Tech Brew Ride Home - Thu. 05/19 – TikTok To Get Into Games?

Starting point is 00:00:00 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 Thursday, May 19th, 2020. I'm Brian McCalla today. A code red alert about vulnerabilities in VMware products.

Starting point is 00:00:43 TikTok has a clever new program to outsource ad content from TikTok users. Oh, and they're also getting into games. FTX gets into regular old stock trading. The dreaded down rounds have arrived. And are there more Airbnbs available in New York City right now than there are apartments for rent? Here's what you miss today in the world of tech. I wanted to put this at the top of the show to get out the word. The CISA is ordering U.S. federal civilian agencies to patch or remove

Starting point is 00:01:16 VMware products affected by a critical RCE vulnerability that hackers are actively exploiting, quoting Ars Technica. Malicious hackers, some believed to be state-backed, are actively exploiting two unrelated vulnerabilities, both with severity ratings of 9.8 out of a possible 10. in hopes of infecting sensitive enterprise networks with backdoors, botnet software, and other forms of malware. The ongoing attacks target unpatched versions of multiple product lines from VMware and of big IP software from F5, security researchers said. Both vulnerabilities give attackers the ability to remotely execute malicious code or commands that run with unfettered root system privileges. The largely uncoordinated exploits appear to be malicious as opposed to benign scans that attempt to identify vulnerable servers and quantify their nymphs.

Starting point is 00:02:06 number. On April 6, VMware disclosed and patched a remote code execution vulnerability tracked as CVE 2022-254 and a privilege escalation flaw tracked as CVE 2020-960. According to an advisory published on Wednesday by the Cybersecurity and Infrastructure Security Agency, quote, malicious cyber actors were able to reverse engineer the updates to develop an exploit within 48 hours and quickly began exploiting the disclosed vulnerabilities in unpatched devices, end quote. Enterprise networks are also under attack from hackers exploiting CVE 2022-1388, an unrelated vulnerability with a 9.8 severity rating found in Big IP, a software package from F5. Nine days ago, the company disclosed and patched the vulnerability which hackers can exploit to

Starting point is 00:02:55 execute commands that run with root system privileges. The scope and magnitude of the vulnerability prompted Marvel and shock in some security circles and earned it a high severity rating. Given the threat posed by ransomware and nation state hacking campaigns like the ones used against customers of SolarWinds and Microsoft, the potential damage from these vulnerabilities is substantial. Administrators should prioritize investigating these vulnerabilities on their networks and act accordingly, end quote. So, if this is you, if you manage VMware and F5 stuff, get on that. TikTok has launched branded mission, a product that lets advertisers crowdsource content from creators to turn top-performing videos into ads,

Starting point is 00:03:43 quoting TechCrunch. Advertisers can launch branded campaigns and encourage creators to take part in them. Brands can develop a brief and release it to the creator community, encouraging them to participate in branded missions. Creators can then decide in which branded missions they want to participate. All creators, who are at least 18 years old and have at least 1,000 followers, are eligible to participate in a branded mission. TikTok says eligible creators whose videos are selected by brands will, quote, benefit from a cash payment and boosted traffic, end quote. On each branded mission page, creators will be able to view how much money they have potential to earn if their video is selected. Brand admission is now in beta testing and available to brands in more than a dozen markets.

Starting point is 00:04:24 TikTok says the new ad product will be available in additional markets later this year, end quote. So forget about the YouTube model of making content and making it available to brands for them to throw ads on top of this goes directly to the source and lets creators make ads or branded content for the brands directly. Interesting. Also interesting are the rumors that TikTok is testing in-app games in Vietnam as part of a push into gaming generally. TikTok says it has tested HTML 5 games in partnership with Zinga and others, quoting Reuters. Reuters was not able to learn TikTok's plans for rolling out gaming features in other markets, although TikTok users can watch games being streamed in most regions, they are not able to play games within the TikTok app. In the United States,

Starting point is 00:05:10 only a few games appear to have been launched, including Zynga's Disco Loco 3D, a music and dance challenge game, and Garden of Good, where players grow vegetables to trigger donations by TikTok to the nonprofit feeding America. According to two sources, TikTok plans to draw primarily on bite dance's suite of games. While the company will start with mini-games, which tend to have simple gameplay mechanics and a short playing time, its gaming ambitions extend beyond that, said one of the people who had direct knowledge of the matter. Users of bytedance's doyang, the Chinese version of TikTok, have been able to play games on the platform since 2019. TikTok's games are likely to carry advertisements from the start with revenue split between byte dance and game developers,

Starting point is 00:05:52 a separate source said, end quote. Yeah, but doesn't Apple dislike it when you put a game store inside of your app? We didn't talk about it, but Sam Bankman-Fried, the founder of CryptoExchange FTX, recently bought a bunch of stock in Robin Hood, saying that it was a cheap, valuable asset, at least in his eyes. But if that was bold, consider this. FtX.us, the U.S. arm of FTX, is launching FtX stocks, a zero-commissioned stock training feature available throughout the FtX app rolling out in the U.S. over the coming months. In other words, at the same time as the founder is investing in competitor Robin Hood, FTCS has built a Robin Hood competitor inside its own business, quoting the block.

