posted about 16 hours ago on re/code
Plus, Walmart puts Amazon on notice with a big Q2 beat; Tencent sees its first profit drop in decades; is Elon Musk crazy?; a deep dive into ... burritos. Facebook has a plan to protect the 2018 U.S. midterm elections from an election disaster like the one that hit it in 2016. The social network says it’s moving quickly on its plan — which includes a physical war room to monitor the elections from its corporate headquarters in Menlo Park, Calif. — and has promised to double the number of safety and security employees on staff to 20,000 people. But with the midterms less than three months away, it’s almost go time — will its efforts be enough? [Kurt Wagner / Recode] [Want to get the Recode Daily in your inbox? Subscribe here.] Walmart just put Amazon on notice: The big-box giant reported impressive second-quarter results with a big beat, showing a rise of 4.5 percent in U.S. comparable over a year earlier. Traffic in its U.S. business was up 2.2 percent, meaning Walmart is doing a better job of luring shoppers to its brick-and-mortar stores. And its e-commerce business delivered a 40 percent gain in sales, making its full-year guidance for digital growth look attainable. [Sarah Halzack / Bloomberg] Tencent shares tumbled after the Chinese social media giant reported its first profit drop in decades. The Chinese government has long has favored Tencent as a technology champion, but is now directly hurting the company’s results with a regulatory shakeup blocking its path to making money from games — Tencent relies on new content to draw and keep users on its WeChat messaging service. Once the most valuable company in Asia, Tencent has seen its market cap fall by more than $170 billion since January. [Lulu Yilun Chen / Bloomberg] Following reports that Google is secretly developing a censored search engine for China, about 1,000 Google employees have signed a letter demanding more transparency from the company to understand the ethical consequences of their work. In April, Google’s outspoken workforce spoke out against its involvement in a Pentagon program that uses artificial intelligence to improve weaponry. By June, Google had said it would not renew a contract with the Pentagon for A.I. work. [Kate Congre and Daisuke Wakabayashi / The New York Times] Two years after Russian hackers breached voter databases in Illinois and Arizona, 36 out of 50 U.S. states have adopted government-approved equipment that allows the federal government to see inside state computer systems that manage voter data or voting devices. The $5,000 Albert sensors were developed by the nonprofit Center for Internet Security, which helps governments, businesses and organizations fight computer intrusions. [Christopher Bing / Reuters] Tomorrow — 8/18/18 — is the most popular wedding day of the year. Nearly 30,000 couples — including Recode’s own Kurt Wagner — are set to marry on Saturday, and guests will spend an estimated $1 billion on gifts and attire for the happy events. According to the multiplatform wedding-planning site The Knot, an average of 136 guests per wedding will attend this weekend’s celebrations, and each of those estimated 3.9 million guests will, on average, spend $261 on the event, including the gift, attire, and accessories, adding up to a $1 billion weekend — and that’s without travel costs. [Colin Bertram / Bloomberg] In her latest op-ed column for The New York Times, Kara Swisher answers the question many of you are thinking: Is Elon Musk crazy? [Kara Swisher / The New York Times] Recode Presents ... Chobani founder and CEO Hamdi Ulukaya and Square CFO Sarah Friar have joined the lineup of speakers at Code Commerce, our second annual two-day forum focused on the most compelling innovations in e-commerce and retail. On September 17 and 18 in New York City, Jason Del Rey and Kara Swisher will talk with sit down with leaders who are reimagining the retail sector to discuss business model disruptions spanning categories from grocery and CPG to luxury goods and high fashion, the growing influence of social platforms like Instagram on the customer journey, and the role of AR, AI and voice technologies in shaping future shopping experiences. Last year’s event sold out, so register today. This is cool A deep dive into ... burritos.

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posted about 19 hours ago on re/code
The social network would like to avoid an election disaster like the one that hit it in 2016. Two weeks ago, on a hastily scheduled conference call with journalists, Facebook executives announced what many felt was inevitable: Someone, perhaps Russia, was once again trying to use the social network to “sow division” among U.S. voters, this time before November’s midterm elections. The “bad actors,” as Facebook called them, created bogus events; posted about race issues, fascism, and President Donald Trump; and paid Facebook to promote their messages. “Some of the activity is consistent with what we saw from the IRA before and after the 2016 elections,” Facebook’s head of cybersecurity policy wrote in a blog post, referring to the Internet Research Agency, a Kremlin-backed online troll farm. That activity, of course, may have altered a U.S. election, and sent Facebook and CEO Mark Zuckerberg down a path of self-reflection that has changed Facebook’s strategy, as well as its mission. There was one big difference, though, between the disinformation campaign Facebook announced in July and the Russian campaign from 2016. This time, Facebook caught the bad guys — at least some of them — before the election. It was a conflicting revelation. On one hand, Facebook’s safeguards to prevent another election interference campaign appeared to work. On the other, it was a sign that Facebook will once again be a target — or perhaps a weapon — for people who want to divide American voters ahead of the 2018 midterms and destabilize support for government officials. Harvard lecturer Eric Rosenbach is bracing for the latter. As the former assistant secretary of defense for Homeland Defense and Global Security, and the former chief of staff for Secretary of Defense Ash Carter, Rosenbach knows how foreign threats like to operate. “My greatest fear, and I hope I’m wrong, is that the Russians, or maybe it’s the Iranians — they’ve already started working on these things, they’ve already conducted penetrations of campaigns, and they’re getting set to go to the next stage of conducting an infowar at the time that will most hurt the candidates that are in key states,” he said in an interview with Recode. “A week or a couple days before the actual election day and midterms, [they’ll] carpet bomb the internet using Facebook and Twitter.” Will Facebook be ready? The company says it’s moving quickly on its plan — which includes a physical war room to monitor the elections from its corporate headquarters in Menlo Park, Calif. — and has promised to double the number of safety and security employees on staff to 20,000 people. Facebook says it’s spending so much money monitoring political ads that it will actually hurt profits. But Facebook is also running out of time to execute its plan. With the midterms less than three months away, it’s almost go time. “When over half of Americans get their news from Facebook, it’s pretty damn important,” said Sen. Mark Warner, D-Vir., who has been one of the country’s most outspoken critics of Facebook’s role in elections. “We’re starting to see the enormous success of the Trump campaign in using social media. I think it’s changing the paradigm.” Facebook’s plan You can boil Facebook’s election plan down into three main challenges: It wants to find and delete “fake” or “inauthentic” accounts. It wants to find and diminish the spread of so-called fake news. It wants to make it harder for outsiders to buy ads that promote candidates or important election issues. Facebook’s top priority is finding and deleting “fake accounts” — either automated bots, or Pages and profiles operated by a real person pretending to be someone else — which are usually responsible for Facebook’s other major problems, like disinformation campaigns and misleading ads. “By far, the most important thing is going after fake accounts,” COO Sheryl Sandberg told a roomful of journalists back in June. “If you look at the things that happened in the [Russian] IRA ads on our platform in 2016, all of it was done though fake accounts.” Fake accounts are easy for Facebook to quantify, and make for nice headlines. Facebook took down almost 1.3 billion fake accounts in the last six months alone, and has routinely highlighted the number of fake accounts it takes down ahead of foreign elections. (For context, Facebook has about 2.2 billion monthly active users, and the company has estimated in the past that 3-4 percent of those are “false accounts.”) Before France’s presidential election in early 2017, Facebook deleted 30,000 fake accounts. It took down “tens of thousands” of accounts before Germany’s national elections last fall. But finding the kinds of sophisticated networks trying to influence elections is much tougher. Facebook execs say they’re getting better at spotting them, in part because it knows the type of behavior those accounts exhibit. The Russian IRA accounts that used Facebook to try and influence the 2016 presidential election also provided a lead to other networks. “Those kinds of investigations actually launch a whole bunch of other investigations,” said Samidh Chakrabarti, who leads product for all of Facebook’s election-related efforts. “What are all of the Pages that those accounts [operated]? And who are all the other admins of those Pages?” “That’s what we call a ‘fan out.’ You basically start from a seed and you see who are potential co-conspirators.” Chakrabarti won’t say how many investigations Facebook has in the works, but says they’re running several at the same time. He also won’t say whether or not Facebook knows of any other coordinated misinformation campaigns. “We’re always looking,” was all Chakrabarti replied. Facebook says these “bad actors” are getting more sophisticated now that the company knows what to look for. When Facebook announced it had found the coordinated information campaign a few weeks back, it also confirmed that these “bad actors” were trying to hide their location using VPNs, and paid for ads through third parties. Facebook wouldn’t say who was behind the campaign, only that it was working with law enforcement and Congress to try and find out. Working with government agencies is something Chakrabarti says Facebook is also doing much more of today than it did in 2016. “There are numerous leads that come from a lot of different places,” Chakrabarti said, though he wouldn’t get into details. “We have a lot of different lines of communication open with different agencies on this.” Sen. Warner, who sits on the Senate Intelligence Committee, says Facebook’s relationship with Congress has improved, though “grudgingly.” “It was not until the summer of 2017, after trips out to the Valley, after sitting with Facebook leadership, that they started to come clean,” Warner said. “Have they gotten better since then? Yes. ... But people just aren’t buying the ‘we do no evil’ and the self-righteousness of all the social media platforms.” Facebook’s efforts to stop so-called fake news may be an even tougher obstacle for the company given the challenges that come with separating black-and-white truths from personal opinions. The company’s efforts to flag false news and work with outside fact-checkers have been well documented, but deciding how to respond to bad information has still caused the company headaches. (Remember Mark Zuckerberg’s Holocaust denial statement? Or the company’s response to Alex Jones and Infowars?) One effort that may be working — or at least creating hurdles for potential bad guys — is Facebook’s updates around election advertising. Following the 2016 election, in which Russian trolls bought thousands of dollars worth of ads that reached millions of people, Facebook created a dashboard where users can browse through all political ads that appear on Facebook’s services. The company also started requiring that political advertisers register with the company, a process that included responding to a physical mailer Facebook uses to verify an advertiser’s address. While the move was intended to keep foreign actors from advertising for U.S. candidates, it created a bit of a hiccup for legitimate campaigns as well. Brian Rose, who ran for Congress in a special election in Mississippi earlier this year, found out his Page wasn’t approved to run ads in late May, less than two weeks before his election. “This is a devastating blow,” he told The Verge. Rose lost in a landslide. (Facebook, which first announced the new process in October of 2017, believes it gave people plenty of warning. The company has previously provided presidential campaigns with assistance in understanding how to use its products — the same kind of assistance Facebook says it would provide any major corporate advertiser — but it isn’t doing that for the midterms, a company spokesperson confirmed.) Catherine Vaughan is the co-founder and CEO of Flippable, a political action committee to help put more Democrats into office at the state level. Sometimes Flippable runs ads, which meant that Vaughan needed to register with Facebook, a process that involved scanning her driver’s license and responding to Facebook’s physical mailer. “We didn’t have a lot of clarity as to what was required,” Vaughan said in an interview with Recode, adding that the PAC couldn’t run ads for several weeks. “I just wanted to make sure I was doing everything by the book, but I also didn’t want it to get like actually lost in the mail.” Facebook is running out of time Facebook’s Chakrabarti has been building tech products focused on civic engagement for years. Before joining Facebook in mid-2015, he worked down the road at Google, “organizing the world’s information about politics, elections, and government,” he wrote on LinkedIn. www.samidh.com Samidh Chakrabarti The one challenge that comes with building products geared toward elections? You can’t finish them late. “Time is always your enemy,” he said. “With most products you launch, you can always move the launch date. You can’t move an election date.” “I feel like we have a good handle and a good plan for many of the problem types that we’re seeing. But whether we will get far enough, fast enough, is really the question,” he added. “It’s just a question of time. I would love if the U.S. midterms were in 2019.” For all the power and influence Facebook has, slowing down time isn’t one of them, and the company is rapidly running out of it to prepare for the midterms. There are still areas where Chakrabarti believes Facebook can improve. It will proactively look for people who share misleading voting information, for example, an issue in 2016 when users on Facebook and Twitter tried to encourage people to vote by text message, a system that does not exist. Chakrabarti says Facebook needs to improve catching misinformation that isn’t in text. That means finding fake photos, videos and even audio that may circulate as the elections get closer. Facebook is approaching fake photos and videos the same way it’s approaching fake stories: Responding to flagged posts by using outside fact checkers. Facebook uses a combination of human reviewers and machine learning technology to detect what’s fake, but eventually hopes to use machine learning to proactively find false photos and videos, too. One other new approach Facebook will take this year: The company plans to set up an actual, physical war room in its headquarters around election time to monitor activity on the service in the days and weeks leading up to the midterms. The company has had digital war rooms in the past, but hasn’t had a legitimate physical war room for a U.S. election. “It’s going to look like a computer lab,” Chakrabarti said, with screens and computers monitoring different metrics that Facebook finds important, like user reports, in real-time. Some of the metrics will even have alarms associated with them to alert Facebook employees if there’s an unexpected dip or spike. But more than the technology, Chakrabarti says the idea is to get people from all of Facebook’s important teams — engineering, data science, public policy — into the same room. “The war room isn’t so much about the technology that’s there as it is about the process of having people across different functions ... be able to diagnose and fix any sort of acute issues that we see,” he said. Despite all of Facebook’s plans — and repeated promises by the company that it’s taking its role in American democracy seriously — not everyone is convinced. “What happened to the United States and the election here in 2016 and Facebook’s role in it is one of the most serious national security issues the U.S. has suffered in the past couple of decade,” Rosenbach said. “Facebook is making some progress, but it’s clearly not at the rate that they should in order to address pretty serious issues of national security.” Facebook, which at first downplayed its role in the 2016 election and then made repeated privacy and security blunders for much of the past 18 months, no longer gets the benefit of the doubt. The company is making changes and has preached repeatedly that this is a top priority internally, but Sen. Warner believes it has only been thanks to extreme pressure from politicians and the public. “I do believe we’ve seen a change in attitude [from Facebook],” Warner said. “[But] I think their progress has been incremental in many ways.” Warner published a policy paper last month outlining a number of ways he thinks technology companies can improve their election monitoring. Included among his ideas: Alerts so that users know if they’ve received a message from a bot and confirmation that people who list a location on their profile actually live in that location. “I recognize none of this is easy and that none of these solutions are one hundred percent comprehensive,” Warner said. “But I think particularly with this upcoming election, they would be important.” “We’re very serious about this,” CEO Mark Zuckerberg told Recode last month. “We know that we need to get this right. We take that responsibility very seriously.” The tough part is, we probably won’t be able to measure Facebook’s success around the midterms until it’s too late.

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posted 1 day ago on re/code
The two leaders will join an impressive lineup on September 17 and 18 in New York City. We’re only one month out from Recode’s Code Commerce conference, a two-day forum focused on the most compelling innovations in e-commerce and retail. But we’re still adding more impressive industry leaders to the lineup of speakers you’ll hear from during the event on September 17 and 18 in New York City, and I’m extremely pumped about the two we are announcing today. Chobani founder and CEO Hamdi Ulukaya took a defunct Upstate New York factory and a style of yogurt foreign to most Americans and transformed them in just a decade into a grocery industry empire with annual sales north of $1.5 billion. In a conversation with Recode co-founder Kara Swisher, we’ll ask the entrepreneur about the acclaim and controversy that comes with his intense focus on company mission — he gave away up to 10 percent of Chobani’s equity to workers and his company employs hundreds of refugees — as well as the battle to stay independent as Greek yogurt competition has intensified and as Amazon and Walmart continue to squeeze consumer packaged goods brands on pricing. We will also be joined onstage in September by Sarah Friar, the chief financial officer of Square, perhaps the most innovative payments and financial services company on the planet right now. Friar has overseen financial performance that has helped Square’s stock rise nearly 200 percent over the past 12 months. There’s a ton to discuss, from Square’s increased investment in its fast-growing Square Cash consumer service to its ambition to complement its brick-and-mortar payments business with more online commerce offerings. Friar also sits on the board of directors at Walmart and runs the “Ladies Who Launch” event series for women in tech. Last year’s Code Commerce sold out, so register today. See you in a month.

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posted 1 day ago on re/code
On NYTimes.com: Let me answer the question many are thinking: Is he crazy? https://www.nytimes.com/2018/08/16/opinion/elon-musk-crazy-tesla.html

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posted 1 day ago on re/code
Plus, Twitter CEO Jack Dorsey is rethinking how Twitter works so it won’t help spread hate; how air conditioning helped create the modern city; happy 60th birthday to the ageless Madonna. Uber is investing its growth in becoming — as CEO Dara Khosrowshahi put it — the Amazon for transportation, a platform that riders can use to access several different modes of transport. Instead of chasing profitability and expanding its global footprint at breakneck speed, it is building out its next chapter, which includes food delivery, scooter- and bike-sharing, car rental, flying cars, partnerships with transit networks and expanding its rides business in key global markets. Uber generated $2.8 billion in revenue last quarter — a nearly $1.1 billion increase over the same period a year ago, representing 63 percent growth — but it still lost close to $900 million last quarter. [Johana Bhuiyan / Recode] [Want to get the Recode Daily in your inbox? Subscribe here.] Meanwhile, investors have urged Uber to sell off its self-driving car unit, which has lost between $125 million and $200 million per quarter over the last 18 months. Uber does not separate its autonomous-vehicle-related finances in its quarterly earnings reports, but a report by The Information claims that the losses from its self-driving unit comprise between 15 and 30 percent of Uber’s quarterly losses. [Andrew Krok / CNET] Twitter CEO Jack Dorsey said he is rethinking core parts of how Twitter works so that it doesn’t enable the spread of hate speech, harassment and false news. After Twitter put Infowars’ Alex Jones’ accounts on read-only mode for a week for violating its policy against inciting violence, Dorsey also said he was experimenting with features that would promote alternative viewpoints in Twitter’s timeline to address misinformation and reduce “echo chambers,” and said he is open to labeling bots and redesigning the “Like” button and the way Twitter displays users’ follower counts. [Tony Romm and Elizabeth Dwoskin / The Washington Post] Elon Musk’s Boring Company wants to build a tunnel to Dodgers Stadium in Los Angeles from a transit station, potentially offering a 4-minute, $1 ride that would skip all sorts of traffic. It’s an interesting idea, but highlights the tension between proprietary, private infrastructure — useful for 81 days a year, when the team has home games — versus simply investing in better public transit and street design. [Jenna Chandler / Curbed] Seed investor Y Combinator is launching a new Chinese incubator called Y Combinator China, and has named former Baidu COO Qi Lu as CEO. It’s the first full-fledged international effort by Y Combinator, which seeded Airbnb, Stripe, Reddit and Dropbox among other startups. [Selina Yang / Bloomberg] T-Mobile is partnering with Pandora and concert promoter Live Nation Entertainment to offer its customers free music, special seating and other perks in an effort to attract and retain customers without changing its prices. As they battle for customers, wireless carriers are adding such extra sweeteners, without resorting to discounting. [Drew FitzGerald / The Wall Street Journal] PRX and PRI, two of the four largest U.S. distributors of public radio, are merging in hopes of becoming a podcasting juggernaut. No money will change hands in the tie-up. Boston-based WGBH, which bought PRI in 2012 and recently turned to PRX as a partner for podcasts, will invest $10 million in developing new content, including a new production studio and a Podcast Garage in Washington, D.C., to train new creators. [Anne Steele / The Wall Street Journal] Today seems as good a time as any for an exploration of how air conditioning created the modern city. [Rowan Moore / The Guardian] Top stories from Recode Why building a business that’s dependent on Facebook is “crazy.” On the latest episode of Recode Media with Peter Kafka, Digiday editor in chief Brian Morrissey says publishers were naïve if they didn’t think Facebook would eventually put its own interests above theirs. This is cool Happy 60th birthday to the eternal Madonna.

