Tech Brew Ride Home - Monday, 7/9 - Thanos Did Nothing Wrong!

Episode Date: July 9, 2018

Xiaomi’s IPO disappoints, Apple Music gains on Spotify, Amazon’s ad business could be a contender, and why half the members of a popular subreddit are getting banned. Stories from: @mikelaris, @noamscheiber Tweets: @danprimack Links:Shares of Chinese smartphone maker Xiaomi stumble on their debut, slipping as much as 6% (CNBC)Xiaomi's weak debut signals trouble for upcoming Hong Kong tech listings (Reuters)Apple slices into Spotify’s lead in the US music market (CNBC)High-Skilled White-Collar Work? Machines Can Do That, Too (NYTimes)Federal researchers are using data from Waze and Maryland to try to predict road dangers (Washington Post)The Thanos subreddit is gleefully heading for mass slaughter (The Verge) 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 Mem Ride Home for Monday, July 9th, 2018. I'm Brian McCullough. Today, Xiaomi's IPO disappoints. Apple Music gains on Spotify. Amazon's ad business could be a contender. And why half the members of a popular subreddit are getting banned. Here's what you miss today in the world of tech.

Chinese phone maker, Xiaomi, had its IPO overnight, or yesterday, depending on where you are in the world when you listen to this. And as feared, it was not exactly a blockbuster. Xiaomi's stock opened for trading down more than 2% and slipped nearly 6% during the trading session before closing just below the original IPO price. If you'll recall, Shomi had to price its shares at the bottom of its expected range. So although the company raised $4.7 billion, it had originally hoped to raise a lot more, in fact, more than twice as much. Shelby president and co-founder Lynn Bin told CNBC, quote,

I think short-term stock price is mostly dictated by market conditions. What we will be doing is to focus on the long-term growth of our business, end quote. Analyst noted that Showme's pricing was definitely aggressive. As noted on a recent episode, Showme has been trying to position itself as an internet company, while the stock market largely sees it as a maker of smartphones. How Hong, head of research at Bocom International, told CNBC, quote, the share was priced at a very high valuation multiple,

substantially higher than its global peers. Even though ShowMe remained to be a very good story, I think the market is at a stage where you have to prove yourself first before the market can give you a good valuation, end quote. Founder Lin Bin retorted that whether or not the market decided Shomi was simply a hardware maker was of little concern. Quote, I don't know how to call us. Make a name for us. We'll be happy to accept anything, end quote. Reuters suggested that overall,

Jaume's week debut might signal trouble for other upcoming Hong Kong tech companies looking to go public. Quote, a packed initial public offering calendar in the coming months will include a $4 billion deal from online food delivery to ticketing services platform, Maiduan Dianping and an up to $10 billion IPO from China Tower, the world's largest mobile tower operator. Given the targeted high valuations of many new economy IPO hopefuls and the number of IPOs going forward, it will be challenging for the market to digest all of them, said Hong Hao of Bocom International. Remember that investment round in e-scooter startup lime that we talked about last week?

It was supposed to be a $300 million round, and both GV and alphabet itself were investing. Well, status update, the round is now reported to be $335 million, valuing Lyme at $1.1 billion, and it's now even more crowded, because Uber is investing as well. And not just investing, Uber plans to promote Lyme through its own app, as well as co-brand some of Lyme's scooters. So again, it's that one app for transportation concept. you should soon be able to rent Lyme scooters directly through the Uber app.

As Dan Premack tweeted, this whole space just keeps getting more and more crowded. Quote, Uber strikes scooter deal with Lyme. Lime took money from GV and Alphabet, so it's another case of Uber indirectly partnering with the company that sued it. Uber and Lyme are competing for the five scooter licenses in San Francisco. Gotta wonder if this is a prelude to M&A, like Uber's, deal with jump. Apple's efforts to expand its services and subscription businesses seems to be going well, at least when it comes to streaming music. Forever, Spotify has held the lead in terms of the number of subscribers to streaming music services, but that lead might not last for long.

According to the Financial Times, Apple Music had around 21.5 million U.S. subscribers, compared to Spotify's 22.5 million subscribers in the U.S. give or take. So Apple is currently only about a million subs behind Spotify. Spotify still has what the Financial Times characterizes as a commanding lead globally, but Apple Music seems to be growing faster in the U.S., in the U.K., and in Canada. Analysts project that by the end of the year Apple Music should have 27 million U.S. subscribers compared to Spotify's 24 million. The state of play globally is that Spotify currently has 75 million worldwide subscribers, but expects to have 100 million by the end of this year. Apple reported that it had 50 million subscribers globally as of May.

