Tech Brew Ride Home - Fri. 03/08 - Senator Warren Wants To Break Up Big Tech

Episode Date: March 8, 2019

Senator Warren proposes breaking up big tech, Airbnb buys HotelTonight, why the big platforms are taking down vaccine content, and of course, the weekend longreads suggestions. Subscribe to the Premium, Ad-Free Podcast Feed! Sponsors: Logianalytics.com/ride Metalab.co Links: Here’s how we can break up Big Tech (Warren For President) Airbnb Wanted Travelers To Stay In Homes. Now It's Buying HotelTonight. (BuzzFeed News) Three Reasons Behind Airbnb’s Deal for HotelTonight (The Information) Turnitin to Be Acquired by Advance Publications for $1.75B (EdSurge) Combatting Vaccine Misinformation (Facebook Newsroom) Weekend Longreads Suggestions: THE HYPOCRISY OF THE TECHNO-MORALISTS IN THE COMING AGE OF AUTONOMY (WarOnTheRocks) HOW ARTIFICIAL INTELLIGENCE WILL REVOLUTIONIZE THE WAY VIDEO GAMES ARE DEVELOPED AND PLAYED (TheVerge) Delete Never: The Digital Hoarders Who Collect Tumblrs, Medieval Manuscripts, and Terabytes of Text Files (Gizmodo) How Munchery’s high hopes led to its decline and fall (FastCompany) Triton is the world’s most murderous malware, and it’s spreading (MIT Technology Review) 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. everybody, Brian here. As I mentioned on yesterday's show, we're rolling out an ad-free version of this podcast. You can subscribe to the ad-free premium feed by clicking the first link in the show notes under the episode description. I'll have more details about the new feed at the end of the show today after the

long reads. So do listen to the end today to learn more. Welcome to the tech meme ride home for Friday, March 8th, 2019. I'm Brian McCullough today. Senator Warren proposes breaking up big tech. Airbnb buys hotel tonight, why the big platforms are taking down vaccine content, and of course, the weekend long read suggestions. Here's what you miss today in the world of tech. As a part of her presidential campaign, Senator Elizabeth Warren today proposed a wide range of tech regulation policy proposals that include breaking up some of the tech giants by rolling back recent acquisitions and mergers at the likes of Amazon, Google, and Facebook. quoting from a medium post titled, Here's How We Can Break Up Big Tech, the senator wrote, quote, In the 1990s, Microsoft, the tech giant of its time,

was trying to parlay its dominance in computer operating systems into dominance in the new area of web browsing. The federal government sued Microsoft for violating anti-monopoly laws and eventually reached a settlement. The government's antitrust case against Microsoft helped clear a path for internet companies like Google and Facebook to emerge. The story demonstrated. demonstrates why promoting competition is so important. It allows new groundbreaking companies to grow and thrive, which pushes everyone in the marketplace to offer better products and services. Aren't we all glad that now we have the option of using Google instead of being stuck with Bing?

Weak antitrust enforcement has led to a dramatic reduction in competition and innovation in the tech sector. Venture capitalists are now hesitant to fund new startups to compete with these big tech companies because it's so easy for the big companies to either snap up growing competitive. or drive them out of business. The number of tech startups has slumped. There are fewer high-growth young firms typical of the tech industry, and first financing rounds for tech startups have declined 22% since 2012. We must ensure that today's tech giants do not crowd out potential competitors, smother the next generation of great tech companies, and wield so much power that they can undermine our democracy, end quote.

The senator goes on to note how half of e-commerce currently flows through Amazon, and 70% of internet traffic goes through Google or Facebook, and she specifically mentions the acquisitions of Instagram, WhatsApp by Facebook, diapers.com by Amazon, double-click, and even weighs by Google, and proposes legislation that would designate large tech platforms with more than $25 billion in revenue as, quote, platform utilities. Quoting from her post again, these companies would be prohibited from owning both the platform utility

and any participants on that platform. Platform utilities would be required to meet a standard of fair, reasonable, and non-discriminatory dealing with users. Platform utilities would not be allowed to transfer or share data with third parties, end quote. So I guess we're about to find out if the so-called tech backlash

has any sort of political constituency, at least among Democratic primary voters. Airbnb is acquiring discount hotel booking app Hotel Tonight for an, undisclosed sum. Hotel Tonight is nine years old, frequent podcast advertiser, was reportedly profitable and was valued at $463 million in a March 2017 funding round. What's in it for Airbnb? Well, look at it in a certain light, and Airbnb is in the hotel booking business already, of course.

