Oct
23

Amazon exec joins Apple in calling for a retraction of Bloomberg’s explosive microchip spying report

Amazon and Super Micro have joined Apple in demanding that Bloomberg retract its explosive report on China planting microchips in tech hardware to spy on American companies.

Last week, Apple CEO Tim Cook refuted Bloomberg's report from earlier this month that Chinese spies placed microchips inside servers to spy on the US. "There is no truth in their story about Apple," Cook told BuzzFeed.

Now a senior Amazon executive has thrown his lot in with Cook. Andy Jassy, CEO of Amazon Web Services, tweeted on Monday that Bloomberg's story was "wrong about Amazon, too."

"They offered no proof, story kept changing, and showed no interest in our answers unless we could validate their theories," he wrote. "Reporters got played or took liberties. Bloomberg should retract."

Business Insider has contacted Amazon to ask if Jassy's statement is reflective of the company's position.

Furthermore, in a statement obtained by CNBC, Charles Liang CEO of Super Micro — the server company at the heart of Bloomberg's story — also called for Bloomberg to walk back the story.

"Bloomberg should act responsibly and retract its unsupported allegations that malicious hardware components were implanted in our motherboards during the manufacturing process," said Liang.

"Bloomberg has not produced a single affected motherboard, we have seen no malicious hardware components in our products, no government agency has contacted us about malicious hardware components, and no customer has reported finding any malicious hardware components, either," he added.

Business Insider has contacted Bloomberg for comment. Up until now, it has stood by the story, telling Business Insider earlier this month:

"Bloomberg Businessweek's investigation is the result of more than a year of reporting, during which we conducted more than 100 interviews.

"Seventeen individual sources, including government officials and insiders at the companies, confirmed the manipulation of hardware and other elements of the attacks.

"We also published three companies' full statements, as well as a statement from China's Ministry of Foreign Affairs. We stand by our story and are confident in our reporting and sources."

Original author: Isobel Asher Hamilton

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Oct
23

Google, Amazon, and Tesla are hurtling into a struggling industry — and it's a sign the bloodbath is just getting started

In the course of Margaret Whelan's conversations with homebuilders in Europe and Japan, she has noticed a difference between them and their American counterparts.

"Everyone delivers houses in days, except here," Whelan, CEO of Whelan Advisory, a boutique advisory that raises capital for housing companies, said at a recent conference in New York. The former JPMorgan managing director lamented that it often takes months, sometimes years, to build a house in the US.

"The bigger homes, they'll take 14, 15 months to build — who's got time for that?" she asked the crowd.

Building speed is just one area that desperately needs innovation amid the worst year for US housing since the financial crisis. The iShares Dow Jones US Home Construction exchange-traded fund, for example, has plunged 28% in 2018, and is on pace for its worst year since 2008. Shortages of land and labor, coupled with rising interest rates and affordability constraints, have slowed the housing market.

And according to investors and industry experts, the players most likely to transform the housing industry are companies well known for disruption elsewhere: tech juggernauts like Amazon, Alphabet, and Tesla.

Here are some examples of their meddling:

Last December, local lawmakers approved a bid by Google to build nearly 10,000 housing units close to its future campus in Mountain View, California, amid a shortage of affordable housing. The homebuilder Lennar announced in May that it was working with Amazon to build model homes fitted with Alexa-enabled devices including lights and thermostats. Tesla installed 450% more power-storage batteries in the first half of 2018 compared to the same period in 2017.

There's a pattern here: these companies have a financial incentive to get into building.

Mark Boud, the chief economist of housing consultancy Metrostudy, is already advising them.

"It used to be that my clients were builders and land developers, period," Boud said at the conference. "Now, it's about 70/30, 30% being these non-traditional players ... that share is going to increase dramatically over time."

Tech companies are poised to embrace more efficient methods of building — including modular and factory-built houses — faster than the traditional players, Boud said.

Their meddling in homebuilding comes at an opportune time: the US housing market is facing a shortage of inventory — especially affordable houses — and is projected to remain under-built through at least 2022.

Metrostudy

Builders don't innovate well

"When it comes to change and doing things differently, builders are not great at that," said Paige Shipp, the Dallas-Fort Worth regional director at Metrostudy.

The example she always tells clients about is the US Postal Service, which operated like a monopoly in its heyday. Then UPS and FedEx came on the scene and shook things up. Now, even Amazon is building out its own logistics service to deliver packages faster.

The fear of change, Shipp said, is greatest for public companies who will see their stocks sink if new methods eat into their profits. But even if they wanted to try, she says they don't have the ideal decision makers.

"We have an industry that's pale, male, and stale," Whelan said, referring to racial, gender, and generational sameness on company boards.

The HGTV generation

Shipp agreed that it would be wise for builders to lean into the needs of younger clients, including millennials, who are buying roughly one out of every two new homes — more than any generation before them.

Metrostudy

"Yes, they do remodel, but we've kind of learned that they really like to watch Chip and Joanna, but they don't want to necessarily be Chip and Joanna," Shipp said, referring to the hosts of the HGTV show "Fixer Upper."

