The Vergecast - Why Facebook acquired WhatsApp

Episode Date: February 21, 2014

The Vergecast is a discussion of all things relevant and irreverent in the worlds of art, culture, science, and technology — and anything else that pops into the twisted minds of this week's hosts. Join Dieter Bohn, Chris Ziegler, David Pierce, and Ellis Hamburger for a scintillating discussion on latest tech news. On this week's episode, we discuss the dizzying sums of money Facebook spent on WhatsApp, the Loop mobile wallet, and Google's indoor mapping prototype, Project Tango. Audio: Learn more about your ad choices. Visit podcastchoices.com/adchoices

To The Vergecast. It is the week of February 17th. I had to look down to check it. 2014. I am Deeter Bone. I'm David Pierce. I'm Ellis Hamburger. And that took you a while.

Yeah. I'm sitting in Josh's seat. He's not here. He has been here for a while. If you weren't aware, Josh has a big announcement that I guess I'm making for him. Yes, you are. I mean, it's like he's been tweeting about it. It's out there in the world that Josh, Josh had a baby.

And it is a baby. And so that is, he still has it. He's on paternity leave and not with us except in spirit. Basically all I know about Josh's baby is that Laura keeps tweeting. Yeah. It's still there. It's still there. Probably watching right now, so be careful what you say.

Laura just keeps me like, we got a baby on Tuesday. Laura's very much Saturday and I still have it. And I mean, it's not. Pick it out. What fun is it until it can read? Come on. Were we supposed to talk about the verge baby vertical or is that still a secret? That's such a good idea.

Oh, it's not... Just apps for babies? Well, it's about implants. Diper reviews? Oh, I see. That kind of thing. That's not bad. You can monitor, like, the baby's vision

and make sure their eyes are on the prize for their whole life, you know? We don't want any losers. So it's basically, like, if you, like, really are hell-bent on getting your kid into, like, an awesome preschool, you just, you're all over Verge babies. Yeah, they all go to the Montessori schools, that kind of thing. No, no, no.

So you got it all wrong. A few Montessori schools. VIRGE Babies isn't about babies. Verge Babies is about the same thing that the Verge is, only it's staffed by Muppets. Muppet babies' version of the Verge. We all speak in high, squeaky voices. We're perishingly adorable.

But we cover the same thing all the time. I'm into it. Yeah. Like the NSA, we just get really angry, but it's babies. So what are you in? It's adorable. They're so angry about the neutrality, y'all. PRISM.

Crib neutrality is going to be the hot topic, I think. Oh, my God. Okay, so it was a week. Yeah. It's been a week. It seemed like it was not going to be a week, and then Facebook decided to make a week out of it. No big deal. Yeah.

Yeah. So they bought WhatsApp for a billion. No, I'm sorry. 16, no, maybe 19 billion. It's $16 billion in cash in stock plus $3 billion in restricted stock that invests over the course of three years. Okay, explain that in English, because I have gotten this tweet a thousand times. That's all it is. It's basically $16 billion up front and $3 billion over the next year.

next few years. Yeah. Is that so that the founders and employees will stay at the company? Among other reasons. Yeah, I'm not totally sure on the structure of it. All that really matters is that it's the biggest deal to ever come out of like a venture-backed startup in history. Yeah.

By like a pretty wide margin. Yeah. And the even bigger deal is that WhatsApp is arguably Facebook's biggest real competitor for people's attention on mobile phones across the world and now they own it. You think? Yeah. You think WhatsApp is Facebook's biggest competitor? 150 million users right now?

Active, that's monthly, but then some like over half are using it like once per day. Yeah, 70% are using it every single day. But isn't what's up like a fundamentally a one-to-one messaging thing, which is not what Facebook has ever seemed to have that much interest in? Not necessarily. The point is that it's private. Whereas Facebook, everybody has these ballooning friends lists that they cannot maintain, which, you know, in some ways is a strength. Was that like a, I have a lot of friends, humble brag? Yeah, it was.

Okay, I was making sure. I think you and I both, we've been on Facebook since, like, a certain time during late high school college, when you watched your kind of social life bloom as you just added friends, friends, friends on Facebook. Sure. It was like there was definitely a period of my life where every single person I met just like instantly added them on Facebook. And now we don't talk to. I saw at a bar, let's be friends on Facebook. And now we don't talk to almost any of them, which in a way has kind of diluted the value of the ability to post to everybody. So what a lot of people are doing is using Snapchat share with just. a few people or especially around the world, since Snapchat isn't as popular globally quite yet,

they're using apps like WhatsApp to communicate with one person or with a group of people. And they're posting the same kind of stuff like photos of friends and family, but they're posting it to private groups. And, you know, there's no feed, but people are getting it all in their pocket. There's no desktop component. Everything is very, very urgent. And that's part of the reason that it's so sticky and so addictive. And they were one of the first apps to really take. take your phone book and turn it into your your social graph. You know what's super weird to me though? It's vital.

What you just described is also Google Plus, and that didn't work at all. No, the thing that's different about WhatsApp is it's not social in the way that we traditionally think of social. It's just, it's a utility app. It's pure. It's a messaging app. It's a texting app. Fundamentally.

It does other stuff, but it's a texting app. But it does it pretty well. And it does it for a buck a year after the first year. And critically, it works on everything. They made a solid J2ME app for feature phones. They've got it on Android. They've got it on BlackBerry. They've got it on Windows phone.

It's on Symbian. iPhone. They've got it on Symbian. Is it really on Symbian? Yeah. All you did is say was Symbian and I'd be like, oh, it's everywhere. Yeah. It's on every platform on the planet.

And what they did was... Is there a Blackberry app? It was such a sleeper hit over the years. Yeah. Everybody's been saying it didn't get much press. I think 2009. Yeah, yeah. And it was one of the first true BBM replacements on iPhone.

And they were actually on iPhone before push notifications even existed within iOS. So back then it was a status system. So you could see what your friends are up to, just like kind of your AIM status. Just like Twitter. That was the original idea for Twitter. It was like status update broadcast thinger. Right.

And what they did was they made themselves a replacement for SMS, which made it really easy to understand. You don't have to explain to anybody in all these countries where WhatsApp is really critical to people's lives. You don't have to explain what it is. you say you're spending a lot of money on SMS right now. Switch to this, your friends are on it. That's it. Yeah, I mean, that's the easiest thing ever, right? It's like, I was, I did some research on this yesterday, and it's the SMS is $120 billion

industry every year. That's a crazy number. And, like, most of that, I don't know this for sure, but I'm sure most of that is outside of the U.S. And it's all at some point going to be eaten by digital, like, database. Right. And texting is like the fundamental way people communicate a lot of places. Like, you hear these stories about, like, people.

people in, like, in Africa, there's all this infrastructure for sending money over text messages. And it's like, it's huge. And if you just show up and you're like, hey, want to do the same thing, but for free, it's like, why not hard to sell? Yeah. That's what's kind of crazy too. Or a buck. Yeah. So we should talk about, we should talk about the scale here. Because like you, every year, we look at like Apple's quarterly results. Oh, lots of billions and you kind of lose track. Sure. So I hear $20 billion and you just think, it's insane. So like, how can we put that in context. It's what percent of Facebook is it?

It's like eight, nine, ten percent. It's just less than ten percent of Facebook's market cap and it's 35 percent of the cash they had on hand. I mean, that's a giant number. And a board seat. And a board seat, which is also an investment. I mean,

that's a big deal. So Apple's market cap is $474 billion. So this would be like Apple dropping $45 billion on something. Yeah. Comparatively. Yeah. The point is Facebook bought Instagram for a billion dollars

and then it tried to buy Snapchat for $3 billion and when those events took place people were like just like you did Dieter this is huge a billion dollars and now this is multiple

degrees bigger than that and I think that the reason is like with Instagram there were a lot fewer users but the engagement was good with this as Zuckerberg said this is not only half as big as Facebook in terms of active users, just about maybe a half, two, third.

But the engagement is so high. Mark Zuckerberg said that this is the only app on the planet that is higher engagement than Facebook. Yeah, yeah. He kept on saying they're going to hit a billion users. We see it coming. And you look at their user graph, and that seems obvious. Yeah, it's insane.

This graph in this post that you wrote, which is really great, is just wild. Like, it just is like a hockey stick. Yeah, so, I mean, yeah, Ellis wrote this great post about it. And, you know, Zuckerberg's, like, mission statement for Facebook is, connect the world's people, right? And when we were talking about this piece, I was like, I always listened to that and heard, like, oh, mission statement snoozed. Oh, this is just words that some committee put together.

I don't care. But it's supposed to be as broad and as vague as possible. Right. But it's not a mission statement. It's a threat. Like, when we were playing around for headlines for this thing, one of the headlines was, like, Facebook is no longer the social network. Facebook wants to be just the network. Yeah.