Mark Mulligan, an analyst at Media Research, told the Financial Times, quote, Spotify has always targeted music lovers who tend to be a bit younger and were early adopters of streaming. A lot of that base has been soaked up now, whereas Apple has a much wider customer base. They can get those more mainstream people very easily because Apple Music is already in their phone, and they already have their credit card info, end quote. One perhaps anecdotal sign of Apple Music's growing clout, the recent release of the album Scorpion by Drake, widely expected to be the biggest album of the year. In the first 24 hours of that album's release, it was streamed 170 million times on Apple Music,

while Spotify saw only 130 million streams. What's interesting about those numbers is that Apple saw more Drake streams despite Spotify having three times the number of total subscribers. So there are, of course, many reasons why Amazon's stock has been on a tear the last 18 months or so. Of course, the main reason is the emergence of AWS as a monster new business, as well as the growing realization that Amazon is simply eating all of commerce, whether online or off. But there's another business that Amazon has sort of quietly been

beginning to monetize that hasn't gotten a lot of attention. Advertising. That is, Amazon running ads on its own website. In the first quarter of this year, Amazon's quote other segment where the advertising business lives in its quarterly reports to Wall Street grew to $2 billion, an increase of 139%. Could Amazon become that? much looked for third horse to compete with Google and Facebook and break the online advertising duopoly.

As a piece from NBC News notes, Google knows what you're interested in, and Facebook knows who you are, but Amazon knows what you buy. If it really turns on the money spigot that that data represents, Amazon could have a major new revenue stream overnight. quoting from Michael Casson, the founder of MediaLink in Advertising and Media Consultancy. What's interesting is advertising is not their lead punch. It's a tiny part of their revenue. It's growing fast, end quote. The digital advertising market is projected to grow 61% in the next year to $316 billion. Amazon is currently in fifth place among digital ad sellers in the U.S.,

but it is projected to leap to number three by 2020 behind only Google and Facebook. Facebook. As Amazon is increasingly the one place that people go to buy things, the fact that its internal search engine is where people go to investigate products could mean that it could basically usurp Google when it comes to commerce searches. Quoting from the NBC piece, the company can serve up search ads alongside its search results that point customers to sponsored posts of just about any product. Those ads show up alongside products labeled Amazon's choice and bestseller, with Amazon's own products called Amazon Basics, usually the cheapest, end quote. So Amazon could win by pimping its own stuff, but also by charging other merchants to show up

as well. Alex de Groot, an analyst at Sencos Securities, a financial firm said on CNBC in April, quote, I think Amazon will do retail search and take Google to the cleaners. Slowly over time, you will see Amazon as your retail search engine rather than Google. But there are even more interesting angles to this. Like everyone else, Amazon is increasingly investing in its own media business. Streaming movies, music, etc. If Amazon Prime Video emerges as a major player, well, Amazon could serve ads there as well.

Plus, there's Twitch, the gaming streaming platform Amazon owns, which is already aggressively being monetized. Oh, and one more thing, the Alexa platform. There are no ads on Alexa yet, but you can. could easily see that being a valuable place to drop an ad or two in someday. But will advertisers want to play ball with Amazon? Sure, advertisers would love an alternative to Google and Facebook, who between them have swallowed up more than half of the entire digital ad market. But as the NBC piece notes, quote, for advertisers, the short-term opportunity that Amazon offers is offset

by the realization that they could be providing the company with the data and market power it needs to eventually run them out of business. Advertisers that spend money to display their products on Amazon's search page give up data about their customers in return for sales, but those same marketers are also helping Amazon build a better mousetrap by learning more about customer intent. How much are you educating them? And could sharing your data benefit your competitors? asked Amanda Richmond, CEO of the ad agency WaveMaker.

We keep hearing about how robots and algorithms will soon be stealing jobs. even from highly skilled white-collar workers. And over the weekend, the New York Times had a piece up that gives a specific example of that very thing happening today. The job of a fashion buyer might seem like a highly subjective one, more of an art than a skill. If you sell 300 pairs of shoes in a month, should you order 1,000 the next month?

