Tech Brew Ride Home - Tue. 02/05 - Facebook Turns Fifteen

Episode Date: February 5, 2019

It’s getting more expensive for Google to make money, Facebook turns fifteen, choosing your own adventure is becoming a trend, and one specific way Fortnite is measurably bigger than the Super Bowl.  Sponsors: Metalab.co DataDogHQ.com/ridehome Eero.com/ride and code: ride at checkout Links: Being Google is getting very expensive (QZ) Zuckerberg's Facebook Post Facebook Makes First Blockchain Acquisition With Chainspace: Sources (Cheddar) Boring Game Plus New Orleans Rebellion Leads to Ratings Drop (NYTimes) 'Fortnite' Had 10 Million Concurrent Players In The Marshmello Concert Event (Forbes) iPhone XR Review (AnAndTech) Amazon Alexa Now Lets You Choose Your Own Adventure (Geek.com) 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 Tuesday, February 5th, 2019. I'm Brian McCullough. Today, it's getting more expensive for Google to make money.

Facebook turns 15. Choosing your own adventure is becoming a trend, and one specific way, Fortnite is measurably bigger than the Super Bowl. Here's what you miss today in the world of tech. I think we're basically done with tech earnings season. It is a compressed week every time. I think those snaps, Spotify, and Twitter are still to go,

there could still be some surprises. Is there anyone else I'm forgetting? Anyway, Alphabet reported Q4 revenue yesterday of $39.3 billion, which was up 22% year over year. But there were a few little concerns. Google's ad business was up 20% year over year to $32.6 billion. And Google's cloud services, hardware, play store, and other businesses generated $6.5 billion in revenue, a 31% increase year over year. But by and large, Google is still an advertising one-trick pony. It's a very fine pony. It's a cash machine pony.

Metaphor getting mixed. Problem is the cost of making money off of that advertising business also rose 25% year over year. As courts put it, it's getting expensive for Google to be Google. Quoting Quartz, much of those costs were from the fees Google pays to cost. companies like Apple to be the default search engine on iPhones and other devices, which are called traffic acquisition costs. Traffic acquisition costs jumped 15% to $7.4 billion during the fourth quarter. But Google, which generates an estimated 31% of all digital advertising revenue globally, according to e-marketer, can't afford to give up such prime positioning when companies like

Amazon are coming for its core business. The increase was less than analysts expected, but still a sizable jump. Alphabet had been cautioning that traffic acquisition costs would rise as more of Google's business shifts to mobile, which comes with higher fees than desktop. Traffic acquisition costs were about 23% of Google's advertising revenue in the fourth quarter in line with expectations, end quote. There's also a concern that cost per click is going down. The money Google makes every time you click an ad went down 29% compared to 2017 and 9% compared to a year. goes quarter. So, bottom line for Google is competitors are coming into the ad space and driving margins down while the costs for Google to generate ads is going up. That's a tough squeeze.

Of course, Alphabet knows that, knows it's a one-trick pony, and that's why Alphabet has been investing in big bets. In fact, that's why Alphabet is organized as Alphabet. To give those big bets room to expand into other ponies, Alphabet can have, and it's stable. Problem there is none of those big bets have paid off yet. In Q4, the other bets category, including Waymo, Verily, fiber, and a bunch more, had revenue of only $154 million with operating losses of $1.3 billion, which is up from a loss of $727 million from the previous quarter. I should have remembered that Facebook's birthday is the day before my own birthday and should have remembered that this year is Facebook's 15th birthday. So I sort of dropped the ball for a special internet history podcast episode. Oh,

well. Mark Zuckerberg marked the occasion last night with a post on his Facebook page, noting that this year Facebook will spend more on safety and security than it had in total revenue at the time of its IPO. And he took a swipe at critics, quote, negative focus on the company. A couple of selections from Zuck's post here to give you a sense of how he sees things right now. Note that I am choosing from several different sections here. Quote, much of people's experience in the past was defined by large hierarchical institutions, governments, mass media, universities, religious organizations that provided stability but were often remote and inaccessible. Our current century is defined more by networks of people who

have the freedom to interact with whom they want and the ability to easily share ideas and experiences. Before the internet, if you had different views or interests from the people in your neighborhood, it was harder to find a community that shared your interests. If someone you knew moved away, you'd often lose touch. If you wanted to raise attention for an issue, you usually had to go through politicians or the press, someone with the power to distribute your message. Now you can connect with anyone and use your voice. You don't have to go through existing institutions in the same way.

