Group Nine Media's NowThis video news outlet is the latest publisher to launch an original video programming division.

The division, called NowThis Originals, will develop and produce original shows for distribution across social, streaming and linear platforms. It's separate from Discovery-backed Group Nine Media's own unit, Group Nine Studios, which supports the content teams across its media brands NowThis, The Dodo, Thrillist, and Seeker.

The Originals team consists of 25 people, and will be overseen by executive producer Matt McDonough. NowThis, meanwhile, led by deputy editor Jon Laurence and political director Nico Pitney, will continue to focus on producing daily video stories for social feeds. Both groups report to NowThis editor Sarah Frank.

"This is a strategic move for us to create more focus and clarity around something that we've already been doing," NowThis president Athan Stephanopoulos told Business Insider. "The idea is to create recognizable IP that will attract audiences, which we can then multiply across social, streaming and linear platforms."

NowThis has already produced 16 original shows since 2017. They include "ConTECHtual," which breaks down the origins and evolution of current technology, examining its potential for the future for Facebook Watch; and "MANE," which explores the intersection of culture and hair.

Since it ventured into original programming, NowThis' watch time has increased 36% year-over-year, with its shows having been collectively watched for more than 300 million minutes. The shows have also attracted interest from brands including Boost Mobile, Domain.com, SheaMoisture, and the NHL.

The goal of the new division is to diversify NowThis' distribution, audiences and revenue, particularly branded partnerships, said Stephanopoulos. Last week, parent company Group Nine CEO Ben Lerer told Business Insider that revenue diversification was a huge focus for the company as seeks to dive into e-commerce. The company said it was in talks with several partners for video distribution deals that would be announced later this year.

Read More: Group Nine CEO Ben Lerer's last attempt at e-commerce ended in mass layoffs, but he's trying again with a fresh approach

"A big focus for us is to lean into the type of programming we've been doing and create a whole host of new programs and shows that allow for brands to come and be a part of them," said Stephanopoulos.

To be sure, other big distributed-media companies have tested the original video waters before. BuzzFeed, Vox Media and Refinery29 have all set up divisions to create shows for social and streaming platforms — more so as these platforms have increasingly funded content creation.

It's hard to make money overnight this way, though, because selling video to distributors can be a slow build, video is expensive to do well, and typically yields lower profits than display advertising.

Facebook and Google get beat up a lot by advertisers for not sharing data with them while controlling the bulk of digital ad budgets. Facebook says that not only is it willing to budge, but that a measurement solution that solves some of marketers' concerns is nearly ready to roll.

Advertisers often complain about social platforms' "walled gardens" that limit the amount of data that they're willing to share. Facebook and Google in particular wield powerful targeting and measurement data but keep it within their own walls for privacy and competitive reasons. That means an advertiser that wants to compare how many people saw, clicked on and bought something from a Facebook ad can't easily see how it compares to a similar Google campaign.

Read more: 'It is this phenomenal game of hot potato': Marketers are poring over legal documents to make sure they don't screw up using data on Facebook

Facebook hinted last year that a data-sharing program was possible but only if other digital advertising companies joined in. But there hasn't been much movement since then, nor has it been clear how a joint-platform program would work. To coordinate the program, a neutral third party would have to process and anonymize streams of data, and it's been unclear what company would be up to such a task.

But according to Brad Smallwood, Facebook's vp of marketing science, the answer to some of those concerns — specifically when it comes to measuring comparable audience and reach stats — already exists.

"I don't think the answer is that we're going to have to build something from scratch in order to make this work," he told Business Insider.

All the major platforms are already on board with Nielsen

Nielsen is one of "several" companies that could potentially power the high-stakes project with its Digital Ad Ratings (or DAR) technology, Smallwood said.

Dozens of digital players including Facebook, Google, Twitter and Snap feed web and mobile data into Nielsen's DAR system. Nielsen then pieces together the data to create audience and demographic stats that show marketers how a campaign run on a specific platform compares to an aggregate digital audience.

Right now, platforms keep their own data close to their chests, but in theory the platforms could share some of their data with each other through DAR so marketers could get a better look at how reach and frequency data performs across Facebook and other digital platforms.

"It's privacy-safe, there's no data that ends up flowing around the system, [and] there's great encryption," Smallwood said.

Nielsen's product is widely used by platforms other than Facebook, and Smallwood suggested that it would be possible to get a data-sharing program up and running without a significant amount of work — as long as all the platforms agree.

A spokeswoman for Nielsen said that it's possible for the platforms to change how they work with each other under the guise of DAR.

Smallwood declined to say to what extent Facebook has talked with Google and others about getting a cross-platform measurement program off the ground, but he said the topic has come up in discussions with industry groups like the Interactive Advertising Bureau and that "everyone is interested in solving this problem."

While agencies welcome more data from Facebook, they're also skeptical that Facebook will follow through and give them access to stats that they have asked for, like attribution or conversion data.

"It's great that they're being more open but I think it's just a starting point," said an agency analytics exec who spoke on background. "I don't think they're there yet."

Facebook says the onus is on advertisers to ask for specific metrics

Smallwood said that to get the ball rolling, large industry players — think vocal CMOs like Procter & Gamble's Marc Pritchard, Unilever's Keith Weed, or an industry group like the Association of National Advertisers— need to speak up and make specific measurement asks.

"We need focus," Smallwood said. "When you get a whole bunch of [people] together and say, 'What do you want?' Everybody wants the kitchen sink. If the ask is too broad, then the timing draws on. The specific ask is the key."

Smallwood acknowledged that Nielsen won't address all of marketers' concerns. Marketers want to dump all data from digital campaigns into one database to compare how each platform performs, but privacy concerns make the scenario challenging.

"We need to know what to build, and we also need people to understand that the privacy piece of this is a real concern," he said. "We need a solution that ends up meeting the need while maintaining that privacy element."

Instead, Facebook is wrestling with creating a privacy-friendly "modeled" method that leans on third-party measurement companies.

Agencies, for their part, argue that they've been clear about the metrics they want.

"It's funny because I think the majority of the brands or us as an agency have already asked for that specificity," said the agency source. "I don't believe that they have got to the level of granularity of understanding the differences of verticals and different types of media."

He added: "I think they do a great job trying to sell the products but then it's like, 'Trust us, they're great products.' That's where companies are having the biggest issues, including ourselves."

Google has its own answer to cross-platform measurement

For Google's part, it has offered advertisers its own cross-platform program called Ads Data Hub since May 2017 that allows brands to match up their own data (like first-party CRM stats) with impression data from both Google and non-Google campaigns.

Here's how it works: Ads Data Hub lives within the software programs Google Cloud and BigQuery. Advertisers first upload their data and then Google shares campaign data from any of its services. Advertisers can also upload data from campaigns running on other campaigns to look at metrics like viewability, reach, frequency and attribution.