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posted 2 days ago on re/code
Digiday editor in chief Brian Morrissey says publishers were naïve if they didn’t think Facebook would eventually put its own interests above theirs. On the latest episode of Recode Media with Peter Kafka, Digiday president and editor in chief Brian Morrissey talks about how the digital media and marketing business is pivoting toward live events and away from Facebook growth-hacking. Morrissey says he’s happy to see the end of “flimsy, overly engineered media brands,” many of which were overly dependent on other platforms to make money. Last week, Facebook exec Campbell Brown allegedly told a group of Australian publishers that CEO Mark Zuckerberg “doesn’t care about publishers.” Asked about those quotes, Morrissey said that even though Brown denies making them — well, yeah. “The fact is, a lot of publishers made poor strategic decisions,” he said. “You can’t rely on someone else to solve your problems. You have to solve your problems on your own.” “I don’t think many people are going to build publishing strategies and their models around Facebook anymore,” Morrissey added. “I don’t think that’s a bad thing. I think that publishers should build their own strategies and as much as possible control what can you control. Facebook will do what’s in Facebook’s interest. The idea of being dependent on Facebook or being dependent on any other platform is crazy.” You can listen to Recode Media on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts. Below, we’ve shared a lightly edited full transcript of Kafka’s conversation with Morrissey. Peter Kafka: Brian Morrissey is editor in chief of Digiday. Is there a grander title? Brian Morrissey: President and editor in chief. President and editor in chief. I usually just go with editor in chief, though. Do you call it Digiday Media or something like that? It’s Digiday Media, technically. All right, we got all of that out of the way. I think the crossover between listeners of this podcast and consumers of Digiday and listeners of the Digiday Podcast, probably 100 percent. Does that make us rivals? No! We’re co-something, something. Exactly. It’s like a collaboration. Yeah, I think it’d be weird if you were listening to this podcast and not consuming Digiday in some part, because you guys do a kickass job covering the ins and outs, and minutiae, and big picture of digital media. Right? Yes, that’s our mission. Stuff we talk about here, plus occasionally have a movie director in, which you don’t do. You’re a little more- I don’t do it. I keep in my lane. You’re narrowly focused. But thanks, I am a big admirer of you and your work. I admire the fact that when I emailed you earlier this summer and said, “Hey, you want to come on?”, you said, “Love to, but I’m in Serbia,” which is the only time anyone has- As I’m wont to do. No one has ever used that excuse to get out of a podcast before. What were you doing in Serbia? My wife is Serbian, so I go to Serbia every now and again. Because she visits there with you. She doesn’t live there. She does not live there, no, but her parents live there. I mean, however you make your relationship work is fine with me. Yeah, exactly. You’re in New York. I think you’re in DUMBO, right, from your tweets? I am in DUMBO, yeah. You’re someone I feel like I know really well, even though I’ve only talked to you a handful of times, and it’s almost entirely through social media, almost entirely through your Twitter feed. That’s true. Yeah, I’m in DUMBO. I run into a lot of people from the media industry there. Brooklyn, DUMBO. Yeah. That’s what happens. You live in DUBMO. You are a serious runner. What else do I think I know about you based on your tweets? That’s mostly it. Do you do the crazy ultra-marathon? I have. I haven’t in a couple of years. That’s when you run 100 miles. Yeah, I got up to almost 60. Jesus. What happens when you get to 60 miles? Well, for me, I stop. But do you reach a euphoric state at some point in the ultra-marathoning? I don’t know if we reach- Because my understanding of marathoning is, when you’re done running 26.2 miles, you’re tired. Yeah. That’s true. And they wrap you in the silver blanket and you go, “Whoo, that was a lot.” Right. Even the guys who are really good at it, they’re done. But if you pace yourself, you can go longer than 26. I think that’s a great segue into media. Do you do this to prove a point? I remember seeing an interview with Dick Costolo. Oh, you know what it was, it was his 50th birthday. Kara Swisher was interviewing him and saying, “Why are you so intent on this fitness regimen you’re doing?” I’m sure there’s a real answer involving psychology and Freud. But he said, “Well, I work with a lot of younger people, and I want to sort of keep up with them. The average Twitter employee age is 26.” Is this the impulse behind your crazy running regime? Yeah, I have a lot of younger people who I work with. No, I think I always ... I got into running basically just that, as a hobby, and you keep running, and you think well, maybe I can try this. Then at some point you just want to go farther and so you do, and it’s possible to do. It takes a lot of just preparation, and then as long as you do the numbers, it works out. You strike me as full, full, full-on crazy. Is there a professional benefit to this? None. Is there a running group of dudes? There’s a lot of- Is there the equivalent of the golf course? I don’t like to run with other people, so I try not to do the sort of- You can’t do source meetings- ... networking. ... at mile 13. I think the venture capitalists all like to cycle. They’re into the expensive gear. You can get multiple bikes. Here, really, you buy one pair of shoes and you’re done, right? Yeah, you get some shoes, and that’s all you need. Unless there’s some special Vaseline for your sweaty parts, right? Vaseline, Aquaphor. Yeah, it’s basically that, and a headband. That’s all you need. All right. We’ve been running with Brian Morrissey, and that’s the end of the podcast. Thank you, Brian. No problem. Your day-to-day job when not running is ... I think of you as an editorial guy, but also business guy. Am I summing up those things? I mean, not business, just because, obviously, I can’t go out and sell ads or anything like that. Why not? Because there’s still a division between content and sales, but- So you think of you primarily as the guy who puts the stuff on the page, or whatever the metaphor is for the page. No, I think we all know that everyone who is involved in editorial, when you get towards being editor-in-chief or something like this, half your job ends up being business-related. Yeah. I mean, this idea that there is this strict division between what the top editor at any media organization does and the business side is just ... Maybe that existed in the past. It doesn’t exist now, because- I don’t think it ever existed, but you’ll see even Dean Baquet, like “Now I pay attention to the business side!” No. ”That’s been a big shift for me.” That always seemed silly, because these are ... Building a sustainable media business, no matter the size, is really difficult. It’s always been difficult, but it’s never been more difficult. And so you have to make products that are going to make money. Otherwise, you’re going to go out of business. I mean, this is still a business. Okay. We’ll go down this path for a minute or two: I’ll go on a sales call. I won’t literally sell the ad. Really? I don’t. Yeah. I mean, if someone says, “We’re talking to so-and-so, they’re interested in participating in the conference you’re doing, they want to meet you.” And so I’ll say, “Sure. I’ll go talk to them, and I have questions for them, and I won’t extol the virtues of being part of the conference, but I’ll be there with an ad sales person.” I’m comfortable with that. I figure this is a meeting I would take under my own auspices. I’m okay with that. I read ads from Mack Weldon, make fine socks, 20% off with a promo code for Recode. You’re wearing them. I’m wearing them right now. I’m comfortable with it, and I sort of have drawn my own lines in the sand, and I also won’t read ads for other products, and I won’t read ads for any media-related product, and that’s sort of my internal ruler, I guess. How do you set that? Your title is president as well as editor in chief. What part of the business side do you participate in? Mostly in the product. I mean, really, in making products that are going to fulfill business goals. To me, that’s what my role is, rather than in the day-to-day of the sales. I think in coming up with packages that people are willing to spend money on, and that deliver value to them, and don’t in any way, sort of, hopefully, harm the user experience, or in any way infringe on our credibility, so I think that’s basically- What about the middle ground where someone either comes to you or you come to them and says, “Hey, so-and-so is interested in sponsoring a package about X.” This is a fairly standard trade publication sort of thing to do, either because a sponsor said, “We were interested in having our name attached to a bunch of stories or videos, or whatever, about X, can you make these things?” Theoretically, they keep arm’s length distance from it. Or you actually say, “We would like to create something, can our ad people go out and find a sponsor for it, we won’t make it if that happens.” That’s a newer version of that. Do you do either of those? The latter, for sure. I mean, I think that’s a normal- Built if sold. Yeah, built if sold, and just making sponsorable products. To me, that’s what it is. And on the event side, obviously, with events it’s a little bit different, but not that much different. So let’s pull back. You went to Digiday six years- Seven and a half years ago. Seven and a half years ago. All right. Almost got the math right. Prior to that, you were at Adweek. Adweek, yeah. As a reporter. Yeah. I was digital editor, but I didn’t edit anyone. I’ve covered the industry for a long time, I guess, and I was at Adweek for about six years, I think it was? And I was looking for something new to do. Have you done anything that wasn’t covering the business of digital media? I was a researcher for a speech-writing firm in Washington, DC for two and a half years, directly out of school. That’s on your LinkedIn. It says “White House” something, but it didn’t mean- Yeah, yeah, no, no, no. It didn’t mean you worked at the White House. No, it didn’t. But weirdly enough, one time, because of that, Omarosa added me on LinkedIn. She thought I, I think, worked at the White House. Have you tried messaging her? No. I went back to find it, and I think she ... I don’t know, what, do you unfriend someone on LinkedIn, un-connect, disconnect? I just got a friend request from the woman who sings the song about Havana. Okay. That’s a little random. Whatever that song — I think her name is Maria something. And I assumed it was a BS thing, but I looked, and it actually is her account. I don’t know why. That’s LinkedIn. No, no, that was Facebook. Oh, Facebook, sorry. Well, that can be Facebook these days, too. I’m an influencer. So you went from Adweek to Digiday. As I recall, Digiday was, I’m going to be polite, a second- or third-tier industry trade. Mm-hmm. Well, it was mostly an events company, right? I mean, Nick Friese is our founder, started Digiday about 10 years ago, no funding, just his own savings, and I think he took an early withdrawal on a 401(k), not to be recommended. But he started it with events, because as you know, to build media from scratch is really hard, because you need an audience before you can get advertising. Events are difficult, but it’s easier on the business side. He filled a room with about 50 publishers, I think it was, who were trying to figure out how to make money. See, I find a lot of people who look at events and go, “That looks great,” but then they take a look at it and go, “Oh, this is way harder than digital publishing. Digital publishing, I put something on the web, or wherever the canvas is, and I made it once, and then I can resell it as many times as I want, and sell ads against it, and my costs are super fixed, and I can’t get into too much trouble,” whereas at the very basics, right, renting a room- Yeah, yeah, no. It involves- ... and getting an AV guy in, right? You’re already in the hole a bunch, and maybe no one shows up, it’s a disaster. I think a lot of media companies are finding that now as they’ve sort of pivoted to events, since advertising has become less attractive as the main part of your revenue model. And actually, I joined ... And Nick and I talked about, he always wanted to build it into a media brand, but events were the basis of it. And I thought it was really attractive, actually, to use the events as the basis of a media company. Usually it’s the opposite way around. And actually, that was because of AllThingsD, because- Oh, no, what did we do? Well, no, because I think what you guys were doing within News Corp at the time was really interesting, in that the events were a platform that was being used to power the brand, and so it not only is a really good economic model, but I think it provides a lot of advantages when it comes to building a kind of a community, if you will. So he was running ... Again, my recollection of the Digiday events is they were really focused. Yeah, super focused. So you weren’t getting the CEO of Company X. Sometimes you would, but very often it was the CRO or someone down the chain. Yeah. Now, it was always very ... Yeah, because the media industry ... The media industry is very strange in a lot of different ways, but one of the ways is that sometimes the people at the top are not as powerful as the people like three rungs down, because the people three rungs down are making spending decisions. Nick was always really smart about getting ... because his background is from the business side, is getting really close to the transaction level, and so the transaction level, when it comes to agencies and stuff like this, is the media supervisor and stuff like this. It’s not the- This is the famous slash infamous 26-year-old media buyer. Well, it’s- But above, that person’s boss. Yeah. Yeah, that person’s boss. And not necessarily the sort of Chief Digital Officer or some figurehead who goes around from place to place. So you have fairly small rooms, very tightly-focused audience, and then you charge not a ton of money to attend these things, either. It was a different model than- It was a different model. ... the AllThingsD model or at the time there were sort of versions of ... Mashable would sell you a $1,000 ticket to hear from thinkfluencers, and I think most people who went there probably were unemployed. Yeah. Could be. There’s a lot of that going on with events. It’s funny, because we started doing these events ... I think we were talking about ... We were doing them in New York and a couple in L.A., and basically what we found was they were great for generating a fair amount of revenue, but your costs got out of control, because things are so expensive in New York and in L.A. Hotels and events spaces are really expensive. I remember one time we did an event with box lunches and we were paying $40 per box lunch, and I was saying to Nick, “Forget about this, let’s go into sandwiches,” I mean, let’s skip the media part. But then we started doing a different model, which is more akin to AllThingsD or Recode, with more summits and ... we call them “summits,” but just things that are ... It’s hard to get people focused on anything nowadays, and so our model has always been to get people away so we can control the audience and stuff like this, have them in nice places. Yeah, that part we tried to do most often, because often people will say, “Well, why don’t you have it somewhere more convenient?” and we say “No, that’s the whole problem.” Yeah, they leave for a meeting, because there’s always someone ... And you have that abandoned name tag problem. If you go to events in cities, you see it, there’s just all these empty name tags of people who have found something better to do. It’s very sad. It is sad. It’s a sad thing. And there is a part of the business market that says, “Well, if they paid you $1,000 or $2,000, and they leave, who cares?” That’s true. It really depends on- That’s a terrible idea, but you hear that. You hear that. But it’s a little bit transactional. Yeah. I mean, it sounds kind of cheesy, but I really do think events as a basis to build media is important because of the community aspect. Some people look at businesses that have events as an important part of their model and they say, “Oh, it’s not scalable.” It’s like well, yeah, it’s not an iPhone. But you can build very nice businesses in which events are a big part of it, and I think one of the ancillary benefits is this community. Look, we’re coming out of this period where there have been a lot of flimsy, overly engineered media brands, that I call them. And by overly engineered, I mean either financially engineered using venture capital — “I’m going to take $80 million in venture capital and build a $60 million in revenue business that loses money.” That’s one way to do things. Or, they’re overly engineered in using a lot of growth-hacking tactics on Facebook in order to get audiences. They’re overly engineered with their ad models. But with an events model, you have more direct connections to your audience, and I think- You know who that person is. They know who you are. They’ve shown up. They’ve made a commitment of both their money and their time. Yeah. You’ve actually met them. I mean, again, people say, “Well, that’s not scalable.” Well, that depends on what your area is. I mean, Digiday, as you said, we’re very focused on how the media and marketing industries are being changed by technology. It’s basic. I apologize to anyone who’s bored, but this is my education about how the ... another version of the events business, but I remember you guys did a ton of events, so many that I literally couldn’t understand how you were mounting them. It seemed like you were literally doing multiple events a week. You’ve stopped that pace, right? Yes, we have. Okay. Although I think we’re going to do something like 50 events, I think, in the next year. So you’re still doing one a week. At some level, probably. And even if you’re just like ... have- We have one on Thursday. ... Ballroom C in the whatever Hilton, that still takes people to market it, and put it on, and show it up, and break it down. It’s just a lot of labor. Well, that’s true, but the advantage is, if you have an infrastructure ... At some point, if you have an infrastructure built to do 30 events, you have an infrastructure built to do 50 events. You already have the infrastructure in place, and I always used to joke, and I still joke, that our competitive advantage when it comes to events, when everyone sort of rushes into events, is that we’ve committed every atrocity possible when it comes to an event. You’ve stepped on all landmines. Yes. The problem with a lot of people who move into events is if they do two a year, is they don’t have enough time to fix screw-ups. So I think that’s a big advantage, having done so many of them, and now we have a team that handles pretty much all of it. Shout-out to the teams. Yeah. I want to ask you about the content part of what you actually do. I thought that Digiday was publishing before you got there, but there really wasn’t a Dig — Yeah. There was something. Yeah, yeah. But I’m just saying, the model was mostly around the events. You show up and say, “I would like to spin this up into a full-fledged news operation. We’re gonna do feature stories, we’re gonna break news. We are gonna be an incredible source of industry information that is both useful to insiders and also people who don’t pay attention to stuff day to day,” which is where you’re at now. That’s seven years later. Yeah. Hopefully. How long ... I say, obviously, it took you seven years to get there, but how long did it take you to break to the point where you’re doing what you want to be doing? I would say it took a year or so. That’s all? I mean, I think so. It’s hard to go back. The basic idea in getting started, ‘cause I know there’s a lot of people — media’s an over covered area, let’s face it. Yes. I don’t know if you noticed this. Yes. Shh. The part that I thought was an opportunity, and Nick and I did, and then Mike Shields, when he joined us, was that a lot of trade publications existed in this model in which they were, one, boring, and two, they were cheerleaders. That’s why you get the 40 under 40 lists, because they’re trying to sell congratulatory ads for ... This is a well-known trade model. You do some lists and then you go to that person’s company or their clients, and the congrats ad is in the magazine. ”Congratulations, you can pay us money.” Yeah. I saw that and I was like, “That has very little economic value.” I think that model existed because the industries were fairly static. What’s going on with media and how much it has changed is the role of a “trade publication” is totally different. I don’t think anyone makes a separation of the type of content like, “Oh, I read this content for my work purpose,” or this because I’m really interested in this hobby, or running, or something like this. It’s all kinda of similar. The role changes in a very fluid environment to be more honest about what’s going on, and particularly the challenges that have been going on with media. Now, there’s a lot more focus on it. I know seven years ago people didn’t like to talk about all the problems that existed. They were saying, “Oh, well you’re not being supportive,” and stuff like this. So you got that feedback right away ‘cause right away you published ... You have a great series, The Confessions. You talk anonymously to a publisher, an ad buyer, whoever, and they give you the straight shit. That seemed to be a trademark of something you guys were doing right away. Yeah, I mean it’s ... You were getting push-back against that? Of course. Because people didn’t want ... There’s a lot of people who have interests in problems being glossed over in the media industry. I think it’s in many industries. There’s an opportunity, I think, to just be a little bit more honest about some of the challenges because we have it in our mission that we want to create change in media and marketing, and to make it a much more healthy and sustainable system. A lot of the things that we were all told when the internet and publishing combined, have really not turned out. Like? We were supposed to get all this great content. It was gonna be free. It was gonna supported by advertising. There was gonna be a long tail that enabled every single, thousands of voices to bloom. Advertising was going to be relevant and it was going to be ... We would not see dog food ads when we own a cat. I am not a cheerleader in any way. I think much more of that is actually happening than we thought. We’re in it so much that we’re disappointed with it, and then also lots of the really obvious negative — I don’t know if “side effects” is the right word — results of that have show up, and there’s lots of publications that have not succeeded. The long-haired Persian cat magazine dot com does not exist, or maybe it’s just a Blogspot. It’s barely maintained. If you could go back and compare this to the landscape in 1992, we’re probably way better off. With the glaring exception of local news, which it’s just a total failure and we’re all gonna die because no one was watching TV locally. That’s a pretty glaring failure, isn’t it? Yeah it is. It is. That part sucks. Yeah. The part where we’re all gonna die. But yeah, I stipulate that things have no panned out in some ways. But you are producing a publication that I read for free. I don’t subscribe. We have to change that. Yeah, there’s a Digiday Plus- Yeah. -version, and that gives me what? We have exclusive research, we have exclusive content. Each day, there is at least one story that is exclusive to Digiday Plus subscribers. How many folks are reading you for free, on a daily, weekly, monthly, yearly basis? For Digiday, like a million in a month. Million. Then how many people are paying you? Thousands. Are the thousands ... Do the million free readers, are they generating revenue for you, or is it almost entirely through the subscription business? Yeah. We make money a whole bunch of different ways. That’s the thing with media, is we cover it but we also live it. We don’t have venture capital backers, so we fund ourselves through profits and we have to ... Through running a business. Yeah, business. It’s the old-fashioned way. We got to support 80 people doing that, so it’s non-trivial, I would say. 80 people, no VC, no outside funding? Nope. Nope. You’re now an owner/funder? No, it’s still Nick’s business. It’s Nick’s business. There must have been a desire to take on some money, especially a few years when everyone was throwing money at media companies. No. Not really. Mostly just because ... We have a small outside investor, who owns a small percentage of the company that just ... When we were building out the publishing arm, we needed some money to hire some people. Being independent has been beneficial because there was a lot of things that, it helps keep you focused on the stuff that really makes a difference to the business versus chasing the latest trends, and pivoting to video, or pivoting to anything that wasn’t going to make sense for our audience and for our business. That’s been beneficial. It feels to me like ... Again, I’m not paying you, but I am a pretty close reader. It seems like sometime, maybe three years ago, two years ago, you guys really took a big leap in terms of the kind of stuff you were publishing. The cadence was getting better, smarter. You’re breaking more stories. Did something happen there? I don’t think so. Look, you end up ... Building these things is really hard. There’s also a lag where people notice things almost like a year or so after, really, they’ve happened in some ways. That’s how brands get built in some ways, because are like, “Wow, you guys all of a sudden are doing amazing stuff.” I’m like, “Really? I thought we were doing better like a ...” Yeah. Internally, you can’t ... It’s the flip side, you can’t actually see it when you’re ... internally. Right. Right, you don’t actually see what’s happening. You think you see what’s happening. Yeah, but it’s just a matter of getting the best ... Again, it’s like clichéd, but they’re clichés because they’re true. You get a good group of people and then they’ve been working together for a longer period of time, and everyone’s on the same page, and so, it helps. You’re talking about focus. The last time I wrote about you, it was, a couple years ago, when you guys were announcing, I think it’s called Glossy. Yes. Was it a print magazine? No, no, no. Glossy is ... You have a print magazine. Glossy was a ... You tell me. Yeah, this is a new brand. That’s why it’s digital media. Obviously the story’s stuck in my head. Yeah. Basically, what we saw was we were doing this for media and marketing going through all these changes, and that there are other industries that have similar dynamics. For us, the best industries to focus on are those that are culturally relevant in some ways. Fashion and beauty was actually an industry that was really attractive to us. How’s that going? It’s going well. We started with fashion, and now we’ve added on beauty and wellness. I know you’re into wellness. ’Cause those are tough ... It seems like those are difficult businesses for people to get their head around turning in ... Making a business out of covering the business of things is harder than it looks. Our colleagues who were at Racked have gone back and forth about how to handle that. I think business of fashion is doing pretty well. Subscription only. Yeah. It’s working for you guys? Yeah. It’s definitely working. When you say there’s a reason to do things that are “culturally relevant ...?” ’Cause look at why do people other than journalists loving journalism. Media is over-covered in some ways. It’s because it’s a sexy industry. It has ... Right, so there’s the people who are in the business who care about it, people who might want to invest in that, and there’s ... What about the people who don’t read about it day to day, but might be interested in some article you wrote ‘cause it’s on TV? Look, our core is always gonna be people who read us because that’s their job. Even though writing about on the business of microchips or plastics might be just as relevant. Petrochemicals is a gigantic industry. Gigantic business. It’s never gonna have an audience of more than a few thousand people. I’m sure it’s going through wrenching change right now. I just think that culturally relevant industries end up being a better fit. Was there an extension that you guys have tried that hasn’t worked? We tried finance. It might have been at the same time. We did it through a partnership and it didn’t work. There’s a whole bunch of different reasons why it didn’t work, like internally, we had a really good team on it, and we built a really good team. The partnership aspect was difficult. When you’re a small company, you start to realize that partnerships, you tend to do better when you control as much as you can. But also finance was too far outside of our core, probably, in some ways. Whereas fashion and beauty really overlap well, particularly with the marketing side of our coverage. It’s mostly brand marketing. That to me was a good lesson for how we expand into new areas, ‘cause we want to keep building different brands. Is there component to the fact that you are self-funded, that the money you make is the money you make, that there’s no outside cash coming in to float you. How does that figure into the risk calculation you make when you say, “We want to try a new thing. It’s gonna involve hiring X number of people committing these resources. It could go to zero.” I talked about a lot of the benefits of being an independent company. One of the challenges ends up being that you don’t make gigantic bets because you can’t too far ahead of yourself on revenue. A lot of times that’s good. We didn’t spin up a giant Facebook Live team or anything like that. But one of the challenges is, you’ve got to make fairly measured bets. Glossy, I think, now we have like five people on it. Sometimes you have gigantic opportunities, or ones that you see, but that you can’t put a ton of resources against. And you live with that. You say, “This is the downside of being a modestly profitable operation.” Modestly? No, I’m just kidding. A profitable operation where “We’re not swimming in cash, and we can’t afford to hire 20 people on a guess.” Yeah. It implies ... It enforces discipline. But obviously, the obvious pairing to that is sometimes you can’t make as big of bets on things as you want. There’s tons of industries we would like to expand into, but we have to be pretty cautious about it. Same thing with geographies. We’ve been in the UK and Europe now for about four or five years. We’ve got a team over in the UK, although they’re visiting us this week. We’re in Japan and a little bit of Australia, but there’s tons of different geographies we want to go to. We talk about that with events all the time and the risk/reward of doing something in China, or Europe, or Israel. Tons of opportunity there, but a ton of distraction, and a ton of resources. Right. You have no idea about ... That’s why ... We have a Japanese site, and we have great partners in Japan that take on most of that, where we would have no idea. It’s finding those partners. But then you don’t have ... If you’re a small company, you don’t have an entire team handling that. It’s you just do it yourself. Everyone does a bunch of different jobs. We’ve been talking around Facebook a lot. Let’s talk about Facebook and how you view them. Generally when it come ... My cynical sense of just how corporations in the world works is, when you have a company that’s been beat up for a year like Facebook has, it’s going to inevitably swing back. In a couple years we’ll go, “Well, that was weird when we all overreacted to the election stuff, and fake news stuff, and Mark Zuckerberg being okay with holocaust denial.” But maybe that’s not the case! Maybe there’s been a tipping point. Where do you come down? I think it’s hard to talk about Facebook as one entity, particularly when it comes to media. I fall into the trap all the time, myself, and I try to make sure that we don’t. But because there’s so many different ... Facebook is so big and there’s so many different constituencies, and I’m sure that there are some constituencies that are really into mending its relationships with publishers. But at the end of the day, Facebook is, probably rightly, all about Facebook’s interests, and those interests sometimes align with publishers, and often times they don’t. Let’s break it down. There is the Facebook publisher story which people like myself have over-covered, for years ‘cause ... Why do you think it’s over-covered? Because I think there is a handful of publishers that care a lot about it, and some of their readers are cognizant of it. It’s an important story, but I think we probably over ... ‘Cause we’re writing about ourselves. Same reason the media broadly is over-covered. There’s that story, there’s the Facebook and advertising story, which is a much bigger story. Then there’s the story — which I feel very bad about really, just ignoring for almost the entirety of Facebook’s existence — is Facebook and the world. The actual impact that Facebook has on people, not industries. I guess we could make more categories. Let’s start with one. The Facebook publisher story, there’s a great story out today about something Campbell Brown — She’s denying it. She’s deny ... You can go back and look this up at the time, but there’s some particularly ripe comments associated with Campbell Brown who’s supposedly the peacemaker on behalf of Facebook. This is, the specifics of the language I haven’t heard before, but the tone and gist and directional is exactly what she’s been saying for a while. Which is, which is ... To be fair, I don’t it’s a bad message for a publisher. Publishers ... Right. Just to fill in the gaps in case you’re not gonna be doing your own Googling, she has said in the past and supposedly said at this meeting, “You guys are kind of on your own, publishers. We’re gonna ... “ ”Stop blaming us for all of your problems.” ”... Stop blaming us. We’re gonna help you in varying ways, but we’re not gonna solve your problems.” No, and nor should they. The fact is, a lot of publishers made poor strategic decisions. With the encouragement of Facebook, is part of the problem. Sure. Yeah, that’s fine. But everyone runs a business. You can’t rely on someone else to solve your problems. You have to solve your problems on your own. Many publishers were all too happy to take Facebook’s traffic, to build their strategies around Facebook’s strategies, and then they were shocked — shocked! — when they found out that Facebook did things in their interests that were not necessarily in the publishers’ interests. To be fair though, Craigslist, which had a huge role in decimating the newspaper business, never got this kind of enmity, in part because Craig Newmark never walked around saying, “I’d like to hear more about your concerns and maybe there’s a way we can work with you” and “I’ve got a new pilot program,” or, “Here’s some funding if you all create” whatever the equivalent of live video for Craigslist would be. He never did any of that. He just went ahead, and sucked up all their money, and shrugged. Now he’s getting a couple bucks back. Facebook did this thing where they periodically went out at conferences or wherever and said, “We’d like to hear more about your concerns.” No, without a doubt. That’s the thing is, Facebook is so big that they have a lot of people who would go out. I remember a publisher saying, “They hire nice people to say nice things to us, and the next day, they take decisions that are completely contrary to our business interests.” That’s just because Facebook is gigantic. It’s a whole bunch of different factions. Grin-fucking, I think is the term we use in public. Maybe now, I think Campbell Brown’s job as far as I understand it is to make nice with publishers, but she’s doing it with tough talk. That’s why it sounded credible, as far as, I don’t know whether she said it to those Australian publishers or not. You think that ship has sailed, like a sloppy metaphor. Facebook is now going on its own direction. No one’s under any illusions about that on the publishing side. It is what it is. I don’t think many people are going to build publishing strategies and their models around Facebook anymore. I don’t think that’s a bad thing. I think that publishers should build their own strategies and as much as possible control what can you control. Facebook will do what’s in Facebook’s interest. The idea of being dependent on Facebook or being dependent on any other platform is crazy. What about on the ad side? It’s only a couple quarters in. The ad guys don’t move that quickly, but there doesn’t seem to be any evidence that any of the negative news around Facebook over the last year has affected advertisers’ interest and willingness to use that platform. Advertisers are really just looking at results, and until Facebook becomes less effective to whatever results those advertisers are after, I don’t think that will change. When we see the last quarter, you saw growth actually slowing in North America, which obviously ... Which is curious. But obviously it’s going to, right? Yeah. There’s only so many people in North America. Pretty much all of them have been exposed to Facebook at some point. That’s true, but Google and Facebook can both, to some degree, engineer results. Google famously never gave guidance, but they always changed things in order to hit numbers because they would just put more ads on a search results page. This is a user number, but the point is ... Yes, user number, of course. If you’re trying to gauge the health of Facebook’s business, I read a lot of hot takes over the last couple weeks saying, “This is the, Russia or whatever has finally caught up to them.” This is going to be like predicting the “year of mobile.” Eventually, people are going to be right. I don’t even think that’s true. I guess if, en masse, people really stopped using Facebook, and it’s easy to find the trend ... I think Kara Swisher right now is working on a trend story where she’s going to quit Facebook. Eventually, Robert Scoble, I’m sure, will as well. I don’t use Facebook. I use it, it’s where my kids’ pictures to go. Now they show me pictures of my kids that I posted eight years ago. It’s this amazing feedback loop. There’s no reason to think that its power as an advertising platform has or will diminish. Not right now. It doesn’t show up in results. Mostly because it’s the best alternative out there. It’s like Google and Facebook are getting all of this ad money because they’re doing a better job for their advertisers. And then Facebook is a global entity. It’s a thing that has more power than some governments, but isn’t really regulated in any sort of meaningful way. Do you think that continues on, or do you think they actually are going to be reined in? I know there’s the GDPR in Europe, but that doesn’t seem like that really fundamentally changes the way they do business. No, I don’t think GDPR is going to be the thing that changes the power equation, but I do think that governments, particularly in Europe, have a lot of interest in rebalancing the power when it comes to Google and Facebook. They’re not scared — Do they have the ability to actually do that? I know they can effectively tax them a lot, but they make a lot. It’s a $5 billion Google tax. Yeah. That’s like nothing. The settlement? It’s almost literally nothing for them. That’s one of many. I wouldn’t discount the severity of, or at least the intensity of Europe’s distrust of Google and Facebook because, look, there’s a lot of people in Silicon Valley who will say, “This is because Europe lost. They lost. There’s been no giant digital technologies that have come out of Europe. They’ve all come out of Silicon Valley, and so Europe is going to do what Europe always does, which is regulate and tax.” That’s one. But there’s also the belief that the power of the platforms, particularly in Europe, is such that the governments will step in. When it comes to privacy ... And can step in, in a way that meaningfully affects the way they do business and/or their business trajectory in the way that the U.S. Department of Justice did with Microsoft 15 years ago. Yeah. It’s very similar to that. Do you think we can and will see a replay of that? I don’t know if we will actually see it because ... We could. I think it’s definitely a possibility. You can’t go to Europe much and not hear people wanting to have these gigantic platforms that are from the United States be severely regulated, and the Germans will act in that way. They’re serious about this. GDPR was, I think, an interesting wonky ... I jokingly promised a GDPR conversation, and here we are. It is an interesting wonky thing. Again, I can’t image that most people who listen to this podcast don’t know what it is, but for those handful that don’t, it is? The Global Data Protection Regulation. Went into effect this summer? Yeah. And whenever you go on your favorite website or not-favorite website and you’re presented with slew of EULA stuff that you’re suppose to “X” quickly. That’s the effective result for most Americans. Yes. Bizarrely complicated, very European piece of regulation that is supposed to give people more power over how their data is collected and used. The idea broadly was, the way that the internet advertising complex has been set up for years is, “We take all your information and do whatever with it. If you really have a problem with it, you can opt out, but good luck trying to find out how to opt out, and good luck trying to find that little icon on that banner ad.” And anytime anyone asks any questions, everyone will just say, “Well, the direct mail guys are sketchier.” Right. Which is true. The Journal had a long series years ago. Yeah, no one cared. They really couldn’t find gross abuses, for the most part. It didn’t seem like human beings actually cared. Seems like that might have shifted, and so GDPR as a result is an attempt to say, “Actually, we’re going to rewrite this. You’re going to have to opt in and say, ‘Yes, take my information.’” It seems practically like we’re still living in that same place though. It is very early with GDPR to see what the impact is going to be. I think at the very least, it caused a lot of companies to think a lot about how they use data. Companies of all sizes. I’m sure Vox Media had a lot of people working on GDPR. We certainly did, because anytime you collect anyone’s data you have to really think about how you’re using that data, and whether or not you’ve given people an affirmative way to opt out of that, and whether you’re just being upfront with people. I think the overall impact could be that the use of data will become slightly less wild. We’ve gone to this period where a lot of people are just collecting data just to collect data, and they’re not being upfront with people about how it’s used. This is why the ad tech world has grown so complicated, and so many different players [are] collecting data in so many different ways. Right. You’ve got Cambridge Analytica, which the most gross abuse of this, I think, to the public, where Facebook was effectively collecting your data and effectively not really asking for permission. We saw it misused. It gets misused in all sorts of milder places. My totally uneducated hunch is that if you ask people about privacy and internet, they say, “Yeah, I don’t like it when I go to Zappos, and either buy the shoes, or don’t buy the shoes, and the thing floats around after me.” Or, “Privacy’s a big deal. I know Facebook is listening me to talk, and that’s why they show these ads.” It doesn’t go much beyond that. Do you think it’s reasonable to ask a regular consumer to think seriously about privacy and what it means to them? No, and I think that’s why ... Look, I don’t know if GDPR is going to work, but the idea behind it, as I understand it, was that it would make people not have to do all that. You had to either be really into privacy or just not care at all. Those are basically your two options, and occasionally complain about retargeting. I don’t know how we’ll get to the point where people are not taking on a side job in managing internet privacy settings, but at the same time can have a say in how their data is collected and used. Joanna Stern of the Journal did this great stunt where she printed out all the EULAs from, I don’t know, 20 top sites or 11 top sites and literally stretched them across a football field. It must be gigantic. Yeah. It was a great stunt. We have not spent almost any time talking about Google. They’re the other half of the duopoly. It seems to be Facebook’s time in the barrel, as Roger Stone would say. YouTube got beat up last year when people discovered, people’s a good question mark around that, or a good parenthetical around that, there were crummy ads on YouTube sometimes next to clean content. But they don’t seem to be suffering the same problems that Facebook has or did. Any idea why they’re being treated differently either by government or public court of opinion? I think from publishers’ standpoint, it’s funny because Google has almost a more dominant position because Google controls the technology that most publishers use in order to make money off of their ads. Right, and enormous power in directing traffic, which they’ve had forever. So long that people have forgotten about it. Right, but Google has more control over publishers and many companies, and there’s actually probably a better case to regulate Google on the basis of their advertising technology than there is Facebook. Facebook can control your traffic, but they can’t really control how you monetize it for the most part. Regular people don’t really dig into the Google ad tech stack, which I don’t blame them. Look, Google has been able to make nice with publishers, which has helped it. Whether that directly translates into coverage of it, that’s up for debate. But look, they just let Facebook take all the punches. Yeah. It’s weird because they didn’t seem like a particularly savvy political player for a long time. Yeah, but then Microsoft. It’s well documented that ... Yeah. Then Microsoft beat up Google a ton. They tried to get Google. They were trying to get them broke up? Yeah, there was a whole ... I don’t even remember. There was a series of Microsoft v. Google stories, and there was a well-documented series of trips by people from Google to the Obama White House. Right. They got savvy about Washington. They had like two people in Washington, and then I assume they just like hired all of the lobbyists and lawyers that Microsoft had hired in order to fight against the breakup, and so they just switched to the other side after that ended. I fear that we’ve been too gloomy for this conversation. What are you most excited about? Either stuff you cover or stuff that’s coming down the pike in the business? Look, I’m most excited about coming out of this era of flimsy media models that were too dependent on platforms. I think there’s a lot of people making it work in media. As we said, it’s really hard, but it’s possible. I know we traffic in some of the doom and gloom, and we do love a good autopsy story of a media company that made a lot of bad decisions and went under. But there are a lot of media companies, some smaller, but some larger that are making it work. They’re doing it through having diverse business models and strong brands. What media company are you most interested in right now who’s not in this room? Not us? Not you? Yeah. I’m interested in all the media companies that are making it work when it comes to direct consumer revenue. Everyone from the Information to the Athletic because I think for too long media has overindexed on advertising, and through indirect revenue sources, I know there’s plenty of arguments for why that’s important to do and accessibility. I think to have like a really healthy media business, it is so much more preferable to have a large group of your user base paying for your products. Do you think that just gets baked into media from now on, that if you’re running a media business, the consumer’s expected to pay for at least part of the costs? Yeah. That’s just the starting point? I think that’s going to be the starting point for just about all media business. How much would you pay for this podcast? We do early access to ours for our members. I like that one. I don’t know. Actually, it’s funny because I’ve wanted to do a subscriber-only podcast, but again, this is a technology problem. There’s no easy, unless you have your own app, as far as I know there’s no easy technology that allows you to have a subscriber-only podcast. That’s like Patreon basically, right? Or versions of that. Yeah. This is also, there has been so much money that has gone into the advertising technology world, but then we start to build a subscription business, you start to realize how comparatively little money has gone into the basics, the basic technology infrastructure for subscribers. Billing? Yeah. All of it. It gets incredibly complicated really quickly. All right, guys, Brian had just given you a new business model to pursue. Start pouring money into it. There’s a couple. We’ll save that for the second podcast. Thank you, Brian. Thank you, Peter.

