Tech Brew Ride Home - Fri. 09/28 - Facebook Breached, Musk Faces A Ban

Episode Date: September 28, 2018

A new Facebook scandal—but this time it’s different, Slack is preparing for an IPO, an exciting new episode of Today in Elon Musk, and, of course, the weekend longreads suggestions.  Links: Slack Actively Preparing for Early 2019 IPO (WSJ) Coinbase now lets users buy 'bundles' (TechCrunch) Compound launches easy way to short cryptocurrencies (TechCrunch) Tesla's Musk pulled the plug on a settlement with the SEC at the last minute (CNBC) The Betterment Weekend Longreads: How Uber is getting flying cars off the ground (CNET) Coinbase Wants To Be Too Big To Fail (Fortune) The Apple Watch – Tipping Point Time for Healthcare (Steve Blank) Meet the Community Keeping Obsolete Supercomputers Alive (Motherboard) The first Android phone 10 years later: An annotated review (CNET) Hacker says he'll livestream deletion of Zuckerberg's Facebook page (Engadget) 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 right home for Friday, September 28th, 2018. I'm Brian McCullough. Today, a new Facebook scandal, but this time it's a bit different. Slack is preparing for an IPO. There's an exciting new episode of Today in Elon Musk for you, and of course, the weekend long-reeds suggestions.

Here's what you miss today in the world of tech. Early this afternoon, Facebook announced it had discovered a security vulnerability affecting around 50 million Facebook. users. Quoting Guy Razen, the Facebook VP of product management. Our investigation is still in its early stages, but it's clear that attackers exploited a vulnerability in Facebook's code that impacted View As, a feature that lets people see what their own profile looks like to someone else. This allowed them to steal Facebook access tokens, which they could then use to take over people's accounts. Access tokens are the equivalent of digital keys that keep people logged into Facebook so they don't need to reenter

their password every time they use the app, end quote. So if you were logged out of your Facebook account when you tried to check it this morning or if you were asked to reset your password, this is why. As Facebook is still investigating this vulnerability, it has logged out more than 90 million Facebook users as a precaution. Facebook says it does not know the origin or identity of the hackers yet, nor has it assessed the scope of the attack fully. Again, Facebook stresses this is early days in its investigation. Facebook only discovered the vulnerability this past Tuesday, the 25th. In a later conference call, Facebook gave more details.

Passwords were apparently not compromised, neither were credit card information. Facebook says it has already fixed the code vulnerability and the view as feature is temporarily turned off. And the company says it is working with the FBI and has also alerted law enforcement in Europe. On the conference call, Mark Zuckerberg himself said, quote, so far our initial investigation has not shown that these tokens were used to access any private messages or posts, or to post anything to these accounts. But this, of course, may change as we learn more. The attackers used our APIs to access profile information fields like name, gender, hometown, etc. but we do not yet know if any private information was accessed that way, he said.

According to Axios on the call, Zuckerberg also said, quote, we face constant attacks from people who want to take over accounts or steal information. We need to do more to prevent this from happening in the first place, end quote. So I want to point out a couple of things. First, if it's not obvious, during the Cambridge Analytica stuff and during all the congressional testimony by Zuckerberg and Cheryl Sandberg and others, Facebook repeatedly stressed that that particular incident,

the Cambridge Analytica one, was not a functional breach of its systems. Cambridge Analytica was an example of a third party with access to Facebook data that was using it in ways that they shouldn't have, that Facebook didn't want them to, and that was against their rules, but again, their system wasn't compromised.

Their code was secure, and they were good stewards of their own data. Quote, we have a responsibility to protect your data and if we can't, then we don't deserve to serve you, Zuckerberg said, in a statement regarding Cambridge Analytica earlier this year. Well, so this today is a material breach of their systems. This was a bug in their code that was exploited.

This was, in short, though you can debate the term, I'm sure, a hack. The other detail that I wanted to note that many people have been pointing out, remember that Facebook's longtime chief security officer Alex Stamos left the company last month. Following his departure, Facebook said it would not be filling the CSO role anymore and said it would be restructuring their organization in a way that would filter security specialists throughout the organization. Quoting a tweet from the information's Sarah Coronda after the conference call, quote, Guy Rosen addressed this issue on the call, says he believes new structure, sans CSO meant Facebook could find issue and address it sooner.

