Tech Brew Ride Home - Thu. 09/27 - When You Take Being an Apple Fanboi Too Far

Episode Date: September 27, 2018

Facebook said it doesn’t market certain data; surprise, surprise, researchers prove they do, Amazon doesn’t love unions, is the Oculus Quest VR’s iPhone moment, and do ride sharing companies actually make money? Links: Facebook Is Giving Advertisers Access to Your Shadow Contact Information (Gizmodo) Amazon's Aggressive Anti-Union Tactics Revealed in Leaked 45-Minute Video (Gizmodo) Teen Apple Hacker Avoids Jail in Australia After Serious Attacks (Bloomberg) Payment Startup Stripe Is Now a $20 Billion Company (Bloomberg) Masayoshi Son, SoftBank, and the $100 Billion Blitz on Sand Hill Road (Bloomberg Businessweek) Lyft Shows Financial Improvement Ahead of IPO Filing (The Information) 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 Thursday, September 27th, 2018. I'm Brian McCullough. Today, Facebook said it didn't target certain data.

Surprise, surprise, researchers later proved that they did. Amazon doesn't love unions. Is the Oculus Quest VR's iPhone moment? And do ride-sharing companies actually make any money? Here's what you missed today in the world of tech. So we know that Facebook targets ads against anything. you tell it about yourself. But according to some new academic research, Facebook also lets ads target you using information you never gave it. In fact, never could have given it. It also

targets you using information given to Facebook ostensibly for security purposes, like when you give them your phone number for two-factor authentication. When Gizmodo asked Facebook about these practices, which it has termed shadow contact information, the company initially denied it. But if you read the Gizmodo piece that is the first link in the show notes. It's pretty damning. It turns out a bunch of researchers at Northeastern University and Princeton did a bunch of tests involving ceding contact information to Facebook for a bunch of dummy accounts and then seeing if and how long it took before they could target ads against that data. Quote, they found that when a user gives Facebook a phone number for two-factor authentication

or in order to receive alerts about new logins to a user's account, that phone number became targetable by an advertiser within a couple of weeks. So users who want their accounts to be more secure are forced to make a privacy tradeoff and allow advertisers to more easily find them on the social network. When asked about this, a Facebook spokesperson said that, quote, we use the information people provide to offer a more personalized experience, including showing more relevant ads, end quote. She said users, bothered by this, can set up two-factor authentication

without using their phone numbers. Facebook stopped making a phone number mandatory for two-factor authentication four months ago. The researchers also found that if user A, whom we'll call Anna, shares her contacts with Facebook, including a previously unknown phone number for user B, who will call Ben, advertisers will be able to target Ben with an ad using that phone number, which I call shadow contact information about a month later.

Ben can't access his shadow contact information because that would violate Anna's privacy, according to Facebook. So he can't see it or delete it, and he can't keep advertisers from using it either, end quote. So to sum up, if you share information with Facebook in order to make your account more secure, perhaps because you want to lock down your personal data, Facebook will share that information with advertisers. If you don't share a phone number with Facebook at all, say the landline to your house that you never use online for anything anyway,

but someone else just happens to have in their address book. And then the automatic contacts uploader adds that to Facebook on their behalf. Facebook will share that landline number with advertisers who will use it to target ads against you, even though you never shared the number in the first place. Lovely, right? The great Brian Krebs of Krebs on Security fame tweeted, quote, being an infosec for so long, it takes its toll. I've come to the conclusion that if you give a data point to a company,

they will eventually sell it, leak it, lose it, or get hacked, and relieved of it. There really don't seem to be any exceptions, and it gets depressing. And another scoop from Gizmodo. They also got their hands on a 45-minute training video that Amazon is sending to team leaders at Whole Foods to teach them how to be on the lookout for workers attempting to form unions at Whole Foods locations. Gizmoto did not post the video itself because it said it wanted to protect the identity of the person that gave it to them, but they did quote from the video extensively. According to Giz, in section four of the video, there is a long list of examples cited, quote,

that can indicate associate disengagement, vulnerability to organizing, or early organizing activity, end quote. Among the examples of these early indications, use of words like living wage, associates raising concerns on behalf of their coworkers. Workers, quote, who normally aren't connected. to each other suddenly hanging out together, end quote. And quote, any associate behavior that is out of character, end quote. So, I guess, don't go into work and have an off day for any reason, if you're a Whole Foods employee, or you too could be accused of being a union sympathizer.