"They would like to have these homes that are ready for them to move in," she added.

In addition, tech companies know well what the digital generation would want in their homes — perhaps even better than traditional homebuilders. Shipp named some traditional builders at the forefront of technological innovation including Tri Pointe Group, The New Home Company, and Taylor Morrison.

Beyond the supply issue, builders also need to address the crisis of affordability. According to Carl Reichardt, a homebuilding analyst at BTIG, the traditional builders best positioned to address the crisis include Lennar and D.R. Horton — his only buy-rated picks amid the bloodbath in housing stocks this year.

"These companies have an increased focus on changing their mix to more affordable product," he told Business Insider by phone.

Still, big tech companies are flush with the cash, the flexibility and most importantly, the financial incentive to upend yet another industry.

"The traditional builders need to be a little bit nervous about this," Boud said. "If we don't do it, someone else will, which is why we're seeing the Amazons and the Googles come into the market."

Original author: Akin Oyedele

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Oct
23

Hackers briefly commandeered the website for Saudi Arabia's big investment conference to send a message about Jamal Khashoggi

Hackers targeted the website for the Future Investment Initiative (FII) conference, a major investment conference hosted by Saudi Crown Prince Mohammed bin Salman.

The website briefly featured images of the crown prince holding a large knife over Jamal Khashoggi's head. In the image, which has since been removed, the prince is standing near what appears to be the flag of the Islamic State terror group.

The Saudi Consulate in Istanbul, where Khashoggi died on October 2, appeared in the background of the image.

Some text below the image read: "For the sake of security for children worldwide, we urge all countries to put sanction on the Saudi regime."

It continues: "The regime, aligned with the United States, must be kept responsible for its barbaric and inhuman action, such as killing its own citizen Jamal Khashoggi and thousands of other innocent people in Yemen. The medieval Saudi regime is one of the sources for #Terrorism_Financing in the world."

The website also linked to a handful of similarly themed YouTube videos.

The Future Investment Initiative site returned to normal operation on Monday, but appeared to be offline again Tuesday morning, local time.

The conference known by some as "Davos in the Desert" has received negative attention in the wake of Khashoggi's disappearance and death. Several companies and titans of industry who were previously expected to attend backed out in recent days, including billionaire AOL cofounder and venture capitalist Steve Case and Uber CEO Dara Khosrowshahi, who were both slated to speak.

The Kingdom admitted that Khashoggi had been "murdered" inside their consulate, but denied that the crown prince had any prior knowledge of the plot.

Original author: Rosie Perper

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Jun
23

Thought Leaders in Healthcare IT: IntelyCare CEO David Coppins (Part 3) - Sramana Mitra

Tier, one of a number of electric scooter rental startups based in Berlin, has raised a chunky €25 million in Series A funding. Leading the round is VC fund Northzone, with participation from existing investors Speedinvest, and Point Nine.

The investment marks the biggest financial backing for a European company in the space, and, according to my sources, signals the beginning of a pending VC war to create the “Bird or Lime of Europe”.

Go Flash (or perhaps just “Flash”), founded by Delivery Hero and Team Europe founder Lukasz Gadowski, is also thought to be out raising a war chest from VCs across Europe. I understand the yet-to-launch startup is already backed by Gadowski’s own cash and €2 million from the mobility arm of Target global.

There’s also Coup, an e-scooter subsidiary owned by Bosch and backed by BCG Digital Ventures that operates in Berlin, Paris and Madrid. And just two month’s ago Taxify announced its intention to do e-scooter rentals under the brand Bolt, first launched in Paris but also planning to be pan-European, including Germany. To name just a few.

Meanwhile, Bird and Lime have made tentative launches in Europe. The U.S. e-scooter services are both available in Paris, with other European cities expected soon.

More on Northzone-backed Tier

Founded by “serial entrepreneurs” Lawrence Leuschner (CEO), Julian Blessin (CPO), and Matthias Laug (CTO), Tier provides electric scooters that can be rented on demand to travel the “last mile” in cities. To use the Tier service, riders download the app, locate one of the available e-scooters using the map, pay a fixed fee of €1 to unlock, followed by a fee of €0.15 per minute to ride.

The startup pitches its mobility offering as an “independent, fun and conscious way of urban commuting,” and says that what sets Tier apart from competitors is the way it plans to work closely with local governments and town halls to help create a sustainable experience. “The goal is to change the current status quo of polluted cities, smog and ineffective, inconvenient and overpriced transportation modes together!” says the company.

Its first active city is Vienna, which launched just last week. However, the plan is to use the new Series A funding to roll out the Tier service to additional European cities, and to further scale the team.

Cue a statement from Paul Murphy, Partner at Northzone: “European cities are uniquely placed to benefit from access to low-carbon, accessible and convenient transport, thanks to their high population density and political commitment to lower carbon emissions. It takes a strong team to navigate a complex landscape. Tier is the frontrunner in Europe, and we have been incredibly impressed with what the team has achieved to date. We think they can become a category winner in a space”.