Google says that it is privacy-secure and compliant with the European Union's General Data Protection Regulation. The catch, of course, is that it's run by Google, meaning that advertisers can not take user-level data out of the platform and use it elsewhere.

Roughly 9,000 advertisers use Ads Data Hub, up from 4,000 at the end of June, said a Google spokeswoman.

"Google has done quite a lot of work in comparison [to Facebook] to be more transparent and even provide data at the event-level," said the agency source. "Even with GDPR and everything, we still have access to it — that audit perspective is way more available, I would say, from the Google side."

Huawei CEO Ren Zhengfei sent an email to staff on Friday predicting trouble ahead for the company, thanks to multiple countries shunning the firm's 5G infrastructure and increased scrutiny of its business.

"In the coming years, the overall situation will probably not be as bright as imagined, we have to prepare for times of hardship," Ren said, according to The Financial Times.

Ren gave an ominous indication that job losses could lie ahead, saying "We also need to give up some mediocre employees and lower labour expenses."

Read more: Huawei's CEO called Trump a 'great president' in an extraordinary plea to end America's war with his company

Huawei's upcoming 5G infrastructure has been banned by a slew of Western countries as the US appealed to its allies to freeze the company out, fearing that Huawei equipment is a way for China's Communist Party to spy on different countries. Germany said last week it was considering a ban on Huawei equipment for its upcoming 5G networks over security concerns.

Huawei said it likely hit $100 billion in revenue in 2018, thanks both its consumer division which produces popular smartphones, and its core telecommunications business. But that explosive growth may slow down, Ren warned.

"Things went too smoothly for us in the last 30 years," he wrote, according to The Financial Times. "We were in a phase of strategic expansion, our organisation expanded in a destructive way. We have to review carefully if all geographical subsidiaries are efficient. […] In order to achieve overall victory, we need to conduct some organisational streamlining."

Ren — a former officer of the People's Liberation Army — recently gave a rare public appearance in which he called Donald Trump a "great president" and tried to assuage national security fears.

Ren's daughter and CFO Meng Wanzhou was arrested in Canada last month, reportedly charged on suspicion of breaking US sanctions on Iran. Ren recently told reporters that he misses her "very much."

The buzzy and well-funded $3 billion artificial intelligence startup UiPath will soon hit $200 million in annual recurring revenue, sources told Business Insider.

UiPath, which does robotic process automation, brought in just $3.5 million in ARR in 2016, according to one source. This means the company grew its revenue by 5614% in just over two years.

ARR is a popular metric used by subscription software or SaaS companies. It essentially takes the value of long-term subscription contracts and normalizes it for a one year period.

The company announced that it hit $100 million in annual recurring revenue in July 2018, then $150 million in November. When UiPath hits $200 million in revenue in the next couple of weeks, its revenue will have grown 33% in just over two months.

Robotic process automation is a set of artificial intelligence tools which perform digital tasks by interacting with human interfaces, such as web pages. UiPath in particular has had success with customers in the government space, from the Army to the Internal Revenue Service.

Read more: 2 dealmakers named David: Uber and Lyft's expected IPOs will trigger competition at Google's in-house VC firms

Founded in Romania in 2005, UiPath stayed relatively low-profile until 2015 when it raised its first round of venture capital. Silicon Valley firm Accel led its Series A in 2017, when it raised around $30 million at a $110 million valuation, according to PitchBook.

Alphabet's CapitalG jumped into the company in 2018, leading its first $1 billion unicorn round with a $153 million Series B. CapitalG and Sequoia Capital co-led a $225 million Series C in September, which valued the company at $3 billion, according to PitchBook.

NEW YORK CITY — A year ago, in January 2018, Walmart expanded its Scan & Go program to 125 stores, calling it a new way to shop with just your phone or a handheld device, and no interacting with cashiers.

By April, that program had all but wrapped up. At the time, a Walmart spokesperson told Business Insider that its ending was due to "low participation" from customers, who found the program difficult to use.

Read more: Walmart just abandoned cashierless checkout, and it reveals a huge challenge in its battle with Amazon

Walmart executive vice president and CTO Jeremy King, speaking at the National Retail Federation's Big Show conference on Sunday, revealed a few more reasons the company decided to pull the plug on the program.

"We found too many errors in the process ... making sure people were scanning things right, multiple quantities, that sort of thing," King said on stage in conversation with the Wall Street Journal's Sara Castellanos.

Handheld devices used in Walmart's Scan & Go test. Walmart

Scan & Go is not completely gone from Walmart. It is still in effect at Walmart's nearly 600 Sam's Club stores, where it was implemented more than two years ago. But at Walmart's more than 5,000 locations in the US, the errors were not tenable, King said.

"At Walmart's scale, you test in 10 stores and see how it goes," King said. "If it's going to be really hard to implement across the board then we usually wait until the technology's better."

King is predicting that that better — or different — technology is coming soon, however. On stage, King listed computer vision — technology that can use cameras and sensors to "see" and understand like a human — as one example of tech he is excited about for 2019.

Computer vision is a natural fit for retail, where it would be able to replace a program like Scan & Go with a more intuitive method that could include technology that automatically tracks customers and what they're buying, charging them appropriately.

"Computer vision can be a hard thing right now, especially for small items," he said. "It's getting better and better, but I see that improving the next couple of years."

King stopped short of declaring a computer-vision pilot for Walmart, but added that he is "really excited" about its potential.

A similar method has already been implemented by Amazon, which is aggressively expanding its own cashierless prepared-food-and-convenience-store concept called Amazon Go. The chain could have up to 3,000 stores in just a few years, according to a recent report.

A shopper using Walmart's now-shuttered Scan & Go tech. Walmart

The stars seem to be aligning for computer vision at Walmart, too. The company's tech division is currently hiring for a "Principal Data Scientist / COMPUTER VISION Engineer," according to a job listing that went up in October.

"Walmart Technology is looking for exceptional research engineers to join our team focused on delivering computer vision-enabled capabilities that can increase revenue, reduce costs and drive a differentiated brand experience that serve 200 [million plus] customers a week," the listing reads.

The job will be based in Walmart's new Dallas-based innovation center focused on computer vision and machine learning, which Walmart's VP of tech modernization, Chris Enslin, announced at VentureBeat's Blueprint conference in March.

In October, Walmart opened a Sam's Club "store of the future" called Sam's Club Now and featuring no cashiers, forcing customers to use the Sam's Club Now app and the Scan & Go functionality.

The store is intended to be used as a playground to test new tech like "computer vision, AR, machine learning, artificial intelligence, [and] robotics," Jamie Iannone, Samclub.com's CEO and executive VP of membership and technology, said in a statement at the time.

