Start Up No.918: WhatsApp co-founder vents, FB Messenger chief vents back, the good-bad Apple News news, is Shazam an AR trojan horse?, and more

This iconic potato peeler came from a radical realisation about users. Photo by Andy Melton on Flickr.

A selection of 11 links for you. J’accuse! I’m @charlesarthur on Twitter. Observations and links welcome.

Apple News is giving the media everything it wants—except money • Slate

Will Oremus:


Sources at several news outlets say they’ve seen their audience on Apple News multiply in 2018 alone. Some now say it has become one of their top traffic sources, alongside Facebook and Google. At Slate, which disclosed its data for this story, page views on Apple News have roughly tripled since September 2017, and the app recently surpassed Facebook as a driver of readership.

Conversations with social media consultants and people who work in audience development at major publications, along with recent reports by other outlets, suggest Slate is not an outlier—which is why many news organizations are now making Apple News an important part of their strategy to reach as large an audience as possible.

There is, of course, a catch. Whereas Facebook sent hordes of readers from its news feed to publishers’ websites, Apple tends to keep them inside its app. And so far, publishers have found that’s not a lucrative place to be. Although Apple allows publishers to sell ads within their stories—and partnered two years ago with NBCUniversal to sell “backfill” ads in slots that the publishers don’t fill themselves—several sources at media outlets told me that they’re seeing little to no revenue from Apple News.

The problem, publishers say, is that the NBCUniversal partnership isn’t yielding much money, and Apple doesn’t make it particularly easy for publishers to fill their own unsold inventory. Apple News doesn’t support some of the common ad systems that dominate ad sales on the web, and not all media companies find it worthwhile to develop and sell ads specifically for Apple News. (Those that do can keep all the revenue or they can let Apple sell them, in which case Apple takes a 30% cut.) As Matt Karolian, the Boston Globe’s director of new initiatives, told me, “The juice ain’t worth the squeeze.”


Oremus calculates that “Slate makes more money from a single article that gets 50,000 page views on its site than it does from the 6 million page views it receives on Apple News in an average month.”
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Watch out, algorithms: Julia Angwin and Jeff Larson unveil The Markup, their plan for investigating tech’s societal impacts • Nieman Journalism Lab

Christine Schmidt interviewed Julia Angwin, who left ProPublica to set up the new site:


ANGWIN: …We have an idea about how journalism should be. It’s much more tech-focused than any newsroom, even though ProPublica is the most tech-infused newsroom out there. We want to take it to another level.

SCHMIDT: What is that next level? What are the nuts and bolts of how this organization will operate differently?

ANGWIN: We describe ourselves as doing journalism that is based on the scientific method. The idea is that objectivity has been a false god for journalism for a long time. It started out as a decent idea, but it’s led to a lot of what people call false equivalents. I think journalism needs a new guiding light, a new philosophical approach, and I think that approach should be the scientific method. What that really means is we develop a hypothesis. Maybe the hypothesis is: ‘Brett Kavanaugh. Did he actually harass a woman or not?’ Then you collect evidence — how much evidence is there for and against this. Then you describe the limitations of your evidence: ‘So far the evidence is only one/two people.’
It doesn’t have to be ‘he said, she said.’ It’s more about: this is the amount of evidence to support this hypothesis, and then here are the limitations of this. There are always limitations to our findings. Even though climate change is well accepted scientifically, there are limitations for those findings as well. That’s our goal, to try to frame our journalism around that.

What that means in practice is having people with technical and statistical skills involved in an investigation from the outset. So much of what happens in traditional newsrooms, in every newsroom I’ve ever worked in, is that there’s a data desk. A reporter goes over to the desk and basically orders data like it’s a hamburger. Usually by then, the reporter has already done the reporting and has a hypothesis based on the anecdotes. Then, if the data doesn’t support it, there’s a fight between them and the data desk. Or, more often, there’s not even data available.


This sounds fantastic. (Not for everyone, of course.) Data journalism – where the story comes from the data – is enormously satisfying when it comes right. Some of my best stories have come from interpreting public documents: the story’s in there, you just have to listen to what the numbers are saying.
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A history of the OXO Good Grips peeler • Fast Company

Mark Wilson heard the story of how the thick-handled swivel peeler was designed, told by Davin Stowell, talking about the designer Sam Farber:


[Farber] and his wife Betsey spent a month cooking and enjoying the French countryside. One night I’m in my office, it’s 7:30 p.m., and I get a call from Sam. He’s in France, where its 1:30. in the morning, and he’s incredibly excited.

