Tech Brew Ride Home - Tue. 09/25 - The Instagram Founders Ghost Facebook

Episode Date: September 25, 2018

Instagram’s founders turn in their two weeks notice, Samsung accuses Apple of stealing, lots of changes coming to Google Search, and a “Netflix for open source.”  Links: Why Instagram's founders are resigning: independence from Facebook weakened (TechCrunch) Facebook’s Terrible Year Hits a New Low (Bloomberg Opinion) Qualcomm accuses Apple of stealing chip secrets and giving them to Intel (CNBC) Google CEO Sundar Pichai to Meet With Top GOP Lawmakers (WSJ) Google's new activity cards will save your previous searches (Engadget) 'NETFLIX FOR OPEN SOURCE' WANTS DEVELOPERS TO GET PAID (Wired) macOS 10.14 Mojave: The Ars Technica review (Ars Technica) 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 Tuesday, September 25th, 2018. I'm Brian McCullough. Today, Instagram's founders turn in their two weeks notice.

Samsung accuses Apple of stealing. Lots of changes are coming to Google Search. And a Netflix for open source. Here's what you miss today in the world of tech. So some really big stories broke overnight and into this morning. The first up is Instagram's co-founders, Kevin Sistram, and Mike Krieger have resigned and planned to leave the company in a few weeks. Facebook was apparently unaware that Mr. Sistram and Mr. Krieger were planning to leave.

In a statement on Instagram's PR website, Sistram wrote, Mike and I are grateful for the last eight years at Instagram and six years with the Facebook team. We've grown from 13 people to over 1,000 with offices around the world, all while building products used and loved by a community of over 1 billion. We're now ready for our next chapter. We're planning on taking some time off to explore our curiosity and creativity again. Building new things requires that we step back, understand what inspires us, and match that with what the world needs. That's what we plan to do, end quote.

In a statement to TechCrunch, Mark Zuckerberg said, quote, Kevin and Mike are extraordinary product leaders and Instagram reflects their combined creative talents. I've learned a lot working with them for the past six years and have really. really enjoyed it. I wish them all the best, and I'm looking forward to seeing what they build next, end quote. So real quick, a bit of history, and then we can get into the necessary tea leave reading. Krieger and Sistram were Stanford classmates. Sistram had created a social location app called Bourbon in 2010. Krieger was a huge bourbon user, met Mr. Sistram, and convinced him to work on the app together. Bourbon was later retooled to focus on photos and renamed Instagram.

Facebook purchased Instagram for $1 billion in cash and stock in April 2012, which we all thought was insane at the time, but is probably one of the greatest technology acquisitions of all time, as Instagram is probably worth 100 times that now and has, as they said, one billion users. Instagram also almost single-handedly helped parent company Facebook fend off the threat posed by Snapchat after Instagram successfully cloned Snapchat's stories feature. And yes, you pedants out there, I know for complicated reasons, the actual original $1 billion purchase price for Instagram only ended up being around $715 million. But I would like to point out that the stock that Cistram and Krieger pocketed is probably worth $4 billion today. So this is a bombshell, especially coming after the departure of the WhatsApp founders just this summer.

The piece to read about this is the TechCrunch analysis from Josh Constine, which I've linked to in the show notes, quoting liberally from Constine's behind-the-scenes reporting, quote. But according to TechCrunch's sources, tensions had mounted this year between Instagram and Facebook's leadership regarding Instagram's autonomy. Facebook had agreed to let it run independently as part of the acquisition deal, but in May, Instagram's beloved VP of product, Kevin Weil, moved to Facebook's new blockchain team and was replaced by former VP of Facebook News Feed, Adam Masseri, a member of Zuckerberg's inner circle.

Adam is a very strong-willed individual, set a source, and Chris Cox, Facebook's chief product officer, and Kevin, never really got along. Between the two, they could pressure Instagram to do more for Facebook, which was important given the impact of scandals and dwindling teen usage of Facebook's brand. Quote, when Chris started taking initiative and with Adam as more of the old school in crowd of Facebook, it was clear that it wasn't going to be pleasant. I saw that this guy's Sistram is going to get squeezed, end quote. According to Constine, Sistram and Zuckerberg generally got along, but they did have some serious clashes over product over the years. In essence, according to Constine, Facebook was increasingly bare-hugging Instagram,

integrating both the product and the management ever tighter into the mother company in order to lean on Instagram, both for growth and to make up for user drift from the main Facebook product, and the speculation is that that has been creating increasing tension. Over at Bloomberg, sure Ovidi doesn't mince words in a piece titled Facebook's terrible year hits a new low. She writes, quote, This, my friends, is a truly terrible time for the Instagram founders to leave. The optics are terrible first off.

