The Big Five in tech are eating each others’ lunch
When the top five companies by market cap are all roughly in the same business, they’ll inevitably start going after each other’s core business. As for startups working on adjacent markets? As long as those markets are large enough, or support one of the Big Five’s larger business goals — well they’re just an hors d’oeuvre.
While Facebook has been aggressive in the past (its Instagram and WhatsApp acquisitions all but insured Twitter and Snapchat’s woes), Google takes this week’s crown as the most omnivorous of the bunch. Not only is the company taking on Microsoft’s LinkedIn with its new Hire service, its also shaking Facebook’s core moneymaker — the newsfeed. Yesterday Google announced a new newsfeed product that looks and feels an awful lot like Facebook’s newsfeed product — minus the baby pics and kitten videos (and, one presumes, the fake news). Built on top of Google’s massive knowledge of its customers’ preferences, search history, and app usage, the newsfeed product has a decent chance of stealing valuable attention from Facebook’s core customer set (and, let’s face it, Twitter is most likely not pleased with this development as well).
And while Google takes this week’s crown, Amazon’s also bellying up to the lunch buffet. A report in Quartz this weeks notes that Amazon recently filed a trademark for the tagline “We do the prep. You be the chef.” That sank Blue Apron’s newly minted stock to all time lows —and the beleaguered startup’s only been public for a few weeks. Not content with spooking the entire home grocery market (remember, it recently bought Whole Foods), Amazon also announced Spark, a shopping service cum social network that, you guessed it, takes the form of a feed that looks an awful lot like Instagram. Only Amazon Prime members can post products to Spark, but any Amazon customer can browse and buy from the “shoppable” feed. While press reports focused on Spark as a challenge to Facebook’s Instagram, it’s likely that executives at Pinterest are sleeping less soundly this week as well.
Watson Slapped, Is Content King?, and a Call for Antitrust from…the Journal?
Welcome back to the Daily. We’re back to our Monday-Wednesday-Friday schedule, but absent our fearless writer, Scott Rosenberg, who’s moved on to a publication we all love, Backchannel. I’ll be writing the Daily for now, please be gentle with me, as Scott’s prose is hard to match. But for today, enjoy what seems to be a building narrative: the role of tech in society is getting a bit too big for its own britches.
It Ain’t Elementary, Watson
IBM’s stock suffered a high profile downgrade late last week, thanks to an analyst report which essentially called bullshit on Watson, IBM’s high-profile “AI as a service” unit. The report, from investment bank Jeffries, used the failure of a cancer diagnosis project at M.D. Anderson as a jumping off point to conclude that IBM’s significant investments in Watson would fail to return shareholder equity anytime soon. Jeffries also pulled data from major jobs posting sites that showed IBM to be far behind Amazon, Facebook and Microsoft when it comes to attracting AI-related talent. That’s a problem for a company that has made Watson the center of its public brand (you did see the ads with Bob Dylan and Serena Williams, right?).
You know how, when you search Google for some kind of product, the top of the results page displays a row of ad boxes for the product? That’s called Google Shopping, and it just cost the company $2.7 billion in fines from the European Union. Regulators there charge that Google has favored its own shopping search tool at the expense of competitors’ offerings (The New York Times).
That penalty amount is way higher than experts expected, and it holds dark omens for Google. It’s not that the large penalty is itself a serious problem for the wealthy company; it earned twice that amount in the first quarter of this year alone.
We shouldn’t be worried about artificial intelligence turning into our new robotic overlords, but that doesn’t mean we should stop worrying about AI, writes Kai-Fu Lee, the Microsoft and Google veteran who helped invent the field of speech recognition and is now a leading investor and voice on the Chinese internet. Writing in The New York Times, Lee argues that our global economy is about to be more deeply disrupted than we have been willing to imagine, as AI draws tight new boundaries around the employment opportunities for humans.
In the continuing debate on whether AI will eliminate tons of jobs or just revamp them, mark Lee down as a strong eliminationist. He foresees “a wide-scale decimation of jobs,” along with an unprecedented flow of profit and wealth to the companies that introduce the new technology.
New technologies create immense opportunities — and consequences. When innovating and automating, we need to be mindful of the human impact.
Artificial intelligence (AI), automation, Internet of Things (IoT) and blockchain — we know these disruptive technologies are changing the world. They’re reducing friction and inefficiencies in markets, fostering new innovations that help people live longer, better lives, and helping under-served parts of the world gain access to micro-financing. And they are allowing companies to develop new products and services that delight their customers.
But for all of the opportunities these new technologies offer, there are also consequences. In the race to innovate, automate and streamline their operations, organizations need to be mindful of the human implications. For organizations — and people — it is no longer business as usual.
Automation may create fewer jobs than those being lost
I’m speaking at a tech conference in New York City tomorrow. Yesterday, I had a tantalizingly odd conversation about a bio that someone assumed I had written. So I went to the conference website to look up my profile, and — Oh. My. God:
“He is one of the most successful authors of all times and his books can mesmerize. He is also an entrepreneur and after being so successful he still carries a decent behavior and very down to earth attitude. He is none other than the very talented Robert Reid.”
Self-confidence has a place in a bio. But certain lines should not even be approached. This one, for instance:
“He went to the very popular university called Harvard University for his MBA degree. He has been a superstar with his work. One of his books was named as Architects of the Web created stir in the market and it was outstanding. The book was solely focused on the Silicon Valley and was very well crafted and written by this genius.”
Reputation and track record really matter in a crisis. Say you have a ton of credibility and good will with your partners and contractors, and one day it turns out that an “accounting error” had led you to underpay them. You can probably just apologize, pay everyone what you owe, and move on.
Uber faced just this kind of problem this week — but unfortunately for the company, its reserves of good will are exhausted. For years it seems that Uber has been taking its 25 percent cut not only from the base fare but also from the taxes on each ride, which in New York are considerable (The Wall Street Journal) — and as a result it has shortchanged its drivers. Now the company says it’s going to make its drivers whole, and the amounts can add up. Recode posted a receipt for one driver’s $7000 refund, and the Journal says the total cost to Uber is likely to be in the tens of millions of dollars.
The economy stands at a threshold moment in the era of machine learning. The artificial intelligences that companies are increasingly deploying are just beginning to take on roles and jobs that used to demand a human being at the controls. But in most cases they’re nowhere near ready to take over entirely. They still need people at their sides — in some cases to generate the data that will train them, in others to provide judgment that’s beyond them.
Welcome to the world of the hybrid human-machine workplace. A couple of recent articles have begun to give us a portrait of this emerging work environment, with its awkward encounters, unemployment fears, and potential for both efficiency and exploitation.
First the market watchers said Twitter was shrinking — and that was not good. Then Twitter announced in its quarterly earnings report today that, actually, it is growing — and that was good. Its stock soared.
The whole financial system around tech companies, startups, and mission-driven newcos is oriented towards growth. Keep growing and you must be on the right track. Stop growing and you’re dead.
Artificial intelligence is making its entry into our lives right now — and, as with so many other innovations, it isn’t coming in through the door everyone expected. Sure, eventually we’ll all ride in self-driving cars on our permanent vacations from our jobs that are being done by machine intelligences. But for now, the AIs in our lives are going to be very busy with far more mundane work: delivering — and blocking — ads.
You already know that the ads you see in your browser and on your phone are selected via the complex interaction of bidding algorithms working from targeting data. You may also already be running an ad blocker that tries to speed the loading time of pages you want to read by bypassing all of that advertising machinery.