Tech Brew Ride Home - Wed. 02/03 – Bezos Drops Mic

Starting point is 00:00:00 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 3, 2021. I'm Brian McCullough. Today, Jeff Bezos is stepping down as Amazon CEO to be replaced by Andy Jassy. Google is losing a ton of money on its cloud, but YouTube is finally hitting its stride. Apple might formally do an Apple car-related tie-up with Kia in a matter of weeks, and why I finally got off the fence and decided to investigate the AR-slash-VR space. Here's what you miss today in the world of tech. You have probably heard by now that Jeff Bezos is stepping down from his role as CEO of Amazon will be transitioning to the role of executive chairman. This will happen in Q3 of this year,

Starting point is 00:01:19 at which point AWS CEO Andy Jassy will become the new CEO of Amazon. Bezos wants everyone to know this is not a retirement in a letter to employees. Bezos wrote, quote, As much as I still tap dance into the office, I'm excited about this transition. Millions of customers depend on us for our services, and more than a million employees depend on us for their livelihoods. Being the CEO of Amazon is a deep responsibility, and it's consuming. When you have a responsibility like that, it's hard to put attention on anything else. As exec chair, I will stay engaged in important Amazon initiatives, but also have the time and energy I need to focus on the Day One fund, the Bezos Earth Fund, Blue Orrush, origin, The Washington Post, and my other passions. I've never had more energy, and this isn't about

Starting point is 00:02:06 retiring. I'm super passionate about the impact I think these organizations can have. Amazon couldn't be better positioned for the future. We are firing on all cylinders, just as the world needs us to. We have things in the pipeline that will continue to astonish. We serve individuals and enterprises, and we've pioneered two complete industries and a whole new class of devices. We are leaders in areas as varied as machine learning and logistics, and if an Amazon idea requires yet another new institutional skill. We're flexible enough and patient enough to learn it, end quote. Quoting CNBC, Amazon's chief financial officer Brian Olzlovsky said on a media call that the executive change was decided in consultation with Amazon's board of directors. He said

Starting point is 00:02:50 Bezos will remain very involved and have his fingerprints on lots of different parts of the company. Oslofsky said Jassy is a visionary leader who will bring his own skill set, but that Amazon expects a lot of continuity with the transition, end quote. Yes, the PR message from across the board is that Bezos is still going to be involved with cool things at Amazon, things like new projects, new products, strategic initiatives. That's very common for founders of these big companies, say, 20 years into them. Eventually, you only want to do the fun stuff, not the dirty stuff of running a huge operation day-to-day. Same thing happened to Larry and Sergey at Google. They transitioned to their moonshots and other bets before drifting out the door entirely.

Starting point is 00:03:36 I'll point out that Bill Gates stepped down as CEO of Microsoft 33 years after the founding of that company. Amazon is only 26 years old by comparison, and yet, Gates was only 53 when he retired. Bezos is 57. I'm not saying 57 is old by any means, but I didn't know that that was his age. All I'm saying is, if you're the richest man on Earth, depending on the day, this sort of thing makes sense. around this stage of life, right? I also think it's worth pointing out, as several people have been pointing out, and as you'll hear again in a second, that if we define the tech oligarchs as Apple, Google, Amazon, Microsoft, and Facebook, Facebook is the only one of the big five to still be run by its founder. The rest are either in their second regime or even a generation or two beyond that.

Starting point is 00:04:22 Companies can change in small ways and large when there's generational turnover, though I would point out that there is basically no tech company that is more infused with the culture inspired by its founder than Amazon is. All those always day one aphorisms are not just all over the walls of Amazon's campus. Amazonians will spout them to you like the sayings of Chairman Mao. But at the same time, I've been saying for a while now that Amazon has seemingly gotten a complete culture makeover recently, gotten meaner lately, or at least a lot more aggressive. Will that sort of thing accelerate? Has that been happening because Bezos has been slowly transitioning out and there's been a power vacuum filled by a new generation, or has that been a change in Bezos himself that we might see reversed

Starting point is 00:05:07 under Jassy? I reached out to our friend Alex Cantowitz to share some thoughts about this whole thing because Alex literally wrote a book titled Always Day 1 about the culture inside of Amazon. Here's what he had to say. Hello, Brian and Tech meme ride home listeners. A few thoughts about Jeff Bezos stepping down as CEO of Amazon. Now, some people will see this as the end of Amazon. I see it as anything, but Bezos was unlike Steve Jobs as a leader. Jobs told everybody what to do and they went out and executed. Bezos was a master facilitator.