Like, I look at Mark Zuckerberg now, and I'm like, oh, it's. He's going to control every way that most people communicate on the planet. That's great. It's not just like he's the biggest social network. It's everybody has to talk through Zuck. As the mobile guy, Dieter, how many people in the world have phones? Do you know? Man, why are you going to put me on a spot like that?

Come on. So I'll throw out a statistic that people were talking about this week is they're expecting five billion people to have like a mobile device by 2017 and now Facebook and WhatsApp are in better position than anyone to capture that opportunity. And so essentially what that says is,

especially to investors, since Facebook is a public company, it says this is a huge opportunity to capture that just pure communication, talking to your friends. Even if Facebook for some people is stale, this is something that's never going to be stale. And I think WhatsApp success proves that.

I mean, Anna, you just, like, you're defining Facebook as, like, this one particular thing. And, like, this is Facebook being, like, much more than just Facebook. Right. Like, Facebook.com might die, but, like, Facebook's never going to die. Right. So what does that look like to you? The next version of Facebook. I mean, it's Disney.

Like, Kara Swisher wrote this really great piece about this, and she compared Facebook to Disney, which is brilliant. And just, like, Disney has all these different companies, and, like, they find, you know, smart ways for their companies to work together. They're like there's ESPN stuff at Disney World. But ultimately those two things have nothing to do with each other, except that they're both owned by Disney. And like, what they can do is that just brings them so much money that they can buy other things and some of them don't work. And Disney doesn't let them jeopardize each other.

No, they don't, they're totally separate companies. Disney. Right. The only thing they have in common is like the CEO of Disney makes money from them. Right. And with Facebook and perhaps the infrastructure. And when Facebook acquired Instagram, people really were doubting whether Mark Zucker was going to let Instagram CEO Kevin Sistram maintain control.

And they did add ads, but if you look at the Instagram sign-in screen, there's not even a sign-in with Facebook button. Yeah. Okay. So, but at the same time, there's clearly, and I think this is what's interesting about WhatsApp is there's, like, I see people's Instagram pictures all over Facebook now. They're everywhere. And it's like there's a really easy connection between those two things and they, like, they win together. And I think there's huge opportunity for them to do that. with WhatsApp where it's like if I don't think they're gonna I don't think they're going to as well I think

I think Jan is no ads he wants to stay independent he's got a seat in the board I'm saying what Facebook offers them is is a value ad what Facebook can say is like oh you want to talk to all your friends you know who has all of your friends is is me it's right here yeah and I can just plug in all your friends I don't you don't have to you can use it however you want and this is what happens this is what Instagram is too like you can plug you can Facebook in Instagram together as much as you want I think you are really smart I think you are risking your brain when you put Facebook next to whatever it is that Facebook just bought. I mean, whenever Facebook-

It was WhatsApp, by the way, that they just- Yeah. Well, I'm talking about any company that Facebook- Tell me more. What's that? So have you ever noticed that when a massive company, let's say Google or Facebook buys a smaller company, that people somehow think that the smaller company,

you know, maybe for good reason they think they're selling out. For $16 million. They basically raid the app store comments. saying how dare they I'm quitting right now people don't want yeah but people Facebook everything yeah that's I think that's this time there's this tiny little group that forms the 100,000 people strong against the new Facebook right get 38 people to like it and that's like but we you know we we see that and that's like I'm saying most people a I think most people really like Facebook and B most people don't

care like I don't think it's gonna change anyone's WhatsApp experience so that there's there's two things one is it going to ruin WhatsApp and I don't I think so. I mean, it's going to have a history of ruining anything. I don't think

it really like it really does. Facebook. They've killed a bunch of apps. Like they bought Dropio, right?

I really like Dropio and then they bought it and just immediately shut it down. I was pissed about that. So they've never kept something alive and ruined it. Yeah.

The second question is, is this going to fix messaging. Like, Ellis and I always complain. Like, oh, messaging is fragmented. There's hangouts and there's WhatsApp and there's

Kakao and there's Kakao and there's Line and there's Google Talk and whatever else. What was that third one you said? Yeah, In South Korea, really? Everyone uses Kikau Talk. Fair enough. All your friends.

All my friends. With Facebook money, are they going to be able to, like, I want the messaging fragmentation problem fixed. Having one company in control of it isn't really my ideal solution, but at least it's a solution. If everybody just uses WhatsApp from now on, sure. But there's no other way to solve your problem except that. No. Deider, you're going to complain because WhatsApp isn't on desktop. You know who doesn't control?

You want email. what you want email. You want you want a faster email. I want SMS that doesn't gouge me. You want a federated standard that everyone agrees on, which is never going to happen again. We forgot how to make those. Right. Yes, we did. Well, they just, they're slow. And nobody can agree on one thing. Nobody can agree on what they want the standard to be, what they want, how they want it to work. And that's why it's not going to happen. But so you just said, WhatsApp, I feel like, I feel like you'd be pretty upset if everybody switched to WhatsApp and you couldn't text from your computer.

I would That's the only reason I use an iPhone I message from my computer I just took a SIM card out of my iPhone Really? Yeah because I broke it back in I dropped it

That's fair Yeah you did I did drop it I super glued it though Which I feel really good about So let's talk about some stats Combined Combined these two companies Command in the

Absolutely enormous portion Of the world's photo uploads But you know what WhatSapp also has Is 200 million voice messages sent per day. Yeah, that was surprising. And Facebook's calling has been, I don't know, a soul that uses it. Yeah, I've got a voice message thing. I forgot about that. Yeah, people. I'm gonna, can I leave somebody of a voice? I'm gonna, you can't keep on. You can't do it on

the web for some reason. It's in their messenger app and it's terrible. You can hit the little eye button in the messenger app and call somebody, but I don't know anybody that uses it, but this is clearly working for WhatsApp. Yeah. And I think that this kind of hints at like a future where like Dieter was saying Facebook controls, you know, all these communication pipes that people are using. And Facebook doesn't care how everybody wants to talk, but they're going to buy any new company that develops a new way for people to talk that people love. And I think that that's the path that we're going down. I mean, Facebook is in some ways it's like too big to fail, but also too big to innovate in some ways unless it's on a smaller scale, like with paper, which was built

out of their creative labs. And people were saying the only reason they were able to build paper was because it was a group of like 10 people. So, okay, huge ambition for Facebook. Insane. How pissed off is Google right now? So reportedly they offered 10 billion to WhatsApp and I think the information posted today that they were going to, they were willing to beat Facebook's $19 billion offer? Really?

Yeah. They real mad. I mean, if I'm WhatsApp, they made the right call. They absolutely made the right call. To go with Facebook instead of Google? Yeah. Google, I mean, like, I ask you, like, I ask you, Facebook has a kill products, right? Yeah, Google's the company that eats you.

Yeah. Like, they'd show up in four days later. They'd be like, just kidding. You're on the Gmail team. Yeah. We'll never see you again. Bye. Like, you get to deal with.

Oh, can I, can I pour a beer on the studio floor for a sparrow? Pour it out for Sparrow. That's exactly. Can I just do this right here? That was upsetting. My producer, John, says I'm not allowed to pour the beer. Yeah. No, but it's like, especially something like, first of all, I really do think, and actually,

if that's true and Google was willing to beat it, I actually think it says a lot about what's happening. is doing and what Facebook has brought to the table, which is to say, which is Disney, right? Like, they have all this money. They're like, here, you have all the money, all the resources, and all the talent you could possibly need, and also will leave you completely. I want a Facebook theme part. That's the dream. It's like, give it time. Imagine Zuckerberg building Epcotts Center. What if Disney just bought Facebook tomorrow they were just like, we just bought Facebook?

And now we own Facebook. It's going to happen. You heard it here first, people. Disney, Disney's like Facebook. Mark Zuckerberg's teenage appro. It's just Mark Zuckerberg. No, it's just packs. He just leaves there now. He just flexes. It's a giant building of his...

Nevermind. Yeah. I also really like the story that they finalized the sale on Valentine's Day. It was like Mark Zuckerberg's awkward Valentine's Day present. He's like, here's $19 billion.

Congratulations. Happy Valentine's Day. Wow. Be a good Valentine's Day present. So do you guys use WhatsApp? No, nobody in the U.S. uses it. No, I mean, I also think that's partly what Facebook is buying.

Like everybody talks about the next billion, right? And it's like those are the people we want are the people who don't currently use. Right. Right. That's like the next billion is going to use WhatsApp. And like it's already out there. And that's, I guess if you can't get there just buy your way in. And it's just, it works.

You really just need to look at one chart. And there's this chart that I found online sourced from Onovo. I don't know. Facebook bought them too. It's an analytics. Yeah, they did. Probably. So what it says is in countries, it basically has all the top apps in different regions around the world.

And if you look at the United States, Facebook Messenger is leading. But in a place like Spain, of all the Messenger apps, 97% of people use WhatsApp, or is 13% of people use Facebook Messenger. And is there a name for this chart? Let me see if I can get it. The chart is really, really good video. I'm picturing it in my mind's eye. I'm sending it. I'm sending it over. No, but I think countries like Spain are not where it gets really interesting.

