to track marijuana sale, you and I would be in a RICO conspiracy. So that speaks to how much has changed, and how today what’s heralded in a newswire as a big partnership, years ago would have put you in federal prison,” he said.

Read Article (Karen Turner | washingtonpost.com | 06/16/2016)

Internet availability and access is important without a doubt, but knowing how to fully utilize the constantly evolving devices that connect to it and the Internet itself, is an issue just as important if not more.  Our instructional webinars are the long-term solution for addressing device usage, and we need your support.

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Why a Current Online Presence Matters?

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Why does Sunrise Senior Living have a blog?  Actually, it appears to have been updated today.  You might think that a company in the residential senior care business wouldn’t.  And further, Brookdale can be followed on Twitter.   So can JoAnn Jenkins of AARP – that makes great sense – AARP is a content/media company.  So what’s up when you can’t find any reasonably current content, or worse, the site offers up a suggestion to meet up in…2015? Or when the last tweet from a company that is still in business and is doing quite well – but their last Tweet was in 2012?

Online presence builds confidence – especially for new connections.  So let’s say that Mr. Offline Consultant is well-liked among prospective clients, has many repeat engagements based on someone he knows. What if a client replaces his last senior contact with someone new?  It happens – there’s a new sheriff in town, so to speak (as with the Philips-to-IBM-move example).  So Mr. Offline finishes up his get-acquainted meeting, leaves the building, and the new executive searches the web. But finds…nothing new from the past 6 months.  Should confidence in Mr. Offline be shaken? And why?

No online presence signals market disinterest or worse -- out-of-business.   Perhaps your files are filled with material from departed companies.  For their time, perhaps they were great ideas, service offerings or products.  Perhaps these firms thought they could market without channel partners or perhaps they picked the wrong partners. Perhaps they led with a poorly-thought out product description.  Whatever the reason for their exit, future prospects have the right to know that they are gone. Consider Emeritus Senior Living -- online now as part of Brookdale but also immortalized on Wikipedia and elsewhere.  Does it matter that Brookdale tweets?  Of course it does -- it shows that they are still around and view Twitter as the searched environment that it is – that they want their website to be found.  And the redirect from the search for Emeritus?  Ditto.

All market segments depend on search. Whether through Twitter or Google, if in business, firms want and need to be found – and with good and reasonably recent content.  Some that disappear without a trace leave the consumer wondering – what happened?  Remember the Floh Club and Florence Henderson?  Probably not, but that one, unlike Emeritus, quietly evaporated, leaving behind only head-scratching.  But as that article just showed, you can be gone but the Internet never forgets. And if you really want to be remembered right now for your current offerings, fix the site, the tweets, aging marketing, and why not…follow lots of people and offer up a few Tweets.

Read Article (Laurie Orlov | ageinplacetech.com | 06/08/2016)

In this digital era, having a current online presence can also extend to individuals as they job hunt and seek to extend their career. An outdated or missing online presence can project a negative impression even if the company doesn’t require a high level of digital skills. This seems to just be the trend in today’s job market.

This is another niche where our service can benefit many individuals in a very convenient way. We really need your support to bring this vital service to the masses. #socialcitynet

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Facebook Outreach Blatantly Ignores “Black Lives Matter”

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When Facebook launched a new system in January to help news outlets and other groups target posts to particular audiences, a representative of the New York Times said it had the potential to kindle “vibrant discussions” within “niche Facebook communities” that might otherwise get lost amid the social network’s 1.6 billion users. And indeed, in the system’s first several months, software algorithms have generated hundreds of thousands of special tags for connecting to even the most obscure groups, including 7,800 Facebook users who are interested in “Water motorsports at the 1908 Summer Olympics.”

But there’s one set of people who can’t be reached via Facebook’s system: those interested in Black Lives Matter, the nationwide grassroots movement protesting police violence against black people.