And recently, it's been trying to position itself as a so-called end-to-end travel platform. More on that a second. First, quoting from BuzzFeed, you can already reserve rooms in boutique hotels, bed and breakfasts, hostels, and resorts on Airbnb. Adding hotel tonight will make it easier for people to find hotels to stay in at the last minute when home hosts are already booked, the company said. Quote, nearly 90% of our guests who first used Airbnb to book a hotel room and return to our platform for a second trip, then booked a home, according to Airbnb. A big part of building an end-to-end travel platform is serving every guest, whether they plan their trip a year or a day in advance, Airbnb CEO Brian Chesky said in a statement announcing the acquisition.

With Hotel Tonight, the company, quote, will offer guests an unparalleled last-minute travel experience that provides unique, memorable hospitality on every trip, on any schedule, at any time, end quote. But there's a deeper game here, one that we haven't really covered before. It's easy to think of Airbnb as the creator and main example. exemplar of its market. But in reality, it is competing with the entire hotel and travel leisure industry. So even if there is not a significant lift to its Uber, that doesn't mean that Airbnb owns the category it's actually competing in. Far from it. Among the many enormous companies

that could be seen as Airbnb's rivals is the 800-pound gorilla booking holdings, nay, price line. Quoting from Corey Weinberg in the information, on its last, EAST earnings call, executives at Booking Holdings tried to compare their company more directly with Airbnb. They said booking pulled in more than $1 billion in Airbnb-style inventory, stays in private homes essentially, in the third quarter last year. That would mean booking took in slightly less than Airbnb itself in that category. Booking.com executives often talk up their ability to offer a broad swath of lodging from high-end hotels to bungalows. The company hired a well-respected Airbnb executive a year and a half ago to build up that side of its business.

It also looked at buying hotel tonight three years ago, the information previously reported, but passed, end quote. Weinberg also notes that Airbnb is increasingly moving onto Booking's turf in its effort to be this end-to-end travel platform. Airbnb has even hinted at getting into flights in some way. Also, interestingly, as Airbnb prepares to go public, there are hints that revenue numbers and the number of hosts on the Airbnb platform is growing more slowly as the company matures. So either the rent-my-house market is saturating or increasing regulations for municipalities are biting into Airbnb's traditional business. Thus, it is looking elsewhere to juice continued growth.

From my I didn't know this existed, kind of, but hey, super interesting anyway file. Turn It In is a developer of AI software that, checks for plagiarism. I believe I've heard of the company now and then when they out some major journalism or celebrity plagiarism case, but apparently they're used all the time these days in colleges and places like that. The company was founded by four university students back in 1998. The founders had to bootstrap because back then no one would give them money for this idea. So they had to get cash flow positive ASAP and bootstrap for most of the life of the company. Today, Turn It In was acquired by Media Conglomerate Advanced Publications, the company that also owns Condé Nast, for $1.75 billion.

At that price tag, the deal is larger than the total amount invested in education tech startups in 2018, which saw $1.45 billion flow into ed tech last year. So I guess there's big money in catching liars and word thieves. Facebook has announced that it will curb vaccine misinformation by reducing the ranking, of anti-vaccine pages and groups, halting recommendations for those pages, rejecting ads for those pages, and more. Again, I wanted to flag this not to weigh in on this topic on any side of the debate,

but to highlight something interesting. You'll notice that a lot of platforms have been acting swiftly around vaccination topics and content. Pinterest straight up banned the topic entirely last month. This seems odd because there's a lot of of other controversial topics that platforms like these don't want to wait into or drag their feet on adjudicating because they don't want to get into any sort of editorial or curatorial brouhaha. So why is vaccine stuff different?

Well, there has been some recent legislative noise around this. You might have seen that teenager that testified before Congress about getting vaccinated when he turned 18 and how his mom was convinced to join the anti-vax cause because of online content. And quoting BuzzFeed, following a measles outbreak in the Pacific Northwest in January, California representative Adam Schiff sent Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai a letter that outlined concerns with the way the big tech platforms surface anti-vaccine content and urge them to take action. Last month after inquiries from BuzzFeed News, YouTube said it would prevent channels that promote anti-vax content from running advertising. The company said explicitly that such videos fall under its policy prohibiting the monetization of videos with, quote, dangerous and harmful content, end quote. And it's that last bit that I've heard through the grapevine about. It's the lawyers.

Apparently, the lawyers have told these platform companies straight up that this particular topic is a potential topic of liability mass destruction. Again, that phrase dangerous and harmful content. There is already legal precedent for liability if platforms do not take down content that threatens or implies imminent danger or harm to the broader public. In a sense, it's the terrorism content example. So apparently, the lawyers have warned these companies that all it would take would be some measles outbreak, say, to happen and infect tens of thousands of people. And then if those people who got sick or died sued the platforms for hosting content that they would claim led to a drop in vaccinations, in a given area. If that were to happen, the potential liability would be so massive that it could wipe a

company out. Yes, even a company as massive as Pinterest or even Facebook. Time for the weekend, Long Reads. No podcast recommendation this week because I haven't had time to explore any new shows this week. Busy week for me. But first up for the Long Reads, thank you to listener Joshua, who tipped me off to this story.

