Tech Brew Ride Home - Fri. 06/26 - Amazon Buys Self-Driving Startup Zoox

Episode Date: June 26, 2020

Amazon is officially in the self-driving car game. Microsoft is officially keeping its retail stores closed… forever. Verizon had joined the Facebook ad boycott. And of course, the weekend longreads suggestions. Links: TinyCapital.com Tovala.com/ride Links: Amazon to buy self-driving technology company Zoox (CNBC) Microsoft is permanently closing its retail stores (CNBC) Verizon is pulling advertising from Facebook and Instagram (CNBC) TikTok says it will stop accessing clipboard content on iOS devices (The Verge) Weekend Longread Suggestions: How India’s Jio Won Facebook’s Heart (The Information) How a “crazy Dutch guy” won the online food delivery war (Silicon Canals) How Uber Turned a Promising Bikeshare Company Into Literal Garbage (Vice) The Credit-Card Fees Merchants Hate, Banks Love and Consumers Pay (WSJ) Top composers used to head to Hollywood. Now they’re into games (Wired) Reddit turns 15: The dramatic moments that shaped the internet's front page (Mashable) 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, June 26th, 2020. I'm Brian McCullough today. Amazon is officially in the self-driving car game. Microsoft is officially keeping its retail stores closed forever. Verizon has joined the Facebook ad boycott and, of course, the weekend long read suggestions. Here's what you missed today in the world of tech. Amazon has signed an agreement to acquire self-driving car startup Zooks, reportedly for $1.2 billion or so. As I think we said, when the rumors about this first hit, Uber always looked down the road and saw a future without the labor cost of drivers. But really, similar calculus has to be obvious to Amazon as well,

and perhaps automation would be easier to achieve for delivery vehicles. And if anyone has a track record for making automation and robots work, it's Amazon, quoting CNBC. Zooks is working to imagine, invent, and design a world-class autonomous ride-hailing experience. said Jeff Wilkie, Amazon's CEO of Global Consumer, in a statement, quote, like Amazon, Zooks is passionate about innovation and about its customers, and we're excited to help the talented Zook's team to bring their vision to reality in the years ahead, end quote. Shares of Amazon move slightly higher following the news. It's a large deal for Amazon, which acquired Whole Foods for $13.7 billion in 2017,

but as otherwise generally made acquisitions of less than a billion dollars, with regulators bearing down on Amazon's every move because of its dollar. dominance in e-commerce and treatment of warehouse workers during the coronavirus pandemic. The purchase of Zooks is certain to attract scrutiny from lawmakers and criticism from rivals. It's also not immediately clear what Amazon plans to do with Zook's technology, but it's possible Amazon could integrate Zook's offerings into its logistics network to offer cheaper and faster delivery, as well as its cashierless grocery stores. Zooks, which was valued at $3.2 billion in a financing round two years ago,

says on its website that it, quote, is creating autonomous mobility from the ground up. But the Silicon Valley Company has struggled due to turmoil in its executive ranks. GoFounder and ex-CEO Tim Kentley-Clay was fired from his leadership post in 2018, a legal fight with Tesla over alleged theft of trade secrets and overall delays in bringing self-driving technology to market, end quote. Microsoft has announced that it will permanently close all 83 of its Microsoft Store retail locations and focus entirely on its online stores instead. Quoting CNBC.

In the past decade or so, Microsoft began to expand its retail presence in an effort to create a shopping experience similar to Apple's, where people could go to try new Microsoft software and hardware created by both Microsoft and its partners. Microsoft even built a store on Fifth Avenue in New York City just blocks away from Apple's iconic Glass Cube store. This decision to close permanently comes after Microsoft decided to temporarily close, stores in March due to the spread of the coronavirus. Microsoft said the closing of its physical locations will result in a pre-tax charge of approximately $450 million or five cents a share, which it will

record in the current quarter that ends June 30th. The charge includes primarily asset write-offs and impairments, Microsoft said. Microsoft will continue to invest in its digital storefronts on Microsoft.com and stores in Xbox and Windows, reaching more than 1.2 billion people every month in 190 markets, Microsoft said. The company will also reimagine spaces that serve all customers, including operating Microsoft Experience Centers in London, New York City, Sydney, and Redmond campus locations, end quote. Verizon has joined the boycott of Facebook advertising, pooling their ads until Facebook, this is Verizon's words, has, quote, an acceptable solution that makes us comfortable.

