This Week in Tech 585
Leo Laporte: It's time for TWiT, This Week in Tech. David Pogue is here. I'm thrilled, plus Steve Kovach, Erin Griffith. We're going to talk about the big d dos attack, and what it all means. The big acquisition of time warner. 85 billion dollars from AT&T and Elon Musk's desire to conquer the world. It's all next on TWiT.
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Leo: This is TWiT, This Week in Tech, episode 585, recorded Sunday, October 23, 2016.
I Can't Wait Till 2021
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It's time for TWiT, This Week in Tech, the show where we cover the week's tech news. What a week this has been! Fortunately, we have a panel that is up to the task. Erin Griffith is here, from fortune magazine where she writes Boom! Is that how you pronounce it?
Erin Griffith: Sure. I like the enthusiasm.
Leo: You talk about the tech, but of course you write a lot of stories about other subjects. It's great to have you back. You and your bike.
Leo: Also with us, in fact, I think we've got an all East-coast team this week. Steve Kovach is here from Business Insider. Do you live in Brooklyn, Steve?
Steve Kovach: Manhattan.
Leo: Oh. He's an urbanite. Big city dweller. People who live in Petaluma as I do, think of Brooklyn as a big city.
Steve: It's huge. 2.5 million people.
Leo: Yuge! Also, David Pogue, are you back East or are you back here?
David Pogue: I am back east, at the moment.
Leo: All of you will be staying up past your bedtime. Welcome. David Pogue with Yahoo, where he is a tech columnist for Yahoo Finance. @Pogue. Long-time friend of this show, it's always great to see you, David. Haven't had you on TWiT in a while.
David: Yeah. It's been a while.
Leo: A while. I think the big story this week was Friday's D dos. Distributed online service attack that slowed down or brought down sites from Netflix and Twitter and GitHub and a lot of sites. I think the real story is that this attack was not your traditional DDOS, it came from Internet of Things devices, particularly things made by one Chinese manufacturer. Cameras, and DVRs made by Xiao Mi. And branded by others. The problem with these devices, they often have default passwords which cannot be changed! So bad guys scan the Internet for them. This case, there are a couple of viruses. MRAI, it scans it looks for the device, and logs in with a default password. Puts itself in memory and now you're on a botnet. Your device, your camera will be used to send packets to dying DNS, that was apparently used by these other sites and brought them down. Mrai is written by a hacker with the handle Honest Sin Pie, but they were in the DDOS industry. Writes, greats everybody when I first got into the DDOS industry I wasn't planning on staying in it long, I made my money. He or she released it's time to GTFO. They released the source code. Brian Krebs posits that the police were hot on her tail, so she preserved plausible deniability by making sure everyone else had the code so she could say I downloaded it, I didn't write it. Krebs was brought down last month with a nasty attack. His provider actually pulled the plug on his site, but most of this came from generic routing encapsulation. Data packets used to establish direct connection from Internet of Things devices. Here's the worst news. Even if you have been hacked and your service slows down, let's say you unplug that... the virus is stored in RAM, but as soon as you plug it in, you'll be re-infected. That's how bad it is.
Erin: I'm the one responsible for this outage on Friday.
Leo: It's all your fault.
David: It's interesting that the company is Xiao Mi, because I found out that both the New York Times and Spotify had been knocked off, that's exactly what I said. Xiao mi!
Leo: Was New York Times also down? I didn't know that.
Steve: Business Insider was down too. We went down for a while.
Leo: I'm not sure I understand that point. Why would dying go down affect all these other sites? You're not customers.
Steve: I'm not sure. I just know our IT guys were sending out frantic emails saying it's not our fault. We're waiting for them to fix it.
Erin: Couldn't it just be that whoever your web host is is a customer of Dine?
Steve: That's probably what it is.
Leo: AWS was brought down as well.
Steve: That's probably what it was, because we use AWS.
Leo: We use AWs, but we have a bunch of different interlocking things, because we've been D dosed before. We use AWS for D Dos protection. The only way to fight denial of service attack is add more bandwidth, because you can't... there's too many IP addresses to say block that IP. Block that camera, but there's a hundred thousand more somewhere else. Here's the scary part. According to Gartner there are 6.5 billion IOT devices in use this year? I wish I had the number in front of me. Half a million more going on. Garner estimates that 6.4 connected things worldwide up 30%. This is the one that scared me. In 2016, five and a half million new IOT devices are connected every day.
David: I would like to know what those are. I've seen the Internet of Things water bottle, the Internet of Things toilet paper dispenser. Even the things that make sense, like an Internet of Things doorbell camera, I don't know anyone with those things. You're telling me six billion people have... I don't buy it! What are we talking about here?
Leo: Your Nest Thermostat, there's a couple million there. There's a lot of... All right. Maybe Gardner is wrong. I should have been more skeptical.
David: Two million thermostats, and all the rest are water bottles.
Leo: Well... Almost everything is connected now to the Internet. Thing of all those Wi Mo and Belkin light switches, the Amazon Echos. We sold millions of those. There's a lot of devices, the problem is I'm sure the Amazon Echo is fairly secure. I'm sure Amazon knows what it's doing and doesn't have a default passport that can't be changed, that the firmware gets updated by Amazon, one would hope.
Steve: What about TVs? Are TVs included in that? That would be massive.
Leo: Anything that's connected to the Internet that's not a general purpose computer or phone I guess would be an IOT device.
David: Usually when people are hitting me up for PR pitches for an Internet of Things device, it's an ordinarily un-networked device that they have added a phone app for, like a coffee maker or a refrigerator.
Leo: TV counts, right?
David: There you go.
Leo: TV wasn't connected to the Internet until recently. Anyway, the real problem is these cheap Internet of Things devices that are not designed with security in mind at all. They're just being put online. I would bet you that every home has a couple or three of them. I got how many TVs? Three TVs hooked up. I've got...
Steve: You can't buy a not smart TV anymore. Everything you buy is Netflix installed or whatever. So that makes sense.
Leo: Cameras. Security cameras, spy cams. You're right. That seems like a large number. 5.5 million new ones a day? You're not buying it. Let's say it's one billion, David. Can you get behind one billion?
David: Maybe if you include China and TVs.
Leo: You have to. You have to include it all. All of these can be used maliciously if they don't have proper security. Routers, this has been a problem for some time. Last Christmas, more than a year ago, remember when the Sony Playstation network was brought down and the X Box network was brought down on Christmas day? It was brought down by the Lizard squad using Routers. Hacked routers. The problem is companies are putting this stuff out and they're not patching it. They're not keeping it up to date. Routers have become such a cheap commoditized device that the companies don't update them. They're attitude is you should buy a new one. There really isn't much commentary on this except wow.
Steve: It's amazing there's not a standard yet. Apple is dipping their toe, they have their own standard... also there are so many standards, right? Home Kit standard, whatever Google has with Nest, WiMo, there's a new standard. That's the problem, it's so fragmented that one of these is going to have a flaw or hole in it that someone can exploit.
Leo: are you playing Pinball, Erin?
Erin: I think somebody is trying to deliver a package to me.
Leo: Go get it. No problem. I like that you get Sunday night delivery in Brooklyn. I want to move there.
Erin: That's Amazon Prime at work.
Leo: You know who it is? They use the US postal service on the weekends, because the postal service trucks aren't working on Sundays, so they use contract employees in postal service trucks. So if you're getting Amazon deliveries and it's Sunday off, it's from the USPS, believe it or not. I think we've all learned something today. Thank you everybody for being here. I picked a bad starting topic, I figured there would be something to talk about, but as I think about what are all these devices, there really isn't that much to say, is there?
Erin: This isn't something I cover super closely, but is this just an arms race that we'll be losing?
Leo: Good question. David, you have a thought?
David: I have a comment. So part of it is you have the wrong guests. None of us are security experts. We all cover it. We couldn't defend a government computer or hack into one. But the thing that is so frustrating to me about this, almost any other problem in the world, there are steps we can take and progress that can be made. There are people attacking climate change by on the state level moving onto solar or greeter programs, with health there are programs to dissuade you from smoking or getting more exercise. Every other problem in the world! This one, people ask me. I got nothing. If Sony and Target, the biggest smartest companies in the world with professional staffs get hacked routinely, we have zero chance at our level.
Leo: The answer is we're screwed? Is that...?
David: I have nothing to offer my readers. It's only going to get worse. It doesn't matter if you change your password and make it complicated and don't duplicate it. It doesn't matter. It will still get stolen.
Erin: Do you think any kind of regulation, like forcing the companies that are making these cheap, crappy connected devices go up to a certain standard, do you think that would make a difference at all, or is it already too little too late?
Leo: It will make a difference. This is a simple fix, which is to require all these companies to have updatable firmware and that they're responsible for making sure... you can't make software without a flaw, but if you look at the example of Microsoft, Apple, Google, when the flaws are found, they patch these flaws. What is an issue is companies are irresponsibly making devices that are not fixable and not being fixed. Step one is to make sure all devices can be updated, step two is to Wire companies.
David: That's a start. My employer, Yahoo gave five hundred million addresses to the Government. There was no hack there, but people were upset about that because they wanted it and Target was an inside job by an employee. No amount of good housekeeping and good protocols would have saved them. This is always going to be a thing.
Leo: Well, it's never going to go away, but there are things we should be doing to fight it. I shouldn't just say throw up your hands or don't have any Internet of Things devices anymore? This is why we can't have nice things?
Steve: Stuff cash in your mattress. Don't use anything.
Leo: I think it's solvable. The problem is twofold. One, there is huge demand for the cheapest possible webcams and routers and all the pricees driven down. Then you have manufacturers all outside of the U.S. who are making cheap products. Problem one is we got to stop buying those. We got to start making rules about those. That's not going to stop those being sold in other countries, and I don't think China is ever going to do anything about this. By the way, Chinese device could bring down DNS just as easily as a US device, so in that sense, we'd have to have global regulation. That doesn't seem likely. We're screwed. We can't even figure climate change out. We've known this was going to be coming. Brian Krebs wrote an article saying he's seen probes from state actors into various infrastructure to see what the defenses are, what the security is. He has anticipated massive cyberattacks. You probably saw a couple weeks ago on Meet the Press Vice President Biden saying we are going to cyberattack Russia with a proportionate response to retaliate for their hacking of the DNC. This is not going to get worse. That kind of dialog escalates it, right?
Steve: We're doing it too, just as much as China or Russia. We're doing it just as bad as them as well. It's a cold war again in cyber space.
Leo: David, you and I have been covering this for a long time, and I think I vividly remember in the mid 90's when the Internet mosaic came out and Netscape and the Internet became wide spread use. This utopian sense that we're going to see the democratization of the world, everybody is going to be able to talk. We're going to see an amazing, thriving economy grow out of it. We were very utopian about it. It's turned into a dystopia in some ways, hasn't it?
David: It's both. The good happened, we didn't anticipate the bad. The bottom line is there are a lot of people who are terrible people. Not just hackers, but cyber bullies, and people who leave comments.
Leo: That's what's interesting because this democratization has given a bullhorn to a tiny fraction. Most people are good. Most people are not hacking IOT devices, this is a small fraction. But all it takes is a small fraction, because they are using the Internet's leverage to have massive impact.
David: The more we try to defend against it the more complicated it gets. I was writing about this new feature of the Apple watch that lets you unlock your laptop by approaching it, but to do that, you have to turn on two factor authentication, which if you can believe this, is not the same thing as two step verification, which Apple launched last year. Two factor authentication replaces two step verification, anyone who is supposed to be able to understand any of this? If you try to turn on two factor identification, it says your iCloud address is not available for this feature yet. They're rolling it out. Apple tech support escalated it, they agreed to turn it on for me, which was great, except now everything disappeared from my calendar. Every program that taps into your iCloud account has to be updated with a two factor thing. I called Apple, they said they didn't know, they'll escalate it, but the guy will be back until Monday. I decide to turn two factor identification off. At that point, I was cut off completely from all iCloud services. I cannot get texts, I cannot watch any of my movies or listen to my music or get into iCloud.com. Nothing. And my calendar is blank. Good protection comes with complication. We're going to see that happening more and more. The more complex the defense, the more inconvenient it will be for the little guy.