Harley-Davidson is preparing to release its first electric motorcycle, the LiveWire, in August. The company hopes the bike will appeal to urban consumers and present a low barrier of entry for people new to motorcycles, Marc McAllister, Harley-Davidson's vice president of product portfolio, said in an interview with Business Insider.

"EV lends itself extremely well to growing the next generation of riders when you think of its ease of entry and its ease of use for non-motorcyclists," he said.

Read more: A former Harley-Davidson executive is attempting one of the biggest challenges in the business — establish a new motorcycle brand in the US

While gas-powered motorcycles require drivers to shift gears, a process that can be difficult to learn for new riders, the LiveWire's electric motor eliminates the need for gear-shifting; riders need only to twist the throttle to make the LiveWire accelerate. The motorcycle will also feature ride modes that can be tailored to the owner's level of experience. An inexperienced owner can opt to have the vehicle's maximum power output reduced, for example.

"It's less intimidating to jump on and learn how to ride," McAllister said.

The LiveWire will also be nimbler and more agile than Harley-Davidson's current offerings, McAllister said, another benefit for urban riders. Appealing to urban consumers is a priority for Harley-Davidson due to the global trend toward urbanization, but the company's gas-powered motorcycles are less suited to urban riders than the LiveWire due to their size and riding styles, McAllister said.

"Getting great at delivering urban riding experiences is something that we see the future needing us to do."

The LiveWire is tailored to urban riders in part by necessity. Harley-Davidson says the LiveWire will have a range of around 110 miles, which is fine for many commutes, but could make road trips difficult.

"[The LiveWire] lends itself to an urban usage because you're going to end up at home," McAllister said. For "most people's normal usage, this vehicle has more than enough range."

For riders who need to charge away from home, Harley-Davidson dealers that sell the LiveWire will have fast-charging stations available once the vehicle is released. Around 150 dealers will sell the LiveWire at first, and the number of charging stations will expand with the number of dealers that carry the vehicle.

Starting at just under $30,000, the LiveWire is priced at the high end of Harley-Davidson's offerings, but McAllister suggested the LiveWire will be among the most expensive electric motorcycles the company will offer in the coming years, the most affordable of which will begin at "a few thousand dollars."

McAllister declined to say if Harley-Davidson planned to make a specific percentage of its portfolio electric in the coming decades, but the company said in a 2018 investor presentation that it plans to introduce at least two more electric motorcycles by the end of 2022.

One of the first rhetorical tricks a public speaker will pick up is repetition.

Theoretically, repetition is a way of ensuring your message really lands. It's a way of persuading your audience into your way of thinking.

Facebook COO Sheryl Sandberg tried to leverage the power of repetition at a speech in Germany on Sunday but, at a crucial time for her company in Europe, it seems to have backfired.

Sandberg appeared at the DLD conference in Munich on Sunday, a kind of warm-up conference for the digital elite before the World Economic Forum in Davos. She also gave an interview to the Frankfurter Allgemeine newspaper.

In a continuation of the Facebook apology tour, Sandberg touched on Facebook's many missteps in 2018, and on other familiar themes in a speech titled: "What kind of internet do we want?"

"At Facebook, these last few years have been difficult," she told the Munich audience. "We need to stop abuse more quickly and we need to do better to protect people's data. We have acknowledged our mistakes."

Sandberg praised Europe's aggressive stance on privacy and announced that Facebook would be funding an AI ethics institute at a German university.

"We know we need to do better," she said, adding that the company was trying to win back users' trust.

If this sounds familiar, it's because she said "we need to do better" in April, June, and in September's Senate Intelligence Committee hearings. CEO Mark Zuckerberg has repeated the phrase through 2018 too.

Sandberg (left) and Twitter CEO Jack Dorsey being sworn in for Senate hearings in September. Drew Angerer/Getty Images

Sandberg went on: "I, and everyone at Facebook, accept the deep responsibility we have to protect the people who use our services. We know we need to get better at anticipating all of the risks that come with connecting so many people."

But those listening to the speech didn't buy the message.

"After a written interview with @FAZnet and this memorized talk, they missed a huge chance to regain trust. It's time for real conversation & dialogue," wrote digital strategist Daniel Fiene.

Another user wrote: "Amazing to see how they have upgraded Sophia the robot to look and talk like Sheryl Sandberg."

Yet another wrote: "Sheryl Sandberg did a sugarcoated [speech], thanking Germany and praising Data Protection. Why can I not believe and trust these promises? Maybe because I cannot forget the active selling & manipulation of Data, she did not mention."

Read more: Sheryl Sandberg is on the hot seat at Facebook — but ousting her alone wouldn't solve its problems

Sandberg should be alarmed by this indication of the temperature in Europe. Germany has been the most aggressive country in regulating Facebook, and is reportedly about to clamp down on the kinds of information the firm can collect. It is one of the most privacy-conscious nations in Europe, and played a key role in the introduction of GDPR, Europe's strict new privacy regulation.

Should Sandberg fail on this trip to convince German regulators and world leaders attending Davos that Facebook can clean up its act, the firm may face stricter rules and fines at home and abroad.

If there's one sure-fire way for Intel to turn the fiasco of its six-month vacant CEO slot into a big win for the company, it's this: lure Apple senior vice president of hardware technologies, Johny Srouji, into becoming the new CEO.

Axios's Ina Fried reports that Srouji is on Intel's short list for chief executive. This follows Bloomberg reporting Monday that several talked-about candidates are no longer in the running, including former Motorola CEO Sanjay Jha and two former Intel executives, Anand Chandrasekher (who a former Qualcomm president) and Renee James. As we previously reported, James is now CEO of her own chip company, Ampere. She worked like mad to get her company off the ground and says she's incredibly happy working for herself at the moment. Bloomberg reported that some of the candidates turned Intel down.

Srouji would be a stroke of genius — and a stroke of luck — for Intel, if they could lure him away from Apple. That's a big if.

Read: Microsoft CEO Satya Nadella describes 2 new kinds of software that will change everything for businesses

He leads Apple's in-house chip development, which has caused Apple to withdraw ever more of its business away from Intel. The latest industry scuttlebutt is that Apple is on track to ditch Intel chips for its Mac PCs by 2020. In all fairness, though, similar rumors have circulated annually for year s about Apple ditching Intel completely.

So nabbing Srouji could potentially help Intel shore up its relationship with one of its biggest customers. And even if Apple still left Intel, Srouji may be just the genius Intel needs to help it get through its endless manufacturing issues.

Under former CEO Brian Krzanich, Intel suffered through one missed mass-production deadline after another, having difficulty retooling its production lines to crank out its latest, greatest, smallest chips. Apple, on the other hand, under Srouji seems to crank out its own new homegrown chips for its iPhones like clockwork.