Quite obviously, Verizon represents the largest advertiser that had yet joined the boy. Quoting CNBC. On Thursday, the Anti-Defamation League addressed an open letter to companies advertising on Facebook, signed by the organization's CEO and national director Jonathan Greenblatt. In the letter, the organization said it, quote, found an advertisement for Verizon, appearing next to a video from the conspiracy group, QAnon, drawing on hateful and anti-Semitic rhetoric, warning that the Federal Emergency Management Agency is planning to bring on civil war with concentration camps and coffins at the ready and claiming Americans are already corned. in militarized districts, end quote. We have strict content policies in place, and we have

zero tolerance when they are breached. We take action, Verizon's chief media officer John Niddy said in a statement, we're pausing our advertising until Facebook can create an acceptable solution that makes us comfortable and is consistent with what we've done with YouTube and other partners, end quote. According to marketing analytics company Pathmatics, Verizon spent an estimated $406,000 in Instagram ads between May 22nd and June 20th. The firm also said that Verizon spent $1.4 million on Facebook in that same time period. Facebook didn't immediately return a request for comment Thursday. According to the Wall Street Journal, however, the company sent a memo from the company's VP of Global Business, Carolyn Everson, to advertisers last week, saying that it does

not, quote, make policy changes tied to revenue pressure and that it sets policies based on principles rather than business interests, end quote. Now, you will note that while Verizon is clearly a big company, its spend on ads on Facebook properties was rather paltry. I don't think Facebook is too worried about this particular pullback. But just a few minutes ago, the news dropped that Consumer Products giant Unilever was pulling U.S. ad spending from Facebook, Instagram, and Twitter for at least the rest of the year.

Quote, during this polarized election period, continuing to advertise on these platforms at this time would not add value to people and society, end quote. In other words, according to Unilever, if you're the maker of, say, Lipton Tea, Helmand's mayonnaise, surf laundry detergent, for the next few months, it's basically too dangerous to your brand right now to advertise on social media. But also, as Casey Newton tweeted, very cynical take, ad budgets are shrinking already during the pandemic. Why not get some applause? for it, end quote. TikTok says it will stop clipboard snooping.

What happened here is, in the earliest builds for iOS 14, there's a new feature that reveals when apps attempt to read the clipboard. And oopsie, although TikTok says it was reading your clipboard to better identify spammy behavior, this is still not a good look, quoting the verge. Whenever a third-party app accesses the clipboard of a device with iOS 14, a notification pops up. Users discovered that TikTok was checking content from the clipboard every few keystrokes, even when the app was running in the background. TikTok parent company Beijing-based bite dance had said earlier this year, it planned to stop accessing devices clipboards, the Telegraph

reported, but did not give a firm date. A TikTok spokesperson said in a statement emailed to the verge on Friday that it had submitted an update to the app store to remove the feature, which it described as an anti-spam measure. The feature was never introduced to Android devices, according to the company. Following the beta release of iOS 14 on June 22, users saw notifications while using a number of popular apps. For TikTok, this was triggered by a feature designed to identify repetitive spammy behavior, the spokesperson said, adding the company was, quote, committed to protecting users' privacy and being transparent about how our app works, end quote. René Richie tweeted, quote, I love how last year Apple Bluetooth shamed so many apps into cutting out illicit tracking.

Now, this year, Apple is clipboard shaming apps. to cutting copy snooping. More of this, please, end quote. But note this tweet from Ketalin Sampano, quote, TikTok is not the only one. Literally almost everyone does it, especially at app startup. And the reason why Apple added the feature in the first place

to dissuade app devs from doing it, end quote. Time for the weekend long read suggestions. The first one up is from the information. so it is behind a pretty hard paywall, but it's also about Mukesh Ambani, Reliance Geo, how Reliance Geo and Ambani got so big and so rich, and specifically, how Reliance Geo would Facebook to be an investor. It is largely about the whole Facebook angle of this story, but if you are able to read this, I think you can use it as a lens to understand why everyone suddenly wants a piece of Reliance Geo. This is what I've been waiting for. For instance,

This is from the beginning of the piece, quote, How Gio rose to prominence in such a short period speaks to the opportunity big tech companies see in India, which, despite being the world's second most populous country with 1.35 billion people, has been a tough market for making money. China, in contrast, has a much bigger middle class willing to pay for services. Few tech companies have earned significant revenues from Indian consumers and India's two most valuable startups, digital payment firm Paytm and Hotel Chain Oyo,

are still struggling to become profitable, end quote. Then this is from later in the piece, quote, before Geo, charges for mobile phone data were far too high for most Indians to afford. Many mobile users would turn off their data plans when leaving the house to avoid running up high bills accidentally. People couldn't afford to stream Facebook videos to smartphones so they would save them to watch at home, said Puja Gupta, who worked at Geo between 2015 and 2019. But since Geo launched in 2016 with Ultra-Longed,

low-cost data plans, the number of subscriptions for wireless broadband packages from all carriers has soared from 175 million to more than 650 million, according to Indian government data. That has created an opening for companies like Amazon and Netflix, which are looking for their next 100 million users. And Bonnie built his state-of-the-art wireless network at a time when rivals struggled to make similar investments. The network was so advanced that it didn't even offer slower 2G and 3G signals requiring Geo to sign carrier agreements with competitors to support older phones. But Geo's new network had the capacity to carry data at costs far lower than those of competitors, which allowed it to offer free data and voice services for a limited time to attract

customers. In some regions, demand was so high for geo services that customers had to wait in lines more than a mile long to get Sims, one executive said, end quote. So it does look like that the angle here is that Gio was the one company that cracked open the adoption of mobile data. And so anybody that would want to do business on mobile data, everyone from Amazon to Facebook to you name it, wants to get in line here. And it also turns out that Ambani and Gio took the catchphrase, data is the new oil, seriously. See, Ambani and his other businesses has a war chest because he's in oil, retail, and media, and so he used all of that to finance this massive move into digital, and seemingly everyone else now sees the opportunity that he did. Next, another one explaining a company and a billionaire that I was not that familiar with, and this one is not behind a paywall. Remember how Just Eat Takeaway recently acquired Grubhub. Well, let me introduce you to Jitzy Grone, the founder of Just Eat Takeaway, profiled by his one-time C-O, quote,