Places like China and places like India and places like Africa are where this gets interesting because those are the places that are now like really in a real way coming online fast. And there's this, I mean, we've sort of seen it with Facebook to some extent. Like there's this crazy inertia. Everybody talks about like, you know, you stop being cool and you die. And like, that's not true. Microsoft's not cool. Microsoft's doing just fine.

Like Facebook's not cool in the U.S. anymore and everybody still uses Facebook. That's why I think that all the companies that they're going to be. to acquire going forward unless they're like aqua hiring or unless they're doing a a a I think they're going to let them operate independently so they don't yeah jeopardize what they've built that's kind of the conglomerate angle right no it's totally true I mean yeah I still think that like what part of what Facebook wants this is that chart by the way and this is wild actually yeah so you can see Facebook messengers Facebook messengers and the blue look that cacao killing it in South Korea yeah killing it and then just

nowhere else. That's great. What's funny, it's... Wow, these are big numbers. Yeah. And Viber, which are recoutin just bought for $900 million. Come on. Isn't even on the chart. I don't see it.

Yeah. I mean, like, I do think this is the huge growth industry that nobody has been talking about for a long time because it's already so big. And there are billions more people to get phones in the next 10 years. And, you know, everybody, nobody in Silicon Valley thinks about how important text messages are. Apparently they do. But they, I mean, they do now.

But, I mean, WhatsApp's been out there for a long time. They've been super popular for a long time. And, like, I mean, even, you know, we, the press don't talk about WhatsApp. It's just, like, the huge company that nobody's ever heard of except that everybody uses. Yeah. It's really bizarre. I don't talk about, like, my electricity bill. Right.

Right. I mean. You don't talk about Con Ed in New York. It's the worst. My buddies all the time. By the way, if you are listening to the show or watching the show and you work for Con Edison, I hate you. I hate you so much.

So let me ask you guys, what other spaces, what other communication spaces could you see Facebook going into? I was going to ask you that. What's next? What else? I asked you first. Now you have to, now you're on this spot.

There's nothing, like, I don't know. What's worth a bunch of money? Twitter. Twitter. Like, I'm not totally kidding.

What about video chat? Video chat? Like, who cares about video chat right now? Skype is the only. Skype is like the thing. The teens are video chatting still. I don't know about you.

You're antisocial. No, it's, I think they're using weirdo apps like OOVoo. God, OUUUU, I'm afraid I'm going to say that. Doesn't Cisco own OUVU? Not totally clear. Yeah. Somebody does. But yeah, I mean, that would be interesting except that I think, I mean, that Skype sold for, what was it, $8.5 billion.

Yeah. Somebody beat them to the biggest player. I'd be Microsoft. It would be Microsoft. Yeah, I don't know. I don't know what else there is. And, like, I think I could see them buying, like, a real. like a really big social games company that is proven success.

Well, not just with one game. Yeah, I mean, that, that's the Zinga thing. Like, that didn't work out so lot. Yeah, that went not great for that.

I'm not talking about Zinga necessarily. I'm talking about something more like, like along the quiz up line of things that isn't, that isn't freemium, that's more like. But is that, but Facebook at this point, is that a big enough play?

It's about, it's like communications. Like, you need to think in terms, you need to think of him as Zuckerberg as a robber baron. Instead of building railroads, he's, building everything we use to talk to each other or buying it.

So if he wants to be everywhere all your friends are, is really what it is. I don't think it's about friends. No? No, I mean, that's what Instagram is. Instagram is only sort of tangentially a communication.

I think he wants to be the layer just above like the pipes. Yeah. He wants to be between you and like, you know, the wire. God. Is Facebook the next Comcast where like everybody hates them and it turns out they run the world anyway? Yeah. What's funny is that that's what a lot of people think like Facebook wants to be in

developing countries. you know, with Facebook for every phone. They're like, oh, I don't know what the internet is. I just know what Facebook is. They build the login identity, but plumbing for a bunch of apps. People use it because it's easier to hit that button and create a new password for every single freaking app.

Yeah. No, it's true. I logged into an extraordinary number of things with Facebook. Yeah. You know, after, you're like, no, I'm not going to do it. No, no. And then eventually, like, oh, fine. And then once you do it that first couple of times,

that's it. They got you. So, you know, it's the fun underdog story of this is that is that the founders were rejected from Facebook and Twitter. a few years ago as employees. And now they're like, what's up?

And now they have all of the money. Sign that check. All of the money. Do we know how much the founders made? They probably don't split that out. They're definitely, one of them is going to like Instagram picture their bank account. It's like $6 billion. For the main, for one of them.

Yeah, I think, uh, Yahn owned something like 35% of the company. Because they only took a small amount of venture capital, right? So like, it was a very tiny number of people involved in this and they all made so much money. that's a pretty outstanding return. Yeah, they did good. Was it Sequoia that was like the only company invested in them? So they invested, they had a $250,000 seed round from whatever. Sequoia invested $8 million, and then a little bit later like, well, you know what, we should get an insurance policy.

Let's get another $50 million. Where they got the $50 million, the founder took a picture of WhatsApp's bank account. This is from a Forbes article, and it was over $8 million. They hadn't got dug into any of that original investment. Wow. Yeah. Good company. Wow.

Yeah. I mean, it was like 42 people? Yeah. Yeah. It's crazy. They work out of some office with no sign. Hard to know who's doing anything there. They say just come around back and knock on the door. This is a front for the mob.

It's definitely a front for the mob. I don't care what anybody says. Let's talk about something else that's fragmented and terrible. Wait, hold that. No, I have one more question. And then we can move on. Got a good transition, that was good. Wasn't that so good?

Just come right back to that. It's too late now. Are you going to do? start using WhatsApp? Yeah. Yeah? For like two days. That's fair.

Yeah. I'm definitely going to download it. It's like, this is ugly because it is. It's so ugly. I hope, this is the one thing I hope Facebook pulls off is that they like, Facebook clearly has good design. Like the Facebook Messenger app is really beautiful. Well.

Paper is really nice. And if they would just like, some head of design at Facebook just needs to stout the WhatsApp guys and be like, listen. I was wondering about that. I understand that you're your own company. It's totally cool. You guys are green. We're blue.

I'm just going to punch you in the face every single. single day until you make your app better looking. And then they're just going to do it. I'll tell you what I want. I think it's part of their charm. No, that's not a thing. No, it is. Look how ugly it is.

It's so charming. No. No. Yes. Yeah, it kind of is. Snapchat's looks and bugs cultivated some sort of trust early on, I think. Because if something is...

Well, people want to room for the underdog. Like, it's very... Yeah, but if something is extremely polished and, you know, you think the production value is big and you think there's a lot of money behind it. And where there's money. That's why people like to root for indie movies. Yeah. Right.

So here's what somebody just... Except now there's money. There's $16 billion. They have money. I'm not going to start using WhatsApp, but apparently it is so pervasive some places around the world. It says you're busy right now. That's not possible. Well, I am busy.

I'm sending you a message right now. I dare you. Are you on WhatsApp? Can I do it from my computer? No, I don't care. So somebody just tweeted at me, apping someone, as in sending someone a WhatsApp message, is in the Dutch dictionary. Actually, I'm... Unless this guy completely made it up for no reason.

Is this the verb now? Do you app somebody? No. App me. No. I hate that. That's awful. But that's, I mean, if it's in the dictionary, that's what it is.

Like, the worst thing about Google Hangouts is that I don't know what to say to somebody when I message them on Google Hage. Hang out with me. I'm like, hey, I hanged you. Like, that's weird. Not going to say that. That's also bad. Like, I outed you. Nope.

That's not good either. That's not cool. It just doesn't work. I hanged you out. Like, hmm. And Hangouts just doesn't work on iOS. So that's cool. God, it's so bad on iOS.

I don't know, man. I'm going to app you definitely sounds like a deviant sexual act. Or like a sort of subtle thing you would say on the phone in case your phone is being bugged, but you're definitely going to murder them. This is all back to my theory that WhatsApp is just a front for the mob. And Facebook is like they just bought the world's mob for $16 billion and now they can be in every country they want. That's my theory.

I'm sticking to it. All right, let's move on. Loop wallet. So this is a mobile payments thing, right? You had a good segue. It's too late. It's gone. It was about fragmentation.

It is... It was poetry. I was beautiful. I was excited about it. It's gone. It's gone. I only just learned how to spell segue. Sieg.

That's how it sounds. Seed. For those who don't know, it's S-E-G-U-E, not S-G-W-A-Y. The more you know. Ellis hamburger, ladies gentlemen. Fun fact. Okay, Loop wallet. So it's my loop wallet.

