Tech Brew Ride Home - Wednesday, May 30, 2018 - Mary Meeker's Internet Report

Episode Date: May 30, 2018

The Code Conference brings us Mary Meeker’s Internet Trends Report and juicy quotes from Evan Spiegel, web publishers find life after Facebook, a new gaming laptop from HP, and how ambulance chasing lawyers can target ads to people in the hospital. Tweets: @simonowens, @agolis Links:Snapchat preps Snapkit platform to bring camera, login to other apps (TechCrunch)Mobile Direct Traffic Eclipses Facebook (Chartbeat)Mary Meeker’s 2018 internet trends report: All the slides, plus analysis (Recode)Digital Ambulance Chasers? Law Firms Send Ads To Patients' Phones Inside ERs (NPR)Glenn's Kickstarter 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 TechMemeh ride home for Wednesday, May 30th, 2018. This is Brian again, everybody. Happy to be back. Today, the Code Conference brings us juicy quotes from Evan Spiegel and Mary Maker's Internet Trends Report also.

Web publishers find life after Facebook. There's a new gaming laptop from HP and how ambulance chasing lawyers can target ads to people in the hospital. Here's what you miss today in the world of tech. The annual code conference is going on this week. If you're there right now, say hi to Gabe for me. The highlight of yesterday's conversations came when Kara spoke to Snap CEO Evan Spiegel. They had a lot to cover. Snapchat's redesign issues, the Snap IPO, Facebook copying Snapchat's key innovations, and on and on and on.

Let's start with the Facebook copycat accusations. Spiegel told Kara Swisher that his wife, Miranda Kerr, cared more about the imitation game than he did. Quote, if you design something that's so simple and so elegant that the only thing other people can do is copy it exactly, that as a designer really is the most fantastic thing in the world. Spiegel joked that while he was flattered

that Facebook wanted to bite Snap style, quote, we would really appreciate it if they copied our data protection practices also, end quote. Snap collects less data. from users than Facebook does and has never offered an API as robust as Facebook's to allow users to give away their friends information for example but Facebook's chief security officer Alex Stamos fired back on Twitter saying quote Snapchat's implicit promise that photos really disappear combined with poor API

security has led to serious mass leaks of revenge porn so no I don't think copying Snapchat would be a smart move and quote He then linked to a Verge article from 2014, suggesting that Snapchat's unofficial API was too easy to hack. Evan Spiegel, though, went on to say that he was confident that Snap had a different culture than Facebook's that would allow it to win in the end. Fundamentally, they're having a hard time changing the DNA of their company, Spiegel said of the competition. And the DNA of their company is all about having people compete with each other online for attention. Snapchat is not just a bunch of features. It has an underlying philosophy that really runs counter to traditional social media.

I think that's why traditional social media feels threatened. Because fundamentally, people realize that competing with their friends for likes and attention is kind of unpleasant and really not that great. Our values are hard to copy, end quote. As for the Snapchat redesign that has seemingly hurt Snap's ability to make money and has seriously dinged its stock price, Spiegel described it as a learning experience. Quote, one thing I underestimated at the time was how much it would impact our investors. They just could not comprehend why we would totally change our product and redesign the service.

For me, that was a really great lesson because it teaches the importance of having that long-term vision, even though it's going to surprise people, even though it's going to make people feel uncomfortable. When you're a private company, you can sort of smooth out the ups and downs. The more important thing for us is building that muscle of not putting numbers before doing the right thing. End quote. Speaking of Alex Damos's tweet about Snapchat's API, sources are also reporting that Snap is prepping a so-called Snapkit platform to let developers bring versions of Snapchat's camera, Bitmoji, and a login with Snapchat option to other apps. So a true Snapchat developer platform, if you will.

Many years ago, Snapchat made a strategic decision to keep independent developers at arm's length. As TechCrunch's Josh Constine has written, many have seen this as a long-term liability for the company. But as Snap's user base seems to be plateauing, perhaps it's long past time for Snapchat to take a page out of the Facebook playbook and go the platform route. quoting Constine, Facebook used a similar strategy to become a ubiquitous utility. So Facebook might copy Snapchat's features, but Snap might finally be ready to copy Facebook's business strategy. Turnabouts is fair play, I suppose. One huge recent trend in media circles has been the love, love, love hate, love hate, love hate relationship that publishers have had with Facebook's platform, and the firehose of traffic that it can send your way.

until it doesn't. Publishers have been scrambling to adapt to changes in Facebook's newsfeed algorithm. Entire companies have risen and fallen depending on Facebook's grace and algorithmic whims. So over the last few months, especially the mantra among web publishers has been to reestablish a direct relationship with their readers and viewers, to not allow Facebook to own the user experience. And it seems that this refocusing on their audience might be paying off at least for some public. publishers. According to Chartbeat, direct mobile traffic to publisher sites surpassed referral traffic from Facebook for the first time in recent memory. What do I mean by direct traffic?

