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Trending: Big Tech companies are getting older but they can still learn new tricks

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It's Wednesday, which means it's time for Trending, the newsletter where we highlight BI Prime's biggest tech stories. I'm Alexei Oreskovic, Business Insider's West Coast bureau chief and global tech editor.

If this is your first time here, this is how you can get Trending in your inbox every week.

This week: Big Tech companies may be getting old, but they can still learn new tricks

Satya Nadella

It's a been an eventful week in the world of Big Tech. 

Microsoft surprised employees on Wednesday with the news of a broad corporate reorginzation. According to an internal memo obtained by Ashley Stewart, Microsoft is merging its Windows group and its hardware group into one unified business unit.

The big winner: Panos Panay, the chief product officer, who will now oversee this Apple-like effort to more closely intertwine hardware and software.

The takeaway: The change is more a reflection of the challenges Windows faces to find a niche in a stagnating PC market than it is a sign of Microsoft's ambitions to take its hardware business much further than it already has. Microsoft still has to keep the PC makers happy who license its Windows software, so any hardware ambitions that could compete with those partners will always be constrained. And besides, under CEO Satya Nadella, the cloud is number one. Everything else is details.

Meanwhile, Google dropped a couple of bombshells on Monday when it (finally) divulged revenue figures for its Cloud business and for YouTube. The latter, a mere 14 years after Google acquired the video streaming site. The new transparency comes just as Sundar Pichai took over as CEO of the Alphabet parent company. When it comes to financial gift horses though, it's always worth taking a look at what's really in the mouth. In this case, Google's core advertising business is looking — sorry — long in the tooth, as the business ages and growth slows. 

It's a challenge facing both Google and Facebook, as the days of hockey-stick growth curves in the online ad business fade into the past.

Google has a deep bag full of high-growth businesses it can draw from and unwrap to placate antsy shareholders. 

As Business Insider Enterprise Tech editor Matt Weinberger writes, Google's Cloud newly-released revenues — on track to be a $10 billion annual business — were solid, even though they came in below an ambitious target set by a Google exec five years ago. 

The lesson for Facebook here isn't to get into the cloud business (though with its data centers, it's not an inconceivable notion), but rather to pull the curtain back on some of its own high-growth businesses. Here's looking at you, Instagram. 

Read the full stories here:

Leaked memo: The head of Microsoft's fast-growing Teams chat app is retiring as Microsoft merges the Windows and hardware groups in a major reorg

How Google turned its long-awaited YouTube and Cloud revelations into shiny objects designed to distract you

5 years ago, a top exec said Google's cloud would drive more revenue than ads by 2020. Google's first peek at the numbers shows that it's off to a good start, but way off that vision.


A new world for startups

unicorn startup

Meanwhile, in startup land, there's a lot of re-thinking and re-evaluating in the wake of WeWork's cancelled IPO and the SoftBank retrenchment. 

Check out Megan Hernbroth's report on the new rules of the road for venture funding, as defined by Silicon Valley Bank, one of the preeminent financial institutions serving VCs and entrepreneurs in the Bay Area. Among the takeaways: revenue pressure is coming to younger, early-stage startups; and layoffs are coming to later-stage companies.

In fact, Rosalie Chan reported last week that DataStax, a $967 million data management startup said to be prepping for an IPO, laid off as many as 100 employees in mid-December, a number that could represent 1/5 of its headcount. 

In more optimistic news, Ben asked investors and VCs at Goldman Sachs, Kleiner Perkins and Intel Capital about the most compelling startup pitches and demos they've seen. Pitching a startup is an art. And every artist needs inspiration.

Read the full stories here:

One of Silicon Valley's biggest investors just laid out a how-to guide for startups hoping to get funding in 2020. Here are 4 main takeaways from Silicon Valley Bank's report.

The 9 most unforgettable and effective startup pitches, according to investors at Goldman Sachs, Sapphire Ventures, and Kleiner Perkins


Here are some of the latest tech highlights:

Leaked screenshots show Amazon is testing an online lending marketplace where sellers can choose loans from Goldman Sachs and other banks

Okta's former security chief explains why he's joining $25 billion Splunk to help it securely move to the cloud

Video-conferencing company Zoom had its best trading day in 8 months, as coronavirus fears mean that more people work from home

From Ashton Kutcher to Jay-Z, these 12 celebrities are the most active of the 'Hollywood angels' making big investments in Silicon Valley

And more good reads from across the BI newsroom:

Ferrari just dropped some tantalizing hints about its electric-car plans

YouTube star Marques Brownlee explains how he got his start and his advice to someone who wants to launch a channel and creator career

Beef lobbyists are ramping up their attacks on plant-based 'meat,' but Beyond Meat's CEO says 'the facts are on our side'

Meet the top 7 US companies dominating the $17 billion solar-energy industry

Thanks for reading, and remember, if you like this newsletter, tell your friends and colleagues they can sign up here to receive it.

— Alexei

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NOW WATCH: Starbucks is giving away free drinks for the rest of 2019. It's one of the 5 sneaky tactics the coffee chain uses to get you to spend more money.

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