Loop wallet. L-O-O-P is pretty incredible. I guess it's really called the technology, at least. It's called Loop. Yeah, yeah. The app's called Loop Wallet, and there are two form. factors out that you can order right now. One is a little square fob with a built-in card reader, and one's like a Mofi-like case. Both of them have magnetic transistors inside of them that let you

hold your phone up to any credit card reader, not the ones with the little, you know, Wi-Fi sign on it that you're like, oh, what is that Google Wallet MasterCard Paypass? This is any credit card terminal. Well, over 90% of in the United States, you hold it up, you pick the card on your screen, you hit the button, and it somehow beams this magnetic signal. to the reader. It thinks it's like brute force, right? It thinks it's been scanned. I wasn't even aware that these reader heads could be communicated with over the air.

So it'll work with almost everything unless you have to put your card in. That's great. But it doesn't actually work because everybody's like, what are you doing to my machine? Right. Are you hacking me? Yeah. Yeah. I mean, there's this shot in this video that we're playing now where you like, it might

actually be this where you like lean over the counter and you're like, it's cool. I got this. I'm just going to touch your cash register for like 10 seconds. Look at her face. Look at her face. Super normal. Don't worry about it. She's like, thank you.

She has no idea what to do with you. This, you're like, oh, it's fine. I'll just do it. And she's like, you just robbed all of money. No, in the cab, that's cool. Just be like, you're not looking. Right. I don't know.

Like, this, I don't know. So you wrote a review and I was editing this and we argued about this for like three days. I just, I am so unconvinced that this is even a good idea. So for like slim wallet people like me, I don't care. Right. And for people with really thick wallets... Do you have a George Casanza wallet?

No. For people with really thick wallets. Although I do carry cash, so I have a little bit. I mean, you're not... Your front wallet, right? No, back wallet. What? No, get out of it.

Come on. You're ruining your spine. So I have to like buy new jeans like every three months because my wallet tears through the back pocket of my... This is true. Constantly. Front wallet, man. No, that's ridiculous.

You are just... Where's... Where am I going to put my chapstick then? So what's interesting about that? Stop carrying chapstick around. Then what's, no. Then my lips will fall off. I've been talking to people about Google wallet, like Chris Ziegler, and he was saying

that when he tried to use it, even though it was officially supported at the stores he went to, they still didn't know what he was doing. Yeah, no, nobody does. And I think like that's the sort of conclusion you came to you that I thought was really interesting. It's like, even if this works, when you're like, hey, can I pay with my phone? Somebody's going to be like, what? No, it's not even just phones.

People know how to take cash and terrible in America when it comes to payments. Like we can't do chip and pin. Europe, everything is chip and pin. It's more secure. Explain what that is. I actually don't totally understand what chip in is. Your card has got two things on. It's got the regular swipe, but it's got a little encrypted chip on it.

And then you tap it, so it's tap to pay. So great. And then instead of signing, you have to punch in a pin. It's like two factors of verification. And they have so much less fraud than here. So much less fraud. And we're not doing it with no chip in signature. Because we've got signature.

Signature is the most insane thing ever. Have you ever? I have never ever signed my name the same way twice in a row. It's never happened. I just walk up, I'd like scribble a bunch of things. Like if you steal my credit card, you can have all of it. Yeah, my checkbook got stolen. Nobody's going to find out.

In college and they were writing checks to Domino's and whatever. So they were sending me to cancel checks after, you know, and they charged me for it. I'm dealing with the bank and it was the worst. And I, like, you would tell instantly it was forged because they actually like, signed my name at full in cursive instead of just like random nonsense scribbles

and D trick and yeah I was like come on who does that nobody does that you're like nobody actually sign my name and then you're like what did we just prove

I just told you it wasn't me so but chip and pin is is coming to America right it's gonna be a thing slowly they're gonna go

a chip and signature so here's what's happening in 2015 I know it's not that much better I know no it's not at the end of 2015 this was actually also news this week

which was inconvenient for Loopwall's launch. It was like the same day, wasn't it? Yeah. So, I mean, it's not completely related because the magnetic part is only like half of what Loop's trying to do. But yeah, it certainly kind of undermines

one of their points. So what's happening here? Some camaraderie? He just loves me. He had a rogue wire that was starting to drive me crazy. So anyway, lost my train of thought. I was watching the same day. The bro pat.

Chip and pin. Oh, okay. So by 2015. 2015, end of 2015, if you don't buy a chip and pin reader for your grocery store or coffee shop, you are going to be liable for fraud and not the credit card companies. So that's basically a huge incentive for them to buy chip and pin credit card readers, which presumably by that point will also bundle in NFC readers as well. So this is what I don't totally understand is why, and maybe I'm missing something here, but why have Visa and MasterC not figured out a better way to something? solve this problem. Like, they're just renting money, so I guess they don't care.

They care. But clearly, like, where those two things, like, loop wallet and the chip and pin thing, make it very clear that the only people who can change this system are Visa and MasterCard. I mean, when you've got a duopoly. No, but I'm saying, retail associations. Right, no, but Visa and MasterCard can show up to the Retail Association and be like, hey, you're going to change everything in the next two years. And they're going to be like, oh, okay, yeah, we'll do that.

But, like, Jack Dorsey rolls up and 80% of people are going to be like, shut up. So you know what's the funny thing? Full suit, bro. And then loop wallet shows up and they're like, what is that? Is Starbucks the only place in America where mobile payments are used as often as they are? I think I saw a quote. It was like more than 25% of Starbucks customers are using their phone to pay. I think McDonald's has a big thing.

Starbucks is the biggest part. People know what they're doing with Starbucks apps on their phone and it never ceases to impress me. I'm like, you know how to do what? You know how to hold up a QR code, do a reader and do this? I was like, I couldn't teach my friends how to do this. No, it's great. I have a bunch of friends. And they don't use their phones any other stores.

No. I have a friend who was like, uh, who makes a budget in Starbucks every month. She buys like a $25 Starbucks gift card, puts it on the app. First day of every month, funnels it up. And then when it's out, it's out. She can't go back to Starbucks for the rest of the month. And it's like, that's the best system ever. And it's all on her phone.

It's super easy. She like hits the thing, pays with iTunes and it's done. And then like it's the best thing ever. And it's the same thing. When you walk in, you hold a. your phone and they know what to do. You know who else does a good job of that is movie theaters. And they're the only other ones that like when I walk in and I'm like, I have it on my phone. They don't freak out. Otherwise everybody's like, why?

airports? I still get like, I hand people my plane ticket and they like move it around and then they put it on the reader and they're like, is it. It goes over. I just, uh, it's over here. And then it's like everybody behind me is pissed off. Like it's just not, it's not good. So Ellis, you need to go. You need to head over. You're going to be on. No, no, no. I was, I was, I was, I'm It got moved to a little bit later. If we want you to get out. Just please leave. Please go immediately.

If you want to get Z power in here, that's cool. Yeah, we want to talk about Project Tango, which just got announced today. And it seems completely terrifying and insane. It's like her. It's like what's happening in her where the person, Scarlett Johansson inside the phone, is seeing through the phone, popping out of his shirt pocket, through his eyes. And seeing the whole world. That's beautiful.

This is the beginning of that. Which is amazing, but also terrifying, which is like the best thing about everything that Google does. All right. So there's a video, I guess we're going to look at a little bit of it while you leave. Everything at Google seems so friendly on the surface. And now they've got the robodogs with 3D vision. God. I'm in on that.

Project to Engel, I don't know. Skynet. All right. Thanks, Alice. Oh, sure. Let's check out this video. My name is Johnny Lee, and I work in the Advanced Technology and Projects Group at Google. Our small team here, based in California, has been working with universities, research labs, and industrial partners to harvest the last 10 years of research in robotics and computer vision to concentrate that technology into a very unique mobile phone.

We are physical beings that live in a 3D world, yet mobile devices today assume that the physical world ends at the boundaries of the screen. Our goal is to give mobile devices a human-scale understanding of space and motion. This is going to allow people to interact with their environment in just a fundamentally different way. We can prototype in a couple hours something that would take us months or even years before because we didn't have this technology readily available. What happens if you have all these pieces in a phone? How does that change what a phone is? We have created a prototype phone containing highly customized hardware and software.

designed to allow the phone to track its motion in full 3D in real time as you hold it. These sensors make over a quarter million 3D measurements every single second, updating the position and rotation of the phone, fusing this information into a single 3D model of the environment. We have a problem called navigation in doors and it's a solution to that problem. It tracks your position as you go around the world and it also makes a map of that. Imagine that you scan a small section of your living room and then are able to generate a little game world in it. I don't know of any other controller or gaming device that can do that at the moment.

Putting all this together, they pulled in experts from all around the world and got them all working on the same project. Those are very high caliber people. Why? It's very simple. I think actually people believe in the vision. Localization and mapping is there on your phone and you just use it. this ability to follow in other people's footsteps.

