Tech Brew Ride Home - Thu. 01/31 - Facebook's Still Making Bank

Episode Date: January 31, 2019

Facebook returns to growth, iPhones might be getting USB-C and 3D cameras, Hulu’s launching pause-ads, and on Reddit, it’s paintings of paintings of paintings of birds, all the way down. Sponsors: Tiny.website DataDogHQ.com/ridehome Links: Mark Zuckerberg wants to get back to building new Facebook products (ReCode) Nintendo cuts Switch sales forecast despite strong holiday season (The Verge) Apple Is Planning 3-D Cameras for New iPhones in AR Push (Bloomberg) HACKERS ARE PASSING AROUND A MEGALEAK OF 2.2 BILLION RECORDS (Wired) Hulu announces a new ad unit that appears when you pause (TechCrunch) The Reddit Painting Links: The orig post Tweet storm showing the painting progression The painting tree illustrated on github Flipboard Links: https://flipboard.com/@thomasgalla1pp6/techmeme-ride-home-daily-podcast-tc2a63l7y https://flipboard.com/@thomasgalla1pp6/techmeme-ride-home-weekend-long-reads-m64k8fj9y 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 ride home for Thursday, January 31st, 2019. I'm Brian McCullough. Today, Facebook returns to growth.

iPhones might be getting USBC and 3D cameras. Hulu's launching pause ads. And on Reddit, it's paintings of paintings of paintings of birds all the way down. Here's what you miss today in the world of tech. It's that time of the quarter when tech earnings are coming at us fast and furious. And this first one was one that I was super interested in seeing. Facebook. Facebook reported Q4 net income of $6.9 billion up 61% year over year, and revenue of $16.9 billion, up 30% year over year. But of course, the devil is in the Mao and Dow details right? Well, guess what? They're growing again.

Facebook reported daily active users of $1.52 billion up 9% year over year. Mows were up to $2.3 billion, as of December 31st, an increase of 9% year-over-year. But here's the headline number. Facebook managed to grow daily active users in both North America and Europe once again. That's noteworthy because both of those markets had seen growth plateau, and people were wondering if it was even possible to grow in those markets anymore. It's also crucial because it's in those markets that Facebook makes most of its money. Revenue per North American user grew 30% year-over-year. Facebook also estimated that around 2.7 billion people now use Facebook, Instagram, WhatsApp, or Messenger, what they call their family of services each month, and more than 2 billion people use at least

one of those family of services every day on average. As Shero Vide tweeted, how many big companies are growing revenue at 30% and posting 45% operating margins? I'm guessing zero. The stock was up over 18% this morning on the news and Eric Jackson, point, pointed out on Twitter that Facebook is up 40% since Christmas Eve. So, you know, as Jay Yarrow put it, Facebook to critics dropped dead, end quote. After the earnings call, everyone took note of what seemed to be the change in tone from Facebook and Zuckerberg especially, quote, we'll let the numbers stand for themselves, said Facebook CFO David Wenner. We are growing in all regions, end quote.

and Zuck himself sounded like he wanted to turn the page generally, saying the key priorities for Facebook this year would be to deliver new experiences. I'm talking about major improvements to people's lives that whole communities recognize and say, wow, we're all doing something new on Facebook or on WhatsApp that we weren't doing before, end quote. Zuckerberg also said, the reality is we put most of our energy into security over the past 18 months so that building new experiences wasn't the priority over that period. So this year, I think we're going to deliver several of those new experiences, end quote.