He was cooking with Betsey, she had arthritis, and she was complaining about the peeler, complaining that it was hurting her hands. As I remember, it was an apple tart, though Betsey claims it wasn’t an apple tart. But that’s what Sam claimed to me.

She was frustrated. The old-style metal peeler wasn’t good. Her background was in architecture and design. I think she initiated the idea of, “Sam, can you do something about this? Make a better handle.” She grabbed some clay and started on her own. She recognized: “This is something that could be made better, and my husband used to be a housewares executive, and he should do something about it.” She was very involved in looking at things, trying things, and giving her input along the way.

It instantly dawned on him, here’s an opportunity to make a product. Nothing had really been done in a serious way with kitchen gadgets. They were either cheap items that didn’t work very well, or if they were more expensive, they might be designed with a steel instead of plastic handle, but they didn’t actually work any better than the cheap stuff.

Here’s something he could do to help people, he thought. So he wanted me to get started on it immediately. He knew he had to do a full line of tools. It couldn’t be just a peeler, it had to be 15 to 20 different tools so it could occupy enough wall space at retail to get attention.


Large-handled grips seems so obvious in retrospect, but you need designers who are working with people who have arthritis for it to be obvious when it’s not there.
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Exclusive: WhatsApp cofounder Brian Acton gives the inside story on #DeleteFacebook and why he left $850m behind • Forbes

Parmy Olson, with a hell of a scoop – and what timing:


“At the end of the day, I sold my company,” Acton says. “I sold my users’ privacy to a larger benefit. I made a choice and a compromise. And I live with that every day.”

Despite a transfer of several billion dollars, Acton says he never developed a rapport with Zuckerberg. “I couldn’t tell you much about the guy,” he says. In one of their dozen or so meetings, Zuck told Acton unromantically that WhatsApp, which had a stipulated degree of autonomy within the Facebook universe and continued to operate for a while out of its original offices, was “a product group to him, like Instagram.”

So Acton didn’t know what to expect when Zuck beckoned him to his office last September, around the time Acton told Facebook brass that he planned to leave. Acton and Koum had a clause in their contract that allowed them to get all their stock, which was being doled out over four years, if Facebook began “implementing monetization initiatives” without their consent.

To Acton, invoking this clause seemed simple. The Facebook-WhatsApp pairing had been a head-scratcher from the start. Facebook has one of the world’s biggest advertising networks; Koum and Acton hated ads. Facebook’s added value for advertisers is how much it knows about its users; WhatsApp’s founders were pro-privacy zealots who felt their vaunted encryption had been integral to their nearly unprecedented global growth.

This dissonance frustrated Zuckerberg. Facebook, Acton says, had decided to pursue two ways of making money from WhatsApp. First, by showing targeted ads in WhatsApp’s new Status feature, which Acton felt broke a social compact with its users. “Targeted advertising is what makes me unhappy,” he says. His motto at WhatsApp had been “No ads, no games, no gimmicks”—a direct contrast with a parent company that derived 98% of its revenue from advertising. Another motto had been “Take the time to get it right,” a stark contrast to “Move fast and break things.”


The lawyer who was there with Zuck disagreed about the clause. So Acton left, with $850m of shares unvested. He had preferred a “metered” system for monetising WhatsApp – you’d pay per message past a certain number. Sheryl Sandberg said “it won’t scale”. (To be honest, I agree with her.)

There’s lots more fascinating detail in this piece. Very instructive about how Facebook has changed.
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The other side of the [WhatsApp] story • David Marcus on Facebook

Marcus, former head of Facebook Messenger, introduced this Facebook posting with a tweet saying “I just couldn’t take it any more, so here’s the other side of the story Brian Acton has been telling”:


WhatsApp founders requested a completely different office layout when their team moved on campus. Much larger desks and personal space, a policy of not speaking out loud in the space, and conference rooms made unavailable to fellow Facebookers nearby. This irritated people at Facebook, but Mark personally supported and defended it.

Second — on encryption. The global roll-out of end-to-end encryption on WhatsApp happened after the acquisition, and with Mark’s full support. Yes, Jan Koum played a key role in convincing Mark of the importance of encryption, but from that point on, it was never questioned. I witnessed Mark defending it a number of internal meetings where there was pushback — never for advertising or data collection reasons but for concerns about safety — and even in Board Meetings. Mark’s view was that WhatsApp was a private messaging app, and encryption helped ensure that people’s messages were truly private.

