Tech Brew Ride Home - Fri. 04/24 - Google Battens Down The Hatches

Episode Date: April 24, 2020

AT&T’s CEO rides off into the sunset is both a surprise and not a surprise at all. Whole bunch of interesting Google news all at once. More on that iOS zero-day, more data on tech industry hiring and layoffs, and, of course, the weekend longreads suggestions. Sponsors: TinyCapital.com CognitoHQ.com Links: AT&T CEO Randall Stephenson to step down, COO Stankey to take over (CNBC) Google to cut marketing budgets by as much as half, directors warned of hiring freezes (CNBC) Google ditched tipping feature for donating money to sites (TechCrunch) Google will make all advertisers prove their identities, so people can see who they are and which country they’re in (CNBC) Apple Finds No Evidence Hackers Exploited iPhone, iPad Mail Flaw (Bloomberg) Tech companies pull back on hiring, flashing another grim warning sign for the U.S. economy (CNBC) Weekend Longreads Suggestions: Silicon Valley balanced grueling schedules with workplace perks. Coronavirus is forcing change (CNET) Preppers Are Quite Prepared to Enjoy Some Vindication (NYTimes) Following the money in a massive “sextortion” spam scheme (Sophos) How Instagram managed to survive antitrust scrutiny when it was acquired by Facebook (Fast Company) IN THE CORONAVIRUS ERA, THE FORCE IS STILL WITH JACK DORSEY (Vanity Fair) Subscribe to the ad-free feed right here, inside your podcast app! 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 Techmeme ride home for Friday, April 24th, 2020. I'm Brian McCullough today. AT&T's CEO rides off into the sunset, as both a surprise and not a surprise at all.

A whole bunch of interesting Google News all at once, more on that iOS Zero Day, more data on tech industry hiring and layoffs, and of course the weekend long read suggestions. Here's what you miss today in the world of tech. This might be a bit inside baseball, but it is big news, even if you're not. if you're not familiar with some of the names, AT&T CEO Randall Stevenson is stepping down from his post and the current president and C.O. John Stanky will be taking over the CEO position beginning July 1st. Now, I'm not sure how far to get into the weeds here, but Stevenson leaving now is sort of surprising. And at the same time, it was widely expected. He would leave soon. And yet at the same time,

there had been activist investors who were pushing Stevenson to leave earlier. And the whole Stanky taking over thing is eyebrow raising because Stanky is the dude that pushed AT&T to get into the content business, which was always controversial. Like if you've been anticipating HBO Max, Stanky is the dude that made that happen. He's also the dude that pushed out all of the old blood at HBO, the old blood that some people like me would call geniuses. Anyway, this is from CNBC, quote, Stanky, who was being groomed as Stevenson's successor over the last couple of years,

recently dropped his position as CEO of AT&T's Warner Media, which will soon be led by Hulu co-founder Jason Killar. Elliott Management, the activist investment firm that pushed for executive changes at AT&T, said it supports Stanky as the company's next CEO. The firm had previously been skeptical of putting stanky at the helm of the company. CNBC previously reported, end quote. So, yeah, you can see there are layers within layers of kremlinology that you could go into here if you want. Who's really winning now is hard to say, and what this means for AT&T going forward is even harder to say, as Edmund Lee

at the New York Times tweeted, quote, activist investor Elliott was upset with Stanky's elevation to C-O-O last year and tried to stop his rise. Here's what Elie is. Here's what Elie. Elliot says now. Elliot supports John Stanky as AT&T's next CEO. We look forward to working with John as he begins his term as CEO, end quote. Stanky's appointment is not surprising. It was his to lose, but the main question I have is the timing. Randall Stevenson had said he would stay on as CEO through this year at least. What happened? End quote. Paging Dan Premack or Peter Kafka or somebody. Tell us what's going on here. here. A whole bunch of Google news over the last 12 hours. First of all, as expected, Google is

feeling the pinch of the coronavirus moment. Internal documents seen by CNBC suggest that Google plans to cut its marketing budget and marketing spend by 50% for the second half of this year, while at the same time freezing all marketing-related jobs and hiring. This would be a more dramatic cost-cutting move than Google had been telegraphing even last week, quote, the drastic move comes a week after Alphabet CEO Sundar Pachai said Google would be pulling back on some of its investments for the rest of the year amid the COVID-19 crisis, starting with hiring. However, at the time, Pachai only said it would recalibrate, quote, non-business essential marketing and, quote, significantly slow down hiring. There were not mentions of such drastic

budget cuts or hiring freezes, end quote. Google, by the way, spent $18.46 billion on sales in marketing in 2019. Though, not all of that is straight up marketing. A lot of that represents the cost required to acquire clicks for its own advertising business, but at the same time, I've seen numbers suggesting that search marketing in terms of ad spend across the board has been dropping as much as 20 to 25% over the last month. And as ever, you know, that's Google's everything in terms of revenue. Also, remember what we said just this week vis-a-vis Snapchat.