In Recode, Kurt Wagner's take on all of this is as follows. The fact that Zuckerberg is starting to talk about life beyond Facebook security improvements could mean a number of different things. The challenges Facebook is facing, from Apple to potential regulation, to user growth, plateauing in key markets, just aren't that concerning. Zuckerberg is underestimating the challenges that lie ahead for Facebook, like Apple, potential regulation and user growth plateauing in key markets, or Zuckerberg is just ready to start talking about something, anything else. Wagner also said that this is, quote, a healthy reminder that despite all the grumbling about Facebook's privacy mishaps, users are still using Facebook's apps and advertisers are still buying Facebook's ads. Facebook scandals don't make for positive press, but they don't seem to hurt business, easily.

end quote. I do have to say I was prepared for this to be possibly another blah quarter for Facebook, which would have indicated that its audience had hit or was nearing some natural limit. The fact that that does not seem to be the case is super interesting. Rapid Fire roundup of a couple of other earnings reports. Microsoft's Q2 revenue came in at $32.5 billion, up 12% year over year. Productivity and process revenue, which you should read as Office 365, was $10 billion, up 13% year-over-year. Intelligent cloud revenue, read Azure, was up 24% year-over-year with Azure itself, Azure revenue growth specifically hitting 76%. So, being a strong competitor to AWS in cloud computing is continuing to go well for Microsoft. LinkedIn revenue grew 29% year over year, so that acquisition is paying off.

And yes, quietly, even the Surface lineup is doing interesting things. Surface revenues grew 39% in the quarter. And don't forget that Microsoft can also play the Consumer Services card. Xbox Software and Services grew 39% despite the fact that actual Xbox hardware revenues were down 19%. And normally I might not mention Nintendo, but there was one little bit of interesting news from their quarterly report. Nintendo reported Q3 profit of around $1.5 billion, up 36% year over year on revenue of $5.6 billion. And Nintendo said it had the best quarter ever for sales of its Switch gaming consoles, with 9.41 million shipped units between October and December. Of course, the key holiday season.

But quoting from Sam Bifford in The Verge, despite the huge numbers, though, Nintendo almost certainly won't be able to hit its self-imposed target of 20 million Switch consoles sold this financial year. The current amount sold since April is 14.49 million units, but last year Nintendo sold just under 2 million. Accordingly, the company has revised its forecast down to 17 million units for the fiscal year. Switch sales momentum remains strong,

however, with 32.27 million consoles sold since launch, and few expected Nintendo to hit the ambitious 20 million figure in the first place, end quote. You know that I like to steer clear of iPhone rumors generally, especially this early in the year, but you also know I always have time for Mark Mark German and Debbie Wu at Bloomberg. The Dynamic Duo are reporting that Apple is testing USBC iPhones and an iOS dark mode, both of which might see the last. light of day this year. Also this year, a possible updated 10-inch iPad this spring, as well as updated iPad minis, so my prayers might finally be answered there. And hey, Apple usually does give us something new on the iPad front in March, so probably sooner rather than later. But back to the iPhones,

switching to USBC is something that a lot of Apple Watchers have thought to be inevitable for some while now. It's probably just a matter of when we see them and if we see them this year or not. But also, there's this possibility, a third camera on the back of the iPhone. Quote, a third camera on the back of the 2019 iPhone will help the device capture a larger field of view and enable a wider range of zoom. It will also capture more pixels so Apple software could, for example, automatically repair a video or photo to fit in a subject that might have been accidentally cut off from the initial shot, according to people familiar with the plans.

The company is also planning an enhanced version of its live photos feature, which pins video from before and after each shot to the photo. The new version will double the length of the video from three seconds to six seconds. The laser-powered 3D camera could debut first on an upgrade to the iPad Pro, currently planned for as early as spring of 2020. According to one of the people, Apple isn't expected to release a major iPad Pro update this year like it did in 2018. It typically upgrades the line in the second half of the year.

Apple in the past has launched major new features on the iPad before the iPhone, including 4G internet connectivity in 2012, end quote. German and Wu also seemed to confirm what others have been suggesting, no 5G iPhone until at least 2020. Earlier this month, I told you about so-called collection. Number 1, that huge cash of stolen credentials and passwords that was dumped on hacker forums. Collection number one reportedly contained 773 million unique usernames and passwords. Well, now collections number two through five are making the rounds.