Leo: My story is much better. Pretty bad, but I wanted to do the same thing, and it said OK. You have to answer your security questions, which good lord. I don't remember the answers. I must have done this ten years ago. I hate security questions. Couldn't figure it out, so I called Apple, and they said of course. We'll verify your identity. They reset my security questions, then I went back to turn on two factor, and they said you've changed your account, you can't turn on two factor for 30 days now. So in the process of setting up two factor, I disabled two factor, but now that i hear your story, David, I think I was blessed.
David: Were you doing two step verification?
Leo: I don't know! I was turning on the new thing so I could unlock my mac with my watch. That's all I was trying to do.
David: I went online to research this, guess what? The tech people get the two terms confused.
Leo: That's the difference?
David: There's a big difference... I can't remember.
Leo: The idea of two factor, there are three ways to do it. Something you know, something you have, something you are. Something you are is biometrics, something you have is your phone, something you know is your password. Two factor would be using two of those three, thereby making it harder for somebody to impersonate you. Two step sounds like you have to know a password and a security question. That's two step. It's not two factor. Both of them are something you know.
David: Both of these apple things are every time you try to log into a new device, or use a new Apple service, they would text you a six digit code.
Leo: So that's two factor. That's a password, which is something you know, and something yo have--you have to have your smartphone for that to work. However, the weak link in this is it's trivial to impersonate someone and take over their smartphone number. So I read an article by a security expert who said actually having a phone number attached to your Google account creates a security flaw because it's a matter of social engineering for a bad guy who is targeting you can call your phone company and say this is Leo Laporte. I need to change my phone, can you send me a sim? They send him a sim and now he has my phone number, and can reset my Google account.
David: Two factor authentication isn't the answer?
Leo: Even the national institute for standards and time has issued a warning that text messages are not a good form of two factor, besides the fact that Apple and Google all use it because SMS messages is a weak link, it's tied to your phone number which is easily hijacked.
David: How do you feel about finger prints? The new MacBooks have a fingerprint reader, just like the iPhone.
Leo: That's a better way to go. Biometrics is something you are. Your eyes, your fingerprint. That's something you are. None of this is perfect. The idea is to have speed bumps. Let's say I steal your password from target, I would still need one more step. Had Colin Powell or Jon Podesta used two factor authentication on their Google account, they would not have been hacked. Did you read?
Erin: What year were those emails?
Steve: Podesta was in the last year. It was all from this campaign.
Leo: This is a great article from Vice from Motherboard. Kudos to Lorenzo Franceski Bikelli who wrote it. Apparently what happened is both Colon Powell and John Podesta got a message we've all gotten from Google or looking to be from Google. Someone just used your password to sign into your Google account, blue button to change your password. It doesn't lead to Gmail, it leads to a Bitly link. They neglected to make it private. This Bitly link as clicked twice in March by John Podesta. It was a link to myaccount.google.com/securitysettingpage.tk. If you only stop at myaccount.google.com. There's no https, that tells you it's not Google, but also you're going to com/securitysettingpage. Had they had second factor, it wouldn't have made any difference, because you still need to get a text message. The bad guy would have had to steal John Podesta's phone number. Again, not perfect, but an additional speed bump. Now we know how Podesta's email was hacked. The interesting thing is this Bitly account is tied to Fancy bear. I know you're happy to hear that. Fancy Bear is according to our intelligence agencies is a Russian state hacker. But, I'm thinking it's a little bit suspicious that he neglected to cover his tracks. So... I, unlike some others am not saying i know more than the seven US intelligence agencies who have all concluded it was Russians. They probably have other evidence. Fancy Bear left some bread crumbs. Turn on two factor, even if it's not perfect, it's better than nothing.
David: Whenever I write about finger prints, I always get blasted for saying finger prints are good, the argument is always if somebody compromises your fingerprint, I don't know how that's supposed to happen, cut off your finger when you're sleeping, you can't change it.
Leo: That's a good point. I think a fingerprint is fine. I do. The bigger issue is some courts have held that you can be forced to give law enforcement your fingerprint.
Erin: Like people are in jail and they make them unlock their phones so they can indict themselves?
Leo: It's not self-incriminating any more than it is to give a regular fingerprint or strand of hair. Recently the FBI wanted a warrant to march into somewhere and force people to unlock their phones. The department of justice got a warrant specifically saying when you search these premises you can force drug dealers to unlock their phones. That warrant said that. DOJ warrant forced people to use fingerprints. I think the motto of this show is "we're screwed." I have to find something cheery. I'm going to search. I'm depressed. The cops have...
Steve: We're going to wake up tomorrow with zero dollars in our bank accounts.
Leo: I know. Wired magazine says there is an enforcement database with 117 million American faces in it, half of all US adults. There's no restrictions on how they can use it. It's widely available. Mostly law abiding people because it comes from driver's license photos. There's no real restrictions on how you can use it. It's available to state and local level police. That wasn't the cheery story I was looking for, was it? Here's one. Larry Lessig, Larry is a classy guy. Law professor at Harvard, he ran for President in this cycle. His plan was, nothing is going to happen unless we get rid of campaign finance reform. But no incumbent is going to support campaign finance reform, because that's how they get the money to become the incumbent. I'm going to run for president, pick a good vice president, I'm going to initiate campaign finance reform, as soon as it's done, I'll resign and let the good VP run the country, all fixed. Didn't work. Apparently it was bad enough to annoy John Podesta who referred to the smugness of Larry Lessig and in an email correspondence said "I F***ing hate that guy. I'd like to kick the crap out of him on Twitter, but I know that's dumb." This was leaked. Lessig who has taken umbrage instead posted on his blog I'm on my way from Iceland to see my Dad, he's not doing well. Landing in JFK my inbox flooded with questions about this leak. Here's my only response. I'm a big believer in leaks for the public interest, that's why I support Snowden but I can't for the life of me see the good in a leak like this, one that reveals no crime or violation of important public policy. He's arguing for the privacy of the two people who slimed him. We all deserve privacy. The burdens of public service are insane enough without the perpetual threat that every thought shared with a friend becomes Twitter fodder. Neera has only ever served in the public (and public interest) sector. Her work has always and only been devoted to advancing her vision of the public good. It is not right that she should bear the burden of this sort of breach." He apologized to her for the leak. Is that upbeat enough? No. All utterances are public whether you think so, or know so. God I'm so sorry. We got happier things, there's an Apple event coming up. Are you flying out for that, David?
David: I am.
Leo: We'll get some speculation on that. Microsoft knowing there would be an Apple event in October but not knowing the date because Apple mean spiritedly won't tell anybody until the week before, forcing you to buy the most expensive ticket possible.
Steve: They're doing an event in New York. They're having a satellite thing here.
Leo: Apple is? You can stay there. That's nice. Microsoft says we want to have an event too. Last thing we want to do is announce the same day Apple does. That's the kiss of death, or even the day after. They didn't know so they threw a dart at the calendar and they said Apple moved its quarterly analysts from Thursday to Tuesday, so probably that means Thursday is the event, so we're going to do our event on Wednesday, and when Apple sent out the invitation, they went Wooh. We got it right.
Erin: That makes me really sad. Microsoft should stop trying to plan their lives around Apple.
Leo: I think they should be able to, but realistically, don't you think...?
Erin: With the whole narrative of Apple is losing its fizzle, couldn't Microsoft usurp them with something exciting?
Leo: That's harder to do than just moving the date. Easier...
David: You rush to beat Apple's announcement at your peril. Samsung raced to get the Note 7 in the marketplace before the iPhone seven announcement and that blew up on them.
Leo: Not good. what's your take on that? Do you think Samsung did something really wrong?
David: Although I'm a terrible security expert for your first segment, I'm a very good exploding battery guy. For a year now, I have been traveling with Nova making a special called the search for the super battery. Batteries are not like double As for our toys any more. Batteries are the key to everything. Electric cars, of course, but the grid. Everyone says there will be solar and wind, but there's no electricity from the wall when that's not shining or blowing. It's not like the falling waters. Electricity when you turn a lamp on is generated now.
Leo: Let's take a break. We'll talk about that in a bit. First I have to talk about my new luggage with a battery in it. This is a good battery. This is the away luggage. It's nice, high quality smart suitcase, starts at $225. They have a carry on, that's what this is. The medium and the large, it's all under $300. It's a four way roller. They call the spinners, right? It's so much easier. Look under the handle. There's two USB ports, charging ports, a little ten thousand milliamp battery in here. Doesn't really add to the weight, which is nice. How many times do you see people searching for a plug at the airport? How often do you find it? If you find it, how many times are there 18 other people plugged into that same plug? Now you got your own charger right here. TSA approved combo lock. Patent pending interior compression system that really saves you space. You can get a week or two of clothes in this with a compression system and still carry it on. Any professional traveler knows the only way to fly is carry on. You do not want to check baggage of any kind. The compression system means you can over pack and fit it all in without having to sit on your luggage. There's a removable laundry bag so you can keep your dirty clothes in there. This is really nice luggage. And as with a lot of the stuff we saw on the Internet, a hundred day trial period. You can return it after any time in a hundred days and get your money back. Away has a special offer for you TWiT listeners, twenty dollars off your order. If you go to awaytravel.com/twit and use the promo code TWiT at checkout. AS I said, it's risk free for a hundred days, full refund, no questions asked. Free shipping anywhere in the continental US as well. Awaytravel.com/twit, use the promo code TWiT at checkout. It's the only bag I carry now. Nowadays phones don't get through. I also have to charge my headphones and my watch. You need a battery everywhere you go, as David will say. awaytravel.com/twit. We thank them for their support of This Week in Tech. You're lucky, has Apple done this before with a satellite event, Steven, so you don't have to go to California?
Steve: Not recently.
Leo: We just watch the Apple Stream.
Steve: I'm going to watch the stream, and they have a showcase thing somewhere in the city.
Leo: There's two reasons to go to an event, one to see your buddies, and the other to touch the stuff.
Steve; I saved myself a trip across the country this week.
Leo: David, you probably already have it. So what is it?
David: It's called Siri thought recognition. I know nothing more than you do, the rumor is its new Macs.
Leo: I'm excited because it's been over a year since we had the new Macbook Pro. Long time.
Steve: It's been a couple years since they did anything significant with the Pro.
Leo: Surprisingly, min chi quo, who is usually good at this stuff, says Apple will have a new Macbook as well. That's the thin one. They're dumping the MacBook air, which makes sense. You're not happy about that? The idea is that the MacBook replaces the air. They're going to have a new 13 inch MacBook.
David: I need my jacks. I can't get by on one jack. I need four of the power adapters. I'm not buying four more...
Leo: Yes, you are, David. How many headphone adaptors did you buy? I bought four so I wouldn't run out.
David: Apple has their air pods, no one has been allowed to review them yet because they're not out yet. But in principle they seem like a great solution. They work for your phone, they switch to your Mac. The only time your screwed is when it's the airline seat back or your car where you haven't a jack. Why doesn't Apple or somebody sell a button that snaps into any jack you could ever find and transmits to your Airpods? Is that not brilliant? Therefore you never are caught out anywhere you go. There is a business opportunity.
Leo: Griffin could do that. It's just a Bluetooth dongle. Transmitter, actually. Some people have the airpods because I've seen people review, but it's a pre-production.
