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Good morning! This Monday, a coming test for Facebook and Giphy, the rules for reopening Apple Stores, and the Indian startup everyone wants to invest in.
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People Are Talking
On Protocol: Game-streaming could someday be a key to unlocking VR's potential, Facebook's Jason Rubin said:
- "Ultimately we'll throw those processors in a server farm somewhere and stream to your headset. And a lot of people are going to say, 'Oh my god, that's a million years away.' It's not a million. It's not five. It's somewhere between."
The Apple-Google contact-tracing plan is a "flamboyant smokescreen," said Cornell professor Helen Nissenbaum:
- "If it's between Google and Apple having the data, I would far prefer my physician and the public health authorities to have the data about my health status. At least they're constrained by laws."
- "People are now explaining Bitcoin to me, and honestly, it's blah blah blah collectibles (My Little Pony?) blah blah blah computers (got one of those) blah blah blah crypto (sounds creepy) blah blah blah understand the risk (I don't, though.)"
- "This is unacceptable. Members from both parties have serious questions about Amazon's business practices and its honesty with the Committee. We will not permit stonewalling of our investigation, by Jeff Bezos or anyone."
The Big Story
It had been a while since we'd seen Facebook play real offense. But after a few years of dealing with one crisis after another, Facebook seems to be back up off the mat. Mark Zuckerberg has reportedly been far more engaged as CEO, the company's once more unabashed in making moderation decisions and product changes — and now it's spending $400 million to buy Giphy. (Hard G, by the way. Fight me.)
Giphy is essentially the default GIF search engine on the internet, with more than 700 million users. It's plugged into Twitter, iMessage, Signal, TikTok, Slack and many other apps and services. That's what Facebook paid for, not the GIFs:
- In 2018, Giphy CEO Alex Chung said that "we're a superset of all companies, because we're embedded in every one of those apps … We can reach basically everyone on the internet at any given moment."
- As Vivek Karuturi, an engineer in San Francisco, put it: "With this type of tech, FB can keep a watchful eye on what's picking up buzz and gives them ample time to react/understand what's going on at the ecosystem level."
There's an immediate privacy concern: Facebook can now see my texts! But I suspect that's overblown.
- Here's how Signal described its integration back in 2017: "The Signal service knows who you are, but not what you're searching for or selecting. The Giphy API service sees the search term, but not who you are."
- Slack told The Verge that it only sends aggregate data to Giphy.
But even if Facebook doesn't learn more about you, there's lots to learn. Giphy stores every keystroke people enter in its search engine; every time one of its GIFs is viewed; and, as Byte creator Dof Hofman pointed out, the tracking ID of any device it's on.
- Giphy could help find new and rising apps, like Onavo did with WhatsApp and others, while also giving Facebook new understanding of what people are talking about — are you sending a happy Michael Scott GIF or a sad Michael Scott GIF? — and where.
Of course, Facebook's story is very different. The app's going to be part of the Instagram team, and Facebook's Vishal Shah said that "we plan to further integrate their GIF library into Instagram and our other apps so that people can find just the right way to express themselves."
- John Borthwick, whose Betaworks startup studio was Giphy's birthplace, told Protocol's Issie Lapowsky that "Giphy is going to be a standalone property within Facebook. It's going to operate next to or in partnership with Instagram, but it's going to be a standalone business."
- If that's the case, it's interesting to see Facebook essentially distance Giphy from big, bad Facebook itself and use Instagram as a shield.
Facebook promised not to shut down Giphy's third-party integrations. Obviously. But how Giphy's many partners react to the product's new corporate parent will speak volumes about how the rest of the tech world views Facebook right now.
Back to Work
How to safely reopen a crowded store
There aren't many places that seem like they'd be harder to keep COVID-free than an Apple Store. People milling around? Touching things? Standing close together? Yikes.
So it's not entirely surprising that Apple's approach to reopening its U.S. stores will be seriously thorough, as SVP of retail Deirdre O'Brien wrote in a note over the weekend:
- Apple's limiting occupancy at each store and requiring that anyone who enters wear a face covering and have their temperature checked.
- "Throughout the day, we're conducting enhanced deep cleanings that place special emphasis on all surfaces, display products, and highly trafficked areas," O'Brien wrote.
- Apple's putting a bigger emphasis on curbside pickup, at-home delivery and one-on-one service, rather than in groups.
O'Brien said Apple will give masks to customers who don't already have one, and suddenly all I want to know is if Apple will be designing its own mask. I mean, the company built its own pizza boxes — I'd be disappointed if it didn't have a take on the N95 mask.
