Tech Brew Ride Home - Thursday, Mar. 15, 2018 - How Amazon Conquers

Episode Date: March 15, 2018

Apple's troubles with Siri, Amazon's had an amazing last three years, but it didn't kill Toys "R" Us, Nest launches a video doorbell, Google answers with no search results, and Drake crashes Twitch. Stories from @ShiraOvide and @rustybrick and tweet analysis from @taralach Credits: Produced by @brianmcc and the @techmeme staff Music by @jpschwinghamer 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 TechMame Ride Home for Thursday, March 15th, 2018. Today, Apple's troubles with Siri. Amazon had an amazing last three years, but it didn't kill Toys R Us.

Nest launches a video doorbell, Google answers with no search results, and Drake crashes Twitch. Here's the news you miss today in the world of tech. There's a big piece that was published this week over at the information. which has been getting a lot of attention online. It's behind the information's paywall, but definitely read it if you can, and actually maybe consider subscribing to the information because they do really excellent, deeply reported pieces like this one.

The piece in question is all about Siri, how Apple launched it seven years ago full of promise, the leader in the voice assistant space, and about how Apple has possibly lost that lead as Siri's technology has somewhat withered on the vine. The information interviewed about a dozen former employees who worked on various teams responsible for the Siri ecosystem, and a lot of them are withering in their criticisms,

describing petty turf battles and unresolved internal debates, for instance, about Siri's true purpose. Should Siri be, quote, quick and accurate information fetcher or a conversant and intuitive assistant capable of complex tasks. According to the piece, Siri was rushed into the iPhone 4

before the technology was really fully ready, and even to this day there are those inside Apple who want to rip out the existing Siri infrastructure and start from scratch. When Alexa shipped, it was rock solid from day one, a former Siri team member laments in the piece, noting the comparisons, of course, that a lot of people make

Amazon's voice assistant. Quote, for Siri to get there, they'd almost need to set everything aside and start over. Siri, Inc. was a separate company that Apple acquired in 2010. The original Siri team had a vision for the technology that was truly conversational, said one of Siri's original executives, quote, it was about making the app store for AI. It was supposed to be a way to orchestrate the Internet through conversation.

end quote. They wanted it to be, I guess, sort of like that voice assistant in the movie Her. But once acquired by Apple, to ensure Siri launched on time, compromises were made. Among the key compromises which some of the Siri insiders think was a mistake, series technology was only updated about once a year on the iOS update schedule, as opposed to the rolling updates that Amazon apparently makes to Alexa. Then there was a question about how much Siri should function as a search engine. There seems to be a mishmash of search technology behind Siri. Some of the technology and engineering talent came from Apple acquisitions, like the search

company Topsy, and older search technology ported over from iTunes. Then there were apparently turf battles related to the speech recognition technology and complications from more acquisitions that were made to build out series AI and machine learning capabilities. The overall impression in the piece is of a sprawling project that has no clear vision or direction. And the anecdote that seems to prove this is the claim made in the piece that Siri team members didn't even learn about Apple's HomePod smart speaker product until 2015 after Amazon

unveiled its Echo Smart Speaker. The piece leaves the strong impression that perhaps a big reason why HomePods might be underperforming as a product is that the Siri integration was so bungled. All at all, it's really a fascinating piece. Check it out at the information. And it's worth pointing out, though, that Siri is still used on more than half a billion devices each month and processes two billion requests a week. Speaking of Long Reeds, over at Bloomberg, Shira Oviday has a great piece titled How Amazon's Bottomless Appetite became Corporate America's Nighter.

The piece outlines how over the last few years Amazon has muscled into seemingly every possible marketplace. OVide points out something that I think a lot of people forget, which is that Amazon's recent dominance is just that, recent. As long ago as only 2014, Amazon actually seemed to be struggling. That was the year that Amazon tried to launch its fire smartphone, which OVDA calls, quote, one of the bigger flops in the history of consumer electronics. And that was also the year that revenue growth during the holiday season was the second worst Amazon experienced since 2001, shortly after the dot-com bubble burst.

