This Week in Tech 584

Leo Laporte:  It's time for TWiT, This Week in Tech!  Man, we have a great panel for you.  Mike Elgan is back in studio from the Wall Street Journal.  Nathan Olivarez-Giles, and from Tai Pei Taiwan, it's Ben Thompson of Stratechery.  We're going to talk about Yahoo, what's going on there, Facebook at work, the Twitter sin.  What should Twitter do next?  And a whole lot more.  Great TWiT ahead, stay tuned.


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Leo: This is TWiT, This Week in Tech, episode 584, recorded Sunday, October 16, 2016.

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It's time for TWiT, This Week in Tech, the show where we cover the week's tech news.  Each and every Sunday, for me it's a great moment to get together with people.  I really love the panels we get together on TWiT.  We got a great one this week.  Ben Thompson who was going to be here last week slept through the show.  But we're thrilled to have you back.

Ben Thompson:  In my defense, there was a miscommunication.  I was not in town... so...

Leo:  I apologize.  But I'm glad we could get you here.  Ben writes at  He is a great analyst who offers both free and paid writings at that website.  Highly recommended.  Everybody knows that Stratechery is the place to go to get the trending analysis.  You're in Tai Pei where it's early, right? 

Ben:  It is.  It's 6 AM. 

Leo:  That's why I assumed you slept through.  I would not be up at this hour. 

Ben:  I have never slept through one.  I was in Singapore last week.  I did wake up to a bunch of missed calls, but I had no idea.  So there was a.... it might have been my fault.  I'm not sure whose fault it was, but I apologize for the confusion and whatever role I may have played, but I'm happy to be here this week. 

Leo:  We had a great show last week, and we're going to have a great show this week.  Also with us, Nathan Olivarez-Giles from the Wall Street Journal!

Nathan Olivarez-Giles:  Always a pleasure. 

Leo:  The LA Dodgers hat to your left, I'm sure it's not yours....

Nathan:  I can explain it to you guys.  It's my favorite baseball team.

Leo:  Are you from LA?

Nathan:  Born in LA, moved to Phoenix when I was little.  But I grew up a Dodgers fan.  Yeah.  I was a Raiders fan, and then the Raiders moved to Oakland and Bo Jackson stopped playing, LA didn't have a team any more. 

Leo:  You had to become a Cardinals fan.  But now you have the Rams, the Dodgers.  You're great.

Nathan:  There's some internal conflict there.  I'm excited LA has a football team again, but they play in the same division as the Cardinals, so I like to see the Rams do well, but my favorite team is the Cardinals.  The diamond backs came out when I was in high school... I don't care for them too much. 

Leo:  Congratulations, as much as I hate to say it, I was rooting for the Dodgers, because I thought it would be great to have a Dodgers/Giants playoffs. 

Nathan:  Yeah, but the Cubs... they haven't won since 1908.  The Dodgers won in 1980.  You guys won in 2014.  The Dodgers got their but kicked last night, it was that grand slam eighth inning.  They're playing right now.  That's how dedicated I am.

Leo:  Let's get a little monitor up for Nathan so we can keep up with that score.  Look who else is here?  Really thrilled to get Mike Elgan back in studio.  I call him the peripatetic Mike Elgan, because I like saying peripatetic.

Mike Elgan:  It's a great word.  I'm a huge fan of not caring about scores. 

Leo:  Anyway, great to have you.  You're back home for a little bit, but I know there's a certain grandchild on the way.  Kevin is here, but Nadia is lying on her back.  They're reproducing.  Congratulations.  It's lovely to have all of you.  As always, whenever I get you guys in, I'm champing at the bit, because there's so much to talk about between Yahoo and Twitter.  I guess we should update you on the Note 7.  That's been a lead story for the last month.  There's a coda to it, I think the whole thing is over now, because Samsung, according to the journals is discontinuing the Note 7. 

Nathan:  No more Note 7s.  They gave up on that phone.  I think was the right call, they should have done it earlier, that phone is discontinued.  They made 2.5 million in the initial versions of the phone, then they recalled those, and they brought out some new ones.  But they started burning, so all of them have been recalled, so they aren't making them anymore.  If you have a Note 7, please take it back to wherever you bought it from.  Every carrier is taking it back.

Leo:  Samsung is offering some blandishments if you buy another Samsung phone. 

Nathan:  They want you to stay with Samsung, which makes sense for them. 

Leo:  What is your sense, do you think people are going to abandon the Samsung?

Nathan:  A lot of people are going to abandon Samsung. 

Leo:  Especially since you got the Apple phone coming out right after this, and you got the Pixel coming out. 

Nathan: It sucks.  I've been reviewing Android phones for seven years now, the phones from Samsung haven't been better than they are right now.  They have really great hardware, they have fantastic cameras.  I still have troubles with a lot of Samsung's software changes to Android, but they're at the top of their game.  If you want to stick with Samsung, the Galaxy S 7 is great, and there are no reports of batteries starting fire or exploding or having any of these issues, but the Note 7 has these problems, and you've got to steer clear of that, so I don't blame a lot of people for giving up on Samsung.  Right now, I think for us who are in this mode of "they have to win back our trust" and we're not necessarily recommend people stick with Samsung, but we're not necessarily telling people to flee them either.  It's going to be a personal choice, but whatever you do, don't play around with that Note 7, because you're looking yourself and the people around you at risk.  We don't say that lightly.  But there's never been a re-recall of a Smartphone before.

Leo:  A re-recall.

Nathan:  There's never been anything like this.  They're not allowed on Us flights anymore. 

Leo:  As of yesterday noon, the transportation administration has banned.  Not even if it's off.  You cannot bring it on.  They'll confiscate it.  I like the punishment.  They said we are not going to be able to put it in the seat back or above.  You have to keep it in your pocket.  Because we want to know when it catches on fire. 

Mike:  You're saying you're not telling people to get away from Samsung.  I am.  Partly because there was the famous misdirected email where they intended to communicate internally when a customer complained and accidentally copied a customer.  There was an intent.

Leo:  The replacement phone that caught on fire on Southwest airlines, they sent a text accidentally to the customer saying "what do you want us to do about this?  Should we sit on it?

Mike:  This is based on history.  Ben can chime in, because a lot of this was from Taiwan.  They were fined more than a quarter million dollars by Taiwan's equivalent of the FTC a few years ago, three years ago, astroturfing online forums, paying fake users to go in there and talk up Samsung.  They were fined for lying in Taiwan, for lying in ads, about Smartphone features.  They were caught cheating on benchmark tests multiple times, and caught lying about cheating.  So this is a company of questionable integrity.  I think it's a good idea for people to vote against shady business by not buying Samsung phones. 

Leo:  I love the New York Time's take on this.  Brian X Chen writing in the New York Times, interviewed a number of people, including a battery expert.  He said he didn't think it was the battery.  He said Samsung was too quick to blame the battery.  I think that there was nothing wrong with them or that they were not the main problem.  He said, I think this is the great way to end this article, the problem seems to be far more complex.  The Note 7 had more features and was more complex than any other phone manufactured.  In a race to surpass iPhone, Samsung seems to have packed it with so much innovation, it became uncontrollable.  Even they didn't know how it worked.

Mike:  They flew too close to the sun.

Nathan:  That's such a ridiculous argument to me.  We are pushing these phones further than they've been before, we're asking more of the batteries and processors than ever before.

Leo:  But Samsung could not replicate the problem and they released a phone with the same problem thinking it was safe.

Nathan:  Part of the issue was, I spoke to some battery experts in some of the issues I wrote myself, was that the phone started on fire and they destroyed a lot of evidence they looked to figure out what the problem is.  So it can literally be the chemistry of the device.  It could be, basically there's two electrodes inside these batteries.  There's a separator between the two because if these two electrodes touch, they will catch fire.  The batteries themselves could be contaminated during the manufacturing process.  The electronics control how the battery works outside of the battery, and there could be other issues that prevent the battery from stopping, taking a charge and over-heating.  There's literally dozens of reasons why this could be the case.  To say that there's too much innovation, it's a big phone with a stylus.  It's not that different.

Leo:  But the Galaxy S7 which is a very similar phone, is not bursting into flames. 

Mike:  If you look at the iPhone Touch disease where the sixes and six pluses.... it's not that there's too much innovation.  Everybody is pushing so hard that everything is turned up to 11, and they're trying to be thin and small.  I think we're going to see a lot more of this thing.

Leo:  Ben, what's the consequence to Samsung as a company?

Ben:  Just real quick on the battery point.  The one important thing to note is that Samsung, the iPhone 7 plus, the battery capacity is 2,900 MAH.  The Samsung Note 6 was 3,000.  So just a hundred more.  The Note 7 was 3,500.  That battery technology is largely a function of size, so basically they were putting a significantly larger battery into this phone.  This is really, to me I'm surprised they haven't said definitively what it is, replaced the first one.  The Samsung SDI batteries where they threw their corporate brother under the bus, because Samsung's SDI is also an Apple supplier.  Apple at the time had this snarky statement that they were confident in the design of their phones.  It's not going to be a problem here.  Basically the consumer protection agency said that the battery was too big for the phone. That makes perfect sense, to go further on the point of how these batteries are made, they're actually thin layers of the chemicals with a porous layer in between, what happens is when they are, multiple thin layers, and if they are squeezed, that is 100% the way to start a fire with this battery.  It seems, I'm not a battery expert, but given the comments by the director of the consumer protection agency, he felt the battery was too big, it would certainly make sense that the replacement battery, which is presumably the same capacity might also have a similar problem.  To me, when you're talking about packing in innovation, that sounds like packing in a battery that's too big to make the phone competitive from a battery standpoint.  We don't know what it is, I'm not a battery expert.  From a quantitative aspect, that massive jump in capacity without a similarly massive jump in the size of the phone itself, unfortunately with battery technology we don't have that level of breakthrough.  That certainly seems like a possibility as to what's happened.  Makes us much worse for Samsung than it would have been because initially I was never on the this will be good for Samsung in the long run phase, because...

Leo:  What was the logic there?  How would this be good for Samsung?  Because they responded quickly...

Ben:  They showed they were trustworthy... etcetera, etcetera. 

Nathan: They've blown this every step of the way.  They haven't explained what happened to this date.... 

Leo:  If it had stopped with the replacements, if they had been able to fix it and replace it, I think it might have possibly done something good to Samsung's reputation, but then to put out phones that continue to burn... that's it.  It's over. 

Ben:  It's never a good thing to have an exploding phone.  My whole point is that entire....

Leo:  But Tylenol, for example, survived it's recall.  It wasn't Tylenol's fault.  Ford survived the Pinto.  Will Samsung survive?

Nathan:  I think Samsung will survive.  But...

Mike:  But they've got this reputation that's seeping into the popular culture.  I was at a coffee shop a few days ago, and there was this family and had a couple of kids.  They asked me to take their picture and they handed me a phone, and it was an iPhone.  Before I took possession of it, I said is that an iPhone 7?  And he said it's the one that doesn't burn.

Leo:  that's probably the level of understanding of normal people. 

Nathan:  They're going to be a punchline for a very long time. 

Ben:  To continue my point.  I think long term damage is significant.  My whole point was to say that this was never a good thing, and anyone who said so was being silly.  Just to be silly, but there have been brands that have survived recalls like this.  It does happen. 

Leo:  This is not unheard of...

Ben:  There's a few interesting things on that point.  The initial recall was bad.  Anyone who is saying it wasn't is confusing themselves.  But the double recall is really significant.  Obviously the short-term financial impact is going to be massive, as you would expect, but the long-term, there's a really big problem with brand perception.  It's going to be pretty significant, not just in the US, but also in other countries.  One area where Samsung really hurt themselves was in China, where they launched the phone in China the same day the recall was announced in the US.  They said that it's fine because they use a different battery.  Of course the same day in China, the China Internet is very active, there were media accounts of phones exploding.

Leo:  Were there fires in china?

Ben:  There were.  The reason why this is so damaging is they were in retrospect pretty arrogant saying don't worry about it, it's a different phone, it's going to be fine and dismissing them outright and really I think causing arguably even more damage.  It's bad enough in the US you get on every airplane they say if you have a Samsung turn it off.  That's brand publicity you can't pay money for, unfortunately it's going in the wrong direction.  I think the sort of arrogant attitude they took in China in particular is very damaging and have long-term repercussions for their brand, particularly in China where the big advantage they have in the Western countries is there's not a clear alternative to premium Android.  In the long-run Google is a huge threat to them and we can talk about that more, but in China, the Wawe phones in particular are doing well at the high-end.  It's the market with the strongest alternative to a Samsung phone.  That's going to be a massive problem for them.

Leo: Where there's competition, where there's a choice, I think consumers probably will just.... especially Android phones which seem like a commoditized product.  The Note 7 is unique because it had a stylus, it was a big phone with a small body.  A big screen with a small body. 

Ben:  Short term, they're going to be getting hammered no question.  They're going to feel this for a while.  The real damage is the potential long-term impact on their brand and the reputation.  Stuff like this can be hard to recover from.  Yes, I get the point those people were driving at is that if you handle it well, you can establish a certain level of people will give you a chance and you can establish a level of trust.  But they've not only obliterated that opportunity, they've made it 100 times worse by blowing...

Leo:  I still don't eat at Jack in the Box.  So I mean there are brands.  Chipotle is still...

Mike:  It has to be said, Google's timing with the Pixel could not have been better.

Leo:  Or Apple.  Both Apple and Google came out with premium phones, and I'm sure Samsung was well aware that this was about to happen.  They provided an alternative at exactly the same price.  I do want to talk about the Google phone at some point.  The Pixel, as attractive as it is, costs as much as a Note 7.  I think it's awfully expensive.  I think it's too expensive. 

Mike:  And if you drop it in the toilet, that's it. 

Leo:  It's not water proof.  Didn't bother me, I don't drop a lot of phones in the toilet.  But... Wawe, is that the phone that's doing so well in china? 

Ben:  Wawe has a hard time in the United States in particular.  They pinned their hopes on the Nexus 6P, there was a miscommunication about Google's goals with the Nexus...  Google asked Wawe to make the Pixel as well, but they were not down with the no branding...

Leo:  I didn't know that.  So HTC won the contract. 

Ben:  HTC is...

