Tech Brew Ride Home - Thu. 06/02 – Something Something, A Joke About Leaning Out?

Episode Date: June 2, 2022

Sheryl Sandberg is leaving Meta after 14 years. Who is Javier Olivan, who is replacing her as Meta’s COO? I’ll let you know. Why the feds cracking down on NFT fraud could have big implications. And Google’s doing that thing Google loves to do with its messaging apps. Again. Sponsors: ClickUp.com promocode ride for 15% off Links: Facebook parent Meta COO Sheryl Sandberg is stepping down (CNBC) Sandberg’s Advertising Empire Leaves a Complicated Legacy (Bloomberg) Javier Olivan, who’s replacing Sheryl Sandberg at Meta, built his career on international expansion (CNBC) US Charges Ex-OpenSea Exec With NFT Insider Trading (CoinDesk) Google is combining Meet and Duo into a single app for voice and video calls (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 Meme ride home for Thursday, June 2nd, 2020. I'm Brian McCullough today. Cheryl Sandberg is leaving meta after 14 years. Who is Javier Olivan, who is replacing her as meta's C-O-O?

I'll let you know. Why the Fed's cracking down on NFT fraud could have big implications, and Google's doing that thing Google loves to do with its messaging apps. Again, here's what you miss today in the world of tech. Cheryl Sandberg is leaving meta this fall. after 14 years, and Chief Growth Officer Javier Olivan will take over as META's C-O. Sandberg will stay on META's board, but while this was widely expected and rumored, Sandberg's eventual leaving the company, it is impossible to overstate how this is the end of a

very specific era, quoting CNBC. Over the next few months, Mark and I will transition my direct reports, Sandberg said in a lengthy Facebook post discussing stepping down. Meta is also planning an internal reorganization to go along with the change, Zuckerberg said. Looking forward, I don't plan to replace Cheryl's role in our existing structure. I'm not sure that would be possible since she's a superstar who defined the C-O role in her own unique way, Zuckerberg said in a Facebook post. But even if it were possible, I think meta has reached the point where it makes sense for our product and business groups to be more closely integrated, rather than having all the business

and operations functions organized separately from our products, he said. Speaking with CNBC's Julia Borsden, Sandberg said, the decision to step down will allow her to focus more on her philanthropic work. The move is not because of the company's regulatory overhang or its current advertising slowdown, she said, end quote. So, look, there is a ton to say here. The glib thing to say is that if the long Silicon Valley tradition of bringing adults into the room to help a startup become a sustainable company,

If that was true for Eric Schmidt at Google, it was doubly true for Sandberg at Facebook. But it's not just about her giving Zuckerberg the guidance and the space to, well, again, not to be too glib about it, but to become a grown-up. If we focused only on that, that would be doing Sandberg a great injustice. Because it's very much possible to say it was Cheryl Sandberg who built meta, nay, Facebook, into the business that it is. The advertising juggernaut that briefly hit a trillion-dollar market cap or came close, that is what she was brought from Google to Facebook to do, to build an advertising business

to rival Googles. And she achieved that, which is no small feat in the least. People forget this, but for very, very long until about a year or two before Facebook's IPO, no one was really sure that you could build a major, major business on top of social media. Sure, you could always throw ads against billions of page views and hours of user attention, but look at Yahoo, look at MySpace, look at Twitter, and especially Reddit to this day. Those are multi-billion dollar businesses, but they're not hundreds of billions of dollar businesses. Meta is, and Cheryl Sandberg did that. Then there is, of course,

her impact on the culture, with her lean-in movement and her advocacy for women in tech and in sea suites. Quoting Bloomberg, who is probably summing it up better than I am, quote, quote. Cheryl Sandberg once remarked that she felt she was put on earth to scale organizations. And during her career as one of the most powerful executives in Silicon Valley, she plowed straight toward that grandiose vision. As an advertising head at Google in the mid-2000s, and as chief operating officer at Facebook for 14 years until her resignation Wednesday, Sandberg oversaw a period during which the internet services ballooned to colossal sizes, fed by a seemingly endless fountain of advertising revenue. Though Sandberg may get most of her name recognition from Lean In, her 2013 blockbuster book encouraging

women to take charge in the workplace, her most significant and complicated legacy may be the tech industry's reliance on personalized advertising, which created both profits and complex nightmares at immense scale. Sandberg was one of the people who made Google's ad business so enormous that it became an essential part of every advertiser's budget. Then after she joined Facebook in 2008, four years after it was created, she brought that same self-service model to the social networking company now called meta-platforms. Instead of targeting users based on their search queries like Google did, Facebook could target based on what it gleaned of their personal identities, connections, and interests. An entire industry of other