Facebook is trying to project confidence that it's moving past its two years of near constant crises. Having the Instagram founders walk out the door shortly after the WhatsApp founders grew frustrated and did the same, does not project the image of a Facebook on shore footing, end quote. OVide notes, quote, it's been Facebook that needs Instagram more than the other way around, and that makes the departure of the Instagram founders a particularly painful sting, end quote. Instagram is still growing fast, OVDade notes. It's still beloved by a younger, hipper demographic. It doesn't have the public image problem that Facebook has had of late,

and people don't seem to feel as bad using Instagram as they do using Facebook. And frankly, that's just me commenting even anecdotally among the people in my life. The ad business that is being ramped up on Instagram is increasingly contributing to Facebook's bottom line. And just as crucially, if the whole story's paradigm really is the new hotness in terms of social networking behavior, then Facebook, in the form of Instagram, still owns the future. As for what Sistram and Krieger are thinking, people can only speculate. Cheddar's Alex Heath tweeted, this feels so sudden. Kevin Sistram in particular has a full speaking schedule ahead of him in coming months to rep Instagram at industry conferences.

Even still, I'm told employees had been placing bets on whether either co-founder would be out by the end of the year, end quote. It could be tough to lose control of your baby. Even if they give you a fairly long leash, as they did for a fairly long time in the case. of Instagram. But, and this is me, Brian speaking here, I've never met a founder who is completely 100% happy after an acquisition, any acquisition, not even once. I mean, don't get me wrong, people can think that selling out was the right decision and even that perhaps the product or company got better thanks to the efforts of the acquirer. But no founder is ever 100% happy because their baby will never end up being 100% the product or the company that they imagined it could be.

But that's what giving up control means. And as Don Draper once famously said on Mad Men, that's what the money's for. Just last week, last Tuesday, to be exact, Qualcomm CEO Steve Mollenkoff, told Bloomberg TV that it was likely that his company's longstanding legal dispute with Apple might be coming to an end. quote, the environment is such that a deal could get done, Malenkov said. Traditionally legal milestones create an environment for both parties to change their perspective, end quote. This suggested settlement talks were possible after two years of public posturing, wherein Apple accused Qualcomm of using its dominance in phone modems to force customers to pay inflated licensing fees

and Qualcomm in a countersuit saying Apple infringed on its patents. Well, so much for the possibility of detente, because as CNBC's David Faber was reporting this morning, Qualcomm is amending allegations in its existing lawsuit against Apple, now claiming that Apple allegedly stole source code and proprietary chip secrets from Qualcomm, and then gave those secrets to Intel in order to improve the performance of Intel chips in iPhones. Quote, Monday's filing and Superior Court in San Diego is the latest salvo in that fight, designed to put pressure on Apple to settle.

But Qualcomm's general counsel, Donald Roe, Rosenberg told CNBC the case stands on its own and would have been filed regardless of the ongoing dispute. Quote, unlawful use of Qualcomm's valuable trade secrets to try to help a competitor catch up, irreparably harms us and must not be allowed to continue, he said, end quote. Qualcomm says that it is making these new charges after the discovery process of the existing lawsuit led it to uncover evidence that, quote, Apple engineers repeatedly provided source code and other confidential information to Intel engineers so they could improve the performance of Intel's chip sets, end quote. At least in today's filing, Qualcomm did not provide any direct evidence in support of these new allegations,

but there is reference to correspondence between Apple and Intel engineers found during the discovery process. I mentioned yesterday how Google is seemingly reaping strategic dividends for not showing up for that congressional grilling a few weeks ago, but that doesn't mean that Google can completely give Congress the high hat. apparently Google CEO Sundar Pichai will meet with top Republican lawmakers on Friday in a private meeting. On the agenda, privacy issues, Google's work with China, presumably including that censorship-friendly search product, and alleged bias in Google's search results towards conservatives. I look forward to meeting with members on both sides of the aisle, answering a wide range of questions and explaining our approach. These meetings will continue Google's long history.

of engaging with Congress, including testifying seven times to Congress this year, Mr. Pachai said, hinting that there may be further meetings in coming weeks with others on Capitol Hill. Could this willingness to sit down and talk have anything to do with the fact that U.S. Attorney General Jeff Sessions is expected to meet today with several state attorneys general to discuss the alleged censoring of conservative speech online by major tech platforms? And yesterday, Google held what search engine land is calling a surprisingly low-key 20th anniversary and future of search event in San Francisco. At the event, Google announced several changes to its search product. Ben Gomez, the VP of Search at Google, sketched out what he says will be Google's vision of