I mean that's when you literally browse to the website to find the content you want as opposed to clicking on a link in Facebook to get there. On desktop, most readers go to sites directly, either by typing in the URL or clicking on their saved favorites in the browser or something like that. but on mobile it has long been the case that generally if you read an article, chances are you got there via a link on social media. Well, no longer. The number of page views coming directly to publishers unbidden by a social media referrer has been growing steadily since October, and Facebook referrals specifically have been declining. As Digiday notes, this is a big deal because, as Simon Owens said on Twitter, quote,

publishers assumed that if Facebook started showing less news, then people would just read less news. But it turns out that they'll go outside Facebook to seek it out, end quote. So maybe actually having the content people want to consume really is the valuable piece of the equation after all. Content really is king. Vox's Andrew Golus tweeted, quote, This is the reversal of a five-year trend that many of us saw as the inevitable social first future emerging. Just more evidence that if you want to be a good digital publisher, you've got to stay humble and stay agile. Late last night, Qualcomm announced its first dedicated platform slash system on a chip for VR, AR, and mixed reality devices.

Called the Snapdragon XR1, the new platform will be designed for the new generation of headsets that will be coming to the market over the next few years. As Anand Tech points out, this is a new strategy for the company. Quote, Qualcomm sees the mobile headset market as encompassing three markets, entry-level cardboard devices used with phones, high-quality but economically priced headsets like the Oculus Go, and then premium-quality headsets like the Lenovo Mirage. Of these three groups, Qualcomm intends to go after the latter two, end quote. Qualcomm will still push its flagship.

flagship, Snapdragon 845 system on a chip for smartphones especially, but when the XR1 comes out later this year, it will be stripped down and made lean for dedicated AR VR standalone headsets that can deliver six degrees of freedom and near 4K experiences. Gamers, you have a new thin and light but also souped up and powerful gaming laptop to lust over. H.P's Omen 15 laptop has been updated with. with an Nvidia Max Q and a reduced screen bezel, a reduced footprint, and a slew of improved internals to make a play to become your gaming laptop of choice.

The new Omen 15 is 7.4% smaller in width and 4.6% smaller in depth while coming in at 5.5 pounds. Pricing starts at $979 for the GTX 1050 TI, core I5, 8 gigabytes of RAM model. $1,299 for the GTX-1060, Core-I-7, 16-Gabytes of RAM model, and finally, $1, $1,6-Gy-Gy-Gy-Gyccccccccccccccccccccccccccccccd-Ram 4K-screen model. So the entire line coming in competitively at the sub-2,000-dollar segment of the gaming laptop market. Well, if it's code conference time, then that also means it's time for Mary Meeker's annual Internet Trends Report.

the slide deck that the entire tech industry pours over like it's a sacred text. And for good reason. The TLDR for this year can be summed up by Benedict Evans's tweet, quote, For the things that have mattered, mobile, Facebook, Google, the charts are flattening out and becoming boring. For the things that are going to matter, cars, AI, blockchain,

there are no charts that tell us anything yet. Yes, smartphone shipments are stagnating, as expected. In fact, this is the first year in which smartphone unit shipments didn't grow at all. And the average selling price per unit is dropping. Commoditization in the smartphone space is happening people. But a few other highlights from Mary's report this year. Something else we knew, tech companies are an increasing part of the U.S. economy overall. In April, they accounted for 25% of U.S. market capitalization. But that still hasn't reached the dot-com. bubble's peak when information technology represented 33% of the U.S.'s total market cap.

China is catching up as a hub to the world's biggest internet companies. Currently, China is home to nine of the world's 20 biggest internet firms by market cap, while the U.S. only has 11. Five years ago, China had two, and the U.S. had nine. U.S. adults are spending more time online, clocking 5.9 hours per day in 2017 versus 5.6 hours. in 2016. More on that in a second. In fact, for all the new details and charts, and I highly recommend you look this up, because Mary's reports are always thorough and fascinating, in a way, a lot of the report continues the trends that Mary has been reporting on for more than 20 years now.

Internet usage is continuing to rise, e-commerce is continuing to rise, et cetera, et cetera. On my bookshelf, I haven't have a copy of the report that Mary published in 1996 when she was still with Morgan Stanley. So I thought it would be fun to compare some of the numbers from that report to this one. In 1996, Mary Meeker was a paid Wall Street analyst, so she began the report by suggesting internet stocks to buy. Among the recommendations, Cisco Systems, which then had a $21 billion market cap. Today, Cisco is a $202 billion company. Also, she recommended buying AOL, which then had a $3.8 billion, market cap. AOL is today, of course, just some vestigial part of oath. In 1996, Mary was predicting

150 million internet users by the year 2000. Today, there are more than 3.5 billion internet users, and that number is still growing at around 7% year over year. In 1996, Mary reported that the number of internet hosts was approaching 10 million. Today, she reports that the number of Wi-Fi networks has surpassed 400 million. In 1996, Mary expected that by the year 2000, there would be 200 million email users worldwide. But just last year, Mary notes that WhatsApp, all by its lonesome, had 1.5 billion monthly active message senders.