Third — on the business model. I was present in a lot of these meetings. Again, Mark protected WhatsApp for a very long period of time. And you have to put this in the context of a large organization with businesses knocking on our door to have the ability to engage and communicate with their customers on WhatsApp the same way they were doing it on Messenger. During this time, it became pretty clear that while advocating for business messaging, and being given the opportunity to build and deliver on that promise, Brian actively slow-played the execution, and never truly went for it. In my view, if you’re passionate about a certain path — in this case, letting businesses message people and charging for it — and if you have internal questions about it, then work hard to prove that your approach has legs and demonstrate the value. Don’t be passive-aggressive about it. And by the way the paid messaging that WhatsApp is rolling out now sounds pretty similar to metered messaging from my point of view…


He also calls Acton “low-class” for attacking Facebook, “the company and people that made you a billionaire”.

Also well worth reading: ex-purchased-by-Facebook-startup-person-who-exited Antonio Garcia Martinez weighs in with a Twitter thread about the differences between Acton and Marcus.
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Facebook’s recent ‘bear hug’ of Instagram frustrated its independent founders • Recode

Kurt Wagner:


Over the past year, both Systrom and Krieger have grown increasingly frustrated and agitated with Zuckerberg and Facebook’s increased influence over the app, according to multiple sources. One characterized it as “bizarre meddling” that hurt morale within the unit.

Specifically, there were worries that Facebook’s moves were hurting the app’s growth — perhaps even intentionally — through some of the company’s product updates and marketing changes, these sources said.

That included a throttling back of Instagram’s promotion inside the Facebook app, apparently ordered by Zuckerberg, that dropped weekly referrals significantly by hundreds of thousands of users.

Systrom was also frustrated with a recent Facebook change to how posts are shared between the two apps. Previously, photos shared to Facebook via Instagram included a label identifying the photo as an Instagram photo, presumably to encourage people to visit or download Instagram. That label was recently removed, which made it appear as though people were posting those photos directly to Facebook and not to Facebook via Instagram.

It was a small tweak, but it was a big deal inside of Instagram, according to multiple sources. Systrom — who has historically been hands-on with all the aspects of the app — disagreed with the decision, and even posted as much on the internal company Facebook page. The feeling of some was that Facebook wasn’t promoting Instagram, and even taking credit for engagement that Instagram was driving.


This take makes a lot of sense. Systrom might have taken a lot, but feeling that his (joint) creation was being ignored, having done the hard work of seeing off Snapchat, must surely have rankled.

And he left just before the next big problem…
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Instagram has a drug problem. Its algorithms make it worse • The Washington Post

Elizabeth Dwoskin:


Recent searches on Instagram, which is owned by Facebook, for hashtags of the names of drugs — such as #oxy, #percocet, #painkillers, #painpills, #oxycontin, #adderall and #painrelief — revealed thousands of posts by a mash-up of people grappling with addiction, those bragging about their party going lifestyle and enticements from drug dealers.

Following the dealer accounts, or even liking one of the dealer posts, prompted Instagram’s algorithms to work as designed — in this case, by filling up a person’s feed with posts for drugs, suggesting other sellers to follow and introducing new hashtags, such as #xansforsale. Ads from some of the country’s largest brands, including Target, Chase and Procter & Gamble, as well as Facebook’s own video streaming service, appeared next to posts illegally selling pills.

Even as top executives from Facebook and Twitter, which has also long struggled with posts offering drugs illegally, promised earlier this month in a congressional hearing that they were cracking down on sales of opioids and other drugs, their services appeared to be open marketplaces for advertising such content. Facebook’s chief operating officer, Sheryl Sandberg, said her company was “firmly against” such activity. Twitter chief executive Jack Dorsey said he was “looking deeply” at how drug-selling spreads on the site.

But activists and other groups have warned tech companies about illegal drug sales on their platforms for years. In recent months, lawmakers, the Food and Drug Administration and some advertisers have stepped into the fray. In April, FDA Commissioner Scott Gottlieb charged Internet companies with not “taking practical steps to find and remove opioid listings.” Sen. Joe Manchin III (D-W.Va.) called social media companies “reckless,” saying, “It is past time they put human life above profit and finally institute measures that crack down on these harmful practices, preventing the sale of illegal narcotics on or through their platforms.”


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Why did Apple spend $400M to acquire Shazam? • Apple Insider

Daniel Eran Dilger:


in 2016, Shazam’s new foray into marketing was compelling enough to raise $30m in new funding from investors, giving the company a unicorn valuation of $1bn. The fact that Apple subsequently paid “only” $400m for it makes the deal sound like a bargain.

Last year, Shazam made an additional step, embracing Augmented Reality. Now, rather that just taking users to a standard website, it could use its Shazam Codes (or visual recognition of products or posters) to launch an engaging experience right in the camera, layering what the camera sees with “augmented” graphics synced to the movement of the user’s device.