Starting point is 00:06:44 FtX.us is going where no crypto exchange has gone before. Regulated U.S. equities trading. The firm, which is owned by billionaire Wunderkin Sam Bankman-Fried, announced on Thursday the launch of a stock trading feature that would make the firm one of the most prominent companies in the crypto space to make the move into regulated securities. According to a press release, FTCS stocks will be offered through the FtX U.S. mobile application. It plans to offer trading in hundreds of U.S. listed companies and exchange traded funds. Elsewhere, rivals like Coinbase have indicated they do not intend to move into

Starting point is 00:07:17 trading U.S. securities. In 2021, Binance shut down its stock-tied token trading operation. The news is striking, given that Sam Bankman-Fried recently acquired a 7.6% stake in the poster child of U.S. retail stock trading Robin Hood. The stake, which amounted to about $648 million at the time of the investment, has spurred speculation among individuals close to the billionaire that he is keen to acquire the entire company. Such a move would fit in neatly with his ever-expanding grip over U.S. capital markets. FtXUS has plans to offer crypto derivatives in the U.S. via a proposal that would allow it to offer such instruments directly to consumers, potentially posing a threat to CME group. Currently, exchanges offer futures and options products to customers through intermediaries like brokers and futures clearing merchants. CME group, which dominates trading across commodity derivatives, has come out firmly against FTX with its CEO Terry Duffy, noting in a recent press release that FTX's proposal is, quote, glaringly deficient and poses significant risk to market stability and market participants, end quote. FTX's mounting presence in traditional markets is also illustrated in its significant stake in equities exchange, IEX, which was revealed in April. Still, FTCS plans to route its stock orders to Nasdaq's market, according to a

Starting point is 00:08:33 news release. The firm does not plan to monetize the business via payment for order flow, which is the typical mechanism through which brokers make money. Through payment for order flow, as it is known in the industry, brokers route orders to liquidity providers to execute. Those trading firms pay the brokers for that order flow, end quote. So I guess the stock trades for FTCS will be a loss leader to get people to trade more lucrative crypto. But if you were getting into the regulated game already with these derivatives and commodities and stuff, then, you know, why not just add stocks too? Makes sense. Chinese citizens, angered by Shanghai's ongoing lockdowns, are evading censorship of viral posts and videos criticizing the government by minting them into NFTs, quoting the Financial Times.

Starting point is 00:09:29 China's censors have been at the forefront of the information battle during the country's worst coronavirus outbreak in two years. They have systematically erased critical articles and posts on mainstream social media sites about the heavy burden of the strict lockdown measures. But the growing popularity of blockchain technology has presented a fresh challenge to the country's censorship regime. Once data is sent to a blockchain network, it cannot be deleted or altered by higher authorities. The country's internet police worked in a frenzy to erase the viral voice of April video, from domestic social media, a six-minute protest video documenting the suffering experience by people in Shanghai cooped up at home. Just as the video was taken down from Weibo and the messaging app WeChat, tech-savvy netizens uploaded snapshots of the video to the blockchain, casting them into

Starting point is 00:10:16 NFTs. Sensors cannot delete information from the blockchain, said Barney Tan, head of the School of Information Systems and Technology Management at UNSW Sydney. One Chinese blockchain enthusiast said the technology has become more user-friendly in the past few years, making it easier to upload and read articles on the decentralized database. People have been posting critical articles on the blockchain so the government cannot delete them. It's happening more now because blockchain technology is getting better, the person added, who did not want to be named because of the sensitivity of the issue. But Tan noted that even though sensors cannot scrub out information from the blockchain, quote, they can still block access to it by preventing people from sharing links on social media, end

Starting point is 00:10:56 quote. From the tech is down file, Salesforce is slowing hiring, according to an internal memo. Meta has frozen hiring of engineers for product teams, including Facebook gaming, dating, and commerce, though Mark Zuckerberg said internally meta is not planning layoffs. According to a new report, Netflix, had 3.6 million cancellations in Q1 of 2022, up from around 2 and a half million in churn for each of the past five quarters. 13% of those users canceling their Netflix accounts came from subscribers who had the service for over three years. And, dun, dun, dun, the down rounds have arrived.

Starting point is 00:11:44 Sources are telling the Wall Street Journal that Clarna is aiming to raise up to $1 billion at a valuation of around $30 billion, which would represent around a 30% drop from its $46 billion valuation in its last round of funding. led by SoftBanks Vision Fund, too. Klarna, along with a firm, has been one of the biggest players in the whole buy-now pay-later movement, quoting the journal. Earlier this year, Klarna spoke with investors about a valuation of more than $50 billion, but some balked amid the market jitters, one of the people said.