Leo:  They're toast, so they'll do anything.

Ben:  I think the difference between the Nexus and the Pixel are significantly greater than a name change.

Leo:  I think that's an interesting conversation, but I do note that Wawe and ZTE have pretty compelling Android devices, which they are for the first time selling in the US.  The Honor 8 and the Axon 7, which are nice devices.  I wonder if that's another reason why Samsung should be afeared.  They're also half the price of the Samsung phone. 

Nathan:  This could be an opportunity for the Motorollas, the Sonys, those companies, if they can deliver the right products at the right time, I think what we've seen that I'm interested in is this mid range of Android phones that are maybe 300, 400 dollars cheaper.  1 Plus 3.  The Nexus line used to play in that space as well, but Google's never really put the marketing effort behind...

Leo:  I'm going to offer a counter argument.  I think this could be the end not just for Samsung but for Android.  It comes on the heals of a lot of Android malware, a lot of security concerns.  Google is fighting a rear-guard action with security because most Google phones are guaranteed to have the monthly security updates.  There is always going to be a market for Android at the low end.  Cheap phones, you don't have a choice.  But at the high-end and the flagship market, I'm wondering if this doesn't give the Apple a chance to eat the entire market. 

Nathan:  You might be right, but it seems as though a lot of people don't associate Galaxy phones with Android.  You talk to a lot of people and they're like, "I have a Galaxy," and you say "do you have an Android" and they don't know what you're talking about.  This is anecdotally, I don't know what you guys think...

Leo:  Samsung would like you to think that. 

Ben:  It's absolutely true.  Samsung has highly differentiated satisfaction scores than any of their rivals.  This is why this is so damaging, because Samsung was a... your point is well made.  We tend to think of it as IOS versus Android, but the way the competition manifests itself and the way most consumers think about it is Apple versus Samsung versus...

Leo:  That's better for Apple.  They don't have to beat all of Android and Samsung is on the ropes. 

Nathan:  It could be better for an Android manufacturer if they make the right kind of device at the right... we don't know what this looks like.  This could be a small opportunity.

Leo:  Let's take a break and I'm going to talk about if this is the Pixel's opportunity to leap into the fray.  I'm sure that's what Google is hoping.  Mike Elgan is here.  It's great to have you!

Mike:  And 

Leo:  How about that Google Plus.  Are you still doing that?

Mike:   Yeah.  I'm doing it.  There's still a bit of the community.  There's always a really awesome minority community.  Remember the Well? 

Leo:  These people won't leave.  In fact, they hope everybody else will leave. 

Mike:  It's getting tough out there, Leo.  Let me tell you.  Google Plus is still out there, but it's not what it used to be.

Leo:  We'll get to it when we talk about Twitter.  Also from the Wall Street Journal, he covers Gadgets.  I hate to say Gadgets. 

Nathan:  It's part of what I do.  Consumer Tech.  Gadgets, apps, anything regular people use.  Lately a lot of virtual reality stuff.  Yeah. 

Leo:  And Nate OG on the Twitter.  Are you an original Gangster?  Or an old Grandpa. 

Nathan:  It's the initials of my last name.  I had an elementary school teacher who couldn't say my full name, so she started calling me OG, and it was third grade, and she didn't know what it meant, all my friends thought that was pretty funny.  It stuck.

Leo:  I don't want to tell you, but you're all blue today. 

Nathan:  The Dodgers are playing the cubs right now. 

Leo:  Can we get a monitor.

Ben:  I'm watching the Packer's game on the side.

Leo:  Ben Thompson, he's watching football from  I could tell you one thing, I'm not watching.  The 49ers. 

Nathan:  They had a great 50 yard pass or touchdown or something.  I'm excited they're starting again. 

Leo:  We should do a sports show with you. 

Nathan:  I could go on all day. 

Ben:  The Niners should hire that college coach who's doing well.  What's he at?  Michigan? 

Leo:  I hear.  Jim Harebow.  He sounds great, doesn't he?  Hobo.  Everybody is going what are you talking about this sports ball thing?  Our show to you today brought to you by Squarespace, the place to make your next website.  Your business, your online store, your blog.  Getting married, make a Squarespace site.  Having a baby?  Make a Squarespace site.  You will make a beautiful professional looking site by using the best engineering, the best designers to make your page reflect your personal feel, your look.  By the way, if you want to do e-commerce, it's never been easier to sell online.  Every Squarespace template has built-in ecommerce.  Mobile is built in too, from responsive design.  Your website will look great, no matter what sized screen.  We know these days you can't predict how your visitors are going to come to you.  Many of them are on phones.  It's got to look and work well for the mobile shopper, sell unlimited products with no transaction fees.  All your data and financial information is safe and secure which means it runs the software, that's really Squarespace's secret sauce. 

Mike:  You mentioned my website Becoming nomad, that is a Squarespace site, and it has to be.  They have this beautiful map so people can track where I am. 

Leo:  It's really... is also Squarespace.  You can also manage, if you're running a business on Squarespace, the dashboard lets you manage workflow even.  Offer fast customer service.  They've got order processing, they've got fulfillment help, they've got shipment notifications.  Even refunds can be handled through the Squarespace dashboard so you really got a full service site there for little money.  I don't know how they offered all this so affordably.  Squarespace commerce app on your phones lets you fulfill orders, manage product inventory, resolve customer issues, it's the only platform I know of that lets you create, manage, and brand your store in a beautiful way in a way that matches the whole site.  Shopping is not an afterthought hanging off the site.  It's the whole site.  They have a basic plan, an advanced plan, with lots of features for your growing business, and of course, they'll let you accept payments instantly.  You'll get a free domain with an annual purchase.  They sell domains now too.  Squarespace domains are awesome.  Your site will look great, it will feel great, and it never goes down.  Squarespace, you can try it right now, they have a free trial button.  All I ask is if you decide to buy you use the offer code TWiT for 10% off and you'll be showing your support for TWiT.  I'm pretty sure we're the first podcast they ever advertised on.  Now they're on every podcast known to man because it worked.  We took them from zero to 60 over the last six years and I'm very proud of that.  You may be tempted to use some other offer code, please use TWiT, let them know that we're still with TWiT.  Do you have offer codes now too, Ben?

Ben:  I do not.    I have a podcast for several years., we have an exclusive sponsorship with male chimps. 

Leo:  That was Ceral that put them on the map with the little girl who couldn't pronounce it.  I never thought of that.  I should have done that.  Podcast is actually, they've been in the news quite a bit lately.  They completed a five part series on podcast from Newhouse?  Who was it that did that.  Pointer?  Might have been pointer.  What scared me is it said here comes the ad tech.  Why would anyone want to take a nice, pristine thing like a podcast and start doing things like monitoring users and intrusive advertising and all of that? 

Ben:  The challenge is that it's not an accident that Squarespace is successful because the nature of their business is they have two things.  One a way to track conversions, which is that code, which is why you have the battle of the codes, but two, they have significant lifetime value, so you see a lot of these purchases are the lifetime value of a customer is pretty significant.  The spend is worth it.  Things like Casper mattresses is a common advertiser.  That's a high-price item.  You don't see a lot of low price items that don't have an easy means of tracking. 

Leo:  they want to be on television where there's a lot of reach, and we don't offer massive numbers, we offer quality numbers, but if you're trying to sell a million pencils it's not going to be very useful. 

Ben:  That means there's a bit of a chasm without evidence that there is a benefit, it's not worth the effort of doing it.  Certainly no one wants advertising tech like the web, but it's not... it's easy for people who are established to say everything is great, let's leave it the way it is forever.  But the reality is the media is not going to reach its full potential with the current model.  It's going to be ultimately crimped.  That will be unfortunate, so hopefully there can be some middle ground where there is a motto that works for more advertisers than a very distinct sound that advertises now.  There's a whole world of advertisers that has a lot more money that doesn't right now. Without any sort of measurement, it's not worth the effort. 

Leo:  There's also a big category. The brand advertiser.  That's the ones you see on Football and baseball.  they don't have... Ford advertises... buys 18 million impressions on a football game.  They can't say let's see how the car sales do tomorrow.  But they do a lot of research and they've bought podcasts.  That's going to be where you'll see it.  Ad tech isn't going to help them either.  It's just an act of faith that you can build a brand on a podcast and they haven't come to that conclusion yet. 

Nathan:  There's a couple things in the podcasting world that I'm interested in that might be able to address some of the issues we're talking about.  They aren't coming from an advertising centric place yet, but there's an app called 60DB that I was looking at the other day, TWiT is on there, but it's basically some former NPR folks, former Facebook folks, and some former Netflix folks, people who worked on the newsfeed and also the recommendation engine for Netflix, they're all about delivering short form podcasts based on your interest, so they are amassing some data...

Leo:  They want to be the Netflix of Podcasts at this point.

 Nathan:  This American life just came out with something for their Podcast where you can share a short 30 second clip, and they're trying to make it as sharable as the Gif. 

Leo:  Sharable would be great.  I'm not excited about anything that commoditizes our premium product.  60DB isn't something I'm looking for.  I feel like anything that commoditizes the product isn't going to be a long-run solution for anybody who is making the content.  That's what happens in the newspapers.  Nobody goes to New York 

Mike:  The problems that you see is there are newscasters that are supposed to be doing the kind of ads you do, they don't care, they don't know about the products really, they're pretending to, they don't sell it, they don't believe in it, they haven't vetted the advertisers, they're simply employees doing what they're told and you can't fake it.  That's the difference.  Sometimes on this network it works great, on other networks the exact same general idea completely fails. 

Leo:  I will always fall in favor of not thinking about advertising, but thinking about the community and building the community's loyalty.  In the long run, advertising works on podcasts because the people who listen to those podcasts care about the podcast and want to support them.  Instead of asking you to give us money directly, we say here's some products you might be interested in, and if we pick the products wisely, that's a big part of it, then the audience can show its loyalty by buying those products.  That's a very hand-made process.  That's not something that's ever going to translate to mass media--which is fine with me.  I work in mass media, I know about mass media.  This is not mass media and I'm happy about it.  Where should we go from here?  Should we talk about Yahoo? 

Ben:  We should get to the Pixel phone.

Leo:  We'll do the Pixel phone and Yahoo next.  Google had, October 4th, we've had time now, two weeks to adjust, their big product announcement.  They announced a lot of products,  not just two new Pixel phones, but also a Google router system, very much like the Ero, Google VR vizor like the Samsung Gear VR, and Google Home. I don't know what you call that category, very much like the Amazon Echo.  I don't know.  Does that say what the category is. 

Ben:  What Mike just said is spot on.  You just listed all the hardware products, but that's not how Google presented it, and I think that's important to note. 

Leo:  It's an ecosystem of intelligence! 

Ben:  Well.  He started by recounting the history of technology as he characterized it, which was the PC, then the Internet, then he said the next Nepock is going to be AI.  I would quibble with the AI definition in a second, but that was the context is they spent 20 minutes going over Google assistant before they got to any hardware but that is the context in which the hardware was being introduced, it's really important to understand.  You talk about the Pixel phone and it being expensive.  The question is why is the Pixel different?  Why is it not called Nexus?  Why do they have a deal with Verizon when they never had a deal with Verizon before?  Why are they spending a lot of marketing? 

Leo:  They had those terrible Pixel ads!  They spent a huge amount of money, 3.2 million dollars in two days!

Ben:  But that's money they never spent previously.  To me, my reaction to that is to figure out why is this such a completely different approach and you back up and think about the assistant and I expect the Google assistant to be excellent.  You think about it, why wouldn't it be?  that's why Google is good at.  Google's tech is very well placed for an "AI" future. 

Leo:  This is a very different play by Google because they're putting a feature in their phones that other manufacturers don't yet have access to. 

Ben: The problem is that the future is terrible for Google's business model.  Google's business model is about providing users a selection and they pick one and they put their advertisers into competition against each other and the user selects the winner of that competition.  That doesn't work at all in an assistant world, they don't have a business model for the assistant world, so you look at what they're doing.  What does Apple do?  You don't buy Apple because you want an iPhone, per say.  But you buy it because it's the only way you can get iOS.  If you prefer iOS, you have one option.  Apple has a monopoly on IOS.  You buy Apple and they have a huge margin to do so.  If Google Assistant ends up being the best assistant by a long shot, and if assistance ends up being a viable way that people interact with the world, what is a proven way to make money on a highly differentiated feature to sell a very high margin piece of hardware, that's the only way to get it.  Given that context of what they're doing, at a minimum, Google is at least exploring a pretty significant shift in their business model, and all the evidence of spending lots of money to promote it, having it on one device, all these things at least suggest that they're experimenting with the world beyond ad sense, and to me that's why this is one of the most interesting announcements that we've seen in a very long time in tech generally. 

Leo:  I completely agree. 

Nathan: That sounds really compelling, but at the Google event, I was there and speaking with a couple executives and the head of the search team and the head of the home team.  That's not what they're doing. they told me that they're going to make the assistant available to be built into as many devices as possible.  They said to expect at CES that there would be a wave of assistant speakers made by other manufacturers at lower price points.  So that sounds good. 

Leo:  Adding Assistant is a simple thing to do to existing phones. 

Nathan:  They also spoke at the event that they're going to open up an SGK next year to allow other people to create assistant commands.  You might be right.  Here's the thing.  With Google, you can never really tell what the hell they're doing because they will change their mind. 

Leo:  That's intentional on their part.  It's Darwinian. 

Nathan: What they're telling me, versus what Ben is saying is the future could be two totally different things.  They might be flirting with both and to see where they gain traction first might be the direction that they go.

Leo:  Is this inconsistent, Ben, with your analysis?  It doesn't have to be on Google hardware to succeed...

Ben:  I've also heard... the big question to me is the phone OEMs.  I've heard rumors as well that Google is making it available in some form, what I'm curious about is two things.  One, it's not a part of Android, it is a separate thing, so are they going to be charging OEMs for it, that would be interesting revenue stream for this, and you add on that the fact that Samsung acquired Viv the personal assistant, and it seems that... Assuredly Samsung knew this move was coming. 

Leo:  Viv, we should point out was created by the folks who created Siri and sold it to Apple. 

Mike:  It's the closest thing out there with AI that's closest to Assistant with multi agency...

