Tech Brew Ride Home - Thu. 11/15 - The Bombshell NYTimes Story on Facebook

Episode Date: November 15, 2018

That huge New York Times story behind the scenes of Facebook, Google adds business messaging to Google Maps, Uber eats is a monster business, Amazon Go has a rival and there’s a new King of YouTube. Links: Delay, Deny and Deflect: How Facebook’s Leaders Fought Through Crisis (NYTimes) Google Maps will let you chat with businesses (The Verge) Uber continues to lose money as it scales scooters, bikes and other newer businesses (TechCrunch) Amazon Go competitor Standard Cognition raises $40 million to expand its cashierless store solution (VentureBeat) PewDiePie's Tumultuous Reign as YouTube King Is Almost Over (Bloomberg) 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. show is sponsored by Datadog. Datadog is a software-as-a-service monitoring platform that provides dev and ops teams with a unified view of their infrastructure, apps, and logs. Data Dog allows you to monitor, troubleshoot, and optimize performance. Your servers, your clouds, your metrics,

your apps, your team, altogether. If you go to Datadoghq.com slash ride home, you can get a free trial at Datadog, and Datadog will even send you a free t-shirt. That's Datadoghug-HQ com slash ride home. Welcome to the tech meme ride home for Thursday, November 15th, 2018. I'm Brian McCullough today. We get into that huge New York Times story behind the scenes of Facebook. Google adds business messaging to Google Maps. Uber Eats is a monster business.

Amazon Go has a rival, and there's a new king of YouTube. Here's what you miss today in the world of tech. Well, there's obviously only one story anyone's talking about right now. If you haven't read it, about an hour before the podcast dropped yesterday. The New York Times dropped a long bombshell of a piece about the behind-the-scenes machinations at Facebook over the last three years, as it's reeled from the crises that we've been talking about so often. Apparently, the piece itself was a year in the making. Came from interviews with more than 50 people, and it is long, but it is super worth reading.

In almost a year now of covering bombshell tech stories, I've never seen one chattered about this much. I really, really, really want you to read the piece, but if you don't, here are the TLDR juicy bits. Facebook's C.O. Cheryl Sandberg, who you might know has a D.C. background from her time in the Clinton administration, reportedly oversaw the creation of a D.C. lobbying effort that included the hiring of a Washington-based consulting firm called Definer's Public Affairs, which the journal describes as spreading disparaging information about critics of Facebook as well as Facebook competitors. Quoting from the Times piece, among other things, Definers worked to discredit activist protesters that were against Facebook, in part by linking them to the liberal financier

George Soros. It also tried to deflect criticism of the social network by pressing reporters to look into rivals like Google, end quote. Late yesterday, Facebook announced that it was terminating its relationship with definers. When the various scandals broke over the last couple years, Sandberg leaned on her Washington connections to tamp down at least legislative outrage as well as media outrage. When Senators Warner and Koblocker introduced legislation to compel Facebook and other web companies to disclose who bought political ads on their site, Sandberg reached out especially to Koblokar to try to soften relations.

As for Senator Warner, who has long been a crusader to rein in the power of tech companies, Facebook had another friend in the person of my senator, New York's Chuck Schumer, quoting the times again. In July, as Facebook's troubles

threatened to cost the company billions of dollars in market value, Mr. Schumer confronted Mr. Warner by then Facebook's most insistent inquisitor in Congress. Back off, he told Mr. Warner, according to a Facebook employee briefed on Mr. Schumer's intervention. Mr. Warner should be looking for ways to work with Facebook, Mr. Schumer advised, not harm it. Facebook lobbyists were kept abreast of Mr. Schumer's efforts to protect the company, according to the employee, end quote.

The Times also noted that Mr. Schumer's daughter is employed as a marketing manager in Facebook's New York offices. As to the Russian election hacking on Facebook, there are some intense fly-on-the-wall scenes in the piece. Alex Stamos, remember him, Facebook's security chief who stepped down to much eyebrow raising earlier this year. Apparently, he took it upon himself to originally investigate when members of his security team first noticed Russian hackers probing Facebook accounts related to the presidential campaigns. At the time, Facebook reportedly had no policy on disinformation or any resources dedicated to searching for it, according to the times. Stamos created a team to investigate. further, found the whole mess of problems that we're all now well aware of, and told Sandberg and Zuckerberg about it. Sandberg, especially, according to the Times, reacted with fury. The fear was that

even investigating this stuff might open Facebook up to liability. And then, according to the piece, that is when the delay, deny, and deflect strategy that is the title of the piece, kicked into effect with tactics like those used by definers' public affairs. Like every other crisis Facebook has faced. The hope seems to have been that this would all blow over with time. One more fun detail. When Tim Cook made his famous quote about how Apple's business model was different than Facebook's, quote, we're not going to traffic in your personal life. Privacy to us is a human right. It's a civil liberty, end quote. The Times says that Mark Zuckerberg was so pissed at this quote, he ordered Facebook's management team to stop using iPhones