Fun fact: Tier’s Blessin was instrumental in setting up e-scooter rival Coup as the company’s “Venture Build” & Head of Growth.

More on Lukasz Gadowski’s Go Flash

Although not yet official — Gadowski’s LinkedIn profile simply lists his latest job title as CEO at “TBA MOBILITY SERVICE” — Go Flash is one of Berlin’s worst kept secrets. The new venture was briefly mentioned by local German blog Gruenderzene, whilst I’ve heard a few more details from my own sources in the German city and from a number of VCs across Europe.

One rumour in circulation is that Gadowski is in the midst of raising a “mega round” from multiple European VCs, with the aim of creating both a war chest to fend off Bird and Lime, but also to launch a pan-European e-scooter service that hits the road motoring via a roll up of other nascent e-scooter startups across the region.

The figure being touted is between $100 million and $200 million, with one source telling me it is still very early days, while another says the deal is practically done. I’ve also heard that Go Flash is already in talks with an e-scooter startup in Sweden (while Delivery Hero garnered much of its growth via acquisition).

As one person familiar with Gadowski’s previous modus operandi put it: “He’s good at fundraising. $100 million wouldn’t be hard for Lukasz to raise. He raised over a $1 billion in equity for Delivery Hero and made a lot of people money”. In other words, we might expect to see some investors previously associated with Delivery Hero take part.

More intriguingly, one source, albeit based on limited information, said that if the mega round is true it will be fascinating to witness a number of top European VCs “colluding” in a bid to keep Silicon Valley at bay. The general sentiment is that the top European VCs don’t want the potentially lucrative e-scooter space, which appears to have very promising unit economics, to be rolled over by a U.S. company in the same way that Uber swept into Europe and overtook much of the local competition.

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Oct
23

10 things in tech you need to know today

10 things in tech you need to know today, October 23 - Business Insider Edition USUKDEAUSFRINITJPMYNLSEPLSGZAES Follow us on: Learn More About Artificial Intelligence With This Exclusive Research Report Discover The Future Of Fintech With This Exclusive Slide Deck
Original author: Isobel Asher Hamilton

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Sep
10

Film3: Redefining filmmaking in the Web3 era

Emil, a new startup from the founders of Movinga, has launched what it claims is Germany’s first pay-per-mile car insurance that measures miles in real-time. Aimed at drivers who do less than 6,200 miles per year on average (or roughly 120 miles per week) — which we’re told accounts for 49 percent of German drivers — mileage is tracked via the Emil app and the supplied dongle that plugs into your car’s diagnostics port.

“With Emil we are building a 21st century mobility insurer,” co-founder Bastian Knutzen tells me. “We believe that insurance products that are offered today can be improved on different dimensions and want to change that by offering flexible and fair products tailored around customer needs. We have started with the German car insurance market where traditionally low mileage drivers have subsidised the higher accident risk of high-mileage drivers which has led to an unfair insurance premium distribution”.

Digging a little more into the technology and model behind Emil, Knutzen explained that the Emil stick is an IoT device with an integrated SIM card that plugs into a vehicle’s OBD-II diagnostics port, from where mileage data is sent to the startup’s servers.

“Customers only pay a low monthly base fee and cents per mile when they actually drive,” he says, meaning that low-mileage drivers can make significant savings on their insurance premiums.

In addition, the Emil mobile app gives your car other ‘smart’ features, such as tracking the vehicle’s location, an overview of all trips (“driver’s logbook”), and remote diagnostics.

The insurance policy itself was developed in cooperation with General Reinsurance AG (a Berkshire Hathaway Company) and the German insurer Gothaer Allgemeine Versicherung.

“In general, we target consumers who want an intuitive, convenient and transparent insurance,” adds Knutzen. “Our customers use their smartphones and other gadgets for payment, banking, shopping, etc., but can’t for insurance. We try to meet that type of expectation for insurance products as well.

More broadly, Emil is tapping into current trends such as growing environmental awareness, urbanisation and car-sharing. “We have decided to offer an insurance which rewards people for not using their cars as our first product. There is a significant price advantage for customers driving less than 6,200 miles annually, which covers around half of German car drivers,” Knutzen says.

Meanwhile, I’m told that Emil’s only funding to date is a “seven-digit” seed round from multiple family offices and business angels with ties to the technology, automotive and insurance industry. They include Johannes Reck (co-founder of GetYourGuide), Lucas von Cranach (co-founder of Onefootball), Roland Grenke (co-founder of Dubsmash), Philip Petrescu (co-founder of Lendico), Verena Pausder (co-founder of Fox & Sheep), Arndt Ellinghorst (German automotive expert), and Oliver Mickler (co-founder Tillhub, co-founder MyDriver and the first angel backer of Movinga).

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Oct
23

Walmart is offering free 2-day shipping on 'millions more' items — and it reveals a key advantage over Amazon (WMT)

Walmart is beefing up its online offerings with a little help from its friends.