Leo:  Robert Scoble published in an interesting post on Facebook, he said the reason Viv did not want to sell to Samsung, they saw the writing on the wall with Apple. They saw where Siri was going would basically make them useless, so they sold fast.  Is that possible? 

Ben:  To me that suggests that Assistant, if it is available to non-Google phones, I'm very curious as to what the terms are. 

Leo:  They give Chrome to everybody knowing it's going to generate revenue for Google in the same way that an assistant even if given away will generate revenue to Google.  wouldn't you want it to be everywhere. 

Mike:  I want everybody to imagine a future that's like Star trek.  Maybe five years out, ten years out, you just talk...

Leo:  President Obama says it's going to be more than that.

Mike:  He's not exactly a technology columnist.

Leo:  Did you read his amazing article in Wired?  My general observation, this is Obama, is that AI has been seeping into our lives in all sorts of ways, we just don't notice it.  Part of the reason is the way we think about AI is colored by popular culture scifi. There's a distinction between generalized AI and specialized AI. All you hear about in Sci-fi is generalized AI.  But that's hard to do.  My impression based on talking to my top science advisors, who are pretty good, is that we're a reasonably long way away from that.  It's the specialized AI that we're going to see in every aspect of our lives from medicine to transportation to the Grid.  I thought that was very interesting.

Mike:  Each individual will have what is essentially a personally AI agent that is always available.  Could be like Her.  Essentially it will do three things.  First of all, it does everything the public AI, the Google search type things, B, it will know all your personal data.  It will know every Gmail message, everything you do, it will monitor your search results and also pay attention to what you do, and the third thing is to control every smart object in your world.  All three of those things simply by having a conversation with this AI.  You say I want this, I want that.  What AI enables you to do ,which Alexa does not is it will choose the third party service.  Right now, with Alexa you have to find it, that's the financial opportunity secondary to...

Leo:  Wouldn't Google want to get in between every transaction?

Nathan:  That's why they want to have their AI front and center everywhere. 

Mike:  The thing with all of these companies is you're going to pick one and you're going to have one following you throughout all your day.  You're not going to want to switch between Siri and Cortana. 

Leo:  So it's a race at this point.

Mike:  So it works the best if it has the best AI, if it's the most ubiquitous.  Google wins on all three of those. 

Ben:  I'll disagree on the business model perspective.  It's not clear to me one, that there is a business model as an intermediary, two even if there is if there are some categories where they can charge an affiliate fee, an affiliate fee model is going to be a significant top line reduction for Google's business.  Right now Google's search business generates high revenues because there is high lifetime value calculation that goes into these advertisements.  Customers are looking to acquire a user for an ongoing relationship, not just a one-time relationship, a relationship where Google is the intermediary for everything sounds good in theory but if you actually look at the way they make money and the rates they get on a purchase, it's going to be a cut in revenue.  Maybe they make up in volume, because there's so many things, but the number of categories where they can actually earn an affiliate fee.  We've seen how that's going to work.  I'm not saying it's going to be a Pixel sell out a profit model in their future, but it certainly seems like they are experimenting with a business model that they haven't done before, and that's appropriate given their long-term challenges in that regard. 

Mike:  I think experimenting is exactly right.  All of these could pan out, but also you have to realize they don't have to make up all the revenue.  They have video advertising, who knows what the opportunities are going to be in VR, there are lots of things coming.  There are lots of revenue models that are coming.  The biggest problem is they realize both apps and search are going to be replaced by a large extent by people talking to the AI assistant.

Leo:  I think we all agree on that is Google is saying we've got to figure out what the future is going to look like.  I think AI seems like a sensible place to look.  Part of the thing I worry about is you and I know what we want.  We want Her.  We want this generalized intelligence that can act as a true assist.  Daring Fireball's Jon Gruber's rebuttal to Mossberg.  I can't imagine how stupid an actual human assistant would have to be not to understand a request like find out when the next debate is and put it on my calendar, and yet none of these can do it.  He's pointing out how stupid they are right now.  I'm also wondering if even though we want a particular kind of AI, if from a purely financial business point of view, if that's not the kind of AI google or anybody else wants to give us.  They may want to say we'll have a bidding war between Yelp and Open Table and whoever pays us the most money, that's who you'll be calling on when you ask for a reservation, that isn't the world you and I want.  We want an assistant that is working for us, not working for Google.  I think Google probably wants the opposite. 

Nathan:  I think of all the ones that are competing, Apple is the one that's going to most deliver that. 

Leo:  Well, look at Mossberg, because he says "why does Siri seem so dumb?"  If it doesn't get better soon, what does that mean for Apple?  I'm going to paraphrase, but it's fair to say that Apple has chosen a pass that is ultimately a dead end in terms of Artificial intelligence. 

Mike:  Siri is not AI.  This is the thing that I'm fascinated about with the assistant is that Google as we know two years ago deep mined.  This is the top shelf AI, this is the system that beat humans in Goh and Atari breakout.  This is good AI, I have the feeling that assistant is like How when it was singing daisy.  They replaced something that was a pretty sophisticated non AI virtual assistant with a baby virtual assistant, which will now go through pre-school.

Leo:  So they took a step back so they could take a step forward. 

Mike:  Exactly.  They're using machine learning... So I think...

Leo:  I agree with you.  Google has the upper hand.  Everybody is trying this, including Facebook.  Mark Zuckerberg is trying to build an assist in his home named Jarvis, you have to think this is more than Mark's 20% project. 

Nathan:  Of course you don't have to be first to win this, If you look at the chat box...

Leo:  I agree.  Facebook from the outside took a wrong turn with chat box. 

Nathan:  I'm intrigued with what you're saying Mike, with the assistant.  In terms of... there's a  part of that.  What we're also seeing a lot of here is a real marketing smokescreen from Google to a certain extent.  A lot of what they're doing with Assistant as it's built into Android and Aloe which you text with is built on what they have with voice surge and what they had with Google Now before.  To a certain extent, they're taking these pre-existing products and they're giving it a new name and representing it in a new way and telling you it's something new.  It's an evolution of something that already existed.  Thanks in large part to stuff they already have from deep mind, but they're still very far away from where they need to be.  I just want to bring this up, because I think there's an echo chamber inside of tech journalism right now that is saying Assistant is new and it's better than Siri and it's better than Cortana and it's better than Alexa.  Assistant is not that new, and it's mostly a re-branding.

Leo:  Is it the same that they showed two years ago in IO?  They showed contextual...

Mike:  I have a feeling that the intelligence is in the input, not the output.  So right now the output is like oh.  But what happens when you tell it you don't like that?  I think it does.  I think there a couple things about it that are impressive, little things like I was texting with my brother-in-law, hey check out this pizza.  We were trying out Alo, and it intervened in our conversation, it jumped in and said Hey.  I could help you with a pizza. 

Nathan:  It's looking for trigger words is what it's looking for.  Google is smart.

Leo:  Apple, Siri is the one that's dying.  Who's going to get to Hal 9000 first?  Where it says, I'm sorry, Dave?

Ben:  Two of those three companies, they have all different challenges.  Apple has the business model that works, I think it's fair to question their technology not because Apple is dumb, but because the sort of thinking that goes into building fantastic products is not the sort of thinking that goes into building...

Leo:  Don't they also have a problem because they've espoused privacy and it's all going to happen on device and we don't want to share your data?  Isn't that an issue also? 

Ben:  Yes.  I guess the question is to what extent is the privacy a cause and to what extent is it a making lemons out of lemonade question? 

Leo:  I think Apple has decided that's their marketing advantage.  They're going to choose that. 

Ben:  Apple has designs on pretty significant business and health in general.  That will be to their benefit. 

Leo:  By the way, Microsoft and Google both are very interested in this. 

Ben:  They both have pretty significant failed initiatives.

Leo:  Both have health initiatives that have failed, you're right. 

Ben:  The big problem for Google is a go to market problem.  They have great technology and the question is how do they get it so people can use it?  Mike made this point about Siri being available on Apple before.  Yes, they have Android, but that's only a part of the market, and it's not the most valuable part of the market because Apple has them.  Apple has the business model, Google has the tech, we're not sure about the business model.  Facebook has the attention, and that's something that's very valuable.  That's my quibble about the future being AI.  It's not just about the technology, it's about ho you access that technology, and Facebook has multiple avenues to garner attention and garner....

Leo:  And they have all the data Google has plus. 

Ben:  They are behind.  It was funny last year when Mark Zuckerberg did a post about Google's AI being able to play Go, and literally 12 hours later, they posted that they had won.

Mike:  But every avenue that Facebook has is a fraction or a subset of what Google has.  Facebook doesn't have a browser, they don't have a line of phones. 

Leo: If you live in your browser on Facebook.... ultimately you do, right?  You open your browser, you open Facebook, and Facebook launches you to every other page. 

Ben:  Browsers are pretty meaningless in the future.  Yes, we browse the web a lot, but mostly in the context of a feed, and Facebook has some of the best feeds in the Industry, and in the future we're not going to be on a browser in an Assistant world.  This is Google's conundrum in a nutshell.

Leo:  What if Google stepped forward and said we want to make Her, Pearl.  We need your help to do this.  We need you to be early adopters, and we understand that what we're making i far from that at this point, but with your help, data, and interaction, you're going to teach our little AI how to become the assistant you want. 

Mike:  They don't have to say that, they're already doing that. 

Leo:  They don't want to explicitly, because consumers might not buy that message, but we geeks, I would go for that.  I would say I'll help you.

Nathan:  That's always been the trade off with google, is give us more of your information...

Leo:  Make it more explicit, is what I'm saying.

Nathan: They could be more clear about it, for sure.  That's exactly.  That's the thing.  Right now, they're not doing that.

Leo:  I'm offering this as an antidote to Ben's appropriate Go To Market conundrum.  What if you go to the market and say this is Daisy daisy, we'd like to get to open the doors, your help is needed.  Would you like to help us?

Nathan:  It would be interesting, because to a certain extent, they've taken that data without fully explaining it to the public, and I think a lot of people don't realize how much they're giving up. 

Leo:  I'm saying turn it on its head.  We're taking your data, but this is why.  We want to make something that's... that's what Google now was.  Make it explicit.

Ben: That's not what is holding Google back.  If it were so easy to ask people to help you out, then there would be a lot more businesses.  There's a reason why Apple spends... if you go back to our podcast thing, you talk about creating the community.  All those excellent things that you've done with TWiT!  That's been successful for you.  Not to say anything bad about your business, but you're closer to me than you are to Google.

Leo:  So you're saying that kind of approach would not scale? 

Ben:  It doesn't scale at all.  There's a reason why Samsung spends $350-400 million a year on marketing their phones, and there's a reason why you had all those ads, whether you think they're good or bad about Pixel. If you are serious about getting in front of consumers and getting meaningful market share, meaningful attention share, they're going to have to invest and spend their way into it. And actually to me that's my biggest root of skepticism. I mean I put this nice theoretical thing about the new business model for them. The reality is they've never demonstrated either the capability or frankly the stomach to build a business beyond—their business fell in their lap. They had a brilliant technological product that people—like Google is the exception that proves the rule. Google won by having the best tech and people use it because it was better. That is very rarely why products win.

Leo: Oh, interesting.

Nathan: I think to a certain extent now we're getting to the point where a lot of people choose Google products because they don't like Apple. And it's like an alternative to Apple and it's like the only other place to go, especially—

Leo: Really? You're voting against Apple by choosing Google?

Mike: People are either voting for Apple or voting against Apple but Apple is the—

Nathan: Apple's what everyone—yea.

Leo: I, well, I can only use myself as an example but I choose Android because it's more flexible, more powerful. I can do more of what I want to do. I'm not voting against Apple and I'm carrying an iPhone right now because I'm waiting for the Pixel. But that's not a vote against Apple. Really?

Nathan: I think a lot of people, a lot of consumers make it that way.

Leo: That just shows how dominant Apple is though.

Mike: Yes.

Nathan: I mean, you know—and I'd love to maybe hear what everyone has to say about how Amazon and Alexa fits into this, how Microsoft and Cortana fits into this.

Leo: Let's talk more. I want to take a break. But let's talk more.

Leo: Our show today brought to you by my mattress. We were talking about Casper mattresses. This is a perfect example. Online retailer, premium mattresses made in the US. And I'm not sure why they advertise on our show except that I think they think you guys need a better night's sleep. That would be my guess, right?

Nathan: A really good guess.

Mike: The audience is exhausted.

Leo: You guys are exhausted. You know what? It is more and more the evidence is the best thing you can do for your health is to sleep properly, to sleep well. And it starts with a great mattress that combines springy latex foam that's on top. But then they give you support with the memory phone, so you're getting underneath. So you're getting—it's hard to describe. You've got to try it. Kind of this combination of comfort and support. It's just what I want because I always slept on firm mattresses but they were too firm. My hips would hurt. This is perfect. It's the 2016 Business Intelligence Group Innovation Award winner. Just the right sink. Just the right bounce. And it lasts a long time. They also are cool. I can tell you from this hot, hot summer. The Casper was great because it breathes. So you're never sleeping hot. Your temperature is very comfortable all the time. And now the best part is you can try it in your home and not in some shop for 5 minutes under bright lights with a sales person looking at you funny. But you and your loved ones can call get on that mattress and really give it a workout for the next 100 days and if at any time in the first 100 days, you say, "Hey, it's not right," they understand. You know, we're not going to let them try it, so we've got to make it easy to return. You call them up. They will take it back. A courier will come get it. You don't have to put it back in the box. People say, "How am I going to get it back in that box?" No, you don't have to. You can throw the box out. They'll just come and get it. I think they donate it is what they do. I don't think they even resell it. They just donate it to a local charity. But you get every penny back. So there's no risk at all. Free shipping and returns to the US and Canada. They are made in the US and to the highest environmental production standards. I was a little concerned when I got the box. It's all sealed up. I thought, "Am I going to open this up and am I going to have to let it breathe for a while before I can?" No. It smells great. It's cool. It's a very refreshing night's sleep. You'll love it. And it's very affordable. We're making it even more affordable with $50-dollars off any mattress when you use the promo code TWiT. Casper, Terms and conditions apply. $50-dollars off any mattress. I got one also for my son in college because, poor guy wasn't really thrilled about sleeping on the dorm mattress. And I don't blame him. God knows what's been going on there. And—

Nathan: That's a rite of passage. Come on.