and Google and Facebook in terms of the sorts of advertisers that Google and Facebook rely on. They tend to rely more on small businesses and, of course, small businesses right now. So anyway, Josh Constine also saw some leaked images from 2019 that suggest Google had been considering a feature which would let users tip money to websites like Wired or the New York Times as part of its contributor program, quoting from TechCrunch. Last year, Google explored tipping as a new wing of Google contributor, a service that lets people pay around 1% per page view to remove ads from partnered websites. Screenshots of the tipping features showed the ability to make one-time donations of 20 cents to $5 to help support sites.

Want to see more content like this on our site? Support with a contribution, one version explained. It's unclear if Google would have taken the same 10% cut of tips that it does from contributor ad removal fees. Google mocked up designs for tipping on sites like the New York Times, wired, and even TechCrunch. If Google had launched the tipping feature, it could have provided a valuable tool to sites battered by the declining display ad market. And now amid coronavirus lockdowns that have canceled events and reduced podcast listenership that media publishers rely on for revenue, the ability to accept donations could have helped sites avoid laying off staff. Perhaps Google should consider resurrecting tipping as a more sustainable form.

of assistance alongside its new journalism emergency relief fund, end quote. And finally, Google announced that it will now require all advertisers on its platform to verify their identities, beginning first with advertisers in the U.S., and all existing advertisers have only 30 days to complete the verification process. Quoting CNBC, Google is making the change to prevent advertisers from misrepresenting themselves and says it should allow customers to see who's running ads and which country they're located in. Consumers have seen a proliferation of ads for products from dubious advertisers like fake vaccines in recent months, fake businesses have also been an issue. Existing advertisers will have 30 days

once notified to complete the verification process since the company is doing the rollout in phases, according to a spokeswoman. If they don't submit the documents by then, Google said it will suspend the account and the advertiser's ability to serve ads until they provide it. The company said consumers will start seeing disclosures that list this information on the advertiser when they click, why this ad, on placements beginning this summer. Google will begin by verifying advertisers in the U.S. and will expand globally, expecting that the process will take a few years to complete. Google began requiring political advertisers to verify their identity back in 2018 before running

election ads, end quote. as someone who has bought Google ads for the better part of 20 years, to me, the most shocking thing is that Google announced this out of the blue and is only giving advertisers 30 days to comply. Forget what they just said about that being a phased rollout. Because usually when Google makes a big change like this, it's super, super slow. Even if it's cosmetic changes like to the ads dashboard or something like that, they phase it in over months or even years. So doing something this fundamental and giving advertisers only 30 days to comply, I'm super curious to know what is behind the sudden urgency.

And also, if you're not familiar with how Google ads works, consider this. For 20 years, Google never asked advertisers to identify themselves before. Never once. Let that sink in for a moment. And you might get a sense of what a big deal, this sudden change in philosophy really is. Remember that story from earlier in the week about an iOS Zero Day that was found by the cybersecurity company ZECOps, and which affected basically all iPhones and iPads for over a year? Well, it turns out that the vulnerability was in the Mail app. And while a patch of the mail app is still forthcoming, Apple says it has found zero evidence yet that hackers were actively exploiting this Zero Day exploit. quoting Mark German. Apple is countering assertions by cybersecurity company ZECOps that software flaws may have allowed hackers to infiltrate iPhones and other iOS devices for more than a year.