Amazon posted its steepest quarterly loss in 2014, and again, people forget this, but Amazon's stock price fell more than 20% over the course of that year. Since then, of course, its stock has quintupled. The turnaround, of course, came after, Amazon revealed what a cash cow Amazon web services was turning out to be. But also, OVide says that Amazon's prime program matured in the last three years, as did its marketplace business. The rents that Amazon charges to third-party merchants who sell on Amazon's platform reached

$32 billion in revenue just last year, representing about half of Target Corporation's yearly sales. The piece concludes by pointing out that there is still plenty of room for Amazon, to grow. To this day, in the U.S., more than 90% of retail sales still happen in physical stores. The shift to e-commerce then is obviously still in its early stages, and Amazon is perfectly positioned, as it already is responsible for 44 cents on every dollar spent online. This piece was complemented by an excellent interactive infographic post at the Wall Street Journal titled Amazon, The Making of a Giant. If you want nice charts and graphs to explain Amazon's rise through the years, you'll be in hog heaven with this one.

The journal's Scott Austin tweeted some great takeaways from the piece. Amazon is now the number two largest U.S. apparel retailer after Walmart. 54% of U.S. households with Internet access are now prime members. And Alexa once had 135 skills, but now has more than 30,000. Finally, Reuters had a piece early this morning that teased out some other interesting new facts. Amazon Prime's streaming television product reportedly drew more than 5 million people worldwide to become Prime members. According to leaked Amazon documents that Reuters was able to take a look at, Amazon's total U.S. audience for Prime Video was 26 million viewers.

An Amazon original show, like The Man in the High Castle, had 8 million. US viewers and Amazon calculated that that show in particular, which cost 72 million to produce, attracted 1.15 million new subscribers, so it created Prime members at about an average cost of $63 per sign-up. As Jeff Bezos himself said of the Prime Video Efforts at a tech conference in 2016, quote, when we win a Golden Globe, it helps us sell more shoes. Since we've been talking about Amazon, I wanted to make a quick note here about a story that you might think is related. Late yesterday, Bloomberg reported that Toys R Us chief executive officer Dave Brandon had confirmed to Toys R Us employees that the chain would be closing all of its U.S. operations. And early today, the company filed a liquidation notice with the U.S. bankruptcy court.

apparently Toys R Us will begin an orderly liquidation of all 735 remaining U.S. locations. Now, you might expect that this is another case of a competitor being Amazon. But as several people pointed out on Twitter, that's not quite the case. It turns out that Toys R Us was the target of a 2005 leveraged buyout by private equity firms, which saddled it with more than $4 billion of debt. Toys Russ was doing about $11 billion in sales, but as Bloomberg's Tara La Chappelle noted, most of that was going right back out the door to service the debt. Tweeted La Chappelle, quote,

Some will say Toys R Us couldn't survive in the age of Amazon slash Walmart slash online shopping anyway. But the reality is, if it weren't for the debt, it could have invested more in its operations stores, e-commerce, and probably could have sustained itself for many more years. years. Debt sped up its demise, end quote. User at Plaverty 24 responded by saying, I do wonder if there is still a market for a Toys Arrust type store, where kids can just roam around and find toys and adults can also actually see and touch the toys, unlike shopping on Amazon. Well, it does seem that there is an $11 billion market out there. One that's very much now up

grabs. Nest today finally put its Nest Hello video doorbell and Nest and Yale door lock on sale. The doorbell can be ordered for $229 and the door lock is available for $249. The video doorbell does require a wired connection for power and obviously is a competitor to the products from Ring, which Amazon recently acquired. Nest also announced a $39. temperature sensor that will work in conjunction with the company's smart thermostats. The tiny disk about the size of a stack of coins can be placed in various areas of your house on tables or bookshelves and the like to sense the temperature in various rooms. The thermostats would then try to optimize the temperature based on your preferences,

you know, like warmer in the baby's nursery, say, or cooler in a room that gets a lot. lot of sunlight in the afternoon. Ness says that you compare up to six temperature sensors with each nest thermostat. The sensors ship in April, and you can order a three-pack for $99. Over at Search Engine Land, Barry Schwartz is reporting that certain Google search results are displaying answers without any search results on them. For example, if you search for time in Los Angeles or time in New Zealand, Google just gives you the answer, and the usual 10 links do not show up below. There is a button that says show all results, but the default is to simply provide the answer. Schwartz was also able to replicate this for calculator-type queries,

conversion queries, like changing Fahrenheit into Celsius and that sort of thing. And when Schwartz queried Google's search liaison Danny Sullivan. Sullivan responded by tweeting, quote, for calculator, unit converter, and local time, we're experimenting with a condensed view to further speed up load time. People who search for these tools rarely use full search results, but the results will remain available for those who want them via the show-all results button.

