AT&T Wakes Up From Its T-Mobile Dream

AT&T has put an end to its $39 billion quest to take over T-Mobile Monday, announcing that it will decline to challenge the FCC’s claims that the deal would lead to fewer consumer choices, poor service and higher prices.

The proposed deal with T-Mobile’s parent company, Deutsche Telekom, announced in March, was supposed to increase the company’s ability to extend service throughout the U.S., according to AT&T.

Mounting Opposition

The proposal was supported by some major tech players, including Facebook, Microsoft and Research In Motion; however, the deal faced stiff opposition from consumer advocacy groups and wireless competitors, most notably Sprint, who said that the deal would create a duopoly and lead to a decrease in innovation and increased prices.

The deal would have combined the second-largest and fourth-largest carriers in the U.S., making it the country’s largest provider.

The FCC and the Department of Justice recently objected to the deal, with the latter launching a lawsuit last August.

When the FCC aired its grievances regarding the proposal last month, it was clear the deal was facing an uphill battle.

“AT&T realized the hurdles that confronted it from both the FCC and DoJ. AT&T faced significant challenges given the skepticism from both agencies,” Michael Carrier, law professor at Rutgers School of Law, told the E-Commerce Times.

AT&T this week reiterated its concerns that blocking the buyout would only prolong a spectrum shortage.

AT&T’s stock was trading down after hours but took a turn upwards into the morning, while Sprint and Verizon were both up.

AT&T denied our requests to comment beyond the press release.

The Losers

“The biggest loser here is Deutsche Telekom because it has planned to exit the U.S. for a long time, and this episode made it waste several months. Besides, the offer from AT&T was great from Deutsche Telekom’s viewpoint,” Aapo Markkanen, senior analyst in consumer mobility at ABI Research, told the E-Commerce Times.

DT will receive about $4 billion from AT&T in a breakup fee agreed upon before the deal was announced. The companies will also enter into a roaming agreement.

However, DT also still has T-Mobile on its hands, and that carrier now faces a fiercely competitive market with no hope of being sheltered by AT&T. Because DT is so heavily invested in Europe and may still be eager to rid itself of T-Mobile, the smallest of the major U.S. providers might be facing the rockiest road ahead.

“I’m not convinced that the FCC ever thought this through from this angle — does having a weak and potentially under-investing T-Mobile really benefit the mobile consumers as a whole?” Markkanen said.

The Winners

Sprint, on the other hand, got the results it’s advocated for since March. The wireless provider vocally opposed the deal, saying AT&T didn’t actually need the spectrum and warning the deal would actually be bad for consumers.

“Today’s telecoms business is more and more a scale-driven business, and now Sprint won’t be lagging that much behind in terms of scale. However, the fact that T-Mobile remains in the picture for now doesn’t change the fact that Sprint itself remains small, and it will have to invest substantially in the next years,” said Markkanen.

The biggest winner, though, might be the FCC and the Department of Justice. The federal agencies were able to flex their muscles and uphold antitrust laws.

“This shows that antitrust law still has teeth. Many mergers have been allowed in recent years, but this shows that if a merger would lead to too much market power, with not enough justifications, it could be challenged,” said Carrier.

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Intuit’s $12B Mailchimp Purchase Breathes New Life Into Email Marketing

Intuit on Monday announced an agreement to acquire Mailchimp, a global customer engagement and marketing platform for small and mid-market businesses, for $12 billion in cash and stock advances. The purchase could be the linchpin that thrusts the mostly financial software company into solving more fertile mid-market business challenges for its customers.

The planned acquisition is part of Intuit’s mission to become an AI-driven expert platform. With the acquisition of Mailchimp, Intuit will accelerate two of its previously-shared strategic big bets: to become the center of small business growth and to disrupt the small business mid-market, said the company in its announcement.

Intuit’s acquisition of Mailchimp sends a great message to all entrepreneurs around the globe that venture capital is not always necessary, observed Michael Kawula, co-founder of CBA, a marketing agency for YouTube monetization. Mailchimp is a bootstrapped success story that has not raised any outside venture capital.

“This is a very clever growth strategy for Intuit, who wants to get in front of SMBs, which is difficult and expensive. Similar to HubSpot’s recent purchase of The Hustle newsletter, a much smaller acquisition, this also is brilliant,” he told the E-Commerce Times.

The acquisition marks a significant impact in industry, according to Osiris Parikh, sales marketing manager at Lilius. He also sees the deal as another reminder that email marketing is not dead — and data is power.

“Intuit has made a strong move to broaden its portfolio and become a leader in catering to the needs of SMBs. It is also a great story of success during Covid-19,” he told the E-Commerce Times.

Deal Basics

Intuit provides a global technology platform that makes TurboTax, QuickBooks, Mint, and Credit Karma. Intuit and Mailchimp will offer an innovative, end-to-end customer growth platform that allows customers to get their business online. It will also enable them to manage marketing, customer relationships, payment processes, and access insights and analytics, along with optimizing their cash flow and staying compliant with experts at their fingertips, according to Intuit.