The company announced on Tuesday that it has partnered with "hundreds" of its top sellers on Walmart.com's third-party marketplace to offer free two-day shipping.

That will result in "millions more" items on Walmart.com being eligible for the perk, which is available on eligible orders over $35, according to the company. The free tw0-day shipping eligibility for these items will start rolling out in November.

As long as a product is marked eligible for free two-day shipping, it doesn't matter who is selling it — customers still get the perk. For example, if a customer has two items in a cart that equal $35, as long as they're both eligible for two-day shipping, it doesn't matter whether the order is coming from a seller or directly from Walmart.

Walmart has also improved the return policy for these select sellers. Starting soon, Walmart will simplify returns, allowing customers to print return slips from its website to attach to boxes and send back to sellers.

Starting in mid-November, Walmart will also send the package on behalf of customers if they bring it to any of Walmart's stores in the United States. All they have to do is bring it to the Services desk fully packaged for return.

In both cases, return fees will vary depending on the items and the seller.

Adding more functionality to Walmart's third-party marketplace enables a more seamless shopping experience for customers to shop and not worry about where each item is being shipped from.

It mirrors Amazon's Fulfillment by Amazon and Prime Onsite initatives, which ships sellers packages and certifies third-party warehouses to ship Prime packages, respectively.

Walmart's new program doesn't take the shipping in-house, but it does offer something that Amazon's online-only operation can't match: a network of 4,700 stores that can serve as a dropoff point.

Original author: Dennis Green

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Oct
23

JPMorgan has signed a deal with technology firm Plaid for customer data sharing and it represents a big development for how the largest US bank thinks about fintech

JPMorgan on Monday signed an agreement with Plaid, a technology company that connects bank accounts with fintech apps like Robinhood, Venmo, and Acorns, that will give its customers better control over their personal data.

Plaid will access JPMorgan's customer data through a secure application programming interface or API, allowing customers to share their financial information more easily and safely. Banks including JPMorgan have pushed back against so-called screen scraping, another way for fintech apps to companies to access customer data that generally is viewed as less secure.

"This is an important milestone between JPMorgan Chase and Plaid because it reinforces some of the principals around customer control and security," said Paul Larusso, JPMorgan's head of Digital Data Sharing and Aggregation. "It reinforces the principle in the industry that data should be securely transmitted through API, and not through screen-scraping."

The agreement facilitates a feature on Chase's bank account, dubbed "Account Safe," that allows Chase customers to see which applications are using their data. Customers can then decide whether they want to share the data with external apps.

JPMorgan CEO Jamie Dimon has previously said that fintech companies that aggregate financial data present risks to consumers because of the amount of private data they collect. But since then, the bank has struck agreements with several other data aggregators in the last few years including Intuit and Finicity.

The deal with Plaid reemphasizes those themes that Dimon has been vocal on and helps the bank to provide customers with a safer and more secure way to transmit their personal information, Larusso said.

The announcement with Plaid also comes as the company is meeting with potential investors about raising money that could value the firm at more than $2 billion, Business Insider previously reported.

Original author: Madeline Shi

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Oct
23

Capital Efficient Entrepreneurship: Neil Vaswani, CEO of Corestream (Part 1) - Sramana Mitra

Neil has turned a $3M investment into a ~$10M annual revenue company by addressing a cumbersome piece of workflow in benefits management. Read on to learn how. Sramana Mitra: Let’s start at the very...

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Original author: Sramana Mitra

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Oct
23

Oracle's Larry Ellison says Amazon’s database is like a semi-autonomous car: ‘You get in, you start driving, you die’ (ORCL, AMZN)

Larry Ellison, Oracle's executive chairman and chief technology officer, spent much of his time on stage Monday bashing Amazon, as usual, saying the rival company is "about 10, 20 years behind in database technology."

Oracle's autonomous database is also still "infinitely" ahead of Amazon's cloud business — Amazon Web Services—the 74-year-old billionaire founder declared at the Oracle OpenWorld keynote. Oracle's database, which includes includes automatic provisioning, security, backup, and more, is completely autonomous, Ellison said, while Amazon's is "semi-autonomous."

"A semi-autonomous database is like a semi-autonomous car," Ellison said. "You get in, you start driving, you die."

Ellison also announced the Oracle Generation 2 Cloud. The Generation 2 cloud is available now for all new customers, and current customers will have their cloud updated to Generation 2 by next year.

"We use the latest machine learning technology and build autonomous robots to go out and search and destroy threats that are inside our cloud," Ellison said.

The Generation 2 cloud has more privacy for customer data and bots that can stop security threats. With the AWS cloud, Ellison claimed, Amazon can see customers' data, and customers could also potentially access other customers' data.

"They have no autonomous features, not available…They've got none of that," Ellison said. "We automatically keep running. In this case, we are infinitely faster and infinitely cheaper."

Ellison also took time to lampoon Amazon for taking and selling open-source database projects developed by others, projects that are made freely available to the public to use and modify.