And Srouji also cut his teeth at Intel, working at its Israel facility from 1990 to 2005, Fried points out.

But, if Srouji is Intel's dream hire, he may also be out of Intel's league, even for the CEO job.

Apple recently gave Srouji a big raise to keep him sticking around. Srouji joined Apple in 2008, and when he was promoted to senior vice president of hardware technologies in 2015, Apple gave him $10 million of restricted stock that vested over four years. Right before the four years was up and all $10 million was free to land in his pocket, Apple doubled-up on him. Srouji made $24,162,392 in total compensation in 2017, including new stock packages on a vesting schedule. And he became, for the first time, a named officer at Apple, meaning that he's so important and so highly paid that Apple had to disclose his compensation in SEC filings.

As we previously reported, that handsome pay package made him the second highest-paid executive at the company after retail chief, Angela Ahrendts. She made a tad more at $24,216,072. CEO Tim Cook, in comparison, earned the least of Apple's executive exec team in 2017, at just under $13 million.

So Intel would need to convince Srouji the challenge and prestige of being its next CEO would be worth giving up the challenge and prestige of developing Apple's chips and hardware. And they'd have to pay him handsomely to make the risk worth taking, too.

Krzanich resigned from Intel in June after the company learned that he had an affair with an employee. He is now the CEO of CDK Global, a car dealer software maker in the Chicago area. Intel's acting CEO is CFO Bob Swan, who says he does not want the CEO role permanently.

It took only two meetings for Cisco's former senior vice president, Christine Heckart, to realize that the log-management startup Scalyr was where she wanted to work as CEO.

Scalyr announced Heckart as its new CEO on Thursday, replacing founder Steve Newman.

Newman, who will become chairman, is best known as the founder of Writely, an online word processor that Google acquired in 2006 and used to build the first iteration of Google Docs.

After the acquisition, Newman left Google and set out to create a tool for engineers to help them troubleshoot code, which would eventually become Scalyr. Customers including TiVo, OkCupid, and even us here at Business Insider use Scalyr to help debug and optimize applications — a market that's heating up in the software economy.

"What I go towards is the chance to change the way work gets done, to change the world in some meaningful way," Heckart told Business Insider. "If Scalyr can help engineers around the world, if it can help them do their job quickly, we can provide a value to the world that impacts and touches every person in every way."

Scalyr was most recently valued at $155 million at the time of its $5.5 million funding round in 2018, according to PitchBook. Investors in Scalyr include GV (formerly Google Ventures), Bloomberg Beta, and Shasta Ventures.

A 2nd chance at being a CEO

Last year, Newman started looking for a new CEO, someone with the business acumen to accelerate the company's growth while he redoubled his focus on the technology. Heckart came recommended by a mutual friend of hers and Newman's who knew that she wanted to leave Cisco and try her hand as a CEO for a second time.

"I had run a company before," Heckart said. She was CEO of a company called TeleChoice before her Cisco days. "When I had small kids, it was hard to do that, so I went back to executive positions for a while, but I wanted to go back to being a CEO of a small company."

Heckart had been approached by five or so companies about coming on as CEO, she said, but it took only two meetings for her to know that Scalyr was by far the best fit.

"After I spent time on campus, I was getting a good sense of the culture," she said. "I went home and told my husband, 'This is the one I want. Even if this doesn't work out, that comparison told me that those other companies aren't the right ones for me.'"

When Scalyr approached Heckart, the No. 1 thing that stood out to her was the culture and diversity of the company. She saw that Scalyr was more inclusive and valued cognitive diversity, meaning different styles of problem solving. To her, that was a sign that Scalyr was the right place to be.

"That wasn't an accident. From the very beginning, Steve and the leadership team built it for cognitive diversity," Heckart said. "It makes a huge difference, not only in the employee experience. It also makes a huge difference in the success of the company."

What comes next

Heckart said that although she's run a company before, this will be her first time being CEO of a venture-backed Silicon Valley startup, which comes with its own unique set of pressures, especially since Scalyr offers a niche product for developers. Still, nowadays, there's a lot of money to be made in catering to developers.

"Kind of like how eyes are the window into the soul, logs are the window into performance and applications," Heckart said. "While it sounds esoteric or incredibly tactical, the right log-management tool not only makes the engineer more successful at their job; it helps them get home and see their kids on time. It helps them solve the problem."

Heckart said she isn't planning any dramatic changes to Scalyr's strategy. The company already has plenty of momentum, so she has the good problem of making sure that it continues. From Cisco and the other tech companies she's worked at, she hopes to bring her experience in growth and scale.

"There's so much momentum here already," she said. "My job is to build on it, to help us really connect with those users, to make sure all the users know about this tool and we bring them together in a community. We have the chance to build a really powerful community and ecosystem."

When it comes to China, Apple might be facing a "code red" situation and may need to respond to it equally dramatically with something it rarely does — cutting prices on recently launched products.

For Apple to successfully transform itself into a services company, as CEO Tim Cook has been talking about, it needs to maintain its base of customers, Dan Ives, an analyst who covers the company for Wedbush, said in a new research note. But it risks losing a significant chunk of its customer base in China because it priced its new iPhone XR too high, he said.

To right its ship, Apple is going to need to "significantly" cut the price of the XR in coming months — perhaps by as much as 20%, Ives said.

"Apple needs to make sure that over the next few quarters they do not lose any current iPhone customers, and thus speaks to the more significant price reductions on the way in China, in our opinion," Ives said. "This is a smart and necessary strategy."

Apple representatives did not respond to an email seeking comment about Ives' report.

Read more: Hey Tim Cook, there's a simple solution to your iPhone sales problem

Some thought the XR would be a big hit

Apple introduced the XR last fall as a lower-cost alternative to its flagship XS models. It has many of the same features, but it has a less costly screen and a lower price. While the XS models start at $1,000, the XR starts at $750. When it launched, some observers expected the XR to be a breakout hit.

Apple launched the iPhone XR last fall as a lower-cost alternative to its flagship XS phones. Justin Sullivan/Getty Images Instead, many consumers appear to be rejecting the XR as too costly. Apple has reportedly cut back on production of the XR repeatedly since it launched. Earlier this month, the company warned that its holiday-quarter sales would fall short of its forecasts and blamed weak iPhone sales, particularly in China.

Ives pointed a finger at the XR for that shortfall. There the device has a base price of RMB 6,499, which is about $960.

"As we have discussed with investors, it has been Apple's pricing hubris on iPhone XR that was the major factor in the company's December earnings debacle," said Ives, who remains a bull on Apple's stock, with an "outperform" rating and a $200 price target.

Many analysts, including Ives, believe that the future for Apple is in selling services to owners of its devices. The company's services segment has been one of its fastest-growing businesses in recent years and such offerings as Apple Music, iCloud storage, and the money Google pays Apple to be the default search engine for the iPhone. For its services segment to continue to grow, Apple will need to at least maintain its user base, Ives said.