And we can also like benefit from what we do for the project back for the open source community. Use it for visually impaired, give them auditory cues on where they're going. You know, being able to map your home, check out, let me see how this furniture looks in the room. Virtual windows to sort of different worlds. I mean the possibilities are really endless. Over the next few months, we will be distributing dev kits to software developers to develop applications and algorithms on proper this platform. We are just in the beginning, and we know there is a lot more work to do, but we are excited about where it is going to go. The future is awesome, and we believe we can

build it faster together. Well, that was an inspiring and beautiful vision of our terrifying hellscape of a future where Google knows everything about us in our homes. And here to talk about it is Chris Ziegler. No, I'm still all this hamburger, I look a little different. Google's so good at making videos. Yeah. It's unbelievable. I got to the end of that and like I'm actually super afraid of what's coming out of this and I got to the end of that video and I'm like, yeah.

So this is like, this is Google. No about my house. It's atap. It's the advanced projects thing, which is part of Motorola. It's like the only part of Motorola that they kept, right? Right. Was ATAP. And it's got Johnny Chung Lee who was on the Connect team and has done a bunch of cool.

He did the thing with the Wii remote on top of his head. And Regina Dugan, who's like doing all the crazy tattoos to identify yourself. Like they're the one. doing really insane stuff. Okay, so it's a phone that can map 3D space inside and using cameras and gyroscopes and sensors in the- Which is not especially insane technology. Like I met with a company months ago that had like an add-on for the iPad that could do the same thing and you just sort of, you like stood there, held the iPad and like spun around in a

circle slowly and it would actually map the room. Well, and LiDAR has been doing this for, I mean, that's what Google is using for the self-driving cars, right? To get like millimeter level accuracy on that. But to have it on a phone and like have it. The one's in your pocket that's tracking you around? So the really obvious application to me, Google's being like intentionally very vague about where this is going to go because it's just a developer kit at this point. But you can see how this would have obvious implications for like street view and like whatever street view 2.0 is, right?

You can see where, you know, you could just arm millions of people with these phones and you can map the interiors of buildings very easily and send that data back to Google. And all of a sudden they've literally mapped every millimeter of every building. Yeah. And the robots will know exactly where to go when. And they come to kill us. Right. Right. And they can just be like, I mean, the crazy thing is like, you can be like, I want Doritos.

And they can literally, like, direct you to Doritos. Right. And on the one hand, that's awesome. And on the other hand, that's super insanely terrifying. It is. It is. That is terrifying. But until they get to the point where they can direct me to a specific flavor of Doritos, does it even matter?

It's the question. No, the answer. If that question is always cool ranch. True. That's true. It just assumes it when you put in Doritos. It's like, did you mean cool ranch? Yeah.

Greener, like, yes, I did. Did you mean Cool Ranch Doritos? Cool Ranch is objectively the best flavor. I mean, that just isn't true. But that's okay. Well, it's objectively the best flavor until, like, it gets in your head, and I'm going to say this to you, and you'll never eat them again. There's kind of a little bit of a, just a little.

Wait, what flavor? Cool Ranch, if you just stop and smell it, you're like, oh, hmm, dead fish. Just kind of rotting fish. Oh, that's not as bad as that. I can live a little. No, just a little, a little bit of day old salmon. So is this really just street view, though?

Is that like, is that? No, that's just an obvious implication, or, you know, an obvious application of it. But this is a motorola project, not a Google project. So it's not like they were planning for that anyway, but you can see how that would make a lot of sense. Sure.

But, I mean, okay, so I get, the things that occur to me are indoor maps, right? So you go to Macy's and they, like, tell you what's nearby. I mean, on some level to me, sounds like it's almost something like ibeacon where they can be like you're near this let us serve you ads so assistance for the visually impaired instead of just like right don't run into things kind of technology it would be like you could they could convert it to something you could see yeah you know see right the space um and cool ranch Doritos I mean games seems to be the

other thing like Ellis Ellis points out her and like you guys have seen this movie right no I have not seen her you know what I have seen though is uh the first four episodes this Season two of House of Cars. So there's a scene in her where he's there, he's sitting on his couch playing a video game, and the video game is not on a TV. It's just like literally in front of him. Is this a spoiler? No, it's fine.

It's cool. You should watch it. It's good movie. But he's sitting there and like to make the guy move, he literally goes like this to make him run up a hill. Yeah. And things like that, it's like when you have actual awareness of your surroundings, you can start to build things like that.

Right. That's not that big a step from I know what your house looks like. But that seems like a weird thing for Google to do. Right. But then there's like Ingris. Google makes no sense to me. It's essentially where I'm at right now. I have no idea what Google is doing as a company.

That is the beautiful thing. Like, Facebook now has a mission statement. Here's what we do. Google's like, stuff is cool. Let's do that. But that is what makes Google such an amazing company is that they can literally fund anything they want using AdSense revenue.

Google has all of the money. Yes, exactly. So they're just like, let's go do some cool stuff. That's why X exists. That's why they're doing self-driving cars, which aren't even commercializable at least 2020. Internet balloons.

the internet balloons. Well, so internet balloons makes sense, right? Because it's for them, like, the one thing that I sort of universally get about Google is that the more people they put online, the more people who use Google. Right. And the more people you use Google, the more money Google makes. Which goes back to Facebook, too, by the way. Right.

No, agree. But so those things are, I get those steps. So, like, Project Loon is, on the one hand, like, a lovely thing to do for people who couldn't get on the internet otherwise. But it's also, it makes really obvious business sense. Something like this, it's like, I mean, other than the scary thing, which is serving me ads every step I will take every single day, I don't see how this makes any sense for Google.

Well, you can see how it's a... Other than to be like a cool look at us where Google moves. Right, but if you look at it the same way as you look at Project Glass, it's a moonshot where it's not commercialized. I hate to use their term. Stay with me. You've broken me. I can't speak. You use the term moonshot and didn't immediately call out that you were being a lot on fire.

No, no. No, I called out that I was being non-ironic about it. That's what I'm saying. That's what I'm saying. But no, no, no. That was a disruptive innovation you just spit out right there. I'm going to pivot. Okay.

So Project Glass is not a near-term thing, right? It's a near-term thing for a thousand nerds, us included. Right. But it's not a near-term thing for the masses. But you can see how in 30 years everyone is going to be wearing some form of heads-up equipment on their face that will look completely normal. They'll look like Dieter's glasses. And I meant that in a good way.

I meant that in a good way, not a bad way. No, but again, that's the same thing, right? Like, that puts more people online more of the time, and that's an obvious win for Google. What about the robots? Explain the robots. Yeah, no, that's the same. Explain buying Boston dynamics. Or the self-driving cars.

Go back to Dieter's, right, but go back to Deeter's vision-impaired example. You can see how Google could end up making a device that basically leads you to all these retail establishments that. Right. A little helper robot. Is that what you're saying? A little, a little helper robot. A next generation is Sony Ibo. Right.

That leads you around and tracks you and everything Google does make sense. They've never done a single thing I didn't understand. No. I get it now. It all ties together. No, I mean, this seems like more than anything Google has ever done. This seems like the minority report move. Where do you like walk around and their ads just blaring at you all the time?

Yeah. Because if Google then goes to businesses and it's like, hey, we know exactly where people are in your store all the time. Give us some money. That's such an unbelievable win for me. Think about that. If they can accurately map right immediately on the device, the 3D space on a computer, they can, on a heads-up display, accurately project stuff onto that surface.

Right. So, like, they can literally put an ad on that wall and that curved chair and whatever else. Yeah. And it's just, it's... They own this whole stack for... advertising and it's that's super scary. I mean it's the same thing like I met with Apple about Ibeacon forever ago and my question kept being like you know this can be terrifying right and they were like yeah but it won't be. I was like but you know this could be terrifying right and they were like yeah but it won't be

fine. Are you excited about I Beacon at MLB this year? I guess I mean this is the same thing like there are ways in which it's super insanely handy where like I can one of the things they were telling me about that I think it's just as a like high level possibility I don't know if they're actually doing this, but they were like, we can figure out where the shortest bathroom line is, or, like, where the right food is near you, or we can, you know, figure out where you are if something goes wrong. And, like, that's all really, really great. But you know what's going to suck is when you walk in in every single step you take, there's another ad from another vendor that's like, hey, come save a dollar on your $13 beer if you come to our thing right now with your iPhone.

I don't want that. Like, I don't. But you, so you're saying you don't want to save a dollar on your beer? I don't want to save a dollar. No. I have no interest saving a dollar. I would rather. I would rather. I would rather pay a dollar more and not have them serve that ad. What ties together, I think it a little bit, but definitely Facebook with that Disney metaphor and now Google. Sure. Like, we can't think of these companies the way that we used to. They're like, they're giant conglomerates now.

Yeah. It's like, you need to think of them like GE in the 80s that just did everything. Right? They bought NBC and everybody was like, yeah, okay, whatever. That's near GE. That's what you do. Right. Like, that's what, like, when Google does some crazy shit, we just have to be like,

yeah, Google, let's just, we don't know. they can't stop spending money and doing weird things. Yeah. It's weird that Apple is like the most cohesive of all of these. Oh, yeah. Well, it's not that weird. I guess. I mean,

Apple, like, of all companies to just, like, throw money and random things to see what's going on. To be at Apple and be in charge of R&D and not just like release the weird crap you're making. Right.

