Tech Brew Ride Home - Friday, May 4, 2018 - Would You Pay For Facebook?

Episode Date: May 4, 2018

Would you pay for a Facebook subscription? Would you pay for Facebook satellite internet? Instagram adds native payments, Warren Buffett doubles down on Apple, the weekend longreads suggestions and plenty more. Stories from: @NellieBowles, @beckyquick Jokes from: @behindyourback Links:Facebook Weighs Ad-Free Subscription Option (Bloomberg)Facebook May Have Secret Plans to Build a Satellite-Based Internet (ieee spectrum)Instagram quietly launches payments for commerce (TechCrunch)Buffett's Berkshire Hathaway bought a stunning 75 million Apple shares in first quarter (CNBC)Why Regulators Should Approve the T-Mobile/Sprint Deal (Tech.pinions)The ‘Race to 5G’ Is Just Mindless Marketing BS (Motherboard) Longreads:‘Hi, It’s Amazon Calling. Here’s What We Don’t Like in Your City.’ (WSJ)Over 400 Startups Are Trying to Become the Next Warby Parker. Inside the Wild Race to Overthrow Every Consumer Category (Inc)All We Want to Do Is Watch Each Other Play Video Games (NYTimes)CoinTalk (podcast) Credits: Produced by @brianmcc and the @techmeme editors Music by @jpschwinghamer 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 May 4th, 2018. Today, would you pay for a Facebook subscription? Would you pay for Facebook satellite internet?

Instagram adds native payments, Warren Buffett doubles down on Apple, and the weekend long-reads suggestions, and plenty more. Here's what you miss today in the world of tech. In Bloomberg, Sarah Fryer is reporting that sources have told her Facebook has been conducting market research in recent weeks to determine whether or not an ad-free subscription-based version of the service might be attractive to some users.

Now, on the one hand, I'm skeptical of this on the level of... I mean, I'm sure Johnny Ive has mocked up some sort of sketches for an Apple vacuum cleaner because why wouldn't he? But that doesn't mean I ever expect Tim Cook to announce an I-suck on stage anytime soon. So I'm sure Facebook has always at least considered some form of subscription version of its service from basically like day one of its existence.

But that doesn't mean I ever expected a pay Facebook to come. However, some of the details in this piece make this rumor at least interesting. Friar's sources acknowledge that Facebook has studied subscriptions in the past, but that when it did so, the results seem to show that users would rebel, thinking that this is just a case of Facebook being greedy, asking them to pay for something that used to be free. But I can also see that Facebook might now have a sense that sentiment may be changing. Quoting from the piece,

The Menlo Park, California-based company has been conducting a broad review of its business to identify ways to close potential security holes and more broadly regain the trust of users and improve their experience. The company has been receptive to changes that even a year ago would have been unthinkable, such as ranking news publishers by trustworthiness and allowing upvoting and downvoting on comment. end quote. An ad-free, data-tracking-free version of Facebook would at least take away an excuse from people not to use the service.

If Facebook has lost those users anyway or if it never had them, it would only be additive to offer subscriptions at this point since they're not making money off those never-facebookers anyway. And according to Friar's sources, that is specifically what Facebook is investigating. whether or not a subscription service might actually be a draw to some of those Facebook agnostics. So I don't know, never say never. Twelve months ago, I would have actually told you never. No way. But do note that both Mark Zuckerberg and Cheryl Sandberg have at least left the door open to subscriptions in recent comments. Sandberg specifically told Bloomberg last month that Facebook considers all monetization options.

And in his congressional testimony, Zuckerberg said, quote, there will always be a version of Facebook that is free. So that's not a no. A couple of other Facebook items, the Wall Street Journal is reporting that within Facebook, there is an internal system, nicknamed Sauron Alert, that notifies employees when other Facebook employees access their accounts. We've long known that certain Facebook employees have permission to access user accounts.

That's obviously the case for any online service. If my outlook email goes down, I assume a Microsoft employee can go into my account and fix things. The news here is that Facebook employees at least get a notification when someone is mucking around in their profiles. So maybe we could get something similar? I mean, if everything at Facebook is on the table at the moment. Quoting from the journal piece, a Facebook spokesman said the company has had discussions about issuing these types of alerts to all users.

In thinking about how we could do something similar for everyone, there are a number of important considerations that come into play. For example, how we can avoid tipping off bad actors or hindering our work to prevent real-world harm in cases of abuse or other sensitive situations, a spokesman added, end quote. This news is timely because Facebook recently had to announce that it had fired an employee that allegedly used privileged employee access to user accounts to allegedly stalk women online. The employee in question was a security engineer, and Alex Stamos, Facebook's chief information security officer, said in a statement to motherboard, quote, We are investigating this as a matter of urgency. It's important that people's information is kept secure and private when they use Facebook. It's why we have strict policy controls and technical restrictions so employees only access the data they need to do their jobs. For example, to fix bugs, manage customer support issues, or respond to valid legal requests.