Apple needs to sell iPhones to drive demand for its services

That's a chronic challenge. Smartphone owners tend to replace their devices every two to three years, and some use it as an opportunity to switch the kind of device they own from an iPhone to an Android device, or vice versa. Apple's customers have tended to be very loyal, but its pricing mistake for the XR could test those ties, particularly in China, Ives said.

Some 350 million iPhones are due to be replaced within the next year to 18 months, he said. Of those, about 60 to 70 million are owned by Chinese consumers, he said. The danger for Apple is that those customers, because of its high prices, don't wait longer to buy their next device, but they buy a cheaper device from a competitor instead. That's why it's crucial for the company to cut its prices, he said.

"If the installed base declines in China, Apple will face an uphill battle in the region for years," Ives said.

He suggested that Apple could boost sales of the XR by cutting the price to about RMB 5,200, or about $768. Reports out of China in recent days indicate that some retailers are already slashing their prices on the XR and other iPhone models.

The price cuts could worry already nervous investors, Ives acknowledged. Some may fret that Apple will take a further revenue hit from such reductions or that it would lose its image as a luxury brand. But such considerations aren't as important as maintaining its user base, he said.

Cutting prices "is a smart and necessary strategy for Apple as this is an installed base story going forward," he said. The growth of its services business, he added, "will be driven off that premise for the next decade, with China a key ingredient in Apple's future recipe for success."

WeWork, the coworking company said to be valued at $47 billion, has been renting space in buildings partially owned by its CEO Adam Neumann, according to a Wall Street Journal report on Wednesday — an arrangement that's netted the executive millions of dollars.

Multiple WeWork investors told The Journal that the arrangement was concerning to them, as the situation creates a potential conflict of interest for Neumann. For example, if those buildings were to raise WeWork's rent, Neumann could personally profit. WeWork's business model involves leasing large amounts of office space, and then subleasing smaller chunks of that space out to individuals, startups, and smaller groups.

In a document for prospective investors last year, the company disclosed that it paid $12 million in rent between 2016 and 2017 to buildings "partially owned by officers" of WeWork, and said it will pay more than $110 million over the lifetime of those leases, according to the report.

Neumann has a 50% stake in an 11-story New York City building where WeWork operates a coworking space, according to the report. The Journal also reported that Neumann is the "main investor" in a group that buys multiple properties in San Jose, California, some of which are leasing space to WeWork.

A spokesperson for WeWork told Business Insider that Neumann has a stake in only four properties from which the company operates, out of its network of 400 coworking spaces globally. Furthermore, the company said everything has been disclosed to investors and approved by the board, adding that it hasn't heard complaints.

"WeWork has a review process in place for related party transactions. Those transactions are reviewed and approved by the board, and they are disclosed to investors," the spokesperson said.

Of note, however, is that, in a 2014 fundraising deal, Neumann was awarded enough equity in the company to exert voting control over its board of directors. While WeWork's board mainly consists of independent directors, Neumann's vote is enough to make or break any proposal.

Read the full Wall Street Journal report here.

Earlier this month, the coworking company announced it would be rebranding from WeWork to The We Company, which it said would better reflect company's ambitions of moving beyond providing office space and pushing further into markets such as education or residential living.

Read more: WeWork is changing its name to 'The We Company' as SoftBank invests $2 billion

The day before the rebranding was announced, WeWork lost out on a $16 billion investment from the Japanese tech company Softbank, which decided to downsize its investment to $2 billion.

Got a tip? Contact this reporter via Signal at +1 (209) 730-3387, email atThis email address is being protected from spambots. You need JavaScript enabled to view it., or Twitter DM at @nickbastone.

You've got to give the folks who run MoviePass credit for at least two things: They're persistent. And they've got a lot of chutzpah.

Two months ago, Helios and Matheson — MoviePass's parent company — cancelled a special shareholder meeting at which it hoped to get investor approval to reverse split its stock. The company backed away from the effort because shareholders were openly hostile to the plan. Indeed, in a regulatory filing, the company said it expected investors would vote down the proposal.

But late on Friday, the company announced new plans to hold a special shareholder meeting. And you'll never guess what it wants investors to approve.

Yup. Authorization to do a reverse split.

Helios and Matheson's "board has unanimously adopted a resolution authorizing, approving, declaring advisable and recommending to the company's stockholders for their approval an amendment to the company's certificate of incorporation to effect a reverse split of the outstanding and treasury shares of the company's common stock in a ratio of 1 share-for-2 shares up to a ratio of 1 share-for-500 shares," the company said in a document filed with the Securities and Exchange Commission.

The company hasn't set a date for the meeting, but even it acknowledged that this effort sounds like déjà vu. It first pitched a similar plan in September, then twice delayed holding a vote on it before withdrawing the plan amid objections from investors.

Helios and Matheson officials are pressing the plan again, because they feel they have to. The Nasdaq national market warned the company last month that it planned to delist Helios and Matheson's stock for failing to meet its $1-a-share price requirement. The company appealed that decision, it confirmed in the regulatory document. But its appeal will be heard by the Nasdaq on January 31, and it needs to be able to show regulators that it has a plan to get its stock price back above the $1 threshold.

Read this: MoviePass's parent company is in dire danger of having its stock delisted by the Nasdaq

"We believe that a reverse stock split could increase the market price of our common stock sufficient to satisfy [Nasdaq's] minimum bid price requirement in the near term," the company said in the statement.

The company already reverse split its stock in July

That "near term" line is important to note. Because this effort to do a reverse split doesn't just call to mind last fall's aborted effort to do the same thing. It also resembles the actual reverse split the company actually effected in July— and the results of that weren't good. Indeed, it's what led directly to Helios and Matheson being in the position it's in today, risking delisting.

Helios and Matheson's stock price peaked in October 2017 at nearly $39 a share — or $9,715 a share if you take into account the effect of the reverse split. After that, it fell in fits and starts as the company's losses ballooned, thanks to the growing number of consumers taking advantage of MoviePass's all-you-can-eat $10 movie ticket subscription plan, and as it flooded the market with new shares, which it sold to replenish the cash it was rapidly burning through.

By May, Helios and Matheson's stock had fallen below $1 a share. After the company's stock spent 30 days trading for pennies, the Nasdaq sent Helios and Matheson a warning letter that it faced delisting if it didn't get its shares above the $1 threshold on a sustained basis.

So, Helios and Matheson announced that it wanted permission to do a reverse split, offering a range of possible split ratios of between one new share for every two old ones to one new share for every 250 old ones. At the same shareholder meeting, it sought permission to increase its number of shares outstanding from 500 million to 5 billion. With the company nearing the limit of its authorized share count, the expansion would give it the ability to sell billions of new shares to continue to fund its business to the point where it could ostensibly narrow its losses and boost its share price.

