Tech Brew Ride Home - Tuesday, June 12, 2018 - E-Scooters To The Moon!

Episode Date: June 12, 2018

E-scooter valuations explode, Facebook turns in its homework, Microsoft’s next Xbox is coming in 2020, how Netflix is winning, and a dreaded 51% attack explained. Here’s what you missed today in the world of tech. Tweets: @annehelen, @arielbogle Stories: @danprimack, @bdsams Links:Scooter startup Bird is seeking a $2 billion valuation (Axios)Microsoft’s Next-Gen Xbox Will Arrive in 2020 (Thurrott.com)The Guy Tapping His Head Meme Explained (NYMag)Inside the Binge Factory (NYMag)Blockchain's Once-Feared 51% Attack Is Now Becoming Regular (CoinDesk)TED Residency (TED) 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 TechMemean. ride home for Tuesday, June 12th, 2018. I'm your host, Brian McCullough. Today, e-scooter evaluations explode. Facebook turns in its homework. Microsoft's Next Xbox is coming in 2020. How Netflix is

winning. And the dreaded 51% attack explained. Here's what you missed today in the world of tech. Why have I been obsessed with the e-scooter space? Well, it's because of headlines like this. sources are telling Axios's Dan Premack that e-scooter company Bird is seeking to raise around $200 million in new funding at a $2 billion valuation. Now, just weeks ago, Bird raised $150 million at a $1 billion valuation. And just three months ago, Bird raised money at a $300 million valuation. So in three months, Bird went from a valuation of $300 million to now $2 billion. As Premack says in the piece, quote, venture capitalists have never before participated in such a rapid and rocketing price spike, end quote. And as I said on yesterday's show, investors must be seeing some great unit economics and some pretty fat margins on these scooter rentals, or else it's just all about creating that comprehensive transportation ecosystem.

There have been rumors floating around that bird rival Lyme was looking to raise at a $750 million valuation. and as Premack later tweeted, quote, Investing in Bird at a $2 billion valuation isn't about the underlying biz of Bird. It's a faith bet that D-D, Lyft, or Uber will buy it. The headlines continue to roll out from E3, but Brad Sams has a real scoop over at Therat.com. According to internal documents, Sam's has seen as well as tips from sources, Sam's is reporting that Microsoft is planning for the next-generation Xbox console

to come out in 2020. The new device is internally code-named Scarlet. Quote, but what is more interesting is that Microsoft describes Scarlet as a family of devices, meaning we may see multiple pieces of hardware released that year, end quote. Now, Sam's doesn't have any idea what the family of devices might encompass, but given all of the talk this week about game streaming to multiple devices, it does make the imagination begin to run wild.

When Mark Zuckerberg testified before Congress, he agreed to provide written follow-up answers to questions from lawmakers. Facebook said it received more than 2,000 questions, and last night, Congress released all of the answers that Zuckerberg had promised to get back to them about. 454 pages worth. Subsequently, people have been sifting through the responses with a fine-toothed comb. If you want some really deep details about what Facebook knows about you, the responses are pretty illuminating. As ABC Online's technology reporter Ariel Bogle tweeted, quote, Facebook collects an honestly exhausting amount of your data, whether a window is foregrounded or backgrounded,

mouse movements, battery level, etc, etc., etc. But lots of people accuse Facebook of continuing to be evasive in its answers. The Washington Post says that Facebook, quote, repeatedly dodged questions from Senator Ted Cruz about alleged bias in its news coverage. And Facebook had a very carefully worded response to the question of whether or not Facebook itself was too big,

perhaps a monopoly, perhaps anti-competitive. In essence, Facebook responded by saying, its competition is the whole internet, and it's just one company, one collection of applications on the internet. Facebook's written response used messaging as an example. Quote, if you're looking to message someone,

just to name a few, there's Apple's iMessage, telegrams, Skype, line, Viber, WeChat, Snapchat, and LinkedIn, as well as the traditional text messaging services your mobile phone carrier provides. Equally, companies also have more options than ever when it comes to advertising, from billboards, print, and broadcasts to newer platforms like Facebook, Spotify, Twitter, Google, YouTube, Amazon, or Snapchat. Facebook represents a small part, in fact, just 6% of this $650 billion global advertising ecosystem, end quote. To which Sarah Emerson at Motherboard responded, quote, Together, Facebook's swath of competitors is the internet to the average American, and probably to citizens of other countries as well,

especially in places where it's tried to launch free basics. As I've written previously, Facebook accomplished this by historically cloning or acquiring its competitors, making the service irreplaceable to millions of consumers. In 2013, it paid $150 million for anovo, which, allowed the company to monitor user activity and see which features they liked best. I understand what Facebook is trying to do. Look at all of our rivals. But it doesn't seem so diminutive when comparing itself to virtually every popular network out there.

