Facebook exits its satellite internet business. Why not when you have Elon Musk’s Starlink? Amazon is picking the pieces.  The e-commerce giant has  acquired more than a dozen of Facebook’s Internet engineers, in a play to accelerate its satellite Internet project called Project Kuiper. While Amazon lags far behind SpaceX’s Starlink service, which already has 10,000 subscribers in its beta test, it does have U.S. approval to one day launch more than 3,000 satellites of its own, notes Fortune.

Facebook has sold its small-satellite Internet division to Amazon and said it has no plans to become an Internet service provider. Amazon and Facebook both confirmed the sale to Ars today.

The Information first reported that “Amazon has acquired a team of more than a dozen wireless Internet experts from Facebook in an effort to boost its multibillion-dollar effort to launch thousands of satellites… The workers are in the Los Angeles area and included physicists as well as optical, prototyping, mechanical, and software engineers who had previously worked on aeronautical systems and wireless networks, according to their LinkedIn pages.” One of those is Jin Bains, who is now a director at Amazon’s Project Kuiper. The employees reportedly moved to Amazon in April.

I am sharing here a piece which I received from a newsletter in full (see below). Essentially, Facebook wants to pay creators just as TikTok and YouTube do. It is a virtuoso circle which compounds due to network effects: if more people come to engage with the contents, the companies will make money on them and recoup their investments. More so, since Facebook is not prepaying anything, the risk is very minimal. In this playbook, there are many things we need to consider. 

The first is that this could be a fish bait acquisition construct which may not really work out well; the media industry experienced that type of arrangement many years ago, and nothing promising came out of it.

The second is that the business model of the 21st century “media” is based on the construct that it is more statistically better to promise to pay thousands of people, and then use algorithms to peruse their contents, accelerate any that shows elements of virality, than hiring a few zen-masters who may not deliver virality. 

Yes, Facebook has a better business model in paying these creators over trying to recruit staff to deliver the same contents. This is the reason why TikTok is a better business than the failed Quibi: out of the tens of thousands of creators in TikTok, there is a higher probability to find viral contents, daily, by an AI, than experienced dozen creators who can create tens of contents yearly.

People, evaluate your business in this age of the internet. Many things compound when you have the right playbook.

Which is a better business model?
A: Have 10 great movie producers to produce 200 short videos for your digital platform over two years (Quibi like).

B: Allow tens of thousands of amateur creators, and use an AI to select the best videos daily and distribute them massively in your platform (Tiktok like).

In year 2000, Option A would have been a good business because the computing resources to run AI were not (commonly) available for Option B. But with cloud computing and the age of AI here, Option B wins. The probability of getting a hit video compounds in Option B while A is limited by the insights of just 10 people; virality is key for short movies.

That is why Tiktok will remain a better business than Quibi which is looking for a buyer despite being under the guidance of legendary Jeffrey Katzenberg.

People, as I have noted in the Grand Playbook of Business, your business model is more important than your ability to execute. Are you improving your business model?

People may open Facebook or Instagram every day to see what’s new with friends and family, but what keeps them scrolling for hours is the content.

Tech giants have realized that having a healthy ecosystem of content creators—the users who publish viral videos and Internet celebrities who record their entire lives—on their services makes users return and helps their businesses grow. There’s simply more for people to consume, more videos to put ads in front of, and more attention to monetize.

To encourage more of this content, Facebook will now offer $1 billion in rewards for those who create hit posts. Facebook will dole out cash to creators on its main app and on Instagram for using specific features, turning on ads that their audiences must watch, or achieving yet-unnamed milestones.

Facebook is following TikTok’s lead on this. The Chinese bite-sized video service had previously set up a $2 billion Creators Fund, which pays well-known creators a few cents for every thousand views on a video. When TikToks hit hundreds of millions of views, the cents add up.

But the undisputed master of the strategy is YouTube, which started its partner program all the way back in 2007 to incentivize high-quality videos. It paid off. YouTube’s 2 billion monthly users watch more than a billion hours of video daily, and the company has paid creators more than $30 billion in the last three years.

A billion dollars is a lot of cash, but the key difference between Facebook and TikTok’s strategy, as opposed to YouTube’s, is sustainability. Over the next few years, Facebook and TikTok will spend all that money with the hope of accelerating user growth, leading to more revenue. YouTube’s content acquisition and revenue strategy, in contrast, are already inextricably linked, meaning it’s much less of a gamble for creators long-term.

But creators should be wary of relying solely on Facebook cash, which is a promise of upfront rewards with no long-term commitment. Take that advice from journalists, whose industry pivoted heavily towards video and livestreaming because of lucrative contracts and the promise of growing viewership. That turned out to be far less sustainable than Facebook had promised, partly due to wildly inflated viewership metrics and contracts that Facebook didn’t renew, leading to a correction in which hundreds if not thousands of journalists lost their jobs.

