Tech Brew Ride Home - Wednesday, Mar. 14, 2018 - Theranos Charged with Fraud

Episode Date: March 14, 2018

Theranos Charged with Fraud, Google bans crypto ads, YouTube fights conspiracy theories, a startup that wants to kill you, Google Maps for games, and Twitter comes after Snap. Credits: Produced by @brianmcc and the @techmeme staff Music by @jpschwinghamer 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 Ride Home for March 14th, 2018. Today, Theranos is charged with fraud. Google bans crypto ads, YouTube fights conspiracy theories.

There's a startup out there that literally wants to kill you. Google Maps for Games and Twitter comes after Snap. Here's what you miss today in the world of tech. The Securities and Exchange Commission today charge medical technological, company Theranos, its founder and CEO Elizabeth Holmes, and its former president, Ramash Balwani, with, quote, raising more than 700 million from investors through an elaborate years-long fraud in which they exaggerated or made false statements about the company's technology, business, and financial performance. In a settlement with the SEC,

Holmes has agreed to surrender voting control of the blood testing company, pay a $500,000, fine, agree to a 10-year ban from being an officer or director of a public company, and return 18.9 million Theranos shares that the government says she obtained during the fraud. If Theranos is acquired or otherwise liquidated, the government says Holmes would not profit from any sale until over $750 million is, quote, returned to defrauded investors. The SEC has reportedly reached the settlement with Holmes, but is, continuing to pursue civil securities fraud charges against Balwani. The settlement today comes after a more than two-year investigation by the SEC,

which came after the Wall Street Journal published an article in October of 2015, alleging that Theranos used its proprietary blood testing technology for only a fraction of the blood test it offered in Walgreens stores. The SEC referenced this specifically in the announcement of the settlement, saying, quote, Theranos's proprietary analyzer could complete only a small number of tests, and the company conducted the vast majority of patient tests on modified and industry standard commercial analyzers manufactured by others. The Theranos story is an important lesson for Silicon Valley, said Gina Choi,

director of the SEC's San Francisco Regional Office, quote, investors who seek to revolutionize and disrupt an industry must tell investors the truth about what their technology can do today, not just what they hope it might do someday." End quote. The Theranos saga has been widely followed because Theranos was one of the highest profile unicorn startups of recent years. Holmes was one of the most lauded entrepreneurs of the last decade, and several of the biggest VC investors were not only backers of Theranos, but were publicly defensive on behalf of the company, to do not.

the point of criticizing the critical reporting on the company. The fact that the best and the brightest of Sand Hill Road could be duped by what the government is explicitly calling fraud is somewhat unprecedented. Chrissy Farr, CNBC's reporter for Tech and Health Convergence, tweeted, don't hate me for asking this, but, and I recognize that Theranos is an extreme example, but startups exaggerate all the time. Isn't it investors just, to not get duped by doing due diligence. Seems like the smart ones in biotech weren't hoodwinked. Several big stories today related to Google.

First up, Google announced that beginning June 2018, it will ban all cryptocurrency-related advertising across all of its advertising platforms. In an update to its AdWords policies related to financial services ads, Google said it will no longer serve ads for cryptocurrencies and related content, including but not limited to initial coin offerings, cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice. So this band extends even to advertising from companies that many would consider to be mainstream

in the space, like, say, Coinbase. If you'll remember, Facebook announced a similar crypto ad ban earlier this year. Google's director of sustainable ads, Scott Spencer, told CNBC, quote, We don't have a crystal ball to know where the future is going to go with cryptocurrencies, but we've seen enough consumer harm or potential for consumer harm that it's an area that we want to approach with extreme caution. Spencer declined to tell the Wall Street Journal how much potential ad revenue Google was turning down to make this move. news of the ban came out on the same day that Google released its annual bad ads report outlining how many ads it had proactively removed from its advertising platforms

either algorithmically or editorially. The report said that Google killed 3.2 billion bad ads in 2017, up 88% from 2016 when it removed $1.7 billion. Some bullet points from the report will give you an idea of the sort of bad ads that Google is referring to. Google says it blocked 79 million ads that were attempting to send people to malware-laden sites, removed 66 million trick-to-click ads, and took down 48 million ads that were attempting to get users to install unwanted software. Overall, Google says it blocked 320,000 publishers from its ad network, more than three times the 100,000

sites it blocked a year ago, along with 90,000 websites and 700,000 mobile apps, all for violating content policies. Google, of course, makes the vast majority of its money from its advertising platforms, and it paid out $12.6 billion last year to publishing partners. So maintaining trust in the integrity of its ads remains super important to Google, not only so that advertisers will continue to pony up, but also so that all of us will continue to be willing to click or tap on all those ads. YouTube CEO Susan Wigiski made news at South by Southwest yesterday when she announced that YouTube will be adding Wikipedia information to videos related to popular conspiracy theories.

The Wikipedia entries would appear under the YouTube videos as a block of text with a link to Wikipedia for more information. on a given topic. Wigiski did not say how many conspiracy theories YouTube would be targeting, but suggested that the program would extend with time. The two conspiracy theories she specifically mentioned on stage yesterday were related to the moon landing and chem trails.

Our goal is to start with a list of internet conspiracies listed on the internet where there is a lot of active discussion on YouTube, Wigiski told Wired editor-in-chief Nicholas Thompson. Wichiske says YouTube has no plans to censor any conspiracy videos. People can still watch the videos, Wigiske said, but then they have access to additional information, end quote. Many have pointed out that this move will do little to address the most recent controversies around YouTube, especially the criticism that YouTube's recommendation algorithm is often how users end up seeing conspiracies. theories in the first place.

