Tech Brew Ride Home - Wed. 02/02 – YouTube Bigger Than Netflix?

Episode Date: February 2, 2022

Alphabet gives a new meaning to the term blowout quarter. Cruise is getting ready to launch its robotaxi business in San Francisco. A GDPR issue that might have huge implications. Starlink has a new premium tier. And what happens if someone buys your house, your IRL house, but in the metaverse? I’m not kidding. Sponsors: TodayInDigital.com Napjitsu.com/techmeme Devry.edu/future Links: Google parent Alphabet announces 20-for-1 stock split (CNBC) Cruise, loaded with another $1.35B from SoftBank, opens up driverless ride-hailing to the public (TechCrunch) SpaceX’s new Starlink Premium tier promises up to 500Mbps for $500 a month (The Verge) European Ad Group Hit With Sanctions Over Privacy Lapses (Bloomberg) Who owns your address in AR? Probably not you. (Protocol) 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 Wednesday, February 2nd, 2020. I'm Brian McCullough today. Alphabet gives a new meaning to the term blowout quarter. Cruise is getting ready to launch its robotaxy business in San Francisco, a GDPR issue that might have huge implications. Starlink has a new premium tier. And what happens if someone buys your house, your IRL house, but in the metaverse? I'm not kidding. Here's what you miss today in the world of tech. Alphabet reported an appellate. blowout quarter yesterday. Let me give you just this one stat. Q4 revenue for Alphabet rose 32% year over year to $75.3 billion. Again, that's quarterly revenue. And stop and think about that. A company

as mature and doing as much business as Alphabet already was is still growing 32% year over year. The law of large numbers is officially dead, I guess. Let me. me put it to you another way. In the year 2021, Alphabet grew sales by a total of $75 billion over a year earlier. So if you were being glib about it, the way you'd say this is Alphabet invented $75 billion in new business just last year. The total annual revenue of Coke, the sugar water company, is $38 billion a year. So Alphabet generated two entire Coke-sized businesses in terms of new sales just last year. And yes, this is largely from ads. Folks like myself have snarked and warned that, you know, Google can't really cram any more ads anywhere. There's diminishing returns. They're

running out of real estate. And yet, Q4 ad revenue was still $61.24 billion up 33% year over year. What about new business beyond just advertising? Well, Alphabet does still lag behind Amazon and Microsoft when it comes to cloud computing, but nonetheless, Alphabet's cloud revenue grew to $5.5 billion from $3.8 billion a year earlier. On the earnings call, Sundar Pichai said the pixel phone, quote, set an all-time quarterly sales record, end quote, in Q4, despite supply issues that everyone's been experiencing. Now, that, too, is coming from a small number. Pixel sales haven't exactly lit the world on fire in the past, and Alphabet declined to break out specific numbers, but, alphabet does lump pixel into its so-called other category, which grew 22% year-over-year.

The real star of the story here continues to be YouTube. YouTube's quarterly ad revenue rose to $8.63 billion up 25.4% you over year. So YouTube generated $8.63 billion in revenue largely ads last quarter. But guess what? Netflix had revenue last quarter of just $7.7 billion. So, for the first time, YouTube alone is a bigger business than Netflix. That in and of itself is amazing. Alphabet has an entire Netflix-sized business inside of itself. Also, remember, 55% of sales at YouTube goes to creators. So when we talk about a creator economy, it's already here. It's already huge. And it's YouTube. As Joseph Flattery put it on Twitter, quote, Web 2.0 doesn't get enough credit for providing creators' ownership. Sure, there is the threat of

deplatforming on the margin, but if you're just a channel that produces recipes, music theory, or obscure historical videos, it's an extraordinary place to build at least for now, end quote. So at the time of my writing this shortly before the markets open this morning, Google's stock price was up around 10% before hours, over $3,000 a share, which Alphabet also said that its board of directors has approved a 20-for-1 stock split slated for July 1st with shareholder approval. Google less split its stock in 2014, quoting CNBC. Alphabet intends to split the Class A, Class B, and Class C shares of the stock. According to the earning statement, the change requires shareholder approval. Each shareholder at

the close of business on July 1 will receive on July 15 19 additional shares for each share of the same class of stock they own. Were the split to happen as of Tuesday's close, the cost of each share would go from roughly $2,752 a share to roughly $137.64 a share, and each existing holder would get 19 additional shares for everyone they already own, end quote. Interesting raise. Autonomous Vehicle Startup Cruise has raised $1.35 billion of additional capital. from the Softbank Vision Fund, which is interesting in and of itself, but more interesting for our purposes. Cruise has also launched a wait list for a driverless robotaxy service in San Francisco that will run between 11 p.m. and 5 a.m., quoting both details from TechCrunch.