Still don't get why this is an either-or situation, though. Why not have a CSO and people embedded throughout the org? Welcome to another episode of Today and Elon Musk, and so soon after the last one. As I am writing these words at 9.37 a.m. Eastern, Tesla shares have opened down 12.5%. This comes as news broke late yesterday that the Securities and Exchange Commission is suing Elon Musk, accusing him of misleading investors back when he tweeted that he had funding lined up to take Tesla private. Quote, while leading Tesla's investors to believe he had a firm offer in hand, we allege that Musk had arrived at the price of $420 by assuming a 20% premium over Tesla's then existing share price,

then rounding up to $420 because of the significance of that number in marijuana culture and his belief that his girlfriend would be amused by it. said Stephen Paken, co-director of the SEC's Enforcement Division. This unjustified action by the SEC leaves me deeply saddened and disappointed, Musk said in a statement, I have always taken action in the best interests of truth, transparency, and investors. Integrity is the most important value in my life, and the facts will show I never compromise this in any way, end quote. In another statement, Tesla and its board, quote, are fully confident in Elon, his integrity and his leadership of the company, they said in a joint statement Thursday.

Our focus remains on the continued ramp-up of Model 3 production and delivering for our customers, shareholders, and employees, end quote. Now, here's the key bit and also the key reason why the stock was down so much this morning. The SEC is seeking an unspecified amount of monetary penalties from Musk, and crucially, they will ask a judge to enjoin Elon Musk from serving as an offer. or director of any publicly traded company if found guilty. So they're really going with the nuclear option here. This is not a slap on the wrist sort of thing. I don't think I have to tell you what an extraordinary thing that would be

if the most famous entrepreneur of this decade were to be barred from his own companies. Some pretty big names in the world of tech were quick to stick up for Elon. Vinod Kosovoz tweeted, he single-handedly replaced oil-based cars and changed space commercialization. His exceptional, unreasonable efforts don't come without deep flaws. Society can easily throw the baby out with the bathwater, end quote. And Michael Errington tweeted, Right, let's take Elon Musk, the most dynamic and interesting entrepreneur in America,

and tell him he can't do that stuff anymore because of one stupid tweet. Great job, SEC. You can charge him without demanding he never act as a public company officer or director again. That's my issue. Let the man build. companies. It helps us all. Oh yeah, he definitely effed with the market. There's a remedy for that. Make the shorts who lost money whole plus punitive damages, end quote. Dana Schwartz, by the way, tweeted, quote, I really hope the Tesla board doesn't force out Elon Musk because that is 100% how we get a

green goblin scenario, end quote. One other bit of news, CNBC's Andrew Ross Sorkin was reporting this morning that Elon was apparently in talks with the SEC to agree to a settlement that would have headed off this suit. But Elon apparently backed out of the settlement talks at the last minute. Quote, under the terms of the deal, Musk and Tesla would have had to pay a nominal fine, and he would not have had to admit any guilt. However, the settlement would have barred Musk as chairman for two years and would require Tesla to appoint two new independent directors, reported CNBC's David Faber, citing sources. Musk reported that, refused to sign the deal because he felt that by settling he would not be truthful to himself,

and he wouldn't have been able to live with the idea he agreed to accept a settlement and any blemish associated with that, the sources said, end quote. According to sources who have spoken to the Wall Street Journal, Slack is actively preparing for an IPO in the first half of 2019. Slack expects it could achieve a valuation well in excess of roughly $7 billion, the level at which a recent round of financing valued the company, these people said. Still, valuations can change until a company prices its IPO. Slack would be one of the largest tech IPOs since SNAP's debut in 2017 that valued that company at nearly $24 billion.

Slack operates a popular workplace instant messaging app that, as of earlier this year, had more than 8 million daily active users and 3 million paid users, end quote. A couple of quick crypto stories here. Coinbase has launched what it is calling Coinbase Bundle, a new offering that lets users buy a market-weighted sampling of its five available cryptocurrencies for as little as $25. The currencies in question are, of course, the ones that Coinbase currently allows you to trade, which are Bitcoin, Ethereum, Bitcoin Cash, Lightcoin, and Ethereum Classic.

The idea is to allow people to get a sort of bundle, or starter kit of coins in order to get their feet wet, thus the low floor for getting in on the bundle at only $25. Also, Compound is a startup that was backed by Coinbase, as well as Andriesen Horowitz, and Compound today announced a new money market protocol that will allow people to easily short cryptocurrencies, but also at the same time even lend cryptocurrencies to others to earn interest. Thus, of course, the name compound. Quoting from TechCrunch's Josh Konstine, compound's protocol isn't just useful for crypto-haters or hodlers who want to generate interest instead of just having their coins gathering dust in a wallet. If and when compound scales,

this will lead to some really interesting improvements in market structure, namely fairer prices, compound CEO Robert Leshner tells me, end quote. Time for the weekend. long reads suggestions this week's long reads are brought to you by betterment. Betterment is designed to break the law of averages with tax-efficient technology and personalized advice from a true financial partner who's constantly working for you. Are you fine with average or do you want more? First up, you guys know my long-standing speculation on when self-driving cars will actually arrive, but get this.

