Quizlet raises $20 million for virtual flash cards

After 14 people were killed in the San Bernardino mass shootings in 2015, Apple refused to help the FBI hack into the shooter's iPhone, calling it a dangerous precedent for the government to make such demands on companies. Tim Cook even went so far as to say the FBI wanted Apple to create "the software equivalent of cancer" in order to gain access to the phone.

In an interview with Fox Business Network's Maria Bartiromo, Oracle founder, CTO, and executive chairman Larry Ellison, called this "bizarre." Ellison was responding to Bartiromo's comment that Silicon Valley tech giants have become increasingly influential and are now in the "crosshairs of the U.S. government."

Ellison said that many of the giant Silicon Valley companies like Google, Facebook, and Apple tend to respond to political issues in a way their younger employees would prefer them to respond.

"Apple will decide if the phone's going to be locked or unlocked," Ellison said. "Apple, not the courts - not our courts, but Apple would make that decision, is just bizarre."

At the time, Apple CEO Tim Cook posted a public letter on the company's decision, saying, "The government could extend this breach of privacy and demand that Apple build surveillance software to intercept your messages, access your health records or financial data, track your location, or even access your phone's microphone or camera without your knowledge. Opposing this order is not something we take lightly. We feel we must speak up in the face of what we see as an overreach by the U.S. government."

FBI agents had previously called Cook "a hypocrite" for the decision. The FBI later dropped the court order for Apple and hired a third party to hack the iPhone. Ellison told Bartiromo that this example shows some of the "political distortions" that can exist in tech companies.

Ellison is not the only tech company founder to have criticized Apple's decision to fight the FBI's request. Microsoft founder Bill Gates previously said he didn't share the belief "that even a clear mass-murdering criminal's communication should never be available to the government."

Ellison also spoke on his views on the political decisions of other tech companies, such as Google's new AI policies regarding military contracts.

Apple did not immediately respond to request for comment at the time of publication.

Tesla CEO Elon Musk told his Twitter followers on Thursday to "Send me ur dankest memes!!" Some Twitter users took the message as an opportunity to poke fun at Musk for controversial tweets he sent in August about potentially taking Tesla private.

One replied to Musk with an image of Musk's face against a dark background made to look like a Nike advertisement.

"Funding secured. Even if you didn't secure funding. Just do it," the image read.

Another replied with an image of Musk holding a marijuana cigarette during his September interview with Joe Rogan, in which he drew criticism for smoking marijuana on camera. (Recreational use of Marijuana is legal in California, where the interview was filmed.)

"Funding secured," the image read.

Musk is unusually active and candid on Twitter, compared to other prominent CEOs, and is known for using the platform to interact with customers, make jokes, and attack critics. Musk's candor has endeared him to the fans and customers who find him more relatable than other famous executives, while also frustrating some analysts and investors who argue that he is temperamental and reckless.

On August 7, Musk said on Twitter that he had "funding secured" to convert Tesla into a private company at $420 per share and only needed a shareholder vote to confirm a go-private deal. Musk's statements attracted controversy and raised questions about the certainty of the funding he referenced and where exactly that funding would come from. On August 24, Musk said Tesla would remain a public company.

The Securities and Exchange Commission (SEC) filed a lawsuit against Musk in September, alleging that Musk had made "false and misleading statements" about the possibility of taking the automaker private. The government agency alleged that Musk had not acquired the necessary funding for a go-private deal or even discussed the terms he mentioned with any potential backers. Those terms included the proposed $420 share price and an option for all existing Tesla shareholders to remain with the company after it went private.

The SEC later reached a settlement with Musk that requires him to step down as the chairman of Tesla's board of directors for three years and pay a $20 million fine.

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The evidence is piling up that digital TV packages (vMVPDs) will not be the savior some TV networks were hoping.

The trend of subscribers ditching satellite or cable TV bundles has been worrying for TV networks, which get paid carriage fees by distributors (per subscriber) to have their channels in the bundle. Luckily for networks, digital TV packages that pay similar carriage fees — from companies like Hulu, YouTube, and AT&T's DirecTV — have sprung up to replace some of that revenue.

But the growth of these new digital packages could already be slowing, which is bad news for networks and distributors alike. A noteworthy data point is AT&T, which has both a traditional pay-TV arm (DirecTV's satellite business) and a digital one (DirecTV Now).

On Wednesday, AT&T reported its earnings, and its DirecTV numbers raised some eyebrows around the industry. AT&T lost 359,000 satellite TV subscribers, significantly more than the 245,000 Wall Street was expecting. But worse, growth of its digital TV service, DirecTV Now, slowed. DirecTV Now added only 49,000 subscribers, well below both Wall Street expectations of 287,000, and its second-quarter additions of 342,000. (Management blamed a price increase.)