It's not uncommon for Amazon to do this, and it even caused software company Redis Labs to introduce licensing changes that would prevent Amazon and other major cloud companies from making money off of their projects.

In the coming year, Oracle plans to focus on growing its application business, CEO Mark Hurd previously told Business Insider.

Original author: Rosalie Chan

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Oct
22

Elon Musk is telling customers to use an unusual loophole if they want to take a Tesla car for a three-day 'test drive' (TSLA)

Consumers worried about buying a Tesla vehicle before they've ever test driven one can exploit a loophole that will let them try out a car for three days.

Better yet: The workaround is sanctioned by none other than CEO Elon Musk himself.

Customers who buy a Tesla car without having test driven it first can essentially get one for a three-day test drive. Such customers can return their vehicle within three days for a refund, he said on Twitter. By contrast, consumers who buy one after having a test drive have only one day to return it.

Musk's tweet was in response to one by James Charles, a YouTube personality, makeup artist, and CoverGirl model. Charles, who is 19, said he's interested in buying Tesla's Model X, but didn't want to do so without test driving it first. Unfortunately for him, Tesla requires those who test drive its cars to be 21 or older.

The "Model X is at the top of my wishlist but [I'm] really disappointed that I can't test drive because I'm not 21," Charles said.

Although Musk's tweet was in response to Charles particular problem, Tesla's policy could be helpful to other potential customers. Because the company's vehicles — particularly the new Model 3 — are often in short supply and the company has a limited number of dealerships around the country, consumers sometimes have to purchase a vehicle before they get to test one out.

Musk's "buy-first, test-later" strategy may be effective, but with the cheapest Tesla staring at around $45,000, you'll have to put down a pretty big deposit just to take a test drive.

Original author: Troy Wolverton

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Oct
22

Most companies using AI say their No.1 fear is hackers hijacking the technology, according to a new survey that found attacks are already happening

Artificial intelligence holds lots of promise among corporations, but early adopters of the technology also see some big dangers.

Bad AI could cause their companies to make strategic mistakes or engage in unethical practices, lead to legal liabilities, and even cause deaths. But the biggest risk early adopters see from the technology has to do with security, according to a new study from consulting firm Deloitte.

That concern is "probably well placed," analysts Jeff Loucks, Tom Davenport, and David Schatsky said in the report. Many of the companies that are already testing or implementing AI technologies have already experienced a security breach related to them.

"While any new technology has certain vulnerabilities, the cyber-related liabilities surfacing for certain AI technologies seem particularly vexing," the Deloitte analysts said in the report.

For its study, the firm surveyed some 1,100 executives at US companies from 10 different industries that are already testing or using AI in at least one of their business functions.

Many see security as a huge risk

As part of the study, Deloitte asked the executives to rank what they saw as the biggest risks related to the technology. By far, more ranked cybersecurity as their top choice than any other risk, and more than half of respondents ranked it in their top three.

Deloitte

The executives weren't just being nervous Nellie's. Many had already experienced the security of dangers of AI. Some 30% of those surveyed said their companies had experienced a security breach related to their AI efforts in the last two years.

The Deloitte study didn't discuss the types of breaches that the companies experienced or what the consequences of them were. But it did note that researchers have discovered various ways that hackers could compromise or manipulate AI systems to nefarious ends.

Machine learning systems can be manipulated

For example, researchers have shown that machine learning systems can be manipulated to reach incorrect conclusions when they're intentionally fed bad data, the Deloitte analysts said. For example, hackers could potentially fool a face-detection system by feeding it enough photos of an imposter to get it to recognize that person as the authorized user.

Such systems could also potentially expose companies intellectual property, the analysts said. If malicious actors were able to generate numerous interactions with a company's machine learning system, they could potentially use the results to reverse engineer the data on which the system was built, they said.

Because of such dangers, many of those surveyed said they had delayed, halted, or decided not to even begin some planned AI efforts, according to the study.

Deloitte

Now read:

Original author: Troy Wolverton

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Oct
22

YouTube's CEO is pleading for users to help fight in its war against European regulators — and the move reveals just how dire things have become for Google overseas (GOOG, GOOGL)

Google's business prospects in Europe seem to grow bleaker all the time.

The company faces multiple probes, fines, and new rules that could raise costs and slice into revenue.

On Monday, Susan Wojcicki, CEO of YouTube, appealed for help from the people who post clips to the web's top video-sharing site.

In a blog post to YouTube's creators, Wojcicki wrote that a new piece of legislation in Europe threatens to "shut down the ability of millions of people ... to upload content to platforms like YouTube," and is "a threat to both your livelihood and your ability to share your voice with the world ... tell the world through social media and your channel why the creator economy is important and how this legislation will impact you."

Wojcicki is referring to is Article 13, a proposed law in the European Union that throws more responsibility for fighting copyright violations on to social networks like Facebook and video-sharing platforms like YouTube.

Wojcicki's claim that Article 13 would break the internet is part of a familiar strategy. A decade ago, the US film and music sectors pushed hard for a law that gave law enforcement the power to shut down suspected pirate sites, but Google, Wikipedia, and their allies whipped up opposition and killed it.