and only use Android phones. Interestingly, even though it did. didn't have to rise to this bait. When Facebook released a response to the Times piece this morning, it included this graph, quote, Tim Cook has consistently criticized our business model and Mark has been equally clear he disagrees. So there's been no need to employ anyone else to do this for us. And we've long encouraged our employees and executives to use Android because it is the most popular operating system in the world, end quote. So yeah, don't expect Zuck and Tim to be vacationing together anytime soon. You'll notice that a lot of this piece was focused on Sandberg, who until now has seemed to be

removed from the scandal. And a lot of the chatter around this story has focused on that. Actually, there's just a ton of chatter around this. I could literally do the rest of the show just reading the various takes from journalists, from others in tech. Mark Benioff tweeted a swipe about don't be evil. There have even been statements from senators, et cetera, but let me just sum up with this take. This piece came off highlighting something

that I think I've said before on the podcast. Facebook feels like a company that needs new blood. In the piece, Zuckerberg comes off as aloof to the point of being checked out. In fact, remember all that speculation about Zuckerberg toying with the idea of running for president? This piece actually convinced me that that might have actually been true, that he really was going to run for president. And actually it makes sense. Let's say you're Zuckerberg in 2015, even early 2016. You've IPOed. You've solved mobile and put your business on a solid footing for record revenue growth for years to come. You're in the process of fending off the threat from Snapchat. It seems inevitable. You're slowly connecting everyone in the world via one of your products or another.

there's no real fundamental problems to solve anymore, right? It's just a math thing. More users, more sharing, more ads. It's Borg-like. It's a perpetual motion money-making machine. You've won. So why not try for a new challenge? You're young enough.

Facebook can run on its own. I think that Sandberg was actually thinking something of the same. After all, she played the Eric Schmidt role. She helped mature a young company into one of the biggest companies in the world. So maybe she could do what Eric Schmidt did, coast off into the sunset, and do her lean-in thought leadership thing. Maybe run for office herself, Meg Whitman style. And that's the point. I think leadership at Facebook is checked out.

And that's what's led to all of their problems. They didn't want there to be any more problems, any fires to put out. They wanted everything to be solved. so that they could move on. They couldn't see that bad actors would begin to use their platform to do bad things because they didn't want those sorts of problems to exist. There's also the issue with Facebook that I've talked about before, how they're a one-trick pony that refuses to learn a new trick.

They only know quantity, more sharing, more connecting, more users, more eyeballs, more ads. They know quantity. And seemingly, they don't want to have anything to do with quality. Their problem now is they need to. improve the quality of their product, the quality of life of their users. Facebook right now has a problem with the quality of its product in the sense that its old metrics for success no longer make any sense. The old metrics were simply growth, more usage, more sharing, more members. And now it needs to focus on the quality of that sharing, on the quality of life of those users, on what Facebook

is doing to the society of our entire planet. That's what I mean by Facebook has a product quality problem right now. But they can't let go of this notion that connecting the world can only be a good thing. No one at Facebook seems to want to admit otherwise that there can be gradation to how good a thing connecting the world actually is. That you might have to actually take steps and craft your product to make sure that it's as good a thing as it can be. your company evolves. Facebook needs its sacha Nadella, someone to come in at the top and change the strategic thinking at a company that has gotten stuck in a decade-long rut. Facebook needs this in order to become the company that it needs to be for the next 10 years and beyond. But because

of Facebook's famous stock structure and org structure and culture, there's only one person that can make that happen. There's a quote in my book from Sean Parker that's relevant here. He once called Mark Zuckerberg the hereditary king of Facebook, and actually that's true because Sean Parker, more than anyone else, made sure that that was possible. Parker said, and I quote, I refer to Facebook as a family business. Mark and his heirs will control Facebook in perpetuity, end quote. Facebook can't improve until Mark Zucker Bergerberg decides to make improvements, whether that means fresh blood, whether that means fresh blood, a fresh understanding of what Facebook's core mission on this earth really is as it's deep

into its second decade or something else. There are other things to talk about today. Google Maps has added a feature that will allow you to message businesses directly from the Google Maps app on iOS and Android. So you've already been able to call businesses if they have public phone numbers by tapping directly in the app. But now you can also message them, SMS style, to ask quick questions and whatnot. So super useful feature. And as Dieter Bone says at the verge, Yelp must be super jazzed about this. But Deeter also points out something that I've noticed too. Google Maps sure is starting to get cluttered with things to do that get in the way of what I mainly want to do.