At the meeting, company CEO Ted Farnsworth seemed to suggest that the company would do one thing or the other — sell more shares or reverse split the stock. The reverse split was an "insurance policy," in case investors didn't pass the share expansion, he said.

Officials took advantage of the leeway to sell more stock

But if investors passed both proposals, they would give Farnsworth and company lots of new latitude to flood the market with additional shares. That's because while a reverse split would reduce the number of shares Helios and Matheson had already issued, it wouldn't affect the total number of shares it could potentially issue — the 5 billion number of authorized shares would stay the same regardless of the ratio by which the company reverse split its stock.

As it turned out, that's just what happened. Investors passed both measures, and Farnsworth and his team took advantage of their new powers. They reverse split the stock by the maximum ratio allowed under their proposal — 250 to 1 — and then promptly started selling new shares. In less than two months, the company share count went from less than 2 million immediately after the split to nearly 1.4 billion.

And the company's stock? Within a week, it had fallen from $22.50 to below $1 a share. Within two weeks of the reverse split, it was below 10 cents a share. Lately, it's been trading at closer to a penny a share.

You can understand, then, why, when Helios and Matheson in September proposed a second split, investors resisted it. The results of the past one had been disastrous. The company had destroyed gobs of shareholder value.

Helios and Matheson is warning of more dilution ahead

But investors had another reason to be wary of another split. While the company was seeking to decrease its share count, it wasn't planning to decrease its authorized share count or to stop selling new shares. Indeed, it told investors that it likely would continue to sell shares to raise money to fund its business.

Shareholders rejected that idea. But Helios and Matheson's executives don't seem to have learned anything from the experience. The reverse-split plan they proposed Friday is basically the same idea, just warmed over. It would give the company the power to reverse split the stock by as much as a 500-to-1 ratio, but it wouldn't reduce the authorized share count or limit sales of new shares. So it would be freed up to issue up to nearly 5 billion shares of the newly split stock.

And that's not just a theoretical possibility; Helios and Matheson is again stating that it likely will resort to selling new shares.

"Although MoviePass recently has implemented significant cost cutting measures ... the company believes it will continue to need to raise capital to fund MoviePass until MoviePass becomes cash flow positive or profitable (of which there is no assurance)," Helios and Matheson said in the regulatory filing, adding that it could sell shares or issue debt.

Helios and Matheson has shown that it will do both over and over. Just last week, the company announced that it had increased the share count by another 20% and by potentially as much as 80% by selling additional shares and issuing warrants for certain investors to buy additional ones.

Its share count now stands at 2 billion shares. That an increase of nearly 119,000% just since its first reverse split. Pretty much every time it's been freed up to issue more shares, it's done that — and existing investors have paid the price.

Investors don't seem to have mellowed since November

The thing is, even Helios and Matheson, which announced this week plans to spin off MoviePass, acknowledged in the regulatory filing that the reverse-split effort is something of a Hail Mary. The Nasdaq could delist its stock even if it believed shareholders would pass the measure. Thanks to the decline of its stock price, Helios and Matheson now isn't meeting another listings standard.

It's market capitalization is now about $26 million, which is significantly below Nasdaq's $35 million requirement. And if that wasn't enough, the market regulators could decide that enough is enough, and that Helios and Matheson shouldn't have the freedom a listing on the Nasdaq would give the company to further dilute shareholders.

Its possible that investors have calmed down and have mellowed their attitudes about a reverse split since Helios and Matheson backed away from the previous effort. But probably not.

Late last month, the company finally held its annual meeting for 2018, and investors were given a chance to vote on Helios and Matheson's board and on Farnsworth's pay. The result: Shareholders overwhelming voted against the four directors who were up for reelection and voted against approving Farnsworth's salary.

Both votes were just advisory, so they didn't change anything at the company. But they give a sense that investor ire hasn't gone away.

In general, customers begin threatening to cancel a service because of increasing prices long before they actually do.

Netflix's 2016 price hike is a perfect example. At the time, analysts at UBS surveyed customers, and 41% said they would accept no price increase for Netflix. None. But UBS estimated that roughly 3% to 4% would actually cancel.

"41% of respondents in our survey were not willing to accept any price increase for Netflix, which is actually very positive when compared to 68% for pay TV," the analysts wrote at the time. "Consider pay TV costs have been rising 3-5% annually and the industry is now losing only ~1% of customers each year, relative to 68% of pay TV customers in our survey indicating no tolerance for price increases."

People simply don't like the idea of price increases, but often tolerate them when they happen.

Now Netflix has raised prices again, introducing its biggest price hike ever this week, which raised the cost of its most popular US plan from $11 to $13. Its lowest tier is now $9, while its highest is $16.

Wall Street isn't worried people will cancel.

"We are bullish on the company's ability to execute the pricing increase," Stifel analysts wrote last week.

Compared with its competitors, "Netflix still offers the best value, even at these higher price points," RBC analysts argued.

The RBC analysts elaborated:

"There is the basic point that Netflix offers a flat-out compelling value proposition — a massive content catalog with an increasingly large amount of original content at a very low price. You and a date want to go out to the movies Gonna cost you $17.66 at your local U.S. movie theater (average price per tick of $8.83). Or you could Netflix and chill and watch Bird Box for ... effectively way under a dollar (depending on how much time you spend on Netflix during a typical month). And you can use the $16 in savings and buy a nice Chianti ... So yes, we believe the price increase will stick."

This view seems to be backed up by Netflix's own projections for subscriber growth in the first quarter. Netflix estimated that it would add 8.9 million paid subscribers this quarter, topping Wall Street estimates that it would give guidance of 8.5 million.

But Netflix can't raise prices indefinitely without any effect. There is some price at which customers will actually start to revolt. And new survey data suggest Netflix will face its next big challenge at $15 per month.

Business Insider used SurveyMonkey Audience to ask at what price Americans would consider canceling their Netflix account.

Here is a chart of what we found:

Yutong Yuan/Business Insider

As you can see in the chart, there is a big jump when you hit $15, from 22% considering canceling at $14 (or below), to 52% at $15. (Netflix's highest tier price is $16 per month, but it's much less popular.)

Just because these Netflix subscribers are considering canceling doesn't mean they will. But it does demonstrate that there seems to be a psychological jump at $15. That's perhaps a reason why HBO's standalone service, HBO Now, is priced at $14.99.

And for Netflix, a similar jump also happens between $19 (64% would consider canceling) and $20 (85% would consider canceling).

Netflix has indicated that it will periodically raise prices, but hasn't said whether there will be a price ceiling. The company did say on its earnings call that it hopes to one day be able to self-fund without relying heavily on debt.