tech companies followed suit with business models that offered products for free and made money off users' personal data instead. Cheryl had a front row seat at the two largest and most successful advertising platforms in history, said Patrick Keane, the chief executive officer of Action Network, a sports media firm who worked with Sandberg at Google in the early aughts. Colin Sebastian, an analyst at Robert W. Baird and company wrote that Sandberg's lasting impact is the success of that advertising model, quote, her legacy in our view is that meta has one of the strongest business models in the digital economy, end quote. In recent years, Samberg's public image was tarnished alongside the mounting criticism against Facebook,

where she was widely seen as a powerful number two executive. Her expertise in legal, operations, and policy complemented she. executive Mark Zuckerberg's preference for product, engineering, and forward-looking technologies like virtual reality. In its earlier years, the social network was praised for its size and its move-fast and break-things disruptor attitude, but over time it was increasingly rebuked for its failure to rein in large-scale misinformation, hate speech, privacy breaches, and lies from political dictators on its ever-expanding online platforms. The scale Sandberg sought for so many years is now the most scrutinized part of her legacy by those who say she pursued growth single-mindedly without pausing to

consider its repercussions. Quote, it has been proven that the way Facebook scaled recklessly, intentionally to dominate the entire global way that we communicate, it's exactly that reckless ability to scale that ended up causing so much chaos and actual harm in many places, said Yale Eisenstadt, founder of Keeley Global, a tech and democracy advisory firm who in 2018 headed the election's integrity team for political ads at Facebook, quote, I've never seen an ounce of self-awareness from her that she played any role in that, end quote. That embattled image stands in contrast to Sandberg's beatific personal brand as a leading woman in the workplace, someone who balanced raising a family with unyielding career ambitions, end quote.

Maybe the best summation of both sides of this coin comes from Sarah Fisher on Twitter, quote. Cheryl Sandberg grew meta's revenue from $272 million in 2008 to $118 billion in 2021. That's over 43,000 percent, depending on who you ask. That corporate growth story is one of the most impressive in history or one of the most reckless, end quote. All right. So who is this Javier Olivan, who is replacing Cheryl Sandberg? Quoting CNBC again. If Sandberg led the charge in building Facebook's advertising business, which still represents 97% of meta's total revenue,

Ollivan deserves credit for its global expansion. His first job at the company from 2007 to 2011 was head of international growth. Over 91% of monthly users now come from outside the U.S. and Canada, according to Mehta's first quarter results. Born in the small Spanish municipality of Sabine Anigo in 1977, Olivan worked in Europe and Asia before making his way to Silicon Valley. After receiving a master's degree in electrical and industrial engineering from Spain's University of Navarra, he worked as a research and development engineer at Siemens in Munich,

and then at NTT Data in Tokyo. In 2007, he graduated from Stanford University's business school and joined Facebook. When he arrived at Facebook in 2007, fewer than 50 million people were using the app with, quote, a very small portion of that coming from users outside the U.S., end quote. That's according to the prospectus for Vi Global Growth, a blank check company that counts Olivan as a board member. In addition to Vi Global, Olivan spent six years on the board of Latin American e-commerce company Mercado Libra, and he invested in geospatial imaging company, Sattel Logic, ahead of the SPAC deal it completed in January. But his career has been centered at Facebook. In 2008, Olivan accompanied Zuckerberg for an appearance at the University of Navarra. He later worked on internet.org, an effort Facebook and other companies launched in 2013 to connect people to internet services and less developed countries.

Spanish was Facebook's first non-English language, and it was the first project Alavan worked on, he said, in an interview earlier this year. Alavan also pushed for Facebook to buy mobile messaging app WhatsApp. Before the $19 billion acquisition in 2014, Ollivan told Facebook management that WhatsApp was more actively used than Facebook, noting that literally everyone in Spain used it, according to a 2002 report from Democratic staffers on a U.S. House subcommittee on antitrust. Zuckerberg said that he agreed with Alvon's analysis that WhatsApp could expose new users to Facebook. Even with the promotion, Alavan may remain relatively under the radar.

Sandberg, in her role as number two routinely updated investors on quarterly earnings calls, a meta spokesperson declined to comment on whether Olivan would follow suit. With some exceptions, I don't anticipate my role will have the same public-facing aspect, given that we have other leaders at meta who are already responsible for that work. Olivan wrote in his Facebook post discussing his promotion, end quote. Another big story hit yesterday afternoon. The DOJ has charged X OpenC head of product, Nate Chastain with wire fraud and money laundering tied to a September 2021 NFT insider trading scheme.