Facebook’s targeting mechanism, designed to route articles and videos from Facebook Pages into users’ news feeds, will gladly help reach other protest communities. For example, publishers can target people interested in the conservative Tea Party or in its largely forgotten liberal response, the “Coffee Party,” as well as those enthusiastic about the “Fight for $15” labor movement and the “Boycott, Divestment and Sanctions (BDS) Movement” around Israeli mistreatment of Palestinians, all by attaching to their posts selectors known as Preferred Audience interest tags.

That there’s no such tag for Black Lives Matter is particularly baffling given that BLM began on Facebook in 2013 and has dominated headlines ever since.

Facebook tells The Intercept that the omission does not reflect its own stance toward the movement and blamed the lack of a Black Lives Matter targeting tag on the software that automatically generates the tags.

But BLM’s absence from Facebook’s targeting program looks all the more stark in the wake of high-profile revelations from a Facebook news curator who told Gizmodo that he and his colleagues had to “inject” Black Lives Matter into Facebook’s “Trending News” section because it was having a difficult time gaining traction.

It also hearkens back to a controversial moment in 2014, when protests in Ferguson, Missouri, over the police killing of Michael Brown blanketed Twitter feeds. Facebook feeds were instead saturated with posts about the “ice bucket challenge,” a boisterous viral campaign to raise awareness for the brain disease ALS. The success of that effort, which according to the ALS Association raised $115 million — nearly six times the group’s annual budget — shows what a favorable algorithm ranking can do for a campaign.

On the other hand, algorithms can also have a potentially crushing effect on social and political movements, which increasingly rely on social media and journalism to grow and sustain their support bases. By providing a tag to target a particular group, Facebook encourages the production of content for that group. And good reporting strengthens political movements and shapes public discourse.

Social media teams, including ours at The Intercept, use interest tags to promote their journalism and expand their reach. If said journalism isn’t reaching its intended audience — and if a publication’s traffic reflects that — outlets are disincentivized from investing limited resources into covering the movement and the issues its followers care about.

According to Christian Sandvig, an associate professor at the University of Michigan who studies the cultural consequences of algorithmic systems, groups like Black Lives Matter may be missing from the system because Facebook’s programmers wrote a “machine-learning” algorithm — based on artificial intelligence — that produces results even Facebook does not understand.

“Machine learning writes its own software. [It] writes its own rules,” he said. “The reason that a particular item or content is selected or not selected may not be recoverable.”

Lending credence to this theory, Facebook said there is no way to know with any certainty why any specific interest tag is included or missing from its list. “We’re committed to and working on improving our system to generate a more comprehensive list of interests that are relevant for people and useful for publishers,” said a Facebook spokesperson.

Companies that write software like the Preferred Audience system often act like “there’s no human intervention — as though writing software wasn’t human,” said Sandvig. “If you ran a business that did something like that you wouldn’t necessarily have this defense.”

Part of the problem may actually be that Facebook is eager to create pleasant user experiences. Its News Feed algorithm brings people content they’re expected to like and hides content that might make them unhappy. So if a lot of users block or hide posts related to Black Lives Matter because they find the violent or controversial nature of the issue objectionable, that can affect how visible other Black Lives Matter content is.

“Because we learn about the world through the social media algorithm, in the future we might be learning about a new kind of world,” said Sandvig. “One that reflects certain decisions — made by internet platforms — about what kind of mood they want us to be in or what feeling they want us to have while using them.”

“The computer and the user coproduce relevance,” said Sandvig. “You’re training the algorithm and it’s training you.”

Read Article (Travis Mannon | theintercept.com | 06/09/2016)

When software engineers are contracted to develop and algorithm, this is done from a standpoint that provides “Plausible Denial” for the entity issuing the contract.

Just as businesses are well aware of any finger-pointing that may arise from their projects in the digital era, all consumers should hone their digital skills as much as possible. We are striving to help individuals in this endeavor. #socialcitynet

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