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posted 2 days ago on re/code
The ride-hail company isn’t chasing profitability yet. Uber isn’t expanding the global footprint of its ride-hail service at breakneck speed anymore. It also isn’t close to being profitable yet. That’s in large part because the company, under CEO Dara Khosrowshahi, is spending a lot of its money building out its next chapter, which goes far beyond ordering car rides with your phone. The Uber of tomorrow includes food delivery, scooter- and bike-sharing, car rental, flying cars, partnerships with transit networks, plus expanding its rides business in key global markets such as India, the Middle East and Latin America. “Cars are to us what books are to Amazon,” Khosrowshahi has said. Just the beginning. Fortunately for Uber, its business is still growing rapidly — though a bit slower these days — putting it in a position to invest in these newer areas. According to financial documents supplied by Uber, the company generated $2.8 billion in revenue last quarter, a nearly $1.1 billion increase over the same period a year ago, representing 63 percent growth. (That’s down from 70 percent year-over-year growth in the first quarter.) But Uber still lost close to $900 million last quarter, down 16 percent from a $1.1 billion loss in the same period a year ago. “Going forward, we’re deliberately investing in the future of our platform: Big bets like Uber Eats; congestion and environmentally friendly modes of transport like Express Pool, e-bikes and scooters; emerging businesses like Freight; and high-potential markets in the Middle East and India where we are cementing our leadership position,” Khosrowshahi said in a statement. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["FxqaX"]={},window.datawrapper["FxqaX"].embedDeltas={"100":665,"200":581,"300":550,"400":550,"500":536,"700":536,"800":536,"900":536,"1000":536},window.datawrapper["FxqaX"].iframe=document.getElementById("datawrapper-chart-FxqaX"),window.datawrapper["FxqaX"].iframe.style.height=window.datawrapper["FxqaX"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["FxqaX"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("FxqaX"==b)window.datawrapper["FxqaX"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); It’s not exactly a surprise that the company continues to lose cash. Uber executives have been vocal about their plans to pour funds into growing the surprisingly successful UberEats food-delivery business while strengthening their position in the Middle East and India. UberEats, for its part, is already in more than 290 cities. At Recode’s Code Conference in late May, Khosrowshahi said that Eats is growing 200 percent at a $6 billion bookings run rate. The company doesn’t break out how much it spends on specific businesses, but a recent report from The Information indicates that losses are “low single digits as a percentage of gross bookings.” As for its global footprint, winning in the international markets it hasn’t already exited remains especially important. (Uber’s most recent exits include deals with Southeast Asian rival Grab and Russian competitor Yandex, which combined to generate a nearly $3 billion gain for Uber in early 2018.) While the Grab deal was in part an admission that Uber couldn’t compete with its homegrown rival, it was also a sort of call to arms in markets like India, Latin America and the Middle East. On top of that, Uber has invested in becoming, as Khosrowshahi put it, the Amazon for transportation — a platform that riders can use to access several different modes of transport. It’s a critical part of creating a viable alternative to personal car ownership — and thus more of a reliance on Uber. To that end, in addition to acquiring Jump Bikes for about $200 million, Uber has also participated in a $335 million financing round for scooter-sharing company Lime. Under that partnership, Uber will let its users rent Lime scooters in its app. This is all in the lead-up to a potential public offering, which Khosrowshahi said will happen by the end of 2019. It’s critical that the company is able to show that there are new viable growth opportunities while continuing to build out existing revenue streams. “I think being able to demonstrate [to investors] that we are a company that is able to deliver multiple growth engines and is able to incubate and execute upon a few different opportunities; I think that’s a really important story,” Uber COO Barney Harford previously told Recode.