Exactly. Because they're, I mean, what's their, what's their cash on hand? Like, $140 billion. Yeah.

Over $100 billion. Yeah. Like Tim Cook could have rolled up with like a bunch of nickels and they could have bought like six WhatsApp. Yeah, Yeah, exactly. And yet they don't, which is really interesting. And I don't know why, to be honest, because, like, this isn't, it's not a bad strategy,

this conglomerate move where they're like... It's kind of a bad. Well, it's very hedged, though, right? It is, but Google and Facebook are both so big enough, and their thing is so, like, fundamentally well-known and well-understood that there's no danger in branding. It's the same with Disney. Like, when you hear Disney, you think Disney World. That's just a thing.

And they got so big doing that, that they were like, we can do whatever else we want, and people are going to think of our core. When I hear Disney, I think Rescue Rangers. That's super weird. One of the reasons that GE is super weird. One of the reasons that GE has been around for 140 years and still seems to be a fundamentally sound company is the fact that they have been hedged for so long. They're in so many different businesses that when one is up, the other is down and it just kind of all evens out. Yeah.

That can't be said for a company like Apple, right, which has virtually all of its eggs in one basket. Right. And to your point, yeah. Well, they got like three baskets. Yeah, but three fundamentally similar baskets. GE's fundamental thing was light bulbs, right? Yes. And that's the thing.

That's what I associate still with GE. And like anything else that comes from GE, it's like, oh, it's GE. They make light bulbs. I don't even know if they made light bulbs anymore. But they were, they built a thing and did it and did it so big and complete that they could do whatever else they wanted with have to remember their old tagline? Maybe. We bring good things to life?

Yeah, yeah, yeah. Yeah, okay. Checking. They used to have a really nice typeface too. then they changed it. Their logo is terrible looking. I want their Wikipedia page. It's super ugly.

Is it still the curse of GE? Oh, it's awesome. It's a great logo. It's like 100 years old. But it's like, it's also in like a washing machine and there's, it's like, I don't know. It's awesome. It's in a GE washing machine. But yeah, so you can see how Google is just kind of like throwing stuff at the wall in every conceivable direction.

And even if one of them, say, for example, they figure out how to make people live forever, which is a business. Yeah, that's true. Then they will be in really good shape. That's true. They're going to be on the internet. a lot if they live forever. Yeah. Is there anything that Google could do where you would seriously go like, I don't, like, really? What?

If they bought Applebee's? If they bought Applebee's? Yeah. I don't know. We would find a way that it made sense for them. They would just put fiber in all of the Applebee's everywhere in the world and you'd have super fast internet. You're right.

And they would like kill the coffee shop office with Applebee. By the way, can I just say that this seat where I'm sitting is Josh's seat? And in every Verge cast he comes on and he complains about his hair. It's the seat. Because mine just started going crazy. You haven't moved your mic at all. It's really upsetting. I don't even know how to look at you right now.

No, but no, this seat ruins hair. I mean, your hair does look terrible. It's, I'll just be honest. What is going on with the, we should move on and talk about this is the worst. Should we talk about Mobile World Congress? That's coming up next week. Well, no, we, we, we should talk about Mobile World Congress. It's more exciting than the Internet being the worst because the FCC has no guts.

Can Google by the FCC? Is that a thing? Oh, got it allowed? Kind of, do I wish they would? I mean, they capitulated a Verizon on wireless. They could certainly buy the United States, in which case they would own the FCC automatically. It's good point. How many WhatsApp do you think the FCC costs?

Is this going to be the new thing? Everybody talks about it in terms of Instagram. Are we going to be like, they bought it for one 30 second of a WhatsApp? Yeah. Poor Kevin. That's awful. Yeah, I know. I feel so bad for the guy.

Well, you know, it's funny, the idea of Google buying the FCC because paying for it is actually the real problem, because the FCC won't man up and classify broadband as a common carrier like a telephone, like a telecommunications line. They're going for this middle path again. And they're doing it because going the common carrier route would be World War III because of all the money from the cable industry in Congress. It is really funny that World War III is like a bunch of really pissed off lobbyists. That's what they got to do.

Like lobbyists throwing money at each other as World War III. Yeah, if you look at, I think you can tell that Tom, who is the recently installed chairman of the FCC feels very bound and tied by Verizon versus FCC, the ruling that came out recently, which we've written about extensively. Check out Eddie Robertson's coverage, if you haven't already, because it's very good.

She just writes like one really angry thing every 48 hours. It's really great. And it's great. Yeah. So you can tell that he feels unsure about how to proceed, and he feels like the FCC is just like kind of dead in the water here. So you put out this long list. he'd been saying for...

See, you say unsure, and I hear... I don't see... I mean, I see that, but, like, behind it, I see fear, trepidation, and something really slimy because he just came from the cable industry. The guy who used to be in charge the FCC is back in the cable industry. I think that's a little unfair for a couple reasons.

Okay. I'm warming up to Tom Wheeler. There was a lot of trepidation about the guy when he took the office, which was totally fair. But you need... Well, you kind of need to consider the fact that when he was at NACTA, which is the cable organization, it was seriously the underdog.

Like, all kidding aside, like, the cable industry was a non-entity. Oh, yeah, the early 80s? Yeah, yeah, yeah. And he left before they got big, but he was, like, fighting from the underdog position. And the same argument could kind of be made with the CTIA. Like, he left in, what, 2001, 2002, something like that. But the CTI is a wireless version of the cable industry.

Right. Right. And then he's kind of been floating around. in investment firms since then. Look, I mean... But anyway, my point, what I was getting to is that he put out this long list of things that the FCC is going to do. And if you read through the list of bullet points, everything is kind of like, we'll wait

and see, we'll wait and see. We'll consider this carefully. We'll talk about this. No, that's fine. But it's like, we'll wait and see, we'll wait and see. You're saying that like it's a reasonable thing. No, I'm not. You're saying that it's not completely obvious what the FCC should do here.

Isn't it completely obvious what broadband is? Yes, no, it is completely obvious. So why does everybody see it except for who? Tom Wheeler? Tom Wheeler, Chairman of the FCC and the cable companies. Well, I mean, I'm just doing the math. Right. I think that he is a realist about being a politician in Washington, D.C.

I mean, you've seen House of Cards. So that's what drives me crazy. Yeah. Like, that's, it just is. Hall have so much money. Yes, they do. So much money. He's being a realist.

He's being, he's being very cautious, is the way I... Sure. Give him the benefit of the doubt. Don't write him off yet. I'm, okay. I have the tiniest, tiniest bit of non-desperate feelings. I won't call it hope. I won't call it.

There's no question... I think we can all agree without question that the state of the internet and of the internet industry right now as it stands is completely miserable and terrible and makes us all want to die. It's a terrible thing. And it's Tom Wheeler's job to fix that. And there's a lot of weight on their shoulders, not just in the cable industry, but in the wireless industry, as there always is. Yeah. So we'll see.

Fair enough. All right, let's talk about more role of Congress. Yeah. So it's starting, what, like Monday? Sunday, Monday. It kicks off in earnest on Monday. There's some stuff on Sunday, but it, like, mostly happens Monday. And we have a bunch of folks there.

Yep. It's going to be a way bigger show. than last year. Yeah. Well, we're expecting Samsung to actually announce something at the show, which, like, we thought they were done,

plural. Yeah. We thought they were done showing off big important stuff at big shows. And now they're like, nope, we're going to go ahead and do Mobile World Congress. I wonder if it's because

Mobile World Congress was so bad last year, that they were like, we can take over the show and do it this year. It's cyclical. It's like when the shows gets off, they're like, oh, we can use it now.

Right. And then when the show gets big, they're like, ah, screw this. We're going to go to our own stuff. We're going to bail. So S5, the new galaxy phone, then apparently it's going to have a fingerprint scanner. We talked about this on the Virgin Mobile show, which you should listen to. It's great.

It's a terrible. It's a fantastic program. We recorded it from a jail cell this week. It was amazing. We did. And then not one, but multiple galaxy gears. Didn't the galaxy gear just come out? It came out like three days ago.

I mean, I guess good for Samsung for being like, okay, we screwed up. This is bad. Let's try again. And that's kind of Samsung's moves. You're giving them too much credit. There's no indication that the new galaxy. gear will be any better than that's fair for this is this is like we screwed up let's do it again this is a company that had its second generation tablet ready to go and then apple announced the new super thin iPad that

was the two that was ridiculous then and within a matter of like three weeks they scrapped their whole tablet and came out with one of the same thickness I mean this is the insane thing about they just like turned it around this is the insane thing about Samsung that is like the most underrated feature of Samsung is they can make anything unbelievably quickly at incredible scale yeah Yeah. And so Samsung's ability to just like rinse and repeat is insane. Yeah. And I think that's like eventually going to be the story of the Galaxy Gear. Like they're going to get to a point like they did with the GalaxyS phones where it was like,

it was like it was slightly better and then it was slightly better and then it was good and then it was really good. And they're like, and now nobody cares because it's really good. And Samsung can do it so fast and take so many chances that it's not going to matter. Here's the difference though. With the GalaxyS, the smartphone, the concept of a The smartphone. Actually, the first GalaxyS is were pretty good, too. Yeah, not bad. I'd captivate.

