Tech Brew Ride Home - Fri. 02/15 - FTC To Fine Facebook?

Episode Date: February 15, 2019

More fallout and analysis of Amazon ghosting NYC, more signs of blockchain actually taking hold on Wall Street, Samsung’s lineup of gadgets leaks and of course, the weekend longreads suggestions. Sponsors: Tiny.website DataDogHQ.com/ridehome Links: The U.S. government and Facebook are negotiating a record, multibillion-dollar fine for the company’s privacy lapses (The Washington Post) Amazon’s Escape From New York (Bloomberg BusinessWeek) Copyright Office Refuses Registration for 'Fresh Prince' Star Alfonso Ribeiro's "Carlton Dance" (The Hollywood Reporter) HSBC forex trading costs cut sharply by blockchain - executive (Reuters) Samsung leaks entire new wearables lineup through its own app (The Verge) Weekend Longreads: The Strong Web (podcast suggestion) Why data, not privacy, is the real danger (NBCNews) Uber’s Secret Gold Mine: How Uber Eats Is Turning Into A Billion-Dollar Business To Rival Grubhub (Forbes) Zillow Wants to Flip Your House (Bloomberg BusinessWeek) The Strange Experience of Being Australia’s First Tech Billionaires (NYTimes) The Secret History of Women in Coding (NYTimes Magazine) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech meme ride home for Friday, February 15th, 2019. I'm Brian McCullough today. More fallout and analysis of Amazon ghosting NYC.

More signs of blockchain actually taking hold on Wall Street. Samsung's lineup of gadgets leaks. And of course, the weekend long reads suggestions. Here's what you miss today in the world of tech. Tony Rahm in the Washington Post is reporting that the FTC and Facebook are in active negotiations to impose a record multi-billion dollar fine on Facebook to settle the FTC's investigation into that company's privacy practices. Quote, the fine would be the largest the agency has ever imposed on a technology company, but the two sides have not yet agreed on an exact amount.

Facebook has expressed initial concern with the FTC's demands, one of the people said. If talks break down, the FTC could take the matter to court in what would likely be a bruising legal fight, end quote. Yeah, about that bruising legal fight, Kara Swisher tweeted, quote, Facebook should take whatever deal it gets and pay a huge fine. A court battle would be disastrous. Zuckerberg should ask his mentor Bill Gates about that, end quote. Lots of people on Twitter were making comments about maybe this is just cost of doing business for Facebook. Kandaruk tweeted, quote,

To put multi-billion dollar fine in context, Facebook had 6.88 billion in net income last quarter and has around $40 billion in cash in the bank, end quote. But as Matt Drainge points out, a fine is only one component of any FTC settlement. There are also remedies about methods of doing business, changes that the FTC can insist upon. Quote, remember, the most important thing with a settlement here, if one does materialize, isn't the dollar amount. Facebook can afford virtually any record-breaking sum the FTC asked for. The important thing is what, if any, behavior slash oversight changes are made, end quote. The reverberations from Amazon's decision to abandon its HQ2 plans,

W-Slas R-T, New York City continue to be felt around these parts. What I think I'm going to do is lean on a piece from Brad Stone in Bloomberg Business Week from this morning, firstly because Brad quite literally wrote the book on Amazon. It's called The Everything Store. Check it out if you never have. but also because a lot of what he says in that piece rings true to me, beginning with this observation. There was opposition to Amazon coming here, and it was very loud, but it was also not exactly widespread. So oddly, it feels like Amazon cut bait at the very first hints of controversy, and they didn't maybe have to. Amazon was attempting some community outreach PR, but even that felt a little half-hearted,

aside from leafletting doorsteps and handing out flyers and queens, saying, Happy New Year from your future neighbors at Amazon. And aside from Jeff Wilkie calling local officials to wish them happy Thanksgiving. I mean, as the piece notes, that was Wilkie calling, not Bezos. So again, that's sort of their heart wasn't in it. In fact, Amazon never even rolled out the big PR gun in the form of Bezos coming here to New York to publicly make nice. Bezos is a legit, charming person in person.

Instead, the image that was left to linger in the local press and among some of the city's politicians was that of the planned helicopter pad atop one of the proposed buildings in Long Island City that would allow Amazon executives to avoid traffic on the BQE, say, and the unreliability of Cuomo's MTA say that makes subway commutes for Us Mir morals such a dicey affair. So while in actual opinion polls, there was strong support for Amazon coming, Long Island City residents who would have been actual neighbors of the Amazon campus were reportedly in favor of the deal 58% to 35%. The field, in public opinion, was effectively seated to the vocal anti-Amazon faction, quoting from Stone's Peace. None of this surprised longtime observers of New York politics, but Amazon, it seems, didn't have the appetite for the

attracted public battle, or the prospect that it could be scapegoated by every subway delay, pizza rat, traffic jam, or housing eviction in Queens from now to eternity. This was not even that difficult a fight, says Esther Fuchs, a Columbia University Urban Affairs professor. I think it's a misreading by Amazon of how politics works in New York, end quote. Julie Samuels, executive director of Tech, NYC, a group that advocates for tech-friendly urban policy, says, quote, culturally the problem was they were not equipped for people to not be excited. They had no tools in place for that, end quote. A couple of observations building off of that.