Leo: It is. I know. I did. You did. They're not comfortable.

Nathan: They're terrible.

Leo: They're stained. I always wonder about those stains. Is that blood? And then so I was nice. I was a nice father. I said, "Look, look for a box." And because it comes in that box they just schlepped it upstairs. And I also said, "Graduate, leave your mattress. It's ok." Because it wasn't expensive. He can, you know, the next guy's going to be very happy.

Nathan: What happened to that video of you doing that slow motion?

Leo: Yea, why don't we show me diving into my mattress anymore? I guess you figured you've seen it. Ben Thompson is here. Stratechery. S-T-R-A-T-E-C-H-E-R-Y. A great site. He does free articles every week but also a paid newsletter which I subscribe to with some of the best analysis of what's going on in the tech industry. It's always a thrill to have him along from Taipei.

Ben: This is the worst lighting at this new office.

Leo: Lighting is so irrelevant. But you've got a view, dude. I love that. Is that of Taipei? What is that?

Ben: Yea it is.

Leo: Nice. Very pretty. You've lived there for how long now?

Ben: This is my 2nd stint. I've been here 3 years this time. I was here 6 years previously so 9 total.

Leo: How's your Chinese?

Ben: It's decent.

Leo: Good.

Ben: The way I put it is if you can't speak Chinese, you'll think it's phenomenal.

Leo: (Laughing) Oh, you speak Mark Zuckerberg level Chinese then, right?

Ben: A little better than Mark. Mark Zuckerberg, well, he has an incredible vocabulary frankly, but he speaks Chinese like someone who spent a lot of time by himself studying Chinese and not a lot of time speaking with people. There's tones and his tones are kind of all over the place. But his vocabulary's very good. I think his vocabulary is probably better than mine is. So I mean, make no mistake, it's super duper impressive.

Leo: It is impressive. It is.

Ben: It's an incredibly difficult language to learn.

Leo: Yea.

Ben: I don't think his approach to China's very impressive but—

Leo: What is his approach to China? What is Facebook's approach in China?

Mike: He doesn't approach China.

Ben: Well, it's, I think it's extremely deferential to say the least. I think it's—you know it's such a massive market it's very understandable from that perspective of why they want in. I'm not sure he—I think he's a little optimistic about the, what would happen if Facebook was actually allowed in China. And the impact, the corrosive impact frankly that it would have on him and on Facebook the company.

Leo: Because he would have to adhere, obey the laws in China?

Ben: Well it would almost certainly have to be a separate Facebook that would be different from regular Facebook. It would have to be hosted in China. There would have to be tracking and censorship and all those sorts of things that are expected of that. And it's not just that, but it's not just that responding to requests, like responding to a take-out request. There's an expectation that a company that's doing this is pro-active in doing this. And so you see what happens a lot in China, is stuff gets censored without the government having to do it because there's a—

Leo: Oh. We just know.

Ben: There's an over response and an expectation of it. And I don't—when and if they become even remotely successful, at any time the government can pull the plug on them.

Mike: And will.

Leo: Yea. It's currently blocked by the great fire wall of China.

Mike: Yep, yep.

Ben: It is and it always will be at the current version. I just think that the return is not nearly what he thinks it will be. And I think there's a little bit of a we will be different sort of attitude about it that I don't think is justified. And frankly I hope that it's never allowed in because I like—I think it's going to be bad for the company. I think it will be bad for their culture to be a part of that. And I don't think it would be profitable to boot.

Leo: I feel like it's almost like Kilroy. I can see American companies looking over the wall, saying "A billion customers. A billion customers. How do we get in there? A billion customers." But Google's have troubles. Yahoo's have problems.

Mike: And Apple's had problems. Anything that involves free speech, if you enable free speech they will never let you succeed in China.

Ben: And even beyond that, it also, it's questionable if they're ever going to really let a foreign company succeed. The reason why Apple has, and Apple, I've used this phrase before, but is sort of the exception that proves the rule. In this case is because of their business model. Because they're selling hardware that's differentiated by software. Software will be pirated or copied. Web services will be blocked. The one way that companies have always made money in China is making hardware. Of course most of them were making ultimately stuff with Windows that could be easily commoditized because Apple products are not easily commoditized yet are still hardware, that's the reason they've been the one company to succeed. But notice as Apple has pushed into more into services, it's getting harder. And China is messing with them significantly more than they were before.

Mike: Specifically around communication because they were accused by Chinese owned media of harvesting data about the Chinese people and where they are as part of this big plot. I mean this is the big concern. The Chinese Government does not want American companies coming in and enabling Chinese citizens to talk to each other without monitoring or control.

Leo: Interestingly, you might associate this to an authoritarian and communist post-mal government, but it isn't. It's historically, going back to the Boxer Rebellion, this is—China has always hated the influence of the West and has—well, not always, but almost always, and often fought it off violently. So this is almost a cultural thing as much as it is political.

Mike: There's two, the two big China hot buttons are at play here. One is domination by foreign powers and the 2nd one is, you know, China historically has just had one big massive dynasty change through either conquering or whatever, or also they're concerned about losing control of the population. They're concerned about—

Leo: It's a big country.

Mike: They—

Leo: It's interesting. Both China and Russia, massive land masses, difficult to control, have this tendency to authoritarianism. It may be the only way you can control it. And now here in the United States we're moving in that direction as well. Big land mass. Hard to control. Ben, I'm sorry. We shouldn't be analyzing China with a guy that's sitting in Taipei right now. If we're completely off base, just pretend we know (laughing). Things are great.

Ben: I'm just drinking tea.

Leo: Actually Facebook launched At Work product this week to the public. It's been out for a long time in beta. This is an interesting play because Facebook is an intranet. We should point out this is not a LinkedIn competitor. This is not a business focus social network.

Nathan: It's kind of a Slack competitor, yea.

Leo: But Slack is so much smaller in capability. I mean it competes not just with Slack but Basecamp and everybody else is trying to—

Nathan: Trello.

Leo: Trello. On the one hand, I think as a company you might say, "Well my employees love Facebook. They know how to use Facebook. There's no training involved. It gives me all the features of these others." But on the other hand you might worry a little bit about giving this information to Facebook even though they do promise it's private.

Nathan: They change that a lot though, don't they?

Leo: Yea.

Nathan: I feel like Facebook is one of the companies you can't trust to be consistent.

Leo: They are charging for this. It is not free.

Nathan: They are. $3 bucks per user.

Leo: That's a lot less than Slack.

Mike: To 1,000 users than it's $2 bucks to 10,000 and $3 bucks under that.

Leo: It's one of the most affordable solutions, right?

Nathan: And the Enterprise space is like one of the few spaces where you can charge for this sort of thing. There's no way they can charge consumers for this.

Leo: And after all the biggest competitor here would be SharePoint for Microsoft and Google. And I don't know, you might trust Microsoft to Enterprise but I don't know if Google's any more trustworthy than Facebook in Enterprise. What do you think, Ben?

Ben: Well I mean to be clear, it is very separate. The data is all separate from the consumer app. And frankly I think it's fair to expect that will be the case. I mean their credibility and opportunity will be completely shot if that were not the case, or if it were shown not to be the case. That said, certainly theoretically, again, there's a lot here that makes sense. People know how to use it. It's mobile first. All that sort of thing. I think it's much bigger than Slack. It's a whole scale sort of replacement for your communications infrastructure. That's also a problem I think because the way you get into an Enterprise, getting into the nature of it and the way it has to be tied into identity, this is a top down sort of product that's going to be implemented by a CIO for example, or whoever that might be. And that's a challenge. That means building a sales force. That means building all the sorts of things that, again, Facebook has not shown any inclination or capability or willingness to do. The big difference with something like Slack is, Slack has 2 advantages that don't seem like advantages at first. The first advantage is it only does chat. Which is well, Facebook does so much more. Well if you have a company that already has an established communications infrastructure, Slack is offering a new thing which is community chat. Yes, we have IRC but for most people it's a new product. And so it slots in with what's already there. So there's more opportunity for one, but then two, Slack's free to try. All you need is an email address. And if you like it, and you need some of the capabilities, a team manager can pull out his company credit card and pay for it. So you can have more of a bottoms up sort of infiltration of the Enterprise approach where Slack eventually once they build up a sales team can go and say, "Oh, by the way, 70% or 60% of your company's already using our product. How about we put together a product that works, a deal that works for your whole company." And I think that's a really revolutionary change in selling Enterprise software and it's only enabled by being on the cloud. And that's a big shift. And Facebook, as compelling as the product will be, and I think there will be some businesses where it's going to be really successful and makes a lot of sense. The level of commitment needed and the way it's going to be sold I think are going to be challenges for the product. And frankly it feels like, let's do it because we can. And that's not a good route to success in business frankly. Like you succeed in business because you align entire organizations and incentives and way you make money around making a product successful, not throwing something over the wall because, oh we're already using it internally. Maybe you'd like to use it too.

Leo: Well, there you go. Forget it, Mark. Not a chance in hell.

Ben: No, I think there is a chance. The thing to remember is it is a great product. And Facebook has been using it. Has been in beta testing. And you talk to anyone at Facebook, I've never met anyone who doesn't love—that's often their favorite thing of working at Facebook is the way that you can use Facebook to communicate in groups and stuff.

Leo: They use it internally.

Ben: And I've actually had some personal experience here, not using Facebook, but when I was at Automatic we used a combination of what are called P2 Blogs. It's kind of a front facing, front posting blog that feels a lot like Facebook. Plus, it was IRC then. They use Slack now along with Skype for video chatting. And we kind of patched together this multi-piece communication area that was amazing. I've never felt more connected and in the loop about what's going on despite the fact Automatic's totally remote and people live all over the world. So like this idea of this completely new way of doing communications is compelling. And the fact that Facebook is offering an integrated solution that does that is amazing. I guess the big question I have is again, this sort of go to market thing. How are they going to actually get companies using that? And the nature of the product being all in requires an all in commitment from companies that use it. And so maybe if you're a startup it might be super compelling to start your company working that way. Going into established companies, I think that just by virtue of being a single use product and having a more compelling business model for a small team that Slack still has pretty significant advantages.

Mike: And go even earlier than startups, they're free to educational institutions so universities might use it theoretically.

Leo: And non-profits.

Mike: Non-profits might use it. And so this could be a long term play that can pay off. Because if they can get people who need to get a solution like this, who can get it for free. And then they move into the workplace and so on, then that could work. I personally think it's going to fail despite how good it apparently is. Most of the things that Facebook has launched over the years have completely failed. And I think—

Leo: Yea. We forget that, don't we?

Mike: Yes, we do.

Leo: A surprisingly large number of things Facebook has tried.

Mike: Yea, so many things.

Leo: Yea, isn't that funny?  Yea.

Ben: Well that's the case for all incumbent companies. I think the unfortunate—

Leo: Incumbents generally don't innovate very well, do they?

Ben: Well the problem is that when a company is started, its initial product is, there's a need in the market that they are fulfilling. And everything about the company becomes aligned in fulfilling that need. Whether it be the culture, whether it be how they make their incentive structure, how they make money, all that sort of stuff. And in the future when a new opportunity comes up, their advantage is they have tons of resources, whereas another startup is very much aligned to the opportunity. And I think an unfortunate mistake a lot of pundits make is, because resources can be easily measured and calculated, they over index on resources when actually it's a lot of this other stuff. It's having a very focused company, a very focused product that matters more. And so yea. I'm with Mike. My default is against an incumbent shifting to a new area, particularly if it entails a new way of selling, a new business model. That's a lot more difficult shift to make than I think most people appreciate.

Nathan: It's just really hard to get people to break their habits. I mean in companies we have established ways of doing things and communicating. I think a lot of us would love to give up email but we can't get our newsroom to give up email to save our lives. It's like it's so—

Leo: At least they don't make you use Lotus 1-2-3.

Nathan: (Laughing) There's that. There's that.

Leo: It could be worse.

Nathan: We've tried to bring in Slack.

Ben: Hey, companies use Lotus 1-2-3 for—some companies are still using it.

Leo: I know.

Nathan: And some newsrooms I've worked in in the past use IRC and loved it. You know, we've tried to adopt Slack. And it's in some teams, in some parts of The Journal it's been a tremendous success and in others it's a miserable failure and nobody uses it.

Leo: The trouble with IRC is you need some—you need a team that really understands IRC.

Nathan: You've got to be able—yea.

Leo: And can customize the hell out of it. But if they can, and they do, and I use our chatroom as an example. We have really smart people. It can be a very, very powerful, useful tool.

Nathan: Oh, it's a blast. It's a blast. You've got to be a learner to use it, you know? It's a blast.

Leo: It's very real-time, very intimate. It's great. I love it.

Nathan: Yea, so—I was just going to say, agreeing with what you're saying, Ben. With Workplace trying to basically come at all fronts and do everything all at once it seems like it might be great software. But to get people to give up all these things that they're used to and you know, even if they hate them it's their routine is difficult. So I feel like maybe the opportunity might come in a long term play with those companies that are just starting but I feel like this is probably going to fall on its face as well.

Leo: You want to talk about Yahoo or you want to talk about Twitter or do you want to—are we done with Google? We talked about every aspect of the Google announcement. I think we've talked about the AI and where Google's going with that.

Nathan: So, of the panel, who's actually gotten their hands on the phone? I did a hands-on with it at the event. Have you guys tried it out?

Leo: You're the only one. And then there are some people I know one of our audience members has one waiting for him when he gets back to Australia because Telstra screwed up.

Nathan: The started shipping them early.

Leo: They shipped them early. We haven't got one here. Jason Howell has his ordered. He'll get it in a fe days, on the 20th. That's the earliest you can get them. Mine doesn't come until the 8th. I'm very intrigued. I just, I had to say my jaw dropped when they announced the price. The sticker shock.

Nathan: Me too. I was a little disappointed in that.

Leo: Is that because, just because the expectation that Nexus is always a little less expensive, or?

Nathan: I don't know. I think they really want to position themselves as a premium brand of sorts.

Leo: It does seem to have flagship, all the flagships. No SD cards. No waterproofing.

Nathan: No wireless charging.

Leo: No wireless charging. That's a big one for me.