Are fashion trends holding? Is a design gaining popularity or have tastes moved on? Increasingly, algorithms are proving more adjudiced. at anticipating what customers want. Gut instinct is being replaced by cold, hard calculations. The Times article highlights a company called Stitch Fix, an online styling service that sends customers one of those monthly box-type deals. You keep and pay for what you want, and what you don't want, you send back.

Quote, Stitch Fix relies heavily on algorithms to guide its buying decisions. In fact, its business probably could not exist without them. Those algorithms project how many clients will. be in a given situation or, quote, state several months in the future, like expanding their wardrobe after, say, starting a new job? And what volume of clothes people tend to buy in each situation? The algorithms also know which styles people with different profiles tend to favor, say, a petite nurse with children who lives in Texas, end quote. The article also mentions how algorithms are getting better and better at producing actual clothing designs that prove

popular as well. So again, actual artistry is being replaced. by math. The best-selling shirt on Indian e-commerce site Mintra was designed by two algorithms working in tandem. Quote, the first algorithm generated random images that it tried to pass off as clothing. The second had to distinguish between those images and clothes in Mintra's inventory. Through a long game of one upsmanship, the first algorithm got better at producing images that resembled clothing, and the second got better at determining whether they were like, but not identical to actual products. This back and forth, an example of artificial intelligence at work, created designs whose sales are now growing at 100%, said Anantanarianian, Mintra's chief executive, quote, it's working.

Travel and routing app ways will reportedly begin providing its traffic and incident data for free to U.S. cities as well as the federal government to help them manage traffic as well as make roads safer. As you probably know, you can report accidents directly in the Ways app, ostensibly to warn other motorists of incidents on the road. The feds wanted to see how well that data lined up with collision report numbers that government agencies have been collecting for years. So far, the consensus is that Ways does a, quote, reasonably good job of not only reporting, but estimating major crashes. The hope is that real-time data from Ways will allow governments of all sizes to address

road hazards in a more timely fashion. Quoting from an article in the Washington Post, using Maryland as a test case, federal researchers are finding they can closely estimate the number of actual crashes on roads from Ways data, according to the Transportation Department. Busy roads with many Ways users provide the best results while less crowded overnight hours

aren't as good. Federal officials foresee development of a nationwide crash count tool, as well as state and local applications. and they envision broader potential breakthroughs if the efforts are successful. Finally today, spoiler alert for Avengers Infinity War. If you haven't seen the movie yet, I'm about to read a story that will basically reveal the ending of that movie. So stop listening now if you need to. Okay.

So here's a fun little thing. Apparently there's a subreddit called Thanos Did Nothing Wrong, which tongue-in-cheek is dedicated to the Avengers Arch Nemesis, with memes, jokes, and other ephemera. The subreddit currently has more than 600,000 members, but maybe not for long. You know how in the movie, Thanos wanted the Infinity Stones

so he could wipe out half the population of the universe because of overpopulation, limited resources, etc. Well, the members of this subreddit want to riff on that by banning exactly half of the subreddit's members randomly and permanently. Just like in the movie. The members of the subreddit are on board with this, posting give ban, give ban over and over again, and quoting from Thanos's speech from the film, Dread it, run from it, destiny still arrives.

Reddit is also on board with this. The subreddit was recently named Subreddit of the Day, and people have been joining in droves just to take part in this joke. Last week, there were only 200,000 members of the subreddit, but people want to join up to see if they'll be banned as well. The moderators of the subreddit actually reached out to Reddit itself to help with logistics. The mass banning was supposed to take place before the July 4th holiday, but Reddit asked them to delay since their engineers would mostly be off for the holiday. Reddit has apparently designed a bot that will snuff out half of the subscribers randomly at some point today, July 9th. At the time of this recording, the culling hasn't happened yet,

So depending on when you hear this, pop over to R-slash Thanos did nothing wrong and see if you can participate in this virtual rapture. People who are banned plan to congregate in new subredits like R-slash in the Soulstone, a reference to a popular theory about what may have happened to everyone who died in Avengers Infinity War. And that's all for today. I've been your host, Brian McCullough. Follow me on Twitter at Brian MCC. Follow the TechMeme editors on Twitter at TechMeme.

sure to check out techmeme.com any hour of the day or night for the latest tech headlines. Talk to you tomorrow.