Those numbers do not paint a rosy picture of the ability of digital bundles to combat pay-TV subscriber losses.

In a note distributed Thursday, analysts at UBS revised estimates for the sector to reflect "worsening" pay-TV subscriber trends suggested by Verizon and AT&T's quarterly results.

"Including streaming TV, we look for 670K pay TV subscriber losses in 3Q18, up from -115K in 3Q17," UBS wrote. UBS expects traditional pay-TV subscriber losses of 1.25 million for the quarter.

NBCUniversal CEO Steve Burke dumped more cold water on optimists during an earnings call Thursday.

Burke addressed a perceived weakness in digital TV packages. While painting an upbeat picture of the pay-TV marketplace in general, Burke said "the growth of the virtual MVPDs is starting to plateau, at least in the last month."

Starting to plateau already?

Using DirecTV Now as an example again, the streaming TV service only has 1.86 million subscribers. DirecTV's satellite business has 10 times that amount. This is not a good time to plateau. And fewer subscribers means fewer dollars to TV networks.

But potentially flagging growth isn't the only problem for these digital TV bundles. They also have terrible margins. Morgan Stanley recently did the math on Hulu's live TV product and estimated it had negative gross profit.

So it should come as no surprise that in the last few days, executives at first Hulu and then AT&T talked about slimming down the bundle and offering packages with positive margins. This could be beneficial both as a way to cut costs and boost subscriber growth.

But it's probably going to hurt the revenues of some TV networks, which risk getting cut out of packages and losing even more subscribers.

Which networks are we talking about?

In Thursday's note, UBS addressed AT&T's comments about "evaluating program lineups."

"We view network groups with broadcast (CBS, Disney, NBCU, Fox) as best-positioned to hold their negotiating leverage against AT&T while standalone cable network groups (AMCX, A&E, Discovery/Scripps, Viacom) are most at risk," UBS wrote. "Still these network groups represent a smaller percentage of program cost and generally have a better price/viewership relationship than networks with sports rights."

As Netflix has grown into a media giant, helping to revolutionize how we consume television, it has developed a tough corporate culture with high standards.

A Wall Street Journal report on Thursday shed light on the streaming service's radical ways based on anecdotes from over 70 former and current employees. According to the Journal, Netflix CEO Reed Hastings is "unencumbered by emotion," and routinely uses a "keeper test" to evaluate employees.

He even used it to fire Netflix's chief product officer and his close friend, Neil Hunt, last year. Hunt had been with Netflix for 18 years.

What is a keeper test? Here's how Netflix has described it: "If one of the members of the team was thinking of leaving for another firm, would the manager try hard to keep them from leaving." If an employee doesn't pass the keeper test, they're "promptly and respectfully given a generous severance package so we can find someone for that position that makes us an even better dream team," Netflix said.

Some managers told the Journal they felt pressured into firing people or "risk looking soft."

In regards to Hunt, Hastings felt the company had grown past its need for him, and told Hunt that former international development officer Greg Peters would be taking his place as product chief.

"I would not have chosen to move on at that particular moment, but you have to separate the emotion from the logic," Hunt told the Journal.

Hastings' commitment to the keeper test has left some executives uneasy. According to the Journal, at a meeting of Netflix public-relations executives in the spring, many expressed that they feared they would lose their jobs every day they came to work.

Here's how Netflix responded to the Journal piece:

"We believe strongly in maintaining a high performance culture and giving people the freedom to do their best work. Fewer controls and greater accountability enable our employees to thrive, making smarter, more creative decisions, which means even better entertainment for our members. While we believe parts of this piece do not reflect how most employees experience Netflix, we're constantly working to learn and improve."

In the wake of a bombshell New York Times story detailing Android creator Andy Rubin's departure from Google following a sexual misconduct investigation, CEO Sundar Pichai sent an email to Alphabet employees.

In the memo, provided to Business Insider from a Google spokesperson, Pichai says that the company has fired 48 people for sexual harassment in the past two years, and claims that none of them received an exit package. He goes on to say that 13 of these people were senior managers or above.

Rubin, who's widely known as the "father of Android," was reportedly paid a $90 million exit package when he left Google in 2014 following allegations of sexual misconduct, including pressuring a Google employee to perform oral sex on him, The New York Times reported on Thursday. The Information reported last year that Google had found that Rubin was involved in an "inappropriate relationship" with a subordinate.

The Times reports that while Google and Rubin appeared publicly to part ways amicably, he still received an exit package even after Google investigators concluded the allegations against him were "credible."

You can read the full memo below sent from Pichai and Eileen Naughton, VP People Operations:

Hi everyone,

Today's story in the New York Times was difficult to read.