Making sure public places are safe for public consumption may be even trickier than reopening offices. Apple's been testing its playbook in China, and O'Brien said its policies have been working. Some of the rules — masks, temperature checks, lines down the block for every store — are just going to be facts of life for a while.
A MESSAGE FROM WALMART
How Walmart Is Promoting A Safer Store Environment
The retailer has expanded paid leave policies, closed stores for overnight cleaning, installed plexiglass barriers and social distance markers and introduced temperature checks for associates.
Money keeps rolling in at Reliance
Do you have lots of money? India's Reliance Industries will probably take it. Over the weekend, Jio Platforms, a tech subsidiary of the Indian conglomerate, raised $870 million from General Atlantic, the private equity firm that has also invested in Facebook, Slack, Uber, Airbnb and others.
Let's just quickly recap Reliance's deals from the last several weeks:
- On April 21, Jio raised $5.7 billion from Facebook, in exchange for about a 10% stake in the company.
- Less than two weeks later, Jio took another $746 million from Silver Lake, valuing the company at about $65 billion — which meant Facebook's investment went up about 12% in 12 days.
- Four days after that, private equity firm Vista put $1.5 billion into the company at the same valuation.
That gives Jio just shy of $9 billion in new capital when you include the General Atlantic deal. Reliance said it wants Jio to become "a global technology leader and among the leading digital economies in the world."
- The bet is simple, really: As India continues to develop the "Digital Society" that Reliance chairman Mukesh Ambani keeps promising, the sheer size of the country will mint at least a few impossibly huge companies. If China's history is any indication, some or all of those companies will be homegrown. And who'd bet against Reliance and Jio?
Oh, and there's no sign of things slowing down anytime soon. Bloomberg reported last week that Reliance is already talking with Saudi Arabia's sovereign wealth fund about an investment. All it needs is some SoftBank money, and it'll have investor bingo.
Coming Up This Week
Protocol's next Virtual Meetup, with Rep. Will Hurd, is on Thursday at noon PDT. He'll be talking with Issie Lapowsky and Emily Birnbaum about surveillance, data, privacy and much more. Register now to join us!
Microsoft's Build developer conference kicks off virtually tomorrow. Based on what we know so far, it's going to be even deeper and developer-ier than usual — should be fun.
Nvidia, Baidu, HPE, and Alibaba report earnings this week.
In Other News
- The Department of Justice's antitrust team has Google in its sights. The Wall Street Journal reported that the DoJ and a number of state attorneys general are preparing for antitrust litigation against the company as early as this summer, largely focused on its online ads business — which is to say, Google's money-printing machine.
- Video game spending continues to rise. NPD's research found that U.S. buyers spent $9.8 billion on games and game content in the first quarter of 2020 — up 11% from a year earlier. Hardware was up 2% in the same quarter, mostly thanks to the Nintendo Switch. Basically? It was the quarter of Animal Crossing.
- James Dyson described his failed electric car project, which cost him about $600 million, in an interview with The Sunday Times. Now the U.K.'s richest man, Dyson explained how the doomed car, code-named N526, could have lasted 600 miles on a charge — and would have had to cost nearly $200,000 for Dyson to break even.
- Tesla is real estate shopping in the South. TechCrunch reported that company officials visited both Austin and Tulsa, as it looks for a site for its next gigafactory. This plan has been in place since long before Elon Musk started thinking about leaving Fremont.
- Fitbit could be the next tech company to get into the ventilator game: CEO James Park told CNBC that the company's planning to submit technology to the FDA soon.
- 32 Senators want the FCC to reconsider its Lidago deal. They, like others, are worried about what the low-power network could do to GPS and other security-related tech. Ajit Pai's response, in short: Nope.
- Alibaba founder Jack Ma is leaving the SoftBank board. SoftBank announced the news alongside a $17.7 billion loss on its Vision Fund. (Index, our daily newsletter about tech and finance, takes a closer look.)
One More Thing
Happy graduation! Love, Oprah
When I graduated from college, I sat in the hot sun for what felt like a month and a half while our commencement speaker, the university's outgoing president, talked about how great he was. The 2020 graduating classes had a … different experience. In addition to all the Zoom graduations and virtual parties, Facebook held a 2-hour ceremony for graduates everywhere, featuring everyone from Miley Cyrus to Hugh Jackman, offering a mix of inspirational speeches, musical numbers and mostly very bad jokes. It was nice! And kind of uplifting! I recommend saving Oprah's epic closing speech for whenever you're feeling particularly down.
A MESSAGE FROM WALMART
Walmart Makes Face Coverings a Requirement for Associates
Walmart is providing masks for associates in stores, clubs, offices, and distribution and fulfillment centers. This is in addition to in-store measures like plexiglass barriers and customer limits.
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