Now users could identify a bottle of Bombay Sapphire gin and see it animate botanicals in front of them, while also suggesting cocktail recipes.

Another Shazam campaign in Australia, for Disney’s “Guardians of the Galaxy 2,” delivered a Spotify playlist “mixtape” along with presenting the movie trailer and an opportunity to buy tickets. A campaign in Spain let users animate Fanta billboards in AR using their phones. And a Hornitos tequila app used a mini-game, rendered in ARKit, to award discounts on purchases.

Given Apple’s interest in building traction for ARKit, which launched last fall as the world’s largest AR platform, it seems pretty clear that Apple bought Shazam, not really for any particular technology as Apple has already developed its own core visual recognition engine for iOS, but because Shazam has developed significant relationships with global brands to make use of AR as a way to engage with audiences.


Hmm. The valuation for Shazam was always a bit dubious, though as he points out the $400m is (by Apple’s standards) a lot of money. If Apple really wants Shazam for its AR (and let’s face it, the purchase price wouldn’t make sense if it’s just on music recognition) then things got interesting.
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Compal to begin production of Apple Watch Series 4 • Digitimes

Aaron Lee and Adam Hwang:


With Quanta Computer’s capacity for the Apple Watch Series 4 at its factory in Changshu, eastern China fully loaded, the wearable’s second supplier Compal Electronics reportedly will begin mass production of the smartwatch in November 2018, according to industry sources.

Quanta and Compal both declined to comment on its clients or orders.

Some market watchers noted that Apple sold around 4.2 million Apple Watches worldwide in the second quarter of 2018 and the device’s global shipments are estimated to arrive at 18.0-19.5m units in 2018. Currently, the Apple Watch has a share of 35% in worldwide smartwatch shipments.


I’d ignore the numbers in there (the “share” depends on who you ask, as does the total) and focus on the fact: Apple’s got one factory now making Watches at its full capacity, and it’s getting a second online. That means it expects to sell a very great many more in the coming months – which, given the larger screen and faster processor and better waterproofing, wouldn’t be a surprise. Remember how you didn’t see anyone wearing AirPods, and now you do? Going to be the same with the Watch.
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Google promises Chrome changes after privacy complaints • CNET

Stephen Shankland:


“We’ve heard — and appreciate — your feedback from the last few days, and we’ll be making some product changes,” tweeted Parisa Tabriz, a security team leader at Google.

Google added in a blog post Tuesday evening that it will add new options and explanations for its interface and reverse one Chrome cookie-hoarding policy that undermined people’s attempts to clear those cookies.

The situation shows the difficulties Google faces offering both the most widely used browser and one of the most powerful online advertising empires. Chrome is a powerful tool that lets websites gather the kind of personal information that makes it possible for advertisers to target ads for a particular audience. But Google operates some of the biggest online sites out there, and Chrome itself, if unfettered, has a view into our most private online activity.


It also – in the current version – doesn’t delete Google signin cookies even if you try to clear the cookies in Chrome. Which means Google can keep tracking you. (This was the subject of the Safari cookie lawsuit in the UK, and the US, where Google hacked Safari so that a Google signin would also be a DoubleClick advertising signin.)
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Why were lettuce supply chains in the New York Times? • Bloomberg Gadfly

Matt Levine on that IBM-Walmart story from Tuesday:


the more complicated challenge is that Walmart wants to track lettuce not only when it is in Walmart’s hands but also at every step of the supply chain: “By this time next year, more than 100 farms that supply Walmart with leafy green vegetables will be required to input detailed information” into the database. This is not a big technological problem—it’s just some more inputs to the database—but it is a logistical and contractual problem. Walmart has to get its suppliers to agree (and to get their suppliers to agree, etc.) to make inputs into the database, and teach them how to use it, and give them passwords, and check that they are inputting information correctly. Database design is an element of the solution here—you want to make the database easy to use and hard to mess up, and you want to give the suppliers access rights only to input data about their lettuce, while only Walmart (and IBM) has the complete view of the whole supply chain—but it is not necessarily the hardest part; the hard part is the social and commercial work of getting the farmers to agree to do a new annoying thing. If you are Walmart, though, I guess that part’s not so hard either: The farmers really want to sell to you, so they’ll jump through some hoops.

Anyway it is all pretty interesting, as a case study in supply-chain management and database design, but I have to say that you don’t generally read a lot of stories about supply-chain management and database design in the New York Times. I can’t quite figure out why they were interested in this one. Can you?


That’s right, it’s because it used the chainblock. Have I got the jargon right?
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