We've covered some of the AI backlash coming from within Silicon Valley recently. Employees at both Google and Microsoft and Amazon to a certain extent have been circulating letters and organizing internal protests about AI projects at those companies, most especially as they relate to weapons. Google, for example, backed away from the Pentagon's so-called Project Maven, if you'll recall, after employee pushback. The problem is, even a decade ago, as a software engineer, if you went to a tech company, you knew you were signing up to do a certain sort of work. And if you signed up for, say, a defense contractor, you knew you were contributing to a specific other sort of work. But increasingly, as AI and autonomy come into their own, these technologies will logically be of use to law enforcement and militaries, as well as other applications. And an argument can be made that if you're, say, an American technology company, there is nothing wrong with contributing technologies that will improve your own nation's national defense.

Especially in light of what we've also spoken about before in terms of the increasing fear that AI is a zero-sum game and whatever nation-state rockets to the forefront of AI will have an almost insurmountable strategic and military lead over others. So I point you to this piece from War on the Rocks, entitled, the hypocrisy of the technomoralists in the coming age of autonomy. Quoting from the piece, the Pentagon's clear policy should reduce the concerns of AI engineers. Both sides should remain alert to the promise and perils of the technology. Unless we can test and develop AI,

the major driver of the emerging seventh military revolution today, we will be seeding distinctive advantages to less-constrained competitors. This may end up making war far less humane. and far more costly for the military and to civilian populations. Were the techno-moralists to win their campaign, they would be responsible for the higher chance of U.S. national security interests being placed at risk due to critical vulnerabilities that are attacked by less morally burdened competitors, end quote. Again, like the vaccine stuff, I present this piece not as advocacy for one side of this debate or the other.

I can actually sympathize with both sides of this debate, but as it is an important, important debate going on right now in tech, I wanted to highlight what I thought was a thoughtful summation of one side of the argument. Next, looking at AI under a different lens, the verge has a look at how artificial intelligence will revolutionize the way video games are developed and played. Researchers are only now beginning to bring the advances in deep learning and machine learning, the stuff that has given us self-driving cars, computer vision, and natural language processing to game development. And it could give us more sophisticated games that can respond in real time, give us characters that can evolve

as you spend time with them and they have experiences in game, and much more cool stuff that we probably can't even imagine yet. Gizmodo has a look at the digital hoarders, those people who collect digital troves of literally everything, I mean everything from Tumblr sites to medieval manuscripts to terabytes of text files. There's even a 120,000 strong subreddit. forward slash digital hoarder. Check out the Gizmodo piece to go down the rabbit hole of a community of people who go down rabbit holes for fun and passion every day. Among the meal delivery services that have struggled of late or failed outright, I mentioned

last month that Munchery shut down completely. I sometimes think it's worth highlighting failures so that we can learn lessons from those failures. So check out the fast company deep dive into what went wrong at Muntary. TLDR, quote, too much VC money, an inflated valuation, growing competition, and a business that really only worked in San Francisco, end quote. And finally, a look from the MIT Technology Review at perhaps the most dangerous piece of malware out in the wild right now. It's called Triton. It was first discovered in the Middle East a couple years ago, but it's spread everywhere since.

And the malware is designed to take over the industrial systems that are in place, to prevent things like natural gas plant explosions, petrochemical plant leaks and explosions. This malware has the potential to possibly cause absolute industrial disasters that could kill thousands of people. And hackers are now using Triton to target companies in North America. Not a pleasant note to end the day on. Sorry about that. But here is some exciting news. From almost day one of this podcast, people have been asking, me for an ad-free version of the show. Well, today we're going to launch one. It will cost $5 a month,

and you can subscribe to it very simply. The very first link in the show notes today says, subscribe to the premium ad-free podcast feed. If you tap on that, you can subscribe in like a couple super simple steps right inside your podcast app itself, super easy. You can even use Apple Pay or whatever. If you listen on a desktop, the link to subscribe is kimberlite.fm. slash ride home. Yes, we've partnered with a new company called kimberlite.fm to set up this premium feed. They don't do anything other than work with podcasts to set up subscription feeds. They take a super small cut, so the vast majority of this subscription will go to us. And you'll get an email when you sign up that will allow you to manage your subscription

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Well, $5 is less than what you pay to those guys, and I hope you get as much value out of this show. show or maybe even more. And I designed this show to be useful, right? I hope this show keeps you informed, but I also designed it to be useful in a super efficient way, like in and out, 15 to 20 minutes and you're caught up on what you missed. That's part of the value of the show, right? Sort of TLDR as a service so you can get on with your life. Well, crunch the numbers again. Each show has on average two and a half minutes of ads. So if you listen to every episode, every month, that's 75 minutes, each month you're listening to ads.

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