Ben: Well none of those were premium features according to Apple as of 2 months ago, so.

Leo: Oh, Apple's in its own universe.

Nathan: Apple still doesn't have wireless charging.

Leo: It is waterproof.

Nathan: And they don't have fast charging which might be two reasons why their batteries don't blow up.

Leo: And their batteries last all day. I've never had a phone last better, longer than this 7.

Nathan: Yea, the 7. I was carrying around the battery case for the 6S and I haven't needed it with the 7 which is pretty impressive.

Leo: Partly that's tight control of the ecosystem, the software, iOS.

Nathan: Oh, for sure.

Leo: Stuff will not run in the background. You have to launch Google Photos periodically just to get it to back up your photos. That's Apple. It's their platform.

Nathan: I think we need to talk about Yahoo though.

Leo: Let's talk about it.

Nathan: I've got to say I'm still pretty mad about all this stuff.

Leo: I'm mad too. What I'm really disappointed frankly by Marissa Mayer. I expected better of her. Maybe I was foolish. But what's apparently the case—look Yahoo was—there's 2 big stories of course and we've mentioned them before. Yahoo was hacked and pretty much the entire Yahoo user database leaked out. Yea, they had passwords hashed but we don't know how well hashed since it was a long time ago. Probably not so well. And, secret questions were in the clear. And emails were in the clear obviously. And then the real question is when did Yahoo know about this. And there's some evidence that Marissa Mayer knew as early as July but kept it a secret in order to keep the Verizon sale alive. Now Verizon's calling foul and saying, "Hey that's material information." They could either cancel the sale or probably what they're going to do is get a significant discount, billion-dollar discount.

Nathan: Which would be smart on their part, you know? It just—

Leo: So that's part one of the problem.

Nathan: Yea.

Leo: What did they know, when did they know it? Are we satisfied that they knew about it and sat on it and if they did—

Nathan: It sure seems that way.

Leo: That's reprehensible.

Nathan: I forget the title of the fellow who resigned but there was basically one of their top security guys found out about this and then resigned and quit. I mean—

Leo: Alex Stamos is now at Facebook ironically.

Nathan: And how long ago was that?

Leo: It was a while ago?

Nathan: Like a year ago or something. So it's like they've known about this for a long time. The data leak, the data breach like you said affected you know, hundreds of millions of users.

Leo: 500-million people. It's the largest data breach of all. It's bigger than MySpace.

Nathan: That happened years ago.

Leo: Half a billion users including you and me and everybody listening to the show.

Nathan: It's like if you use Yahoo, what reason do you have to stay using Yahoo right now? I mean they've done everything they can to show us with these moves that they don't care about our privacy, about our security. It just feels like a huge slap in the face, massive disrespect.

Leo: Stamos joined Facebook as their chief security officer June 2015.

Nathan: Yea, yea.

Leo: More than a year before even Yahoo was supposed to know. You've got to wonder what was going on.

Nathan: And I know there's certain things in contracts for guys like this, so that he can't blab about it or whatever.

Leo: He can't talk.

Nathan: But the fact that that happened so long ago and we're just finding out about it now. And that Marissa Mayer knew about it and she tried to keep it secret. And listen, she's got to protect her shareholders. I get it.

Leo: No.

Nathan: But God damn it she's got to protect her users first.

Leo: She's got to protect her users.

Nathan: Because if you don't protect us, that's going out the window.

Leo: You've got nothing.

Nathan: Those shares aren't going to be worth a God damn thing.

Leo: Now it's difficult to leave Yahoo. For a while they disabled email forwarding. They put that back.

Nathan: That too. That too.

Ben That wasn't a mistake.

Nathan: That too pisses me off. You know. The only—I get so mad about it. The only thing I use Yahoo for right now is fantasy football. And as soon as the season's over I'm out. I'm out. I swear to God.

Leo: Well I still use Flickr. I like Flickr. We use Flickr.

Nathan: Flickr's great too. Listen, there's a lot of good stuff that Yahoo does. But all these things are so bad.

Mike: Tumblr, yea.

Nathan: And so terrible.

Mike: It seems to me like the plane was on fire and all they've been focused on is making sure their parachute is packed right and all that stuff. And they just wanted to get out before all this stuff blew up.

Nathan: Yep. Yep.

Mike: It's completely wrong.

Nathan: Just kicking the can down the road. It will be Verizon's problem soon, right?

Mike: Exactly.

Leo: I have to say I thought there was a problem with Yahoo for several years because it was Yahoo Mail that was always hacked. It was always Yahoo Mail that you got the email from your friends saying, "I'm in Europe and I lost my wallet. Would you send me $1000-dollars?" That was always Yahoo Mail. And I just feel like it's been insecure at least for a long time. And maybe that breach, you know, already stuff was being filtered out of that breach. Turn on two-factor. Do not—now, here's the thing. Do not-- we had a piece yesterday, and if you want to, we showed you how to delete your Yahoo Mail yesterday on The New Screen Savers.

Nathan: We had a piece on that.

Leo: But I don't recommend it. A, because you've got your football, and you've got your Flickr and you've got your Tumblr. But B, because you may, you don't remember you've been using the Yahoo email address as a way to maybe get 2nd factor authentication or a reset on other accounts. And if you do release your account, they will reuse that email address. They've already started. They've done that before. So what it really would behoove you to do is kind of sanitize it, change the password, turn on two-factor and then every month, send one email (laughing).

Nathan: Imagine. We're asking people to empty their Yahoo accounts of any sensitive data and then just leave it there. Like check on it once a month so that the company doesn't screw them over worse. Jesus, man.

Mike: And this is a well understood in geek circles problem, right, so we have—

Leo: All right. We have an update. LA Dodgers.

Nathan: No, no. He said don't pound the table.

Leo: I was pounding the table, John. We're all pounding the table because of Yahoo. As long as you're hear can you check the Dodger's score?

Mike: Marissa Mayer's fault.

Leo: (Laughing). Now, speaking of Dodgers, they're not going to do their earnings call this week.

Nathan: Yea. Yea, Yahoo cancelled their earnings call.

Ben: That was an awesome segue, Leo. I just want to acknowledge that (laughing).

Leo: Speaking of Dodgers—can they do that? Can they do that?

Mike: Speaking of people that dodge things.

Leo: They still have to announce earnings.

Nathan: So shady. So shady.

Leo: But they're not going to have a call.

Ben: They can cancel the call. They have to release earnings.

Leo: They just don't want to answer questions.

Nathan: Incredibly shady.

Leo: Look, if Donald Trump and Hillary Clinton can have a debate on Wednesday, Yahoo can have their earnings call.

Mike: They're not going to have a debate. I don't think so.

Leo: You don't think so?

Mike: No.

Leo: Maybe they'll cancel that too.

Nathan: No way.

Leo: I know, Mr. Trump is not a quitter.

Mike: There's no benefit to either of them.

Nathan: (Laughing) They're going to do it. They have to.

Leo: This is our version of the Coliseum. The Christians and the lions.

Nathan: So bad. It's all so bad. Don't buy Samsung phones. Don't use Yahoo anything. And the debates. Oh, God.

Leo: Ok, and then there was one more thing Yahoo did that also loses some faith. Now, Yahoo has a checkered past with the Federal Government, remember?

Nathan: This is even worse.

Leo: Yahoo turned over a couple of Chinese dissidents almost 10 years ago now. But this is that same issue. You do business in China, you have to adhere to the laws of China, right? Any way, you can go back on forth on that one. After that they did fight some National Security letters. They went to court. They tried to protect user data. They lost. Then they got another one apparently. The US Government secret order saying, "You need to search your email, all the users email for some specific information, a signature that we believe belongs to a malefactor." Reuters reported that last—a couple of weeks ago. The New York Times reported the government was looking for specific digital signature of a communications method used by a state sponsored foreign terrorist organization. Hey, they should find that. Yahoo initially said, "Oh, it was easy. We just modified our spam filter. That's already going through the mail images. We said just look for this too, while you're at it." But then apparently that's not the case. Anonymous sources, and again, you always have to consider the source, anonymous sources told The New York Times that—a actually told Motherboard, I apologize, that it was not spam filtering or child pornography filtering but the tool was more like a rootkit.

Mike: Yep.

Leo: And it was discovered by Alex Stamos' internal security testing team during one of their checkups. They thought hackers had put it rootkit on Yahoo until they got a memo from upstairs saying, "Oh, no, no, no. That was—it's ok." If it was just a slight modification of the spam and child pornography filters, the security team wouldn't have noticed and freaked out said an ex-Yahoo employee. It definitely contained something that did not look like anything Yahoo Mail would have installed. The backdoor was installed in a way that endangered all of Yahoo's users.

Nathan: And supposedly without the knowledge of the actual security team, right?

Mike: Right. But this is what the NSA and the police organizations around the country want. They want their own private backdoor. They believe, delusionally, that nobody else can access it. Nobody else will get at it. We just want our ability to just have free reign inside of every place where everybody is having conversations. That's what we want. And we're doing it for the children.

Leo: And by the way, since it was in fact Stamos who discovered it was installed on purpose, we know this happened prior to June 2015. It was more than a year ago.

Nathan: Yep. Yep. It was so bad that after this happened, Google, Microsoft, Twitter, Facebook, basically all these major companies came on and said, "We're not doing this same sort of thing."

Leo: Don't worry. We're not doing that.

Nathan: And you know, and whether or not you want to believe them is one thing. But the fact that all these companies have to come out and acknowledge that I think says something about the weight and the seriousness of this. It's—this is even worse to me than the hacking thing.

Leo: I agree.

Nathan: This is just one more reason if you have a Yahoo account, to question what the hell are you still using it for and do you really want it?

Mike: Yep.

Leo: Sad, because when Jerry and David created Yahoo, it was the first internet search tool. It was—they were internet pioneers. And I remember using Yahoo. I remember going visiting Yahoo and seeing the servers. They were still on premises. And they said, "Yea, it's over there."

Nathan: Wow, that's cool.

Mike: Exodus, it was the Exodus facility. I was like, "There's Yahoo. Wow."

Leo: There's Yahoo. Those boxes right there.

Nathan: Not the same Yahoo anymore.

Mike: Nope. They should just sell it off for parts and close the doors.

Ben: Well this is the big thing because Yahoo—the reality is that that initial Yahoo was, Yahoo was doomed in their competition against Google from the beginning because they were a media company really from the beginning. They were creating a list of words that were on the internet.

Leo: It was never a search index, right.

Ben: Google—exactly. Google was using the links, the very structure of the internet to create its index which meant as the web got bigger, Yahoo increasingly didn't work. But as the web got bigger, Google got better. And that was something that they really didn't want to compete against. The one thing they have is this massive user base, like 2R points above advertising. It's hard to change consumer behavior. But no, I agree. For both of these things, I mean at a minimum I object to the fact that they had to install anything like this. But at a minimum at least do it in the most possible secure way possible.

Leo: And the least damaging. The most constrained way possible.

Ben: And frankly I agree with you. Frankly there is—I hope the message gets out to the general population that you should not be using Yahoo period. It's like—and if that ruins their value to Verison, good. Like they deserve it and frankly we need some examples of companies just utterly selling people down the river like this and I think the upcoming shareholder lawsuits, also things are going to be very fascinating and deserved.

Mike: And to a certain extent, Yahoo's entire business is stupid because—

Leo: (Laughing) Not only that, but your business is stupid.

Mike: Exactly. There's no unifying glue for Yahoo. They've acquired a thousand companies and they slap their logo on it. And then you find out about these great things when they close them. You know, Yahoo just closed blah, blah, blah. I'm like, really, I would have loved using that. And so there's really no connection between Tumblr and the fantasy football thing.

Nathan: And Flickr.

Mike: And Weather. Like why are these things all in one company?

Leo: This is going to be, we're going to look back at 2016, maybe 2017 and say it was the year Yahoo and Twitter died. And we'll talk about that in a second. But first (laughing)—I'm hoping. First, ladies and gentlemen, we had a great week. And if you missed any of it, we have created a small movie for you to enjoy, to watch.

Narrator: Previously, on TWiT.

Leo: At this point, most people are going, "I'm done. I don't need that Yahoo Mail account anymore. I don't trust these guys." We thought we'd get you on because you're the only person in the world who seems to know how to delete a Yahoo account.

Mikah Sargent: There is a page, surprise, but I could not find it by searching through Yahoo.

Narrator: All About Android.

Myriam Joire: So this is a pair of headphones I picked up in China. They're made by a company called, Vinci, as you can see, Vinci, whatever. It's Android. It has sensors so it can detect whether it's on your head and pause when you remove it and stuff. It streams music from Spotify and from Amazon Music, a bunch of other music services, and it has voice control. But I think it's kind of cool that we see Android in devices and are wearable but are not smart watches.

Narrator: Triangulation.

Leo: Ben Wizner is our guest. He's director of ACLU Speech, Privacy and Technology, his claim to fame. Principle advisor to Edward Snowden. Do you think the Intelligence Committee is waiting for another San Bernardino to once again launch that effort or have they understood the need for strong encryption?

Ben Wizner: I think the intelligence community is really divided on that question. And this is what's so fascinating about it is that you see people in the military and the NSA who realize that actually we have more to lose than more to gain in a world where encryption is easily broken by law enforcement.

Narrator: TWiT. For justice.

Leo: If you missed that interview with Ben Wizner on Monday, watch that. Download that. That was just fantastic. Snowden's legal counsel and the head of the ACLU Speech, Privacy and Security. Something. Some project. What's ahead? Well, I can tell you. Actually I probably shouldn't tell you because we have a whole team of people working on that. Let's just ask Jason Howell. Jason?

Jason Howell: Hey, thanks, Leo. Here's a look at just a few of the stories that we're going to be watching in the week ahead. On Monday, October 17, Tesla is expected to announce a new product. CEO Elon Musk took to Twitter last week to tease the announcement saying the product will be unexpected my most people. Tesla normally rolls out the red carpet for major product reveals, so this will most likely be something a little less than say an actual vehicle announcement. The rumored solar roof perhaps? An updated auto-pilot? We'll find out more tomorrow. On Thursday, October 20th, Google will begin to ship its new Pixel devices to those who ordered them after the product announcement earlier this month. This signals the beginning of Google's efforts to go toe-to-toe with competing premium smartphone offerings with the devices conceptualized from the ground up by the company. Also on the 20th, Amazon's smaller 2nd generation Echo Dot begins shipping to consumers for $49.99. The Dot has much of the functionality of the full-size Echo and don't forget that you can buy a 6-pack for the price of 5. That should give you plenty of stocking stuffer awesomeness for the holidays. Megan Morrone and I cover all of this and a whole lot more all week on Tech News Today, each and every weekday at 4:00 PM Pacific. That's a look at the week ahead. Back to you, Leo.