To get there, Netflix will have to balance subscriber growth and price hikes. And these survey results suggest that certain price points might be more difficult for customers to stomach than others.

But Wall Street sees a path. At least 15 firms raised their price targets following Netflix's fourth-quarter earnings.

Here is more detailed info about how the survey was conducted:

"SurveyMonkey Audience polls from a national sample balanced by census data of age and gender. Respondents are incentivized to complete surveys through charitable contributions. Generally speaking, digital polling tends to skew toward people with access to the internet. SurveyMonkey Audience doesn't try to weight its sample based on race or income. Total 1,095 respondents, a margin of error plus or minus 3.11 percentage points with a 95% confidence level."

HP and Hewlett-Packard Enterprise will pay 2,189 of its current and former California sales employees settlement fees, with an average payment of $5,430.06, after it settled their lawsuit for $25 million, court officials say.

Some will be receiving much more and some far less.

The case involved former salespeople alleging that HP's computer systems weren't tracking commissions properly and they weren't getting paid in a timely manner. They filed suit some nine years ago.

However, in 2016 Business Insider reported that sales people were still complaining about messed up pay, after HP had split into two companies. The sources that we talked to at the time were not aware that other salespeople were suing.

Read: CEO Satya Nadella says that Microsoft is embracing Amazon's Alexa instead of fighting it — and he wants to be friends with Google, too

Those sources told us in 2016 that the wacky pay situation had gotten so bad that some people were behind on their mortgages and facing foreclosure, others were late on their alimony. One salesperson was even told that he actually owed his employer money, over $130,000, after the first quarter of 2016, sources told us.

Business Insider again reported on these issues in 2017, after an HP executive sent an email to the troops apologizing. (That executive has since left the company.)

Several months after Business Insider's second report, HP and HPE agreed to the $25 million settlement deal. And it took another year for the legal volley to officially end and for the court to approve the deal. That happened earlier this week.

In addition to the $25 million penalty fee, HP and HPE said they are currently overhauling their sales and commission-tracking computer systems. The companies told the court that they have already spent or budgeted between $60 million and $70 million through their fiscal 2018 on the new systems and expect to pay another $5 million in fiscal 2019, according to legal documents.

The new system is known as the Incentive Compensation Environment or "ICE", according to court documents. And it integrates with cloud financial software from startup Anaplan, with inventory-tracking software from startup Zyme and with Salesforce (although HP Inc., the PC and printer HP company, has since ditched Salesforce for Microsoft Dynamics).

The settlement wasn't backpay, but a penalty, and each person's share depended on their wages, Jonathan Parrott tells us. Parrott is an attorney at the Franklin Azar law office working for the plaintiffs.

Of the $25 million that HP and HPE agreed to pay, nearly half went to the lawyers and legal fees. And a few million went to state agency penalty fees as well. The named plaintiff, Jeffery Wall — the one who sued before the suit was turned into class action status for thousands of people — was paid an additional $25,000, settlement documents show.

HP When the settlement was originally agreed to, back in December, 2017, there were some 1,323 people as plaintiffs in the class action suit and payments to people ranged from the lowest of $144 to the highest of $81,237.

However the final payments wound up quite a bit lower because the court agreed to add another 866 salespeople as plaintiffs to the case. All of them split a kitty of about $11.5 million, out of the $25 million. (The rest went to lawyers fees and government agency penalty fees).

So the total number of salespeople who went to court over pay issues at HP and HPE was nearly 2,200 people.

Parrott told us another interesting fact about this settlement as well: Although plaintiffs included both former and current HP/HPE sales employees, only the ones who left the company received significant cash. Most the money for current employees is being paid as a per-employee penalty fee to the state, he said.

Even so, many class action suits representing this many people result in only a small token payment to the plaintiffs, Parrott says, as would be expected whenever legal fees take a big chunk of the award and everyone else shares the rest.

A spokesperson for HPE did not respond for an immediate request for comment on the payment amount but previously told Business Insider: "HPE is pleased that the mediated resolution in this dispute that was reached by the parties in 2017 has been approved by the Court."

In its latest effort to stave off the steady flow of teens leaving its platform, Facebook has been building a dedicated space for users to discover memes and viral content.

The new platform, called LOL, is designed as a "special feed of funny videos and GIF-like clips" using content "pulled from News Feed posts by top meme Pages on Facebook," according to a new report from TechCrunch. Under each meme that appears in LOL, users can choose three reactions for the post: "Funny," "Alright," or "Not Funny."

LOL is currently in private beta and is being tested out by 100 high school students who got parental consent to participate and also signed non-disclosure agreements with Facebook, according to TechCrunch.

A Facebook spokesperson confirmed in an email to Business Insider that it is working on the platform, saying: "We are running a small scale test and the concept is in the early stages right now."

However, those who have seen LOL told TechCrunch the design is "cringey" and misses the mark. LOL is apparently featuring content that is weeks old, and that has surely already been seen before by the meme-obsessed users who would actually use the platform.

Read more: An internal email shows how Facebook learned of a 'psychological trick' to get teens to try a new product

From TechCrunch's screen grabs, LOL's design and features draw comparisons to Snapchat's Discover feed. Facebook's LOL includes section for themed content collections called "Dailies," which look pretty similar to curated clips Snapchat compiles for Discover. LOL also lets you filter your feed by category, including "Fails," "Pranks," "Savage," "Wait for It," "Celebs," and a personalized "For You" tab.

As it stands, LOL reportedly acts as a replacement for Facebook's Watch tab. But Facebook has yet to decide whether LOL will exist as a standalone app, or as a feature within the existing app, TechCrunch reports.

Facebook's increasing unpopularity among Generation Z has been well-documented, and experts say Facebook has been taken over by parents. Only 5% of teens chose Facebook as their preferred social media platform in a Piper Jaffray survey from Fall 2018, and almost 80% of surveyed teens chose either Instagram or Snapchat instead.

In response to its dwindling presence in teens' lives, Facebook has attempted to grow several features and spinoff apps. Facebook launched a standalone app in November called Lasso that's drawn comparisons to TikTok (and the late video app Vine), but the app has yet to take off like its competitors. Facebook also acquired the anonymous app tbh, which was popular among teens in late 2017, but closed down the app just eight months later. Other ventures include Hello, Slingshot, and Poke, but all have either shuttered or faded into virtual non-existence.

A Florida man arrested and facing charges of unlawful sex with a minor and 22 counts of child pornography allegedly used "Fortnite" and an accomplice to meet the victim, prompting a response from Florida Attorney General Ashley Moody.

In a statement posted to the Florida Office of the Attorney General website, Moody said that Anthony Gene Thomas, 41, of Broward County, used the video game "Fortnite" to meet a 17-year-old girl and have sex with her. Moody said pictures and video of the sexual encounter were discovered when police executed a search warrant on Thomas's phone.