Employees who abuse these controls will be fired, end quote. One more Facebook item before we move on. It's a rumor, but IEEE Spectrum is reporting that, according to public filings at the FCC, Facebook might be developing orbital technology to deliver internet via satellite, similar to what companies like SpaceX and OneWeb are already known to be doing. Quoting from the piece, a filing with the Federal Communications Commission last week

revealed details of a multi-million dollar experimental satellite from a stealth company called Point View Tech LLC. The satellite named Athena will deliver data 10 times faster than SpaceX's Starlink Internet satellites, the first of which launched in February. However, Point View appears to exist only on paper. In fact, the tiny company seems to be a new subsidiary of Facebook formed last year to keep secret the social media giants plans to storm space, end quote. Facebook did not respond to multiple requests for comment. We spoke yesterday how inside Facebook the thinking might be that apps like Instagram are really the company's future.

Well, are you ready to shop on Instagram? TechCrunch is reporting that Instagram has quietly added a native payments feature to its app, available only to a subset of users, that allows you to register a credit card with your profile and buy things without ever having to leave Instagram. Instagram. Instagram confirmed that payments are available in a limited way to do things like book appointments at places like restaurants or salons. Instagram started dabbling and shopping in 2016, letting you tap through to buy items on sites like Warby Parker. But that was just essentially glorified linking.

You still had to whip out your credit card to pay. The ability to pay natively with a tap is what's new here. As Josh Constine writes in TechCrunch, with its polished pictures and plethora of broad, Brands shopping through Instagram could prove popular and give businesses a big new reason to advertise on the app. If they can get higher conversion rates because people don't quit in the middle of checkout as to fill in their payment info, brands may prefer to push people to buy via Instagram, end quote. Constine also notes that registering a credit card or payment account would also be one more stepping stone to bringing peer-to-peer payments to Instagram as well. Starting on July 10th, Google will require anyone buying a.

ads related to candidates in U.S. federal elections to either be U.S. citizens or lawful permanent residence. This obviously comes after similar moves from companies like Facebook looking to prevent foreign meddling around this election cycle. The new policy would not, however, cover ads related to political issues, only specific candidates. In a blog post, Google General Counsel Kent Walker wrote that the company is continuing, quote, efforts to increase election advertising transparency, to improve online security for campaigns and candidates, and to help combat misinformation. Stay tuned for more announcements in the coming months. So Apple apparently was right. The iPhone 10 is doing very well after all. In fact, it might be the best-selling smartphone in the

world. At least that's the case made by Linda Sween at Strategy Analytics in industry research firm. Sui claims that strategy analytics data shows that the iPhone 10 shipped 16 million units this quarter and captured 5% of market share worldwide in the first part of 2018. In fact, the top four best-selling phones in strategy analytics estimate are iPhone models. The fifth most popular phone was the Jaume Redmi 5A, and the Samsung Galaxy S9 Plus came in at number six, shipping 5.3 million units last. quarter. Also in her report, Sui said that Apple has now sold almost 50 million iPhone 10 units worldwide and that 345 million smartphones shipped globally last quarter, which was actually

down 2.4% year over year. In a slightly tangential story, CNBC is reporting ahead of the annual shareholders meeting that Warren Buffett's Berkshire Hathaway has bought an additional 75 million shares of Apple, adding to the 165.3 million shares it owned at the end of 2017. In a statement to CNBC, Apple's CEO Tim Cook said Apple is, quote, thrilled to have Warren and Berkshire as a major investor. On a personal level, I've always greatly admired Warren and have always been grateful for his insight and advice, end quote. CNBC labeled the news of the Berkshire position as stunning and astounding. which it probably is if you realize that 75 million shares of Apple comes to $13.725 billion at current prices.

I guess Buffett had no doubts about iPhone 10 sales either. I wanted to point you to a couple of straight-up opinion pieces. The first one is from Mark Lowenstein, the managing director of mobile ecosystem and advisory services firm focused on mobile and digital media. His post is called Why Regulators Should Approve the T-Mobile Sprint Deal. Lowenstein says that unlike the conventional wisdom on Wall Street that the chances of the deal being approved by regulators sitting at less than 50-50, he thinks that if the two companies play their cards right, there are some key factors that might push the deal over the top this time. I won't go into all the points that Lowenstein makes, but he says that there are truly more players in the broadband game now and that this deal would really help with the rollout of the 5G network. but I thought this point he made is key, and it mirrors what Ben Thompson has been saying at Strateree. Quote, without a merger, what are Sprint's real prospects?