Steve:These are the pre-production units right here.
Leo: Let me see. Show off.
David: You're allowed to show those?
Leo: The sound shouldn't be better. Is it better?
Steve: The sound is almost the same as the ones that come in the wires. About the same.
Leo: At that price, that seems like a premium price headphone.
Steve: I forgot what it is. 150? 160. Yeah.
David: Since we're allowed to talk about it, I've been using a pre-production pair...
Leo: You said no one had them.
David: No one has the real ones.
Leo: I don't review pre-production because you don't know what it's going to be like when it comes out. But I think this is pretty close, right?
David: By the way, I was among the ones who mocked these things when they came out.
Leo: You look like you've got something coming out of your ear.
David: You know what? I'm a convert. The whole thing about you pull it out of your ear and the music/movie stops. Yes, I'll have the sirloin, thank you. Phil Schiller said something weird at the Apple event, if you use one at a time, that's ten hours of playback charge. I realized, it's actually great to listen to just one.
Leo: Not for music, but for books or speaking on the phone.
David: YouTube videos... You're still clued into the world around you. You put them into the dental floss box and they have 24 more hours of charge.
Leo: When are these going to be out?
Steve: I bet on Thursday they'll say. My guess is there's brilliant ear pods that are on sale today or something like that.
Leo: Will the new Macbooks be on sale pretty quickly? They have to be if you're going to get them to the market. Erin, do you have air pods too? Am I the only one who doesn't have them?
Erin: I'm not a gadget reviewer. I don't write about the announcements. I'm more of a corporate narrative person. I'll talk about how this changes the future of listening. They're not sending them to me.
Leo: Steve, are you a gadget person?
Steve: I do all the reviews for AI.
Leo: I don't know. Good.
Steve: The thing that bothers me about them is volume control. On wired headphones you have that dongle you can answer the phone or adjust the volume or switch tracks. With these you can't do that. You have to use Siri for everything. So if I want to turn up the volume, I have to tap it, Siri activates, my music pauses I say raise or lower the volume, and my music resumes. Which is a terrible experience.
Erin: If you're running or your hands are occupied....
Leo: Siri is not always responsive either. How often do you get I can't connect to the network? Does that mean I'm not going to be able to turn my headphones down? What do I do on a plane?
Erin: Take one out!
Leo: I can live with that. Of course everybody said you're going to lose them.
David: I don't think you are. I think that's overblown. I've noticed that it takes me less time to get these things in and out of my laptop bag than to pull out the traditional earbud chord that I have to untangle and plug into things.
Leo: I agree with you. It should be a thing of the past.
Erin: I think the price point is good in that way. When you buy a crappy pair of sunglasses, you're inevitably going to sit on them or leave them somewhere, but if you have a nice, expensive pair you're going to bring the case along with you wherever you go and make sure you remember them and you don't put them on your head and stretch them out. People will take extra care because of how expensive they are.
Leo: How does the Microphone sound when you make phone calls?
Steve: Totally normal.
David: What's interesting is these air pods make it possible to do phone calls with the Apple watch. I'm not a fan of one, I don't own one. Right now you can make phone calls with it by holding it up to your head like an idiot, but now you can walk down the street with the Airpods communicating with the watch, communicating with the phone.
Leo: New 13 inch MacBook pro, 15 inch MacBook pro, we're going to see the arrival of Thunderbolt 3, which makes sense. The new Intel chips that support those. Min Chi Quo is saying skylight. The biggest change will be the OLED touch bar, which I like. Replacing the function key with a programmable screen, which means your applications will have custom function keys. I like that idea.
Steve: That just makes sense. Who uses the function keys? Maybe some photo shop nerds. It'll be interesting to see how that adapts and how developers make a change for what you need to do.
Leo: Quo does say don't expect the new 5K cinema display. That will be next year, new iMacs next year, and is notably silent on the MacPro. The MacPro is super annuated. It's 3 years old now. How many people own Mac Pros?
Steve: High end video editors. You have one. Normal people don't need it.
Leo: I gave mine away.
David: How do I get on your Christmas list?
Leo: I gave it to some poor guy who works for the Wall Street journal. How much money could he have? I gave it to Nathan Olivarez Giles. He said he wanted one for editing. I said mine is a doorstop. Literally holding the door open in my office. You would be doing me a favor by taking it off my hands.
Erin: You're swimming in expensive gadgets.
Leo: Yeah. But that's my job, that's what I'm supposed to do, buy and try so you don't have to. I was clear from day one that you shouldn't get the MacBook Pro. It's un upgradable. It's a perfect little snowflake. Apparently the Microsoft event the day before will be new surface hardware. Not sure exactly what.
Steve: Sia. All in one, it's their iMac competitor. The surface pro and surface book won't get a big update at all. It's going to be this all in one Windows 10 version of the iMac.
Leo: I guess you probably won't see any more Windows phones.
Steve: That's toast. They're done with it.
Leo: I like the idea of an all in one. Other Windows OEMs makes all in ones. Microsoft does not make an all in one. I like the surface book and I use it a lot, once it got the proper firmware updates. Microsoft said it was a hard computer science problem, it took months to get it working, but they did. All right. We'll be covering those events, I'll be up early west coast time, 7 A M on Wednesday to cover the Microsoft event. I think the Apple event is 10 AM pacific. Did that cheer anybody up? Feeling better now? Happier. I could bring you down. More than 90% of genuine Apple chargers and cables sold on Amazon are fake. I can bring you down in any circumstance. Apple has filed infringement cases against mobile star LLC. They're the primary maker of these counter fit products. They're using them made for iPhone Logo and everything. Apple says they're not only illegally using the trademark, but the fake chargers in this day and age have not passed safety tests and pose a risk to consumers. So you thought you were safe once you turned in your Note 7.
Erin: Did they say what the risk is?
Leo: I don't think it's going to blow the phone up. A bad charger can be a problem. WE have seen... there was an iPhone a couple years ago that caught on fire in China, and Apple said it's certainly the third party charger that was not spent.
Erin: If you're buying a charger on Amazon and it's not from Apple the store, shouldn't you assume it's counter fit?
Leo: No. Because Apple has this made for iPhone thing. And I've always said, don't buy anything that isn't MFI, but if it has the MFI label on Amazon, that should be safe. Apparently not. It's a fake MFI logo.
Steve: The Amazon basic stuff is great. They're like six bucks...
Leo: Do they sink as well? Or do they just charge?
Steve: I've always been happy with Amazon basic stuff.
Leo: I would think if it's from Amazon it would be safe.
David: Under the skin, this is the exact same conversation that we started with.
Leo: The IOT problem.
David: You can't trust anything. Things you thought were OK are not. Your email is not and never will be private, your Apple branded chargers are fakes and blow up. You're just taking away everything we used to be in.
Leo: I didn't want this to be a downer, man.
David: Doesn't somebody have a story about giving laptops to children in Africa or something?
Leo: Nobody does that anymore. We tried that. There's a new pixel phone. We'll talk about that. The Google phone is now out. Did you guys review it? Hold on a second. We'll talk about that. Google home should be coming out in week or two. Google did change, and this is from Pro publica, how they handle your web tracking information in a way that is a little worrisome, so we'll bring that up. Whole lot more still to come. I'm sorry I depressed everybody. Erin Griffith is here from Fortune.com. Steve Kovach from Business Insider, always a pleasure to have you. David Pogue he is a columnist, writer, senior editor at Yahoo for the tech section and Yahoo finance.
Leo: All of the above.
David: Something like that.
Leo: What we haven't talked about, and you'll have something to say about this, is the massive 85 billion dollar acquisition of Time Warner by AT&T.
Steve: Ruined my Saturday night.
Leo: Why do they do those things on a weekend?
Steve: They rushed the deal. It leaked out and they wanted to avoid competition.
Leo: Don't want anybody else coming along with more. They may regret that. We'll talk about that in a second. Let me talk about razors. You wrote a good article. You asked the question, Erin, is the razor business a tech business. What's interesting to me is that they're using the Internet to eliminate the middle man in businesses to sell direct. Harry's is a great example. They bought the factory in Germany that makes the best razor blades, and instead of going through a drug store and getting 100% markup, they sell them direct to you. I've been using Harry's at least a couple of years. It's for people who want a great shave experience for a fraction of the price. By the way, one of the things I love about Harry's they're always improving their product. They don't raise the price, little improvements that make a big difference The Harry's Truman set is a great deal. I'm going to give you an even better deal in a second. But you get the razor handle, the three blades, a full sized foaming gel. They've added to the blades, now they have a fifth blade in the back, they've got lubricating strips that are even better. The flexible hinge is improved. Still two dollars a blade! Harry's produces high quality razors and sells the for half the price. I want you to check them out. Harry's is so confident that you're going to love their blades, they're going to send you a free trial set, that's the razor, five blades and cartridge, and shaving gel free when you sign up for a shave plan. The shave plan means you'll always get fresh blades and fresh shaving cream shipped directly to your door every month or two months depending on your need. Because you're a fan of the show you'll get a bottle of Harry's balm shipped. This gets better and better. I love how this Harry's post-shave balm smells. It's a really nice way to smooth your skin after you shave. Go to Harry's.com/twit, claim your free trial set and your post shave balm. Love how that smells. Harrys.com/twit. It's funny that a razor company should be called Harry, because it makes you un hairy. I never thought about that. But they call it Harry's. Google has dropped the ban on personally identifiable web tracking.
Erin: This is going to be another depressing story, by the way.
Leo: It's the news! I can't change that! You know what it is? It's this election. It's bringing us all down. This whole year sucks.
David: You got two happier topics on the table. We could talk about the Pixel phone, which you know that Steve and I like...
Leo: I'm not going to mention this. Go look at Pro publica for yourself. They're just spitting in my soup.
Erin: Actually, they're related though.
David: That's true, they are related.
Erin: Google and the PII; it's a little scary, right?
Leo: So, all right. So I think that really at this point there's two phones in the world. There's the Google Pixel and there's the Apple iPhone. And anything else is going to be an also ran. Am I not right on that?
David Pogue: What about the Galaxy?
Leo: What about what?
Steve: But they explode.
Leo: No, no, no. I think Samsung has just dialed itself out of the game.
David: No, come on.
Leo: It's over.
David: No. That's like saying that you know, when Coke introduced New Coke and it was a flop, that was –
Leo: If New Coke had exploded in your hand, maybe.
David: Ok, fine. Tylenol. When people put poison in the Tylenol, that's like saying ok, there will be no more Tylenol because no one will ever buy another bottle. No. What the company does is they take extreme steps to reassure the public. They redesign. They come up with new safety things. And they carry on. I mean it goes on in every quarter of life.
Erin: You could argue that they bumbled it so hard that the extreme steps part, it's too late for that.
Leo: The difference between Tylenol and Samsung is that Tylenol was some bad guy putting poison in Tylenol. They didn't manufacture poison Tylenol. And so they took steps to make sure it was sealed. In fact all products now on the drugstore shelves have all the safety seals. And that's why. The difference here is Samsung—not only did Samsung, clearly at this point it's obvious, mis-design that phone, because even the replacement phones continued to have the problem, the thinking now I believe is that they put too much battery in the phone. And the battery was under pressure. And as a result, the lithium was plating and short circuiting. Samsung couldn't fix it. Didn't fix it with a replacement phone. So they continued to blow up. This is a—
Steve: Became a GTA mod.