when I'm in Google Maps. As Dieter puts it, quote, Google Maps is becoming overburdened with so many features and design changes that it's becoming harder and harder to just get directions in it. There's group planning. There's a social-esque follow button

for local businesses. You can share your ETA. There's a redesigned explore section. And there's almost no way to get the damn thing to show you a cross street near your destination without three full minutes

of desperate pinching and zooming and resuming. It's becoming bloated, is what I'm saying. It's Google's equivalent of Big Blue, as Facebook nicknames its flagship app that does a thousand things across countless strange nooks and crannies, end quote. But frankly, bloat is becoming true of all of Google's products lately. Even the main search page is suddenly getting a bunch of clutter. Again, if they ever add horoscopes, then we know for sure that the old minimalist Google really is gone for good. Uber reported its Q3 numbers, toting up a net loss of $939 million on $2.95 billion in revenue.

That revenue number was up 38% year over year, but also that net loss number was up 32% quarter over quarter. Uber's total gross bookings rose to $12.7 billion. But the super interesting number was this one, quoting from TechCrunch. Uber for the first time has also broken out Uber, Uber, Eats specific gross bookings, which the company says accounted for $2.1 billion of overall gross bookings and is growing at over 150% year over year. Last month, Uber announced it intends to expand Eats to cover 70% of the U.S. population by the end of the year, end quote.

We've been hearing rumblings for a while now that Eats was quietly turning into a monster business for Uber, and this confirms that, I guess. Uber CEO Dara Kosra Shahi recently said that the way he sees it, 10 years from now, ride hailing, might only account for less than 50% of Uber's overall business. He's envisioning a freight business, scooters, and bikes, et cetera. But also, apparently, a lot, a lot, a lot of eats. Did you know that Amazon Go, those cashierless stores,

that Amazon is beginning to roll out across the country, has some competition. I'm going to let Venture Beat tell you about them. Quote, San Francisco-based Standard Cognition, this summer announced a partnership with Paltack in Japan that will see its autonomous checkout solution deployed in 3,000 stores along with unnamed retailers in North America and Europe. And it's impressed investors with its progress. The company today said that it has raised $40 million in Series A funding, led by initialized capitalized, capital with continued participation from CRV and Y Combinator. Co-founder and CEO Jordan Fisher, one of seven founders, five of whom came from the U.S.

Securities and Exchange Commission, said that the capital will fuel its ongoing global expansion and allow it to expand its team. In 2019, consumers will start to see autonomous checkouts deployed in their favorite stores, and by 2025 it will be common, said Fisher. We can't wait to every. execute on this stage of standard growth, end quote. Finally, there's a new King of the Hill over at YouTube for years. Pouti Pooty Pies, 70 million fans have made his the most subscribed channel on YouTube.

But Pudi Pai has been dethroned by T-Series, which has racked up more than 100 million combined YouTube subscribers. Who or what is T-Series? Well, they're one of India's largest record labels. T-Series. operates 10 channels on YouTube showcasing the music videos of its artists and its flagship channel,

also called Just T-Series, just edge past PoudiPie Pied's 70 million subscriber number. T-Series only had 30 million subscribers at the beginning of the year, and according to Bloomberg, quote, the company's assent has shocked the tight-knit community of online personalities,

prompting some to rally behind PewDie Pye and delay T-Series's assent. While claiming the most subscribers on YouTube is largely a symbolic achievement and the company already has the most monthly views, the end of Pute Pai's five-year rain is a watershed moment that reflects important changes as the internet gets more global, end quote. Indeed, according to Bloomberg, more than half of the 10 most popular channels on YouTube in terms of monthly views are outside of the U.S. And YouTube now has more than 300 channels in India with more than a million subscribers each. As for T-Series, it now posts all of its music on YouTube first.

And YouTube revenue alone now counts for between 20 and 25% of T-Series' nearly $100 million in annual sales. Quote, Bouchon Kumar, T-Series' chief executive officer, this digital era is fantastic. It's here to stay. It's giving us popularity. It's giving us recognition, end quote. I did mention the book. book earlier in the show, and I know that I swore I wouldn't bother you with book stuff for a while,

but, well, we are two reviews short of my review goal on Amazon. We wanted to get to 50 reviews there, and we're sitting at 48 at the time of this recording. So if two of you were so kind as to review the book on Amazon and get us past 50, as you know, coming up short of nice round numbers activates my OCD a bit. And while you were there, you know, the book would make a good holiday gift. It's called How the Internet Happened, if you've forgotten. And hey, don't forget, we have a podcast subreddit now, R-slash Ride Home. I wasn't actually able to make it on there much today, but I will be hanging out there all weekend, so drop by there and say hi. One more show before then, of course.

Talk to you tomorrow.