Tech Brew Ride Home - Mon. 01/29 – Is Arc Search The Future Of Search I Was Talking About?

Episode Date: January 29, 2024

Amazon calls off its iRobot acquisition. Is Arc Search the future of search we were talking to Baratunde about this weekend? Why you can’t search for Taylor Swift on X at the moment. How many ads will be in streaming? And who is quietly killing it in subscription gaming? The answer may surprise you. Links: Amazon Drops $1.4 Billion iRobot Deal; Vacuum Maker Cuts Jobs (Bloomberg) Arc Search combines browser, search engine, and AI into something new and different (The Verge) Arc’s new iPhone browser wants to be your search companion (TechCrunch) X Halts Taylor Swift Searches After Explicit AI Images Spread (WSJ) Chinese AR Glasses Maker Raises $60 Million to Compete With Apple (Bloomberg) Amazon Is Now Charging Prime Members Extra for Ad-Free Streaming. For Some, That’s a Deal Breaker. (WSJ) Games are helping the New York Times thrive amid media chaos (Axios) 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 Monday, January 29th, 2024. I'm Brian McCullough today. Amazon calls off its iRobot acquisition. Is Arc Search the future of search we were talking to Baratune Day about this weekend? Why you can't search for Taylor Swift on X at the moment? How many ads will be in streaming?

And who is quietly killing it in subscription gaming? The answer may surprise you. Here's what you missed today in the world of tech. After opposition from EU regulators, Amazon is ending its $1.4 billion acquisition of Rumba Maker IRobot and will pay IROBOT a $94 million walkaway fee. Fast on this news came the headline that IROB will lay off around 31% of staff. And given that IROB has had half a billion dollars in losses just since 2021, there are lots of people saying this regulatory move, ostensibly to promote the health of a market, could actually have the effect of killing the company the regulator was looking to protect. So what does that do to the home robotics market if iRobot is no more? Quoting Bloomberg.

The European Commission, the EU's executive arm that oversees antitrust, is generally known to opt for remedies that correct any risks to fair competition rather than ban mergers outright. But companies often short-circuit the process by choosing to abandon deals that appear to be headed for a veto. Amazon's move, which comes with a $94 million termination, fee to be paid to iRobot follows a similar decision recently by Adobe to walk away from a planned $20 billion acquisition of startup Figma after locking horns with antitrust regulators in the EU and the UK. Amazon decided not to offer remedies to concerns flagged by regulators. The commission had earlier warned

Amazon could be tempted to demote other robot vacuum cleaners on its platform and promote its own products with such labels as Amazon's choice or works with Alexa. The regulator also said Amazon may find it, quote, economically profitable to shut out rivals and had attempted to pressure Amazon into offering concessions in order to get the greenlight in Brussels to no avail. While the company considered an appeal, that process was likely to take years. People familiar with the matter said, who asked not to be named discussing information that's not public. The merger agreement expires this summer and the companies had already renegotiated the terms once. Last year, after IRobot was forced to secure a $200 million financing facility and Amazon cut its per share offer

by about 15%. Amazon and IRobot have been close partners for years. The retailer has long been iRobot's biggest customer at times accounting for more than a quarter of sales. Irobot in 2021 stopped disclosing the identity of its biggest customer, which, during the most recently reported quarter, accounted for about 22% of revenue. The vacuum maker, meanwhile, is a customer of Amazon Web Services Cloud Computing Group and has dispatched executives to speak at Amazon events. Though small for a company of the size of Amazon, an Irobot acquisition would be the fourth biggest in Amazon's history, trailing only its purchases of Whole Foods, Movie Studio MGM, and the One Medical Concierge Healthcare Service, end quote.

When we're talking about the existential AI threat to Google Search, this is what we mean, people being trained on a new type of search, something like this. The browser company has released Arc Search. A new iOS app that takes a user's search query, browses the web and builds a custom web page to answer the query. Now, you might be familiar with the browser company. They make that ARC browser that some people are absolutely evangelical about. And though technically, ArcSearch, which at the time of this recording is already number seven in the app store for utilities, is just a browser. It's their special browse for me button that is the key, quoting David Pierce in The Verge. A few minutes ago, I opened the new Arc Search app and

typed what happened in the Chiefs game. That game, the AFC Championship, had just wrapped up. Normally, I'd Google it, click on a few links, and read about the game that way. But in Arc Search, I typed the query and tap the Browse for Me button instead. Arc Search, the new iOS app from the browser company, which has been working on a browser called Arc for the last few years, went to work. It scoured the web, reading six pages it told me from Twitter to The Guardian to USA Today, and returned a bunch of information a few seconds later. I got the headline, Chiefs win. I got the final score, the key play, a notable event that also just said the Chiefs won,