Leo: This is the band GTA, Grand Theft Auto mod that turns, that gives you a Note 7 to throw and blow up people with. Samsung by the way got this pulled. They're going to get this show pulled down. They've got this—see, there it is. They got it pulled down from YouTube as a violation of Samsung's copyright. Fortunately, because we're news and we're using that for commentary, we're safe. But anyway, I think Samsung was at fault. And I also think, at first I thought they're handling this well, but I think they mishandled the recall because first of all they didn't tell the CPSC right away. They should have used a full CPSC recall which would have made it illegal to sell the phone. They didn't. They delayed that. Then when they put replacement phones way too quickly back in the marketplace, they started having problems with that. And to this day, there's a very large number of Note 7 owners who still have the phone in their pockets. Some estimate as many as a million.
Steve: So I agree with you, Leo, for a different reason though. It's not that this whole exploding issue. It's like Samsung definitely this year leapfrogged Apple in terms of hardware design and camera and some other capabilities on the hardware end. But the software is still junk compared to how streamlined iOS is. You load up the Samsung phone. You have you know, 2 or 3 different email apps and 2 or 3 different chat apps and you're not guaranteed to get all the software updates in time. And that's been this problem with Android since the beginning, right? And the Pixel just solves all that. You get the Android clean out of the box. You're guaranteed to get updates right away. The hardware is nice. Google Assistant just knocks Siri out of the water. And I think—
Leo: The timing for the Pixel's very good. And I think that's why—
Steve: Oh, it's perfect.
Leo: I think that's why Samsung might be threatened at this point.
David: But a consumer can't tell the difference between the Note 7 and the Galaxy which hasn't been exploding?
Leo: No, I think they can but don't you think—it's not, if you know, there's enough choice out there that a consumer could very reasonably say, "Yea, I'm not going to take a chance. I'm just going to get somebody else's phone. I hear pretty good things about the Pixel or the LG V20 or some other phone." And just say, "Why take a chance?"
David: Am I missing something or aren't the Google phones available only from Google?
Leo: No, they're available from Verizon.
David: They are?
Leo: Yea. And in fact I have one from Verizon. That was the only way I could get one in time. I'll be honest with you, if I handed you an iPhone 7 Plus and the new Pixel XL, same exact sized phones, and you held them both, you would say, "Well, the iPhone is clearly a better, physically a better phone." I agree with you, Steve, that in other respects the Pixel might be better. I think the camera might be better than the iPhone camera. It's a very good camera. But what it misses and I kind of missed was the 2 lens thing, the ability to take a telephoto or a somewhat more zoomed in picture.
David: I wind up using that so much.
Leo: I use that a lot. And I missed it in the Pixel. Now, where I will agree with you 100%, Google Assistant on the Pixel is remarkable. It is—
Steve: It's great.
Leo: Siri isn't even close. Cortana isn't even close. Echo isn't even close. It is Google leapfrogging the other guys. And this could end up being a real advantage. And it's not available on Samsung. In fact it's not available on any other Android phone except the Google Pixels. So this is Google's timing is perfect. I don't think Google planned it but their timing is perfect to say, "We're going to make a phone that's better than the OEM Android phones."
Steve: And I think David hinted at something though. They're not going to outsell Samsung or Apple anytime soon. It's going to be they can't reach that scale yet. They don't have the distribution. They're not in—people still go to AT&T and T-Mobile and they go to their wireless carrier to buy these things and they're just not available there except for Verizon. So it's, you know it's going to take another year or two before they can really reach that distribution point and—I mean you can't even buy it now. It's just totally out of stock.
Leo: No, doubt, yea.
Erin: But why do you think that they are even making this to begin with? They've gone along for so long just having Android and being fine with other people making phones on their platform. Why do you think they decided now that they need to own the entire phone?
Leo: I have a theory on that. But I'd love to hear what other people say before I talk.
Steve: I hope I don't blow up your theory or something. My theory is, this is—and I've talked to people about this there. This is the way they can see, the only way the see to push Android forward. They're really into this whole assistant thing.
Erin: Because of fragmentation problem.
Steve: Because of the fragmentation problem.
Leo: Security issues.
Steve: They were actually upset—security issues like the Stage Fright thing last year. And they're upset that you know, there was that list being floated around of their OEM partners saying, "Here are the worst offenders who can't update their devices on time." And this is how they feel like they can help solve that problem. I'm skeptical whether or not it will work that way. The result is you get an awesome phone, but what, you know, fix the major damage that's happened to the Android ecosystem over the last 7 years or so? Probably not or at least not anytime soon.
Leo: What it really does is emphasize the 2 tier aspect of Android. Most Android phones, more than half are cheap phones sold around the world. I mean really cheap phones from BLU and—you know, just—I mean we think of the ZTE or the Honor 8 from Huawei as cheap phones. Not a $400 phone, I'm talking a $100 dollar, $50 dollar, a zero dollar phone. That's most Android by far. Then there's the second tier which is high end, higher end and high end Android. I agree with you, Steve, that in the short term that's Google's goal to try to make Android a cleaner, better platform. But I think in the long run it doesn't really have much to do with Android. My theory is that really this is a new Google. This is a whole new way of looking at things and Sundar Picai really hinted at this at the event when he talked about Google Assistant everywhere. Really the product here is not the phone or the Home or the hub or the routers. The product is Google Assistant everywhere. And I think that's really where they see the big growth being and where they have a huge advantage, right, is the Assistant.
Steve: And they don't know how to make money on Assistant yet. There's—what do ads look like on Google Assistant? What do voice ads look like? What do you get?
Leo: Oh I think there's affiliate fees. How do they make money on Chrome?
Erin: The Assistant isn't just the Assistant itself. It lives in all these other things including like the Home or their really bad chat app that they rolled out and everybody hates.
Leo: Allo! They've got to fix that. Yea, yea.
Erin: But they're going to build a better version of it. Like they want an Assistant to be eavesdropping on all your conversations and saying, "No, buy this." And then we'll get a little bit of a kickback when you do buy it.
Leo: I agree. I think that's the, how they make—the monetization strategy is not advertising.
David: Last year I stopped off and visited the Siri guys who left Apple and they have now started a 2nd generation voice assistant Viv.
Leo: Which they sold to Samsung.
David: Samsung? Did they?
David: They did? Oh, that's a shame.
Leo: (Laughing). I wanted to say that before you finished the thought. They were at SRI. That's where the name Siri comes from.
David: It's actually not easy to fake that but Siri, the guy—
Leo: They got it wrong.
David: Who headed it is Danish and Siri is—is it Danish I think. And Siri is the Danish god of vengeance and forcefulness or something. You can Wikipedia it.
Leo: But it did come out of SRI. I'm not mistaken about that.
David: It did. So I always thought that too. I thought it was Siri. But anyway the point is it links together multiple requests into one. So I need to buy flowers on my way home from Bob's house. Or I need a flight on Thursday, extra leg room leaving after 8:30 and then a 3-leg—I mean you can make these long requests, you know? I need to stop and pick up a bottle of wine around $20 bucks on my way home from work as I go to my dinner party. And it will know about your calendar. It will know about your work. It will know about your wine tastes. It will put all that together. And the way that they're going to make money is because where you haven't specified, you know, I need a flight Thursday, blah, blah, blah, then the airline or the florist or the wine store will have paid a premium to be the one they recommend.
Leo: Exactly. I mean they make money on Chrome because they make money when you use Chrome Search.
Erin: And that's what Facebook M's supposed to do. You don't have to own the phone in order to even do that.
Leo: Right. No but I don't think they care so much about the—I think ultimately, I think you're right. They need to clean up Android. I think that might be a lost cause because they're never going to, the chain phones are not going to be cleaned up. So that means more than half the Android phones out there will always be security flaws.
Steve: And they tried that with the Android One thing and that's going nowhere.
Leo: Right. I think what they're, I think the long range thing is more like—and I think they also realize that ads are not the future either. Google needs a 2nd act. And—
Steve: That's what Alphabet's for.
Leo: Yea. With a lot of moon shots. You're the queen of Moonshots or boom shots, Erin.
Erin: Oh, God. Yea I had a fun reaction form them about that article (laughing).
Leo: What—ok, so tell us. What happened?
Erin: Well I wrote that—and I'm not the only one who has written this. A number of people have kind of written different versions of this but the fact that Google is, some of their Moonshots are kind of falling back down to Earth and they're putting a lot of pressure on them to actually make money and it's causing everybody to sort of question the whole entire thesis behind the Moonshots. But they assured me that they are very much still moon shotting and that they're not 2nd guessing their crazy innovation factor. It is full throttle innovation, just maybe a little bit smarter and less—they're not burning money. But Ruth Porat is not shutting the whole thing down as a lot of people have speculated.
Leo: Interesting. Yea, she's the new CFO and rumored to be a real penny pincher.
Erin: Right and there's been some big departures. Some people in the self-driving car program have left including the guy who was running it. There's been kind of—
Steve: Project Wing left.
Erin: Who's that?
Steve: The guy from Project Wing left, too.
Erin: Right, yea. And so a couple of sort of high profile- I mean and actually if you look back, I was looking at this recently. There was a Bloomberg, a big profile on Bloomberg maybe like 2 years ago, kind of introducing the Moonshot Factory and talking about all the crazy things and like there are maybe 12 execs that were interviewed. It was kind of introducing all of these people that are really in charge of it. And I think I counted over half of them have since left and these were the people that were rolling out to show off how exciting it was. And that was only a few years ago. So I get that there's a lot of—it's easy to get frustrated and leave if your thing isn't working out exactly how it is in a really strange corporate environment like that but it did seem like a lot, a lot of them have left.
Leo: Google's got some challenges. Alphabet's got some challenges. It's not easy to find a 2nd act. That's historically very difficult to do.
Erin: I mean and if you're under pressure to have this big, new money making engine, self-driving cars as your best bet. They've been working on that for 6 or 8 years and exciting as it is and there's so much hype around it, that's still so far out from being a money making endeavor. I think that they're just trying to tamp down the hype because they realize it got way ahead of the reality and shareholders shouldn't be expecting to see a revenue line from self-driving cars for at least a few more years.
Leo: Well I always felt like, and a lot of the early Moonshots felt like Sergay's hobbies. Like stuff he was interested in. Not because they wanted to make money on it. We're making plenty of money. This is stuff we can spend it on.
Leo: And nowadays that's not, it's a different climate at Google.
Erin: Right and now they're like, "Oh, it's really expensive. Project Fiber is extremely expensive."
Leo: Yea they killed Fiber. Killed or slowed down or halted Fiber.
Erin: Pulled back. Yea. Yea.
Leo: Look at Apple. Another rumor now strong and I think it's probably accurate that the unannounced Apple Car project is now—the former unannounced Apple Car project, as many are starting to leave, some lay-offs are happening. The first crack was oh, Apple said, and this was a couple of months ago. Again, these are all rumors. Apple's never said anything about an autonomous vehicle.
Erin: But in a way isn't that so much smarter than doing the big cover story? I mean as a journalist you want the cover story but like, having never acknowledge that it exists when you here the rumors about it falling apart, at least you didn't hype it up and then it is that much worse when it falls apart.
Leo: Right. But it's not so different because Apple, it doesn't matter if Apple says anything. It gets hyped up by all the Apple press that wants Project Titan to be, they've hired a thousand people. There's clanking sounds coming out of a building in Sunnyvale. It's—I mean, Apple's kind of—there's nothing they can do to not get it hyped up. Anyway, I always wondered what kind of business that was going to be for Apple, whether that really was—Apple's looking for another, I can't call it the 2nd act. Apple's had about 8 acts. But whatever its next act anyway.
David: But I have to say, we're touching on something that's been bugging me lately and it's this Apple rumor story. The press loves a rumor because that's a story. And then when it turns out not to be true, that's a story. Like what? You made it up in the first place.
Leo: We've got to fill pages.
David: You can't get more mileage out of a story because it didn't turn out to be true. That doesn't work. And like on the car thing, I mean yes, they fired or lost 500 out of a thousand-people working on it. But what you don't understand is that Apple, like Microsoft, Samsung, Google, Amazon, all of them, is always working on new projects that they haven't announced. Always.
