Start Up: more YouTube ad trouble, iPad optics, troll factory rebrands, Walmart madness, and more

An Uber self-driving car, here seen the right way up. Other orientations were on display this weekend. Photo by iwasaround on Flickr.

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A selection of 12 links for you. (British) Summer time is here! I’m @charlesarthur on Twitter. Observations and links welcome.

LA Times and ads • Nelson’s log

Nelson Minar:


The LA Times is a good newspaper and is currently doing the best political coverage in California. They are also the most aggressive ad shoveling website I have ever seen. Their ad blocker blocker and paywall works, preventing me from reading articles. I even tried installing an ad blocker blocker blocker which doesn’t work.

So I open articles like this in incognito mode, and let it run its ads, and close the popups and mute the videos and try to ignore the visual distraction. But boy that page does not go quietly. Here’s how they reward their readers.

That’s a timeline of 30 seconds of page activity about 5 minutes after the article was opened. To be clear, this timeline should be empty. Nothing should be loading. Maybe one short ping, maybe loading one extra ad. Instead the page requested 2000 resources totalling 5 megabytes in 30 seconds. It will keep making those requests as long as I leave the page open. 14 gigabytes a day.


Yes, ad services doing the work. This is part of how many sites monetise; Recode used to recycle its page even if you didn’t have the tab frontmost.
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iPad optics • Asymco

Horace Dediu on the puzzle of slowing iPad sales:


user satisfaction with the product continues to be very high. Apple cited that in November, 451 Research measured a 94% consumer satisfaction rate for iPad Mini, a 97% rate for iPad Air, and 96% for iPad Pro. Finally, browsing, shopping and app usage data also show continuing high utilization for iPads.

Furthermore, iPads are still growing in “non-consuming” markets. iPad posted double-digit growth in both Mainland China and India, it continues to attract a very high percentage of first-time tablet buyers.

Finally, within corporate buyers there is a 96% satisfaction rate with 66% purchase intent. Apps and solutions are continually being developed for the platform.

Taking into account that the iPad has a large, stable, engaged and loyal user base that continues to expand and find new uses the optically bad sales data needs an explanation. The simplest explanation is probably the best: iPads remain in use far longer than phones, and perhaps even longer than some computers.

Anecdotally we can see evidence for this. Few iPads are replaced every two years the way phones are. They are not tied to service contracts or subsidized. They are also less likely to be damaged during usage as phones are dropped and banged-up. iPads are more stationary or carried in protected containers. Phones are in pockets, iPads are in bags.

So iPads are longer-lived products and it’s perfectly reasonable that people who have them keep using them and more people are joining them but slowly.


Consider that corporate PCs often get replaced quite strictly on a three-, four- or five-year basis. No such certainty in the consumer market.
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Uber suspends self-driving car program after Arizona crash • Reuters

Gina Cherelus:


Uber Technologies suspended its pilot program for driverless cars on Saturday after a vehicle equipped with the nascent technology crashed on an Arizona roadway, the ride-hailing company and local police said.

The accident, the latest involving a self-driving vehicle operated by one of several companies experimenting with autonomous vehicles, caused no serious injuries, Uber said.

Even so, the company said it was grounding driverless cars involved in a pilot program in Arizona, Pittsburgh and San Francisco pending the outcome of investigation into the crash on Friday evening in Tempe.

“We are continuing to look into this incident,” an Uber spokeswoman said in an email.

The accident occurred when the driver of a second vehicle “failed to yield” to the Uber vehicle while making a turn, said Josie Montenegro, a spokeswoman for the Tempe Police Department.

“The vehicles collided, causing the autonomous vehicle to roll onto its side,” she said in an email. “There were no serious injuries.”

Two ‘safety’ drivers were in the front seats of the Uber car, which was in self-driving mode at the time of the crash, Uber said in an email, a standard requirement for its self-driving vehicles. The back seat was empty.