And one more, and remember, I have to trust Gizmodo on quoting this accurately, a section of the video apparently warns managers that you can't threaten employees who talk about unionizing. because that's against the law. But that doesn't mean management can't do other things like, you know, state opinions. Quote, opinions can be mild like, I'd rather work with associates directly or strong. Unions are lying, cheating rats. The law protects both, end quote. Now, Gizmodo points out that videos and anti-union tactics like these are not uncommon in the retail industry.

They cite Target, Lowe's, and Walmart as examples of companies who have face criticism in recent years for similar training videos. And Amazon released this statement in response, quote, We're perplexed as to why Gizmoto takes issue with a company wanting to better engage its employees, train hundreds of managers to maintain an open and direct dialogue with associates, and create channels to drive innovation on behalf of the customer in a caring and inclusive environment. The reporter clearly cherry-picked soundbites from the video to meet his editorial objective and do not align with our view on how to create career opportunities for employees, end quote.

This is a odd little story. An unnamed Australian teenager has been sentenced to eight months' probation for breaching Apple's data systems over the course of several months in two periods between 2015 and 2017. The now adult defendant was only 16 at the time of the original hacking. Investigators later recovered around one terabyte of sensitive internal Apple info on the defendant's computer, but customers' personal data, Apple wants you to know, was not compromised. This was all, again, internal Apple stuff. Quote, the teenager exploited a virtual private network used by authorized people to connect remotely into Apple's internal systems, the

magistrate said. Helped by another youth, he later sent a computer script to the system which created a secure shell tunnel, a method of accessing systems and bypassing firewalls, enabling them to remove data more quickly. During the attacks, he later, the teenager was able to access internal security policies and to save authentication keys, the magistrate said, end quote. The reason I call this an odd little story is there's no indication that the teen did anything nefarious with the data, and previous reports indicated that the kid was just an Apple fan who actually dreamed of working at the company someday, quoting from Bloomberg.

The teenager's lawyer had argued it began innocently as a result of his fascination with Apple and, quote, love of information technology, the magistrate said. In an interview with police, the defendant said part of the appeal was, quote, just being in the corporation, pretending you were employees, and that accessing the networks had become addictive, she said, end quote. So I guess this is a case of taking being a hardcore Apple fanboy to a real extreme. Okay, let's finally get to that Connect Five event that Oculus held yesterday that if you got the corrected version of yesterday's show,

you actually heard in my outro that we were going to get to today. The Oculus Go was updated yesterday with new visual rendering features to improve image quality, added YouTube VR support, and added a new casting feature, which allows you to share whatever content you're using inside the Go with a nearby TV. Also, there were what Venture Beat called a metric ton of improvements made to Rift Core 2.0, the underlying operating system that Oculus uses. Among them improved avatars and developer-focused hybrid apps

for porting 2D games to the system. But the big news was the new headset, the standalone Oculus Quest. Stand-alone, no computer needed. Shipping next spring for $399 with 50-plus games expected at launch. This is Oculus's first all-in-one, totally wireless. Again, no need to tether to a computer. VR headset that also offers position tracking, both for the headset and the included, also

wireless dual hand controllers, and six degrees of freedom. The Quest uses the same optics as the Oculus Go, so a display resolution of 1600 by 1440 per eye. If you follow this sort of stuff, this was the promised project known as Santa Cruz. This is apparently Oculus's flagship consumer headset for the foreseeable future and the company promised to invest in it heavily. Quoting Owen Williams in his overnight newsletter about this, quote, By squishing everything required to play into a single device, Oculus is hoping to reignite an industry that largely fizzled out after the hype died down. For game developers, it's an opportunity to define the killer app for a new platform.