This is the first time the DOJ has done any sort of case like this, and it is this precedent that is potentially the big story here, quoting Coin Desk. Nate Chastain, the OpenC staffer who quit the NFT marketplace after an insider trading scandal in September 2021, is now in the crosshairs of U.S. authorities. Chastain was charged Wednesday with wire fraud and money laundering in connection with with trading on confidential information about which non-fungible tokens were about to be featured on the OpenC homepage. The Department of Justice said in a press release, the two charges each carry a maximum sentence of 20 years in prison. The Justice Department

alleged in the release that Chastain flipped, quote, dozens of NFTs after choosing to feature them on the website, selling them for two to five times what he initially paid. Chastain hid his fraud by making these purchases using anonymous digital currency wallets and anonymous OpenC user accounts, according to the Justice Department. NFTs might be new, but this type of criminal scheme is not, U.S. Attorney Damian Williams said in a statement. As alleged, Nathaniel Chastain betrayed OpenC by using its confidential business information to make money for himself. Today's charges demonstrate the commitment of this office to stamping out insider trading, whether it occurs on the stock market or the blockchain, end quote.

Chastain 31 is working on a new NFT project Oval, as Coindex reported in March, based on investor materials. The Justice Department said Chastain was arrested this morning in New York. Attorneys believe Chastain's arrest signals the onset of a new wave of enforcement actions related to NFTs. Max Dillendorf, a New York City-based attorney whose practice is focused on cryptocurrency and NFTs, said the arrest sends a, quote, very, very loud message to the industry that federal regulators now have NFT transactions in their crosshairs. We know that there is a lot of insider trading in the industry in NFTs and in decentralized finance or defy, Dillendorf told Coin Desk. So the question for projects and project promoters is, are you really disclosing all of the information to the users or the community? A lot of projects and a lot of

market participants are walking down the edge of a knife. Dillendorf added, they get pulled in for an audit or get subpoenaed by any of the federal regulators. I mean, it's so easy for regulators to build a money laundering case and it's so hard to defend against one, end quote. While a coming regulatory crackdown could spook the industry, Moish Peltz, a New York-based NFT lawyer, told Coin Desk, that consumer confidence in NFT marketplaces could improve with stricter regulation. If consumers are going to have confidence in the NFT marketplace, it is important for them to know they are not being taken advantage of by insiders using confidential information to their disadvantage, Pelt said in an email to CoinDesk, end quote. Quoting, dare

Bessonjo on Twitter. For insider training to stick, this would imply that NFTs are securities, which has gigantic ramifications across the industry. A guilty verdict would put the entire NFT industry under the jurisdiction of the SEC overnight, end quote. And quoting, at D. Johnson underscore CPA. Finally have our first legal case of insider trading in NFTs. Results should be interesting. Guessing alpha groups and influencers are deleting old messages furiously today where they've consistently front-run big announcements, end quote. Finally today, let's bust out the old jokes about Google and its messaging apps. Google says it plans to combine its Duo and Meat video calling apps into a single platform later in 2022,

using Duo's app as the foundation under the Google Meet brand. So, Duo as the platform, meat as the brand. Not confusing at all. It never is. quoting the verge. By bringing them both together, Google is hoping it can solve some of what ails modern communication tools. Quote, what's really been important is understanding how people make the choice as to what tool they're going to use for what purpose and what circumstance, says Javier Saltero, the head of Google workspace. Our digital lives are filled with a million

different chat apps, each with its own rules and norms and contact list, some for work purposes, and some for personal ones. Google's hoping it can use Gmail addresses and phone numbers to bring all that together. It's really important and powerful to be able to reach you that way, Soltaro says, and allow you then to decide whether you want to be reached or not, as opposed to having to manage all of these different identities and deal with the consequences, end quote. Soltaro has been preaching this idea of reachability for most of his tenure at Google, and it has led Google to integrate meet and chat into so many of its other services. It's a good goal, but it comes at a cost. Adding everything to everything has made some of Google's services cluttered and complicated. You can

start a meeting from anywhere, but do you actually want to? Streamlining your communication choices is a good idea, but haphazardly cramming everything together doesn't work. Over the last couple of years, in particular, meet has become a powerful platform for meetings and group chats of all kinds, while Duo has stayed more of a messaging app. Google promises it's bringing all of Duo's features to meet going forward and seems convinced it can offer the best of both worlds. It's not quite right to say that Duo is being killed, though. The app which Google originally launched in 2016 has an easy way to make one-to-one video calls does a number of useful things that meat doesn't. For one thing, you can call someone directly, including with their phone number, rather than relying on

sending links or hitting that giant meet button in your Google Calendar invite. Duo has always been more like FaceTime than Zoom in that sense. Google also launched an iMessage competitor, Allo at the same time as Duo. Alo didn't turn out so great. As the two services become one, Google is leaning on Duo's mobile app as the default. Pretty soon, the Duo app will get an update that brings an onslaught of meat features into the platform. Later this year, the duo app will be renamed Google Meet. The current Meet app will be called Meat Original and eventually deprecated. This sounds confusing, but Google claims it's the best way forward, end quote. Of course, it's confusing. It's Google's messaging about its messaging. It's always confusing.

You know that old phrase about everything in business is just bundling and unbundling. Well, the sole initiative to combine everything will only probably last as long as it takes for someone at Google to dream up another two or three brand new messaging apps to launch confusingly. That's all for today. Talk to you tomorrow.