And on any other day, Zuckerberg would be touting Facebook's ubiquitousness. I always thought one day someone would connect the whole world, but I never thought it would be us. He told the crowd at last year's Facebook Community Summit, end quote. Lots of other people mentioned anovo. Here's the New York Times as Mike Isaac, quote. Facebook conveniently elides any mention of its use of ano to spot the would-be competitors it mentions in this response. Then either buy or clone them before they become a real threat. There are no real competitors because Facebook knows how to kill them first, end quote.

Insert roll safe guy meme here, which a lot of people think is a picture of Eddie Murphy tapping his head, but is actually British filmmaker and actor Coyote Awumi tapping his head. Can't be mad at me for being a monopoly if I have no competitors. So this literally came in over the wires 10 minutes ago, which is why you're getting this in your feed, possibly five to 10 minutes late. But a federal judge just ruled this afternoon that AT&T's $85.4 billion purchase of Time Warner is legal,

clearing the path for the merger to go through. The judge did not impose any conditions on the merger's approval. This is pretty much the bull maximalist outcome if you're reading the tea leaves not only for mergers in general over the next few years, but also for tech and media and tech media mergers as everyone and their mother tries to weapon up to try to do battle in the new streaming digital media galaxy. So this is a proper long read suggestion, but it's way too good to wait until Friday. Why are all of these companies rushing to consolidate in the content and media space? As I've been saying over and over, the answer is Netflix. And the cover of this issue of New York Times Magazine features a lengthy feature,

delving deeply into Netflix and how and why it's upset everybody's Apple Cart. A good summary comes early on with these two quotes. I've never seen any one company drive the entire business in the way Netflix has right now, says Chris Silberman, managing director of ICM partners and agent for Gray's Anatomy and scandal creator Shonda Rhymes, who moved her production company to Netflix last year. And quote, the first word out of everybody's mouths in meetings is, how do we deal with Netflix, says one longtime TV industry executive. How do we compete with Netflix? What are they doing? End quote. You might think that a lot of Netflix's success comes from its vaunted algorithms. Netflix knows more about.

what you watch than say NBC does. They look at which shows you start but never come back to, which shows you binge all the way through within what seems to be a key 28-day window. And Netflix breaks up audiences into taste segments based on content affinities, not based on outmoded Nielsen categories like male Hispanic 18 to 34. I say outmoded because Netflix recognizes those are advertiser-friendly categories meant to target adds not to gain insight into audiences or taste. And yet, says Netflix programming guru Ted Serendos in the piece, quote, it's 70% gut and 30% data.

Most of it is informed hunches and intuition. Data either reinforces your worst notion or just supports what you want to do either way, end quote. Some juicy details from the piece. Netflix likes to tout Rotten Tomatoes ratings in press releases, but quotes from the piece suggest that internally Netflix seems to trust IMDB rankings more. Netflix does know that you share your password with probably lots of other people. Netflix has 125 million subscribers right now,

but when Sarandos was asked to estimate Netflix's true current global audience, he replied about 300 million. Unlike a traditional Hollywood studio, there's a real decentralized decision-making structure when it comes to greenlighting shows or movies at Netflix. This is a quote from Ted Sarandos in the piece. Two layers beneath Cindy have full green light. He's referring to Cindy Holland, Netflix's vice president of original content.

The only way that we can do what we do at the quality and volume we're doing it is to give power to my executives to make those choices. One agent, the author of the piece, spoke to, told the author that translates to at least, quote, five or six scripted development executives he can pitch to knowing that they have the authority to make a project a reality. Quoting again from the piece, the heads of Netflix's other big divisions, international, unscripted, documentary, stand-up comedy,

are similarly able to give the idea a go-ahead. Most of my team have more buying power than anyone has selling power in Hollywood. My direct report team can greenlight any project without my approval. They can green light it against my approval, says Sarandos, end quote. The picture that this piece paints comes down to this.

It's not that traditional Hollywood fears that Netflix will become an entertainment monopoly, per se, though some people probably do fear that. It's that Netflix also has this whole family of kin up in Northern California that can essentially muscle out all of the existing content incumbents and quickly. So, you know, you have Netflix spending its billions of dollars every year on hundreds of original shows and movies. but as the piece says, you know, Amazon Prime video can spend as much as Jeff Bezos feels like spending every year. Google's recent YouTube video revamps are attempts to get in the game. Facebook is always trying to experiment in videos. And Apple has already committed $1 billion to video efforts this year. There are only so many shows, so many creators, so many good ideas out there.

So if you're a Viacom or a Disney even, your production and development budget might only be equivalent to a rounding error. on the bottom line of some of these tech bohemists. Bill Gates used to remind Netscape during the browser wars that Microsoft didn't have to make money on web browsers. Similarly, Jeff Bezos never has to make a dime on his $250 million dollar Lord of the Rings rights investment. It's business at a scale that Hollywood has never had to reckon with before, so bulking up is basically Hollywood's only option.

It's consolidate or die. Whatever Sarandos does say, about Netflix trusting its gut, it's still quite clearly a tech company at heart. Quoting again from the New York piece, Mysterious though it might seem, Netflix operates by a simple logic, long understood by such tech behemoths as Facebook and Amazon. Growth begets more growth begets more growth.