a note about Travis Kelsey and Taylor Swift, a bunch of related links, and some more bullet points about the game. Basically, instead of returning a bunch of search queries about the Chiefs game, Arcsearch built me a web page about it. And somewhere in there is the browser company's big idea about the future of web browsers, that a browser, a search engine, an AI chatbot, and a website aren't different things. They're all just parts of an internet information finder, and they might as well exist inside the same app, end quote. In other words, it's not quite what folks are going for with GPs or with

BARD, say, it's not a bot that just gives you the answer to your question, but it is a bot that goes through and essentially clicks on the 10 blue links of traditional Google search, reads all the web pages for you, and comes back with a summary. TechCrunch, for example, queried how to make a perfect poached egg. Not only did they get the steps, they also got pictures, links to YouTube videos, Macrumors asked how to change attire. I asked if Gene Hackman had retired from acting. It told me what Gene has been up to these past few years. I asked for the best-performing stocks of the S&P 500 in 2023, and it queried the likely places like Yahoo Finance. And I'm sure if I had clicked through on a link, I could have gotten to a page where somebody had listed this

neatly in a table or something, but I didn't have to. This is a likely. This is a little. sort of what we were talking about this weekend with our conversation with Baratune-Thurston. I'm not saying Google couldn't do something similar and probably will eventually, but that's the point. The idea of the web being this universe of bespoke links and pages that we have to curate ourselves might already be on the way out. As Martin, SFP Bryant said on threads, is it the future of search or is it a novelty that will be ruined by hallucinations? I have a horrible feeling the answer might be both, end quote. If you download this and give it a try, you might come away with the sense that it's just another web browser. Fair enough.

But try that search icon down at the bottom and be sure to hit the browse for me button because that's where the action is, the summary web page, quoting TechCrunch. These pages are great for me to get information at a glance, and I can also use the dive deeper section to explore additional links listed for the topic. However, at the moment, I can't share these pages with anyone unless I take a screenshot. If users don't want to use the AI-powered feature, they can just tap on the query to use Google, Bing, Duck, DuckGo, or Ecosia, whichever you have set as default. Notably, last week, the browser company announced that users can set perplexity as their default search engine on the ARC's desktop client, but it's not clear if this option will be

available for the mobile client. There's also a reader mode for all web pages for easy reading, and you can bookmark the web page as well, but there is no folder system to store these bookmarks. Arc search browser also archives tabs after one day. This is customizable to save you from tab over. You can look at your open tabs through the tab switcher on the bottom bar, or you can swipe and hold from the left edge of the screen, end quote. Quite frankly, the IP and legal implications of this are staggering, and I would expect

a major controversy about this to flare up soon. As Anil Dash said on threads, all the various search engines and AI assistance moving towards consuming our websites, forming summaries of the most valuable content, while introducing various degrees of inaccuracy, and stopping users from being able to visit or form a relationship with our sites, sometimes not even having a link to or even knowing the name of the site that actually answered the question, is deeply destructive, end quote. Speaking of this weekend's NFL playoff games, if you wanted to do a search right now for is Taylor Swift going to the Super Bowl, you can't, at least on the site formerly known as Twitter.

That's because X has blocked all Taylor Swift searches as a, quote, temporary action and done with an abundance of caution, days after explicit AI-generated images of her flooded the site. Late last week, X was inundated with AI-generated pornographic images of Taylor Swift. One post, live for 17 hours, had more than 45 million views, hundreds of thousands of likes, and 24,000 reposts, quoting the journal. Graphic fake images of Swift began spreading across X on Wednesday, prompting fans to swarm the platform with real pictures of the ERA's tour star. Swifties also pushed X to take stronger steps to delete the phony photos,

saying they were flagging accounts spreading the fake images for the company. The slogan Protect Taylor Swift trended on the site. By Thursday, a flurry of accounts that were flagged by users for sharing the most viral images were suspended or otherwise restricted, though the fakes were still relatively easy to find on the platform. X said in an online statement later in the week that it prohibits the sharing of not non-consensual graphic imagery and has a, quote, zero tolerance policy for such content. The statement didn't mention Swift by name. Our teams are actively removing all identified images and taking appropriate actions against the accounts responsible for posting them, the statement said.