Others found it ironic that YouTube would use Wikipedia as an arbiter of veracity, as Wikipedia is, of course, run by volunteers and has tons of essentially user-submitted content that theoretically could be manipulated. On Twitter, the Wall Street Journal's Mike Isaac pretended to be a YouTube press release, saying, quote, please to inform our users that our infinitely gamable platform will now be protected from disinformation by a service that can be edited by literally anyone. BuzzFeed News's Tom Guerra tweeted, Good to see YouTube addressing the real problem,

the lack of any good way to encourage mass defacing of Wikipedia articles at scale. And Wikipedia itself expressed some caution at the news. Executive director of the Wikimedia Foundation, Catherine Marr, tweeted, while we are thrilled to see people recognize the VIII, value of Wikipedia's non-commercial volunteer model, we know the community's work is already monetized without the commensurate or in-kind support that is critical to our sustainability. So, yeah, it might be a good look on YouTube if Google donated some money to Wikipedia since it's essentially outsourcing some of the fact-checking that it seems to be unwilling to do itself.

YouTube does have content moderators, of course, and has recently pledged to hire 10,000 more of them. Wigiski also said, coincidentally, yesterday, that YouTube will now limit moderators to only four hours a day of screening all of these videos, especially the videos depicting violence, murder, suicide, and other disturbing subjects. A Y Combinator-backed startup is looking to preserve your brain so that future scientists can upload it to the cloud or some other virtual digital environment. Nectome, or Nectomy, which received $1 million in funding, including $120,000 from Y Combinator, as I mentioned, and a $960,000 grant from the U.S. government is currently taking $10,000 deposits for a high-tech embalming process called vitre fixation or adelaide-stabilized crypto preservation. Nectome is led by co-founders Michael McKenna and Robert McIntyre,

who have previously won the Brain Preservation Prize, which is a thing. The pair have previously demonstrated a complete rabbit connectome, a complete map of the neural connections in a rabbit's brain, and they also recently carried out the same procedure on the corpse of an elderly woman just this past February, marking the first successful, demonstration of vitrofixation on a human brain. Nectome will pitch itself to investors at Y Combinators demo day next week. So, upload your brain after you die.

Sounds good. Y Combinators Sam Altman has reportedly already signed up for the $10,000 down payment, except that there is some fine print on the After You Die part. The actual process will involve nectonement. connecting terminally ill people to a heart-lung machine while pumping patients full of embalming fluids. As co-founder McIntyre says, quote, the user experience will be identical to physician-assisted suicide, end quote. In other words, to scan your brain, they have to kill you. This, of course, led to plenty of jokes on Twitter.

Reason magazine writer Peter Sutterman said, this is why you never buy new tech in its first generation. And frankly, this is something that has always bothered me about the whole we'll upload our brains and live forever promises that people like Ray Kurzweil and others like to make. Even if you scan and upload my brain and you don't have to kill me to do it, I mean, sure, there would be another me inside a computer somewhere talking back to me and swearing to me that he's me. But I would still be here, right? And I would still have to die at some point.

So that doesn't exactly solve my problem. Google announced today that it is opening up its Google Maps platform to game developers so that they can create more games meant to be played out in the real world, a la Pokemon Go. The Verge notes that there's been a whole wave of location-based mobile games announced recently, based on everything from the Walking Dead and Ghostbusters to Jurassic World. So developing these types of immersive games based on superimposing actual geography over gameplay

might get a lot easier. Google says it will allow developers real-time access to Google Maps data and let them plug that data into Unity, which is one of the most popular game development engines. This will apparently allow developers to customize maps and turn things like roads and buildings into in-game objects. A new API will make it easier to add points of interest, spawn points, and mission locations. The wildly popular Pokemon Go was developed by Niantic, which was a former Google subsidiary.

After the success of Pokemon Go, product manager Clementine Jacobi said Google was surprised by a deluge of interest in its map data from game developers. So, says Jacobi, quote, we went out and talked to a big wave of developers from all across the space to try to understand where we could have the most impact, end quote. So if you felt like Pokemon Go was just a big fad because you haven't seen any other copycat games like it pop up,

maybe this was just because developers didn't have the tools to do something similar. And now they do. Finally, late today, CNBC reported that sources had told them that Twitter was working on a new camera-first feature that could, quote, change the emphasis on the platform from text to video and images, giving advertisers a competitor to one of SNAP's most popular advertising opportunities. The three sources in question were reported to be from ad agencies, who had either seen a demonstration of the press. product or had at least heard about it. The CNBC report noted that Twitter reported its first profitable quarter recently and has

been aggressively targeting new advertising opportunities since then. Twitter stock was up as much as 7% today and some traders on Wall Street have been crediting this rumor for the price rise. That's all for today. If you like what we've been doing here, I just wanted to remind you that the best way to support the show is. is to rate us and more importantly write a review about us on Apple Podcasts, Google Play, overcast, whatever platform you're listening to this show on.

The response to our first week has been great and we want more people to learn about this pod. Heck, if you were so inclined, just tell a friend about us. The TechMeme Ride Home was produced by Brian McCullough. You can follow me on Twitter at Brian MCC. and as always you can get the latest headlines any time of day or night at techmeme.com. Thanks for listening.