845 gigabytes of usernames and passwords are almost 25 billion total records, therefore tripling the size of collection number one. So if that was the biggest collective leak of credentials in history, than this really is. At this point, it looks like someone has just been collecting all of the stolen credentials from all of the major breaches of recent times, Dropbox, Yahoo, LinkedIn, etc., and just dumping them en masse into the wild.

It's still unclear how valuable this data is, as the fact that somebody is just putting it out there for everyone to take would indicate. But as Wired notes, quote, the sheer size of the collection also means it could offer powerful tool for unskilled hackers to simply try previously leaked usernames and passwords on any public internet site in the hopes that people have reused passwords, a technique known as credential stuffing. Quote, for the internet as a whole, this is still very impactful, says Chris

Rowland, a cyber security researcher and founder of the IOT security firm Phosphorus.io, end quote. Hulu is launching a new ad unit that will appear on screen when viewers pause the video they're watching. But before you really freak out, it's not going to be a video ad. Quoting Anthony Haugh in TechCrunch, the Hulu pause ad is more like a translucent banner, or as Hulu vice president and head of advertising platforms, Jeremy Helfand put it, a car billboard on the side of the road that appears on the right side of the screen. This makes for a better viewing experience since it's less distracting than a video and you can

still see your TV show underneath. And Helfand argued that it's also better for the brand because it allows them to get their message across in a quick and simple way. Also, pause ads won't appear until several seconds after you pause. That's in case you've paused so that you can rewind or otherwise adjust the video, which isn't really an ideal time to show you an ad. If you start fiddling with the controls, the pause ad either won't appear at all, or if it's already on screen, it will immediately disappear. Similarly, it should disappear as soon as you hit play again, end quote. The pause ads will apparently start showing up in the second quarter of this year, and Hulu says this is all part of its desire to launch more of what

it terms non-disruptive ad formats, with the goal being that these new ad units would eventually account for as much as 50% of Hulu's ad revenue within the next three years. Finally, today, it's occasionally just fun to report on the odd things in the odd corners of the internet that make me remember why we all love the internet in the first place. Have you seen this recursive painting thing from Reddit? 15 days ago on the subreddit R-slash-pix, user Gaddafo posted a picture of a painting. Actually, it's a picture of his mother holding a painting

that the mother had painted of a bird, writing, my mom painted this and said no one would like it. It's her second painting. Well, as encouragement, someone then posted a painting that they did of the mom holding a woman. her painting. And then someone posted a painting that they did of the guy holding his painting, of the mother holding her painting. And then someone did a painting of that post. You can see where this is going, right? Recursion painting for the win. There is now a chain of people posting

paintings, a people posting paintings, of people posting paintings, of people posting paintings, like when you stand between two mirrors and it goes on into infinity. In the show notes, I posted three numbered links. The first is the original Reddit post. And then the second is a Twitter thread showing how the chain has evolved thus far. And third, there's even a web app on GitHub that is tracking all of the branches of the chain of paintings because it's split off into several different branches at this point.

As Nick Kapoor, who first turned me on to this, wrote on Twitter, I'm tempted to say these people have way too much time, but this is legit amazing. Hey, I forgot to put the link to the flipboards that a listener created for us with all the links to all the stories I mention every day in the show notes originally last night.

So hopefully I remembered to put them at the end of today's show notes. And while we're on procedure, is anyone from Microsoft listening? For a year now, I've been using Office and One Drive to do the show every single day. I open up a word file on my laptop

to write the show script. Then when it's time to record, I open the script on my phone and read from that when I'm in the recording booth. But ever since I did a word update about a week ago, I have to put in my OneDrive password every freaking time I want to save a file. It doesn't remember my credentials. And now, this is the second day in a row that I can't save

a file to OneDrive. Just spins and spins, refreshing, refreshing, but never actually opens my folders. So I'm forced to read from Simple Note on my phone, like an animal. So if someone could fix that on the back end, that would be much appreciated. Talk to you tomorrow.