Apple launched an investigation and said in a statement, The mail issue was insufficient by itself to allow cyber attackers to bypass built-in security, adding it will fix the issue soon. We have thoroughly investigated the researchers report and based on the information provided have concluded these issues do not pose an immediate risk to our users. The researcher identified three issues in mail, but alone they are insufficient to bypass iPhone and iPad security protections, and we have found no evidence they were used against customers, end quote. I've got some more data here, so let's do another quick high-level check-in on hiring slash layoffs in the tech industry and the startup ecosystem. analysts say they're seeing drops of around 20% in job openings at tech companies and startups from mid-March to mid-April with steep drops in sectors like supply chain logistics and delivery,

i.e. big pullbacks around e-commerce companies, quote, the drawdowns have been especially acute in the Bay Area and in the sub-sector of internet and technology, including companies like Pinterest and Yelp. These platforms have reported significant bumps in user engagement, but they have been offset by a sharp slowdown in advertising spending. Even more traditional roles seem to be on precarious footing. Postings for software, hardware, and IT jobs have all dropped double digits between mid-March and mid-April. Between January 1st and April 15th, well-established hardware companies like analog devices, Dell, Intel, and Micron have all cut job postings between 30 and 60%. Over that same time frame last year,

the companies either increased listings or held fairly steady. Even industries seemingly poised to benefit amid strict social distancing measures have seen wide pullbacks in job postings. Cyber security infrastructure seems like it would be as important as ever with more people working from home, but those companies aren't necessarily ramping up hiring. Of the top 20 most valuable public cybersecurity companies tracked by ThinkNum, six have reduced the number of job posting since the start of the year. Two have held hiring steady, while just two others have added to their job boards. and FinTech has seen one of the starkest divergences in hiring trends.

Some firms have benefited from the shift to digital and contactless payments like PayPal. The company nearly doubled the number of job postings between January 1st and April 15th. During that same period last year, listings actually declined, but hiring at some of the most highly valued financial tech startups like SoFi and Stripe are down double digits since the start of the year. Overall, of the 219 privately held tech companies with valuations of a billion dollars or more that are tracked by LinkedIn, supply chain logistics and delivery companies are slowing the fastest with a decline of 72% in job postings. Travel startups have also been slammed with listings down 47% just between February and March, end quote. Time for the weekend long read suggestions.

first off, CNET looks at how Silicon Valley workers are coping with the whole work-from-home strain. For decades, Silicon Valley sold itself as a worker's utopia. The promise was that if you worked hard, you'd succeed with big salaries, employee perks, and stock-option payoffs that could make you a millionaire. This is the driving force behind the always-connected work culture in Silicon Valley, but for families stuck at home with no caretaker backups to speak of, many employees are being left to choose between caring for loved ones and doing their daily work. The non-stop 24-hour work culture that led many tech companies to hire high-end chefs for free food cafeterias,

offer on-site car oil changes, and in some cases do free dry cleaning, is running up against the realities of child care and other family care in self-quarantine at-home situations. The unspoken agreement that all those benefits came in exchange for long and grueling work hours is falling apart at home. Quote, you want to know who's really having a moment right now? The preppers. We said on last weekend's bonus episode, Tech folks were early in sounding the alarm on the coronavirus, and there's a lot of self-styled preppers in the Valley,

as the time says, quote, now with COVID-19, they feel vindicated because they are. The coders and founders long snickered at for stockpiling flour and toilet paper were absolutely right. Properly masked and drenched in purified. they are railing against a tech press that they feel mocked them as late as February for reducing travel and not shaking hands. They are, of course they are, making a slew of COVID-related startup investments, and a cool-headed blog called The Prepared, with features like prepping checklist

for beginners and rational reasons you should prepare, is emerging as a voice of the movement, end quote. You know how in the wire, they said if you follow the money, you never know where you'll end up, well, Sophos News actually did this, actually followed the money and the profits and everything else surrounding a sextortion spam scheme that I actually think we talked about earlier or maybe later last year. Remember those emails saying, you don't know me, but I'm emailing you because I saw what you did on your webcam and I've got the video to prove it. I know I got those. Anyway, SOFOS followed the crypto wallet addresses that scammers used to collect their extortion money relating to this scam, and quote, While the extortion scams themselves were hardly innovative, the cryptocurrency flow wasn't the only thing that suggested a certain sophistication behind some of these attackers.

Many of the messages relied on a number of technically interesting obfuscation methods to try to slip by spam filters. and while the vast majority of recipients either never saw the messages or didn't pay, enough saw and fell for the ploy that wallets associated with the messages pulled in 50.98 BTC during the five-month period. That amounts to roughly $473,000 based on the average daily price at the times the payments were made and an average of $3,100 a day, end quote. Another excerpt from Sarah Fryer's Instagram book called No Filter. this one looks at the whole background of the Instagram acquisition by Facebook and how it managed to evade antitrust scrutiny.