Starting point is 00:05:39 His whole thing was building a culture that would empower employees to bring ideas to management and then bring those ideas to life. That won't change under new CEO Andy Jassy. Amazon will remain inventive and in day one, as Bezos likes to say it. Number two, what does Bezos do next? I think he's going to space. in talks. If you've watched Jeff Bezos, he said Blue Origin, his spaceflight company is the most important thing he's working on. It's kind of weird. Like what happened to Amazon? Well, now we know

Starting point is 00:06:04 he's leaving Amazon so you can have a chance to go do this. So it's going to be Bezos versus Elon Musk in the space race. May the most bold tech founder win. And then finally, out of all the big tech companies, Amazon, Apple, Facebook, Google, and Microsoft, there's only one that has its founder at the helm. And that's Facebook and Mark Zuckerberg. Fun story. Zuckerberg, when he was just starting out, tried to shadow Jeff Bezos as he was learning how to become a CEO. And he asked through Don Graham, who was the owner of the Washington Post and member of Facebook's board, Bezos told Graham, other than being shadowed around by Angelina Jolie, I don't think anything would bring my life to a complete standstill more than having Mark walk around with me. And he said, no.

Starting point is 00:06:48 I think Mark is still sensitive about that. At least he seemed so when I brought it up to him. But now he is the last one in the ring. and that is all I have. Thanks, everybody. As always, check out Alex's newsletter called Big Technology for more on this and a bunch of other stuff. He's covering it every day. Speaking of Andy Jassy, it was an open secret that Jassy would be Bezos's successor for a while now. He's seemingly been groomed for the role for a long time.

Starting point is 00:07:14 He was Bezos's first ever technical advisor, shadowing Bezos for a full year to basically learn how to run a business of the Jeff Bezos way from the man himself. And the importance of JASI to Amazon overall is obvious in the most recent Amazon earnings report from just yesterday. AWS reported 28% revenue growth. AWS alone is responsible for about 52% of Amazon's operating income. Amazon is a cloud computing juggernaut that just so happens to also deliver laundry detergent to your door every day. Here's a brief dossier on Jassy from CNBC. Quote, Jassie graduated from Harvard University in 1990 and from Harvard. business school in 1997. He then went straight to Amazon and never left. In an interview last fall,

Starting point is 00:07:59 he said that his wife and he agreed that they'd moved to the West Coast to be closer to her family for a few years and then moved back to New York. That was 23 years ago, of course, and the statute of limitations has probably expired, he quipped. Critical to Jesse's success has been his ability to attract all types of businesses and organizations to AWS products, offering services for the smallest of startups and the world's largest enterprises like Apple. Along the way, he's won business from the Central Intelligence Agency and Democratic National Committee. In recent years, more AWS contracts have come public as companies like Pinterest, Slack, Lyft, and Snowflake held their IPOs and had to disclose their heavy cloud spending. As of mid-2020, Amazon controlled

Starting point is 00:08:40 33% of the global cloud infrastructure services market, followed by Microsoft at 18% and Google at 9% according to Synergy Research, end quote. As I just mentioned, Amazon had an earnings report yesterday, and the Killing It theme is continuing. Amazon reported its first ever quarter of $100 billion in sales up 44% year over year, with net income more than doubling to $7.2 billion up from $3.3 billion a year earlier. Also worth noting this, Amazon ended 2020 with 1.3 million employees, An increase of 500,000 employees from 2019, employee numbers overall were up 63%. But Alphabet also reported earnings yesterday, and I have to give you a mea culpa.