When Netflix adds more content, it lures new subscribers and gets existing ones to watch more hours of Netflix. As they spend more time watching, the company can collect more data on their viewing habits, allowing it to refine its bets about future programming. More shows, more watching, more watching, more subs, more subs, more revenue, more revenue, more content, explains Sarandos, end quote. But as BuzzFeeds and Helen Peterson tweeted in response, quote, How can you write this many words about Netflix and not talk about how mediocre its original movies are?

I want someone to admit they're an old school B-movie production house, end quote. And indeed, that would be my question. For all the original shows and movies Netflix produces, where is Netflix's The Wire or Breaking Bad or There Will Be Blood or Get Out? Where's the first piece of original Netflix content that is so intrinsically good? It's undeniably a classic work of art. We're still waiting for that level of creative breakthrough from them. The piece is called Inside the Binge Factory and there's a link to it in the show notes.

I'll end today with a couple of cryptocurrency items and then finish with an explainer piece. Coinbase has announced plans to add support for Ethereum Classic, a fork of the Ethereum token to its crypto exchange in the coming months. Coinbase is, of course, the largest crypto exchange in the world. If your uncle dipped his toe into buying Bitcoin, it's likely that he did so by opening a Coinbase account. But until now, Coinbase only supported four coins, Bitcoin, Bitcoin, Cash, which is a fork of Bitcoin, Ethereum, and Lightcoin. Ethereum is the second highest value crypto token after only Bitcoin, but this forked coin, Ethereum Classic, or ETC, is only the 19th biggest currency by market cap.

ETC, as I said, is the result of a hard fork of the Ethereum network. Many in crypto circles had been critical of Coinbase because it had supported the hard fork of Bitcoin, Bitcoin Cash, in mere months, but still had not supported this similar fork to Ethereum years after it took place. In related news, Apple says it is banning cryptocurrency mining on the iPhone and iPad. There is new language in Apple's App Store review guidelines, which states, quote, apps may not mine for cryptocurrencies unless the processing is performed off device. And apps, including any third-party advertisements displayed within them, may not run unrelated background processes such as cryptocurrency mining, end quote.

In case you haven't seen the headlines, there have been all sorts of incidents of malware and even shady advertisements recently that try to hijack a user's CPU to create computational pools to mine various cryptocurrencies without the user even knowing it. This new language by Apple goes beyond just stopping that sort of thing, though. For the first time, Apple is basically saying no on-device cryptocurrency mining, period. You can still trade and store cryptocurrencies on your iPhone, of course, but no mining. As many pointed out, though, iOS devices are not good mining candidates anyway because they don't run the custom chips that miners prefer.

Finally, at least five cryptocurrencies have recently fallen victim to the dreaded 51% attack. Mona coin, Bitcoin Gold, Zen Cash, Verge, and Lightcoin Cash. What is a 51% attack? Well, CoinDesk? has an explainer up that's got you covered. Essentially, a 51% attack is when a group of miners control more than 50% of a blockchain network's mining hash rate, what you can think of as a cryptocurrency's collective computing power. If you tip over that magic 50% mark and control the majority of the hash rate,

you can do all sorts of things from preventing transactions, from being confirmed to essentially double spending coins. quoting from the coin desk piece, it wouldn't make sense to amass all this expensive hashing power to double spend a $3 transaction on a cup of coffee. An attacker will only benefit from this investment if they're able to steal thousands or even millions of dollars. As such, hackers have found various clever ways of making sure the conditions are just right to make them extra money.

That's why attackers of monocoyne, Bitcoin gold, Zencash and light coin cash, have all targeted exchanges hosting millions in cryptocurrency. By amassing more than half of the network's hashing power, the Bitcoin Gold attacker was able to double spend two very expensive transactions sent to an exchange. Through three successful attacks of Zencash, a lesser-known cryptocurrency, that's a fork of a fork of privacy-minded Zcash, the attacker was able to run off with about more than 21,000 Zen, the Zencash token, worth well over $500,000 at the time of writing, end quote.

Essentially, it's the smaller coins that are at risk because they are cheaper to attack. Quote, if your savings are in a coin or anything else that costs less than a million dollars a day to attack, you should reconsider what you're doing, end quote. So tweeted Cornell professor, Amin Goon Surer. Quick random plug, everybody. TED conferences, the people who make TED Talks, have a residency program. You come to New York, work out of TED headquarters, about a dozen weeks or so, work with other amazing residents from all sorts of disciplines, and you give a TED Talk at the end.

I was part of the first residency class a few years ago, and so I know that the application period for the fall residency is about to close. If you have an idea worth spreading, as they say, you have until Sunday, June 17th to apply. Google around for TED residency and send in your application, or there's a link in the show notes. If you're selected, you'll have the time of your life. Believe me. And you'll get to meet me as well if somehow that was a draw.

Anyway, check it out. That's all for today. Thanks for listening.