Winners & Losers: Shopify rings up an IPO, Google’s in antitrust trouble

“Quelle horreur!” said Google Shopping’s 14 customers

 

▲ Shopify

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Shopify office

A beleaguered Canadian tech sector was overcome with joy this week when Ottawa-based Shopify filed for an initial public offering. Launched in 2006, Shopify is a subscription software firm that helps businesses manage e-commerce, and it’s exploded in popularity since then thanks to its ease-of-use. The company, cofounded by 34-year-old Tobias Lutke, now has 632 employees and generated more than $105-million in revenue in 2014. (It’s not yet profitable, and the company stated in its prospectus that the red ink could remain for a while as it grows.) The praise from the tech community was effusive. “What a great company!” said Kik founder Ted Livingston, who may or may not look like this. “This is our first gold medal contender,” said C100 founder Chris Albinson. Hootsuite founder and apprentice lumberjack Ryan Holmes tweeted his congratulations too. “I hope the HOOT ticker is free,” he added coyly, apparently unable to overcome the self-promotional impulse beating inside every entrepreneur. Shopify’s pending IPO is significant for what it says about the future of the Canadian tech sector. The loss of Nortel and the decline of BlackBerry has caused a lot of pessimism inside and outside of the sector, but a new crop of companies seems to be on the rise. Hootsuite, Desire2Learn, and Vision Critical are all expected to IPO in the next year or two. The hope is that strong, profitable companies will create a genuine tech ecosystem, attracting jobs and money, and creating new entrepreneurs and investors as a result. Shopify is just the first out of the gate. In short, there is a lot riding on Lutke, who serves as the company’s CEO. Don’t Balsillie it up, kid.

▼ Google

Finally, Europe tackles its real problems

Google logo

After a five-year investigation, the European Commission filed formal antitrust charges against Google, alleging it uses its near-monopoly on search to favour its own comparison-shopping service. Some observers say this is just the beginning as European antitrust chief Margrethe Vestager continues to look at other areas of the company, such as how Google treats travel and local services. Separately, she announced a probe into Android on the suspicion that Google uses the mobile platform to favour its own apps and services. Google refuted the allegations in two blog posts, which both argue that more competition exists than ever before. In fact, one of the posts contends that Google Shopping is an insignificant presence in Europe. A series of graphs show Google’s service is way behind Amazon and eBay in terms of unique visitors in Germany and France. It is rare for a company to contend its services are ignored and unpopular with such enthusiasm, but this is the nature of antitrust cases. Google could end up paying billions in fines, and have to make changes to how it does business. When the European regulators charged Microsoft in 2000 for antitrust violations, the company ended up paying US$2.3 billion in fines, and some argue it became a much more cautious firm, taking fewer risks. We have no stake in the outcome of this case, but we wouldn’t want Google to end up taking fewer risks. We’re still looking forward to relaxing in our self-driving car and managing our Google+ circles on our face computer through Internet beamed from giant balloons some day soon.

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