Wouldn't it be better for network investment, the market, and consumers to have three strong competitors, rather than two giants, a sort of strong number three and a weak number four? Can regulators point to any other countries where there are four healthy and profitable national wireless carriers? End quote. But let me pair that now with another opinion piece in motherboard Carl Bode has a piece titled, The Race to 5G is Just Mindless Marketing BS. Quoting from the piece, 5G is really just a collection of emerging antenna and core network technologies

that will make wireless networks faster, more efficient with lower latencies. But at the end of the day, the 5G revolution is really just a slightly better version of the 4G-LTE networks. you're already familiar with. Actual commercial deployment and handset availability isn't expected until 2020 or later. Links to both pieces are in the show notes, of course. So that must mean it's time for the weekend long read suggestions. This week, I've got three pieces to recommend and a podcast.

In the Wall Street Journal, there's another look at Amazon's quest for a second headquarters and the various cities vying to win the prize. It seems that even once Amazon rejects your town, they'll still call you and tell you why they rejected you. And cities are actually acting on this advice. Quote, Cincinnati and Sacramento, California are restructuring workforce development programs to focus on tech talent. Orlando, Florida is considering starting a community fund to invest in local tech companies and draw more entrepreneurs. In Detroit, elected officials and business leaders are. pushing a ballot initiative for a new regional transportation network that would connect

outer counties to the city, end quote. I have a lot of thoughts about this piece, about how bizarrely this is a clash of market competition and government in a weird way. All these cities were chasing Amazon's brass ring and the regional wealth bonanza it would bring. And bizarrely, that has opened up their eyes to making, I don't know, investments and improvements in their communities that they could have made earlier, but didn't, because they hadn't been incentivized to improve themselves before. Of course, you would think that's the job of government to improve your local economy. Maybe the overall U.S. economy would be helped if Amazon just rotated its headquarters

every five years or something. Inc. magazine has a fascinating piece up about how, after the success of Warby Parker, which was incubated there by former students, the University of Pennsylvania's Wharton School has become ground zero for an entire generation of what are known as direct-to-consumer startups. There are now some 400 direct-to-consumer startups, many of them founded by Wharton alum. Quoting from the piece, I've basically pitched a tent outside of Wharton, says Andrew Mitchell, who founded the venture capital firm Brand Foundry to invest in digital first consumer businesses. You guys know I'm fascinated by the game Fortnite.

The New York Times has a piece up describing how the Fortnite craze is, is sweeping America, causing shopping malls, movie theaters, and even parking garages to turn themselves into e-sports arenas so people can come and pay and play and watch Fortnite competitions. This is a story not only about the continued ascendancy of gaming and especially gaming competitions as a major entertainment force, but also possibly as a partial and perhaps momentary solution to the decline of other industries. Quoting from the piece, those 150 million gamers in America want to gather. They want to sit next to each other, elbow to elbow, controller to controller. They want the lighting to be cool, the snacks to be hot pockets, and they want a full bar because they're not teenagers anymore. It was inevitable.

Movie theater attendance hit a 25-year low in 2017, while 638,000 tuned in to watch Drake play Fortnite recently. End quote. Later in the piece, they speak to Anne Hand, the CEO. of Super League gaming, which converts movie theaters into e-sports arenas, and has raised $32 million from investors. Finally, the podcast I want to recommend is Coin Talk. I'm not really that deep into the crypto space, but I do like to keep my ear to the ground,

and the one crypto podcast I regularly listen to is Coin Talk. It's hosted by Aaron Lamer and Jay Kang. You might know Aaron as the co-founder of Longform and the host of the Longform podcast. and also as a fairly successful songwriter. You might know Jay Kang from his work at Vice News Tonight and The New York Times and Grantland. And the best part about this show is that the two of them are crypto-obsessives,

but they're very much crypto-out-siders. So this isn't a bunch of nerdy insider jargonoffs. This is a really good show for normal folk and for skeptical no-cointers, as they like to call them. And it's also a really hilarious show. I think that this week's show would be a really good entry point for new listeners. It's very entertaining, but also a good way to dip your toe into the latest crypto news. So search your podcast app for Coin Talk.

And that's all for today. May the 4th. I don't know how you feel about this day becoming sort of a quasi-official holiday, kind of like 420. I mean, I'm as big as Star Wars fan as the next guy, but I kind of hate all of the rampant punning that you have to endure from people today. but here you go. Here's my favorite one I saw, courtesy of New Yorker writer Mara Quint. Question, why couldn't Po Dameron find his sandwich?

Answer, because Beebe ate it. There you go. Share that with your kids. They'll think it's hilarious. And have a good weekend. I've been Brian McCullough, and I still will be when we do this all again on Monday.