But her plea now is unlikely to bring the same success. Google, YouTube's parent company, has suffered multiple hits to its credibility the past year.

In all cases, the company has denied it broke any rules.

The company has also tried working things out at the negotiating table.

YouTube has tried to improve its relationship with the big entertainment companies. The big music labels are impressed by the money brought in by streaming-subscription services, such as Spotify. So YouTube launched a similar service.

And last week, the video-sharing service made it easier for users to buy concert tickets on the site.

See Also:

Original author: Greg Sandoval

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Sep
10

Deepfakes aren’t going away: Future-proofing digital identity

Google's online advertising business mints tens of billions of dollars every year.

But the company is is undergoing a metamorphosis.

The transformation of its business is already much further along than many people realize, as Google and parent company Alphabet's sprawling efforts start to bear fruit.

Check out this chart from research firm Statista, which illustrates Alphabet and Google's revenue from non-advertising sources. In just ten years, the non-advertising side of the business has grown from an afterthought to 14% of the topline.

And the $15.5 billion generated outside of ads last year is serious money — it's more than four times the revenue that Twitter and Snapchat, combined, generated last year.

Statista

Google knows that one day the ad business will max out and growth will slow. Wall Street likes growth companies, and Google is well into an effort to grab market share in a host of other business sectors.

Google Cloud is a big part of that effort. In fact, Google executives have previously said they believe selling access to Google's cloud could one day overtake advertising as Google's primary source of revenue.

Google is facing tough competition in the cloud from the likes of Amazon and Microsoft. And recent revolts by its own employees have forced Google to bow out of lucrative military contracts.

Some of Google's other revenue sources include Google Fiber, its high speed broadband service, and the sales of consumer electronics such as Google Home, Pixel Slate.

There's also the 30% cut of app, music and movie sales that Google gets from transactions on its Play Store, which is the main digital hub for Android devices.

This week, Google announced that it would allow European phone and tablet makers to not include the Play Store on Android devices if they didn't want to. That's a major change (which Google decided to do as a result of an EU antitrust investigation) and it remains to be seen how that will affect Google's efforts to build up the non-advertising side of the business.

See Also:

YouTube's latest partnership shows how it's had to learn to play a different game to win in the music business

YouTube's plan to replace cable TV just took a big leap forward — but it also exposed a critical turf war for the future of television

Skeptics laughed at Google's side bets, moonshots and forays into management's sci-fi dreams. But the numbers indicate some of that toil and investment is paying off.

According to Statista's data, Google's non-advertising revenue in 2008 totaled $667 million. That equaled 3.1. percent of sales. Last year, non-ad revenue came in at $15.5 billion, which represented 14 percent of Google parent company Alphabet's overall sales.

Although Alphabet's various non-advertising businesses all face some bumps in the road that could slow down growth, the company's massive R&D spending means it has a lot more big bets that could eventually pay off.

UBS analyst Eric Sheridan, for example, wrote earlier this year that Alphabet's Waymo self-driving car business could eventually be worth as much as $135 billion. The self-driving car division of Alphabet is expected to begin commercial operations in Arizona before the end of the year.

Original author: Greg Sandoval

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Oct
22

An upcoming game is charging fans nearly $8,000 for an 'ultra limited edition' package — here's what's inside

The Devil May Cry video game series is known for stylish action and the "Ultra Limited Edition" of the upcoming "Devil May Cry 5" wants to help fans capture the flair of their favorite characters, quite literally.

Capcom is now taking reservations for an "Ultra Limited Edition" of "Devil May Cry 5," with a choice of three replica coats based on the game's three playable characters, Dante, V, and Nero. Each of the coats is made of genuine leather and has been designed to match the character's outfit in the game, right down to the extra zippers and battle scars.

The three ultra limited edition replica coats. From left to right :V ($5,318.58), Nero ($6,649.02) and Dante ($7,978.79) Capcom

The price of the ultra limited edition varies depending on which character you chose. The cheapest package belongs to the newest character, V, and will run you $5,318.58. If you'd rather don the hoodie of DMC4's hero Nero, you'll need to fork over $6,649.02. Unsurprisingly the most expensive coat belongs to Dante, the series' original protagonist. Capcom is charging $7,978.79 for Dante's signature red trench coat.

Capcom used a replica of Dante's jacket for motion capture. Capcom

All three ultra limited edition packages also come with a copy of the game for PlayStation 4 or Xbox One and three printed posters featuring art from the game. Capcom is also offering a limited edition package that comes with a much less cool short-sleeved button-up "work shirt," a copy of the game, and the posters for $105.07. Pre-orders from Capcom's eshop will also get an exclusive character color set to use in the game.

The limited edition work shirt seems pedestrian by comparison. Capcom

Reservations for the ultra limited edition of "Devil May Cry 5" went live on October 22 and will last until November 19. Since the package is currently exclusive to Japan, be sure to add the extra cost of importing before you order. All versions of "Devil May Cry 5" will launch on March 8 for PlayStation 4, Xbox One, and PC.