Leo: Thank you, Jason Howell. It is earnings week so we're going to have earnings calls from Apple, Intel, not Yahoo (laughing). A lot of companies as well so there's lots of news coming up this week. I wonder what Elon is announcing?

Nathan: Can't wait.

Mike: They found a way out of the simulation. They cracked it.

Leo: Ok, so the rumor was that Elon and some others are paying physicists to find a way to break through the simulation that Elon's convinced we are all in. That we are all in a video game—

Nathan: We're in the Matrix basically.

Leo: Yea, we're in the Matrix and—

Nathan: (Laughing) I love that so much.

Leo: I love when you can't prove it one way or the other. How does it change your life in any significant way? I don't know.

Mike: Or can you?

Leo: Well, if you could pay physicists to break us out, maybe that's what he's going to announce tomorrow. That would be a big announcement.

Nathan: No one is more fun. He's like let's go to Mars. Let's make a rocket. Let's make electric cars. Let's find out if we're in the Matrix. This is so cool.

Leo: I have a red pill and I have a blue pill. And would you like to take one? Make sure though you choose wisely.

Mike: I don't know. I don't want to remember nothing. Nothing, Leo.

Leo: Nothing. I like this simulation. I'm going to stay here. You know the only thing that would be kind of a relief is that—so, when you die, do you wake up and go, "Well, that was a great game.  You want to play again?"

Mike: That's right (laughing).

Leo: What do you—I mean, are we playing ourselves or is somebody playing us?

Nathan: Good question. Good question.

Mike: And does Elon Musk have the cheat codes?

Leo: (Laughing) Well what he did say is because he believes this it gives him a remarkable amount of freedom, right? Because he can't—well if it is a game, might as well play as hard as you can. Not worry about what's going to happen.

Nathan: That would be a nice perspective to have on the world.

Leo: I don't want to wake up and have to do a new map, though. That's not going to be fun. Can I use the same map? I've gotten good at this one I think.

Mike: They've got a better map now, Leo.

Leo: (Laughing) Oh, Lord. All right. Twitter. Oh, wait a minute. I'm going to do an ad. Then I'll do Twitter. How about that?

Leo: I was very skeptical, I have to say, and I've tried kind of Enterprise graded systems like Ubiquity and you know, the top of the line routers, hundred-dollar, multi-hundred-dollar routers. And nobody had solved this big problem which was getting—the very simple problem, but fundamental problem of distributing Wi-Fi over my entire home. And I had actually put in powerline networking and repeaters and all sorts of stuff. Wireless distribution system. And then Eero sent me this. This is the Eero system. And it solves, really the single router model is dead. Eero is the new way. And you start—you could buy an individual Eero. In fact, if you were in a studio apartment this would be a great choice for your base unit. Like any router, it has Ethernet in, Ethernet out. You can attach that and it works fine. I do this to a switch or a hub or a—

Nathan: PlayStation or something like that?

Leo: Yea, well actually what I do is I put it on a switch and then I can everything be wired to the Eero. But then it also has the Wi-Fi. You fire up the Eero app on your iPhone or your Android device and you then add another Eero. And another Eero. And as many Eeros as you need. Each one distributes it to a larger area. And this is the first Wi-Fi system I found that actually gets to every point in my house without a dead zone, without complaints from Lisa. And that's a big one, the spousal approval factor very high. No more buffering.

Mike: Yes, that's why they call it Wife-FI.

Leo: You know it was funny, I was just showing Nathan the Eero app on my iPhone and it said, "Hey there's an update." This is one of the other things that Eero does. It's awesome. You create an Eero account and it updates automatically. Hey there's an update. We can wait until later tonight or do you want to do it now? I said, "Well nobody's home." So I just updated all my routers from here.

Mike: That's cool.

Leo: It's really cool. You can see if you go to your network settings, it does constant bandwidth checks so you know the status of your network. Shows you all the devices on the network, currently and previously by name. You can reserve devices. And then here is some additional smart stuff. For instance, and I talked to the founder of Eero about this, it looks at the device. It knows for instance that that's an Apple TV. And it says, "Ok, well, we're going to give you QOS on that device. We're going to improve streaming on that device because you're not going to really need it so much on your Nexus 6P." It's amazing. It had great guest networks. This thing really works. And the thing is, it's simple. It's easy. You can give this to an unsophisticated member of your family or friend and suddenly they're going to have Wi-Fi that works.

Mike: But, Leo, what about all the exercise I get holding the laptop up in the corner of the room where the Wi-Fi is?

Leo: (Laughing) I can't help you with that, Mike. I'm sorry. By the way, WPA2 encryption, of course nothing less. They wouldn't dream of it. Its customer support, and I tested them out on this. I called them and I said, "I am trying to set up, I have a server, I'm trying to set up on my Eero and I need to port forward," and you know, I gave them a typical kind of geeky question. They were great. They walked me right through it. They said, "Did we help? Did that work?" And he sat with me maybe an hour on the phone through reboots and everything. It is an Enterprise grade Wi-Fi system that really works. We're partnering with Eero to offer you free overnight shipping. If you go to and use the offer code TWiT. So what you do is go to Buy your Eero system. And then at checkout, just check the box that says overnight shipping and enter the code TWiT and then boom, that will be zero., offer code TWiT. If you have been suffering and I know so many people are, with dead spots, with Wi-Fi that just doesn't work, with speeds that fluctuate up and down, this is such a great solution. E-E-R-O, and don't forget the offer code TWiT for free overnight shipping. I love that Eero thing. Love it.

Leo: I don't know if I—look, I should always recuse myself on any conversation about Twitter. I was an early adopter. Got on it first December of 2006. Even in the first 6 months I quit (laughing). At the first I quit because of the confusion between TWiT and Twitter. And I remember interviewing Ev Williams and I said, "Ev, why did you name it Twitter? You knew we— "Because he'd been on our shows. He said, "I didn't think either of us was going anywhere. I thought we'd be small companies. There would be no conflict."

Nathan: Burn. Double Burn.

Leo: Well he went somewhere. Twitter went somewhere. But I always had these mixed feelings. Then of course with the free speech issues and the trolling issues. At the same time, you can't, I can't quit you, right? If I hear a rumor that a celebrity has passed away, I don't turn on CNN. You go to Twitter, right? You don't go to Facebook. You go to Twitter.

Nathan: It's still my favorite social network.

Leo: I'm not crazy about 140 characters makes people talk like they're having a stroke.

Nathan: This is true.

Leo: I think that that's a problem. Now, I know they've done some things lately to change that.

Nathan: They could do more.

Leo: I also feel like it's disjointed. So you'll be following—you know, everybody's talking about the debate, and then somebody says something about his sandwich. It's like what? Maybe I'm too old.

Nathan: Hashtags have never been the solution to filter conversations that they should have been.

Leo: It's fragmented. And then also, and this is the thing that's growing, gnawing away at me. I blame Twitter a little bit for what's going on in our country right now. Because I—oh, this sounds terrible. But I think we have a little too much democracy. I was a big believer at the beginning of the internet. This is going to be great. Everybody's going to get a voice. And the bad voices, shine the light of day on it and that was—disinfect. And ultimately what we're going to do is get rid of these elites who control the media and everybody's going to have a voice. And it was a real utopia. Now I feel like it's a little dystopian.

Mike: You've had some great conversations on multiple TWiT shows on this topic.

Leo: I know. I bang this gong all the time.

Mike: No, but it's important. And this is the moment to talk about it. I think that—to me, personally, I think that the solution is somewhat obvious. So people talk about real names versus anonymity. I think you need pseudonymity. I think you basically have to have a real name facing Twitter behind the scenes. And then you can call yourself anything you want. But the point is you can't create a new account every 30 seconds. And I've had so many arguments in the last 3 months, political arguments with people with zero followers or 5 followers and an egg avatar.

Leo: You shouldn't be talking to them. Why are you talking to them?

Mike: I know, exactly. And so it's—people just create these phony accounts.

Leo: Here's what I would say the biggest problem with Twitter is, is that everybody is equal on Twitter. And every account, however dumb, however few followers, has equal voice with every other account. And so brands especially fall for this. And they see stuff on Twitter and they take it seriously. It's as if, oh my God, Jane Pauley just said something bad about me. That's a bad choice of words. And you get what I'm saying, that everybody's equal on Twitter so it's a little too much democracy. Anyway, none of this matters. Let's—

Ben: No, it does matter.

Leo: I want to stipulate you can fix this. Now go ahead.

Ben: Well first off, I will push back against any argument that says everyone is equal is a problem. Because frankly the fact that the internet makes everyone equal is the entire reason why I've been able to build the career I've been able to.

Leo: Yes, and me too.

Ben: And I feel a little—I get a little irked by that Norwegian editor writing about Facebook demanding special privileges because he's an editor on Facebook. Like that, to me that's very problematic. And a return to a world where yes, there was, it was simpler and there was more defined what we saw, there's lots of stuff we didn't see. We didn't see police violence. We didn't see this sort of—

Leo: Wouldn't we have seen all that without Twitter? The Arab Spring would have happened without Twitter. You cannot say Twitter—

Nathan: True. Twitter and Facebook and all that.

Ben: I'm just saying it's really easy, it's always easier to see the problems that have arisen from something than it is to see the benefits, particularly when—and in general it easier to look back at the good old days when you benefitted from the good old days and to not see the millions of people that did not benefit from the good old days.

Leo: I think if there's no Twitter, there's no Donald Trump.

Mike: Ok, but here's the problem. It's not that everybody is equal, it's that everybody is not equal. So you, Leo Laporte, everybody knows where you were, what you do, what your thoughts are, what your laptop is, what you this, who your family, all that stuff. They know all about. And then some anonymous creep will come along and get into this war with you and you two are not equal. They have a huge advantage. They might have 20 fake accounts. So it's 20 against 1.

Leo: I should apologize because you know, we've had this conversation so many times. There's no point in belaboring this. I will stipulate Twitter's fixable. The issue today is will anybody buy Twitter and if nobody buys Twitter, what will happen to Twitter? Twitter announced it was for sale. It has some suitors, all of whom, every one of whom has said, "Yea, never mind." For reasons I think this conversation illustrates. So now what?

Nathan: There's no place for realtime-ish conversations to happen online like Twitter. There's nothing else like it, right? And so trolling issues aside which are persistent—

Leo: But let's say it's fixable. Why would Salesforce, Apple, Google and Disney all turn their back on it?

Nathan: Well I mean if it's fixable then why hasn't Twitter figured it out in the first place, right? I mean this has been a year--

Leo: Because it's a dysfunctional management and it always has been.

Ben: Well good luck with that. To Mike's point, Mike's point is exactly right. The fastest, easiest way to fix this is to figure out a way that one person can only create one account. Obviously there will always be holes in that but Twitter doesn't do anything to restrict that. And why don't they do anything to restrict that? Well, they could be stupid or it could be that the single most important number driving their stock is the number of monthly active users.

Leo: And also Twitter was founded as the free speech wing of the free speech party.

Nathan: Quote unquote.

Leo: So there is a historical, genetic thing in Twitter that we are not—and by the way, look at 4chan and Reddit. Two other companies with the same attitude who are suffering as well.

Nathan: Yea, well you know I think for Google, for Apple, for Disney, for Salesforce, I think the question is ok, what is Twitter and how does it fit into our business. And Twitter interestingly enough, like Yahoo, has never been able to really articulate what it's about. And some of the frustration that comes with that I think is a reflection of us as people who use it, is we only use it for different ways, right? Trump uses it for his thing. Other people use it to find music. Other people use it to help organize like the Black Lives Matter movement. Other people use it to talk about sports and fashion or whatever. So there's all these different things that people are using it for. But there's no clear, you know, like what is it? Is it where you go for news? Is it where you go to talk to your friends? Is it where you go—

Leo: It could be all of the above. Ask what the phone system does. You know I mean what does the internet in general? It could be all of the above. I don't have a problem with it being many things to different people.

Nathan: But I think it's hard for these other companies to figure out how it fits in and what to do with it.

Leo: Well who—is somebody going to buy it?

Mike: Well first of all before we get to who might buy it, let's talk about who's not buying it and why. I think each of these companies has completely different reasons. I mean for example, someone talked about Bloomberg buying it. This is a private company. They could probably use the data they say.

Leo: Well I think that any company that's looking at it is looking at the data more than anything else, right?

Mike: But that's a completely whack business for them and it's really expensive for Bloomberg. So you look at Google. Google doesn't really need the data.

Leo: Don't they, though?

Mike: I don't think they do. They have such superior data. The problem with Twitter is—

Ben: Well no just that, but Twitter already gives them their data.

Mike: The number of people who are identifiable that were, ok, this is Leo Laporte. It's the same Leo Laporte that has this YouTube account. That's the same person. It's a tiny number of people on Twitter. There's so much anonymity.

Leo: Yea, Twitter has 300-million monthly active users of which no more than half, probably significantly less than half are not spammers.

Mike: Right.

Leo: So let's say a 100-million active, real active users. That's a small number compared to a billion and a half Facebook users.

Nathan: Pinterest has more right now.

Leo: Pinterest has more.

Nathan: Yea, I think we ran a story on that.

Leo: Instagram has 3 times that number.

Mike: Exactly. It's a completely out of left field business for Salesforce. Disney doesn't want to be associated with all the vitriol and profanity and pornography and all that stuff. Apple doesn't really want to be in the social networking business. And so each of these companies that has the money, has a different reason for not wanting it. So I really buy into the inevitability that some financial, no-name financial company nobody's heard of is going to buy it, strip it for parts, turn it into nothing and it will be the end of Twitter.