Starting point is 00:12:16 In 2019, Klarna, whose investors include Sequoia Capital, Silver Lake, and Dragonhear Investment Group, was valued at close to $3.5 billion, according to data from Pitchbook. Its valuation jumped massively through several funding rounds during the pandemic as consumers and businesses move transactions online, a trend accelerated by pandemic-induced lockdowns. Klarna raised money in March 2021 and was then valued at $31 billion. The June fundraising made Klarna more valuable than most large European banks. Public and private market investors are now second-guessing the inroads Klarna and other by now pay later firms made with consumers. The share price of NASDAQ listed a firm holdings, a Klarna competitor, is downstate. 75% this year, giving it a market value of 7.2 billion. That decline comes even as the payment network

Starting point is 00:13:02 earlier this month boosted its 2022 revenue guidance to 1.33 billion or 1.34 billion in a range from earlier guidance of 1.29 to 1.31 billion, end quote. But that's kind of how this happens. I was talking to an investor friend this morning who was balking at the valuation of a company he was considering putting money into because they have a public competitor who I last year, and that competitor's stock is down like 80%. If you've got a public competitor, it's hard to argue that the apples to apples math shouldn't at least be considered when looking for even private valuations. Finally today, you know one recently IPO tech company that is holding up comparatively well? It's Airbnb. Now, I did say holding up comparatively well.

Starting point is 00:13:54 Airbnb's stock is down about 50% from its all-time highs and down about 20% from its IPO price But still, that's better than a lot of other folks. I just told you about Affirms 75% drop. Anyway, I wonder if Airbnb's resiliency has anything to do with this. According to data from AirDNA, Inside Airbnb, and Douglas Ellman, New York City has around 3,000 to 13,000 more Airbnb listings right now than rental apartments listings. Again, there are currently thousands more Airbnb's available in the...

Starting point is 00:14:30 this city right now, then there are apartments. Quoting, curbed. Ever since Airbnb came on the scene in 2008, there have been concerns that the short-term rental company would deplete the housing stock by sucking up available rooms, causing prices to rise in cities like New York and San Francisco, where there were already severe housing shortages. The absolute number of available apartments and houses on the site peaked before the pandemic and has since dropped back, according to both inside Airbnb and AirDNA. But there's a difference now. There are just so few apartments, to be had that Airbnbs make up the majority of the city's available rentals. Airbnb doesn't release listings or bookings data and wouldn't comment on the data collected by

Starting point is 00:15:10 AirDNA and Inside Airbnb, though its representatives were willing to confirm that its New York City listings inventory has fallen since the start of the pandemic. They pointed to several other factors, none related to Airbnb that may have contributed to the housing shortage. Quote, over the past two years, our entire space listing supply citywide has decreased, and it now represents a fraction of a percent of the city's rental units, and all while rent prices have trended upward and city issued permits for new unit development remain down by a double-digit percentage. A spokesperson for the company wrote in an email, that number is somewhat gamed, though. Airbnb is comparing its inventory to the total number of rental units in New York,

Starting point is 00:15:48 not just the available ones, which as of 2017 was 2.18 million. But of course, only a tiny fraction of those are open in any given year, let alone any given month. The company has, for its part, always vehemently denied that it plays any role in the housing shortage, insisting that it provides income that helps people remain in expensive cities they'd otherwise have to leave. Its representatives also pointed to several factors that can make scraped third-party data inaccurate. Multiple listings for the same property and listings that show up as active but are rarely available. For example, a townhouse that homeowners only ran out when they travel, meaning it's active year-round but only available for a few weeks a year. But even if AirDNA and inside Airbnb

Starting point is 00:16:30 are overestimating the number of apartment and home listings on the site by a wide margin, and with the caveat that Douglas Ellman's rental reports don't cover the Bronx or Staten Island, it seems likely that the number is at least broadly accurate. On top of the full home listings, there are nearly 9,000 private and shared rooms available on Airbnb according to AirDNA. Does it matter that there are more Airbnbs than rental listings right now? Doesn't that point to just how scarce all rentals are, except hotel rooms, that is? Well, yes, but with people fighting over every decent apartment that comes on the market, it's worth taking note of how many apartments have been taken out of circulation to become short-term rentals.

Starting point is 00:17:07 Some may be townhouses or condos rented for only a few weeks a year, of course, but lots are surely brownstone garden apartments that a decade ago might have gone to long-term tenants. On a Brooklyn list serve, I belong to, every few months. Someone asks about Airbnb instead of renting their brownstone's garden level. The city's housing market, always tight, is now close to crisis. You'd have much better luck finding a one bedroom and a brownstone for a few weeks than a year-long lease, which doesn't seem likely to change anytime soon, end quote. The very last link in the show notes, if I remember to do it, is for a Twitter space we are going to do at noon Eastern time tomorrow. So 9 a.m. Pacific, we're going to be talking to Andresen Horowitz's Chris Dixon, the head of their

Starting point is 00:18:00 entire crypto investment wing. We're going to talk about the state of the crypto market right now. The link is to a reminder that you can set to listen in on the space when it happens. We only have about 20 minutes to talk to Chris, the Dixon Chris, I mean, but I imagine the Messina Chris and I will stick around for a while after that to talk about some more news items from this week. Don't know if I'll have tomorrow's show out before the space happens tomorrow or if it will be in the middle of me actually producing the show, so either tomorrow's show will be early or a tad late. We'll see how productive I can be tomorrow morning. Talk to you then.

Tech Brew Ride Home - Thu. 05/19 – TikTok To Get Into Games?

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.