Tech Brew Ride Home - Wed. 04/22 – Facebook’s Big Play In India

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 TechMeme ride home for Wednesday, April 22nd, 2020. I'm Brian McCullough today. Huge Facebook investment in India. Tech earnings season is back and this promises to be a hum-dinger for all the reasons you can imagine. Two iPhone zero days found in the wild, Patreon does do layoffs but says creator numbers are holding up and a roundup of the iPhone SE reviews.

Starting point is 00:00:55 Here's what you miss today in a jam-packed world of tech. Facebook has made a pretty big move out of the clear blue. Sky investing $5.7 billion for a 9.99% stake in Geo. Who or what is Geo? Geo is the subsidiary of India's most valuable company, Reliance Industries. Geo is specifically a subsidiary that is an Indian telecom brand providing wireless and other services to around 388 million customers. So this is a big deal for a bunch of reasons we're about to get into, but let's start with the fact that this is Facebook's second largest ever outside investment, following from its $22 billion acquisition of WhatsApp back in

Starting point is 00:01:44 2014, and actually, WhatsApp might be key to what's coming. Quote, we're making a financial investment, and more than that, we're committing to work together on some major projects that will open up commerce opportunities for people across India. Facebook CEO Mark Zuckerberg said in a post on his personal Facebook page. Yes, what could Facebook do in India with a partner who has actually? access to that many millions of consumers, quoting TechCrunch. One possible collaboration could be, said David Fisher, Chief Revenue Officer at Facebook and Ajit Mohan, VP and Managing Director of Facebook India, bringing together GeoMart in e-commerce

Starting point is 00:02:22 business, that is a joint venture between geo and reliance retail, which is India's largest retail chain, with WhatsApp, which counts India as its biggest market with more than 400 million users. It's also the most popular smartphone app in India. We can enable people to connect with businesses, shop, and ultimately purchase products in a seamless mobile experience, they said. Reliance Geo, which began its commercial operation in the second half of 2016, upended the local Indian telecom market by offering bulk 4G data and voice calls for six months to users at no charge. The telco kickstarted a price war that forced local network providers, Vodafone, and Airtel to revise their data plans and mobile tariffs. However, they struggled to match the offerings

Starting point is 00:03:08 of Geo, which has become the top telecom operator in the country. Reaching Geo's users might interest Facebook, which attempted and failed to expand its free internet initiative, free basics, in India. The company has since expanded express Wi-Fi to India, though its potential and scale remains comparatively small, end quote. Yeah, you think Facebook might be interested in all of those Indian consumers. The New York Times also speculates that the geo investment might pave the way for Facebook to connect WhatsApp to GeoMart. Quote, India is a large market for Facebook. More than 400 million people across the country use WhatsApp, its global messaging service, while more than 300 million people use the company's core social network Facebook. Facebook has historically not made as much

Starting point is 00:03:52 money from each user in Asia as it does elsewhere, but the company hinted that the new partnership could change that. WhatsApp has worked for years to build tools for small businesses and has dabbled in payment systems, while Facebook has also invested in creating digital storefronts for entrepreneurs to sell goods and services online. Nikil Pawa, however, in MediaNama, says that Facebook's deal with Geo is unlikely to make a dent in India's mobile payments market, where Google Pay, phone pay, and Paytm have emerged as the big winners. Quote, Reliance Geo was always looking at a vertical integration play with content payments

Starting point is 00:04:30 and commerce, a key part of its offering to. consumers alongside connectivity. It doesn't appear as if content and payments have worked for Geo, when compared to the likes of Google Pay, Phone Pay and Paytm in payments, or with Hot Star and Amazon Prime and content. Commerce is a big part of Reliance's plans, and Mukesh Ambani made a strong pitch for e-commerce on Geo. Both Facebook and Reliance need commerce to work for them. With this deal, they've chosen to cooperate rather than compete with each other and combine forces against these other established players. I wouldn't be surprised if a large part of this funding will be deployed in onboarding merchants for GeoMart and acquiring customers for WhatsApp pay. Will this partnership

Starting point is 00:05:11 work? I would be surprised if it makes a dent. GeoMart is not the core business for Reliance Geo. They're going to need someone entrepreneurial and attention from the top, like they had for Reliance Geo for GeoMart to scale and feed WhatsApp pay with transactions, end quote. Three months ago, when tech earnings season was kicking off, then I remember thinking, these earning seasons have gotten a bit boring because it's the same old stuff. Tech companies making money hand over fist, growing a little bit every quarter. I was actually beginning to think maybe I should start de-emphasizing tech earning seasons a bit on this show.