But with the, with the, with the, with the, with the, with a smartphone was supposed to be, was already well established. With wearables, there's still no clear indication. Right. What a wearable is supposed to be and what kind of wearable people want. Yeah. Well, and Samsung as leader is, is a lot less established. Right.

Samsung using its sledgehammer to force people to, it's marketing sledgehammer to get people to buy its smartphone. It's like, okay, that doesn't affect my life. They've made such good ads of the gear. Doing it with wearables, though? I have to look at these stupid things. Yeah. And PC people struggle with them.

You don't like the digital boil? Dude, it's so bad. So, anyways, multiple gears, right? Multiple gears. Great. And ACC is supposedly doing. Wearables. Wait, wait, wait, wait.

But we need to discuss new Galaxy Gear ties in instead of Android. Yeah, well, that's not, no. I don't, we talk. don't care if it runs Android or Tysen. Just don't suck. I mean, my, like, I don't want Tysen on my phone because I want apps, but there's no app ecosystem for wearable. So I don't care what operating system runs. As long as it plays nicely with your phone is really good is going to pick up an app ecosystem. You know what's going to, I'm going to put a terrible thought in your heart. I mean, that's what Pebble is done, right? Like they have theirs is their own thing. I'm going to put it.

I'm going to spite their operating system. I'm going to put a nightmare of a thought in your heart and soul. No, no even worse. What's going to happen is pebble is going to develop such a lead with app ecosystem, that the killer app for the galaxy, the next galaxy gear is going to be a pebble emulator. It allows you run pebble apps. That would be great. I'm all in. And then Google will buy them or Facebook will buy them and I won't have any idea why.

But so HCC's ones are supposedly what's happening is what I'm going to accept. They're doing the phone later, March 25th. But they're potentially doing a watch based on the Quakom talk you reviewed forever ago. I did. And I'm really hopeful that if this. happens, it will not use the same wristband, which is the worst wristband in the It's really insane. It's so bad.

There are two things that made it really bad. One was the fact that the band was touch sensitive, so you would just like randomly touch it and things would happen. And then the battery was at the very bottom of the band for no reason. So it was really uncomfortable. You couldn't like put it down on the thing about that Qualcomm talk. It's also a prototype. It's also a prototype.

The Miracal screen, right? Right. Which is a, which is we've been, I've been looking at Miracel technology at trade shows. since I started going to trade shows. Yeah. I mean, it's been six or seven years. It's just objectively. You trundle over to Qualcomm's booth

and they'd have this little postage stamp thing and there'd be no backlight. You'd be like, oh my God, it's a color screwing though backlight. It works. And just every year the poster stamp got bigger and bigger and now it's big enough to be a watch.

Yeah. So if they get rid of all the crappy parts about the Qualcomm Talk watch, which is literally everything but that display and they make something with that display. If they just get rid of that. It's a solid name.

The talk's not a bad name. No, it isn't. It's a bad name for a watch. Actually, on the back of the package, if I remember correctly, it says tick, and then it shows like an old school watch, and then it says talk. That's pretty good. It's pretty good. Yeah. No, but I think, like, Mirosol is just objectively, like, good.

It's great. It was made, its fate was to be in a smart watch. Yeah. Basically. I also really like that our piece says there's just a sentence in this piece, which Rich wrote for us based on a Bloomberg thing, which also says HTC has two other wearable devices in the works, including an electronic bracelet that plays music. Like, what? What is that?

This is a company that can't afford to make a bunch of random crap. Google can do whatever it wants. It can be balloons, find a space, and give you internet. You know what this thing is going to be called? HECC needs to focus. This is going to be called the boom wrist. No. I guarantee it.

The boom wrist. You're so right. Yep. This is the most upsetting. It's just going to have beats logos all over it. Yep. No, they thought they were done with beats. You're never done with beats.

No one's ever done. You can never escape beats. It's like the Hotel California. sound systems. It just never ends. And then a Google Now smartwatch, which seems super obvious. Yeah, but apparently none of this stuff is going to be shown to humans at Mobile World Congress.

Oh, really? It's going to be like backroom meetings where they try and sell it, is what I think the Bloomberg report said. Okay. So do you think with the Google Now smartwatch, do you think it's conceivable that this is going to be like Google's Nexus smart watch? Do you think this will be an official partnership? That would be interesting.

And I will say... Wouldn't be weird if that came from HTC, though? Do you guys use Google now? Yeah, all the time. Really? All the time. I just started again because I realized that it got a lot better than the last time I tried it. It's gotten way better, but it's still like, eh.

But it's like terrifyingly good now. I use most when I travel. Really? It's fantastic for what I travel. I'll load it up and I'll be like, yo, like your package got delivered. I'm like, I don't even know what package you're talking about. Like it just knows things. Yeah.

It knows really terrifying things about my life. Yeah. I don't know. Yeah. I agree. No, and the thing that I love about. now is the, like, just little bits of, like, things that are happening. Yeah.

And it's, like, it just reminds me of, like, things I have to do today. Yeah. Or, like, here's, here's the game you forgot was on. Here's the score. You know? Yeah, no, it's great. And it's so much better than it used to be. And, I mean, we've been saying for forever that since the beginning of Google now,

it was like, oh, this would be good for wearable devices. Right. It's like, it'd be so nice if I could just look at my watch and it's like, here's what's next in your calendar and here's all it'll take you to get there. And you remember Google, I was good at that now. Google bought WIM not long ago to do. presumably exactly this. That, yeah.

And Wim was like, Wim did a decent job, like really early on. Well, decent is strong. Wim's fatal flaw was not including Bluetooth in the, in the, it had Wi-Fi. It had Wi-Fi, but no Bluetooth. Whoopsies. Wow. Sorry, guys. So the last thing that we're really expecting is the Nokia's X phone, the Android phone.

And what are we expecting this to be? It's going to be a phone that runs Android. Got it. No, but is this like... It's going to be low end, right? And it's not going to... So this is... But this is Nokia owned by Microsoft's Nokia.

Well, not yet. Not yet. That's the thing. So they're going to make this phone... And then we made this and we're releasing it. God damn it. And then like, 25 minutes later, Satya Nadella is going to come up and just smack it out of their hand on stage and be like,

you shut up. No, because it's for the low end. Who cares? Well, so devil's advocate. Okay. And Tom has been... And by devil, you mean... I mean, Tom Warren.

Android? Tom Warren's advocate. Tom Warren's advocate. Intrepant Microsoft reporter. They have so fundamentally stripped, presumably, they have so fundamentally stripped this version of Android of its Androidness and replaced it with Microsoft Services and Microsoft UI that, or Nokia UI, I guess, technically, that no one will know that it's Android and there's zero chance that they will mention the word Android on stage at NBC. Then why do it? That's a great question. You're asking the right questions, David.

You should be a journalist. presumably because Android can run on lower-in hardware than Windows phone can. I mean, that's got to be the only reason I can think of. No, but is that seriously true? Like, if you look at the Lumia 520, it's so cheap. It is so cheap. It's so not very good, though, is the thing. Well, yeah, but neither is low in Android.

Well, fair. No, but I just, I know, I don't get it. Like, I don't get why this is a smart move. It's a hate for... It's a hate release. Like, a bunch of engineers at Nokia were super pissed that they didn't get to build their own stuff. So they built their own thing. They brought Steve Neal up.

He's like, I don't know about this. And then he didn't get the job of Microsoft. He's like, ah, screw it. Just put it out there. I don't care. Do it. Well, so we were talking about this just a little bit on the mobile show. I think what may have happened is at some point, Nokia was seriously working on Android across the range as a plan B in case Windows phone failed.

And that project got smaller and smaller and smaller until eventually it was just like an Asha replacement. And then they're still using Windows phone on the high end, of course. But you can imagine how at one point they were like, yeah, we might need to bail to Android. Like that's a serious possibility. So they were, you know, exploring it across the range. And now the scope just got smaller. I mean, but that ship sailed, right? Like, they're not going to switch to Andrew.

The platform was burning. They jumped into the ship and now the ship has sailed. I don't know. But it's still sort of slowly sinking. It's going very fast. And then it lights on fire because it's a burning platform. Yeah, right. It's like a Viking funeral.

It's a burning, sinking ship. Yeah. I've learned a lot. Oh, man. Yeah, I'm really curious to see how that goes down. And even more than that to see how they talk about it. Because I think if they're like... They will never say Android once.