Leo: Oh, that's true.
David: We know that the iPad was actually supposed to be the first product before the iPhone. But it took a longer time to percolate and get out there. So, all these companies are always working on all kinds of experimental projects. You don't know which one's going to become real until you work on it and see if it's viable. So the twisting of the story into you know, "Oh, Apple's failing now." It doesn't quite hold water.
Leo: Yea, but it's fun.
Erin: I get the experimenting thing but a thousand people? That's a huge investment that—I mean why don't shareholders know about that?
Leo: They wanted to keep it quiet.
Steve: They clearly thought that—they wanted to keep it quiet but they clearly thought there was an opportunity there, a massive opportunity. They're investing billions in this thing. Their R&D spending has just been increasing you know, several times orders of magnitude over the last couple of years and a lot of people think, you know, the car was sucking up a lot of that spending. So I mean it is significant. It is, even though it turned out to, you know, kind of fail or is failing, investors should care about that and people will care about that even if it never happens.
Erin: Yea. Although I do agree with you the certain hype cycle, the build them up then break them down thing is dangerous. But they're public companies so that's what they signed up for.
David: You know what, Steve? I buy what you just said. I would say you're right. This qualifies as more than a casual feeler that they sent out. So I would like to remove from the record my last comment.
Leo: (Laughing) Will the reporter strike that from the record and we'd like to ask the audience to forget that they ever heard David say that. That will work. That will work. I do want to talk about autonomous vehicles because Tesla made a very big announcement this week which pissed me off because they instantly obsoleted by 2-month-old Tesla. Thanks, Tesla.
Steve: It's a doorstop. I'll take your Tesla.
Leo: Yea, you might as well. What am I going to do with it (laughing)? Tesla makes a poor doorstop. I can tell you that right now. But let's take a break. We're having fun. Erin Griffith is here from Fortune. She makes things go boom at Fortune. Com, @eringriffith on the Twitter. Steven Kovach, he's here from Business Insider. I'm sorry. Yea, Business Insider. He's a correspondent there. @stevekovach and of course David Pogue, Tech Columnist at Yahoo Finance. And also author of a great new book series on how to live life better. You will finally understand how to fold sheets with corners or something. Lots of tips in there. You just did a new one, right?
David: Yea, there's one coming out in 3 weeks called Pogue's Basics Money.
David: Which is my favorite one yet.
Leo: That's the one I need.
Leo: Because I do know how to fold sheets with, fitted sheets. But money, got no idea. Got no idea. The Pogue's Basics series, Essential Tips and Shortcuts that No One Bothers to Tell You. There's a concept in Japanese culture of a pillow book. The book you put on the pillow of your child to tell them everything they need to know. It's generally about sex but it can be about other things as well. This is a pillow book for the 21st century.
Leo: I like it. I love this new angle for you.
David: Yea, I'm excited about the money one. You dig a little deeper into society—I mean everybody knows a couple of money saving tips. You know, buy your Europe ticket 52 days in advance or whatever. But when you scratch the service of everything, you know, restaurants and housing and travel and clothing and electronics, everything, we are leaving money on the table everywhere we go. I just kind of like carved out the savings and earnings tricks are in every corner of life.
Leo: I can give you one. Don't buy a Mac Pro and use it as a doorstop and then give it some guy. There's a tip right there. That's a good tip. That's a great tip. So we'll look for Pogue's Basics Money, the third in the series right?
David: That's right.
Leo: You have tech and life and now money.
David: That's right.
Leo: I got a tip for you. Here's a way to stop going to the post office. This is actually a really good tech tip that saves you money too. It's Stamps.com. If your business sends mail, US Mail, whether it's, maybe you sell on Amazon or Etsy or eBay or maybe you send out invoices or brochures, Stamps.com is a must. It really makes it a professional fulfillment operation and you can do everything you need to do from your desk. You never need to go to the post office again. Starts of course by buying and printing real US postage whenever you need it from your computer and your printer. You don't need any special ink. You don't need a postage meter. I see people, to this day, line up at the post office to recharge their postage meter. And I want to say, "What are you? Do you have a steam powered Stanley Steamer out front or are you still using horses?" It's like, folks, you can print postage from your computer and printer. You don't need a postage meter. You don't need to pay all that money on the ink. And with Stamps.com it's a lot more of course, because not only-- they give you an USB scale so your postage is always correct. You never have to put a little extra on to make sure it's not postage due or you know, I've seen people do this, lick 5 extra stamps. Don't put stamps on at all. You can print right on the envelope or on plain paper or you can print a label that has your company logo on it. The return address is automatically filled in. The address of your recipient, you can take it right from the page on Amazon or eBay or Etsy or wherever you sell. Or your address book. It works with all the major address books. It tells you exactly what you need for postage. It will even suggest the right class of mail, including certified mail. And assure you of the cost rates so you to pick the one that's right. You can—and by the way, you just, when you're doing a mailing you stack it up, put it by your desk, push a button on the website, the mailman comes to you and picks it up. You don't have to go to the post office to drop it off. By the way, I don't know if you know this, but since 9-11, the post office has had a regulation that if something weighs more than 16 ounces, you're supposed to bring it to the post office so they can give you the stink eye and look you over. Not with Stamps.com. Any size package they'll come and get it. And we've got a really nice trial offer for you. If you go to Stamps.com and you click that microphone in the upper right hand corner that says, "You've heard of us on the radio or podcast." And use our offer code TWIT. This is like pretty amazing. It's $110-dollar bonus offer. You get of course a 4-week trial of Stamps.com but you also get $55-dollars in postage coupons you can use over the first few months. You get that digital scale worth $50bucks. You do pay shipping and handling on it. That's about $5 bucks but they give you a $5-dollar you know, kit of like stuff you need with it. And the supplies kit is what you call it. And all of that is yours right now if you go to Stamps.com, click the microphone and use the offer code TWIT. $110-dollar value. That's good. $55-dollars in free postage! You know when to do it? Do it now so you don't have to get in line at the post office while everybody's mailing their Christmas packages. Oh, you hate that time of year. The amateurs come out. If you're a professional, if you mail for a living, you do mailing in your business, you've got to have it. Stamps.com.
Leo: Fun week this week. We had a lot of fun. Lot of great shows and what we've done in case you've missed any of it, we've created this small, compact mini-movie that we are now going to send through the internet to you so you can see what you missed. Watch.
Narrator: Previously on TWiT:
Bryan Clark: There's something I wanted to clear up real quick. There's a thing in business that you release bad news late in the day on Friday. Well every time I've been on the show, it's always been on a Friday. Are you trying to tell me something here?
Jason Howell: No, actually. I think, yea, actually.
Narrator: This Week in Law.
Denise Howell: Forbes managed to find record of a search warrant having been issued. The warrant included the fingerprints of the owners of the various devices that were found on the premisis.
Lisa Borodkin: Suppose there was a conviction of somebody based solely on evidence the government was able to obtain under this questionable, novel warrant. Pretty serious threat to the privilege against self-incrimination under the 5th Amendment as well as it opens a Pandora's Box of concerns.
Narrator: iOS Today.
Megan Morrone: Last week I promised I would make a dongle holder.
Leo: So these are headphones that you're not going to use.
Megan: Right. And then you're going to need Sugru. Isn't it beautiful? It looks like it was designed by Apple.
Leo: I would guess this is what Chernobyl smells like now.
Megan: You should do advertising for Sugru.
Megan: That's what Chernobyl smells like.
Leo: And we've got a very big week ahead. Very busy week ahead! Megan Morrone, what's coming up?
Megan: Thanks, Leo. Here are some of the stories we're looking forward to in the coming week. Over the next few days there will be so many events. On Wednesday, October 26th, Microsoft will hold a Windows 10 hardware and software event where we're likely to hear some Surface news. Their enigmatic invite tagline simply reads, "Imagine what you'll do." Then on Thursday, it's Apple's turn so finally update some Macs. Hello again said our invitations that must have gotten lost in the mail again. Will we see new Mac Books Pros with OLED touch screens in place of function keys? Let's hope so. In other Apple news this week, the Nike + branded Apple Watch comes out with that perforated band that I still can't decide if it's super cool or hideously gaudy. The watch itself is essentially the same as the Series 2 Apple Watch, just with a few software and Nike branded swoosh tweaks. Apple's wireless Airpods also in the cool or gaudy camp are set to come out in late October so we might start seeing those this week as well. I know you ordered some, Leo, and I can't wait to see just how fast you lose them. Also this week is the PepCom Holiday Spectacular which is a little bit like CES but before the holidays and featuring stuff you might actually want to buy. We'll be there streaming all that good stuff live. Jason Howell and I will 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, Megan. TNT, Monday through Friday, 4:00 PM Pacific, 7:00 PM Eastern time, 2300 UTC right here at TWiT.tv. I know what Bill Belichick will do with his Surface (laughing). 5 minute rant and he threw it. Fortunately, the NFL covers those Surface Pros in a fine rubber carrier so it's probably intact. And then of course the NFL brought up a bunch of other coaches like Andy Reed who said, "No, no, we like our Surface Pros." How long is this Microsoft deal with the NFL for the Surface? Must be a—
Steve: I don't know. We're in year 3 aren't we?
Leo: Yea. And they must have spent hundreds of millions of dollars for this.
Leo: Does it hurt Microsoft that Bill Belichick doesn't like it? By the way—
Erin: Is this a Microsoft specific problem? I mean wouldn't he be having the same problem if it were an iPad or whatever?
Leo: He ended up using a binder and as Paul Thurrott, our Windows Weekly host said, "You understand the binder has images taken with a digital camera and printed out field side with a printer and put in the binder. So it's not exactly you know, a low tech solution at this point." I don't know. I don't think anybody looks at Bill Belichick and says, "Well if he doesn't like it I'm certainly not buying one."
David: And for those of you, for those of us who missed the story, what was he unhappy about? Why did he throw his Surface?
Leo: So actually the problem is larger than the Surface. As you know, the NFL has a deal with Microsoft. They replaced any other tablets they might have been using with Surface Pro Tablets. I don't think even for a long time, they were using the older Surface Tablets. I don't know if they even got to the Surface Pro 4. It was a $400-hundred-million-dollar deal in 2014. And part of the problem was the broadcasters kept calling them iPads. Took them a while to get over that. And in the press conference this week, after the Patriots game on Sunday, he went on for 5 minutes saying how horrible these tablets were. But the problem it turns out is that the tablets are owned not by the Patriots or any other team, but by the NFL itself. The Patriots IT guy had to integrate in all of these NFL owned wireless technologies like the headsets. You know they get paid for that, too. They were Motorola for a long time. I don't know if it's Bose now or what they use. The networks for the tablets. The networks for the press. All of this has to be integrated into the Patriots IT. In fact Belichick said the Patriots IT guy did a great job of handling it but he had no power to diagnose or fix problems with the league provided equipment. And so Belichick said, "I'm not using these anymore. They never work." And if you think about it, and this has happened in a couple of games, you're in a tight situation and suddenly this tablet stops working. And you're supposed to send the play out. That can be a problem. So he's going to use binders of plays.
Erin: And drawings.
Leo: And drawings on old fashioned paper. By the way we should mention, Belichick has also complained that he can't set the clock in his Toyota. So I don't think it hurts Microsoft that much. Although it does make you want to—if you're going to do product placement, you want to probably do it somewhere where you can really control how it's being used, right?
Steve: Where coaches and players aren't throwing them down in frustration.