Original author: Kevin Webb

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Oct
22

Atlassian's stock just got whacked, but Wall Streeters still see a bright future ahead

Australian team productivity software company Atlassian saw its stock drop 14% on Friday after it announced its earnings, falling from $81.89 on Thursday evening to $70.18 by the end of Friday. The stock has since rebounded slightly, and was trading at $72.64 on Monday evening.

Atlassian reported revenue that beat Wall Street analyst's expectations by 3%, but the beat left some investors disappointed.

"While they guided up, they didn't guide as much as people had hoped and expected," Joel Fishbein, Jr., a software and cloud technology analyst at BTIG, told Business Insider. "The operating margins are a little bit less than what Wall Street had expected."

Here's what it reported:

Revenue: $267.3 million. Analysts polled by Bloomberg were expecting $260 million.Net income per diluted share: $0.20. Wall Street forecasted $0.19 a share. Revenue guidance (next quarter): $287 million to $289 million. Analysts are predicting $281 million. Net income per diluted share guidance (next quarter): $0.21. Wall Street was forecasting $0.20 a share.

The question going forward is whether Atlassian can penetrate the IT market, analysts say. The company has strong product demand, according to Fishbein, and just before the end of the quarter, Atlassian increased pricing for its products, meaning there's a potential upside to the numbers next quarter.

Atlassian is focused on serving the IT market. At the start of fiscal 2019, Atlassian announced its acquisition of IT alerts technology company OpsGenie for about $295 million and introduced a new incident management platform called Jira Ops. Atlassian also just revamped Jira, its oldest and most well-known software product. The first quarter is off to a strong start so far, Fishbein says.

This past year, Atlassian partnered with Slack, and one of Atlassian's key products, Trello, saw its user base grow to over 35 million people. Atlassian also surpassed 100,000 cloud customers. Morgan Stanley analysts also believe that Atlassian has strong growth potential, as there are 100 million technical users around the world up for grabs.

Original author: Rosalie Chan

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Oct
22

A new survey suggests Salesforce and SAP have an early lead over Amazon and Google in the next frontier in tech (CRM, AMZN, GOOGL, MSFT, SAP)

Cloud giants Amazon, Google, and Microsoft are all touting their artificial intelligence bona fides.

But the companies that are already embracing AI technologies are more frequently turning to the likes of SAP and Salesforce for such capabilities.

Deloitte

Although many of those early adopter corporations are tapping into the AI technologies of the cloud service providers, more of them are getting such features from enterprise software companies, according to a new study from consulting firm Deloitte. For many corporations, that's "perhaps the easiest path" to incorporating AI into their businesses, analysts Jeff Loucks, Tom Davenport, and David Schatsky said in the report.

"These systems have the advantage of access to immense data sets (often their own customers' data), and can often be used 'out of the box' by employees with no specialized knowledge," they said.

For the study, Deloitte in the third quarter surveyed some 1,100 executives at US companies representing 10 different industries. All those surveyed represented companies that are already testing or using AI in at least one of their business functions.

Some 59% of those surveyed said they were using AI from the provider of their customer relationship management, enterprise resource planning, or other enterprise software. Among the enterprise software firms that offer such capabilities is Salesforce, whose Salesforce Einstein can help companies identify which potential clients are most likely to sign up as customers; and SAP, whose Leonard machine learning technology can help companies analyze their data.

Still, many of the AI earlier adopters are also tapping into the capabilities of the cloud vendors such as Amazon and Google. That was the third most popular method of getting access to such technologies, cited by some 49% of those surveyed.

In many cases, though, executives at the early adopters indicated that they feel a need to develop their own AI technologies, rather than relying on those solely created by other companies. The second most popular way executives named for developing or acquiring AI was to codevelop it with partners; 53% of those surveyed said that was what their companies were doing. Meanwhile, some 49% of companies said they were using open-source tools to develop AI capabilities, and 39% said they were using crowdsourcing services.

Original author: Troy Wolverton

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Oct
22

MORGAN STANLEY: There’s an important reason Microsoft would never buy Electronic Arts or Activision to create the 'Netflix of video games' (MSFT)

Microsoft is hunting acquisitions to build out its gaming business, which Morgan Stanley estimates to be worth $40 billion to $45 billion.

But don't expect it to buy Electronic Arts or Activision.

The economics of buying a big gaming company don't make much sense for Microsoft, which makes a "large content acquisition less likely than investors believe," Morgan Stanley analyst Keith Weiss said in a note published Monday

That means Microsoft will probably focus on smaller gaming publishers in its quest to turn Xbox into the Netflix of video games and beat out its biggest competitor, Sony.

"Bottom-line — the economics of driving a strong return from such an acquisition appear challenging," Weiss wrote. "Microsoft would have to pay for revenue streams which couldn't be replicated post acquisition."