search going forward. He outlined three search shifts that Google feels are coming. First, they feel that search will evolve from just getting answers to going on, quote, journeys. Also, Google wants to move beyond search queries to allow users to make discoveries without even searching. And they're doubling down on visual content, moving beyond just text to deliver information. To these ends, Google is now revamping search to include new activity cards that will surface relevant results from recent searches you might have done recently. Quoting in Gadget's description of this, quote, when you're searching for camping, for example, a tab appears above

all your results to show you your recent findings. Scroll down the page and you'll see listings organized into categories like sleeping bags or campsites. You'll be able to create your own collections and Google will suggest you make them based on what you found too. The idea is that Google will know what you've been planning and the pages you've already seen so you won't have to repeat the tedious job of making sense of the entire internet all over again. It'll also show you search terms that you've used before, end quote. Google has also tweaked the ranking algorithm on image search to make it easier to find photos and is adding tags on each image result that will let you know if it's an image of a product you can buy. You can also create collections of photos, Pinterest style.

Also, if you browse to the Google homepage on mobile, soon you'll see a news feed called Discover. Quote, Discover will do more to show relevant content, stuff that might not necessarily be just recent news. It will have topic links to dive deeper into the content you're seeing in the feed, and there will be a little slider on the lower left corner of each card that will let you increase or decrease the amount of news you'll see in your feed. At the moment, most of the feed is personalized, and it will prioritize entertainment and other news items based on your interactions with it, end quote. So that traditional image we have of Google, of it just being an empty white page

with a search box and a couple blue text links, that's going the way of the dodo, it seems. Does anyone remember how crowded the Yahoo homepage got crammed with stuff by like, I don't know, 1999? I guess if Google ever starts promoting horoscopes on the homepage, we'll know for sure that we've come full circle. On a day where we've ended up having to talk about moves by a lot of the big tech players, let's palette cleanse a bit by talking about an interesting up-and-coming startup. Tide Lift has been described by TideLift itself. as a sort of Netflix for open source.

The problem for a lot of open source projects is that since they're open source, it's tough for developers to earn a living, keeping the projects going and iterating. If you're lucky, your project can sort of be adopted by a corporate patron for one reason or another who will pay you a salary to keep the project going. But if not, you're left toiling away on something

that you might never be able to charge for in any capacity. So how does TideLift change this? Quoting from Wired, the idea is that a company pays a subscription fee to Tidelift, which takes a cut and then distributes the remainder to open source projects that the subscriber uses, such as Babel. In exchange, the subscriber gets assurance that the software is properly maintained. Why would a company shell out cash to Tidelift for software they've been using for free?

Primarily for support, and also to ensure that the software stays up to date and works well with other programs, end quote. So in other words, this is sort of taking that corporate, patronage model and standardizing it. Maybe the model is closer to Patreon for open source. As Wired notes, this is also how major open source projects make money. Red Hat, for example, made $2.9 billion in revenue last year based on Linux and other open source software. Corporate customers pay Red Hat for technical support and such. So this is simply an attempt to make that sort of thing work for smaller but still vital projects.

When a corporate customer signs up with Tidelift, the company looks at that customer. code and systems to see what open source software that company is dependent on and then distributes fees to registered developers who are working on the projects that the corporation uses most. Quote, we couldn't understand why something like this didn't exist, so we created it, said TideLift CEO Donald Fisher, a former executive at Red Hat, who Wired says founded the company with other open source veterans. TideLift has raised 15 million in venture capital and has $1 million earmarked for new developers who join its program. JK., JK, JK, let me quickly add just one more, one more thing.

MacOS 10.14 Mojave came out yesterday, and so in honor of that, the last link in the show notes is to one of Ars Technica's famous, exhaustively comprehensive reviews of the new operating system. Quote, the reviewer, Andrew Cunningham, Mojave includes the biggest and most consequential changes to the Mac's user interface, the desktop, and finder that we've seen in years. Some brand-new apps ported over from iOS, new automation features, an overhauled app store, and significant improvements to small but frequently used actions like taking screenshots or using Quick Look, end quote.

Cunningham says, it's been a while since he's liked a new Mac OS release this much. By the by, a lot of you have been asking whatever happened with those suggestions I solicited from you guys surrounding possible podcast swag, which a sponsor wants to produce. Thanks to all those that did actually tweet at me suggestions. I think the consensus was to do something around unquote or end quote, since if there's definitely one thing I say every single episode, it's unquote or end quote. I actually don't know, which one do I say? Though there might be something produced around the phrase, tell him Brian sent you also.

I don't know. We'll have to wait till no. next month to find out. I just passed along the ideas and they're going to run with them, so we'll see. Talk to you guys tomorrow. Ridiculous to be two years into your career and counting your ideas. An opportunity. Morning when you wake up, along with Jesus, for giving you another day.