We are dead serious about making sure we provide a safe and inclusive workplace. We want to assure you that we review every single complaint about sexual harassment or inappropriate conduct, we investigate and we take action.

In recent years, we've made a number of changes, including taking an increasingly hard line on inappropriate conduct by people in positions of authority: in the last two years, 48 people have been terminated for sexual harassment, including 13 who were senior managers and above. None of these individuals received an exit package.

In 2015, we launched Respect@ and our annual Internal Investigations Report to provide transparency about these types of investigations at Google. Because we know that reporting harassment can be traumatic, we provide confidential channels to share any inappropriate behavior you experience or see. We support and respect those who have spoken out. You can find many ways to do this at go/saysomething. You can make a report anonymously if you wish.

We've also updated our policy to require all VPs and SVPs to disclose any relationship with a co-worker regardless of reporting line or presence of conflict.

We are committed to ensuring that Google is a workplace where you can feel safe to do your best work, and where there are serious consequences for anyone who behaves inappropriately.

Sundar and Eileen

On Thursday, new details about Android founder Andy Rubin's 2014 exit from Google came to light in a bombshell report by The New York Times. The report alleges the internet company paid him $90 million despite concluding that there was credibility to a sexual misconduct claim against him.

According to The Times, Rubin was ultimately asked to leave Google after pressuring a woman (with whom he had an extramarital relationship) into performing oral sex in a hotel room in 2013. The two's relationship was cooling around the time of the incident, but the woman had been worried to cut things off in fear that doing so would affect her career, according to two company executives briefed on the relationship.

Rubin was involved in other sexual incidents during his time at Google as well, according to the report.

The report claims:

Rubin's spokesperson told The Times that the Android founder did not partake in misconduct and that "any relationship that Mr. Rubin had while at Google was consensual and did not involve any person who reported directly to him."

Upon Rubin's departure from Google in 2014, he was celebrated by Google's chief executive at the time, Larry Page.

"I want to wish Andy all the best with what's next," Page said in a statement. "With Android he created something truly remarkable — with a billion-plus happy users."

In an email to employees on Thursday, CEO Sundar Pichai said the following:

"In recent years, we've made a number of changes, including taking an increasingly hard line on inappropriate conduct by people in positions of authority: in the last two years, 48 people have been terminated for sexual harassment, including 13 who were senior managers and above. None of these individuals received an exit package."

Many, many gamers are eagerly awaiting the release of Rockstar Games' "Red Dead Redemption 2" on October 26 — almost certainly the most anticipated game of the year, with the possible exception of Nintendo's "Super Smash Bros. Ultimate."

But there's a little bad news: the game will be without online multiplayer for at least a few weeks, after launch. Rockstar Games has announced that "Red Dead Online," the action-western game's online multiplayer mode, won't be available until the launch of a a public beta-testing program in November.

"Red Dead Online" will be available for free to anyone who buys the PlayStation 4 or Xbox One versions of "Red Dead Redemption 2." Rockstar developers have said they consider "Red Dead Online" and "Red Dead Redemption 2" to be two different games. Players will be able to explore the open-world environment of "Red Dead Online" alone or with friends, and the online mode will have its own narrative storyline.

According to Rockstar, "Red Dead Online" will feature both competitive and cooperative gameplay, but the company is warning fans to expect some growing pains.

"As with most online experiences of this size and scale, there will inevitably be some turbulence at launch," a statement from Rockstar reads. "We look forward to working with our amazing and dedicated community to share ideas, help us fix teething problems and work with us to develop 'Red Dead Online' into something really fun and innovative."

Rockstar certainly has practice at building mega-popular online games; its ongoing support for "Grand Theft Auto Online" has helped sell more than 100 million copies of "Grand Theft Auto V" since September 2013.

Games sales analyst Mat Piscatella told Business Insider that Since "GTA 5" went on sale in September 2013, it has appeared in the top 20 best-selling games list 57 out of 58 times, through early August 2018. The only time it failed to break the top 20 was in October 2014, when the game landed at #21.

The original "Red Dead Redemption," released in 2010, was a popular online game in its own right — and Rockstar now has many more years of experience crafting exciting online play. Luckily the game's single-player campaign is quite impressive on its own, so players of "Red Dead Redemption 2" will have plenty to hold them over until "Red Dead Online" is ready to launch. Still, this news will likely come as a bummer to many.

Google's revenue increased 22% in the third quarter driven by healthy performance in its mobile search business, but the results were slightly below Wall Street expectations and the stock took a dive in after hours trading on Thursday.

Shares of Google-parent company Alphabet were down roughly 5% in extending trading, after finishing the regular trading session up more than 4% in anticipation of the results.

Google's Q3 report came on a big day of tech company results, with Amazon, Intel, Twitter and Snap all giving Wall Street udpates on their businesses. Shares of Amazon were down 9% in extended trading Thursday, following its report.