Having set up Takeaway.com as a student and worked on it his entire professional life, Grown understood in his blood, not just that number of orders sent to restaurants is the North Star metric in the industry, but that there are two key ways to get there. Dominate restaurant supply and be top of mind for consumers. Everything else, including the question beloved of bankers, of who does the delivery, is just noise, end quote. motherboard takes a look at Uber's acquisition of Jump, the Bikshare startup, and how it has seemingly been a complete failure. But the reason for its failing, at least according to motherboard,

is not having a clear sense of what the business actually was, at least not as clear a sense as the quote that I just read to you, quoting from the motherboard piece. Holt brought an Uber 1.0 approach to Bikshare, one that mimicked what companies like MoBike and OFO were doing. They flooded the streets with bikes under the philosophy that any second a bike is not on the street, it's losing money. They expanded to new markets and hired so many people so fast. Some employees spent half their time in hiring meetings and prospective employee interviews. Teams doubled or tripled in size within months, only to find they were now overstaffed. Bike mechanics at the main warehouse would have thousands of bikes to build that were just delivered from China,

but local mechanics in the cities where Jump operated didn't have spare parts to fix the bikes on the store. street. In other words, jump employees felt Uber was applying a software business mentality to bike share. It was, to Jump's longtime employees, a fundamental misunderstanding of what kind of business they were in. Uber was running Jump with the mindset that anything that's broken can be patched, but as one employee put it, quote, a firmware update can't fix a bike chain, end quote. Also, I want to share this Wall Street Journal piece about credit card merchant fees. Well, what's the tech angle there. Well, when we talk about fintech and payment startups going after the credit card industry, we're talking about interchange fees. Read this piece to understand the market that new

style payments companies are either trying to disrupt or at least claim a piece of. Paraphrasing Jeff Bezos, of course, your margin is my opportunity. And quoting from the piece, when you buy something with a credit card, the merchant often remits around 2% of the price to the bank that issued it. The fee can be higher, At times around 3% on more generous rewards cards, the bank returns some of these interchange fees, also called swipe fees to the cardholder in the form of rewards, including cash back, points, or airline miles. Separate smaller fees are paid to the payment networks such as Visa and MasterCard and to the financial institution that helps process the transactions. Because retailers' profit margins are slim, they pass some of the fees onto customers through their higher prices, according to the National Retail Federation. Because customers typically pay the same price, whether they use cash or a card, economists say this

equates to a transfer from users of cash to users of cards. How much of a transfer? On average, a cash-using household pays $149 a year, and a card-using household receives $1,133, according to a 2010 study from the Federal Reserve Bank of Boston. The discount to customers who often make hundreds of thousands of dollars a year is a giant reverse Robin Hood moving billions of dollars a year, said Aaron Klein, a fellow at the Brookings Institution specializing in the financial industry, end quote. Music composers used to head to Hollywood to make big money by creating scores and soundtracks for movies. Now, according to Wired, top composers are often heading to video games to chase those

big bucks. Quote, it's not so much that film composers are flocking over to compose for video games, it's more that there's a small but potentially growing class of more generalized composers for media who love working on a variety of film, TV, and games, said Danny Kellher, founder and CEO of Laced Records, which specializes in digital and vinyl soundtrack releases for games. It feels like video game music is finally receiving the praise and mainstream recognition it deserves, and this is helping to attract more composers to the medium. These composers draw heavily on Hollywood's orchestral language, but they have to reinvent it, too. They must transform the passive music of film into the active music of video games, end quote.

And finally, donning my history had, as you know I love to do, Reddit is turning 15. And more than most, certainly more than most major tech platform oligarchs, other than maybe Twitter, Reddit had a really convoluted, downright, tortured and twisting life so far. Read the Mashable piece that is the very last link in the weekend, Long Read's section of the show notes. for the gritty Reddit details of its last 15 years. Quick correction, I made the joke yesterday that Amazon's new counterfeit crime unit sounded like a television cop procedural, sort of like CSI or NCIS or something like that. But, of course, those shows were all or are all CBS shows.

So I apologize. That shows you how much I actually watch network television. That is all for today, but it is all for today. is not all for this week. We've got a weekend bonus episode coming at you tomorrow where we talk to the great Apple Watcher, René Richie, about WWDC this week, a deeper dive into everything we saw at the keynote, but also much more than I've been able to mention about what's been happening at all the developer sessions all week. Look for that and look for me again on Monday.