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The Briefing: Spotify Throws Brown Under Bus

The Briefing
Talk about hanging someone out to dry! A day after DoorDash confirmed it had hired Lee Brown, Spotify's longtime ad chief, as chief revenue officer, Spotify executives went out of their way to complain about the company's ad performance—and by implication, the job Brown had done. When asked on the company's second-quarter earnings call about Brown's departure, Spotify's co-president, Alex Norstrom, said the ad business hadn't progressed enough, "so we felt it was the right time for a leadership change."  CEO Daniel Ek added that Spotify had "simply been moving too slowly" in advertising and that it was "an execution challenge, not a problem with the strategy." Ouch! Brown declined to say anything in response when we asked. What makes the comments puzzling is that there was no real reason for Spotify executives to make them. The earnings disappointed investors—Spotify stock fell 12%—because revenue and operating profit fell short of Spotify's previous guidance. But the revenue shortfall was mostly due to the weakening of the U.S. dollar against the euro during the quarter, while the profit shortfall was due to higher payroll and other expenses. 
Jul 29, 2025

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Talk about hanging someone out to dry! A day after DoorDash confirmed it had hired Lee Brown, Spotify's longtime ad chief, as chief revenue officer, Spotify executives went out of their way to complain about the company's ad performance—and by implication, the job Brown had done. When asked on the company's second-quarter earnings call about Brown's departure, Spotify's co-president, Alex Norstrom, said the ad business hadn't progressed enough, "so we felt it was the right time for a leadership change." 

CEO Daniel Ek added that Spotify had "simply been moving too slowly" in advertising and that it was "an execution challenge, not a problem with the strategy." Ouch! Brown declined to say anything in response when we asked. What makes the comments puzzling is that there was no real reason for Spotify executives to make them. The earnings disappointed investors—Spotify stock fell 12%—because revenue and operating profit fell short of Spotify's previous guidance. But the revenue shortfall was mostly due to the weakening of the U.S. dollar against the euro during the quarter, while the profit shortfall was due to higher payroll and other expenses. 

Sure, Spotify's ad revenue growth of 5% (excluding the impact of foreign exchange) is paltry compared to the 10% growth in users of the service's free, ad-supported version. But that's been the case for a while, as veteran ad analyst Brian Wieser noted in his Madison and Wall newsletter today. And while Brown may be partly responsible, it's not believable that his failure to "execute" on the strategy was the main reason, as Ek claimed. Instead, as my colleague, Cathy Perloff, reported in this deep dive in February, the company's problem in advertising is that it is constantly trying to get frequent listeners to the free tier (those targeted by ads) to sign up for ad-free subscriptions. In other words, Spotify cannibalizes its ad business to drive subscriptions. For years, Spotify has claimed its ad business would get bigger, and for years, it has failed to do so. Brown has been in the job since 2019—if the weak ad performance was Brown's fault, why didn't Ek act sooner to replace him? 

This isn't the first time Spotify has been so blunt about a high-level departure. In late 2023, Ek explained Chief Financial Officer Paul Vogel's exit by saying, "Spotify is entering a new phase and needs a CFO with a different mix of experiences." But the unhappy comments about the ad performance were a more obvious criticism of Brown's performance. The truth may be that Ek has an unrealistic idea about Spotify's potential in advertising. Either way, the American-style of explaining departures—claiming that someone "wants to spend more time with their family"—may be a bit too euphemistic. But Spotify's alternative seems a bit too harsh.

Another big cybersecurity deal may be in the works. The Wall Street Journal reported Tuesday that Palo Alto Networks was in talks to acquire Israeli firm CyberArk Software for more than $20 billion. If it happens, it would be the latest in a string of multibillion-dollar tech acquisitions this year, including Google's $32 billion purchase of Wiz, Meta Platforms' $14.3 billion purchase of almost half of Scale AI and Salesforce's $8 billion purchase of Informatica.

It's quite the change from the deal-free years of President Joe Biden's administration, when antitrust cops like Lina Khan kept deals from happening. Ironically, though, some members of the Trump administration were fans of Khan, including Vice President JD Vance, so it wasn't a slam dunk that the new administration would take a more favorable view of deals. 

But reports on Tuesday that the Justice Department had fired two senior antitrust staffers, after weeks of infighting over its handling of the Hewlett Packard Enterprise and Juniper Networks deal, suggests the new administration isn't taking an ideological approach to antitrust review. Instead, it's all about lobbying and who has the best connections to Trump's people. Epic Games CEO Tim Sweeney, who has fought a yearslong antitrust case against Apple, summed up one interpretation of this development when he tweeted on Tuesday that "one can no longer assume that the U.S. will enforce U.S. competition law against U.S. companies." Big tech, you can bet, isn't too sad about that.

• Anthropic is raising a new financing at a $170 billion valuation in a deal led by Iconiq Capital, reported Bloomberg. That's up from the $58 billion–valued round before the investment, led by Lightspeed Venture Partners at the start of this year.

• JPMorgan Chase is nearing a deal to replace Goldman Sachs as the provider of Apple's credit card program, The Wall Street Journal reported.

• Cerebras Systems, a startup developing artificial intelligence chips to challenge Nvidia's, is in talks to raise up to $1 billion in private funding, potentially delaying a plan to go public this year, The Information reported.

• The Consumer Financial Protection Bureau said it will fast-track a new rule governing access to consumer financial data, weeks after JPMorgan unveiled new data-access fees that threw the fintech industry into turmoil.

Check out today's episode of TITV with insights from Human Ventures' Joe Marchese about how AI is affecting advertising.

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