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Silicon Valley and at least some corners of Washington, D.C., will be buzzing Thursday morning over an exhaustive, embarrassing, and damning report in The New York Times about Facebook. The article details the California company’s combative, deceptive, and otherwise sharp-elbowed response to the swirling controversies over false news and other abuses on its powerful platform. (Facebook says the story has some inaccuracies.)
For all its rich details and deep reporting by a five-journalist team, there’s a certain dog-bites-man-quality to the article. A giant corporation, at the apex of its wealth, power, and adulation in the eyes of its users, the news media, and investors, reacts badly to a crisis. It runs every play in the crisis-management playbook—delay, conceal, lobby, fund bipartisan attacks on competitors, self-righteously deny wrongdoing—but one.
That would be candor.
Faced with the knowledge that Facebook had been duped, Facebook angrily stuck its head in the sand. Then it tried, unsuccessfully, to deflect attention away from itself. The best companies humbly acknowledge mistakes as quickly as possible in the hopes of forgiveness.
That’s what’s different about Facebook, which in turn is a proxy for Silicon Valley—a place where humility is in short supply. Facebook CEO Mark Zuckerberg killed his own meat and proudly took long paternity leaves. Chief Operating Officer Sheryl Sandberg started a corporate feminist movement. Neither could conceive that their company, technologically daring on the one hand (Zuckerberg’s domain) and slickly attentive to its public image on the other (Sandberg’s), could possibly be responsible for gross injustices against democracy.
Silicon Valley companies like to pretend they’re special in some sort of moral, ethical, or existential way. It turns out they’re just companies.
Taxi driver. Preparing for a possible public offering next year, Uber saw the growth in its gross bookings for its ride hailing and food delivery services jump 41% in the third quarter from a year earlier to $12.7 billion. Revenue increased 38% to $2.95 billion and the company’s net loss hit $1.1 billion, down 27% from last year. Uber also introduced a customer loyalty program called Uber Rewards, with four tiers of benefits based on points accrued from using the company’s services. At the highest “diamond” level, customers get priority pick ups, access to the highest-rated drivers, and 24/7 phone support, among other perks. Lyft introduced its own plan earlier this week, but Mashable rates Uber’s as superior.
Smooshed. The price of cryptocurrencies is crashing again. Bitcoin was down 12% over the past day while XRP (Ripple), the second-biggest virtual coin, lost 9%, Ethereum’s Ether was down almost 13%, and Bitcoin Cash fell 9%. Hard to find a reason why, though as we reported yesterday, IMF managing director Christine Lagarde gave a speech pushing central banks to launch their own digital tokens.
Tumbleweeds and cobwebs. The latest airwave license auction at the Federal Communications Commission got off to a modest start on Wednesday, with initial bids in the first two rounds totaling just $42 million and about one-third of the licenses useful for 5G getting no opening bid at all. Verizon already owns about half the licenses in the 28 GHz band, including in many prime urban locations, possibly dampening bidding interest.
Glacial pace. Microsoft this year improved its representation of women from the bottom to the top of the company: among its intern classes, in technical roles, and in senior leadership. Between June 30, 2017 and June 30, 2018, Microsoft’s global workforce went from 25.5% to 26.6% female. In technical roles, women’s representation grew from 18.5% to 19.9%. Among interns, women went from 40.4% to 42.5%. In leadership, women’s representation increased from 18.8% to 19.7%.
A trillion here, a trillion there, pretty soon you’re talking about real money. On Wall Street, shares of Apple lost 3% on Wednesday, the fifth consecutive day of declines following reports from iPhone parts suppliers of slowing demand. The five-day drop has cut $107 billion off Apple’s market value which now stands at $886 billion. Morgan Stanley analyst Katy Huberty says it’s all noise and urges buying the shares. Cisco System‘s latest quarter showed revenue grew 8% to $13.1 billion and adjusted earnings increased 23% to 75 cents per share. Both were better than analysts expected and Cisco shares gained 4% in premarket trading on Thursday.
Follow the money. Last year’s big corporate tax cut included an additional sweet treat for some of the biggest tech companies, allowing them to repatriate largely untaxed overseas profits and pay just an 8% tax rate. Where did the cash go? At Apple, Alphabet, Cisco, Microsoft, and Oracle capital investment increased 42% to almost $43 billion in the first three quarters of 2018, the Financial Times reports. But share buybacks almost doubled to $115 billion. Apple was among the most extreme cases, increasing investment by 14% to almost $15 billion while tripling spending on stock buybacks to $63 billion.
FOOD FOR THOUGHT
The war among the largest tech companies over cloud computing seems only in the middle innings. But while Microsoft appears to be making progress in catching up to longtime leader Amazon, Google’s efforts aren’t keeping pace. Dina Bass looks into the situation for Bloomberg Businessweek and finds Microsoft’s prior skills at serving large enterprises outmatching Google’s offerings.
IN CASE YOU MISSED IT
Cable and Satellite TV Lost 1 Million Subscribers Because of Cord Cutting By Jonathan Vanian
Facebook Users Have Raised $1 Billion on the Site Since 2015 By Natasha Bach
BEFORE YOU GO
Is 2018 over yet? Almost? Phew. Summing up the feelings of many on both sides of the Atlantic, the Oxford Dictionaries named “toxic” the word of the year, just beating out “techlash” and “gaslighting.”
“Our research shows that this year, more than ever, people have been using ‘toxic’ to describe a vast array of things, situations, concerns and events,” the group said in a video release.