People now have much greater power, and that creates opportunity, but also new challenges and responsibilities. As networks of people replace traditional hierarchies and reshape many institutions in society, from government to business, to media, to communities, and more, there is a tendency of some people to lament this change, to overly emphasize the negative, and in some cases go so far as saying the shift to empowering people in the ways the Internet and those networks do is mostly harmful to society and democracy. To the contrary, while any rapid social change creates uncertainty, I believe what we're seeing is people having more power and a long-term trend reshaping society

to be more open and accountable over time, end quote. So Mark says Facebook is all about power to the people. And look, I could read a whole bunch of snark that came out last night about this. That points out, if looked at from a certain angle, the truth is, all the power is accruing to Facebook. It's power to the Facebook and power to Zuckerberg himself, as much as it might be power to the people. as Shira Frankel tweeted,

quote, mainly on this point, which is a theme Zuckerberg has touched on before, Zuckerberg argues that Facebook takes power away from, quote, large hierarchical institutions. There are few institutions in the world as hierarchical as Facebook, end quote. And here's Sarah Fryer, quote, imperfect analogy, but imagine Facebook as a town.

People tell the mayor, the schools are terrible. And the mayor responds with, but our roads work. Shouldn't we celebrate that you can get to school? Oh, and the mayor is permanent, end quote. And former Facebooker Alex Stamos said this, quote, the big question now is, what responsibility is it of platforms like Facebook, but realistically many more now and in the future,

to shape the actions of individuals and whole societies? And are we willing to cede that power to these corporations, end quote. Speaking of Facebook, you might remember, their intentions to get into crypto in a big way. Organized a whole crypto division headed by veteran Facebook executive David Marcus. And as we noted at the time, Marcus is also formerly the president of PayPal, so some experience in things like payments. While Facebook has made its first acquisition in the crypto space,

according to Cheddar's Alex Heath, the company in question is chain space, a startup founded by University College London Research, that were working on smart contracts for use on payments. Quote, according to Chain Spaces August 2017 White Paper, which outlines the academic and technological details behind the project, the team wanted to build a distributed ledger platform for high integrity and transparent processing of transactions within a decentralized system.

That essentially means that one of ChainSpace's goals was to improve the speed of transactions through blockchain technology, which currently functions much slower than traditional financial institutions like Visa. The researchers behind ChainSpace were also looking at how blockchain and decentralization could be applied to areas outside of payments, like polling. Four of the five researchers behind Chain Spaces' academic white paper are joining Facebook's blockchain group, according to people familiar with the matter. Two of the white paper authors, Alberto Sonino and George Danes,

already lists their employment as blockchain researchers in Facebook's London office on LinkedIn, end quote. Don't let that mention of polling fool you. Sure, Facebook could apply blockchain to a lot of things, including polls, but their interest in the space is most logically in payments. Heath also reveals that Facebook was reportedly in talks with Algorand, another blockchain-based payments platform, which had raised $66 million in funding to date. Chain space, in comparison, was only currently in the process of raising its first round of funding,

which Heath says was less than $4 million. So, AccuHire on the cheap. CBS says that 98.2 million people watched the Super Bowl this past Sunday, making that a 5% drop from the audience numbers last year, but also making it the smallest audience for the big game since 2008. Not surprising, I guess. It was a low-scoring game, apparently not super exciting. Not really tech news either, right?

but here's the tech angle, and then I'm going to expand on it. 2.6 million people streamed the game, which CBS says was a digital viewership record. And here's how I'm going to expand it. EDM artist, Marshmallow, held two in-game concerts on Fortnite this past weekend. This is also sort of not big news. People have been doing stunts in-game in-Fortnight for a while now. But compare that last story to this. apparently 2.6 million people streamed the Super Bowl, right?