Starting point is 00:09:37 I had been having a funny feeling that Alphabet would report a bit of softness, and I couldn't have been more wrong about that. Alphabet's revenue was up 23% year over year. Google Cloud revenue was up to $3.83 billion from $2.6 billion a year earlier. But remember, as comparison to see how far ahead AWS truly is, AWS revenue came in at $12.7 billion for the quarter. Also, for the first time Google disclosed operating income slash losses for the Google Cloud unit, and they were losses. Google Cloud lost $5.6 billion in revenue for fiscal year 2020. So keep that in mind, vis-a-vis our segment yesterday on Google Stadia.

Starting point is 00:10:23 I think the big headline from Alphabet, though, is the continued maturity of YouTube. On the earnings call, Sundar Pichai said YouTube more than doubled its advertisers via its True View ad format, and YouTube's brand business had rebounded from early pandemic losses. YouTube ad revenue came in at $6.89 billion up from $4.7 billion a year earlier, representing a 46% jump. Alphabet crowed that YouTube now reaches more 18 to 49-year-olds than all linear TV networks combined. As our friend Simon Owens tweeted, quote, YouTube generates more money than Netflix or Viacom,

Starting point is 00:11:01 and a huge portion of that revenue goes to small independent creators, end quote. Something, something, the creator economy is the future. There's more smoke around this Apple car fire. It's getting real, y'all. Bloomberg is reporting that. Apple is planning a $3.6 billion investment in South Korean carmaker Kia, that it may sign a deal with Kia as soon as February 17th, and the plan is to begin manufacturing cars in Georgia as early as 2024 with an initial target of producing 100,000 cars a year. I should probably specify that

Starting point is 00:11:42 I mean the U.S. state of Georgia, quoting Bloomberg. Kea Motors jumped as much as 14.5% after a local media report that Apple will invest $4 trillion or $3.6 billion as part of a collaboration with the South Korean carmaker on making electric cars. Last month, Hyundai, an affiliate of Kia, backed away from a statement that said it was in talks with Apple, revising it to say only it had been contacted by potential partners for the development of autonomous EVs. The news pushed stock in Hyundai up almost 20% on the day. Kia shares are now at their highest since 9%. 1997, end quote. So let me quote a tweet from Brian Romella, because he's been echoing something that I've been hearing from several people lately, quote, Applecar is a deep part of Apple AR slash VR and Apple Viser.

Starting point is 00:12:35 These are all linked technologies that connect to the new Apple Silicon 100 processor wafer systems devolved for Apple Car. Big moves ahead for Apple, end quote. You all know that I invested in an Oculus Quest 2 recently, not just scratching a gaming itch by doing that. It's because now that we've been seeing Facebook, Apple, everyone moving big guns and big resources into the VR slash AR front as the next big thing in the multi-sided Silicon Valley great game, as it were, I decided I wanted to have a better understanding of the marketplace as it exists for both AR and VR before everything really pops off. I'm also searching around for an AR platform to experiment with. If any of you have any recommendations, right now I'm taking a hard look at. at Enreal and their whole nebula glasses platform. Anyway, signs that I'm right to try to get ahead of this trend. Oculus now says that six Oculus Quest titles have each cleared $10 million in revenue and one third of all paid apps available on the Oculus store have earned more than $1 million, quoting Upload VR. The figures were released in a blog post authored by Mike Verdu,

Starting point is 00:13:56 VP of content at Facebook Reality Labs. Verdu's post acknowledges Facebook has been temporarily swamped with new submissions and is, quote, working on adding resources and changing our processes to accommodate all developers who want to launch games on Quest, end quote. We heard from developers looking to release a new app on Oculus Quest that they've been told by Facebook that the release schedule is already filled into 2022. We asked Facebook whether they are hiring additional developer relations personnel and whether more capacity is being opened up in the release schedule, but a representative declined to provide

Starting point is 00:14:29 more detail beyond the statement made by Verdue. Facebook employs a strict console-like content curation policy for the Quest Store, but the company does allow sideloading content and announced in mid-2020 that it would add a non-store distribution method in 2021. The statistics announced today by Facebook show some developers able to navigate Facebook's approval process for store release are finding increasingly significant revenue, end quote. I've also been hearing that more than a million units of the Quest 2 have now been shipped, and that's not even six months old, so, you know, drop in the bucket, I suppose, compared to other platforms, but significant numbers, nonetheless. If VR really is going to take off, it probably needs to