Over at Google/Waymo, they’ll be groaning. Or delighted. This was inevitable (admit it), but is it better than it happened to Uber – everyone’s favourite whipping boy this month – rather than the poster boy for self-driving cars, Waymo? Segue straight into…
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Inside Uber’s self-driving car mess • Recode

Johana Bhuiyan:


taking drivers out of the equation would also increase the company’s profits: Self-driving cars give Uber 100% of the fare, the company would no longer have to subsidize driver pay and the cars can run nearly 24 hours a day.

But the company’s autonomous efforts are in turmoil. According to extensive interviews Recode conducted with former and current employees at the self-driving effort, many think it is at a technological standstill and plagued by significant internal tension, especially among its executive leadership.

The issues have included a wave of key talent departures and problematic demos. At least 20 of the company’s engineers have quit since November. One source says a “mini civil war” has broken out between those who joined Otto in search of the independence of a startup, and those who joined Uber’s ATG with ambitions to solidify the company’s place in the future of transportation.

Many of those issues and the resulting questions can be traced back to when Uber acquired Otto, several sources said. As part of the acquisition, Kalanick put its founder and CEO Anthony Levandowski in charge of all of its autonomous efforts.

Uber says that it’s normal for an entity that was founded two years ago as of January 2017 to see this level of attrition, particularly as the company recently paid out its employee bonuses. However, the departures began as early as November 2016. Additionally, a company spokesperson said Uber’s ATG has seen fewer departures than the overall company and has hired more people than have left since the start of the year.


There was a meeting scheduled for Monday, though possibly it was brought forward?

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Inside Alabama’s auto jobs boom: cheap wages, little training, crushed limbs • Bloomberg

Peter Waldman:


Parts suppliers in the American South compete for low-margin orders against suppliers in Mexico and Asia. They promise delivery schedules they can’t possibly meet and face ruinous penalties if they fall short. Employees work ungodly hours, six or seven days a week, for months on end. Pay is low, turnover is high, training is scant, and safety is an afterthought, usually after someone is badly hurt. Many of the same woes that typify work conditions at contract manufacturers across Asia now bedevil parts plants in the South.

“The supply chain isn’t going just to Bangladesh. It’s going to Alabama and Georgia,” says David Michaels, who ran OSHA for the last seven years of the Obama administration. Safety at the Southern car factories themselves is generally good, he says. The situation is much worse at parts suppliers, where workers earn about 70¢ for every dollar earned by auto parts workers in Michigan, according to the Bureau of Labor Statistics. (Many plants in the North are unionized; only a few are in the South.)

Cordney Crutcher has known both environments. In 2013 he lost his left pinkie while operating a metal press at Matsu Alabama, a parts maker in Huntsville owned by Matcor-Matsu Group Inc. of Brampton, Ont. Crutcher was leaving work for the day when a supervisor summoned him to replace a slower worker on the line, because the plant had fallen 40 parts behind schedule for a shipment to Honda Motor Co. He’d already worked 12 hours, Crutcher says, and wanted to go home, “but he said they really needed me.” He was put on a press that had been acting up all day. It worked fine until he was 10 parts away from finishing, and then a cast-iron hole puncher failed to deploy. Crutcher didn’t realize it. Suddenly the puncher fired and snapped on his finger. “I saw my meat sticking out of the bottom of my glove,” he says.

Now Crutcher, 42, commutes an hour to the General Motors Co. assembly plant in Spring Hill, Tenn., where he’s a member of United Auto Workers. “They teach you the right way,” he says. “They don’t throw you to the wolves.” His pay rose from $12 an hour at Matsu to $18.21 at GM.


It’s quite disturbing how low the bottom is in a race to the bottom.
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Russia’s infamous ‘troll factory’ is now posing as a media empire • Moscow Times

Alexey Kovalev:


Today, FAN forms the core of a media empire consisting of 16 news websites. Collectively, they employ over 200 full-time journalists and editors whose content attracts more that 30 million pageviews every month.

The monthly cost of running FAN and its sister sites is in the area of 20 million rubles ($350,000), RBC estimates. The source of the funding is unclear too, but most of the websites in the empire attract little if any ad revenue. Allegedly, the group has a mysterious sponsor, believed to be Yevgeni Prigozhin, who also known as “Putin’s Cook.”

