From left, Tim Stuart, chief financial officer of Xbox at Microsoft; Phil Spencer, Microsoft’s CEO of gaming; and Microsoft finance chief Amy Hood arrive to court in San Francisco on June 29, 2023.
David Paul Morris | Bloomberg | Getty Images
Microsoft’s finance chief advised employees not to “build a gold toilet” during a 2018 meeting, according to emails that came up during federal court hearings last month over the software maker’s planned Activision Blizzard acquisition.
The quip might invoke a 2016 social-media claim (proven false by Snopes) that former President Donald Trump owned a solid gold toilet. Rapper MC Hammer reportedly did too. Whatever inspired it, the reference seems to highlight the potential for richly valued technology companies to build products just because they can, ignoring the likelihood that they won’t resonate with many customers.
“Amy’s words from the meeting in the Fall still ring in my ears – ‘don’t build a gold toilet,'” vice president Catherine Gluckstein wrote in a February 2019 email to Phil Spencer, CEO of gaming at Microsoft. Gluckstein works on advertising and the cloud-based game-streaming service formerly known as xCloud.
A Microsoft spokesperson declined to elaborate on Hood’s remarks.
Immediately before the toilet comment, Gluckstein mentioned Microsoft’s plans to test xCloud with consumers. She noted that she was unclear on what Microsoft was trying to determine with the tests and where the feature would fit in with Xbox’s go-to-market strategy.
“I’ve made that mistake on too many products, and I’m sure everyone else has too, when we’ve built features before we answered the core questions,” Gluckstein wrote.
Spencer wrote in reply that mobile gamers don’t necessarily want to play a hardcore game such as Halo on their phones while using an Xbox controller over Bluetooth.
“This is building the gold seat (for our existing TAM),” Spencer wrote. “It doesn’t help us grow.”
Perhaps Microsoft ought to stop what it was doing and start picking up intellectual property and releasing mobile games, or it could acquire a mobile game publisher such as Nexon, Spencer added.
When Gluckstein responded, she wondered about lesser forms of in-house development that Microsoft could explore.
“What struck me is are we trying to run one perfect experiment when perhaps we should be running multiple ‘ceramic toilet’ experiments (smaller scope, more scrappy),” Gluckstein wrote. “Would this be a better way to move on from ‘guessing.’ Are we pushing ourselves to learn the customer WHY fast enough?”
Microsoft moved forward with xCloud beta testing in late 2019. But over five days of court hearings in June, Microsoft executives testified that xCloud, now known as Xbox Cloud Gaming, has failed to become a viable alternative to PCs or Microsoft’s Xbox consoles, where games can run locally. Earlier this year Google shut down Stadia, its take on game streaming.
Microsoft hasn’t given up on cloud gaming. But it’s also chosen to grow through dealmaking. Last year the company announced its intent to buy Activision Blizzard, which makes mobile hit Candy Crush Saga, for $68.7 billion. A federal judge will decide if Microsoft can close the transaction, despite objections from the Federal Trade Commission. British regulators have also tried to block it.
Read the emails from Spencer and Gluckstein regarding Hood’s “gold toilet” comments below.
Paxton sued Google in 2022 for allegedly unlawfully tracking and collecting the private data of users.
The attorney general said the settlement, which covers allegations in two separate lawsuits against the search engine and app giant, dwarfed all past settlements by other states with Google for similar data privacy violations.
Google’s settlement comes nearly 10 months after Paxton obtained a $1.4 billion settlement for Texas from Meta, the parent company of Facebook and Instagram, to resolve claims of unauthorized use of biometric data by users of those popular social media platforms.
“In Texas, Big Tech is not above the law,” Paxton said in a statement on Friday.
“For years, Google secretly tracked people’s movements, private searches, and even their voiceprints and facial geometry through their products and services. I fought back and won,” said Paxton.
“This $1.375 billion settlement is a major win for Texans’ privacy and tells companies that they will pay for abusing our trust.”
Google spokesman Jose Castaneda said the company did not admit any wrongdoing or liability in the settlement, which involves allegations related to the Chrome browser’s incognito setting, disclosures related to location history on the Google Maps app, and biometric claims related to Google Photo.
Castaneda said Google does not have to make any changes to products in connection with the settlement and that all of the policy changes that the company made in connection with the allegations were previously announced or implemented.
