Tech: Apple buys music discovery app Shazam
Apple is scooping up the pioneering music-recognition app Shazam for a bargain price, said Micah Singleton in TheVerge.com. Apple confirmed this week it had acquired Shazam for a rumored $400 million—a steep decline from the $1 billion valuation Shazam had at its last funding round in 2012. Despite a groundbreaking technology able to identify a song playing on the radio or elsewhere, and 1 billion downloads since 2008, Shazam has “had a hard time finding a viable business model,” banking just $54 million in revenue last year. The company’s technology, which is already integrated with Apple’s Siri interface, will now gain a “deeper integration” with Apple’s operating system.
“Apple’s Shazam deal is a sneak attack to hit Spotify where it hurts,” said Kif Leswing in BusinessInsider.com. Apple Music, Apple’s music-streaming service and live radio station, has just over 30 million subscribers, half as many as rival Spotify. But Shazam offers a diverse global customer base of hundreds of millions, and more than a decade’s worth of data on which songs listeners are interested in. It can also help Apple “discover songs that are starting to get popular” around the world—a kind of “early warning system” for hits. That will help Apple Music compete with Spotify’s popular “handpicked playlists” and other data-oriented tools.
Autos: In shift, Ford to assemble electric cars in Mexico
Ford “changed its plans” this week, announcing that it will manufacture its new battery-powered cars in Mexico, rather than in Michigan, said Neal Boudette in The New York Times. Last year, “after heavy criticism” from then–President-elect Trump, Ford canceled plans to build a $1.6 billion electric-car plant in Mexico and said it would assemble the cars in Michigan instead. The company now says it will build the electric vehicles in Mexico after all, and provide the Flat Rock, Mich., factory with “an even larger investment than previously planned,” focusing instead on “making a range of self-driving cars.”
Economy: Federal Reserve bumps up rates
In a widely expected move, the Federal Reserve raised short-term interest rates this week by a quarter percentage point, into a range between 1.25 percent and 1.5 percent, signaling its confidence in the strength of the economy, said Nick Timiraos in The Wall Street Journal. The increase was the fifth since the central bank began raising rates from near zero two years ago. Jerome Powell, the nominee to replace current chair Janet Yellen, is expected to take over in February, pending Senate confirmation.
Autos: Seven-year sentence for VW manager
Volkswagen’s “massive diesel emissions cheating scandal” has landed a former executive in prison, said Eric Lawrence in the Detroit Free Press. Oliver Schmidt, the former manager of VW’s Engineering and Environmental Office in Auburn Hills, Mich., was sentenced last week to seven years in prison and ordered to pay $400,000. Federal Judge Sean Cox in Detroit described Schmidt as a significant player in VW’s attempted cover-up of its decade-long scheme to cheat on diesel emissions tests. Schmidt, a German national, is the highest-ranking VW employee to be convicted in the scheme in the U.S.
Health care: Hospital merger could create huge chain
Hospital operators Ascension Health and Providence St. Joseph Health are in talks to merge in a deal “that would create the largest U.S. owner of hospitals,” said Melanie Evans and Anna Wilde Mathews in The Wall Street Journal. The combined entity of the two nonprofits would generate roughly $45 billion in annual revenue and create a chain of 191 hospitals with “unprecedented reach” across 27 states. If the deal goes through, it “would up the ante” in the face-off between big hospitals and health insurers; both groups are trying to gain the advantage “in negotiations over the cost of care and greater control over patients.”