Everyday, the sites churn out dozens of articles every day that praise Putin, cast Ukraine as a failed Nazi state and expose the nefarious machinations of the United States. Still, FAN stands out. It exploits the unstable media labor market to lure in journalists from other publications with salaries above the market average. FAN even employs foreign reporters — RBC reports they are the most likely to be sent to Syria to provide coverage.

In its coverage of Syria, FAN has an unique advantage over other news outlets — including state-owned media behemoths. Unlike new organizations, FAN reporters are not obligated to embed with Russia’s Defense Ministry, which censors coverage.

Instead, RBC reports that FAN reporters embed with the so-called the “Wagner Group,” a private military company — also reportedly funded by Prigozhin — that is covertly employed by Russia’s Defense Ministry to buttress its Syria operation. This allows FAN’s reporters to file their reports from dangerous frontlines faster than state news media.


Hall of mirrors adds conservatory extension.
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iMessage apps have become pretty interesting and useful • Finer Tech

David Chartier:


Not stickers, apps. I’ve been a sticker proponent for quite a while, as stickers have been a massive (and profitable) hit in other countries for years. They also just make people happy, and in a world like this one, we need more of that. But some apps like Line attribute most (if not all) of their attraction and impressive revenue to stickers. Apple and iMessage basically just closed a five-year gap there.

iMessage apps are different. They appropriate functionality, which lives elsewhere outside of iMessage, and place it right in the conversation with you. For a while, I figured “why not just open that app and tap a share or copy link?” But tinkering with two iMessage apps helped things click for me: Pocket and Fandango.

They remove friction from switching apps to grab content, a link, or even functionality, and keep that stuff right there with me and my friends. There’s something useful about not having to break away from a conversation to go get this stuff.


I always think only of stickers, but apps might be worth looking at again.
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Survey finds foreign students aren’t applying to american colleges • NBC News

Ron Allen:


In Cairo, Momen Rihan, who spent a few months as an exchange student in America and decided not to come back, said he’s been observing posts on social media from other travelers.

“They say they face problems at airports when they try to check into the United States because they are Arab,” Rihan said.

Taiwanese student Vicky Sung, who is deciding whether to attend University of Southern California or Boston University, said she’s mindful of recent attacks on foreigners living and working in the United States. In February, two Indian-born men working in Kansas were shot and one of them killed in what federal prosecutors are calling a hate crime because the shooter allegedly said, “Get out of my country.”

“Safety is a big concern for choosing which university to go to,” Sung said, “or even whether to go at all.”

Her friend, Yi Zhihui of China, also expressed concern about whether Trump will make visa’s more restrictive if tensions with China over trade or other political issues heat up.

“I consider education sort of an investment, and if my visa gets canceled and I can’t enter the country, that’s kind of investment failure,” he explained.


Drip, drip.
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Walmart’s e-commerce binge is one big Silicon Valley bailout • LinkedIn

Jake Anderson-Bialis on Walmart’s buyup of a number of perhaps not-so-profitable e-commerce companies:


Let me be clear, e-commerce is an insanely hard business. Judges in Colombia have more lifetime security. Especially if you’re selling and moving physical product. Only in e-commerce could a company brag about being “contribution margin profitable,” which is code for “we barely make enough money to build anything valuable.” What’s their answer for losing money on customers? Volume. Unless your company’s name starts with the word “Warby,” “Harry,” “Stitch,” or “Blue” (all spectacular dog names, by the way), it’s probably not a great e-commerce business. The reality is there is a yawning chasm between the superb e-commerce businesses and the rest.

Once e-commerce companies go public, they trade at 1x forward revenue. And not a nickel more. That’s a problem when you’ve fooled investors, and yourself, into valuing the business at 3 – 5x. Ultimately, e-commerce companies spend evermore more money to acquire worse customers, sales slow and profits become elusive. Personally, I rode Zulily shares down 80% and most days felt like my own personal flash crash. And Zulily was one of the better-run outfits.