Starting point is 00:05:55 But now, of course, everything has changed, and we're about to start the most break-out-the-popcorn earnings season that we've had in tech since probably. this podcast began. Netflix kicked things off last night by reporting Q1 revenue of $5.77 billion up 27.6% year over year. That came in slightly above analyst's estimates, but the big number was when Netflix reported net subscriber additions of 15.77 million paid subscribers up 22.8% year over year. Netflix now has 182 million global accounts, which is just insane. Quoting CNBC, Netflix says it expects 7.5 million global paid subscriber editions in Q2, but warned the number was mostly guesswork, since it can't know when stay-at-home orders around

Starting point is 00:06:47 the world will be lifted. It expects lower net subscriber additions in the third quarter as more economies open, and because its third quarter last year included new seasons of popular series, Stranger Things, and Money Heist, which won't be on the docket that quarter. Quote, We don't use the words guess and guesswork lightly, CEO Reid Hasing said on the company's earnings interview. We use them because it's a bunch of us feeling the wind and it's hard to say. But again, will Internet entertainment be more and more important over the next five years? Nothing's changed in that, end quote. The company said shows and films it expected to release in the second quarter are still on track to release as planned

Starting point is 00:07:25 since their filming had already completed. Netflix said it would have additional cash on hand as production. Dates are on pause and that it would make up for some of the losses of content with licenses of films and TV series, end quote. And I found this quote from Reed Hastings interesting. He's talking about Disney here and the launch of Disney Plus, quote, over 20 years of watching different businesses, different incumbents like Blockbuster and Walmart and all those companies, I've never seen such a good execution of the incumbent learning the new way and mastering it. and then to have them achieve over 50 million subscribers in six months, it's stunning.

Starting point is 00:08:04 So to see both the execution and the numbers line up, my hat's off to them, end quote. Netflix stock was actually slightly lower on all that news this morning, but Snap's stock is up almost 30% at the time of this writing after it reported Q1 Daily Active Users on Snapchat increased 20% year over year to 229, million users. Revenue increased 44% year over year to $462 million and time spent watching Discover content rose more than 35%. That's what is known in the business as knocking the cover off the ball. Let's go with CNBC again. Quote, it all comes as social platforms and media businesses have reported big increases in viewership and engagement, but have still seen advertisers pulling out or

Starting point is 00:08:59 decreasing spend. Twitter, for instance, pulled its first quarter guidance in March, citing an impact to ad spend despite a jump in user engagement. But Snap might be a special case. The company appears to rely more on deep-pocketed larger advertisers instead of a smattering of millions of small businesses that advertise on other social networks like Facebook and Google, and may also rely less on the sectors like travel, whose ad spend has been hard hit. As those types of companies pull back on advertising to whether the coronavirus pandemic, Snap has the advantage of keeping growing thanks to its cohort of advertisers that are in a better position to keep spending. Lightshed analysts noted in a note Tuesday that Snap appears to be, quote, far better position than its peers to withstand the challenges ahead, end quote.

Starting point is 00:09:46 They said the platform likely has, quote, maybe a couple hundred thousand small business advertisers versus the more than eight million at Facebook and Instagram. It also has less exposure to travel and leisure categories compared with Google and Facebook, they wrote. analysts argued the platform is also less tied to marquee events and brand buys that are a core focus at platforms such as Twitter, end quote. So is Snap oddly in the best position for the current corona moment among the so-called big social platforms? Samir Singh tweeted, quote, notable that this happened before the full impact of the pandemic was felt. In Q2, engagement should take off even more, although ad spending will take a hit as well, end quote. Researchers say they found two iPhone zero-day exploits out in the wild, which that's pretty wild, because, you know, on the one hand, this is a big deal because zero days on iPhones are so rare as to be,

Starting point is 00:10:49 maybe there's only one or two that have ever been discovered in the past, but also might this explain some of the high-profile hacking cases, especially among celebrity CEOs that we've been reporting on recently? I'm going to quote here from Vice. These vulnerabilities, ZEC-OPS researchers wrote in a report they published on Wednesday, are widely exploited in the wild in targeted attacks by an advanced threat operator or operators to target VIPs, executive management across multiple industries, individuals from Fortune 2000 companies, as well as smaller organizations such as MSPs, end quote.