Leo: Yea, exactly. Microsoft did make a big announcement. I thought this was interesting. I don't know if it's—you know, Microsoft's sitting here with Cortana. They're watching Google and the amazing Google Assistant. They're watching Siri. They want to make sure you understand that they are doing their best. In a paper published on Monday, a team of researchers at Microsoft's Artificial Intelligence and Research said that for the first time ever, their speech recognition system makes the same or fewer errors than professional transcriptionists, than humans. They reported of a word error rate of 5.9%. That's down almost half a percent from last month. And that's about equal to that of people who are asked to transcribe the same conversation, the lowest ever recorded. David, I know you always have used Dragon Naturally Speaking and stuff like that. This is—have you tried the Pixel and the Google Assistant speech recognition? It seems to be remarkably good.
David: Yea, no I haven't. But I can tell you that every year I review Dragon Naturally Speaking, which is the only remaining Windows speech recognition system that you can buy separately and every year I do the same thing. I take a random book off the shelf. I read a thousand words. And I count how many mistakes it made. And I can tell you though if it made 5.9% errors, that's 6 words out of a hundred that got wrong, I'd throw it out the window. That is not accurate. Dragon version whatever they're up to now, 12, gets usually 1 word wrong out of a thousand, maybe 2 words wrong. Yea, nowhere near 6%. So I don't quite understand.
Leo: Well they're using this task that's an industry standard called Switchboard. So maybe that's a challenging task. I don't know. Maybe there's noise in the background. I don't really know the methodology for this. But I agree with you. 6% would be bad. Because, in fact I always said that. Dragon Naturally Speaking's really good but if it makes 4 mistakes out of a hundred words, that's 4 words you have to fix.
David: That's right.
Leo: And it's a pain in the butt. But it sounds like it's gotten really quite good. One in a thousand's great.
David: Oh, it's like Star Trek at this point.
David: I mean most people don't use it unless they're somehow disabled and need to use it. And lawyers and doctors I guess but in general I think most people who are only amateurly just use what's built into the Mac or Windows which is—they're not knowing what the state of the art really is.
Leo: I use—well, it's interesting. Because I use dictation all the time on my phone. I dictate text messages. Because I have big sausage fingers. And I'm not accurate, especially the Apple keyboard. I'm terrible on it. But dictating is great. I dictate emails. And I am very impressed with improvements Google's made with the Google Assistant. It is remarkable. Even in noisy environments it really does a good job. Echo's pretty good too, right? You can talk across the room to Amazon's Echo and it usually kind of understands.
David: Yea. Echo's got—Echo's designed for distance listening so it has 7 microphones in an array that measures the angle and the distance. I find that unbelievable what Amazon did.
Leo: Very amazing. So, Elon Musk, he put off the announcement. It was going to be on Monday. He had it on Wednesday evening and said, "From this moment forward, all Teslas that we make, Model Ss, Model Xs, will have built in, the hardware to do true autonomous driving." He says, "The software's not there yet. But as we improve the software we hope to get it by the end of next year to the point where it's twice as good as a human driver." You're twice as safe in a Tesla. What do you think? Is anybody going to let people drive, you know, let the Tesla drive? You have to pretend that you're driving like—
Erin: He really doesn't care what the people think (laughing).
Leo: I guess not.
Erin: The reaction to the autopilot fatality that he had was so callus, just like, "It wasn't our fault. We don't know. They weren't using it properly. We told him not to do that. And they did it anyways. So it's not our fault." And this is just another example of that. He's announcing this thing. Who knows how it's exactly going to work or when it will really be rolled out and available. And he doesn't really care at all that people are completely freaked out by this technology.
Leo: I have a Tesla and I use the autopilot all the time. But I don't think of it as self-driving. I think of it as driver assist.
Erin: Even though it's called autopilot.
Leo: Yea, it's misnamed. And in fact in some countries you can't, I think it was Germany that said, "We don't want them to use that name because that implies that it's self-driving." It's not. It's assist. But this is what he's implying now. This is on the order form for a new Tesla. Full self-driving capability doubles the number of active cameras from 4 to 8, enabling full self-driving in almost all circumstances at what we believe will be a probability of safety at least twice as good as the average human driver. Furthermore, the car will come to you. For instance, they give an example of you get to work. All you need to do is tell—get in, tell the car where to go. If you don't say anything by the way, the car looks at your calendar and takes you there as the assumed destination or if you don't have any appointments it will just take you home. So you get in the car and it just goes. It will figure out the optimal route, navigate urban streets even without lane markings, manage complex intersections with traffic lights, stop signs and round-a-bouts, handle densely packed freeways with cars moving at high speed, and this is my favorite part, you get to your destination, you simply step out at the entrance. Your car will enter park seek mode and go look for a parking spot and park itself.
Steve: Pretty cool.
Leo: I'd like that.
Steve: It's not going to happen anytime soon.
Erin: But in reality—
Leo: It will be illegal for a—I mean I guarantee you for at least the next few years, if a cop sees your car driving itself down the street, it's going to, you're going to have a problem. I don't know how he pulls it over (laughing).
David: I mean clearly there are billions and billions of dollars and great minds on this problem, right?
David: It's clear it's coming. And what blows my mind is not the concept of self-driving cars, it's when you combine that with Uber. I mean if you fast forward 50 years, think of all the things that were designed to protect us that will go away. Speed limits, driver's license, driver's ed.
Leo: I'm ready. I want to get in the car and do all this. I would do it today.
David: Garages. I mean you'll always be dropped off right at the entrance. There will be no more need for parking.
Leo: Oh, by the way, Elon's also thought of that. He says, "Please note that using a self-driving Tesla for car sharing and ride hailing for friends and family is fine. But doing so for revenue purposes will only be permissible on the Tesla Network. Details of which will forthcoming."
Erin: He's taking the exact opposite tact. Like basically every other self-driving car company be it GM partnering with Lyft and acquiring Cruise Automation or Google and Uber also, they're plan to get this into the market is to do robot taxis. And he's basically saying Tesla is doing the exact opposite of that.
Leo: You cannot be a robot taxi. Yea. And if you do, it will be through our auspices. There's also—
Erin: But I think that's smart. I mean just—sorry to belabor this, but I think it's smart to go with the robot taxi thing because at least you can then control it versus like you own these cars and you're in charge of keeping them up and making sure everything works properly and everybody's happy instead of just giving it to people and saying, "Follow our rules and if you don't it's your fault and uh, we hope people don't die."
Leo: (Laughing). And it's not just regulatory. It's not just police. It's not just—it's also insurance companies. I know my insurance company was nervous when we said we were getting a Tesla. They literally, they asked me, the agent said, "Are you going to use auto pilot?" This was right after the accident. And I said, "Well, yea."
Erin: That's one great example of why Elon Musk's approach to this versus the auto industry's approach is wrong. He's like, "We'll build the technology and figure out the rest later. We don't have to care about—"
Leo: Oh, but I love him for that though.
Erin: I mean it's cool and it's exciting to watch but I think that the auto industry had been doing this for a lot longer and at a lot bigger scale and they realize the way to make it work long term is to—baby steps.
Leo: I will never bet against Elon. I know what you're saying but boy, he's shot the moon several times now.
David: I wonder, how to you explain that? Is he, is he like Steve Jobs? Is he a technical genius? Is he a visionary genius? Is it just that he's gotten lucky over and over? I mean you're right. Every time he does something big, people say it can't be done. You can't start a new American car company. You can't start your own private rocket company. You know everyone keeps saying that and he keeps doing it. So how do you guys account for that?
Leo: That's fascinating, isn't it?
Erin: I think bluster really helps.
Leo: Bluster. No, this is bluster backed by doing it though. I mean he's actually done it.
Erin: Sure but I mean if you look at the scale of Tesla compared to the other Big 3 auto players and how many cars they're making, there's a huge difference. It's amazing what he's done so far but I don't necessarily see like Tesla auto pilot or Tesla self-driving cars changing the world at this point on scale that—
Leo: Aren't you rooting for him though?
Erin: Yes. But I'm also kind of tired of the like big announcements like in 2019 we're going to have somebody on Mars and like come 2019 no one's going to remember this announcement. They're only going to remember how cool he was.
Leo: I agree. But you need some PT Barnum to do what he's done. I mean but you have to have both. It has to be backed by reality and success but you also have—there's, you've got to be a salesman, a showman.
Erin: Sure, that's a big part of it. But Tesla's also been late to deliver every single car that it has announced. And so I mean, there's just a little bit of a gulf between the reality and the announcements which is whenever there's a new big announcement I'm kind of like, cool. I'll see you when it happens.
Leo: Well they are putting this hardware in. Now the issue is of course getting the software working and then you know, one thing about a Tesla, you get updates every few weeks. I meant they're always updating it, tweaking it. I don't know.
David: You have a Model S, Leo?
David: Oh, you have an X. You have that one?
Leo: The one with the doors that go like that.
David: Wow. Is it cool?
Leo: Yea, I love it. But I drank the Kool-Aid. That's the problem. So what really happens is you get hard headed people like Erin who are really absolutely right but then you're fighting against someone like me who has drunk the Kool-Aid and I know you're right logically but I want him to succeed. His goal is nothing less than to eliminate our dependence on fossil fuels.
Erin: Oh I get that. I think that's great too but I don't think—
Leo: It's more than great. It's a plan to save the planet.
Erin: He's not going to single handedly do it, though. He's doing it by—he's almost like how Bernie Sanders pulled Hillary to the left. Like his innovations have helped the auto industry realize that they need to get on this stuff too. So it's—
Leo: Well, whatever it takes.
Erin: It's awesome but I don't buy into every single big announcement that he has.
Leo: Yea, no I agree with you.
David: I did put down my thousand dollars for a Tesla 3.
Leo: Yea, you should. You would love a Tesla. It's really fun to drive. My review is on—finally I did a review of it for The New Screen Savers yesterday. I've had it for a few months.
David: Yea, I can't wait for 2021.
Steve: If you're lucky.
Erin: Going to Mars? Is that—
Leo: He says we're all moving there. Oh you get your Tesla in 2021. It's actually a toss-up whether you'll go to Mars or get the Tesla 3 first.
David: I think my number is 400,037.
Leo: That's why I—by the way, I didn't because you know—by the way, when you buy a Tesla, part of what you're doing, and the reason he's got me, is you are spending a ridiculous amount of money to support his vision. You don't have to get a Tesla. I could have gotten a Chevy Volt. You get a Tesla, kind of as a—it's a donation to the cause.
Erin: To a very rich man.
Leo: Yea, I know.
Erin: To a very overpriced stock.
Leo: I know. I know. But if he—if it succeeds, we'll talk. If it succeeds in 10 years.
Erin: I'm not rooting against him. I'm not saying—
Leo: I'm rooting for him. I'm putting my money where my mouth is.
Erin: I'm a neutral party.
Leo: No, you're a good journalist. You're absolutely right. No, you're absolutely right. I can't even argue with you. And I have to admit, I just bought a Tesla that doesn't have 8 cameras and 12 ultrasound, mine will never be level 4 autonomous.
Erin: You should hook up with George Hotz or one of those people that's like, retrofitting cars.
Leo: There you go. I might have to do that. I might. But who are you going to trust, really? Are you going to trust George Hotz and let him drive you?
Erin: Oh, Hotz, yes. Sorry.
Leo: Are you doing to let him drive you? I don't know. Is Elon doing an AMA right now? I think he is. Yea. But it's an AMA, ask me anything about becoming a space faring civ. Oh, it just ended. So he's doing, he did an AMA today. It's over now. On how to go to Mars with him, how to become a space farer. Wow.
Erin: 100% of that first trip is going to be people from Reddit.
Leo: You know I can't say that's a bad thing.
Erin: He has a very loyal following on Reddit.
Leo: That wouldn't be a bad thing.
Erin: I know. I find every time I write about him.
Leo: Can we send some Twitter trolls along with him for the ride?