Leo: I like this article form John Hempton. He's a hedge fund guy at Bronte Capital. He says you're right. It will be an investment company. But the reason it will be an investment company is because in order to make Twitter work—they have $2-billion-dollars revenue. You've got to cut a significant amount of the costs. And it's going to be so brutal, so ugly, that no company with a public face really wants to buy it. So it's going to be some investment company like Carl Icahn or somebody who doesn't care what you think. He says literally a Wall Street bastard. And that person can do the job needed to turn Twitter into something useful. No to shut it down. Not even sell it off for parts. But just to clean it up and make it profitable.

Mike: Where are the bastards when you need one? You know what I'm saying?

Leo: Does that make sense?

Nathan: It does. I mean a lot of folks that I've spoken to and that I've talked to on some of these sorts of things say that there's too many people over there that don't know what they're doing and the staff's too big. And it's kind of a bloated company.

Mike: Everybody talks about how there's mismanagement but I think the best example of that is that their costs have gone way, way, way up and their losses have remained constant. So matter how much, and the revenue's gone way up too. Twitter is a company that they could have continued to run on a shoestring budget and it would still be 95% as good as it is now but they've had Facebook envy. Everyone's telling them, "You've got to beat Facebook. You're a public company. You've got to go after the money. You have to be like Facebook." And so they twisted it and changed it and—

Leo: Bronte says, "If you can't have 40% operating margin, then you're inadequately brutal." Personally I think 50% is possible. What about you, Ben? What do you think? You follow this stuff very closely and you're good in the financial markets. Do you think that's what makes sense?

Ben: I do. The problem for Twitter is it goes back to horrible management. And the horrible management is impactful in 2 ways. So first off, the product stagnated and did not improve in any meaningful way for like 4 years. And the problem is the initial Twitter concept was so good. It got a huge number of users. They never had to go through the trouble of figuring out what made Twitter compelling and selling that to other people. And so right now, it's this sort of like unfinished, rough product that does a ton of different things and it's not focused on really doing them very well. The 2nd problem with mismanagement though is by virtue of the mismanagement, by not figuring out the product and not building a business, they compensated by raising an absolute epic ton of venture capital. Twitter raised $760-million dollars' worth of venture capital which is way more than Facebook raised and for a much smaller business that frankly doesn't do very much. And the reason was that they were too busy fighting with each other to actually build a business. And so the problem is, venture capital makes a ton of sense for a social network. It's really the only way to build this sort of product or medium or whatever you want to call Twitter. It's the only reason to call to build this sort of company because you need, all the costs are up front. And you want to generate a scale engine on both sides. On the user side where the users are generating content, and on the advertising side where you want to build sort of a self-serving sort of business that scales along with the users. The problem is that the user growth capped out and they never got the scale advertising business model off the ground. The vast majority of their advertising is selling it directly. So you have this company that the way I've analogized it in other podcasts was it's like your kids. They get a little chubby before they grow tall. Twitter got really, really, really chubby. And they never grew tall. And so they have this massive cost structure. They have this huge bloated company where they could be a very nice, $5-billion-dollar company with their current revenue model, maybe even higher, but I completely agree with John Hempton. I think it was a very astute article. It was very well put that right now the companies—like we still talk about Twitter in this ridiculous way. Oh, Twitter has so much potential. Oh, imagine what they could do with this? Or do that? They're 10 years old. Like the time to talk about them and their potential is passed. They are what they are and I increasingly agree that the appropriate route is to embrace that. Are they going to lose all their engineers? Are they going to lose all their talent? Yes, they are. But unfortunately, they had their chance. It's passed. And hopefully they can build something with what's there. And to your point, I think Hempton's point is well made, they will be a much more attractive acquisition target once that process is over. Yes, they might die. The surgery might kill the patient but at this point, to buy Twitter now, it would be foolhardy. Why would you want this company? The only one that makes a possible passel of sense is Google just because they don't have any sort of feed product on mobile. For all their business model we've talked about before. But the fact is Google—Twitter inventories on double-click. And they get the firehose of data because Twitter made this deal, this desperate deal that Google would save them and now Google has everything they need from Twitter without having had to pay a dime for it. So, yea. I'm a pessimist as well.

Mike: I also hate the fact that every Silicon Valley company has to make a trillion dollars of profit a year otherwise they're nothing. Why can't Twitter just have a hundred thousand active users, grow slow, be this incredibly valuable thing.

Leo: It's the plus model.

Mike: Well, I don't know if Google + is actually profitable.

Ben: Well, that's the problem with all the venture capital raised. This goes back to management. They put themselves in way too—

Leo: They can't tread water at this point.

Ben: Well the only way out of their predicament was to grow hugely and now they're paying out all these stock options. This is a ridiculous number of stock options to keep talent there. And it's only deepening the hole that they're in. The only way out for Twitter as it's constructed is to dramatically increase their user base. And that's not happening. We've seen—I wrote this on their IPO in 2013 that the company was in big trouble because their user base, because they had this user growing problem. And especially as advertising gets more and more concentrated, they never built a scalable advertising model. Like I mean this has been apparent for years that this was a problem. I think that what's increasingly difficult now is just how toxic an asset this would be and why no one wants to buy them. And they're stuck in this paradox. Right now the value of Twitter is almost assuredly much less than its current market cap. The problem is its current market cap is inflated because people hope someone will buy them. But they won't be bought until the price goes down. So they're stuck in this paradox where they will only be bought once everyone gives up on the prospect of them being bought. The only problem is that might only happen when they die and that would be unfortunate.

Leo: Well I think we're getting close. The stock price has been tumbling.

Nathan: We're really going to be missing something though once Twitter goes away.

Leo: No, I agree. No, no, I agree. It's a loss.

Nathan: If it goes away. I hope it doesn't go away.

Ben: Yea, I hope it doesn't. There is—this is why it's so frustrating, because there is so much value there. It is an incredibly valuable piece of information that is really not duplicated anywhere. It's highly different. And so I do hope it goes through this process just because if it could come out, either a much leaner company—as Mike said, they're generating $2.2 billion dollars in revenue. And they have a, their gross profit is $1.5 billion. Like they have the workable model here. The problem is their G&A and their compensation prices are so out of whack with the reality of the business.

Leo: Can they get out of those? Are they committed at this point? I mean aren't they contractually bound to these people?

Mike: They're like student loans.

Ben: Yea, well I mean that's the big question around acquisition and lots of people being laid off and things of that nature. I mean that's why I think there's increasing sort of sense that that's the only way out for them because they have to get out of this.

Leo: You sound sad. Don't be sad (laughing).

Mike: I'm sad too. Here's why it's sad. Here's exactly why it's sad. We all want to embrace and invest our time in a social network that we love, where we develop connections and friends and so one. And these keep getting ripped out from under us as people scatter off to these little social networks. So now where do you go?

Leo: I wonder if there isn't a backlash against social in general.

Mike: Yea, I think there might be.

Leo: Maybe social isn't really--

Nathan: I think maybe like a public facing social thing, I think the trend I think we're seeing is more private stuff like Snapchat.

Leo: Let's just go to a bar and have a drink and forget this internet thing.

Mike: It doesn't scale, Leo.

Leo: It scales plenty. You don't need more than 10 friends, do you?

Nathan: Well then you have a chain of bars or whatever, right? Franchise them.

Ben: Again, the evidence of the way people actually spend their time means that social's not going anywhere. I's deepening. And I certainly share concerns about the societal impact. Frankly I think Facebook is the bigger issue here, not Twitter.

Leo: Right.

Ben: And the way that it's customized to you.

Leo: Just because we're addicted to it doesn't mean it's good for us.

Nathan: Amen to that.

Ben: Well but just because it's a dramatic shift in the way the world works does also not mean that it's a bad thing. Again, I think it's really easy to, particularly for people in media and journalism who had their business models decimated by the internet, it's really easy to pin the blame on whomever is winning now. And the fact of the matter is, the world is significantly different. A major thing for me writing in general is you know, the internet is of the level of the Industrial Revolution where everything about society is going to change. Our political institutions are going to need to change. The way our media is is going to change. The way people work is going to change. All these things are going to change and that's—one, it's going to be really hard. It's going to be really painful and to be clear, this is very different from tech. This is very different from the first tech 1.0 which was like ERP solutions and all that stuff which made business way more efficient, but didn't change the way business worked. The way business works is fundamentally changing and that's by definition going to entail a lot of pain and a lot of upheaval. But I don't want to go back to the middle ages before the Industrial Revolution. It's hard. And my concern is not that we stuff the genie back in the box, or close Pandora's Box or any other metaphors I can mix in one sentence. The question is what's our level of awareness of the reality of this change and how quickly can we get our society and our institutions in a way to handle this change. And it's not going to stop. Like it's just, it is what it is and I think once we accept that and can figure out a way forward, we'll be in a healthier place, albeit still a very challenging one.

Leo: Well this just in on Twitter. Elon Musk tweets, "Moving the Tesla announcement to Wednesday. Needs a few more days of refinement." By the way, you might note that Elon has 5.6 million followers and follows 39 people.

Nathan: And where's he going to make that announcement once Twitter dies (laughing)?

Leo: Yea, right. That's a very good point.

Mike: That's the beauty of Twitter. It's a place where people broadcast and where anybody can potentially—so if somebody with 10 followers tweets something massive, it snowballs and is retweeted and becomes this—and it's a place where you can go reliably to get the big news and the real-time news.

Leo: Ironically, not on the Moments tab (laughing). Twitter's own big news tab doesn't work.

Nathan: I don't think Twitter's ultimately going to die. I think something's going to happen. You know, it's probably going to be like well we're talking about some maybe possibly terrible you know, activist investor group takes it over, strips it away. But—

Ben: But what's terrible about an activist group that actually builds a viable business out of Twitter?

Nathan: Well if they could it could be great. There are just lots of terrible ones that don't, right, that strip them.

Ben: A lot of companies deserved to die.

Nathan: And that's also true.

Leo: And somebody pointed out in the chatroom, "We don't lament Netscape Navigator anymore either." This is the nature of—

Mike: Speak for yourself.

Leo: (Laughing) This is the nature of the beast.

Nathan: Or Myspace. Yea, yea.

Leo: Stuff moves on. Stuff moves on. We're going to move on.

Ben: You know about Twitter—I can't move on with Twitter. It's impossible.

Leo: Don't move on. Keep talking, Ben.

Ben: I swore off of writing about Twitter for Stratechery because—

Leo: I should too because notice how it's a hot button.

Ben: But you can't stay away. You can't stay away. I think Twitter, I'm an optimist for this reason. I think Twitter is so unique and offers such unique value that I do think, I just decried this phrasing, but I do think there is a business here. And I think it sticky enough that it will survive the surgery. But, I do think the surgery needs to happen for all involved.

Leo: But what's difficult is to figure out who should do the surgery and what the surgery should be. We don't even know why the patient is sick.

Mike: And don't use a chainsaw, please.

Leo: Well, maybe it's going to take a chainsaw. I mean, I don't know. And I think one of the reasons companies have walked away from Twitter is they don't, they're not really sure what surgery needs to be done. We all see value. We all see problems. And I don't know what the solution is.

Mike: Crowdfunding takeover by the journalists of the world. Journalists of the world, unite.

Leo: And we see so many—

Ben: You want to talk about crappy market caps.

Leo: (Laughing) We see so many people trying to duplicate Twitter with no success. It's a fascinating—

Ben: Social, any product with user generated contents or any sort of network effect has to be free. Like there is no other—however they make money, it has to be free for the user. It's not viable otherwise. The single most important feature of any network is do I have friends or family using it or professional contacts or whatever it might be.

Nathan: One of the disappointing things is I feel like they're actually on to something with live video with that kind of conversation happening underneath it. I mean, you know, hey, I know Mark Zuckerberg says he wants Facebook to be video-centric and all that stuff, but—

Leo: Well it is. My Facebook feed is live video all the time.

Nathan: But the conversations that happen on Facebook underneath your feed aren't close to what you get when you see it on Twitter or you see it on Periscope. They really do something different. And it might be because Facebook hides so much behind their login, you know, their free paywall or whatever, you know? But you know there is no wall like that for Twitter. You can see what's going on even if you don't take part and with the way streaming's booming right now, there's something special that's happening here. I hope that they figure it out before screwing that up.

Leo: Will you watch, election night will you watch the Bloomberg feed on Twitter?

Mike: I will.

Leo: You think that's the place to be?

Mike: I do.

Nathan: I think I will. I know I'm doing it for sports now and I've been doing it for the elections.

Mike: I'm watching the Oscars, the Super Bowl and all that kind of—the debates. For me it's Twitter.

Leo: I always have Twitter running with the TV on but you're saying—

Mike: And I'm tweeting like a maniac, too.

Leo: But you're saying that Twitter's strategy of putting live video on the feed means you can just watch, just sit on Twitter.

Nathan: Yea that and they have their Apple TV app is pretty clever. And I think—

Leo: Does anybody use that? It seems really weird to me to watch, to have the Apple TV app running.

Nathan: I kind of like it.

Ben: The problem is the—currently if you watch video on the app it just shows random tweets. It doesn't show your Twitter stream. Which I guess makes sense in that the goal is to reach people who don't have their own stream.

Leo: If it were properly curated that could be awesome. How is it curated?

Mike: It's not.

Ben: The problem with curation is always been bad. And it's always been focused on brands and like famous people which is a bit boring, brandy type tweets. Whereas the real value of Twitter is the little more, how shall we say, spicier tweets that can accompany a sporting event or something like that and the jokes that rise up.

Leo: Could you make a bot that would curate Twitter appropriately? Could you do sentiment analysis or some sort of grading of tweets that—

Ben: And how is Twitter going to hire those people?

Leo: Yea, because they don't have stock that anybody wants. Because they love Twitter.

Mike: That's why Google should buy them.

Leo: Open source it. I mean people don't get paid to do open source projects. And there's some amazing stuff being made there. I don't know. It seems like there's a solution.

Nathan: There's got to be somewhere.

Leo: All right. Let's take a break. We'll come back. Lots more to talk about but only about a minute more in the show. We're really running out of time. We've got to make these shows with Ben and Mike and Nathan 4 hours long. Can we do that (laughing)? Mike Elgan is here. He's our digital nomad, at It's so nice to have you in the studio.