Starting point is 00:11:25 One of the two vulnerabilities, according to Abraham, is what's known as a remote zero-click. This kind of attack is dangerous because, it can be used by an attacker against anyone on the internet and the target gets infected without any interaction, hence the zero-click definition, end quote. So yeah, you know which sort of celebrity attacks I'm thinking of here. But also, it's worth noting Apple says it's on top of this and we'll have a patch in an upcoming update to iOS. So when an update happens maybe this week or next, definitely jump on that and install it right away. Follow up to the Patreon thing from yesterday. Patreon has confirmed that it has laid off 30 employees or around 13% of its workforce, but it disputes what I said earlier about project launches being down on the platform. In fact, they say they've actually seen a surge of new creators since the whole coronavirus crisis hit. This is from TechCrunch. In March, Patreon wrote in a blog post, not only are patrons not leaving the platform, we've even seen many of them upgrade their tiers to support their favorite creators.

Starting point is 00:12:37 during this challenging time. Additionally, the average income for creators was 60% higher in March than in previous months, according to the company. Around that same time, however, Patreon said it saw patrons exiting the platform more than usual due to financial hardships. Still, Patreon said churn rates were stable. Quote, this surge, along with years of continuous growth, has put Patreon in a strong financial position to help creators successfully manage creative businesses during this challenging time. The spokesperson said, although the business is in a strong cash position,

Starting point is 00:13:10 we want to ensure that we can continue to support creators for many years to come, end quote. Thus, I suppose, the moving forward with those 30 layoffs. Finally, today, the iPhone SE 2020 edition reviews are out. Quick summary, good battery life, decent camera if you're in decent light. And yes, the design is old, but for that price, this is a pretty,

Starting point is 00:13:39 insane deal for what is generally near top of the line hardware. I'm going to go with three reviews for our traditional quick whip around, and I'm going to start with Dieter at the verge, who's usually my go-to for these sorts of things. He says the new SE is a strong case against ever paying $1,000 for a smartphone ever again. He gave the SE an eight and a half out of 10 saying, quote, the iPhone SE shines a bright, clarifying light on the entire smartphone industry, putting even Apple's own top-end phones in Sharp Relief. What are you paying for when you spend $800 or even $1,000 or more for a phone? The list turns out to be more about niceties than necessities. As I write this, I have an iPhone 11 Pro, Galaxy S20, 1 Plus 8 Pro, and Pixel 4XL within Arms Reach. Each has a

Starting point is 00:14:29 multi-camera system, an advanced biometric identification system, and a big, nearly-bezzles OLED display. In the case of the Android phones, they also have high refresh rate screens that make everything look radically smoother. Is all of that worth the cost? Sure, for a lot of people. Is any of it necessary, though? Other than low-light photography, there's virtually nothing that I do on those $1,000 phones that I can't do equally well on the iPhone SE. It is fast, capable, reliable, and familiar. I'd miss those advanced features and more expansive displays, but not as much as you might think, end quote. Here's Joanna Stern in the journal.

Starting point is 00:15:07 There were a few things I missed about my iPhone 11 during my week of testing. Performance wasn't among them, though. Powered by the same A-13 bionic processor, the SE was just as snappy to launch apps and handle games. Scrolling through long documents. Fine, you got me. Scrolling through Instagram was very smooth. Some seem deeply angered about the large size of the new SE. Indeed, the new iPhone SE feels huge after holding the Earth.

Starting point is 00:15:32 original iPhone SE with the 4-inch screen. But hold the new SE after holding a 6.1-inch iPhone 11, and it feels teeny tiny. It's all relative. The touch ID fingerprint sensor is in its usual spot inside the home button. However, if you're coming from an original iPhone SE, iPhone 6S, or earlier, you'll note that the button no longer presses down. Instead, you feel a little bump of feedback when you press it. The nicest thing about touch ID, unlike Face ID on the new iPhones, it works when you have a on. Very handy for using Apple Pay at the drugstore, end quote. And finally, here's Lauren Good in Wired, quote, I'm here to tell you that you don't need the most expensive iPhone. You don't need the most expensive iPad either. We've already covered that. If Apple's new iPhone SE proves anything,

Starting point is 00:16:18 it's that you can get an excellent mid-range iPhone, one with the processor power of a top-of-the-line smartphone for $400. Sure. The iPhone SE is not as advanced as flagship phones. Its drawbacks are obvious right away. The display isn't as brilliant. Its camera isn't as remarkable. The phone's battery sputters by the end of the day, but it's still a good iPhone, and for a lot of people, that means it's good enough, end quote. I actually fell asleep at 9 p.m. last night, which is kind of nuts. I think it's probably the first time that's happened. First time I've been in bed and asleep before midnight since the whole lockdown began, I think, which is weird. I'm full of energy today. I'm focused. Not a lot to do with all of this energy.

Starting point is 00:17:06 Maybe I should try to go for a run today. I've got the masks to make that happen. So let's see if I can make it happen. Talk to y'all tomorrow.

Tech Brew Ride Home - Wed. 04/22 – Facebook’s Big Play In India

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