Steve: Only Twitter eggs are allowed on the Mars trip.
Leo: You have to be a blue egg or you can't. What do you think of the story, the reason Mark Benioff walked away, why Salesforce walked away from Twitter is the same reason that Disney walked away from Twitter. The trolls.
Steve: That's part of it.
Leo: It's not just the trolls.
Steve: It's not like it's just that but I think that's part of it.
Erin: Benioff wanted to be the hero. He wanted to save this company and also you know, have a big social company after Microsoft bought LinkedIn. But I think it was not his decision. It was pressure on him, like you don't want to own this cesspit of awfulness that can't be fixed. And it's losing tons of money and it's not—
Leo: And no one has any idea what to do with it. And it's unmanageable, etcetera, etcetera. And yet, as much as I hate it, it's also clearly, it's hugely, amazing, important thing. Right? Or no?
Steve: Yea, it's important. It's a news product. My boss actually had a really good tweet sized analysis of this whole thing and that's it's so essential to news. I mean it's where news breaks first. It's built the political career of Donald Trump for good or bad, mostly bad. But it's—
Leo: Well it depends how you feel about him, right? But it's clear that—it's almost clear that without Twitter there would be no Trump.
Steve: Right, but it's a different kind of product. It's not people are—it's always been valued as like let's say a Facebook competitor or a traditional social network where it's clear it's just evolved into something totally different and it should be valued and operated as such. And it's not. I mean they're making some moves with this live broadcasting thing and that's kind of interesting experiment I guess. But it's, I mean, I think it's time for them if they can't sell themselves to really ask some serious questions about what kind of product they are and how people use it. And I mean the core of it is—there is a social aspect to it of course but it's a news product. It's a media property.
Leo: David, you must, you were early on Twitter, right? You used Twitter really early on? Has how you used it changed or your opinion of it changed over the years?
David: Yea, although my use of it is very strange because I, you know, I'm sort of on the stage. It's sort of like I'm a public figure.
Leo: We use it as broadcasters. Yea, we broadcast.
David: Yea, exactly. But I have to say, every time I hear a headline like that one, I mean it is a cesspool and the internet has become a cesspool. But that problem I feel like is fixable. Like we've seen examples where companies have fixed the awfulness of the internet. Like when Amazon started requiring real names for product reviews. Bam. Like 80% of the awfulness went away. And like I don't know if you guys have hung out on Slashdot—
Leo: Love Slashdot. Yea.
David: They have the most effective, simple, brilliant system. Basically every time someone comments, everybody else gives it a thumbs up or a thumbs down. And then you, the Slashdot visitor have a slider. How much of the garbage do you want to screen out of your feed? It's brilliant. So show me only the top 20% of things that people have rated to be meaningful discussion and all the garbage—you know, not cycling anyone's free speech. You're just giving me the ability to say, "I don't want to see it below level 3."
David: And all that stuff gets hidden from me. And I don't know why—like Twitter doesn't even have a thumbs up or a thumbs down. I couldn't screen my stuff if I wanted to.
Erin: And part of the problem is that Twitter has just, had such an execution problem from the very beginning. Like if you look at this bullying problem that they had where you know, Leslie Jones is being targeted and she decided to quit and Twitter's like, "Oh, boy, we're going to work on this and try to figure out how to filter out all these bullies." The next day after that happened, Instagram rolled out the ability to filter out your comments based on certain emojis for Taylor Swift because she was being targeted. Like they can just build this overnight. Whereas Twitter will be like, "Oh, let us think about it. I don't know." And they're very slow to even build solutions or test them. And that has been their problem for a very long time. Basically since they went public they've had you know, how many different heads of product, how many different people in leadership, COO, CEO changes? And so it's kind of a matter of execution.
David: Yea, I totally agree. Like from a—like security problems we were talking about earlier, there's no silver bullet. There's no obvious way to solve that. This one I feel like there is. We have a minority of people as Leo was saying who are idiots and jerks that have problems who are making life miserable for everybody else. But the everybody else sees that and should be able to rate and help screen them.
Leo: A reputation system seems like the best way to do it.
David: Yea. We have—
Leo: But remember, after Slashdot there was Digg. And Digg had a reputation system and the first thing that happened is that people gamed it like crazy. And in fact that kind of really put Digg out of business was how much gaming was going on with the reputations.
Erin: I actually think that the whole idea of these like self-policing communities is really, was this beautiful, lovely thing that we thought about at the beginning of the internet and we found out that like in fact the internet is different because we're alienated from people because there's a screen separating us from others. And people who would be normally enforcing those norms of like, no, don't be a jerk, just don't care because they would rather be in the real world or they don't want to spend the time doing the policing and really investing in making the community great. And so that's how we have people who care the most who are the angry, crazy trolls that are the loudest and able to gain the most momentum and make the biggest impact on networks like Twitter.
David: But there are hundreds of thousands of times more normal people than the angry, crazy trolls. That's what I can't understand. If there were a low friction button that you could click like, that's garbage. That's garbage. And if hundreds of thousands of people did it, even if only 3% of us did it, it would screen those people out.
Erin: Perhaps. I'm a little bit skeptical just because I feel like there's still a lot of nastiness on Facebook. It's just doesn't get the same momentum.
Leo: Yea, it's a lot better though.
Erin: People are nasty with their real names.
Leo: Yea. Yea, I think though, David, if the price keeps going down on Twitter, the stock price, you and I can buy it and we'll fix it.
Leo: It will cost a buck fifty. We'll take it over. It will be easy.
Erin: I would support that deal.
Leo: It would put a—
Erin: I almost want to see Twitter survive because that's where we get like our ecoboost from.
Leo: Well when somebody dies, where's the first place you go to find out if it's true? When you hear, oh, did David Bowie die? Where's the first place you go? I always go to Twitter. That is the place. You can turn on CNN. It's not going to have it for 20 minutes. But if you go two Twitter you will know if it's true or not.
Steve: And that goes back to what I said earlier about it being a news product more than--- that's its real value it's just so-- instant information. If something happens somewhere, someone there is tweeting about it. And you know I really don't think they're looking at that hard enough in the way they structure their company and the way they value the company.
Leo: They've got to figure it out. They've got to figure it out. $85-billion-dollars. That's what AT&T says Time Warner's worth. We'll talk about that when we come back. David Pogue is here from Yahoo Finance where he writes about tech. He knows what it's like to be acquired (laughing).
Leo: Sort of. Maybe. Maybe not. I don't know. What is it like at Yahoo? Do you go into work there or do you do work from home?
David: Both. I go in a few times a week.
Leo: What's the atmosphere like in there? Are people just like discouraged or?
David: You know, I mean there are various schools of thought, various degrees of mood about it but the one that I think prevails is when you look at Verizon's other acquisitions like AOL and Huffington-Post and so on, basically there was some consolidation of Salesforce and things like that but the content creators were basically left alone. You know, AOL soldiers on and Huffington-Post soldiers on. And that's what, I mean it's likely they'll so with us, the writers and the creators of this stuff so that's my hope is that we'll be able to keep on doing exactly what we're doing just without the incessant, "What's happening to Yahoo? It's going down the drain."
Leo: Yea, you don't want to hear that anymore. Well I think that this AT&T Time Warner thing is similar. You get a pipes company buying a content company. We'll talk about what it means and why this is happening in just a second. Also here from Business Insider is Steve Kovach. Always great to have you, Steve.
Erin: Also knows what it's like to be acquired.
Leo: Oh. That's right.
Steve: I know what it's like to be acquired. Yea.
Leo: God, I forgot all about that. You know that's actually—
Steve: A much different scale, but yea.
Leo: But that's a testament to how, I mean it didn't really change how business, the feeling of Business Insider or the voice or anything.
Steve: Not at all. No, not at all.
Leo: And Erin you haven't been acquired, have you?
Erin: I actually my first 3 jobs I was, the company I was at was acquired. I was at a company called Merger Market that sold to the Financial Times Group and I was at Thompson when we merged with Reuters. And then when I was at Ad Week we were bought by a private equity group (laughing).
David: It's you, Erin.
Erin: I know. And I was at Time Inc. when we spun out from Time Warner. Yes.
Leo: You know I think that's just the way it is these days in journalism and content. I mean I worked in radio for 40 years. It's radio. You know, everybody's been through that. If you work in radio for a length of time, having the station change format or sell most likely is universal. Well, we'll talk about this. It will be our wrap up story in just a second.
Leo: But first a word from our friends at GoToMeeting, the best way to have—why do a phone conference? Have a meeting. Have a meeting. Nowadays clients and colleagues are all over the world, perspective clients. You're doing a pitch. That person could be halfway across the country. Could be in another continent. With GoToMeeting though it's just like you're meeting in person. You start the meeting with GoToMeeting. It can be just a simple phone conference call basically or seem to appear that way. And it's very easy to do that too by the way. You send an email. They generate them automatically. Your client, even if they've never used GoToMeeting, they click the link. The software's installed almost instantly. You're talking together. Then you say, "Well, I would love to show you my PowerPoint presentation." And you share your screen. Now they're seeing what you're seeing. You can circle stuff, show them stuff. You can pass off controls so if you have a colleague in another place and they have part of the presentation to give, you can pass off control. If you're working together you can collaborate on documents. My favorite part though is then turn on the camera and you're going to get crystal clear HD video coming right from your webcam and now it really is a face to face meeting. It's really remarkable. The body language, the expressions. You're truly communicating. Whether it's a sales demo or a presentation, collaboration. Maybe just an ad-hoc meeting. I know there are teams separated geographically that keep GoToMeeting running all day. Every meeting counts. And by the way if you ask GoToMeeting customers, 9 out of 10 say they close deals more than 20% faster. It makes a big difference because you're in effect meeting face to face without any of the expense or annoyance of travel. GoToMeeting. Don't phone it in. Use GoToMeeting. Start your free 30-day trial right now, free. 30 days. GoToMeeting.com just click the try it free button. GoToMeeting.com. We don't have meetings anymore. We have GoToMeetings. That's the best way to do it. GoToMeeting.com. We thank them for their longtime support of TWiT.
Leo: By the way, this just in from the San Jose Mercury News. Down in Hollister, Larry Page's flying car has been seen, spotted.
Steve: Oh, my God.
Leo: A mysterious aircraft in Hollister, it has apparently—I'll turn off this bad music. It's apparently a distinctive sound as you see it flying above you, strikingly different from the roar of a typical plane. "It sounded like," according to one person who saw it, "an electric motor running, just a high-pitched whine." Hovering 20, 25 feet off the ground. It's apparently a flying car from a company called Zee.Aero funded by Larry Page. So forget self-driving cars. Larry's segueing right to the next big thing.
Erin: Yea, but note that he did not put it under the umbrella of Google.
Leo: Yea. But he can do that. He's got billions of dollars, right?
Erin: Right. But I think probably 3 or 4 years ago it would have been but—
Leo: He doesn't want that Ruth Porat looking over his shoulder.
Erin: No, not this one.
David: And how exactly is it a flying car? It looks just like a small plane.
Leo: Yea. I don't know.
Erin: (Laughing). It's a trick he's playing on us.
Leo: Maybe it doesn't. It's just a small plane. I don't know.
David: I mean isn't any small plane essentially a flying car?
Leo: Well this hovers, ok? So it can take off straight up in the air.
David: Oh, that makes it a car.
Leo: And it can land in your driveway. Right? So that's a little more car-like.
Erin: So it's more like a helicopter that drives.
David: Thank you.
Leo: Well what would make it to you? A flying car would be something with 4 wheels that you could land on the highway and then drive off?
David: Exactly. A flying car is something with wings that fold up and then you would go drive on the highway.