First, as I said at the time, the whole HQ2 sweepstakes in retrospect, I mean, it just turned out to be a giant PR misfire. Instead of an innovative tech company spreading its largesse around the country, it ended up feeling like, like the analogy I used previously, an NFL owner extorting a city for a fancy new stadium. One gets the that Amazon wanted to be in New York City all along. So instead of doing the whole dog and pony show, they should have just come here like Google is doing and not ask for incentives. And even, I don't know, spitballing here

maybe offered to invest in infrastructure improvements as a housewarming gift. Instead, the tax breaks felt like welfare handouts to a company and a person in the form of Jeff Bezos, who in an accident of history became the richest person in the world, and the richest company in the world at the exact same time this was all going down. And speaking of accidents of history, quote,

for them to not have anticipated a political backlash to this kind of incentive package when it sits right in the backyard of people like Alexandria Ocasio-Cortez just shows complete incompetence, says Richard, Florida, an urban studies professor at the University of Toronto, end quote. That's not hyperbole, by the way. The activist network that AOC has energized in the city I've heard just moved immediately from the success of her election to this juicy new target that landed right in their laps at the same time. And they came armed with the constituent emails and telephone numbers

from that recent campaign. For all of Amazon's vaunted data gathering, which the HQ2 sweepstakes was probably also about, right, they apparently blanched at the notion of using that sort of data to wage an actual public relations or even political campaign, which is what they we're going to need to run. And that's what really puzzles me about this still. Why not have simply chosen a Nashville, an Indianapolis, a Cleveland in the first place? It would look like Silicon Valley spreading the wealth around. Coming to NYC only looked like wealth concentration.

And other municipalities, political classes and bureaucratic systems, would have been much more amenable, would have been happy to give Amazon everything they wanted. New York was always going to be grumpy about it on some level. Probably would have done what Amazon wanted, but they would have extracted their pound of flesh first, which is why, in the end, escaping from New York, Snake Pliskin style, as the graphic on the stone piece so delightfully illustrates today,

this was probably the right call in the end, because again, as Bradstone points out, right now, every time the train is late, we blame Cuomo. Every time a new luxury high rise goes up and rents go up and a neighborhood gentrifies, we blame Bloomberg. But for the next 20 years or so, an entire generation, there would have been one fat, juicy, easy target, fairly or unfairly, that everyone in the city would blame every time anything went wrong, Amazon. And Amazon didn't want that target on its back for an entire generation. Quick follow up to a previous item that we did. the U.S. Copyright Office has refused a copyright claim for the Carlton dance.

You might remember that Fresh Prince of Bel Air star Alfonso Ribisi was claiming he was owed something for players being able to do a celebratory dance inside Fortnite that he claimed looked like the dance that he made famous, the Carlton. Ribisi is suing the makers of Fortnite, and I did not know this, but also suing Take to Interactive for a similar dance move in game. in, I think, maybe NBA 2K. Anyway, those lawsuits do continue, though Take 2 is seizing on this recent refusal from the Copyright Office to grant a copyright to the dance to say that the suits should be dismissed. And a quick follow up to something that we talked about just yesterday. The major global banking conglomerate HSBC says that its blockchain technology is already

being used every day by the bank and it's working as intended. If you'll remember, yesterday I talked about how J.P. Morgan had announced a JPM coin, an actual token. So this is not a token, but apparently HSBC, quote, processes between 3,500 and 5,000 trades a day on its FX Everywhere system, settling trades worth $350 billion, Mark Williamson, chief operating officer of FX cash trading and risk management told Reuters, end quote. So as I just said, as many as 5,000 trades are settled using the system daily. And apparently this has reduced foreign exchange trading costs on those trades in particular, I guess, by 25%. So I thought all was quiet on the crypto front, as I said yesterday, at least when it came to Wall Street.

And perhaps the big banks were quietly dropping what they maybe had come to. think of as a fad. But what if the opposite is actually true? Maybe there are tiny signs here that the practical application of blockchain in financial systems is actually dawning right now, right before our eyes. Now, there most definitely has been a lull in product announcements after the deluge of CES, but that's about to come to a change over the next couple of weeks in a big way with Samsung, among those expected to make headlines with new device announcements very soon. But that same company has also gotten the ball rolling by today announcing a 10.5-inch Galaxy Tabb S5E, reportedly its lightest and thinnest ever tablet, and the first tablet with the Bixby

Personal Assistant built in, all starting at $399 and launching in the spring in Q2. But that's not all because Samsung accidentally leaked. its entire lineup of new products that are expected to be announced alongside the Galaxy S-10 next week. Quote, the Galaxy Wearable App for Android, formerly known as Samsung Gear, now displays several new products on the front page, including wireless earbuds, a smartwatch, and a fitness band. The update was spotted by Twitter account Sam Central Tech, end quote.