Morgan Stanley drew this conclusion after creating a model for what it would take to acquire a hypothetical publisher valued at $39 billion — a midway point between EA's $31 billion market cap and Activation's' $53 billion market cap.

The model showed that Microsoft would have to get 100 million subscribers to its gaming platform in four years in order to justify the expense of a large acquisition. Microsoft would likely struggle to attract such a large userbase, according to the note, since it represents 1/3 of the estimated total console gaming population.

And while adding games like Madden and Call of Duty to its subscription service would likely attract new customers, it probably wouldn't be enough to offset the cost.

This is in part because an acquisition of that size would require Microsoft to pay a premium of around 25%, according to the note. And whatever company it acquired would likely lose some of its revenue streams once its licensing rights are restricted to Microsoft.

So if Microsoft wants to keeping building out its proprietary gaming content, it will likely keep targeting smaller studios.

The company has already made a play for smaller publishers. In June, it announced a new internal studio called "The Initiative," as well as the acquisition of four smaller content studios: Ninja Theory, Playground Games, Undead Labs, and Compulsion Games.

And Microsoft is rumored to be in talks to acquire Obsidian Entertainment, according to Kotaku.

Original author: Becky Peterson

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Oct
22

There could be thousands of undiscovered creatures in the sea — here are the most terrifying ones we know about

Do you like to swim in the ocean? It's great until you feel something brush your feet. Sure, it's probably a scrap of seaweed. But, it could be one of the hundreds of alien-looking aquatic animals living beneath the waves. At least, the ones we know about.

The following is a transcript of the video.

A lot of people aren't comfortable swimming in open water. I mean, you never know what lives in the water beneath your feet. The ocean holds many bizarre deep-sea monsters.

As you dive 140 meters underwater, you might see a megamouth shark. Sure, they look scary, but those 50 rows of teeth are for filtering krill.

The Japanese spider crab is happy to welcome you to 300 meters down. These massive crustaceans are thought to live to 100 years old and are a Japanese delicacy.

Even deeper is the Pacific blackdragon. It uses its chin barbel as a lure to attract small fish.

Another hundred and 50 meters down, we meet the vampire squid. It has bioluminescent organs called photophores that produce flashes of light and prefers free-floating debris from the surface to blood.

Look, here comes a blobfish! This thrilling deep-sea fish was voted the world's ugliest animal by the Ugly Animal Preservation Society. But its jelly-like skin looks much more natural at 900 meters.

The deeper you go, the more alien things look. Goblin sharks are believed to be unchanged for 125 million years, making them living fossils. They can launch their jaws forward to grab prey.

Down here, we enter the midnight zone, where no natural light can reach. You might also pass Tiburonia granrojo, or 'Big Red', one of the largest jellyfish in the world.

The fangtooth has teeth to spare, the largest of any fish. It can't even fully close its mouth.

The Sea Devil is the quintessential deep-sea anglerfish. Its bioluminescent lure attracts prey close to its massive jaws.

At 1,500 meters, the Frilled Shark looks closer to an eel. Its needle-like teeth hook squid ½ its size, and its jaws can gulp them down.

The barreleye looks upwards through its translucent head. It recognizes the silhouette of prey in the dim light. But it should watch out below for the Ghost Shark. Its body is covered with sensory organs that detect motion in the surrounding water.

Down at 2,200 meters is one of the biggest residents of the deep. At 14 meters long, the colossal squid is the largest known invertebrate. Its arms have sharp hooks, which it uses to catch prey and fight sperm whales.

Deeper down are giant isopods, super-sized crustaceans. These guys are closely related to common pillbugs. As we go deeper, we enter the Hadal zone, where life is less common. But you can still find some extreme life forms as deep as 7000m under the surface, like our friend the sea spider. It sucks up worms from the ocean floor with it's proboscis.

There are potentially thousands more undiscovered creatures swimming around under us. Who knows what else might be living down there?

Original author: Rob Ludacer

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Oct
22

Uber's top dealmaker and trusted adviser to the CEO has resigned following reports of a sexual-misconduct investigation

Uber executive Cameron Poetzscher, who led corporate development at the ride-hailing startup, has resigned following reports of an investigation into sexual misconduct, according to The Wall Street Journal.

A spokesperson for Uber confirmed Poetzscher's departure to Business Insider without commenting on the reason.

"We thank Cam for his four and half years of service to Uber," the person said.

Poetzscher, a close adviser to CEO Dara Khosrowshahi, led Uber through its $7.7 billion investment from SoftBank.

An outside investigation in 2017 found that Poetzscher had a pattern of making sexually suggestive comments about his coworkers and that he had a consensual affair with a colleague at Uber, which violated company policies, according to The Journal.

Though the investigation took place a year ago, the allegations weren't made public until a September 2018 report in The Journal. Poetzscher was formally disciplined in November 2017, according to the report, though some people at the company argued he should have been fired.

Nelson Chai, Uber's recently hired chief financial officer, will take over Poetzscher's corporate development duties until a new person is hired for the role. Poetzscher did not immediately respond to a request for comment.

Original author: Becky Peterson

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