Leo: Oh, you want an amphibious vehicle kind of thing. Airphibious (laughing). All right. The big story broke. Kept poor Steven Kovach up late last night. $85-billion-dollars. By the way, AT&T only has $7-billion in cash. So this is a deal involving stock and I imagine a considerable amount of debt.
Leo: $40-billion. And AT&T already has what, $120-billion in debt?
Steve: Yea. Or $40-billion loan. I'm sorry.
Leo: Loan. Well that's called a debt if you borrow. It's not a bond. So interesting. Clearly AT&T is worried, right? Why would you take all this debt on, take all this risk? Do they—
Erin: Is it really that much though? They've got recurring revenue, cash flow.
Leo: I guess. I mean I'm sure the board wouldn't approve it if it weren't doable. But it seems to me this is the kind of thing a company does when it says, "Our current business is going to falter." And look at Comcast. Look at Verizon. Look at AT&T. All of them are pipe businesses, right? They're delivery businesses. And they're all getting into content. Comcast buys NBC Universal. Verizon buys you and everybody else. Is it mistaken? A number of people are saying, "Oh, this is as bad as AOL Time-Warner. This is going to be a horrific nightmare." Kara Swisher's article was hysterical.
Steve: I missed that. What did she say?
Leo: She said it's going to fail for the same reason that AOL Time-Warner failed which is the executives like the HBO executives who pretty much torpedoed the AOL Time-Warner deal aren't going to be—the ghost of AOL will haunt the Time-Warner AT&AT deal she says.
Erin: Oh, they will screw it up.
Leo: There you go.
Erin: A merger this big? How can you possibly like integrate it in any way that is successful? I mean, I think more than—there's lots of data out there that says like more than half of all mergers over a billion dollars fail. This is so big that there's going to be, there's going to be some major problems with it. But at the same time, it's smart because Time-Warner was going to sell. Like I think everybody has known that for a long time. So it's a matter of whose hands it ends up in. And AT&T kind of makes the most sense. They don't want Verizon to get it. They don't really want another larger competitor to get it. So why not do it?
Leo: Steve, you said you were doing this story late last night because they were rushing it and it leaked out and they didn't want Time-Warner to be in play.
Steve: Right. That's the going theory. I think someone confirmed that. They were asked about this on the conference call last night and they kind of dodged the question. But I think someone like right before we jumped on the podcast, someone confirmed that. But yea, it came out Thursday that there had at least been talks. And it turns out their talks started in August. They talked about that yesterday. And then as soon as the news busted open, those talks accelerated so quickly that they hammered the deal together and then by Saturday night they had it ready to go.
Leo: Wow. That's unusual. I don't cover business but that seems very fast for such a big deal.
Steve: It happened fast. I mean I think that the two COOs met for the first time in August. And here we are the 3rd week of October, end of October and it's a done deal. That's very fast for something like this I feel like. And it was just accelerated because you know Apple was sniffing around way back in May. There are likely others sniffing around or they don't want anyone else sniffing around rather. So that's why it came out at such an odd time. Why do—
Erin: I think it happened fast though because Time-Warner has been wanting to sell or entertaining the idea all year. It's not like a lot of deals happen, take a long time to come together because the target company has to kind of become ok. The CEO has to become ok with the idea of giving up control and selling the company. But they've been wanting to do it for a long time.
Leo: Well, I mean it's obvious Time-Warner spun off its cable business, a big part of its business. They are in a competing pipes business. They are a content company, just a content company. HBO.
Erin: And they sold off their content business, Time Inc.
Leo: The sold off the magazine.
Steve: Part of it, yea. They sold off the print.
Erin: Yea, that's the company I work for now.
Leo: So Time Inc. is not part of the deal.
Erin: No. We are a separate independent company that, depending on the day, are valuation is less than that of BuzzFeed.
Leo: Wow. Is that, does it also include DC Comics?
Steve: It does.
Steve: No, no, no.
Erin: Not Time Inc.
Leo: So DC Comics does got to AT&T. So they own Batman.
Steve: They own Harry Potter. They own Game of Thrones.
Leo: All the HBO properties. They own CNN which may be a regulatory issue. Although, there was hardly any pushback when Comcast bought NBC Universal, so (laughing).
David: Do you guys have any sense of--
Erin: As an example of why the deal should happen, but regulators especially in the last couple years have been extremely critical of big mergers like this. So that example might not work this time around.
Leo: Go ahead, David.
David: Steve and Erin, do you have any sense of what the relative size of these two companies is? Is it a great big company acquiring a smaller one, or are they the same size?
Erin: They're both Fortune 500. I haven't looked up their market caps recently. Steve, you would probably know.
Steve: Actually I don't remember off the top of my head. The market cap for Time Warner before the news was like $70-billlion I think. Something like that. And I totally forgot what AT&T was.
Leo: AT&T has to be much bigger than that, right?
David: I don't know. Harry Potter's pretty big.
Erin: I'm looking up their Fortune 500.
Leo: AT&T forward revenue is $146-billion revenue. Market cap is $226-billion.
Erin: AT&T's Fortune's 10.
Leo: Yea, AT&T's pretty big.
Erin: So they're the 10th highest revenue company in the country and Time-Warner's significantly lower.
Leo: Yea. So it's a big fish swallowing a smaller fish. But David, why do pipe companies, why do these delivery companies buy a content company? What is the value to them? Are they afraid that their business needs this?
David: Dude, ask me about like settings on the iPhone. I have no idea.
Leo: (Laughing) I just thought I'd throw you a bone there, David.
David: (Laughing) It is a total, total mystery to me. In fact, Yahoo's the first time I've ever been an employee of a company in my life. I'm 53 and this is the first time I've ever had benefits and a business card.
Leo: Well it's about time, Mr. Pogue. It's responsibility.
David: (Laughing): I know. Apparently that business card's about to change.
Leo: A Verizon company.
David: The thing I don't even get about companies is like, what is a company? Like we're talking about all these people leaving Google and you know, leaving Apple and then they go to Facebook. And then Facebook people go to Yahoo. And Yahoo people leave and they go to Google and then they come back to Facebook. And like what is a company? If all the people have changed, is it still that company? Do you know, kind of like, what is a company?
Leo: So many moons ago, the motion picture creators, the movie companies owned the theaters. And in the 40s a big antitrust regulation split them up because it was felt, and I can't disagree, that the creators of content should not own the distribution of content, that that should be kept separate for competition reasons. The Sherman Antitrust Act was used to split the cartel in effect. Seems to me this is very similar but of course times have changed a lot since the 40s. And I can see the advantage if you're AOL. I can see the advantage of going to a distribution company as a content company. But I see from the point of consumers the disadvantage because let's say as an example, AT&T decides, "Well, from now on HBO is only available on U-verse." Or "From now on when CNN does a story on AT&T," I mean there's all sorts of issues I think that are regulatory issues but I doubt very much in this current political climate we're going to see anything happen. Well, anyway, we'll watch the story. I think you're right. I don't know what there is to say or even why this happens. Some say it's ego on the part of AT&T. Comcast has theirs. Verizon has theirs. We want ours. Last story. A couple of obituaries. Leo Beranek of Bolt, Beranek and Newman, one of the 1st—the company that really created the internet at the request of the Defense Department, BBN, passed away. 102 years old. He was an acoustic engineer but ended up working on the first internet in the 60s. And then one of our peers, maybe he's peerless, David Bunnell, passed away also this week. Very sadly, a very young age. He was perhaps the guy who created our business, the founder of not just PC Magazine but PC World which I've always thought, you know I've always thought IDG and Ziff-Davis were at each other's throats. But he created magazines for both and Mac World. David, did you know David Bunnell?
David: Met him a couple of times. But I know that he was indirectly responsible for my first job as a writer, Mac World for 13 years.
Leo: Yep, yep, yep. All of us I think owe something to him. Harry McCracken wrote a very nice piece about him on Fast Company. I highly recommend it if you want to know more about David Bunnell. I did not know him but of course everybody I know, either worked for him or knew him or something. David Bunnell passed away on Tuesday at the age of 69. And that, on that high note, because we've had such an exciting, happy show. Geez, Louise. We're going to wrap this thing up. It's very nice—
David: Way to bring that depression full circle there, Leo.
Leo: Full circle.
Erin: Started low, ending low.
Leo: Oh, man. This is a rotten world but we live in it so let's make the best of it. I keep getting, I don't know how I got on this mailing list. I keep getting notices saying, "Register to vote. Register to vote." Of course I've been registered to vote since I was 20. But register to vote and I just got one that said, "This is it. Our last message to you. If you don't register tomorrow, you can't vote." It's like, thank you. Your last message, thank you. But I guess it's probably a message for some of our viewers. If you haven't registered to vote, November 8th is just around the corner.
David: Did you see that article about the Facebook? Facebook added a one line that said register to vote and every state registered this 28% spike.
David: Because of Facebook's one line.
Leo: That's the power of Facebook. And actually I think that's pretty cool. That's pretty cool. It does worry you with Google and Facebook could of course, I guess you know—
Erin: It's really cool when they do things that you like.
Leo: Yea, yea, maybe. There you go. But that's at least very nonpartisan. It doesn't say who to vote for. It just says register to vote. You don't get to complain if you don't vote. So yea, good for them for doing that. We can argue on and on about other influences that Facebook has on our culture but look at that.
David: Look at that. Look at that bump.
Leo: It's remarkable. Just like in some cases—
Erin: What if they said for one day, go volunteer or—
Leo: Right. Oh, I think they will.
David: Seriously they should.
Leo: I think they will. I think they will. I think the worry is that at some point they may say, "Go vote for Hillary or go vote for Donald," and that would be a problem.
Leo: Damnit, I brought it down again. All right. Thank you. I'm stopping. I'm going home. Erin Griffith, great to have you. Thank you so much.
Erin: Thanks for having me.
Leo: Fortune.com she writes about things that go boom in the night.
Erin: My URL for my stories is actually fortune.com/unicorntears.
Leo: No. You bought that one or you got that one. I remember that. We talked about that last time. It's also fortune.com/boom, right?
Erin: Yes, that too.
Leo: But I like unicorn tears. That's good (laughing). That's awesome. Always a pleasure! Thank you so much for being here. I really appreciate it. Yep. Thank you, Steve Kovach. Great to see you as well from Business Insider.
Steve: Always great to be here. Thanks.
Leo: I hope you get some sleep tonight. I hope no big mergers happen.
Steve: Yea. I think we're done for a while.
Leo: Hope so. Hope so. And of course, David Pogue. Love you, man. I miss you. It's great to see you again. And I hope that you will come back soon and give my regards to Jeffy. I'm sorry we kept his daddy away from him.
David: Thank you.
Leo: He probably doesn't like it when people call him Jeffy.
David: He goes by Jeffery.
Leo: Yea, yea. Well he was only 8 months old when I called him Jeffy.
David: (Laughing) Yea.
Leo: It was a little different.
David: At the time he was ok with it.
Leo: He couldn't fight it. He had no way to stop it. Thank you everybody for joining us. And thanks for being here in the studio. We had a great studio audience as always, email firstname.lastname@example.org if you'd like to join us. Every Sunday afternoon we're here at 3:00 PM Pacific, 6:00 PM Eastern, 2200 UTC. You can also watch our live stream at twit.tv. And you know, be in the chatroom because we love the chatroom. Irc.twit.tv. It's a great way to shout back at us while the show is going on. If you can't be here in person, or live or on the chat or whatever, you can always get on demand audio and video of everything we do on our network, twit.tv is the website. You can subscribe to, to audio or video on iTunes, on any podcatcher, Google Play Music, Stitcher, Slacker. We're everywhere that you can get podcasts. We're there. So please do subscribe. You don't want to miss an episode! Thanks for joining us. Another TWiT is in the can. Bye-bye.