So the smart watch appears to be called the Galaxy Watch active, though no clue on what that entails the Galaxy Fit and Galaxy FitE appear to be the fitness bands, and the Galaxy Buds appear to confirm Samsung's latest wireless earbuds. The rumor on those little guys is that they can reportedly charge wirelessly using the Galaxy S-10 as the power source itself. Time for the weekend long reads suggestions beginning with our podcast recommendation. I made fun of nerds this week for being bad at social mores, but there's absolutely no reason nerds can't buck stereotypes when it comes to being healthy, being athletic, being active. I would make a case for being nerdy about health, actually. The Strong Web podcast is for

entrepreneurs and web developers who enjoy fitness and are interested in living a better life. It's hosted by Eric Arbe, a full-stack developer and former touring golf professional. Past and future guests have included David Heinemeyer Hansen, West Boss, Chris Coyer, Dan Mall, and many more. This year, the show just launched several mini-series with the first one centering on content creators and people who make a living by putting out educational content or software for the web. So be creative, learn to be a better dev, and also learn to live healthier. Search your podcast app for The Strong Web. First up for the long reads.

Tuesday's show got a lot of feedback about tracking and surveillance and Amazon buying ERO and what our smart home future might end up doing to our sense of privacy. Around that same time, I ran across this piece by NBC News's tech correspondent Jacob Ward that posits that it's data, not privacy, that we need to be worried about. This section especially got to something I've been thinking about a lot lately. And in the future, the handing away of anonymous data to companies is going to give them. so much insight into human behavior that the systems built on that data may sweep all of us up without our conscious participation in the process, end quote.

Well, what I've been thinking about lately is that I'd argue we're already there and actually you don't even have to participate in the process to be a part of the matrix. Read this one for sure because we're going to go deeper into it soon. Second, I've hinted here because I've seen it alluded to in a bunch of places,

but quietly it seems like Uber Eats has turned into Uber's secret weapon, quite possibly a monster business that might help paper over any issues with Uber's larger ride-hailing business when Uber IPOs later this year. Well, Biz Carson in Forbes has the goods. Quote, Uber Eats is on track

to deliver some $10 billion worth of food worldwide this year up from an estimated $6 billion plus last year. Uber takes a 30% cut and a delivery fee then pays drivers, suggesting that Uber Eats could generate at least one billion in revenue this year or an estimated 7 to 10 percent of the total. That means Uber Eats is already among the planet's largest food delivery services and ranks second in the U.S. behind rival Grubhub, end quote. Also this quote from the piece from Uber CEO Darakosha. When I first joined Uber, I think Uber was much more associated with ridehaling and Eats was this interesting part-time endeavor. It has since

exploded in a good way into a truly significant business, end quote. Next, I haven't talked a lot about Zillow on the show, but the big feature piece this week in Bloomberg Business Week is about Zillow and a slew of other startups who are continuing to plug away at bringing technology to real estate, specifically. Did you know you can now sell your home to Zillow? Zillow will now buy your home from you. They started doing this last spring. and as the piece outlines

Wall Street has been skeptical about Zillow's pivot from merely being a real estate ads platform to becoming an actual real estate flipper, a buyer and a seller. And indeed, it is a risky bet. Ads are a high margin relatively simple business. Actually flipping homes is capital intensive and low margin, but Zillow thinks its reams of data on real estate markets

and clever algorithms can help it succeed. Next, the New Yorker. Times has a profile up of the two founders of Atlassian. And while entrepreneur porn is always fun to read, the Atlassian story is especially fun because the two founders, Scott Farquhar and Mike Cannon Brooks, essentially bootstrapped their way to a $20 billion business. As someone says in the piece, quote, okay, tell me a company in the valley that listed with a $5 billion market cap and where the two founders owned 75%. They didn't need Silicon Valley, end quote. And that's the other cool part about this story. Atlassian is an Australian company. The Atlassian guys are Australia's

first tech billionaires. And as the piece outlines, it's interesting to see the cultural implications of that in this case. And finally, a super long read from Clive Thompson in the New York Times. It's an excerpt of his new book, Coders, that is coming out in March. I'm actually in the middle of reading an advanced copy, and hopefully we'll have Clive on for a weekend episode next month. Coders is about the whole wide scope of software developing in general, but this excerpt in particular is about something that I bet you didn't know. Computer programming as a profession and a calling once had a much better gender balance than it does today. In the U.S., in the 1960s, one in four programmers were women, more than one in four, in fact. And even more recently than

that, the proportion of women who were programmers professionally was 35%. That was in 1990. That number fell to 26% by 2013. What changed and why? Check the last link in the show notes to find out. That's all for today. I've been your host, Brian McCullough. Super interesting weekend bonus episodes this weekend. I talked to NBC's Jacob Ward about that first long read on today's show,

about how it's data, not privacy, that we have to worry about. And I talked to Apple Scooper extraordinaire Mark German about what else? Apple. Enjoy those and talk to you again on Monday.