Key to this process is Intuit’s ability to enable businesses to combine their customer data from Mailchimp and QuickBooks’ purchase data to get the actionable insights they need to grow and run their businesses with confidence.

“We’re focused on powering prosperity around the world for consumers and small businesses. Together, Mailchimp and QuickBooks will help solve small and mid-market businesses’ biggest barriers to growth, getting and retaining customers,” said Sasan Goodarzi, CEO of Intuit.

Mailchimp brings to Intuit technology at scale along with global customer reach.

Founded in Atlanta, in 2001, Mailchimp began by offering email marketing solutions. The company evolved into offering customer engagement and marketing automation processes fueled by an AI-driven technology stack. Mailchimp’s data and technology spans 70 billion contacts and more than 250 rich partner integrations. Its AI-powered automation at scale fuels 2.2 million daily predictions.

“Over the past two decades, we have vastly expanded and evolved Mailchimp’s platform to help millions of small businesses around the world start and grow,” said Ben Chestnut, CEO and co-founder of Mailchimp.

Why Mailchimp’s Worth It

While the email marketing sector is pretty crowded, Mailchimp stands out in terms of size and scope. The company reportedly has 13 million total global users, 2.4 million active monthly users, and 800,000 paid customers, noted Charles King, principal analyst at Pund-IT.

“Plus, half of its customers are outside of the U.S. Additionally, while people tend to focus on the mass/might of large enterprises, small businesses are really the heart and soul of most economies,” he told the E-Commerce Times.

The acquisition likely represents a lucrative opportunity for Intuit to integrate Mailchimp data with QuickBooks and provide greater analytical capabilities to customers. The synthesis of financial and marketing data in this case provides valuable and actionable insights about an organization’s clients, added Lilus’ Parikh.

“It’s also a great diversification of offerings to centralize SMB operations through one platform and benefit from Mailchimp’s established user base,” he said.

Another supporting factor for Intuit’s interest in Mailchimp is the renewed stature of email, according to Elice Max, co-owner of EMUCoupon and someone who has been involved in online marketing for eight years.

“Email marketing has made a comeback in recent years. With increased digitization caused by the pandemic, all digital mediums including email have gained a renewed importance,” she told the E-Commerce Times.

Email Marketing’s Resurgence

Technology giants are looking to build more integrated and holistic solutions. Microsoft recently bought Clipchamp, a video production tool. Both companies are looking to build platforms for the new tech-savvy SMBs, Max Suggested.

“More than anything, it means a renewed confidence in the field. Experts have been talking about the death of email marketing for a while now. But a $12 billion acquisition by a big player like Intuit means email promotion is alive and kicking,” she said.

Another factor is Intuit keeping its eye on the ball. It is important to remember the significance of Mailchimp as the pioneer in marketing automation and email marketing in particular.

“Intuit is looking to make a statement that it wants to become more than a financial software company,” Max observed.

QuickBooks Synergies

One of the motivations that lies behind Intuit’s purchase of Mailchimp is its desire to lead a revolution in the CRM capabilities of SMBs, according to Will Ward, CEO of Translation Equipment HQ . Think about the effect the pandemic has had on the popularity of remote work and the amount of remote SMBs being established.

“You would expect there to be a lot of growth potential here in the next few years. With Mailchimp and QuickBooks, Intuit is providing an end-to-end customer growth platform, and with around $20 billion invested already its belief in SMBs is evident,” Ward told the E-Commerce Times.

Like any other system that handles transactions such as orders and payments, you need to work closer to the actual customer channels. With the Intuit e-commerce product, launched about a year ago, this seems like a natural step by adding marketing automation and reaching out with its e-commerce offering to the MailChimp customer base, suggested Johan Liljeros, general manager and senior commerce advisor, North America for Avensia.

“The acquisition has added synergies between the platforms while still being able to operate as independent platforms. Looking at Intuit’s offerings, it appears they are moving towards expanding [into] digital transactional experience,” he told the E-Commerce Times.

Final Thoughts

Email marketers should be ready for disruption along with other business services providers. Intuit has been both savvy and aggressive in the way it built its business, effectively becoming the 800-pound gorilla of small business accounting and tax solutions, according to Pund-IT’s King.

“With that kind of ally behind Mailchimp, life is going to become a whole lot more ‘interesting’ for other email marketers,” he predicted.

The Intuit-Mailchimp deal should offer Intuit customers significant benefits, such as new solutions and services for bolstering their businesses. At the same time, the deal highlights the fact that old technologies can continue to be vital and dynamic.

“For years, many have claimed that email is dead or dying and quickly being replaced by whatever the tech du jour happens to be. Mailchimp — and now Intuit — beg to differ,” King quipped.

Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open-source technologies. He is an esteemed reviewer of Linux distros and other open-source software. In addition, Jack extensively covers business technology and privacy issues, as well as developments in e-commerce and consumer electronics. Email Jack.

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