Starting point is 00:15:11 have a second trick pony beyond gaming, though, right? And of course, Facebook probably bought Oculus in the first place because it figures that VR is the next step in social. So, speaking of side-loading, note this. Facebook has rolled out Messenger, for the Oculus Quest, as well as something called App Lab, which will let developers distribute apps outside the Oculus Store without the need for side-loading. Quoting and gadget, people who have logged into a Quest or Quest 2 using their Facebook account will be able to chat with their Facebook friends while wearing their headset. You can type out a message in virtual reality, send pre-written phrases, or use the voice-to-text

Starting point is 00:15:48 feature to chat with your buds. There's also the option to start an Oculus party from Messenger so you and your friends can hop into the same game, and for instance, face off in Beat Sabre. Software Update version 25, which is rolling out gradually, also introduces a feature called App Lab. This will give developers a means to distribute their apps and games outside of the Oculus Store without users having to side-load them. Facebook suggests this will allow it to maintain a high level of quality within the store while giving developers a safe, secure way to share creations that might be more unrefined or experimental. Although these apps may not be in the Oculus store, you can still search for them if you know the exact name and they'll pop up in the App Lab section of the results.

Starting point is 00:16:28 Developers can also share their apps with a URL. Any App Lab games or apps you buy will be added to your Quest library and they'll receive automatic updates, end quote. I'm actually in the midst of trying to put together a bonus episode about my experiences with the Oculus thus far and delving into the state of VR gaming, specifically in the near future. From the News You Can Use Department, if you spend your days on Google Meet as much as or maybe more than you do on Zoom, then you're going to want to know

Starting point is 00:17:07 about the new green room feature of Google Meet because it will let you, you know, get ready for your close-up, Ms. Desmond, quoting The Verge. Google has now made it easier to check your appearance and your tech before a meet conference with its new green room feature. when you start or prepare to join a meeting in the usual ready-to-join window that first appears, you will now also see a small button below your video that says,

Starting point is 00:17:31 check your audio and video. Just click on that button, and a pop-up window will not only show your video image, but allow you to see and change which microphone, speaker, and camera is currently live. A next button on that pop-up window then lets you record a short six-second video sample, allowing you to see how you will look and sound to the others in your meeting. According to Google, the clip is private to you and will not. be saved. Your mic, speaker, camera, and connection are also checked by the system and get green checkmarks if they seem to be working, end quote. This feature is apparently available right now.

Starting point is 00:18:09 And since we did that, let's end on this. Zoom has a new feature that is positioning it for a world where people might actually be able to go back to the office. Quoting CNBC, Zoom on Tuesday said it has come up with a way to let people visiting offices check in with a receptionist without physical contact. It involves starting a Zoom call naturally. The new feature, Kiosk mode, is part of Zoom Rooms, one of the company's enterprise offerings. Unlike the standard Zoom Video Calling Service, which lets people use their own PCs and mobile devices, Zoom Rooms is meant for meeting places such as conference rooms, and it starts at $499 per year per room. Here's how the system works.

Starting point is 00:18:48 Once an office visitor enters a lobby, she goes to the touchscreen monitor with a camera and speaker and taps a button to start a call with a receptionist. The visitor talks with the receptionist over Zoom, and the receptionist can enable the visitor to enter the office space, such as by remotely unlocking a door. Quote, the receptionist doesn't need to be in the office. Harry Mosley, Zoom's chief information officer, told CNBC in an interview on Monday, they can be at their own home, they can be anywhere. They can actually be in a different country, and they can support multiple buildings, end quote. Kiosk mode can also help companies reduce the number of receptionists they have on each floor of their buildings, Mosley said, end quote. nothing to report today another day of sledding if we can fit that in talk to you tomorrow

Tech Brew Ride Home - Wed. 02/03 – Bezos Drops Mic

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