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posted 3 days ago on re/code
Plus, the co-founders of Tinder and FanDuel are suing their parent companies; HQ Trivia jumps from smartphones to Apple TV; and will it be money or luck? It’s the summer of the Megs: Startups raising upward of $100 million or more used to be a unicorn-level rarity. Now it’s practically routine — there were 273 last year, and even more projected for this year. The jump in oversize investments is led by relatively new investors, including the Japanese conglomerate SoftBank, Chinese companies and sovereign wealth funds, who want to put their money down before young companies go public. The limitless pots of money are changing the normal way of building a tech company — they risk becoming too reliant on funding and never finding a path to profit. [Erin Griffith / The New York Times] [Want to get the Recode Daily in your inbox? Subscribe here.] Tinder’s co-founders are suing IAC, the former parent company of the popular dating app, for at least $2 billion. Co-founder Sean Rad, along with eight former and current Tinder execs, says IAC purposefully deflated Tinder’s valuation in order to avoid paying him. Meanwhile, FanDuel founder Nigel Eccles didn’t make a dime when the fantasy sports site was acquired by a European gambling company earlier this year. Along with three other co-founders, he’s suing in Scottish civil court, demanding that the company be revalued, and is looking for more than $120 million. [Kurt Wagner / Recode] Uber named Matt Olsen as its chief security officer, replacing Joe Sullivan, who left last year amid controversy over his handling of the company’s data breach, which affected 57 million riders and drivers and involved a payout to hackers to keep quiet. Olsen previously served as National Counterterrorism Center director and National Security Agency general counsel. [Kate Conger / The New York Times] Chinese telecom companies ZTE and Huawei have been largely banned from use by the U.S. government and federal contractors after President Trump signed the John S. McCain National Defense Authorization Act. Both companies were called a national security threat by a 2012 House report, and heads of U.S. security agencies have recommended against using their products. [Jacob Kastrenakes / The Verge] The FBI has warned U.S. banks that ATMs will likely face a coordinated global attack by criminals in the “coming days.” According to cybersecurity blog Krebs on Security, the FBI was tipped off that cybercriminals would hack payment card processors or banks and use ATMs all over the world to withdraw millions of dollars over the course of a few hours. Meanwhile, hundreds of Instagram users are reporting that their accounts were hacked.[Shannon Liao / The Verge] In an attempt to return to its earlier viral growth, the live online quiz game HQ Trivia made its debut on Apple TV. HQ has seen 12.5 million unique installs, but on iOS, it has fallen from the No. 1 U.S. trivia game to No. 10, and from the No. 151 overall app to No. 585; it has seen a similar decline on Android. Meanwhile, clones of the game are popping up on mobile — this week, Fox unveiled the amusingly titled FN Genius, which looks and works almost exactly the same as HQ. [Josh Constine / TechCrunch] What’s driving Elon Musk? We know you all love to read about him, so here’s an entertaining oral-history style portrait in aggregate of one of the tech industry’s most high-profile and controversial figures, as told by his family, friends and colleagues. [Amit Katwala / Wired UK] Top stories from Recode Glassdoor CEO Robert Hohman explains why reviews with sexual harassment allegations don’t get removed. On the latest episode of Recode Decode, Hohman says those allegations matter a whole lot for job-seekers who could be harrassed. This is cool Money? Or luck?