“This settles a raft of old claims, many of which have already been resolved elsewhere, concerning product policies we have long since changed,” Castaneda said.
“We are pleased to put them behind us, and we will continue to build robust privacy controls into our services.”
Virtual care company Omada Health filed for an IPO on Friday, the latest digital health company that’s signaled its intent to hit the public markets despite a turbulent economy.
Founded in 2012, Omada offers virtual care programs to support patients with chronic conditions like prediabetes, diabetes and hypertension. The company describes its approach as a “between-visit care model” that is complementary to the broader health-care ecosystem, according to its prospectus.
Revenue increased 57% in the first quarter to $55 million, up from $35.1 million during the same period last year, the filing said. The San Francisco-based company generated $169.8 million in revenue during 2024, up 38% from $122.8 million the previous year.
Omada’s net loss narrowed to $9.4 million during its first quarter from $19 million during the same period last year. It reported a net loss of $47.1 million in 2024, compared to a $67.5 million net loss during 2023.
The IPO market has been largely dormant across the tech sector for the past three years, and within digital health, it’s been almost completely dead. After President Donald Trump announced a sweeping tariff policy that plunged U.S. markets into turmoil last month, taking a company public is an even riskier endeavor. Online lender Klarna delayed its long-anticipated IPO, as did ticket marketplace StubHub.
But Omada Health isn’t the first digital health company to file for its public market debut this year. Virtual physical therapy startup Hinge Health filed its prospectus in March, and provided an update with its first-quarter earnings on Monday, a signal to investors that it’s looking to forge ahead.
Omada contracts with employers, and the company said it works with more than 2,000 customers and supports 679,000 members as of March 31. More than 156 million Americans suffer from at least one chronic condition, so there is a significant market opportunity, according to the company’s filing.
In 2022, Omada announced a $192 million funding round that pushed its valuation above $1 billion. U.S. Venture Partners, Andreessen Horowitz and Fidelity’s FMR LLC are the largest outside shareholders in the company, each owning between 9% and 10% of the stock.
“To our prospective shareholders, thank you for learning more about Omada. I invite you join our journey,” Omada co-founder and CEO Sean Duffy said in the filing. “In front of us is a unique chance to build a promising and successful business while truly changing lives.”
Liz Reid, vice president, search, Google speaks during an event in New Delhi on December 19, 2022.
Sajjad Hussain | AFP | Getty Images
Testimony in Google‘s antitrust search remedies trial that wrapped hearings Friday shows how the company is calculating possible changes proposed by the Department of Justice.
Google head of search Liz Reid testified in court Tuesday that the company would need to divert between 1,000 and 2,000 employees, roughly 20% of Google’s search organization, to carry out some of the proposed remedies, a source with knowledge of the proceedings confirmed.
The testimony comes during the final days of the remedies trial, which will determine what penalties should be taken against Google after a judge last year ruled the company has held an illegal monopoly in its core market of internet search.
The DOJ, which filed the original antitrust suit and proposed remedies, asked the judge to force Google to share its data used for generating search results, such as click data. It also asked for the company to remove the use of “compelled syndication,” which refers to the practice of making certain deals with companies to ensure its search engine remains the default choice in browsers and smartphones.
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Google pays Apple billions of dollars per year to be the default search engine on iPhones. It’s lucrative for Apple and a valuable way for Google to get more search volume and users.
Apple’s SVP of Services Eddy Cue testified Wednesday that Apple chooses to feature Google because it’s “the best search engine.”
The DOJ also proposed the company divest its Chrome browser but that was not included in Reid’s initial calculation, the source confirmed.
Reid on Tuesday said Google’s proprietary “Knowledge Graph” database, which it uses to surface search results, contains more than 500 billion facts, according to the source, and that Google has invested more than $20 billion in engineering costs and content acquisition over more than a decade.
“People ask Google questions they wouldn’t ask anyone else,” she said, according to the source.
Reid echoed Google’s argument that sharing its data would create privacy risks, the source confirmed.
Closing arguments for the search remedies trial will take place May 29th and 30th, followed by the judge’s decision expected in August.
The company faces a separate remedies trial for its advertising tech business, which is scheduled to begin Sept. 22.