We're closely monitoring the situation to ensure that any further violations are immediately addressed, and the content is removed, end quote. Something, something gutting, your trust and safety teams might save you money in the short term. But also, think of the broader AI narrative. quoting Casey Newton on Mastodon. The Taylor Swift harassment campaign on X is a warning. These same tools are already being used to harass average people across lots of platforms, and the response from tech companies and lawmakers hasn't been nearly good enough, end quote. Interesting raise from a company we've been talking about for years,

and FYI, no, I am not an investor in them, wish I had been. AR Glasses Maker X-Real has raised $60 million from an unidentified supply chain partner at a greater than $1 billion valuation for more than $300 million in funding, quoting Bloomberg. This will help us scale our manufacturing capabilities and research and development CEO Chi Zhu said, adding that the company has enough capacity to meet demand for its glasses this year, but needs the money to fulfill orders in 2025. Chi said that his company has the ability to produce between 500,000 and 1 million units this year. The investment should allow for production of 2 million devices next year.

The company expects to generate $100 million to $150 million in revenue this year and between $200 and $300 million in 2025, according to Chi, who said he wants Xreal to go public in the U.S. within two years. The seven-year-old business now has about 600 employees and is based in Beijing. The company's airglasses present notifications, games, and video in a wearer's field of view. Chi said that XREEL's products have made gains on more costly technology from Magic Leap and Microsoft, which sells a headset called the HoloLens. 2020 was a very good year, and the market size pretty much doubled, Chi said. The company which said it gets the majority of its sales from Amazon's website offers AR glasses for as little as a few hundred dollars, but it believes its latest pair, the Air 2 Ultra is what will drive future revenue. There's a good chance we can do 50,000 units of the Ultra this year, she said,

adding that the cheaper models are, quote, definitely easier to sell and that mass consumers aren't seeking as many bells and whistles as what they might get on rival products, end quote. As all the streaming services move to offer cheaper tiers supported by ads, we've joked many times that they're just becoming the old-school style of television they were supposed to supplant. But does that mean they will give us the old-school level of ads? Well, at least not yet. For example, the Wall Street Journal has seen a presentation where Amazon says Prime Videos' ad load per hour will be two to three and a half minutes, below traditional TV and most streamers.

and they expect 195 million monthly viewers, quoting the journal. Some commercials would appear before a program begins playing, while others would interrupt it. Any amount of advertising is a no-go to many, quote, If I have to watch ads, I shouldn't have to pay for my entertainment, said Joel Gratzick, a 42-year-old digital consultant from Chicago, a lesson he said he learned from all those years watching Netflix.

He decided not to renew his prime subscription when he found out about the new ad-supported Prime Video. A presentation reviewed by the Wall Street Journal said Prime video ads are expected to reach an estimated 159 million global viewers each month. That is significantly larger than the 23 million monthly active users that Netflix said this month its ad tier had globally. Netflix's ad-supported tier accounted for 9.4% of its U.S. subscribers in December, according to subscription analytics firm Antenna, compared with 22% for Disney Plus's ad plan, which was launched around the same time in late 2022.

When Netflix introduced a cheaper ad plan, it kept the price of its ad-free version stable. Disney Plus, meanwhile, launched the Ad Supported Plan in concert with a price increase. Customers could pay up to remain ad-free or accept ads and stay at their current monthly subscription cost, end quote. Finally, today is Netflix, and as I'm reading today, Warner Brothers Discovery are experimenting with games in order to buttress their streaming subscription numbers and cut down on churn. Do you know who quietly has been killing it with gaming subscriptions? The answer may surprise you. The New York Times says users played its puzzles and games. more than 8 billion times in 2023, led by Wordle with 4.8 billion plays, and the New York Times

games app had 10 million downloads, quoting Axios. Our vision is to be the premier subscription destination for digital puzzles, Jonathan Knight, NYT's head of games, tells Axios. What differentiates the Times' games from myriad other mobile games, Knight says, is that they don't try to keep you playing for as long as possible to boost ad revenue. We're not trying to get you to spend 24-7 in our app. We're not trying to get you addicted to solving level after level after level, he says. Maybe you do two or three of them, maybe just one. Some people play first thing in the morning, or it's just their before bed habit or lunch break or whatever it might be. We want to fit into your life, and I think that's really resonating with people, end quote. The company's

subscription revenue increased nearly 10% to $418.6 million in the third quarter of 2023 with digital product earnings rising nearly 16% to 282.2 million driven in part by bundles, end quote. Nothing for you today. Talk to you tomorrow.