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posted 3 days ago on re/code
Hohman says those allegations matter a whole lot for job-seekers who could be harassed. On this episode of Recode Decode, hosted by Kara Swisher, Glassdoor CEO Robert Hohman talks with Kara about how the company has evolved since its early days, when Hohman wanted to merge employer transparency with the gaming sensibilities of World of Warcraft. He discusses why the company has so many rules and regulations for moderating reviews, including what happens when an employee alleges that a manager has sexually harassed them. “Someone said, ‘the CEO only hires blondes and they disappear into his office for hours on end and rumors fly,’” Hohman recalled on the new podcast. “It’s like, ‘Okay, are we going to allow this? Are we not going to allow it? Does it belong?’ Well, it kind of matters if you’re a woman. A blonde woman thinking of going to work here. So we allowed it and we took the heat for it.” Plus: Why letting employees and ex-employees rate a company’s CEO was so successful; why Glassdoor nixed a planned feature to let them rate their direct managers; and why there’s a strong correlation between employees who have a bad work/life balance and CEOs with high approval ratings. You can listen to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts. Below, we’ve shared a lightly edited transcript of Kara’s full conversation with Robert. Kara Swisher: Today in the red chair is Robert Hohman, the co-founder and CEO of Glassdoor. It’s a website that lets employees and former employees leave anonymous reviews of their managers and companies. He previously worked at Expedia in the early days of that company, and currently sits on the board of the nonprofit Tech for America. Robert, welcome to Recode Decode. Robert Hohman: Thank you. It’s great to be here. It’s such great timing to have you here. There’s so much fury around companies and what they’re doing and companies and employees really talking about it. It is an interesting time. I think it’s fair, yeah. So let’s first of all talk about your background. I like to start in the first section talking to how people got to where they are. So give me your background. Don’t go to birth, but you know what I’m saying. So I grew up in the Midwest. Both grandparents were farmers, so it was a very blue-collar upbringing, and I found that I loved computers around sixth grade on a TRS-80. Okay, Trash-80. Absolutely fell in love with it. I just started coding and ... I had a Trash-80. Did you really? You owned one? No, it was for where I worked. I was a young, young reporter and I had one. We had couplers ... So the first computer I owned was a VIC-20, but it only had 3.2K of memory, and I needed 32K. Okay, so you really are a geek. Move along. Well, yeah, so I made money by baling hay in the summers. That’s what you did in that area, and so I would bale hay to buy memory for my computers. Oh wow, that’s a first. Well, it worked out. I learned hard work, and I learned ... Something you wanted. Yeah, for something I wanted and something that I was deeply passionate about, too. Right, right. And so you came to Silicon Valley, or what did you ... went to school to ... ? So, where I’m from people don’t usually go off far for school, to be honest, but I had an uncle who’d gone to Stanford, and I did well in school, and he said, “You should apply,” and I got in, crazily enough, and ... Nobody gets in now, just so you know. Yeah, I know, I know. Like, three people. It’s kind of crazy. It’s totally crazy. And I got on a plane, and I fell asleep, and I suddenly woke up in California and it was one of the most amazing things you’ve ever seen, ’cause you grow up in Ohio, California is like this far-away land where stars live and everything else, and my grandmother was convinced every major sin originated in California, so everyone was opposed to me going, but I went and it was amazing, and that kind of opened ... So you stayed here, and then you got into computers. I did. I’m a software engineer. In my soul, I’m a software engineer. I write code. And I always wanted to start a company. I had a dream of starting a company from going way, way back. But as I was graduating Stanford, I just felt like I didn’t know enough. I was a good engineer, but I didn’t know marketing. I talked to a lot of tech founders that feel this way too. I didn’t know marketing, I didn’t know finance, I didn’t know a lot of what I thought I would need to start a company, and so I thought, “Okay, I’ll go work at a big company for a while and learn.” So I went to work at Microsoft. And by the way, people still, to this day, when I say I go to work at Microsoft, they’re like, “Oh, I’m so sorry.” I didn’t say anything. I said it silently inside my head, but ... You don’t understand. In 1993, Microsoft was dominant in a way that no other company ... Even today, no one had that kind of ... It was amazing, and I worked on Windows for a little while and got a really good education. And then met Rich Barton, who was starting ... Expedia. Well, it was Microsoft Travel Technologies. That’s right. You don’t remember, but they had a thing called Mungo Park, which ... Oh, I remember Mungo Park. Do you remember Mungo Park? Kara Swisher remembers Mungo Park, all of it. And Microsoft Dodge, and Microsoft Beethoven, and ... Underwire, the women’s site. I don’t remember that one. Oh yeah, that was real tasteless. Underwire. I was like, “What?” when I heard. I was like, “No.” That is kind of crazy. That’s a goofy name. Ballmer was like, “What do you mean?” I’m like, “Oh my God, if I have to explain it to you ...” Ballmer’s a funny guy. Yeah, yeah. I guess. Yes. Lots of stories. That’s one way of putting it. So, Rich was working on Microsoft Travel, and then it spun off into Expedia. And why did you move there? It was an early time for Expedia. Yeah, I got to Expedia really really early. It was one of these things, another lesson I kind of look back on over my career. I kind of had to choose who I was going to place my bet on, and I met Rich, and I met a couple other leaders at Microsoft, and I placed my bet on Rich as potentially being my mentor and that’s the way it turned out. He’s been my mentor for 25 years, and sort of the rest is history. Right, so you worked on Expedia, which ... Things have changed so drastically in the travel space, but it was literally the first iteration of what was going to happen. Yeah, it was, and again, the thing that was interesting is ... You’ve gotta remember, we were building a website in ’94, ’95. Nothing existed, so for the engineers listening to this, it was all on C++. I’ve lost years of my life to tracking down memory leaks. There was no security infrastructure. We had to write all of it. It was kind of a crazy, crazy, Wild West time on the internet. But it was fun. We grew really really fast. Rich convinced Ballmer and Bill to spin us out. I think we’re still the only company that Microsoft ever let go. Right, right, could be. I’d have to think, yeah. We spun out, went public, and that was a crazy, crazy ride. And I learned an awful lot about building companies and building cultures, because the Microsoft culture was super fascinating, the culture we built at Expedia was super fascinating, and I took that on to my other companies. Right, and so you went from there to where? So I stayed at Expedia for quite some time, and then in 2000 ... I guess it must have been 2005, I moved here to run Hotwire. Expedia had acquired Hotwire, and I moved to San Francisco from ... ’Cause I had been in Seattle all this time. Acquired Hotwire and moved down here, did that for a year, and then I needed a break. I was tired, so I took a year off. I worked on my house for a little while, and I learned how to fix anything in my house, which I recommend to anybody. For a geek it was a really fun thing, and then I spent a good six to nine months playing World of Warcraft. Oh, okay. My children play that. Which was awesome. Okay. But how do you get to Glassdoor, because ... I mean, Expedia’s sort of a judgment site, essentially. Well, so Glassdoor, I guess, triangulated from two forces. One was Warcraft and gaming, and I’ll come back to that one, but the main one was transparency. So we didn’t realize until about halfway through Expedia that what we thought were an e-commerce site, and if you would have stopped me, I would have told you that, but in reality what we were doing was providing transparency to the travel landscape. We didn’t understand that, but if you’ll think about it in hindsight, you had to call every hotel. Oh, I remember. You call agents and airlines. You couldn’t call airlines, actually. And then if you went to an agent they had the green screen, and you kind of felt like they were interpreting it, and you wish you could just take control of it yourself and look at it, and that’s fundamentally what we did, is we provided that transparency, and that allowed us to build a really interesting business. Rich went on to do that same thing in real estate with Zillow. And so Rich and I got back together and were thinking about what big decision do people make in their life where, because of the way the world is developed, they have very little information to help them. Real estate was an example, travel was an example, and where you go to work was a glaring example where people knew nothing. Maybe you knew one person that worked at a company and you could ask them what’s it like, but you knew very very little. You knew very very little about salary information and fair pay, and that’s come to be very very important. So we knew that it would be hard. We knew that it would be somewhat tricky to get right, but if we could get that information out of people’s heads in a constructive way, we could make a contribution, and we might be able to build a really big business around that, and so that’s how Glassdoor was born. But where was it thought of? Because there’d been ... People had whisper networks about companies and people know each other, but there isn’t a lot of knowledge about companies or about how people really operate. Do you mean literally how did the idea come up? Yeah. Rich and I were on the phone, I had been playing World of Warcraft for like seven months, and I learned this about myself: I hit the max level in World of Warcraft, and the next day I called Barton and I was like, “Okay, I’m done.” I’m so goal-driven, it’s very interesting. I learned that about me, and so we literally started brainstorming on the phone about things, and he’s like, “You know, you remember that time we left this ...” We had left a printout of ... Every company takes these surveys, and then there’s the detailed comments at the end, and those are the best, and Rich had printed them. Or the worst, or wherever your perspective ... Both, yeah. They’re what you want to read. The numbers aren’t that useful. 100 percent, yeah. Richard printed them out, and he’d left them on a printer, and he was like, “You remember that?” Well done, Rich. Yeah, exactly. And his assistant luckily had saved him, but we’re like, “What if that had just gotten out? And what if the spreadsheet that had everyone’s salary and stock, what if it just became public knowledge? How bad would that be?” And we started going through the thought experiment of it. People think Glassdoor was — used to think, anyway — Glassdoor was built to stick it to the man, and I used to joke. I’m like, “I think I am the man. Rich and I are the man.” We were both CEOs of companies. That wasn’t what we were trying to do. We were trying to figure out ... It’s really bad for companies when people make poor decisions about where they go to work, and they usually do that because they have poor information. And so if we could just pull this together in a constructive way, it would be really really valuable. The part that came from gaming was the constructive part is based on the community rules and norms, and that’s the hard part about a site like Glassdoor or any user-generated site. What I experienced in gaming was, the first time I ever actually belonged to a community, for one. I got up, was happy to see my guildmates, and the rules and norms that were adopted really kind of ... There were some groups that were toxic and there were some groups that were not toxic, and it was super fascinating to see how very small, subtle decisions were what separated the two. Absolutely. I wrote about that today, was talking about that concept of community, that if you make rules ... It’s not just rules. You need to have values. You have to have all kinds of things. Yup. People confuse rules with values. And a way to enforce them. So when we launched Glassdoor, we started collecting these reviews, and we read them before we published them, mostly ’cause we wanted to see what’s going to come in, and we weren’t sure yet. Right, ’cause it could be used as disgruntled ... But that then ... We were just feeling it as we were reading it, we were like, “Wow, this is really valuable,” and so to this day, I think we’re still the only site that pre-moderates. So when you post something on Glassdoor, it doesn’t go live. It goes to a moderator who decides if it fits norms and guidelines, then it goes live. I want to talk about this later, ’cause it was exactly what I wrote about Twitter today, that they need to have, at some point, people ... Facebook and others. But we’ll get to that later. So you decided ... Was it more like you wanted to get the salary information, or just the feedback information, or is there any one part of it than when you were first conceiving of it? And then I want to talk about what it turned into. There were three legs to the stool. There was, “What’s it like to work at the company?” Right, which is comments. Yep. There was salary, because that’s so critically important and we knew that, and there was basically, “How much confidence do you have in senior leadership?” And that was one of those tiny decisions at the time. We were like, “Hey, let’s do a CEO approval rating, just like a presidential approval rating.” Turned out to be a big deal, because lo and behold, lots of CEOs care about that rating, and it opened a lot of doors to us and it helped us become important in their organizations because it was very personal. It’s funny. We tested at the time, there was going to be a fourth leg to that stool. We were going to let you rate your manager. Oh, individually? Your individual manager, all the way through the org, and we did the tests with users where we sat behind a two-way mirror, and they loved this concept of Glassdoor. It was just a concept thing then, and they were like, “This is great. Can I get it? Does it exist?” And you know you’ve got something when people say that. And then we’d get to the part where we’re rating their manager, and then it was like ... It took about four seconds, and you could just see their brain turn, and they’d be like, “Wait a minute. Does this mean I could be up there? This sucks. This concept is terrible.” Judge not lest ye be judged. But it was just clear we couldn’t do that. That wasn’t going to work. It would take more time to figure that out. So the idea was, because one of the things that had broken out in Silicon Valley was this 360 evaluation, which was already within companies. Why is that different? That’s what they try to do to try to get the full scope. They never get the full scope because people are dishonest about their work experience inside of a company, I find. Yeah, it’s interesting. You have to pull it out of them, for sure. Yes, so it’s very interesting. What’s different about Glassdoor from things like that is first off, it’s public. The very nature of ... Let me explain. A 360 meaning you get reviewed by everyone around you, from assistants to people above, but go ahead. Right, and typically it either goes only to you or to you and your manager. But it’s private. It doesn’t go ... It’s not open and available. And so I don’t even think we fully understood at the time how powerful this would be, but the idea that this information was public and that anyone could see it meant that even though many companies get the same information internally from surveys, they get a more authentic tone from an independent third party and a platform, and also, it forces companies to do something about it. Right, ’cause people can see it. Having run a company, it’s so easy to take those surveys, and even well-intentioned, you mean to fix the stuff in them ... Right, like, “Oh, that’s a disgruntled ...” You start to figure. Well, even if you don’t, you know it’s a problem, and you know you should fix it, and just it never makes the list. When it’s public and it’s harming your ability to hire and recruit, it sort of forces you to deal with it, and I’ve had that experience with our own problems on Glassdoor, posted on Glassdoor. Right, about Glassdoor. So when you’re putting these things public, the idea is to effectuate change that people want to do. They wanna have some sort of change. Let’s get back to the idea, and in the next section we’ll talk more about this, but of sticking it to the man, ’cause that’s how people looked at sites like Glassdoor. Whatever it was, it was Yelp or wherever it was — and obviously we can talk about the gaming the system later — but you didn’t think of it as sticking it to the man, right? How it didn’t ... Yeah, and to be honest ... That’s precisely what you were doing. Well, I wouldn’t have even told you that my main goal was effecting change, ’cause it wasn’t, actually. I think that was a pleasant side effect. My main goal really was to educate job-seekers on what different cultures were like. Because there are very few bad companies. Yes, I’ve met them, but most companies are just very different. There’s really type-A companies that are super aggressive, and there’s companies that are lifestyle companies and they’re more laid-back, and it’s kind of ... Figuring out which one fits you matters. Right, and there’s just bad people within companies. Sure, that is true too. And by the way, that’s part of the reason CEO approval rating, we felt, was so important, is because when it’s the very tippy-top person, it does tend to affect the whole organization. Absolutely, 100 percent. Yes, I agree with that 100 percent. And so, yeah, that was our goal, was to educate job-seekers. And so it took a while for companies to come around on this. But there was a kind of a wave of transparency happening around us anyway, and that helped. Twitter was happening, LinkedIn was happening, Facebook was happening, and it was kind of clear that — Yelp was happening, TripAdvisor — that if it could be reviewed, it was probably going to be reviewed. Right, so why not make it the workplace? And then the question was ... Well, it was different for us, and what I always felt from the beginning was this was a little different, though. This was a review of a company and a serious topic, and so I always felt a responsibility to get the community rules and norms right and to make it constructive, because there had been sites before us attempting this, and they kind of devolved into cesspools. Cesspools, right. It’s a big topic, in fact. I keep referring to this column I did, but I said Twitter has devolved into a cesspool too much. They’ve not allowed ... Talk about the standards you put in place. Yeah. I don’t want to talk about Twitter. I’m talking about yours, because it is the kind of thing that, exactly, could ... like, “I hate my boss.” It’s not constructive, it’s just a lot of griping. At the same time, there’s nothing wrong with disgruntled people, because it’s a good thing to hear from them. But you’d want to hear from more people, so that you have a fuller conceptual idea of ... That’s exactly right. Right, right. So what was different about Glassdoor was that we couldn’t ... A lot of sites, like Yelp or TripAdvisor or other user-generated sites, 0.1 percent of people can leave the majority of the reviews, because they stay at a bunch of hotels or they eat at a bunch of restaurants. Right. Right. If you’re reviewing companies, it just doesn’t work that way. You work at a company, and even in the Bay Area, you only change every two years. So we needed lots more people to contribute. That is definitely true, so the structure of the site had to encourage that. And so, there was a variety of ways we did that. But we mostly listened to the community; Jeremy Stoppelman from Yelp once gave me that advice, early on. He said, “Look, your community’s going to tell you where it wants and needs to go.” Right. We used their reviews, and the complaints about their reviews, to listen to what was fair. Things we heard were, one, it’s okay to talk about quasi-public figures in reviews. Not okay to talk about people that are not quasi-public figures, and that pretty rapidly meant we ... You couldn’t do individual managers. Yeah, we made a rule which said, you couldn’t even do the singularly identified thing. You can’t say, like, the Regional Director of Akron. That’s still individually identifying it. The review comes down. Yeah. Or never goes up. So there’s that rule. There was rules around, early on, there was no way for an employer to respond. Then we allowed for an employer to respond, and for a job seeker to respond back, and this tit for tat started, and that was bad. That got really bad fast. Yeah. Then, we adopted the one response method, which is basically, the review goes up, the employer gets to respond, and that’s it. Right. That felt like the right balance. Yeah, because the person had his say, or they did. They both had their say, right? Right. Hard things we’ve had to figure out over the years are, when someone alleges sexual harassment in the workplace. Well, we’ll get to that, it’s a whole, yeah. But, go ahead. Go ahead, talk about it. Well, we always look at it through the lens of, “Will it help a job seeker on whether to go to work here?” Obviously, that information is relevant to whether you’re going to go to work there, and so we allow it. There were other types of crimes being reported in reviews that weren’t relevant to whether you’d go to work there, per se. Right. Like what? And we decided — basically, violent crimes, or drug use, or this person ... a lot of times, it’s one person doing something to another person, which doesn’t necessarily reflect the workplace as a whole. Right. And so, a lot of times, we would say, “Okay, that belongs more with law enforcement, it doesn’t belong on the site.” Yup, yup, yup. We’re talking about things that matter, about whether you’d go to work here. Right, right, and so, over time, you evolved these standards, or values, or ... well, there’s values and standards and rules, they’re all different things. But I find that unusual, because a lot of companies sit here and say, “I don’t do that.” They just sort of have a free-for-all, “open is best” kind of thing, whatever floats. Companies that make choices like this ... like, I remember, Apple, when they made the App Store choices. Now, they haven’t been perfect, but they certainly, definitely were mocked at the time that they did that, I remember. Like, “What? You can’t decide about anything,” and I was like, “Yeah, they kind of can. It’s their store.” Yeah. They can put anything they want on their shelves. Yeah. Talk about that concept, because not putting things up is such an anathema to Silicon Valley people. They’re like, “Let’s get it all out there and let’s see it!” I think it becomes, like you said, a cesspool. Yeah. Well, I think it was a little ... Glassdoor was different enough, because of the seriousness of what was being discussed, it’s different than Facebook, and it’s different than Twitter. Right, right. There’s some serious things being discussed on it. There are, but, I mean, it’s such a broad diversity of topics happening on those platforms, I have some sympathy for the decision of when and where and how to moderate. It was pretty clear to us, early on, that this was going to be a serious conversation. It was meant to be a serious ... we wanted it to be a serious conversation. Right. We didn’t want it to be … Do you remember, at the time, there was ... Am I allowed to swear? Yeah, please. There was fuckedcompany.com. Fuck, yes. Yes, I do. Okay, and we had had a mantra internally: “We don’t want to be a fuckedcompany.com.” Right. Look at that guy. Well, it was really humorous, but not very helpful. Yeah. What was that guy’s name who ran it? I don’t know. I had him at my house once. He was funny. I bet he was! Anyway, he was really funny. It was super funny and entertaining, but it wasn’t actionable or useful. Yeah, yeah. Tell me why. Explain. Because, it was just like bellyaching. And mean. Yeah. It wasn’t actionable or useful information. You didn’t feel like you were getting the full story or a nuanced version of the story. Right. You were getting a sensationalized, extreme version. “That company sucks,” that kind of thing. Yeah, exactly, and so, we didn’t want to be that. We wanted to be a serious review about a company’s shortcomings and the things that make it great, and one of the things we asked is, advice to senior management. Like, if you could sit with Steve Ballmer, what would you tell him on how to run Microsoft at the time? Right. Right. So you’re encouraging helpful discussion. People, like, it was crazy when we surveyed users. That changed the whole tone. They were, like, “oh,” like it ... “Do I have to be helpful?” That was one of those subtle mindset things that put people in the mindset of, “Yeah, if I could tell him, what would I tell him?” Yeah, right. And made them serious. Yeah, right. See, talking about that, because when you have an anonymous platform, it devolves. Devolves is what happens a lot, and pretty much almost every platform devolves. Well, there’s anonymous, there’s shade of gray on that, first off. A Glassdoor is anonymous to the community. Those people are not anonymous to us. Right. We have to have an email address, and yeah, we also have to be able to communicate with you, or we will take down all of your content on our site. Right. For all the reasons they talk about today. But at the same time, it’s super important that your information be anonymous to, obviously, the community and workplaces. Because the workplace ... Yeah. No, obviously. Yeah. They will retaliate, and one of the debates we had early on was, should we require a company email address to contribute? Like Facebook did with colleges, or whatever. Or Dell. Yeah, exactly. Or, at microsoft.com, or at dell.com, or something like that, and we feared that companies could just go look at logs and see that people had ... Right. So they want to use their Gmail account with them. It turns out, big companies won’t do that. Big companies ... Big companies could do it. They could, but we don’t see that. Right. What we do see is little companies, like, they’re usually small law firms in Florida. I don’t know why. Well, they’re a little sketchy. Seemed to be the worst behavior is behaviors, when it comes to this. Yeah. Right. So, trying to figure out who’s being mean about that. Exactly! And they will. They’ll go look at, like, every last thing, because they presented it to us. They’re like, “I know who left this review. Here’s the firewall logs.” Yeah, yeah. It’s like, “Oh, my God! This is terrible.” I mean, God, right, yeah. Can’t take a criticism, can you, right? Sick. But again, going back to that, devolving. You ask helpful questions ... Yes. Which suggest that you want a serious answer, and then people don’t just throw mud at each other. Yeah. But it does create a situation where you’re going to get a certain type of person, versus the whole company. How do you solve for that? Great question, and we worried about this early on. We were really afraid we’d see this bimodal distribution, either people that hate their company or love their company, and no one in the middle. Right. Like I said earlier, we needed to get a really broad distribution. Which is where the truth is, right? Yes, I agree, and so, we created various mechanisms on the site, the strongest of which was, if you wanted to see salary information, you had to give. It’s called give to get. You had to contribute. So you couldn’t, unlike Yelp or TripAdvisor or others, you couldn’t consume content on Glassdoor without contributing. Right, right. To this day, actually, you can’t, after three or four page views, consume without contributing. Ooh, that’s interesting. You have to make them say something. Yeah, you have to give something. Now, it can be a salary. If it’s just going to be light, it’ll be on your phone. Typically, it’s a salary, but some people ... I was skeptical, but I was stunned at the quality of reviews we got from mobile devices like this. It shocked me. Yeah, okay, so they had to contribute to something, and to create a thing. So what, then, became the goal? I want to talk about the business model, also, but what became, then, the goal? As to give, just as a clearinghouse for information, if you can make better hiring decisions, essentially? Yeah, that’s right, that’s exactly right. Our mission is to help people. Or go in to get hired. We wanted to help people find a job in a company they love. Right. So, if we could get the information that helped you figure out, like, “What’s the story with this company?” and, “I have this offer in front of me. Is it fair? Could I ask for a little bit more, or would I be overplaying my hand?” Interview questions were a huge one. Right. Like, in the ’08 recession? People were freaked out. There were people laid off that had not been ever laid off. Right. And an interview is one of the most stressful things that you do, short of public speaking, and they said, “If I could just be a fly on someone else’s interview,” like, “How long is it gonna take?” “What are they gonna ask me?” Right. That was one of those times we went, “Okay.” Helpful information, right. “We can get that information. Our community would gladly give that information.” Right, tell you what it’s like there. Ultimately, the idea is to give people, place people where they belong? Because it’s usually a pull situation, where the companies pull into people. They pull from LinkedIn, or they pull ... versus a push situation, where the employees select companies they like, too, or not. You mean the hiring process? Yes, the hiring process. Pull versus push? It’s always focused on the company. You’re used to the Bay Area. Yeah. It’s pull in the Bay Area, for sure, just because there’s such a shortage of tech workers. Right, okay. But I don’t think, in the general economy, and certainly, outside the United States and the world economy ... Sure. It’s pretty balanced. The bluer you go, the more push it is, and the more knowledge worker you go, the more pull it is, I would say. Right, okay, that’s interesting. Yeah. So, your goal is to get people to understand where they, if they’re good, to walk about working somewhere. You ever thought to do more editorial things, where you would take the synopsis of what people say and then do that? Can you talk about that? I could probably describe Patagonia from talking to people who work there, myself, and I haven’t done much research. Or, Google, or- Ah, interesting. We have avoided Glassdoor speculating on these companies. Right, okay. For conflict reasons. Right. What we have done, though, is, and we have this great vantage point,with which to say, “What are the patterns we see in great companies?” And we publish this Best Places To Work list every year. Right. Then we can look and see, like, “Okay, what are these 50 companies doing, all, that’s all the same?” We publish a lot of stuff around that. Right, talk about that. Well, so, and we hired an economist to basically, then, begin to bring some science to bear on this. Let’s see, my favorite findings on this. Did you know, there is an inverse correlation between work/life balance and CEO approval rating? Meaning, the lower the work ... it’s slight, but it’s there. The lower work/life balance is, typically, the higher CEO approval rating is. Why? Okay, well, once you go and unpack it, what you find is, it is ... people are willingly trading off work/life balance to go to work for these iconic leaders and companies. Oh, I see. Oh. And so, like, the New York Times article about ... It’s like, culty. Amazon, and Bezos slamming Amazon’s work/life balance. Like, we had given the Times all this data, which kind of contradicted their article. Because, what it said was, “Yes, Amazon has terrible work/life balance. That’s not the point.” That’s right. The point is, people are willingly doing that, to go after this mission. Yeah. Actually, that was one interesting issue I had with that guy. I mean, I think, being sort of shocked by it, I was like, “They like it, and they picked there, so ...” Exactly! And in fact ... I don’t know. Those rich people want to get abused, that’s their beeswax. You pick what you want. You pick the kind of place you want. Not every workplace is the same. Especially a place like that. I think that’s the hard part is, we imagine all workplaces should all be the nice, same, nice place. I mean, you pick Ellison for a certain thing, and you pick Google for a certain thing. I’m just picking tech companies. You’re dead right, and they’re totally different, right? I mean, Ellison’s environment is totally different than Zuckerberg’s. Right, right, right. Yeah. Well, internally, yeah. Yeah, they’re different, and then there’s other things that work into it, as where you want to go from there and its corporate reputation, and everyday things like that. So what else? Give me another one. That’s real interesting. That makes total sense, though. Ah, so that was fascinating, yup. You want to believe in somebody. Things that drive employee ... Oh, this is one that’s fascinating. It was either the No. 1 or No. 2 driver of employee satisfaction was growth opportunities. Particularly, it skewed, the more knowledge worker you got, and the more you got into large metropolitan hubs, the more true it became. Because what people are doing is, on the day they are dropping into a job, they’re basically starting to think about their next job. Yup, 100 percent. And so, what they’re doing is, they’re basically saying, what can you do to help me in the two or three years I’ll be here so that my next step will be a step up? Right. That is what they really value. Which, companies do a terrible job. That’s ... It varies. Well, around diversity, it’s real interesting. They spend a lot of time hiring, but not a lot of time retaining and training and managing people. Retaining is tough, but training and managing, you’re right. Well, but moving people up, who aren’t used to, you know what I mean, moving those people up? They just leave them, and then, that’s it. They think the hiring is the last stop on the ... I guess that’s fair that companies have been slow to invest. I’ve heard it from a lot of diverse candidates, yeah. I think that’s probably fair, that companies have been slow to invest in this. Then they don’t do well, and they’re like, “Oh, look, we hired diversity and they didn’t do well.” It just goes ... it’s like, “You didn’t do anything to change the way it was done.” Anyway, it’s an interesting ... Yeah, yeah. So that was one. One of the biggest ones that I think has been fascinating is because we have so much pay data. It’s detailed, and it’s down to the person and their job title and their location and their company. We were able to unpack the pay gap in a way that I don’t think anyone had been able to do before. So you’ve heard the data that says women are paid 76 cents on the dollar, for $1 in men. That’s true, but it’s a broad average, which isn’t that helpful, and I think actually doesn’t help the cause. Because if you say that to me or any other leader, I think we’d go, “Yeah, I don’t pay women 26 percent less. That doesn’t make any sense.” It doesn’t resonate. If you unpack it, it’s like, I forget the exact numbers, but 15 percent of it’s tenure, and women have typically less tenure, because they drop out to have babies, and for other reasons, and then, the rest of it is job titles. Or another, like, 10 percent of it is job titles. So, career sorting. Women are told, sort of from an early age, “You don’t belong in tech. You don’t belong in math. You belong here,” and they tend to be lower-paying jobs. Right. When you take those, and I’m not excusing those two, but it helps to understand them. It helps to understand that, okay, career sorting makes it this much of a difference. Then there’s 6 percent left that is unexplainable, that is probably the true, true bias. Of sexism, yeah. Of sexism. Right, and how people ask for money and everything. Yes, and that’s helpful, too, because then that’s a number that I think a lot of people go, “I could see how, if I weren’t really paying attention ...” Right. Six percent could get by me. Right, absolutely, 100 percent, absolutely. Yeah. And how people ask for money, how they negotiate for money. Then you can start studying that. We publish these tools on our site. Yeah, because you don’t want anecdotal. Anecdotally, I can tell you, men are more aggressive asking for money. Sure. As a boss, it’s 100 percent. That’s not everybody, but it’s a clear, you can feel it in it. As a broad categorization, and it seems to be true, yes. Yeah, yeah. Yeah, which is interesting, and then, you don’t know what to do about it. Yes. Like, what do you do? Like, please ask for more money. You’re not really, and that’s not really your business, right? Yeah, I know. Well, so, at Glassdoor, what we do now is, we started using this. So our economists built this model that basically looked at our, when we do reviews every six months and when we get pay raises and bonuses now, we can basically look to see, did we have gender bias? Once we normalize for tenure and job title, and we found that we didn’t. But what’s awesome is, once you have that model, every time we do reviews and every time we give raises, we can see if we can introduce anything into it. Right, right. You can look at review scores. You can look at bonuses. Right. Is there any groups that have bias by gender, or ... Right, right, right, which is hard. We’re here with Robert Hohman. He is the cofounder and CEO of Glassdoor. We’ve just been talking about salaries, which is sort of, I think, the big ... even though people talk about whether they like their job or they feel good about their job, money really is a great equalizer in terms of how you feel. It’s not the No. 1 driver. Okay. All right. Tell me the No. 1 driver. So, opportunities for growth is there. Right. Right. Confidence in your leadership is there. Yup. It’s like, money is No. 4, or something like this. It’s not even in the top three. I guess, what I mean is, equity of money. Like, that people know who makes what, and stuff like that. Fairness matters. Yeah, that’s fair. Fairness, yeah. So, I think it was Ellen Pao who was onstage, who was talking about this of blind hiring. People have talked about that concept of not knowing who the candidates are. Yeah, right. Can you ... How does that ... What do you think about that? I think it’s a great idea, I guess. I think it’s a fine idea. I guess, you know, I think what’s challenging is in the Bay Area in particular ... Bias in hiring right now I think takes a couple forms. I think it takes the form of the community or what already exists in the company. Right. Like some workplaces are just not clearly friendly to women or certain groups. People of color. Right. That’s something that has to get better. Then, I think there’s this massive problem upstream, which is that certain groups and women and other groups have been being told for years you don’t belong in these careers or whatever else, so we’re reaping the benefits of that still. It’s going to take years for that to work. Right. Because, you know, girls can code and minorities can code. A bunch of other organizations are starting to fix that now. It’s still going to take 15 years before those people are showing up in our candidate flow. I know, it’s a pipeline issue. It is. But it’s real. The blind thing doesn’t resonate that much with me, only because look, if the person can code, we don’t care. Almost everybody I work with doesn’t care what color they are, what religion they are. Right. But there are lots of people who have stories that their coding gets judged differently. I mean, dozens and dozens. It’s not a ... I think that’s fair. It’s not a goblin that suddenly appears. I think that’s more to do with once they’re then in place at a company. Right. How they’re judged. How ... Is there bias within the company. Right. Right. I think we definitely can do better there, for sure, if these stories that we’re hearing ... Right. I’m not a shrinking violet, but I’ve had so many ... Imagine doing a sexist remark to me and I’ve had it. It’s like, you know what I mean? Yes. There’s no doubt. There’s people who have ... It’s not the right time. I can imagine if I’ve gotten them, everybody’s gotten them kind of thing. It’s education too, because I think a lot of people don’t even realize they’re doing it in some cases. I’m going to argue with you. I think they do. I think they often do, and I think it’s an easy out to say, “Oh I had no idea.” Maybe. I may be a little over-idealistic, but I think ... I see a lot of ignorance. Oh I think there’s lots of lovely people. I see a lot of ignorance around this topic, where people are like, “What’d I say?” Yeah. Well, I know. It’s like, that’s not okay. You can’t say that. Yet it happens over and over again. It’s like at some point it’s like, “Clean your room.” Fair. You know what I mean? It’s ultimately ... I make a joke and I don’t think I believe it fully. It’s unconscious bias versus ... I think some of it’s very conscious and it’s not. Because it never changes. Once it’s pointed out it still doesn’t change, so therefore you’re aware of it. What happens is a CEO doesn’t put it on the list of ... Like you were saying. It’s No. 4 or whatever it is. It’s often No. 14 and not No. 1. It never will get to No. 1, therefore will never happen, because it’s got to come from the top down. Yeah. I think that’s fair. The good news is, Gen Z and even millennials are demanding this. Yeah. They want to work at a place that is inclusive and that is taking these things seriously. If they’re not, it’ll take time but they’re going to hold them accountable. Let’s actually end up talking about that. Lots of companies now, they’ve all these message boards. They’ve got all these internal ones. Just like what you’re doing where I’ve sent ... I’ve written about ones at Yahoo, ones at Facebook and different things like that. People can be very, very clear about what they don’t like. I think a lot of these companies like Google and others have encouraged that. Real complaints. I remember Sergey and Larry had started their Friday “Scream at Sergey and Larry” sessions essentially, which I liked. I’ve been at many of them. I think they’re astonishing what people complain about. Like, it’s usually like, “The pudding wasn’t good.” I’m like, “Stop it.” I know. The coffee. Coffee. Limited coffee flavors. Whatever. I’ve gotten that one, actually. I know. Sometimes I’m like, “Really?” No, we’re not in a bubble here. This isn’t a first-world problem. I don’t even know what world it is. Fantasy-world problem. But I like that. The idea of complaining to the boss, like the flat structure. Yeah. Talk about that concept, like, the idea. It’s been around, this concept of complaining, but right now people are not just complaining. They’re wanting to do something about it. Like Google going into China. There’s a huge hubbub going on internally at Google in a very vocal group of employees who do not want this to happen. Same thing with Microsoft and ICE. Using ICE. Or people ... Lots of, just all over the place, employees are sort of rising up. They are really the base, if you want to use a political term, of these CEOs. People feel more emboldened to talk. I think what has happened ... Well, I think at a macro point, here’s what I think has happened. I think that in our parents’ generation, and even to a degree in our generation, you were expected to check your heart at the door on your way in and come do your work, and pick your heart up on the way out the door. You know, your philanthropic work, your do-good work, whatever you felt was important was supposed to be separate from work. Right. I think starting with the millennial generation, let’s call it people under 30, we definitely see this clearly in the data too. They are demanding that companies break down that dichotomy. In fact, they’re rewarding companies who are able to align their work with a positive impact in the world. They want to know, I’m working 40, 50, 60, 100 hours a week. Is it ... Tell me how I’m making the world a better place. I’ll give you incrementally ... Those companies can pay a little less. Like, they get real value for that. Yeah, right. I think this is just the next evolution and extension of that. Now this is a very small group of companies. We should acknowledge that. But I think that’s what we’re seeing, is that people are bringing more of their entire world view to work. Now, I think it’s a very complicated sticky subject. Like, if you’re CEO of a company ... Fact is, if you’re CEO of a company of any size, you’ve got dramatically different world views. You’ve got people that voted for Trump. You’ve got people that didn’t vote for Trump. You’ve got people that are everywhere in between. You can’t claim to be an inclusive environment if you’re going to tell people who voted for Trump that they have no place in your workplace, I don’t think. Right. I don’t think that’s what it is. I’m talking about they have opinions. These employees have opinions on doing work. Like Google people don’t want to work on the Defense Department things. They don’t want to ... Like, there’s a lot more speaking up. Yeah. I get that. I was just using Trump as an example. Yeah. I get that, and I think that’s absolutely their right. I mean, my father-in-law refused to serve in ... He flew peacekeeping ... He flew food aid missions because he refused to drop bombs. I think that’s your right. That’s just an extension of something that happened in the ’50s. Yeah. That’s a personal decision, though. Right. But it’s the speaking up of employees. I want to talk about that trend. This idea that people now can speak up a lot more than they used to. Or maybe they don’t. Oh sure. Again, the force of transparency in the world, and also what’s happened too is this balance of power, especially in knowledge workers. If you go all the way back to the 1950s, the labor economy. Labor was completely interchangeable. If you didn’t like what was going on here, I’ll just replace you, because on the assembly line I just need you to do this thing. As we became a tech and knowledge economy over the last 70 years, talent began to matter. You actually could make a big difference relative to the guy next to you on the assembly line. You were not interchangeable anymore. That meant your opinions were something that had to be dealt with. Right. Where does it go from here? Where does it go? You guys make money how? We’re a recruiting company at the end of the day. Recruiting company, yeah. Yup. We help companies hire. Giving them insights into what people think about their company, correct? We make most of our money by helping companies hire on the platform. They list jobs. They can sponsor jobs. They can have a why work for us section on Glassdoor. Explain their mission, vision and values. Because job seekers will tell you, they really value what the community says, but they want to hear from the company too. Right, yeah. They know that that’s the other side of the coin. Then, sure, come ... But those nasty reviews can be right next to the stuff that they’re trying ... They can. Yes, they can. We will not ever take a review down for a company that is working with us. They just have to deal with it. They just have to deal with it. Yeah. Is there something that comes to you to have good reviews? What do you think of the qualities of good companies are then, and the ones, the bad ones? The consistent themes that we see around ... I’m drawn to the leader, because it typically has a lot to do with the leader. Clear communication around a bold mission and vision. Like, Trump wins the ... Not that Trump wins the day again and again and again. You can just point to these leaders who are just really good at saying that’s where we’re going. Communicating it again and again and again. Everybody understands it. They feel like they’re a part of it. They could be making ... They’re not tech companies. I remember in ’08, Caterpillar, the company that makes backhoes and stuff, laid off. Had a huge lay-off and their ratings went up because their leadership did such an amazing job actually outlining, “This is the mountain we’re climbing. Those of you that are left, this is what we’re going to do.” People deeply appreciated it. Right, because they got the honest truth. That’s one. Clear direction. Clear leadership. It’s a key one too. It’s not just the CEO. People talk a lot about senior leadership as a group. Who the CEO allows into that circle really speaks volumes about what they truly believe. Right. And can’t be underestimated. That one shows up again and again and again too. Right. Then bad. What are the things that pop up? Obviously lack of communication. Rudderless. Companies that don’t seem to know where they’re going. What do people typically complain about? Trying to think. We don’t study bad that often. We study the things that make companies great, so I’m trying to think anecdotally what I’ve heard. You know, again, a lot of it’ll go to the leader. People will complain a lot about just a hypocritical leader that just says one thing and does something completely differently. Nothing kills people as much as that. Right, absolutely. Where’s it go from here? What happens now? You obviously are mobile. What else? Let’s finish up talking about that. Where does it ... For Glassdoor? Yeah. We’re launching in over a dozen new countries this year. We operate in 15 countries now. We’ll add over a dozen this year. I assume they’re a different environment. Excited about that. Work environment. You know, it’s kind of interesting. We expected it, and everybody said, “Oh the Germans will never tell you this.” Germans never stop talking. It turns out they do. Right. It’s almost exactly the same. You know, the French are pretty much the same. The U.K. Except with a lot more hand-waving. Yeah. Oh no. We’re launching in Italy this year, so we’ll get more of it this year, you’re right. Try to take “basta” out. Go ahead. Asia could be different. Asia is something we’ll tackle probably in the next year or two. That may be where we begin to see our first real deep cultural differences. But we’ll see. That’s big for us. Obviously we agreed to be acquired by Recruit just a couple months ago. That’s exciting, because fundamentally hiring is a matching problem. You’re taking a company and you’re taking people and you’re being like, “Who would do well?” That fundamentally is a data problem. Data problems fundamentally are typically scale problems. Right. We’re pretty big. We see 60 million people a month to our service. But we’re not as big as Recruit or Indeed. Having Indeed as a sister company and being a part of the Recruit portfolio and allowing us to begin to think about ways that we can use our mutual scale to do this. We can begin to, I think, help people find jobs at levels that just no one else is likely to — How does LinkedIn and others fit in to that? LinkedIn is one of the biggest competitors we have. They’re huge. They have a tremendous amount of awesome data. Owned by Microsoft. What’s that? Owned by Microsoft. Hopefully a little distracted. Off integrating their data into all kinds of other things. I will say this. Amazing data. I don’t know if in their bones they’re a recruiting company. The thing that drew me to Recruit is in our bones, we are helping people find jobs. That’s why we get up in the morning. I’m going to get a call from Jeff Weiner, but go ahead. I don’t know. Maybe Jeff believes that. I don’t think he does though. He’s about connecting people with economic opportunity. In many ways they have a broader mission in some ways. And information. Yeah. We’re kind of focused on a more narrow slice of it. Of like, we want to help people get jobs. That was Recruit’s mission and Indeed’s mission. That all aligned really, really well. All right. Last question. What’s the very worst review you’ve ever seen? Oh god. I know you have one. The very ... Well we probably wouldn’t have posted it. Yeah. Well maybe. What’s the one you’ve posted? Well okay. We get ... Can I just tell you on this topic some of the funniest, most memorable moments I have at Glassdoor are the content moderation meetings that we have where we get together like every couple months to revise the rules. Right. I like that you do that, by the way. We will pull a review. We’ll pull a review and we’ll put it in front of us. We’ll be like, does it belong or does it not belong? We have seen everything. We have seen more ways to spell “fuck” than you can imagine. Right? Like we debated it. Well, if it’s P-H-U-C-K, is that okay? Or if it’s a euphemism for it is that okay? Or is it not? That is a great management meeting to have. I think I would like to be in that meeting. It’s funny, man. Then of course, you get the really, really serious accusations, but like most of it’s pretty funny. It’s like “The Office,” right. The worst stuff is probably around accusations of sexual harassment. Like, I guess the one I’m ... Okay, one is jogged. Company ... Then we agonize over allowing it on the site. We did allow it. Someone said the CEO only hires blondes and they disappear into his office for hours on end and rumors fly. It’s like, okay are we going to allow this? Are we not going to allow it? Does it belong? Well, it kind of matters if you’re a woman. A blonde woman thinking of going to work here. Right. So we allowed it and we took the heat for it. Yeah. Good for you. Well, this has been fascinating, Robert. I really appreciate it. Thank you for coming on the show. You’re going to stay with Glassdoor. Is that right? I am. I’m excited. Yeah. Good. Good. Fantastic. Recruit is owned ... It’s out of Asia, right? It’s out of Japan, yeah. Japan. That’s what I thought. Tokyo. That’s right. Anyway, this is really interesting. We’ll have you come back for more.