Cruise is opening up its driverless robotaxy service to the public in San Francisco as the GM subsidiary creeps toward commercialization with a fresh $1.35 billion investment from SoftBank's Vision Fund. SoftBank had previously committed to investing an additional $1.35 billion on top of its initial $900 million investment once Cruz was ready for commercial deployment. For now, these rides are free and a public waitlist has been set up Tuesday via Cruz's website. The company said in a blog post Tuesday that members of the public who joined the waitlist will not have to sign a non-disclosure agreement before using the service. There were a small group of friends and family who completed rides on January 27th, and they

under NDAs until this morning, a company spokesperson said. Cruz's initial driverless service is from 11 p.m. to 5 a.m., a company spokesperson confirmed, adding that night driving is part of its strategy to start where it can have the best impact and expand methodically from there. Cruise tests its autonomous Chevy Bolt vehicles throughout San Francisco. However, the driverless service is limited to certain areas and streets within the Hate-Ashbury, Richmond District, Chinatown, and Pacific Heights neighborhoods. Cruz has nearly all of the permits required to operate and charge for rides and vehicles that operate without a human driver behind the wheel. It has the three permits required by the California

Department of Motor Vehicles to test and deploy drivered and driverless vehicles, including one that allows it to carry the public. It also applied for a permit with the California Public Utilities Commission to charge for those rides, though the company has not yet received that permit, end quote. Hey, Cruz, I haven't been out to San Francisco in over two years now. So hook a brother up. Happy to air my first driverless ride on this show. Elon Musk has announced Starlink Premium, a $500 per month tier for the internet via satellite service, with claimed 150 mbPS to 500 MbPS download speeds up from 50 mbps to 250 MbPS for the standard tier, quoting the verge. Premium also claims roughly double the up.

upload speeds at 20 to 40 mbPS compared to 10 to 20 mbps for the standard tier. This increase in performance doesn't come cheap, though. While the base Starlink service costs $499 for the hardware and $99 a month, Starlink premium will cost $2,500 for the antenna and $500 a month. Deliveries are due to start in the second quarter of this year. There's also a $500 deposit just to reserve a premium dish. Starlink's website says the new tier is targeting, quote, small offices, storefronts, and super users across the globe, end quote.

As well as its increased speeds, Starlink also promises that its premium service will perform better in extreme weather conditions and that its customers will get access to 24-7-prioritized support. This is the second new satellite dish that Starlink has started taking orders for in the last 12 months. In November, it unveiled a more compact rectangular dish. That's thinner and lighter than the company's previous circular dish. The big question, though, is whether the new premium tier is able to offer a more consistent service than what we experienced when we tried Starlink out for ourselves last May. Although it was fast, with speeds sometimes in excess of 100 mbPS, we found that the connection would frequently slow down and drop out. It meant that using services

like Zoom or playing games online weren't really an option with the satellite-based internet service, but with new hardware and hundreds more satellites having launched in the months since, there's every chance the Starlink service will have improved for many, end quote. Belgium's data watchdog has fined IAB Europe, 250,000 euros after finding its ad-targeting tool violated GDPR and ordered changes to be made within two months. I'm flagging this because this could end up being a bigger deal than it sounds, quoting in gadget. After a years-long process, data protection officials across the European Union have ruled that Europe's ad tech industry has been operating unlawfully. The decision handed down by Belgium's

APD, and agreed by regulators across the EU, found that the system underpinning the entire industry violated a number of principles of the general data protection regulations or GDPR. The Irish Council for Civil Liberties has declared victory in its protracted battle against the authority, which administers much of the advertising industry on the continent, IAB Europe. At the heart of this story is the use of the transparency and consent framework, or TCF, a standardized process to enable publishers to sell ad space on their websites. This framework set by IAB Europe is meant to provide legal cover in the form of those consent pop-ups, which blight websites, enabling a silent digital auctioning system known as real-time bidding or RTB. But both the nature of the consent given

when you click a pop-up and the data collected as part of the RTB process have now been deemed to violate the GDPR, which governs privacy rights in the block. The APD has ruled, that any and all data collected as part of this real-time bidding process must now be deleted. This could have fairly substantial implications for many big tech companies with their own ad businesses, including Google and Facebook, as well as big data companies. It may also have a large impact on many media platforms and publishers on the continent who will now need to address the fallout from the finding. Regulators have also handed down an initial fine of $250,000 to IAB Europe and ordered the body to effectively rebuild the ad tech framework it currently uses. This

includes making the system GDPR compliant, if such a thing is even possible, and appoint a dedicated data protection officer. Until now, IAB Europe has maintained that it does not create any personal data and said in December that it was a standards center and a trade association rather than a data processor in its own right, end quote. If that's all kind of confusing, here are two tweets that might give you a sense of the possible impact of this, quoting Dar Obasanjo. Incredible GDPR ruling finds pop-ups used on 80% of EU websites to be illegal. All data collected through IAB's TCF must now be deleted by more than 1,000 companies using it. This includes Google's, Amazon's, and Microsoft's online advertising businesses, end quote. And James Ball, quote, The good news, major companies may have to delete loads of data on you. The bad news, those annoying cookie consent pop-ups could get much worse as a result. The questionable news? cookies are on the way out and being replaced by new forms of tracking, end quote. Finally today, from my something that never occurred to me file,

startups have begun selling and renting out AR spaces tied to real-world addresses, raising questions about who should have the rights to a property's AR layer. Like, you know how buildings and landowners have air rights, right? They own the air above their roofs or their soil. This is sort of like that. You can't do anything above. the ground unless you have permission or pay for it, right? This is like that, but for augmented reality.