Mike: Great to be here. Nice place you've got here, Leo.

Leo: It's kind of—you know, it's similar. Does it feel familiar.

Mike: A little bit. A little bit.

Leo: It's weird, it's different but it's the same. It's weird that way.

Mike: Yea.

Leo: Nathan Olivarez-Giles from The Wall Street Journal and a Dodger lover. Beautiful.

Nathan: As long as they're in LA, they're my team.

Leo: It's a beautiful thing. I like you're Niners hat, sir. Thank you for wearing that. Why?

Mike: Got to represent.

Leo: This used to be a Niners mug. Somebody has peeled the Niners badge off my mug.

Nathan: Who did that?

Leo: Not me. Some Dodger fan was here.

Nathan: (Laughing) Hey, I had nothing to do with that.

Leo: I didn't do that. No, you know what it is? And I know because you admitted it. It's a Raiders fan. That's who would do that. They got no conscience. No conscience. Also with us, always great to have him, from, Ben Thompson and the sun is now out fully in Taipei and shining in his window. It's nice to have you. Boy, you guys are always so good, so salient, so pithy, so wise. I appreciate that.

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Leo: Ok. We talked about Twitter. We talked about Yahoo. This is depressing. Let's talk about—what can we—we talked about Facebook.

Nathan: We talked about Samsung's exploding phones.

Leo: Samsung's exploding phones. What's the good news in tech? Google Fact Check. I think this is Google using its power for good not evil.

Mike: Yes. Yes.

Nathan: Very interesting.

Leo: One of the things Twitter and others have done, and the internet has done has made it possible to spread disinformation as easily, as quickly as information. And when it's spread at a rapid pace, it's almost so fast that you believe it. So I think what Google's doing in my opinion, and I'd love to hear what you think, you wrote the article on this, Nathan, they're going to add a Fact Check label to search results.

Nathan: Yea, basically in Google News now for listings to news stories—

Leo: Oh, it's just in News.

Nathan: Just in News so far. You know this is the sort of thing that could bleed over.

Leo: News makes better sense though.

Nathan: Yea. But basically there are more than 100 websites that they've identified that are dedicated to fact checking.

Leo: Wow. There's PolitiFact I know.

Nathan: PolitiFact, Full Fact, there's a lot of others. There's actually—

Leo: I guess you've got to include Snopes in that list, too.

Mike: Oh, I would absolutely include Snopes, yea.

Nathan: Yea, definitely. So there's been more of a rise in the last few years of these websites that are dedicated to this. Not to mention the sort of stuff that The Wall Street Journal does, you know, The Washington Post and The New York Times, everybody, and NPR does great fact checking during the debates.

Leo: This is difficult though for news outlets to do especially when candidates are saying, "Well, the media's manipulating this election. You can't believe what they say." And I think people believe that.

Mike: They do.

Leo: So it's hard to find objective information.

Mike: I've discovered in arguing with politically minded trolls on Twitter—

Leo: By the way, this is Mike's article about the same thing.

Mike: And what I found is that certain—I'm not going to get political here, too political, but certain political groups have pre-inoculated their idiotic users, followers, whatever you want to call it, against fact checking itself.

Leo: You can't trust the fact checkers.

Mike: The fact checking sites are just a smoke screen for the powers that be, etcetera, etcetera. Exactly. So that's a real problem. But I think that—my message to the world is, you know most of these fact checking sites are very good. That the politicians have learned to speak in a way that is fact check proof. So for example in my article I give a couple of examples. But essentially speaking vaguely and categorically instead of specifically enables them to have nothing to fact check. It's like quicksand.

Nathan: Yea, definitely.

Mike: I would like to say one thing on this. The different fact checking sites do different things. So the political ones like PolitiFact, and so on are great for politics. There are ones for urban legends and so on and also politics like Snopes, and so on. Hoax Slayer is a good one. But there's one that's for tech mostly. And it's very good. It's called Emergent. If you could throw that on the screen. It's called Emergent.

Leo: Emergent.

Mike: Emergent, yea. It's called is the—

Leo: E-M-E-R-G-E-N-T.

Mike: That's right. And they have this—you see if it's green, it's true. If it's red, it's not true and if it's white it's not clear if it's true or not.

Nathan: Yea, unverified.

Leo: Oh, this is good. I'm going to add this to my—

Mike: Isn't this great? So it's a—the call it a real time rumor tracker. Again, it's very heavily spun towards technology. And it's just a fantastic resource where they just get to the bottom of it. They explain. They talk about the originating source. It's tagged so you can search by tags or keywords and so on. And it's just a great way to separate the BS from the truth.

Nathan: Yea, Google doing this and labeling these sorts of sites—

Leo: It's by the way.

Mike: Info.

Leo: A little hard to find otherwise.

Nathan: On Google News it's kind of a responsible thing to do.

Mike: It is.

Nathan: Because like you said, there are those that are known for doing legit stuff and Google is taking a nonpartisan approach on this and that matters. It's basically just calling it out and saying, "Hey, this is someone verified. This is someone legit that has a history of doing this right." And you know, if you don't believe the media, then you probably don't believe Google's little tags either. So this might not be for you. That's I think, I guess, ok.

Mike: But again, there are forces out there that want, they're in opposition to actual facts.

Nathan: Of course.

Mike: And opposition to actual reality and they want to convince everybody that facts are—there's no such thing as facts and there's only opinion or bias or whatever. And that's simply not true. There in fact are facts. Facts exist. And so we need to—and here's my general tip which I think really resonated with a lot of my readers. Instead of using fact checking sites as places where you go and look up things that people are disagreeing with, use them like they're publications. Use them like they're blogs. Go to them preemptively and get the truth before you get the lies. And just browse them. They're actually-- the way that they tend to format content is actually very readable way to get the news, to get the information that's out there. And follow their Twitter accounts. Follow their social media accounts and they tend to tweet out or send out what they've concluded. And you can just see it go by and you're like, "Ok, so that's not true." And then when you actually see the falsehood later on, you already know. Oh, that's not true.

Nathan: Yea.

Mike: And so it's a really powerful thing. The internet has made it super easy to spread falsehoods but they've also made it easy to identify what's true and what's false. And we should all be active in figuring that out.

Nathan: This really to me isn't a new problem. I mean this has been an issue as long as there's been a media, as long as there's been politicians.

Leo: It's at the speed of light now.

Nathan: They move quicker now.

Leo: And they proliferate it in a way that's harder and harder to know what's right.

Nathan: But I think ultimately kind of, I'm talking about some of the things that Ben brought up with Twitter, you know there are more people engaging in these conversations than ever before. The business models for news outlets and journalist organizations and things like that have been hurt incredibly by the internet. But more people are reading the work than ever before that we do. And I think that's ultimately a good thing. Now, we do have some folks maybe who are in certain camps who might want to believe their political heroes that say that all media is bad and there are no facts and there is no truth. But I think that most people know that that's BS. And I think that just as before, before the internet, if a responsible consumer of news, a responsible person who just wants to learn about the world around them is going to look to more than one newspaper. Is going to look to more than one news website. Is going to look to more than one fact checking website. Is going to constantly be challenging what they know to be true and to read more than one book and all that stuff. So it's the same sort of problem. It moves quicker. I think sometimes it feels amplified and more emotional because we're just—it's being thrown in our face every day. Every time you get on Facebook and Twitter, every time we turn on cable news or look at the home page of any news website, it feels bad. I think it feels a little heightened right now because it's an election year. But I think there's something good underneath all this. And the fact that we're all participating in these conversations in maybe a larger and more public way than ever before. And I think more young people and communities that hadn't been included in some of these conversations before are getting included nowadays. So that's also something that is a threat to a lot of the stakeholders and old power structures and all those things. So ultimately I think this is going to be good. But I'm glad that Google is making this move.

Mike: Me too.

Leo: Unfortunately, we've got to wrap it up. But I'm going to give you guys—if anybody has a story that we didn't cover, that—

Ben: I just wanted to add one thing too.

Leo: Please do. Go ahead.

Ben: I thought Nathan made a really important point that whether the effect is going to be, I question how effective it will ultimately turn out.

Leo: People believe the facts they want to believe.

Ben: Well, it's more how does it get in front of them. You have to actually search for the question in ad issue and then there will be a label in the search results. And I guess the thing I would take from here is I think Google does deserve a lot of praise for here because the real company that needs to make a move here is Facebook.

Nathan: Amen.

Ben: And that's where—

Leo: In fact, Facebook's almost doing the opposite with their trending stories. This is not a fact. But it's trending.

Nathan: And Facebook will tailor your newsfeed depending on what you're most likely to engage with which means if you share and react to more liberal stuff, they'll show you more of that and conservative vice versa or whatever.

Leo: You can counter that, though. I made a point of following every presidential candidate including all the republican candidates on my Facebook. So I do see Donald Trump's tweets.

Ben: Right, but no one else does that.

Nathan: (Laughing). Very few.

Leo: Really?

Ben: I think your point about the trending stories, Facebook's response to accusations of bias was to fire the entire team. It's preposterous. It's frankly, it's not taking seriously their role in society. And there's no indications that they care or they understand that. And so by all means, lets praise Google to the skies and by implication let's shame Facebook. Because they're, Facebook's—yes, this whole thing that Facebook's a media company is dumb. They're not a media company. They are like, the reason that they are valuable is they are a platform and they live on user generated content. But at the same time, their role and their impact on society cannot be denied. And their refusal to take that seriously and to put their head in the sand and pretend that they will fix it with an algorithm is in the long run I think it's going to be bad for Facebook. Because there's going to be a backlash eventually. I've been denying your points, Leo, about a backlash. But there will be one. And the concern for Facebook, we saw what happened with that picture in Norway. Like at some point the government's going to get involved. And that's not going to be good for Facebook's business. And they need to take it seriously. And so I would praise Google with the clear undercurrent, that's no longer implicit. That's very complicit, that what a welcome counter to what we're seeing from kind of the real news distribution source.

Leo: I have to say, now that I'm looking at Facebook's Trending Stories, I think they've solved this problem by eliminating news entirely and just covering like, well, stuff like this. So—

Mike: There's fake stories and then there's real stories about fake things.

Leo: (Laughing) There you go. There is something fake here but it's not the story. Ok. Anything we missed? Boy, what a great—I think that's a great way to end. And I appreciate everybody for being here. Ben Thompson from Stratechery. You know, Ben has his bully pulpit. You've got the Exponent Podcast. You've got But I am thrilled that you spend some time with us once in a while because I love your insights. Thank you for being here.

Ben: Glad to be here and sorry again for whatever happened last time.

Leo: No, it wasn't your fault. I don't blame you. No need to apologize.

Ben: It might have been my fault. It was probably my fault.

Leo: Even if it was your fault, it wasn't your fault. I don't blame you at all. We also thank Mike Elgan because whenever you're in town, life is better.

Mike: Thank you.

Leo: And there's more lattes. Did you drink both of those?

Mike: I drank both of them, Leo.

Leo: Holy Cow.

Mike: You saw me sprinting and scampering away to the bathroom.

Leo: You ain't sleeping tonight, by the way.

Mike: No, no, no.

Nathan: I only got halfway through mine.

Mike: I'll sleep next week.

Leo: The pumpkin spice is strong in this one. We also, I'm thrilled as always to have Nathan Olivarez-Giles. Now that I gave him my Mac Pro, he has to show up anytime I ask him to.

Nathan: Actually there's a stickers app that my colleague Joanna Stern and I created.

Leo: What?

Nathan: It's called Pupmoji.

Mike: Yea, it was great.

Leo: What? Wait a minute. This is for messages?

Nathan: Yea, Apple's messages.

Leo: What's it called?

Nathan: It's called Pupmoji.

Mike: Now you drew the cartoons of her dog.

Nathan: I drew the cartoons of her dog. She put in a column about how easy it is to make an iMessage app and I drew them on an iPad Pro but I finished them on the Mac Pro you gave me.

Leo: See? See? I'm already gaining the benefit of that.

Nathan: It's a free app. We're not going to charge for it because it was for a news story. There's only a couple. We want to add more. But yea. This is a direct result of that. So thanks.

Leo: Pupmoji. So I'm going to go, go to Messages, hit the A, hit the 4 little dots. I'm going to go to the store with a plus sign. And then I'm going to search for—there's no search. Oh, yea there it is. P-U-P-M-O-J-I.

Nathan: Yea, not to shamelessly plug something.

Leo: And this is Joanna's—aww.

Nathan: So Joanna like coded it. It's really simple.

Leo: She coded it?

Nathan: If you have Xcode.

Leo: I'm impressed.

Nathan: It's basically just templates. It's not hard to do at all. But—

Leo: I'm impressed!

Nathan: Yea, I basically drew those on an iPad Pro. Then using Adobe's Cloud, I brought it up on the Adobe Illustrator App on the Mac Pro and finished them there.

Leo: Let me find it here. Now I've got—see, I have way too many stickers. Aww.

Nathan: Bought a beautiful Dell display to go with it. Real nice.

Leo: Aww. Let's send these all to Lisa because she loves dogs. Whoops. Is that a—

Nathan: It is. I drew a cartoon poop emoji next to the dog looking guilty. It was just—

Leo: (Laughing) And now I've sent it to my wife. So what could possibly go wrong? I'm not going to publish her response.

Nathan: Anyways.

Leo: She says, "Stop texting me." Ok.

Nathan: I just brought it up because I want you to know I appreciate it. I'm using it. And I always enjoy being on the show.

Leo: Pupmoji. See? It's like cast your bread upon the water and you get poop emojis back. We thank you all for being here. Great studio audience. Thank you for being here today. If you want to be in the studio audience, just email We'd be glad to have you here. And if you can't, you can always watch the live stream. We do it 3:00 PM Pacific, 6:00 PM Eastern time, 2200 UTC on Sundays. You can also be in the chatroom at We love having you in the chatroom. Now, if none of that is possible, don't worry because we always make on demand audio and video of every show available on our website, and wherever you subscribe to podcasts. And the good news is they're more and more ways to get that. So whether it's iTunes or Google Music or Stitcher or Slacker or your podcast app on your favorite device. Make sure you subscribe to TWiT because you don't want to miss a minute. Thank you everybody for being here. We'll see you next time! Another TWiT is in the can. Bye-bye.

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