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posted 3 days ago on re/code
Nigel Eccles thinks he got ripped off. Nigel Eccles created the fantasy sports site FanDuel back in 2009, and when it was acquired by European gambling company Paddy Power Betfair earlier this year, FanDuel was valued at $465 million. It’s the kind of deal you would assume would make Eccles a very rich man. Apparently that wasn’t the case. Eccles, who stepped down as CEO about six months before Paddy Power took a controlling stake in FanDuel, didn’t make a dime on the deal thanks to a “waterfall” financial arrangement in which some of the company’s early investors were paid out first. FanDuel’s $465 million valuation wasn’t large enough that people who owned non-preferred shares — mostly regular employees, including founders — actually made any money. Eccles thinks that’s unfair and that FanDuel was purposefully undervalued in the deal — an extraordinary claim — essentially cutting him and the company’s other employees out of the money. So Eccles filed a petition in Scottish civil court last month with FanDuel’s other three co-founders, including his wife Lesley, demanding that the company be revalued. Eccles thinks the founding team’s cumulative shares are worth more than $120 million. Current FanDuel executives — including Eccles’s replacement as CEO, Matt King — are set to make millions on the merger. Eccles has a interesting argument. Shortly after Paddy Power and FanDuel started discussing a deal, the United States Supreme Court ruled that the federal law prohibiting sports gambling, the Professional and Amateur Sports Protection Act, was unconstitutional. That meant that all U.S. states were suddenly free to make their own laws governing sports gambling. On paper, that was great news for FanDuel, which operates fantasy sports contests where winners get cash prizes. It’s a business that many already considered to be a form of sports gambling, even though FanDuel fought that label for years. Now that states were free to legalize sports gambling, a market estimated at hundreds of billions of dollars, FanDuel stood to benefit. But even though Paddy Power’s stock jumped 28 percent in the two weeks following the PAPSA decision, FanDuel’s valuation was not recalculated before the deal closed. “The decision of the board (whose interests are aligned with preference shareholders), not to seek and act upon a new market valuation in the face of a material event, which is likely to have significantly increased the market valuation of FanDuel, is a breach of its fiduciary duties,” the petition reads. Now Eccles wants the Scottish courts to force FanDuel’s preferred shareholders — investment firms KKR and Shamrock Capital, among others — to “purchase the Petitioners’ ordinary shares at market value.” “The petition is simply not rooted in facts or reality,” a FanDuel spokesperson told Recode via email. “In preparation for this deal, an exhaustive process was undertaken with the anticipation of PASPA’s likely repeal. The deal was consummated consistent with the corporate governance rules and cap table established under the former founders’ leadership. The facts are that this was a sound business transaction that achieved the highest valuation possible for shareholders and was the right strategic move for the company’s future.” Spokespeople for KKR and Shamrock declined to comment. Of course, there is a good counterargument here. It’s possible — perhaps likely — that FanDuel’s $465 million valuation was the best the company was ever going to get, even with the PAPSA repeal. FanDuel bankers shopped the company around to more than 100 different potential buyers, according to two sources familiar with the process. Paddy Power was the best option. FanDuel’s business was also on the decline. Once valued at almost three times the merger price, FanDuel lost a lot of momentum thanks to a separate failed merger with DraftKings and numerous legal battles over whether or not the company violated federal sports gambling laws. It’s also unclear exactly how much impact legalized sports gambling would have on FanDuel’s business — it’s impossible to know how quickly states will adopt sports gambling laws, or how much it will cost FanDuel to operate in those states once laws are in place. Eccles’s petition is the latest saga in what has been years of drama for FanDuel. First the company spent massive amounts of money on advertising while competing with rival DraftKings in the U.S. That advertising ultimately caught the attention of U.S. regulators, some of which thought FanDuel should be considered sports gambling, which was illegal. That led the company to spend massive amounts of money fighting legal battles. Then FanDuel and DraftKings finally decided to merge in late 2016, a decision that many on both sides believed should have happened years earlier. That deal was essentially blocked by the Federal Trade Commission, so the companies dropped the merger. Now, after years of arguing that daily fantasy sports should not be considered sports gambling, Eccles is hoping that new laws paving the way for sports gambling may finally bring him his payday.

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posted 4 days ago on re/code
Co-founder Sean Rad says IAC purposefully deflated Tinder’s valuation in order to avoid paying him. Tinder co-founder Sean Rad’s saga with former parent company IAC has started a new chapter. Rad and some of Tinder’s other co-founders and employees filed a lawsuit Tuesday against IAC that claims, among many other things, that Tinder’s holding company purposefully undervalued the dating service so that IAC wouldn’t be on the hook to pay those co-founders, who combined own more than 20 percent of Tinder, as much money for their shares. The situation: IAC, which owned Tinder, signed contracts with early Tinder employees agreeing to value the company at four separate times, once in 2017, 2018, 2020 and 2021. Employees would then be free to sell their stock options in Tinder based on those valuations. Tuesday’s lawsuit claims that IAC used “misleading and incomplete financial information” to value Tinder at $3 billion in 2017, below what Rad and others think the company was worth. Tinder will bring in about $800 million in revenue this year, which is 75 percent higher than the projected revenue number used to calculate the 2017 valuation, the suit claims. IAC then merged Tinder with Match Group, another IAC property, cancelling the three remaining scheduled valuation dates. Tinder co-founders now have shares in Match Group, a much larger company in which Tinder is the star product of many, versus shares in Tinder directly. “Tinder’s our big growth engine,” Match Group CEO Mandy Ginsberg said on Recode’s podcast last month. Tinder’s co-founders and employees are asking for at least $2 billion in damages. “Through deception, bullying, and outright lies, IAC/Match stole billions of dollars from the Tinder employees,” the lawsuit’s plaintiffs wrote in a press release. The release also said that “IAC/Match cooked the books to manufacture a fake lowball valuation of Tinder.” The lawsuit, which is 55 pages long, includes lots of damning claims. Included among them is a claim that former Tinder CEO and IAC executive, Greg Blatt, “groped and sexually harassed” Tinder’s VP of communications and marketing, Rosette Pambakian, at a 2016 company holiday party. Pambakian, who is listed as a plaintiff on the lawsuit, still works at Tinder, according to her LinkedIn. Blatt is listed as “Vice Chairman” of Match Group’s board of directors. A Match Group spokesperson did not immediately reply to a request for comment. Tinder was founded in 2012, but has a scandalous history that makes the company seem much older. For starters, Rad was publicly pushed out at Tinder — it was an ugly split — then re-hired for a short time before Blatt was brought in as his replacement. Another former Tinder co-founder, Whitney Wolfe Herd, sued Tinder back in 2014 with claims of sexual harassment against another co-founder, Justin Mateen, who is a plaintiff on Tuesday’s suit. Wolfe Herd then went on to found Bumble, another popular dating service, which IAC sued in March for patent infringement. Tinder Founders v IAC by Kurt Wagner on Scribd

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posted 4 days ago on re/code
Plus, online activists like Sleeping Giant are hitting hate mongers in the wallet; Andreessen Horowitz launches a special fund for black athletes and celebrities; how millennials murdered mayonnaise. The Saudis are a big deal in Silicon Valley, and they are getting bigger. The news that the Saudi Arabian government had essentially convinced Elon Musk to weigh taking Tesla private is another reminder that Riyadh is an ascendant, underrated power player in Silicon Valley finance. On the other hand, it turns out the take-private funding Musk mentioned in his bombshell tweet — which he says was supposed to come from the Saudi sovereign wealth fund — wasn’t quite “secured” after all. [Theodore Schleifer / Recode] [Want to get the Recode Daily in your inbox? Subscribe here.] Online activists like Sleeping Giants are hitting hatemongers like Alex Jones and Infowars where it hurts the most — in the wallet. Founded by someone who had spent two decades in the advertising industry, the volunteer project points out to companies that they are advertising in awful places — advertisers fled both Bill O’Reilly and Laura Ingraham after Sleeping Giants campaigns. As the conversation continues about how we should challenge hate online, and here’s one more note of caution — we should be wary of celebrating any case of censorship — especially by opaque companies — because practices that marginalize the right will cut both ways. [Margaret Sullivan / The Washington Post] Facebook news executive Campbell Brown reportedly told a group of Australian publishers that if they didn’t cooperate with the social network, their business would die. “We are not interested in talking to you about your traffic and referrals anymore. … That is the old world and there is no going back,” Brown said, according to several reports of the meeting. Facebook said that the comments were taken out of context, and Brown said in a statement that the company’s goal is to “help journalism succeed and thrive.” [Sara Salinas / CNBC] In an effort to boost diversity in tech, Andreessen Horowitz launched a $15 million fund for black celebrities, athletes and media figures. Kevin Durant and Will Smith are among its initial limited partners. The small fund, called Culture, will invest alongside a16z’s main $1.5 billion fund; the firm will donate the usual proceeds from fees and carried interest to nonprofits aimed at boosting the involvement of black people in technology. [Yoree Koh / The Wall Street Journal] Netflix CFO David Wells, who led the streaming service’s aggressive international expansion to 190 countries, is leaving the company after 14 years. Wells said he plans to focus more on philanthropy after helping Netflix choose his successor. [Todd Spangler / Variety] Banks and retailers are tracking how you type, swipe and tap.“Behavioral biometrics” — the way you press, scroll and type on a phone screen or keyboard — can provide data as unique as your fingerprints or facial features. To fight fraud, some companies are tracking visitors’ physical movements as they use websites and apps, but others are going significantly further, unobtrusively amassing tens of millions of profiles that can identify customers by how they touch, hold and tap their devices. [Stacy Cowley / The New York Times] Top stories from Recode 10 charts that sum up 2018 (so far). News cycles come and go, but data is forever. This is cool How millennials murdered mayonnaise.