By reducing the friction to zero and making the headset instant on with zero drivers or configuration, it might be enough to make it stick. If you can throw on your headset and be somewhere else in under 10 seconds, that would change everything, end quote. Still, Owen is cautiously skeptical. Oculus apparently was mum about the battery life of this new headset. And as people have said ad nauseum, this technology still has yet to have its iPhone moment or even generate its killer app or do anything that would make everyone suddenly realize VR is something they definitely need in their lives. Perhaps this device is the device that will finally crest that invisible hill?

In a way, the analogy would be to Tesla, and then finally producing a low-end mass market vehicle in order to finally achieve scale. Will the Oculus Quest be the equivalent of the Model 3 and push VR into the mainstream? We'll have to see early next year. Let me hit you with some funding news. Stripe CEO Patrick Collison says the company has raised $245 million at a $20 billion valuation up from the $9 billion valuation stripe earned in November of 2016.

Collison also said that, quote, about 84% of American adults shopping online bought something via Stripe in the last year, end quote. Hunter Walk tweeted, there's a great story to be written about when, if, how, Stripe, Coinbase, and Square are going to compete to divvy up the future of FinTech. To which commenters also said, that doesn't even mention players like Paytm and Ant Financial. Also, Home Flipping Startup Open Door just raised $400 million at a valuation of $2 billion plus. Guess who invested? SoftBanks Vision Fund and Real Estate Tech Company Compass raised its own $400 million round at a $4.4 billion valuation.

Want to guess who led that round? SoftBanks Vision Fund, though the Qatari Investment Authority also joined in. So maybe it's time to check in with Masaan again. The Japanese dealmaker has told Bloomberg he plans to raise a new $100 billion fund every few years. Of the current Vision Fund, $65 billion of that fund has apparently already been committed to investments. Sone also tells Bloomberg he plans to. to invest around $50 billion a year every year for the foreseeable future. To put that number in perspective, in 2016, the entire U.S. venture capital industry invested $75.3 billion.

You guys might get tired of me harping on San and the Vision Fund, but it's hard to overstate how much he and his fund have disrupted traditional VC and how much the Vision Fund through its investments will be shaping the companies and technologies we'll be talking about for decades to come. I've linked to profiles of Masa Son before, but the Bloomberg link in the show notes will give you another summary with some eye-popping graphs if you need further convincing. Finally today, Uber has been divulging its financials for a while now. But thanks to the information, we just got our first look at how Lyft is doing. Lyft's revenues more than doubled in the first half of 2018 to $909 million. dollars, but its net loss grew 46% to 373 million.

Quote, in other words, Lyft lost 41 cents for every dollar in revenue it generated in the first half. While that's a lot of red ink, it's a marked improvement on the first half of 2017 when Lyft lost 62 cents for every dollar of revenue it reported. Lyft has to continue pushing down the net losses as it grows if it is to get a good reception from investors when it goes public, which is expected to happen next year before Uber goes public, as the information previously reported, end quote. Shira OVide tweeted,

Congratulations on your negative 41% net income margin for a business that is billed as having high profit potential, end quote. That reflects a sizable chunk of conventional wisdom out there that has long been skeptical of the whole business of ride hailing, after all the aggressive international expansions are rolled back after the aggressive subsidies are eliminated, and the prices for rides are more realistic, is there actually enough margin there in the end for ride hailing as a business model to ever be meaningfully profitable? Or was the play here just to get big fast, create a virtual monopoly and or hope that self-driving technology catches up fast enough that you can eventually

take drivers out of the cost equation? Well, we now know the financials of two of the biggest players and the answer to the question, does ride hailing as a business model make sense, seems to be still very much up in the air. By the way, as I'm sure you noticed, at least some of you maybe, yesterday's show when it came to this section was blank. Small editing error that I was sort of aware of, but couldn't fix, and then it went live, and then I couldn't fix it, and then I fixed it later. So I want to take this time to acknowledge that Chris Higgins wrote 95% of yesterday's episode. He did all that math on the Apple news advertising piece.

Thanks, as always, Chris, for pitching in. Follow Chris on Twitter at Chris Higgins. Hopefully you're actually hearing this section today. Talk to you tomorrow.