This is apparently only a trial and might not be permanent, but Sullivan noted that initial testing was strong enough to merit a broad rollout. For a long time, Google has tried to provide instant answers to queries, which could be answered by obvious facts. But until now, even when Google auto answered a question, it would still show the links and credit the website that provided what it figured was the right answer. Webmasters have been debating this move furiously, and many are not happy. SEO consultant Alan Bleweiss tweeted, Commoditize Public Domain Info, I see no problem with this. What they do with hotel and flight info with limited pricing is a problem.

This not so much, I don't think. To which digital marketer Martin McDonald responded, Disagree, dangerous precedent. Next, it'll be sports scores, then weather. Marketer Jeff Kay tweeted, For my fellow SEO nerds, this has huge implications and shows just how much Google is prioritizing their efforts to make search more friendly for Google Home and Google Assistant. The issue here is that webmasters and people that produce content on the web fear that they could be Xed out of entire categories of searches. There are tons of sites that are designed primarily to provide information or answer specific questions.

My personal favorite example would be all the sites that rush to provide the searchable answers to every day's New York Times crossword puzzle. By cutting out the middleman, yes, Google is clearly making certain types of searches cleaner and faster, but Webmasters fear that Google is creating a sort of walled garden of answers to queries outside of the larger web. And that says nothing about the actual information it might scrape without crediting the source. SEO consultant Dan Schur noted that the specific query, What Time Is It in Blank, gets about 1.8 million searches a month globally. Twitter user at Freemich said, quote, Time and date I'm okay with,

stealing data and blurbs of text from other websites to answer questions and eliminating the need to click through to them, not so much. The ironic thing is that for 20 years, Danny Sullivan was the reporter covering the search industry, who would have been the one to uncover changes like this, and would be the one pinging Google to find out what was going on. But last October, Sullivan took a job at Google itself, taking over the public liaison role that had been filled by Matt Cuts for so many years. So now it's Danny Sullivan that has to answer for things

when angry webmasters take out their pitchforks and angrily storm the Googleplex over changes like this. And lastly today, pop superstar Drake made video game history last night when he logged into Twitch to play the popular sandbox shooter Fortnite. Drake was hosted by the popular pro gamer Tyler Ninja Blevins, who was also joined by Pittsburgh Steelers' wide receiver, Juju Smith Schuster, and fellow rapper Travis Scott. At the height of the streaming, there were 630,000 concurrent viewers

breaking Twitch's previous record of 388,000 views of a single stream. Fortnite is currently the most popular multiplayer game of the moment, boasting 40 million players worldwide, and it rose to prominence by copying the survival style of Player Unknown's Battleground. Tyler Ninja Blevins is one of the most popular Fortnite streamers, who is reportedly making $350,000 a month from Twitch subscriptions alone, and Drake is Drake. Drake says he's been playing Fortnite a lot recently

as a way to relax after spending all day in the recording studio. Of course, the fun of watching a live stream is listening in on all the banter. During the stream, Drake revealed he no longer eats meat, likes pineapple on his pizza, thinks that Fortnite should concentrate on improving existing maps rather than creating new ones, and lots of people gave credit to Drake for his gameplay.

where he showed a willingness to be the kind of team player who drops weapons and other supplies for his teammates. Twitch, of course, is the video game live streaming platform owned by Amazon, which counts 15 million daily active users who spend an average of 106 minutes watching other people play games. Lots of people made God's plan jokes about this,

but I think I'm going to resist. And that's all for today, the show was produced by me, Brian McCullough, as well as the dozen or so lovely tech meme editors. Follow me on Twitter at Brian MCC, and Techmeme.com is your one-stop shop for tech news any hour of the day. We'll be back at you tomorrow.