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posted 4 days ago on re/code
Not only are the Saudis are a viable pool of cash for cash-seekers, they are building considerable leverage in Silicon Valley dealmaking. The Saudi Arabian government cannot make any Silicon Valley hotshot do anything. But they can make it awfully appetizing. The news that the Saudi government had essentially convinced Elon Musk to weigh taking Tesla private served as another reminder that Riyadh is an ascendant, underrated power player in Silicon Valley finance. If Musk and the Saudis manage to take the $60 billion company off the public markets, it will embolden a sovereign wealth fund that, despite its charm offensive in recent years, is still working to secure its footing in America’s old-guard money world. The Saudis have not been quiet about their ambitions to play with the big boys in Silicon Valley over the last three years. The country’s $3.5 billion investment in Uber was not a splash but the opening of a gusher, an unsaid hello from Saudi Arabia to U.S. companies that it is a willing investor if they will help move the Saudis off their dependence on oil. Soon after came Saudi-sized checks into the $100 billion SoftBank Vision Fund, the most ambitious investing project in Silicon Valley today. America’s jet-setting class toasted the country last October at what has become a new stop on the high-finance conference calendar. And, of course, there was this year’s visit by Mohammed bin Salman, the country’s emissary to Silicon Valley, who was greeted with glitz and glam at America’s most prominent corporations. Don’t be surprised if the Saudi sovereign wealth fund soon opens an office in San Francisco or on Sand Hill Road. These Saudi moves haven’t been universally embraced. Yes, money knows no boundaries, but some CEOs and venture capitalists do grumble about whether a country with a shoddy human rights record should be holding the purse string in the American economy’s most vibrant, innovative sector. The kicker: These complaints are made very, very privately — a full admission if there ever was one that Saudi Arabia is going to stay part of the U.S. financial firmament and isn’t worth upsetting. If the Saudis are indeed able to successfully finance a take-private of Tesla, it would take that understanding one step further: Not only are they a viable pool of cash for cash-seekers, they are building considerable leverage in Silicon Valley dealmaking. Dumb, desperate money — so often the caricature of foreign investors trying to make a buck in the U.S. — this is not. Listen to how Musk described the process in his latest statement: Going back almost two years, the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private. They first met with me at the beginning of 2017 to express this interest because of the important need to diversify away from oil. They then held several additional meetings with me over the next year to reiterate this interest and to try to move forward with a going private transaction. Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction. Recently, after the Saudi fund bought almost 5% of Tesla stock through the public markets, they reached out to ask for another meeting. That meeting took place on July 31st. During the meeting, the Managing Director of the fund expressed regret that I had not moved forward previously on a going private transaction with them, and he strongly expressed his support for funding a going private transaction for Tesla at this time. I understood from him that no other decision makers were needed and that they were eager to proceed. Just because Musk has “funding secured” — in the perhaps-soon-to-haunt him words of his first bombshell tweet — does not mean that he will accede to the Saudis’ coaxing. And Musk obviously has his own independent reasons to at least be open to shielding Tesla from the public markets. But the Saudis, in Musk’s retelling, have figured out how to patiently, skillfully work one of Silicon Valley’s most headstrong CEOs. The Saudis have not totally blended in. There are still unique regulatory, political and financial risks to taking money from overseas investors that will never evaporate entirely. But they are showing muscle and projecting strength that makes them more and more indistinguishable from Silicon Valley’s other homegrown power players.

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posted 5 days ago on re/code
The SEC isn’t commenting yet. In a new blog post today, Tesla CEO Elon Musk attempted to clarify some very pertinent points about what taking the electric car company private would look like. But the unpredictable executive has prompted more questions than he answered. Specifically, Musk said that when he tweeted his intentions to take the company private last week — and said he had “funding secured” — he said this because a member of the Saudi Arabian sovereign wealth fund “strongly expressed his support for funding a going-private transaction.” Musk wrote that given the enthusiasm for taking Tesla private and given that the fund has “more than enough capital” to bankroll this sort of a transaction, he left the meeting “with no question” that a deal could be closed, and it would only be a matter of getting the process going. But that doesn’t exactly mean that the capital needed to take Tesla private — which Musk says wouldn’t be a straightforward leveraged buyout, because it would be funded by equity, not debt — has been “secured.” Tesla is still a public company, which means it’s subject to the rules and regulations of the U.S. Securities and Exchange Commission. That means words do matter. While the SEC may not take issue with Musk using Twitter to announce he was considering taking Tesla private, former SEC chairman Harvey Pitt has said that it would be a violation if Musk’s tweet wasn’t entirely accurate. So it matters — greatly — if funding was in fact secured before Musk tweeted that it was. The SEC declined to comment on whether Musk’s new blog post was a sufficient explanation for his tweet. But Musk went on to say that it was “premature” to provide a full report of the plan to an independent board committee, as is typical, because he is having more discussions with the Saudi fund, as well as with other investors. This, again, implies that funding hasn’t been entirely secured. “Another critical point to emphasize is that before anyone is asked to decide on going private, full details of the plan will be provided, including the proposed nature and source of the funding to be used. However, it would be premature to do so now. I continue to have discussions with the Saudi fund, and I also am having discussions with a number of other investors, which is something that I always planned to do since I would like for Tesla to continue to have a broad investor base.” While the SEC may not have much to say publicly, recent reports indicate the Commission was already looking into Musk’s public announcements of things like manufacturing and sales goals before the take-private tweet. The Commission is also said to have broadened the scope of that inquiry to include whether the “funding secured” statement was intended to be factual, according to Bloomberg. But it’s not just the SEC that’s looking into the factual nature of Musk’s tweets. Already, two class-action lawsuits have been filed by investors against Tesla and Musk, both of which alleged Musk “materially misled investors” with his tweet last week. These lawsuits, both filed in the Northern District of California, accuse Musk of manipulating the market with false statements that caused investors “to purchase or sell Tesla securities at artificially high or low prices.” A few hours after Musk’s tweet, the stock jumped to $371 from $358. Trading was halted shortly after. Today, it’s trading around $352 — far short of the $420 mark. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["nZBJ9"]={},window.datawrapper["nZBJ9"].embedDeltas={"100":675,"200":600,"300":600,"400":575,"500":575,"700":575,"800":575,"900":575,"1000":575},window.datawrapper["nZBJ9"].iframe=document.getElementById("datawrapper-chart-nZBJ9"),window.datawrapper["nZBJ9"].iframe.style.height=window.datawrapper["nZBJ9"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["nZBJ9"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("nZBJ9"==b)window.datawrapper["nZBJ9"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); While inquiries into whether Musk misrepresented where the company is in this process continue, this situation is actually a perfect example of why he wants to take Tesla private. Musk has long lamented the pressure of operating a company publicly and last week wrote that taking it private would allow Tesla to focus on meeting its goals instead of meeting Musk’s self-imposed and publicly stated deadlines. It also means there may be less weight placed on Musk’s tweets.

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posted 5 days ago on re/code
Plus, Saudi Arabia’s sovereign wealth fund is in talks to help Elon Musk take Tesla private; back-to-school season means the newest ways for marketers to sell direct-to-kids; comedy on the road — and from robots. Here’s why Facebook banned Alex Jones — and why Twitter didn’t. The ethical controversy has created a week’s worth of discussion and opinions: Here’s a glimpse inside Twitter’s Friday meeting where CEO Jack Dorsey and other execs discussed Infowars, what “dehumanizing speech” means and a possible drafting of new policies. Meanwhile, Jeff Jarvis argues that platforms are not publishers, and that social media and journalism share space in a larger ecosystem, each with distinct jobs to do. “Twitter is not The New York Times,” he says. “It is Times Square.” It’s not a binary choice keeping the likes of Infowars or banning them, opines Mike Masnick, who suggests moving to a world of protocols instead of platforms, in which Facebook and others would open up so that third-party tools can provide their own experiences — and then each person could choose the service or filtering setup that they want. [Casey Newton / The Verge] [Want to get the Recode Daily in your inbox? Subscribe here.] Saudi Arabia’s sovereign wealth fund is in high-level talks to become a significant investor in Tesla as part of CEO Elon Musk’s proposal to take the electric car maker private. The Public Investment Fund has recently built up a $2 billion stake in Tesla — just shy of 5 percent — and discussions began before Musk’s controversial tweet saying he was weighing a plan to take the company private. The Saudi fund sees its investment in Tesla as a strategic way for the world’s biggest crude producer to hedge against oil. [Matthew Martin and Ruth David / Bloomberg] Back-to-school season is peak time for direct-to-kids marketing, and retailers are using YouTube influencers, apps and Snapchat filters to sell directly to children as young as 6. Nearly half of 10-to-12-year-olds have their own smartphones; nearly 1.5 million children age 11 and under have active Snapchat accounts. And instead of TV, kids are watching hours of videos on platforms like YouTube, where companies such as Nike and Nintendo routinely partner with “influencers” to get their toys, clothing and accessories featured in personalized videos. [Abha Bhattarai / The Washington Post] You might never know it by driving through the place, but Appalachian backwater Spruce Pine, N.C, is the center of a billion-dollar industry — it’s the source of the purest natural quartz ever found on Earth, the ultra-pure, super-secret sand that makes your phone and tablet work. Here’s a macro- to micro- examination of our future in a grain of sand. [Vince Beiser / Wired] While the Trump administration talks about investing $8 billion a federal “Space Force,” three billionaires are racing make commercial space travel a reality. Virgin Galactic founder Richard Branson’s has spent about a billion dollars in his quest to build and test manned rockets; his rivals are Blue Origin, owned by Amazon founder Jeff Bezos and SpaceX owner Elon Musk, the founder of Tesla. Branson’s ace in the space race is pilot Mark Stucky, who manned the 60-foot-long SpaceShipTwo in a successful rocket-powered flight in April. [Nicholas Schmidle / The New Yorker] This is cool The best one-liners in America are on the highway. And: A robot walks into a bar. But can it do comedy?

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posted 5 days ago on re/code
News cycles come and go, but data is forever. It’s still summer and yet 2018 has felt years-long. Here’s a look at the year so far — with a focus on tech and business stories — told through charts. Elon Musk has been on a Twitter rampage Tesla/SpaceX CEO Elon Musk has been especially prolific on Twitter this year, inspiring a full WSJ analysis and graphics package. Most recently, he surprise-announced that he was considering taking Tesla private — at a nice round number of $420 — with mysterious “funding secured.” Other tweets have been bizarre and inappropriate, such as accusing a diver trying to rescue children in Thailand of being a pedophile. And sometimes he’s just talking to randos. Here’s a look at Musk’s tweet count per month, not including retweets or replies: if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["DJ1XW"]={},window.datawrapper["DJ1XW"].embedDeltas={"100":692,"200":575,"300":550,"400":536,"500":536,"700":536,"800":536,"900":536,"1000":536},window.datawrapper["DJ1XW"].iframe=document.getElementById("datawrapper-chart-DJ1XW"),window.datawrapper["DJ1XW"].iframe.style.height=window.datawrapper["DJ1XW"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["DJ1XW"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("DJ1XW"==b)window.datawrapper["DJ1XW"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Electric vehicles are gearing up for a record year While Elon Musk blows off steam, more than 152,000 plug-in electric vehicles have sold in the U.S. so far this year, putting 2018 on track for record sales. Three of the five best-selling months of all time for electric vehicles have all happened this year, according to electric vehicle publication Inside EVs, and we haven’t even reached the holidays, which marks peak car-buying season. Tesla’s Model 3 is the best-selling electric car in the U.S., and production is just ramping up. Inside EVs is projecting that plug-in electric vehicles sales will hit 325,000 this year, a 60 percent increase. Here’s what it looks like so far: if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["vUXri"]={},window.datawrapper["vUXri"].embedDeltas={"100":678,"200":575,"300":575,"400":550,"500":550,"700":550,"800":550,"900":550,"1000":550},window.datawrapper["vUXri"].iframe=document.getElementById("datawrapper-chart-vUXri"),window.datawrapper["vUXri"].iframe.style.height=window.datawrapper["vUXri"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["vUXri"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("vUXri"==b)window.datawrapper["vUXri"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Juul has become a vaping phenomenon Juul seems to have finally made vaping “cool” — at least from the perspective of teens and some venture capitalists. The company, which makes sleek, flashy, flavored e-cigarettes, owns about 60 percent of the U.S. vaping market and is now valued at $15 billion — about the same as Lyft. Watch Juul take off in Google searches here: if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["tLYuq"]={},window.datawrapper["tLYuq"].embedDeltas={"100":664,"200":575,"300":550,"400":550,"500":525,"700":525,"800":525,"900":525,"1000":525},window.datawrapper["tLYuq"].iframe=document.getElementById("datawrapper-chart-tLYuq"),window.datawrapper["tLYuq"].iframe.style.height=window.datawrapper["tLYuq"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["tLYuq"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("tLYuq"==b)window.datawrapper["tLYuq"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); The U.S. is still super polarized Politics rarely make for pleasant conversation, but this year feels especially charged, with everything from gun control to international policy seeming like it’s going to upend civil society. One effect (and/or cause) is that President Trump elicits highly divergent opinions from Americans, depending on which side of the political spectrum they fall, according to polling data from Pew Research Center. There’s a huge gulf in his approval ratings between Democrats and Republicans: Some 84 percent of Republicans approve of him compared to just 7 percent of Democrats, for a gap of 77 percentage points — more so than any other recent U.S. president. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["VJz5Y"]={},window.datawrapper["VJz5Y"].embedDeltas={"100":566,"200":466,"300":441,"400":416,"500":391,"700":391,"800":366,"900":366,"1000":366},window.datawrapper["VJz5Y"].iframe=document.getElementById("datawrapper-chart-VJz5Y"),window.datawrapper["VJz5Y"].iframe.style.height=window.datawrapper["VJz5Y"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["VJz5Y"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("VJz5Y"==b)window.datawrapper["VJz5Y"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Cryptocurrency prices are down big after last year’s crazy rise If 2017 was the year of go-go bitcoin, 2018 has been a correction. Major cryptocurrencies bitcoin and ethereum are worth half what they were at the start of the year. Prices peaked late in 2017, when it seemed like everyone was hopping on the get-rich-quick bandwagon and glued to their Coinbase apps. Still unknown: Whether the blockchain will someday power technologies or services as transformative as the internet — or not. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["9Meqd"]={},window.datawrapper["9Meqd"].embedDeltas={"100":575,"200":575,"300":550,"400":550,"500":550,"700":550,"800":550,"900":550,"1000":550},window.datawrapper["9Meqd"].iframe=document.getElementById("datawrapper-chart-9Meqd"),window.datawrapper["9Meqd"].iframe.style.height=window.datawrapper["9Meqd"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["9Meqd"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("9Meqd"==b)window.datawrapper["9Meqd"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Facebook took a big bath, but it’s already recovering In July, Facebook announced that its growth was really starting to slow. Its earnings report sent shares down 20 percent and knocked nearly $120 billion off the company’s market cap — the largest one-day decline in U.S. history. Already the stock had been quite volatile in 2018, thanks in part to revelations about a third-party analytics firm amassing data on Facebook users without their permission. But it’s also already gained back about a third of its crash. Here’s its stock price year-to-date: if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["fkzBG"]={},window.datawrapper["fkzBG"].embedDeltas={"100":614,"200":575,"300":550,"400":550,"500":550,"700":550,"800":550,"900":550,"1000":550},window.datawrapper["fkzBG"].iframe=document.getElementById("datawrapper-chart-fkzBG"),window.datawrapper["fkzBG"].iframe.style.height=window.datawrapper["fkzBG"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["fkzBG"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("fkzBG"==b)window.datawrapper["fkzBG"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); MoviePass was, sadly, too good to be true When MoviePass started charging $10 a month for nearly unlimited movie theater tickets, it seemed unbelievable. Since then, MoviePass has plummeted back to reality. It’s tried raising prices and altering its unlimited offerings to a much more pedestrian three movies a month, as it tries to staunch its cash burn. Its valuation, too, has collapsed, as majority shareholder Helios and Matheson Analytics went from being worth hundreds of millions to less than half a million dollars. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["JnYWU"]={},window.datawrapper["JnYWU"].embedDeltas={"100":675,"200":600,"300":550,"400":550,"500":550,"700":525,"800":525,"900":525,"1000":525},window.datawrapper["JnYWU"].iframe=document.getElementById("datawrapper-chart-JnYWU"),window.datawrapper["JnYWU"].iframe.style.height=window.datawrapper["JnYWU"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["JnYWU"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("JnYWU"==b)window.datawrapper["JnYWU"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); The biggest fire in California history is burning There were 18 wildfires blazing in California recently, two of which rank among the biggest in the state’s history. In particular, this year’s Mendocino Complex fire is the largest on record for the state, with more than 300,000 acres already destroyed. Climate change, sprawling development and plenty of fuel are ushering in an era of megafires. Here’s a list of California’s largest wildfires by acreage and year: if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["k7PZz"]={},window.datawrapper["k7PZz"].embedDeltas={"100":620,"200":542,"300":503,"400":503,"500":503,"700":503,"800":503,"900":503,"1000":503},window.datawrapper["k7PZz"].iframe=document.getElementById("datawrapper-chart-k7PZz"),window.datawrapper["k7PZz"].iframe.style.height=window.datawrapper["k7PZz"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["k7PZz"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("k7PZz"==b)window.datawrapper["k7PZz"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); U.S. unemployment rates are at long-time lows The national unemployment rate is at an 18-year low, with just 3.9 percent of the workforce currently unemployed. Low unemployment is typically a sign of a strong economy, but in this case, it masks stagnating wages and the fact that many people have dropped out of the workforce. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["h3sYn"]={},window.datawrapper["h3sYn"].embedDeltas={"100":600,"200":550,"300":550,"400":525,"500":525,"700":525,"800":525,"900":525,"1000":525},window.datawrapper["h3sYn"].iframe=document.getElementById("datawrapper-chart-h3sYn"),window.datawrapper["h3sYn"].iframe.style.height=window.datawrapper["h3sYn"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["h3sYn"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("h3sYn"==b)window.datawrapper["h3sYn"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); There’s no song of the summer, but #InMyFeelings stormed social media The “In My Feelings” Challenge, inspired by a video from Instagram comedian Shiggy, involves jumping out of a moving vehicle and dancing along to Drake’s hit song by the same name. Since the video’s debut in late June, social media has been alight with numerous adaptations of the dance routine. It has inspired more than a million posts on Instagram and more than 3 million tweets, using #InMyFeelingsChallenge and related hashtags. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["9bL72"]={},window.datawrapper["9bL72"].embedDeltas={"100":656,"200":589,"300":550,"400":550,"500":525,"700":511,"800":511,"900":511,"1000":511},window.datawrapper["9bL72"].iframe=document.getElementById("datawrapper-chart-9bL72"),window.datawrapper["9bL72"].iframe.style.height=window.datawrapper["9bL72"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["9bL72"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("9bL72"==b)window.datawrapper["9bL72"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Bonus: Electronic scooters took over U.S. sidewalks First there were none and now they are seemingly everywhere: Within a year of launching e-scooter services, already, nearly 4 percent of people in major U.S. cities have used an electric scooter, a much swifter adoption rate than previous forms of transportation. That potential has given Bird and Lime sky-high, unicorn valuations. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["dfnyG"]={},window.datawrapper["dfnyG"].embedDeltas={"100":249,"200":199,"300":174,"400":174,"500":174,"700":174,"800":174,"900":174,"1000":174},window.datawrapper["dfnyG"].iframe=document.getElementById("datawrapper-chart-dfnyG"),window.datawrapper["dfnyG"].iframe.style.height=window.datawrapper["dfnyG"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["dfnyG"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("dfnyG"==b)window.datawrapper["dfnyG"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Have a suggestion for a chart here? Tweet us at @Recode.

