Daily Brief: Google’s Hoping A Cybersecurity Firm Will Help It Lock Down Even Bigger Profits

Daily Brief: Google’s Hoping A Cybersecurity Firm Will Help It Lock Down Even Bigger Profits

almost 2 years ago3 mins

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Google announced on Tuesday that it’s agreed to buy Mandiant, in a major cybersecurity deal that could be key to its future success.

What does this mean?

Google’s been looking for ways to reduce its reliance on advertising – which still makes up the bulk of its revenue – for some time now, and Mandiant could help it do just that: it’s the go-to cyberattack specialist for some of the biggest companies in the world, from Nvidia to News Corp. So the tech giant hasn’t messed about: it’s shaken hands on a deal worth $5.4 billion – around 53% more than the cybersecurity specialist was worth before the announcement. That deal – Google’s second-biggest ever – will allow its cloud business to offer cybersecurity tools to protect its customers, as well as help them respond to threats more quickly. And with the cloud becoming increasingly important in this remote world, those products could be bigger money-spinners than ever.

Why should I care?

Zooming in: This could take a while.

Data from Synergy Research Group shows that Google accounted for 10% of the cloud provider market last quarter – not bad, sure, but nowhere near Microsoft’s 21% and Amazon’s 33%. This deal, then, is a concerted effort to help fix that imbalance. But it isn’t going to happen overnight, with some analysts arguing that it’ll take some time to get this deal past regulators. Google’s nothing if not patient, mind you: its $2.1 billion acquisition of Fitbit took 14 months to get the go-ahead.

Cloud provider market share

The bigger picture: Batten down the virtual hatches.

Some analysts think Google’s deal could be the start of a trend where cloud platforms buy up cybersecurity firms. After all, cyberattacks have become more common in the last few years, and some experts are expecting there to be twice as many by 2025. They will if Russia has anything to say about it: Russian cyberattacks are estimated to have jumped 800% in the first two days of the Ukraine invasion.

Cyberattack frequency
Source: Embroker

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Lego Announced Record Revenue And Profit For 2021

Lego image

Lego announced record 2021 results on Tuesday, after the world’s biggest toymaker spent the year carefully assembling a winning strategy.

What does this mean?

Lego was given a new lease of life in 2020, when tinkerers of all ages replaced a world they were locked out of with one made of blocks. And turns out it’s a hard habit to kick: Lego fans rushed back to the company’s reopened stores last year, in hopes of getting their hands on one of its must-have Harry Potter and Star Wars kits. That demand didn’t just offset the company’s higher costs: it made Lego one of the few retailers to open stores last year – 165 of them, to be precise. That drove its revenue 27% higher last year than in 2020, and its profit up by more than a third – both to record highs.

Lego earnings
Source: Lego

Why should I care?

The bigger picture: Lego’s building.

Lego has been dominating the toymaking market for years now, and that’s partly down to some smart planning: the company builds production facilities close to where it wants to sell its toys, meaning it reduces the logistical costs and challenges that most of its rivals are facing. That’s been especially important in the last 18 months or so, when supply chains have been all blocked up. And it’s not stopping now: Lego’s planning to start building its sixth global factory in Vietnam soon, as part of a $1 billion push to tap into the Asian market.

Zooming out: A jawline made for Hollywood.

Still, Lego’s update shows that it isn’t immune from higher costs, and nor are its rivals. That might be why Barbie-maker Mattel said last month that it’s planning to push into areas like gaming, filmmaking, and NFTs to help boost sales. It’s not a bad idea: projects like those aren’t wrapped up with supply chains, and a world as calamitous as this one needs – no, deservesRyan Gosling as Ken.

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