Is it possible that flying cars might actually get here? first. CNET has a piece looking at Uber's Uber Air Initiative, its attempts to get air taxis off the ground, and for various reasons, they swear that flying cars in some limited capacity really might be right around the corner. For one thing, the technology to make them possible is largely already here, so we're not waiting on some sort of breakthrough to happen. But as you'll see in the article, regulatory issues are another story. Next, I've read a lot of segments lately about Coinbase, but I'm not sure we've ever spoken in depth about Coinbase, which is, in a lot of ways, the biggest player in the crypto space and perhaps the most successful

company in the crypto space. Bitmain accepted, of course, I guess. What's the old saying, though, in a gold rush, the easiest way to get rich is to sell the shovels. Also, though, it can be a good move to actually be the market where people buy and sell the gold. In the show notes, check out the fortune profile of Coinbase, which has become a good move. the primary way most people get their entree into owning and trading crypto, as well as an interesting look at the founder of Coinbase Brian Armstrong. Next, when the Apple Watch came out, there was a little bit of push and pool. Some people were excited that a new revolution in healthcare seemed to be on the horizon.

Other people were like, this is still just sort of a gimmick. Well, the best macro-level look at the Apple Watch and wearables and health tech. comes from Steve Blank, the founder of Epiphany, if you remember that company from the 90s. On his personal blog, Steve, not only looks at where things like the Apple Watch are now, but where they could go, and also gives a really comprehensive and sober look at the whole regulatory infrastructure on this potential health tech stuff. One of the section headers in the piece reads, the FDA, running hard to keep up with disruption. But also, here's an intriguing headline from the piece. Did Apple Cut in Front of the Line?

Check it out. As I say, I think it's the best deep dive on this topic I've seen so far. Next, you know technology history is my main hobby, and I told you I recently had an episode of the Internet History podcast talking to a big muckety-muck from Silicon Graphics, which was considered the Apple of its day. Part two of that episode is coming out this Sunday, by the way. Also, though, check out the motherboard story

about the community of nerds who are buying, refurbishing, and keeping Silicon Graphics workstations alive. If you were alive back then, then you might remember these workstations were the beasts of the era, the things that gave us the dinosaurs in Jurassic Park. That's how powerful they were. It's worth checking out the piece for the pictures alone

to see prime examples of what sexy hardware design looked like in the mid-90s. Also, this did not quite get the attention of the 10th and, of the iPhone, but the first ever Android phone came out 10 years ago. CNET takes a look back at the T-Mobile G1. And finally, today, this is not a long read, but an event that you can pencil into your calendars for this weekend, and I wasn't even going to include it, but given today's

news, you know, kind of have to. A white hat hacker is promising to hack into Mark Zuckerberg's personal Facebook account on September 30th and delete it. The hacker in question, Chang Chi Yuan says you can watch him do it on Facebook live. So maybe look that up on Sunday and see if he's successful at giving Mark Zuckerberg more heartburn to cap what has probably been not the best month of his life. Facebook, by the way, said the vulnerability announced today has nothing to do with Chi Yuan's stunt. And that's all for the long reads brought to you by Betterment. Investment involves risk,

of course, but TechMeme ride home listeners can get up to one year of their investment money managed for free. Just go to betterment.com slash ride. That's betterment.com slash R-I-D-E. Betterment. Outsmart average. That's all for today. Weekend music for the weekend. A bit of a PSA here. I broke down and got an iPhone 10S, because I was coming from an iPhone 8 and I wanted to see what notch life was all about. I did all the things you're supposed to do. I wiped the phone. After turning off, find my phone, of course.

I tried to unpaer the watch, but that still gave me a bit of a hiccup. Had to repair it twice. But one thing I had never thought of before, in the last year or so, I've been a good boy, and I've switched over to two-factor authentication for everything that I could, like everyone tells you to do for important accounts. And not just the send you a text message two-factor authentication either, the actual on your phone, on a dedicated app, two-factor authentication, mainly Othi and Google Authenticator.

Well, and here's my PSA. Don't forget when you get a new phone to take those two-factor authentication apps into account. None of my two-factor tokens transferred over to the new phones. Fortunately, I could recover most everything I use on, Google Authentator, though there's one important account that I still can't access until I go through a lengthy process. But, Offi required me to go through a full multi-day process to recover their tokens, and thankfully, those steps were easy to take.

So hats off to Offi for actually having a process in place that worked. But anyway, learn from my mistake. Before you wipe your phone, Google around and figure out what you need to do for your two-factor authentication apps and what procedures will help make the transition less painful than the one I'm going through. Talk to y'all on Monday.