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posted 8 days ago on re/code
Plus, Tesla’s board is taking Elon Musk’s proposal to go private seriously; Tribune Media calls off the Sinclair Broadcast merger; how people laugh online around the world. Samsung unveiled its flagship Galaxy Note 9, which looks nearly identical to its S9 predecessor but boasts a bigger screen, a huge battery and a more powerful S Pen. Available for preorder today, and in stores Aug. 24, the Note 9 comes in two configurations, starting at $999. Our sister site The Verge had some hands-on time with the device and said the 6.4-inch Infinity Display is “phenomenal to look at,” but it “still feels like a giant phone in your hand.” Not at all coincidentally, viral game sensation Fortnite is available on select Samsung Android phones now, including the Galaxy Note 9. Your move, Apple. [Chris Welch / The Verge] [Want to get the Recode Daily in your inbox? Subscribe here.] Samsung also announced a long-term partnership with Spotify, including support for its forthcoming Galaxy Home smart speaker. Spotify is now part of the setup experience on Samsung devices — it will come preloaded on the Galaxy Note 9, for instance — and will also become the default music option for Bixby, Samsung’s voice assistant. [Chaim Gartenberg / The Verge] Tesla CEO Elon Musk gave the week a jolt with his tweeted proposal to take the company private at $420 a share. It still isn’t clear if that number is a troll or if Tesla has committed financing, but Tesla’s board of directors is taking Musk’s offer seriously and plans to meet with advisors next week to explore the buyout — and it may tell Musk to recuse himself from the process. Musk holds about 20 percent of Tesla, which right now has a market cap around $59.3 billion; taking the company private at $420 a share would value it around $71 billion. [Alex Sherman / CNBC] Speaking of Tesla, its senior VP of engineering Doug Field has gone back to Apple, where he has reportedly joined the company’s self-driving car project, codenamed Project Titan. Before Tesla, Field was Apple’s VP of Mac hardware engineering. This suggests Apple’s ambitions for the future of mobility may be more than the dampened expectations of late.[John Gruber / Daring Fireball] Tribune Media called off the proposed $3.9 billion deal for Sinclair Broadcast Group to purchase Tribune. Tribune also filed suit against Sinclair — the largest U.S. broadcast station owner, with 192 stations — over allegations of material breach of contract, claiming it took too long and was too aggressive in its dealings with regulators. The collapse of the merger — hatched 15 months ago and backed by President Trump — potentially ends Sinclair’s hopes of building a national conservative-leaning TV powerhouse that might have rivaled Fox News. [David Shepardson / Reuters] When Indra Nooyi steps down as PepsiCo’s CEO after 12 years in the role, her departure will leave only 23 women — less than 5 percent — with top jobs at companies in the S&P 500 stock index. Nooyi’s departure comes as part of a trend: In recent months, Denise Morrison of Campbell Soup Company, Margo Georgiadis of Mattel, Meg Whitman of Hewlett Packard Enterprise and Irene Rosenfeld of Mondelez, have left their jobs. That’s a 20 percent drop in the number of female CEOs. Nooyi’s replacement will be Ramon Laguarta, a two-decade veteran of the company, and, also, a man. [Sheelah Kolhatkar / The New Yorker] A new report suggests that receiving personal “snail mail” makes millennials feel “special.” The U.S. Postal Service — which has been hobbled by the rise of the internet, and lost $2.7 billion last year alone — sees that trend as a chance to stage a turnaround. [Sarah Holder / CityLab] Top stories from Recode WeWork is still growing phenomenally — and losing a lot of money. But revenue growth is accelerating, according to the office-sharing startup’s second-quarter earnings report. The “Trump bump” in the New York Times’ subscription growth is over. Almost 40 percent of new digital subscriptions are for crosswords and cooking. Gaming chat app Discord will start selling games to its 150 million users. on the latest episode of Recode Media, Discord CEO Jason Citron said that for now, at least, it wants to be a “neighborhood game store” — so, no big games like Fortnite. This is cool From “lol” to “xaxa”: How people around the world laugh online.

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posted 8 days ago on re/code
Revenue growth is accelerating. WeWork’s growth is accelerating as the office-rental firm adds more locations and tenants. But the company is still spending a lot to achieve that growth. WeWork generated $422 million in the second quarter, according to a financial presentation shared with Recode, representing 113 percent year-over-year growth. That’s faster growth than in prior quarters. Based on June’s revenue, it’s now on a $1.8 billion annual run rate. But the company is still losing money. Its net loss was $723 million in the first half of the year on about $764 million of revenue. That’s a larger loss than the same period a year ago, when it lost $154 million on $362 million of revenue. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["l47MX"]={},window.datawrapper["l47MX"].embedDeltas={"100":600,"200":575,"300":550,"400":550,"500":550,"700":550,"800":550,"900":550,"1000":550},window.datawrapper["l47MX"].iframe=document.getElementById("datawrapper-chart-l47MX"),window.datawrapper["l47MX"].iframe.style.height=window.datawrapper["l47MX"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["l47MX"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("l47MX"==b)window.datawrapper["l47MX"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); In an interview with Recode, WeWork CFO Artie Minson said the losses reflect the large capital expenditure it takes to open up new offices, which require time before they become profitable. WeWork also famously reports a vanity metric called “community-adjusted” earnings before interest, taxes, depreciation and amortization. This is supposed to show how profitable the bare bones of the business would be, without the expenses it spends on growth. Here, it says it’s becoming more profitable — $202 million in the first half of 2018, up from $95 million at the same time last year. Other notes from WeWork’s docs: There are now 268,000 WeWork members — people who use a WeWork space or its office services — which is more than double the number from a year ago. Occupancy rates increased to 84 percent across WeWork’s 287 locations, up from 78 percent occupancy a year ago. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["UBhVH"]={},window.datawrapper["UBhVH"].embedDeltas={"100":600,"200":575,"300":550,"400":550,"500":550,"700":550,"800":550,"900":550,"1000":550},window.datawrapper["UBhVH"].iframe=document.getElementById("datawrapper-chart-UBhVH"),window.datawrapper["UBhVH"].iframe.style.height=window.datawrapper["UBhVH"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["UBhVH"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("UBhVH"==b)window.datawrapper["UBhVH"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Overall, average revenue per member decreased to $6,641 on an annualized basis, down from $7,022 this time last year. Minson said this is because WeWork has grown its presence in relatively less-expensive markets like Mexico City. But on a constant city basis, the company is taking in more revenue per head. Big corporate clients — tenants who work at companies with more than 1,000 people — now make up 25 percent of WeWork’s membership, up from 17 percent at the same time last year. The company also announced another $1 billion investment from SoftBank in the form of convertible debt.

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posted 8 days ago on re/code
Almost 40 percent of new digital subscriptions are for crosswords and cooking. Donald Trump’s election to the U.S. presidency — and the chaos that followed — drove a massive spike in digital news subscriptions for the New York Times. Whether it was because of readers’ desire to be better informed, or simply to support a newspaper that was aggressively covering Trump’s administration, the Times grew by hundreds of thousands of subscribers in the months following Trump’s victory. While the Times’ subscriber base is still growing, that “Trump bump” appears to be over. The company said this week that it added 68,000 digital news subscribers in the second quarter, ending June with 2.4 million digital news subscribers, 2.9 million total digital subscriptions (including crossword and cooking subscriptions) and 3.8 million total subscriptions (including the printed newspaper). if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["M3FKM"]={},window.datawrapper["M3FKM"].embedDeltas={"100":625,"200":575,"300":550,"400":550,"500":525,"700":525,"800":525,"900":525,"1000":525},window.datawrapper["M3FKM"].iframe=document.getElementById("datawrapper-chart-M3FKM"),window.datawrapper["M3FKM"].iframe.style.height=window.datawrapper["M3FKM"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["M3FKM"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("M3FKM"==b)window.datawrapper["M3FKM"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); But that growth rate in new digital news subscriptions is down 27 percent from the same period a year earlier, and well below its peak of more than 300,000 in the first quarter of 2017 — the quarter of Trump’s inauguration, the travel ban and other big stories. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["4K0K9"]={},window.datawrapper["4K0K9"].embedDeltas={"100":675,"200":600,"300":575,"400":550,"500":550,"700":525,"800":525,"900":525,"1000":525},window.datawrapper["4K0K9"].iframe=document.getElementById("datawrapper-chart-4K0K9"),window.datawrapper["4K0K9"].iframe.style.height=window.datawrapper["4K0K9"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["4K0K9"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("4K0K9"==b)window.datawrapper["4K0K9"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Subscriptions have become increasingly important to the New York Times as it faces industry-wide declines in its advertising business. Its subscription revenue increased 4.2 percent in the second quarter compared to the year earlier, while advertising revenue declined 10 percent. Subscriptions currently account for about two-thirds of the company’s revenue. Nearly 40 percent of the Times’ new digital subscriptions last quarter came from its crossword and cooking products, up from about 8 percent in the second quarter of 2015. Before June 2017, the New York Times did not charge a separate subscription for its cooking site, so the other digital subscription revenue had been coming from crosswords alone. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["HUqZQ"]={},window.datawrapper["HUqZQ"].embedDeltas={"100":717,"200":614,"300":550,"400":550,"500":550,"700":525,"800":525,"900":525,"1000":525},window.datawrapper["HUqZQ"].iframe=document.getElementById("datawrapper-chart-HUqZQ"),window.datawrapper["HUqZQ"].iframe.style.height=window.datawrapper["HUqZQ"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["HUqZQ"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("HUqZQ"==b)window.datawrapper["HUqZQ"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); News subscriptions are more expensive, and brought in about $40 in revenue per subscriber last quarter, whereas the crossword and cooking offerings brought in about $10, on average.

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posted 9 days ago on re/code
For now, at least, it wants to be a “neighborhood game store” — so, no big games like Fortnite. For people who play video games on the PC, Discord is a big deal — it lets them talk to their friends while they play, and interact with fellow fans and their favorite games’ developers when they’re not playing. Non-gamers might be surprised to learn that those are killer features: To date, Discord says it has registered 150 million users and has 19 million people using it every day. Now the “pre-revenue” company is ready to start making money. It wants to sell new games to those millions of users, Discord CEO Jason Citron said on the latest episode of Recode Media. Games will be sold in two ways: Users who pay $5 a month for premium Discord features will get access to an “all-you-can-eat buffet” of games, or they will be able to buy games à la carte. Although the PC gaming market is currently led by the Valve-owned digital store Steam, Citron believes Discord’s social features will drive gamers to discover new titles that they wouldn’t play otherwise. “The primary way that I figure out what games to play is based on what my friends are doing,” Citron told Recode’s Kurt Wagner. “Now, I can see that very clearly in Discord and I can go buy, directly from us.” For now, at least, the Discord store won’t have every PC game, and you won’t find huge cultural-touchstone titles like Epic Games’ Fortnite. Instead, Citron said it will curate a list of “cool indie titles” and recommend them to users based on their friends’ tastes; Discord will take a cut of those sales, though it’s not disclosing the terms of the revenue split. “The other stores have, like, everything,” he said. “You walk in and there’s tons of stuff everywhere... We really want to create that feeling of walking into a neighborhood bookstore, where you feel like there are people there who you trust that are curating the selection of things available and calling out why you should be interested.” You can listen to Recode Media on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

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posted 9 days ago on re/code
Plus, SoftBank wants to back a startup that delivers pizza made by robots in the truck en route; hands-on with the $2,295 Magic Leap AR headset; the art of Burning Man — now with air-conditioning. Uber was slapped with a major setback in its largest American market after the New York City Council voted to freeze new-vehicle licenses for Uber, Lyft and other ride-hail services in the city. The new rules will make New York the first major U.S. city to restrict the number of ride-hail vehicles and to establish a minimum wage for drivers. Uber and Lyft will be fine — the real concern is that this may set a precedent and a model for other cities that are trying to find ways to rein in the ride-hail companies. [Johana Bhuiyan / Recode] [Want to get the Recode Daily in your inbox? Subscribe here.] While Twitter CEO Jack Dorsey touts the company’s “rules” as the reason it hasn’t banned Alex Jones or Infowars, “it is values that Mr. Dorsey should really be talking about,” Recode editor at large Kara Swisher writes in her latest New York Times column. “By values, I mean a code that requires making hard choices — curating your offerings, which was something Apple got made fun of for doing, back when it launched the App Store, by the open-is-best crowd.” [Kara Swisher / The New York Times] The Magic Leap augmented reality headset finally went on sale (but not everywhere), and after our sister site The Verge spent an afternoon playing with the $2,295 goggles, the verdict is … “not the kind of revolutionary (or downright magical) advance that Magic Leap has teased for years … still very much a work in progress.” Here’s an interview with CEO Rony Abovitz— who now admits that all the pre-market hype was a mistake — and the inside story of his quest to remake the once-mysterious Magic Leap into an ordinary company — with a real product. [Adi Robertson / The Verge] The New York Times continued its digital growth, adding 109,000 digital-only subscribers in the second quarter of 2018; The Times now has 2.9 million digital-only customers, out of 3.8 million total. Revenue from digital subscriptions rose to $99 million in the second quarter, an increase of nearly 20 percent over the same period a year ago, but the company also saw a 10 percent decline in advertising revenue. [Jaclyn Peiser / The New York Times] Disney reported mostly positive financial news earlier this week, but its conference-call conversation was focused almost entirely on what some are calling “Disneyflix.” CEO Bob Iger said the successful introduction of the company’s still-unnamed streaming service would be Disney’s “biggest priority” in 2019, which will also bring the integration of 21st Century Fox assets. Iger also said he would seek subscription sales for the service from every corner of the Disney empire — theme park pass holders, holders of Disney-branded credit cards and those who own Disney time-share properties. [Jill Disis / CNN] Salesforce named Keith Block as co-CEO alongside Marc Benioff. Block, who joined Salesforce in 2013 and became COO in 2016, has been called “the buttoned-down yin to Benioff’s Hawaiian-shirt-wearing yang,” and has served helped to drive the company past one revenue milestone after another. Benioff said the move “really reflects how Salesforce is run today.” [Clifton Leaf / Fortune] Top stories from Recode Tinder’s business will double this year to more than $800 million. Young people are apparently happy to pay for online dating. How much WeWork is too much WeWork? Larger tenants can now rent a more private WeWork space with less branding. This is cool The art of Burning Man — in an air-conditioned Washington, D.C., museum. And yes, there’s a VR version.

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posted 9 days ago on re/code
On NYTimes.com: The platform won’t ban the dangerous liar Alex Jones because he “hasn’t violated our rules.” Then what’s the point of these rules? https://www.nytimes.com/2018/08/08/opinion/twitter-alex-jones-jack-dorsey.html

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posted 9 days ago on re/code
What city will try heavy-handed regulation next? Uber and Lyft took on New York City once again, and this time they lost. The New York City Council voted today to pass a package of bills that would, among other things, instate a 12-month pause on adding new ride-hail cars while the city studies the companies’ effects on congestion and driver wages. Uber and Lyft have warned users that this may lead to higher prices and longer wait times for rides. “These sweeping cuts to transportation will bring New Yorkers back to an era of struggling to get a ride, particularly for communities of color and in the outer boroughs,” Lyft VP of Public Policy Joseph Okpaku said in a statement. This is hardly the end of the world for either company, or for their local competitor, Via; the bills leave a reasonable amount of wiggle room for each to continue to grow. For example, they can apply for more vehicle licenses if they can show that service in underserved areas has been diminished. They can also add more wheelchair-accessible vehicles, which aren’t part of the cap — the issue is that wheelchair-accessible cars are typically much more expensive. “We take the Speaker at his word that the pause is not intended to reduce service for New Yorkers and we trust that he will hold the TLC accountable, ensuring that no New Yorker is left stranded,” Uber spokesperson Matt Wing said in a statement. But the real trouble is that this may set a precedent for other cities looking to regulate Uber. While Uber and Lyft may be able to stomach a pause in what is Uber’s largest market in the U.S., attempts to replicate these bills in other places may prove to be much more overbearing or sweeping than those passed today in New York. And with both companies eyeing an IPO in the next two years, regulation that dictates how much these companies can grow across several top markets could pose a more serious risk to their forecasts. While Uber won its last battle with New York City, its efforts to counter were weaker this time around. For one, both Uber and Lyft had less time to activate their most loyal riders and community leaders. The last time New York City Mayor Bill de Blasio tried to impose a temporary cap on Uber, the company had about a month to fight it. This time, Uber and Lyft only had around two weeks. More importantly, it wasn’t just a cap that Uber and Lyft were fighting. The New York City Council rather strategically packaged the cap proposal with bills that would regulate minimum wages for drivers — which the companies didn’t oppose — in the aftermath of a string of driver suicides. Both companies simply had less ground in opposing this package of bills. Over the next year, New York’s Taxi and Limousine Commission will study the ride-share companies’ effects on congestion, how often their cars have passengers, and driver wages, among other things. The findings will then be used to determine decisions like whether there should be a permanent cap on ride-hail licenses, minimum livable wages for drivers and a potential minimum fare for each ride. (Worth noting: Both Uber and Lyft have had often-contentious relationships with the New York TLC.) But today, drivers — taxi and ride-hail alike — are rejoicing. “Workers and New York leaders made history today,” says Ryan Price, executive director of the Independent Driver Guild, a pseudo-union created out of a settlement with Uber. “It’s not easy taking on Silicon Valley behemoths, but we kept on fighting for what we know is right and today the workers prevailed.”

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posted 9 days ago on re/code
Larger tenants can now rent a more private WeWork space with less branding. WeWork has realized that not all of its customers want to drink the WeWork kombucha. The company has grown to a $20 billion valuation by supplying office space with short-term leases, flexible terms, a built-in community and a signature glass-and-hardwood office design that’s minimal but distinct. But that is more than what some tenants — particularly bigger ones, which are increasingly WeWork’s customers — want. So today, WeWork announced new, less-branded and less-staffed offerings, called HQ by WeWork. These are targeted at medium-sized businesses that want WeWork’s flexible lease terms without its preset culture. This allows larger tenants to “pull pieces of WeWork culture as needed, but not being sort-of engulfed in it,” said WeWork Chief Growth Officer David Fano. HQ by WeWork is targeted at businesses with around 11 to 250 employees, putting these companies on private floors in smaller buildings than typical WeWork locations. WeWork will still provide the basics — office furniture, phone booths and conference rooms, some facilities maintenance — but there won’t be things like WeWork-branded signage, building-wide happy hours or full-time staff dedicated to the building. If customers want more amenities, such as cold-brew coffee or increased staff — such as a dedicated community manager — they can order them as add-on services. “The idea is WeWork is all-included, and this is a la carte” Fano said. The move comes as WeWork tries to grow beyond its initial audience of entrepreneurs and “co-working” tenants — focusing on larger clients — and as competition grows. New York-based Knotel, for example, offers “agile” headquarters on flexible leases, with over 60 locations in four cities. Convene, another would-be rival, recently raised $152 million. WeWork has also moved into consulting, offering office-design advice, and recently won a deal to redesign a UBS office in New York. WeWork has already signed six leases for HQ by WeWork buildings and claims that there has been high demand from tenants.

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posted 10 days ago on re/code
Apparently young people are happy to pay for online dating. It turns out young people don’t mind paying for online dating. Tinder will generate more than $800 million in revenue this year, according to Match Group CFO Gary Swidler. That’s more than double the roughly $400 million Tinder brought in last year, and also means the dating app will be responsible for almost half of Match Group’s projected annual revenue of $1.7 billion. Swidler mentioned Tinder’s projected revenue on Match Group’s earnings call this morning. The company has talked about Tinder revenue in the past, but always at the end of the year. Today was the first time it has shared Tinder revenue projections. Tinder generates almost all of its revenue from subscriptions. Swidler says that Tinder Gold — the premium subscription service it rolled out last year, which gives users more features for $14.99 a month — is a big reason that sales are up. The other reason is from more paying subscribers. Tinder added almost 300,000 new subscribers in the second quarter, and now has almost 3.8 million total. For context, Tinder’s business in 2018 will be almost as big as Snap’s business was last year, and growing at about the same pace Snap was in 2017, too. The big difference is that Tinder is very profitable, and Snap isn’t. Match has said in the past that Tinder’s profit margin is higher than 40 percent. That suggests the company could generate at least $320 million in profit in 2018. Snap lost $353 million in the second quarter alone. Lastly, it’s clear after seeing Tinder’s success why Facebook is suddenly interested in dating. Facebook has some perceived advantages over Tinder — it has a massive network of people already on its service, and has shown that its matching algorithms can be almost too good. One of Tinder’s advantages over Facebook, though, is that it’s not Facebook. Still, Facebook is suddenly facing the prospect that its main Facebook app, which has grown like crazy for a decade, may be slowing down. Adding another line of business — particularly if it chooses to follow Tinder’s subscription strategy — would make some sense.

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