"This case is disturbing not only because it involves child pornography, but also because a popular online game was used to communicate with the victim," Moody said in the statement. "We have reason to believe there could be additional victims, and I am asking anyone with information about the recruiting of minors for child pornography, or any other type of sexual exploitation, to call law enforcement immediately."

Read more:Microsoft's Bing search engine reportedly had a child porn problem

Moody's statement did not specify whether images of other underage victims were found on Thomas's phone, but there's been a call for any victims to come forward, and she wrote that "authorities believe there could be as many as 20 additional victims."

The Attorney General's office says a co-conspirator first met the victim on "Fortnite" and eventually introduced her to Thomas. Moody alleges that Thomas "manipulated" the 17-year-old by offering her gifts, credit cards, and a cell phone after she told him she was having a hard time at home.

Eventually, Thomas and his co-conspirator allegedly coordinated an in-person meeting with the victim on Aug. 25, 2018. Moody says the pair picked the victim up and drove back to Thomas's home, where he allegedly had sex with her. The 17-year-old's parents reported her missing the same day; police located her at Thomas's residence and brought her home on August 26th. Moody says that Thomas stayed in contact with the teen after the encounter, and the search warrant that would uncover the child pornography was eventually executed on October 11th.

Thomas faces charges of soliciting a child for unlawful sexual conduct using computers, traveling to meet a minor for unlawful sexual activity, possession with intention to promote sexual performance of a child, 22 counts of child pornography, and unlawful sexual activity with a minor. Police have not identified the name or age of the co-conspirator, or whether they will be facing criminal charges.

Like popular social networks, games like "Fortnite" put young players shoulder to shoulder with adults with few barriers to communication. As Moody suggests, parents should be monitoring their children's online activities to ensure they're not being exposed to physical and emotional violence.

"Parents need to know that predators will use any means possible to target and exploit a child," Moody's statement reads. "I am asking parents and guardians to please make sure you know who your children meet online, and talk to them about sexual predators."

Open source software companies like MongoDB are making drastic moves to protect their intellectual property from cloud giants like Amazon or Alibaba — but a clash between MongoDB and $31 billion software giant Red Hat highlights the potential pitfalls of that strategy.

Fedora, a Red Hat-sponsored open source operating system, has dropped support for the very popular MongoDB database. Although Fedora is sponsored by Red Hat, and has project leaders who work at Red Hat, it's technically a separately-run open source project. Fedora cited concerns over the company's controversial new licensing agreement, and indeed, Fedora has tacked MongoDB's SSPL onto its "bad license" list.

This comes months after Red Hat, which is on the cusp of being acquired by IBM, removed MongoDB support from its Red Hat Enterprise Linux OS in November.

Late last year, MongoDB announced the Server Side Public License, or SSPL. Under the terms of the SSPL, any cloud provider who wants to take the free MongoDB database and package it up as service for their own customers has to also release their code as open source, free for anybody to see and use...or else pay MongoDB for a license. It's intended to make it harder for cloud providers to make money from MongoDB without paying up.

The problem, in Red Hat's view, is that the SSPL violates a core principle of open source, which states that anybody should be able to use this free software any way that they want to, without restrictions, even if they're using it to turn a profit — a line of thinking that echoes many critics of MongoDB's SSPL and licenses like it.

"It is the belief of Fedora that the SSPL is intentionally crafted to be aggressively discriminatory towards a specific class of users," Tom Callaway, a technical and community outreach program manager at Red Hat, wrote in a blog post. "Additionally, it seems clear that the intent of the license author is to cause Fear, Uncertainty, and Doubt towards commercial users of software under that license."

For its part, MongoDB has disputed the characterization that the SSPL disqualifies the platform as open source. Indeed, MongoDB has submitted a redrafted second version of the SSPL to the Open Source Initiative, an industry body, to win the right to call it an open source license.

Read more:Two software companies, fed up with Amazon, Alibaba and other big cloud players, have a controversial new plan to fight back

"We continue to work with the OSI as they deliberate on the SSPL and we still strongly believe that the SSPL meets the tenets of open source," Eliot Horowitz, CTO and co-founder of MongoDB, said in a statement.

However, Red Hat itself isn't so bullish about MongoDB's chances, here. Richard Fontana, senior commercial counsel at Red Hat and himself a member of the OSI board, calls SSPL the "most controversial license the OSI has received in years," and admonished MongoDB for breaking from the open source community.

"Here's a major community project that looks carefully at the license and says, 'look it doesn't need community standards on what a free software license is,'" Fontana said. "It's a strong statement and that may have an impact on the debate as it goes forward."

Bradley M. Kuhn, the president of the Software Freedom Conservancy, says that he consulted with Red Hat on this situation, and isn't surprised that the company is moving away from MongoDB.

"MongoDB released this license with no discussion with the community. This frustrated all of us, and I sense that frustration with Red Hat as well," says Kuhn.

'A burdensome requirement'

Beyond Fedora and Red Hat Enterprise Linux, Red Hat is looking at other places where it might have to take action over MongoDB's move towards the SSPL, says Fontana.

The general feeling at Red Hat, says Fontana, is that the SSPL adds a potential legal headache for customers and users of its products. There's no precedent for something like the SSPL, and that could make problems for any company who wanted to ensure they were in full legal compliance while using MongoDB, he says.

"Our customers really appreciate the fact that we are very careful about the licenses that we say are open source products. They look to us for guidance. If they found this unusual license with an unprecedented restriction, I think some customers might be legitimately concerned," says Fontana.

Read more: Startups are taking on Amazon's cloud with a controversial new plan, but experts warn it could undermine the foundations of open source

More than anything, SSPL essentially requires users that are offering MongoDB's database server as a service to make much of their own, potentially proprietary code, available for free. Fontana says this goes far beyond what any other free software license requires.

"That's actually such a burdensome requirement that I would say it's impossible to comply with," Fontana said.

Moving forward with the license

While MongoDB awaits a verdict on the second version of the SSPL, it's still using the first. Other companies, like Confluent and Redis Labs have also made similar license changes, for similar ends, though they haven't submitted them to the OSI.

Ultimately, the SSPL didn't stop Amazon Web Services from creating its own MongoDB-compatible database service called DocumentDB, though MongoDB has said that the two aren't directly competitive. Eliot Horowitz, CTO and co-founder of MongoDB MongoDB

While Fontana gives MongoDB credit for going through the approval process, and calls MongoDB's issues with cloud providers "a legitimate concern," he believes MongoDB should not have started using SSPL before it was vetted by the open source community.

"I would encourage MongoDB to go back to using an accepted and approved license for an open source license. They should wait for OSI to make a decision about SSPL," Fontana said. "That would be a preferable way to proceed."