As one hedge fund manager friend likes to say, “companies get valued either on DCF (Discounted Cash Flow) or GFT (Greater Fool Theory).” I cannot tell you how many investments have been made in the last five years with the thinking “we’ll just sell this to Amazon, Google, Apple, or Facebook” (let’s call this the “A.G.A.F. approach”). But these players got rich, and stayed rich, by being disciplined and building their own products. Amazon knows e-commerce better than anyone and owns the market. Guess how many companies its bought for over a billion dollars? Zero…

…E-commerce, especially in Silicon Valley, is a roach motel for shoddy businesses run by slick entrepreneurs.


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Google’s YouTube has continued showing brands’ ads with racist and other objectionable videos • WSJ

Jack Nicas:


A week after Google apologized for running customers’ advertisements alongside objectionable videos, triggering a change in policy, its YouTube site is still rife with examples that are angering more big advertisers and causing some to cut spending with the tech giant.

Google’s automated system placed ads for some of the world’s biggest brands—including Coca-Cola Co., Procter & Gamble, Inc. and Microsoft Corp.—on five YouTube videos peddling racist and anti-Semitic content, according to a review by The Wall Street Journal.

Asked about the Journal’s finding that their ads were still appearing with such content on YouTube as of Thursday night, Coca-Cola, PepsiCo Inc., Wal-Mart Stores Inc. and Dish Network Corp. said Friday they were suspending spending on all Google advertising except targeted search ads. Starbucks Corp. and General Motors Co. said they were pulling their ads from YouTube. FX Networks, part of 21st Century Fox Inc., said it was suspending all advertising spending on Google, including search ads and YouTube.

Wal-Mart said: “The content with which we are being associated is appalling and completely against our company values.”


It has started to hit search ads? Stuff got real. This was Friday; I think there weren’t many Google or YouTube staff relaxing at home over the weekend.
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Google kills Gchat, replaces with Google Hangouts • NY Mag

Madison Malone Kircher:


Starting in June, Google is saying good-bye to one of its most beloved products, Gchat. Officially, the chat app’s name was Google Talk; Gchat was just what hip, personal-computer owners started calling it back in the day, but the name has persisted. While the functionality of Gchat isn’t really going away — users will be rolled over to Hangouts, a Google chat platform that has been up and running for four years at this point and does effectively the same thing — the name and user interface will be no more.

Gchat’s run as the king of adult instant-messaging started back in 2005. For those of us just getting into the web around then, it was a perfect platform: Your tech-inept parents weren’t on it yet. It was cleaner and easier to use than AIM. And there was the added bonus that because it was new — Gmail launched in 2004, a year prior to Gchat — you might actually be able to snag a variation on your name, if not your given name exactly. Realistically, you probably went with something much cooler and more true to your inner spirit, like “flypegasusfly,” “crewgirl16,” or “mormonboy12804.” (I wish I could say I made any of those up.)

Sure, when the Google Hangouts switch happens in June, your online interactions aren’t really going to change that much. But the name will die, and that’s something to grieve on this slow-for-tech-news Friday.


One fewer, sort of, Google messaging app, or is it platform? But still more of them than you can shake a stick at.
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Swarovski shelves plans for Basel smartwatch launch • WatchPro

Andrew Seymour:


“Swarovski has decided to postpone its smart device initiative and will not present new smart device products at Baselworld 2017. Swarovski is simply not ready yet. We cannot yet make any statement regarding the timing of the launch,” he explained.

Details of the Android device, aimed at the women’s market, first emerged at the Consumer Electronics Show earlier this year when tech partner Qualcomm told journalists it was providing the chipset for the watches.

Mr Buchbauer said no blame could be laid at the feet of Qualcomm and Google for the delay.

“The cooperation with and technology provided by all partner companies have been outstanding. The postponement was purely driven by Swarovski’s strive for excellence in execution,” he commented.

Swarovski has already been involved in the smartwatch market through collaborations with Samsung, Polar and Huawei. But the watch it was due to unveil in Basel would have been the first produced by its own team.


Perhaps realised that it’s not going to be a magic wand – not even a crystal-encrusted one – to boost sales.
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Errata, corrigenda and ai no corrida: none notified

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