You don't think? No, they will not say the word Android. Then what are they going to say? I mean, did Amazon say Android when they announced a Kind of? I don't think so. Well, but they named it, though. They were like, here's what... Do you think Nokia's going to have their own name for whatever OS this is?

Probably, yeah. They're called X. I don't know. Just like every other phone out on the market is full X. It's completely unpronounced. This is just call it Asha and just like hope nobody actually knows what Asha is. is and they just go for it. We were actually talking about

Asha's Nokia's low-end phone line. Right. You remember, Dieter, I think you were at this Nokia world where they introduced Asha for the first time and they spent like half an hour talking about what Asha meant. Yeah. Like I can't remember what language it is, but it's like, you know, they described it.

So yeah, maybe they'll do that. It's a lovely name. I googled it and I get the American Speech Language Hearing Association. I don't think that was it. I feel like I'm close. I don't think that was it. Maybe not quite there. Yeah, we'll see.

I mean, it's a weird move. We've been saying for years and years and years that if they had taken the Nokia, like, N9, which was their first new design language phone. Right. That was running Migo. If they had taken that and just put, like, ICS on it, it would have been an amazing device. Yeah, we've been saying this for forever, right? Like, if they would just, Nokia builds better phones than anybody.

We just reviewed the icon, which is not quite up to Nokia standards. No, I, like, I can't. say it for sure, so I can't, like, write it, but I am so sure that everybody at Verizon just, like, gets off on ruining good things. They're just like, oh, you made this really nice phone. No. Throw it in the dirt, make it twice as large and put 40 logos on it, and then we will sell it in our stores. Make it an inch thick. Yeah.

Or, like, they have some secret backdoor deal with Samsung where they're like, you can only sell ugly phones except Samsung. You know what, you're right. Think about the Samsung continuum, which was the worst phone ever made. Oh, God, the Samsung continued. Oh, man. Wait, was that the one with the two screens? Yeah, it wasn't really two screens. It just had like a piece of plastic over the screen to make it look like two screens.

Wait, okay, speaking of Samsung, I have a question. So I just reviewed this Galaxy Note Pro, the big tablet. Which is this big? It's a television. Yeah. Like, I, the only way I can be described it right now. There it is. That is the guy's now, bro.

You used it as a literal, like, food tray. Yeah. Yeah. You can carry things. on it. It's lovely. But A, it's now just horribly broken. Thank you, Michael Shane. It's not his fault.

What I, I get to the end of this whole thing, and I'm still like, this is what everybody thinks is about to happen, right? Is that we're going to make tablets that are our primary computing devices, right? Like, there are all these rumors that Apple's making a big thing, or like somewhere between the MacBook Air and the iPad. Samsung's doing it. Everybody, like, the surface is sort of this. Like, is this a good idea?

do we want this? Are laptops dying? And eventually we'll just all have tablets and that'll be like the thing that we do? No. Yes. But like PC sales are down. Right?

Tablet sales are, I just, I don't know. We're at this weird inflection point where like people are writing that nobody cares about tablets anymore but then tablet sales are growing and PC sales are dying. But here's what people do. And I just don't know.

Here's what people really want. They buy their iPad and then they buy a keyboard case for it. Right. Just buy a laptop. Just do it. Just buy a laptop. That's the thing. But I think ultimately, I mean, the trend seems clear that it's going to be iPads and keyboard cases. And for the life of me, I can't figure out why for anyone who actually does anything ever. And I guess maybe that's my fundamental theory is that most people just want to sit around and not do stuff. Like those things are different. Just buy a laptop. But if this thing right here would add a little bit thicker screen and when you pulled it off it turned into an iPad and when you put it on it was a Mac, would you not buy that? Yes, I would buy that.

You would buy the hell out of that. So it's a hinge problem and it's a battery complexity problem. No, it's also a software problem. Right. If you can make a device, I mean, I also want to be able to chop off a corner and have it be my cell phone. But like, I don't know, all of these things, like I get, this is the Moto Arix all over again. Right. I said when the Moto Aitrix came out, I was like, this is the best idea.

This is the future. And I was just so wrong, just so wrong. Just because it was a, but it was a bad software. It was a terrible product. But what they did was they were like, we. made a phone and you dock it into a tab, or you dock it into whatever you need it to be, and then it works as that. But you also have weird feelings about the pad phone.

I love the pad phone. I love it so much. I don't understand these feels. There's a new one coming and it's coming to AT&T, and I'm going to get it. It's going to be the best. It's going to be the best. I'm going to use the pad phone station all day. Oh, do not.

All day. Don't do that. No, do not because you learn what it's like to try and work on Android. You learn what it's like to work on Android that can actually let you have multiple things on the screen at the same time. It's not good. Yeah, I mean, beyond everything else, that's the problem. It's way better than what I expected.

The multitasking on the tab pro is way better than what I expected, but I wasn't expecting much. Right. I mean, it's ultimately like, I can sit here and like resize my browser and I can have eight apps open if I want to in there. However, I want them to work. And it's just Android is a million miles away. I mean, the bottom line is that.

But if that thing, like, if I could dock it into a keyboard and it would run Windows all a sudden, look at you try and drag windows. That would be great. But that's, I don't know that. that's possible. So that's like, that's straight up just a Haswell. It's a processor problem. Sure.

An OS problem. I mean, this is also what like, and presumably will fix that. It's also the possibility of like Chrome OS and Android merging, right? Is that when I want it to be, it's an Android tablet and then I dock it in and it's a Chromebook. Right. But Chrome OS is only marginally more, in fact, it's not even more functional than Android. It's a way more functional than Android.

What? It's a browser. Come on. Like, all I use is a browser anyway. And to be able to have like a bunch of windows open and do stuff side by side and everything's a web. I have a Chromebook. I love it. That's a window.

problem. It's not an OS problem. Yeah, but honestly, I think at a, on some level, the biggest productivity problems we have on these mobile devices are window problems. Yeah, like windows, yeah. Window and like button problems. Yeah. Like easy switching between stuff and window problems.

And like ChromeOS is a small way of solving that. Trying to make me say WebOS, aren't you? Damn it. It's true. No. Is it going to look back in 50 years. Like shit, they got it right the first time. No, it wasn't.

The first time was terrible, but not. terrible, but not great. But that concept of panels that lost, that never got made. Well, it was the joke about the Irish, like the Irish discovered civilization and then they had a Guinness and lost it. It's like, that's what WebOS was. Well, Dieter, you're going to buy an LG TV for this very reason, right? Oh, yes, you know.

I'm not buying an LG TV. No, I'm not buying a TV for five years easily. I've got a TV that's like two, maybe three years old. No, it's two years old. I've got an Xbox one plugged into it now. for Titanfall. Yeah, which I can't play anymore, which I'm really bad at.

I didn't know the beta was going offline last night. I didn't play, and then I tried to play. I'm real bad. And now I'm really sad. I'm terrible at that game. I'm terrible. Just awful.

Also, the Xbox one is embarrassingly large. It's big. It's so big. Put it next to anything else. A cable box. A TiVo. I've got the, you know, IKEA is definitely like,

live in the ocean on my cable box. IKEA's replacing an expedite shelf line, which has got all the hipsters angry, because it's perfect for holding records. And we use it as an entertainment center. Oh, yeah, we wrote about that. Yeah. We use it an entertainment center and we use it to have, you know,

we've got records in it because you have to have records if you live in Brooklyn. But underneath. You just moved here and just immediately bought a bunch of records. Yeah. Underneath, I had a little expedite slot with an Xbox 360, a Wii, and an Uya. Everything was in there. It was stayed cold. It was fine.

This conversation is going south. I took all three of those things out. I'm like, I'm going to place all this with the one. It's going to be awesome. Nope. It has to sit on top of my entertainment center. Maybe that's why IKEA has continued it. Yeah.

Because they were like, crap, it doesn't fit the Xbox one. We got to try something else. It could be why. No, that thing is large. It's very large. Stupidly big. Yeah. Yeah.

And super loud, it turns out. Especially when I'm playing tight phone. Literally every component of it has a fan. The power supply, the Connect has a fan and the box has a fan. That's true. The Connect fan is my favorite. Yeah. Wow.

I feel like I think we're done. We're wrap it up. So if you want to contact us, you can. You can email us. The email address is The Vergecast at Theverge.com. Is that right? Just Vergecast. There's no the.

Just Vergecast at Theverge.com. We're also on Twitter. I want to thank Ellis Hamburger, who is here earlier. He is at Hamburger. She's awesome. Which is the best. David Pierce is at Pierce, David, which is the worst. Yeah, that's true.

The worst. Just, I'm telling you, please everyone berate whoever at David Pierce is on Twitter. He's actually a very nice guy. Don't do that. He talked a few times because sometimes I berate him into trying to give me his Twitter. Very nice guy. But please everyone berate him into giving me his Twitter handle. Thank you.

Chris Ziegler is Asi Power. I am at Backlon, and there's a really good story behind that, which I'd love to tell you sometime. But until I do, this weekend, your family, keep Josh away from him.