Quote, the regulators were short-sightedly looking at the current marketplace and ignoring what Facebook and Instagram had the potential to be in a few years or even months. The real value of Instagram and Facebook together was their network effect, the momentum they gained as more people joined. Even if someone enjoyed using an Instagram competitor like Path, if their friends weren't on, it, they wouldn't stay. Path shut down in 2018 after selling to a South Korean company. Zuckerberg understood that. Understood that the hardest part of creating a business would be creating a new habit for users and a group they all wanted to spend time with. Instagram was easier to buy than to build because once a network takes off, there are few reasons to join a smaller one. It becomes a part of the infrastructure of society, end quote.

And finally, once again, I can't get enough of Jack Dorsey profiles. especially one that comes from Nick Bilton, and especially one that includes details like these. This is from Vanity Fair. For the past four and a half years, Jack Dorsey has been living his best life. While the 43-year-old multi-billionaire is one of the only CEOs on the S&P 500 who oversees two public companies, Twitter and Square, with more than 8,000 employees, and is an angel investor or advisor to startups. Until the coronavirus recently obliterated the global economy, he might have been one of the least stressed out people in America. As he talked about last year when he went on a podcasting spree,

each day Dorsey wakes up in his multi-million dollar glass mansion with postcard views of the Golden Gate Bridge, checks to see what the sleep tracking ring on his finger says, then lowers himself into an ice bath before meditating in a warm tent sauna. This is followed by a seven-minute workout and then drinking his breakfast, which he calls salt juice, a concoction of water, salt, and lemon, which is the only thing he will eat until the evening when he enjoys his single real meal of the day. His day wraps up in a slightly more extreme version of the way it began with a ritual of 15 minutes in his barrel sauna, followed by three minutes in his ice bath, which he does back and forth three times for an hour.

Then he meditates again. People close to Dorsey caution, though, that his health routine changes frequently so what he's doing now likely doesn't align with what he talked about months ago, end quote. Yeah, I'll admit it. I'm petty enough that I eat those sorts of details up. But more importantly, the piece goes into greater detail on the whole activists trying to fire Jack from Twitter thing. And the piece ends this way, quote, In an uncanny twist, given the virus now decimating the global economy, Dorsey might have just received a stay of execution. Any stock declines will be attributed to coronavirus eviscerating the markets as a whole.

According to someone familiar with the company's internal projections, the amount of time people spend on Twitter is expected to rise this quarter. While people around the globe are on lockdown in their homes, the one place millions are turning for a constant flow of information is social media, especially Twitter. More importantly for Dorsey is that with travel bans and social distancing, Cohn's CEO search will be limited. And the killer likely won't be able to even attend the first board meeting in person, which means Dorsey won't be sweating as Cohn presses him with tough questions, unlike the board members who oversee the company now. But even the virus might not be enough to save Dorsey in the slightly longer term. According to one person familiar with Elliott and Silver Lake's thinking, there is another scenario. Inevitably, the two investment firms could team up to acquire Twitter, taking it private and turning it into a true global utility akin to a telecom or cable giant.

If this were to happen, the board would be disbanded and Dorsey would be cast out and never let back into the building. Quote, Jesse Cohn will get his way. the cone observer said. I can assure you one way or another, Jesse will get his way. Jack has no chance, end quote. Have you all heard about that new social network that all the cool kids are using all the sudden? Clubhouse is the name. Hey, Clubhouse, I'm a cool kid in Silicon Valley. Maybe send an invite my way, not just for me, you understand, but so I can report back on Clubhouse to all the cool kids who listen to this show. you could always send a bunch of invites so that I could spread them around to the listeners. Thanks in advance. By the way, all you cool kid listeners, we've got a super cool weekend bonus episode coming

your way tomorrow talking about something I've been dying to dive deeper into for months now. When you listen, you'll understand why, because we're going to discuss the company that I think maybe has the best shot at becoming one of the new tech oligarchs over the coming years. So enjoy that. And now, not safe for work. Curse word. Trigger warning coming at you in five, four, three, two. Because I'm in a mood, y'all, riding into the weekend like...

Picture this. I'm a bag of dicks. Put me to your lips. I am sick. I will bunch of baby...