Quoting Protocol, It's the stuff of nightmares. The other day I found my property occupied by a stranger who was renting it out Airbnb style. The good news, I'm okay. I wasn't actually evicted from my own home, at least not in this world. Someone had acquired my property in Upland, a blockchain-powered game that allows people to buy, develop, rent out, and sell virtual land parcels based on real-world property borders. It's a bit like Monopoly, played on top of Google Maps, with virtual land speculation

happening on a gamified version of the real world. With bright and colorful imagery and a goofy-looking llama as a mascot, Upland emphasizes that it's all fun in games. That's true for its economy as well, as most of its in-game transactions have little to no monetary value in the real world. The person who bought my property currently makes the equivalent of four cents a month in upland's in-game currency by renting it out to other players. However, Upland has big ambitions, which include eventually expanding into AR and providing its data via APIs to third-party developers who may one day be able to build their own game and non-game applications with it. And the company is not alone. A small but growing number of startups and crypto initiatives have begun selling and renting out AR spaces tied to real-world addresses.

One day, these efforts could be key to telling your smart glasses which information to display as you look at a famous landmark or even your neighbor's home. This brings up a ton of questions. Who should have the rights to an AR layer tied to a physical address? What does it mean that these AR properties are being divided up among early adopters, before most people even know they exist? Will we see the same issues that have plagued real-world real estate, including gentrification and displacement, replicated in AR? And on a more personal level, what should I do about my virtual squatter, end quote.

Skipping down and quoting from later in the piece, Upland players can acquire land plots based on real-world property data the company is licensing from mapping provider Mapbox and then develop them to generate higher revenues similar to the way a house or hotel would increase the rent and monopoly. And there are other in-game incentives to becoming a real estate mogul. Let's say you collect three properties on the same street or three museums which are harder to get. One of the founders explained, once you complete that collection, your yield on those properties increases, end quote. This type of gamification appears to be working. The person who bought my property in Upland currently owns about a dozen land parcels both in the Bay Area and on the East Coast. That's comparably

small fish. My neighbor's property is owned by someone who currently holds more than 500 such parcels and whose net worth is around 5.5 million units of Upland's UPX in-game currency. UPX can't be cashed out directly, but players can opt to sell their properties for U.S. dollars. If one wanted to buy 5.5 million UPS directly from Upland, the price would be around $5,000, end quote. And scrolling down to the conclusion of the piece, quote, turns out I wasn't the only one who was weirded out by Upland's virtual land grab. I share the instinct of your reaction. It seems like there's something wrong with this, agreed Stanford Law School Professor Mark Lemley. Lemley and UCLA law professor Eugene Volkhoff

authored a paper about legal aspects of AR and VR in 2017, and I was hoping that he would be able to tell me whether Upland selling a virtual representation of my property was legal. Quote, I don't know that there's an answer, Lemley said. This is not something that the law has dealt with before, and it's even hard to find a particularly close analogy, end quote. The data that Upland is using to build its game on top of the real world, including addresses and property borders, is publicly available or easily licensable, and there are good reasons against restricting access to it. Without such data, we would have no Zillow, no Yelp, no Google Maps. But while using the data in aggregate,

might be fine, a lot of issues remain unresolved. Lemley cited Pokemon Go as an example. When the pioneering AR game started to take off in 2016, some people filed lawsuits after finding pokey stops on their private properties. Those cases mostly don't succeed, and to the extent they have any merit, they seem to be because of the triggering effects of physical presence, Lemley said. I put a pokey stop on your property and a bunch of strangers randomly come onto your property, end quote. In other words, the issue is not the AR layer itself, but the real world behavior it could provoke. There are also some potential issues around trademarks, which is why Upland doesn't sell its players specific stores, but only the properties they reside on. We would

never say we are selling this brand-named property, one of the founders said. All we do is sell addresses, which are public goods, end quote. Still, the mere fact that money is involved does add some complexity and could be seen as something akin to free writing, Lemley said. We don't actually have a legal doctrine that really fits this well, but it definitely heightens the instinct that you're doing something that ought to belong to me, he said. Someone's taking the house I've built, or the property that I've purchased, and profiting from it, end quote. Huh. So get ready for AR eminent domain cases, I guess. That's all for today. Talk to you tomorrow.