Our time spent online, as I said, continues to rise. In the 1996 report, Mary said that the average adult watched four hours of TV per day. So the 5.9 hours we spend each day online, has absolutely trounce the numbers from the time when couch potatoes reigns supreme. In fact, daily mobile video viewing is now approaching 30 minutes a day. Finally, in this year's report, Mary noted that e-commerce is still growing 16% year over year and is approaching $500 billion in sales. In 1996, Amazon's website had only been open to the public for about eight months,

so there actually wasn't much in the report about e-commerce. But Mary did have this to say, and I quote, Commerce is in its early stages on the internet. Flowers have sold the best because they're easy. Setting up shop is getting easier and easier. Those who master the model early and become frequently visited sites may have some advantage versus other competitors. Those winning appear to be CUC and Internet Shopping Network slash Home Shopping Network, end quote.

No mention in 1996's report of a year. young man by the name of Jeff Bezos. Last week I gave you a brief update on the market cap horse race among the major tech companies. So here's another interesting data point of note. Yesterday, Microsoft surpass Alphabet's market value for the first time in three years. Microsoft's market value was $753 billion at the end of trading Tuesday, surpassing Google's parent company Alphabet, which came in at 739. billion. Both were up a bit in value in today's trading, but Microsoft held its lead to claim

the mantle of third most valuable company in the world, leapfrogging alphabet at number four. Apple and Amazon hold the numbers one and two spots, respectively. Most analysts attribute Microsoft's recent stock price run-up to the strides the company has made in its cloud computing business lines. But as the Verge pointed out, Microsoft is a bit more of a diversified tech company than its mega tech peers. Quote, Google generates roughly 90% of its revenue from advertising, and the iPhone accounts for roughly 60% of Apple's entire revenue. In Microsoft's most recent quarter, its Windows surface and gaming divisions made up roughly 35% of revenue, with cloud taking around 30%

and office and productivity more than 30% end quote. So you can think of Microsoft as a roughly equally balanced three-legged stool. Microsoft's stock price has more than doubled since CEO Satcha Nadella took over from former CEO Steve

Balmer four years ago now. iPhone users, you might have gotten the notification on your device but if not iOS 11.4 arrived yesterday. What sort of goodies will you get if you update? Well the big feature is now you can have your messages in the cloud, iCloud to be specific, because now iCloud will store all of your messages,

iMessage and SMS alike, so they're not just sitting siloed on your individual devices. This should help with message syncing between devices, and since it will also store the messages including photos and attachments in iCloud, this will theoretically free up more storage space on your devices. And if you buy a new device, your old messages should pop right over and show up as well. To turn on messages in iCloud, on your phone or iPad, go to the Settings app, then tap on the Apple ID pane, that area at the very top with your name, picture, and what says Apple ID, ICloud, iTunes, and the App Store, then tap ICloud, then toggle messages to on. If you're on your Mac, go to the Messages app, go to preferences, and then check the

messages in iCloud box. Finally today, a really disturbing story about how advertisers are able to use smartphone location data to send mobile ads to people based on their location. And by location, let me use this as an example. Are you sitting in a hospital emergency room right now? Are you at the chiropractor's office, maybe? Some people are reporting that they're suddenly getting ads on the internet. their phones from personal injury lawyers. Prosecutors in Massachusetts last year reached a plea agreement

with a digital advertising firm, which had been selling ads to a Christian pregnancy counseling and adoption agency, which was targeting people who entered planned parenthood clinics. Now, from what I can gather, this does not mean that if you're sitting in your doctor's office, you'll suddenly get a text message from a personal injury lawyer. But you know how when you browse for new shoes online and the next thing you know you see ads for those very same shoes on Facebook. It's like that. But the ad companies in this case are using geo-fencing to determine when you've been to a certain location so that they can then retarget ads to you later on. I have a link to the NPR article that describes how this is possible. But in the end, it all comes down to what we were talking about last week. Phone companies

are selling your location data to third parties. And you cannot opt out of sending your location to your phone company. As Vice News's David Gilbert tweeted, you think you're annoyed by all the GDPR messages and emails. That's all for today. I want to profusely thank the excellent Glenn Fleischman for his work holding down the fort while I was away in Florida last week. Glenn announced this afternoon a Kickstarter project to bring back his much-beloved podcast, The New Disruptors. You can find out more about helping to bring the new disruptors back by going to New Disruptor. dot org forward slash kick that's new disrupt dot org forward slash kick and also there will be a link in the show notes i've been your regular host brian mccullough at brian mcccc on twitter hopefully you're

happy to have me back because as the hack stand-up comedian says i'll be here all week