Guess how many people watched the marshmallow concert live inside Fortnite? Sources from Epic have reported that it was 10 million. So 2.6 million people streamed the Super Bowl, and 10 million people watched a live marshmallow concert on a video game. Roughly four times the number of people who streamed the Super Bowl, or putting it another way, one-tenth of the total viewing audience of the Super Bowl across all mediums. And that 10 million figure does not even count the number of people

who might have watched on Twitch, as Forbes's Paul Tassie wrote, quote, this was such a massive success that clearly it will not be the last time this happens. Any artist should now be dying to do a Fortnite show as the level of exposure is insane. And even if you already have a big audience, it's a way to get even more new, probably younger fans. everyone is already clamoring for, say, a Drake show next, which suddenly does not sound all that crazy, end quote.

A couple of odds and ends here. Facebook Messenger now lets you delete messages from everyone's view for up to 10 minutes after you've sent a message. It's not like on Gmail where there's a ticking timer, though. If you tap on any message you've sent, you've got 10 minutes to remove it for everyone involved in the conversation or simply remove it just for your eyes. Those involved in the conversation will see a text that the message has been removed by you if you choose that option, though.

And this is especially useful given those ginormous caches of user credentials and passwords floating around out in the hacker web that I've told you about recently. Google has launched password checkup, a Chrome extension that alerts users to breaches and prompts you to reset things if you're trying to log on to a site that has been compromised. Google automatically resets the passwords of your Google account if it thinks it's been compromised. But now, with the new extension, if Google sees you using a username and password on a third party that it knows is no longer safe, it will warn you and nudge you to change your password. I don't think I ever did a review roundup for the iPhone 10R, and so not to be remiss. Anantec today came out with their review of the 10R, and it's one of their typically superiors. Super detailed, super deep dive reviews. So if you wanted to learn everything you could ever want to know about the 10R,

reviewed from every conceivable angle, there's a link in the show notes. An Anteck's takeaway, the LCD display might not be quite as brilliant as on the 10S, but it leads to brilliant battery life. Anantec said they got 12.95 hours of web browsing out of the 10R, the third best battery life of any phone they've ever tested behind only the the Huawei Mate 20 and Mate 9, and way ahead of the 10S Max's 10.31 hours and 10S regular's 9.43 hours of battery life.

Finally today, Netflix doesn't have the Choose Your Own Adventure gimmick to itself anymore, because now Alexa is letting you read literal Choose Your Own Adventure books via Audible. There is now a new skill on Alexa that lets you decide your own fate via two classic RA Montgomery titles, Journey Under the Sea and the Abominable Snowman. Quoting from geek.com, simply ask your digital assistant to open, choose your own adventure to get started. Along the way, say, go back to regress one scene,

start over to return to the beginning or change story if you're sick of the cold or sea life. Each book features progress tracking and automatic bookmarking as well as numerous possible endings, 28 in the Abominable Snowman and 37 for Journey Under the Sea. We knew that Chuse was perfect for this space, Melissa Bounty, associate publisher at Chuseko, said in a statement, How Better to Emmerse You in the Story. Chuseko is the company that owns the Choose Your Own Adventure IP. I did not know this, but Chuseko recently sued Netflix,

claiming that that Black Mirror episode with the Chusekto, Choose Your Own ending gimmick infringed on its trademarks. Quoting from the lawsuit, viewers have already been confused about the brand's association with the film and are likely to be confused in the future, end quote. Which is a bit of sour grapes, if you ask me. I mean, we all called it a Choose Your Own adventure episode, but did Netflix ever say that? Specifically? That's all for today.

I've been Brian McCullough. Nothing profound to leave you with today, because I'm out of here for some birthday. My wife got me a cool podcast-related birthday present. Tickets to a live taping of the Flop House podcast. I think I've mentioned the Flop House before, a We Watch Bad Movies podcast, but the best in that genre, and actually probably one of the oldest. And it's really in a great comedic tradition,

ranging from mystery science theater through the glory years of the daily show, which again makes sense because the pod is hosted by two Daily Show headwriters, one of whom went on to produce the latest MST3K incarnation on Netflix. And of course, the third host is Stuart, who I think I've said before, is Brooklyn's best bartender. Check out the Flaphouse if you never have. Talk to you tomorrow.