Of course, creators arguably already have a better business model than journalists. They at least benefit from the competition between platforms to recruit them for making content. That may be why YouTube alone paid its creators the equivalent of 345,000 full-time salaries in 2019, at a time when the U.S. has only about 85,000 journalists.  (Fortune newsletter)

That is a Live  TV looting – and trying to take the goods home. But the car cannot just make space available. But while this is happening in South Africa, I am hoping that African Union calls an emergency meeting to evaluate the state of the continent. What we are witnessing in South Africa is no more about Jacob Zuma. Yes, this is a broken system where failed humans are using an unrelated issue to do what they have been dreaming: let us make everyone like us. Yes, loot and get the economy to ground zero so that poverty is equitably shared! It is very painful indeed.

Go back to the recent history of Africa, before the age of Twitter and Facebook, people demonstrated and blocked roads. This new dimension of looting is exceedingly new. And I cannot understand how it became what it is today.

The Aba Women demonstration got the deal done without looting. Many demonstrations during the IBB and Abacha regimes in Nigeria happened, but  no looting. But today, any instance of a  protest brings low humans out, breaking and looting private properties.

Who will build the shops and malls of the future if protests end with looting? This is a risk vector for investors and I am saddened by what is happening in Africa. We are scaling madness!

China is expected to roll out the e-yuan, its digital currency, at scale, later in the year. The United States has also started work on e-dollars. Nigeria plans to launch a digital currency next year. The Central Bank of Nigeria boss revealed this plan during the 279th MPR meeting – “We are committed in the CBN and I can assure everybody that digital currency will come to life even in Nigeria”.

At 7pm WAT, Tekedia Live will discuss the implications and opportunities of this redesign. 

Thur, July 15 | 7pm-8pm WAT | Digital Currencies: E-Yuan, E-Dollars, E-Naira – Franklin Peters Bitfxt (Dubai, UAE) 

Zoom link in the Board

Apple plans to offer Buy Now, Pay Later service. With that consumers can pay for any Apple Pay service in installments over time, rivaling the “buy now, pay later” products popularized by fintech powerhouses like Affirm and Paypal. In other words, Apple is now a lending company, and can technically make small marginal gains on the loans! That is good news for Goldman Sachs, its partner, as the bank continues to recalibrate for the new age where volume, even at low margins, is critical. Yes, Goldman Sachs can help process that $99 “loan” through Apple Pay Later. Just a few years ago, no one could have expected that from GS.

The upcoming service, known internally as Apple Pay Later, will use Goldman Sachs Group Inc. as the lender for the loans needed for the installment offerings, according to people with knowledge of the matter. Goldman Sachs has been Apple’s partner for the Apple Card credit card since 2019, but the new offering isn’t tied to the Apple Card and doesn’t require the use of one, said the people, who asked not to be named discussing unannounced products.

As Apple works on lending, Netflix is preparing to offer video games. The company has hired a former Electronic Arts business leader to drive game development, with a view to offering games within the next year. That is a very important playbook if the plan is to do all necessary to get people to renew their subscriptions.

Netflix’s growing fascination with video games will soon explode in the form of a full-fledged game-publishing arm.

While Netflix has yet to post its own announcement about the initiative, the streaming-video provider has confirmed to Ars Technica that it has hired a former EA and Oculus exec to lead a Netflix game-publishing team.

The newly hired exec is Mike Verdu, who most recently worked in developer relations with Facebook’s Oculus VR team (his public profile still says that’s his current job). He has worked in game development and publishing since the early ’90s, and his first studio, Legend Entertainment, was eventually acquired by GT Interactive.

Then, I report that Google has bought a fintech company: “Alphabet, Google’s parent company, has agreed to buy Japanese payments firm, Pring. The startup’s three top shareholders – Metaps, software company Miroku Jyoho Service Co Ltd, and Nippon Gas Co – announced on Tuesday they would sell their combined 87% holding in Pring to Google.”

You may ask: what is going on here? What is happening here is the power to do anything because once you have the foundational technology stack, you can easily combine and recombine things on the top stacks. Apple can add lending. Even GS can offer cheap loans. Netflix can go into gaming because it has all the core pieces already. And Google is adding payment because there is no reason not to. For Google specifically, it comes down to what I have called fintechnolization: the stable state of most digital platforms is to add a financial service product.

This thing called software will eat the world – and will also save the world, economically. It will bring a unification in many business sectors as everything business becomes a technology company, offering nothing but services in many verticals. The bank of the future will be tech firms which offer banking as a service, just as insurers of the future will be technology firms which offer insurance services.

In the next few years, technology products will evolve: Facebook can do many things right there. So, the critical playbook for innovators is to think from day one on how to deepen their moats and protect their castles, and one way of doing that is to add physical domains in anything you are doing.  When you have physical components, digital firms cannot easily automate you out. A physical component could be providing dedicated payment systems to farmers and supporting those farmers with logistics provided they use your payment technology. As you provide that support, disintermediating you will become harder.