Read Thursday's big group of tech company Q3 earnings reports:

Amazon's stock falls 9%, as disappointing revenue, guidance seem to outweigh standout Q3 earnings

Snap's stock crashes 10% after announcing it lost 2 million users last quarter — even though it beat on the top and bottom line

Intel beats Wall Street's expectations with 19% revenue growth in third quarter

While the growth rate in Alphabet's topline showed a slight deceleration from its performance a year ago, company executives expressed optimisim about global economic condititions during a conference call with analysts on Thursday.

Unmentioned during the call however was the bombshell report in the New York Times, published hours earlier, that detailed allegations of sexual misconduct among several former Google executives in recent years. Google executives also said very little about the regulatory scrutiny facing the company in Europe and the US over everything from user privacy to the spread of misinformation on its services.

The growing criticism of the company, along with the broader market uncertainty, had sent Google's shares down 8% in the past few weeks leading up to the Q3 report. And the slight dissapointment in revenue was all investors needed to punish the stock.

Here's what Alphabet reported:

Q3 net revenue: $27.2 billion, up 22% year-on-year, but shy of the $27.33 billion expected by analysts.

Q3 EPS (GAAP) : $13.06, compared to analyst expectations of $10.45

Operating margin: 25%, down from 28% in the year ago quarter

Traffic acquisition costs: 23% of advertising revenue, the same as in the year ago period.

Othe Revenues (includes Cloud and Play businesses): $4.6 billion, up 29% year-over-year

Employees: 94,372, an increase of more than 5,000 employees from its last report at the end of July

During a conference call, Google CFO Ruth Porat said the company's ad revenue growth in Q3 was "led by mobile search with a strong contribution from YouTube, followed by desktop search." She warned that traffic acquisition costs would continue to increase going forward as consumers increasingly shift from using its search engine on desktop computers to mobile devices.

Google's operating profit margin was squeezed by rising costs in the three months ended September 30, but a lower tax rate and a $1.4 billion boost in "other income" from equity investments helped Alphabet post a larger than expected net profit.

Alphabet's "Other Bets," the various subsidiary companies focused on ambitious projects like self-driving cars and healthcare technology posted a widening operating loss of $727 million, compared to $650 million in the year ago period.

With about one-fifth of the world's total population, China is the largest video game market on the planet. Despite heavy regulations on media and online content in the country, Chinese gamers spent nearly $38 billion on video games in the past year, according to New Zoo.

But while China's audience for video games has seen consistent growth, officials in the country have expressed concern about potential gaming addiction and the impact video games have on the country's youth. As a result, Chinese regulators have slowed the approval process for new games in the country. The Wall Street Journal reports that less than 5,000 games have been approved so far this year, compared to more than 14,000 games released during 2017.

Approvals have primarily been reserved for major companies, and China is home to the biggest gaming company in the world, Tencent. However, Asia's largest company posted a decline in profits for the first time in more than a dozen years during August 2018, noting that Chinese regulators blocked the sale of major releases. Tencent's overall market value has tumbled more than $200 billion since peaking in January.

China's government is unapologetic about its efforts to monitor the release of new media in the country. There are strict limitations on the number of movies that are imported from the U.S. each year, and movies and games alike are deeply scrutinized for their portrayals of violence and offensive content. China overhauled its approval process in March 2018, establishing the State Administration of Press and Publication, but the new agency has been less than aggressive in addressing video games. Some Chinese officials believe the increased popularity of video games has had a negative impact on children, keeping them away from school and promoting addictive behavior.

Last year, in an effort to preempt new regulations, Tencent implemented oversight features for its most popular game, "Honor of Kings." The game automatically limits children under the age of 12 to one hour a day, adolescents between 12 to 18 are allowed two hours a day. Parents can also monitor the amount of time children spend playing and block their access to the game on specific devices. Tencent is now considering using facial recognition software to identify players by comparing their photo and information with a police database.

Mobile games dominate the Chinese video game market and the most popular games, like "Honor of Kings," earn more than a hundred millions dollars every month through microtransactions. Still, with the government reluctant to approve new games or allow monetization for popular titles, Tencent and other video game publishers are losing billions in potential revenue. The Wall Street Journal reports that gaming companies are currently losing as much as $200 million a month due to the lack of approvals.

Right now there are few signs that China is willing to expedite the approval process for video games and the issue raises a greater cultural question for Chinese officials. The country will eventually need to decide whether it wants to embrace video games as a growing part of the national culture, or continue to scrutinize the medium for possible negative influences. In the meantime, game developers will have to keep struggling to reach the world's largest market.

(BRENDAN SMIALOWSKI/AFP/Getty Images)

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