The Big Story

Pinterest tries to fix Pinterest

Anna Kramer writes: Can corporate culture change really happen? Pinterest is about to find out. After announcing a controversial settlement to a gender discrimination suit, the company's board adopted a series of recommendations to reform how it investigates misconduct (see here and here for more on how we got here). The recommendations will force Pinterest to change how it handles basically everything with regard to its employees: workplace conflict, misconduct, racism, promotions, disciplinary action and more.

We'll have to wait to figure out if these recommendations are pie-in-the-sky or actually bring real change, but, either way, here are some of the most interesting and practical ones in the report.

• Pinterest will have to create an ombuds office, which will be independent from HR and investigations teams. The office will, for example, provide employees with confidential counsel about whether to file an official complaint and help them understand the investigation processes. It appears designed to address the fact that HR teams are often motivated by the interests of the company rather than the employee.
• CEO and exec pay and performance reviews may also be tied to the company's efforts to meet its diversity goals around hiring and retention. The report doesn't specify exactly how this will work, but it does say that the board-level talent and compensation committee should "consider, as appropriate" progress on these goals in their reviews. Sounds interesting, but I would like to know what "consider" means.
• The company also has to rethink promotions. Lower-level promotion is very important for retention, but decisions are often just too personal. Mid-level managers often make promotion recommendations without considering the full impact on company culture or careers, and they can often be motivated by personal interests and biases. Pinterest now has to come up with a better, more consistent system.

The rest of the recommendations focus on respect, fairness and a clear articulation of rules and expectations. Because the company will be required to publish updates on its progress in implementing these requirements, we can keep an eye out for those reports in order to measure whether any of this is anything more than talk.

Want to talk more about all this? I'd love to hear from you! You can reach me at akramer@protocol.com.

Risk Factors

Brick and mortar ain't dead yet

Honestly, can we cool it with the IPOs for a minute? The market's crazy, nobody knows anything, and I'm sure within the time it took you to read this sentence eight more companies filed to go public anyway. Oh, look!

• Yesterday, both Coinbase and UiPath filed confidentially for an IPO. Then announced those confidential filings, making them just … filings, I guess.
• Meanwhile, Poshmark flipped its S-1. It looks set to go public sometime in January.

Given there's something to read about Poshmark, let's do as we always do here at Source Code and dive into some Risk Factors. Here's what Poshmark is worried about:

• The old guard is catching up. Poshmark, an online fashion marketplace, has figured out how to get people to shop in new ways. (A pandemic helped!) But the big-box stores — the S-1 names Target, T.J. Maxx, Walmart and others — are quickly figuring out how to do online commerce, and even build marketplaces, themselves. Brick-and-mortar is a lot more nimble than it used to be.
• Any marketplace is fragile. Poshmark has to deal with the possibility of counterfeiters, and figure out how to scale its own authenticity-certification programs. Problematic buyers and sellers make Poshmark look bad, and the company could be held liable for illegal listings. Running a marketplace takes vigilance, and gets harder as it gets bigger.
• It's really reliant on social and search traffic. "Our ability to maintain and increase the number of visitors directed to our website is not entirely within our control," it wrote. (Don't feel bad, Poshmark, that's true of … every company on the internet.)
• The future of shipping is scary. Poshmark uses the USPS for all its deliveries, and is rightly worried that the system seems to be crumbling. (You can bet that Wish and others are worried about this too.)

Poshmark had an up and down year, but seems to be entering the public markets on a high note after 2020 forced such a big boost in ecommerce. But as with so many pandemic-aided businesses, there's now a big question: Is this the top of Poshmark's potential? Or are we at the beginning of a new way of life that will live on past the pandemic?

Wish is in many ways a very different company, but investors weren't sold on its ecommerce vision this week. Now, what happens to both Wish and Poshmark will say a lot about how investors view the future of shopping.

Regulation

So many antitrust fights

Speaking of things that just keep happening: We have more antitrust action against Google. This time it comes from 38 attorneys general, led by Colorado and Nebraska, alleging that Google is using monopoly tactics to shore up its place at the top of the search industry.

• Self-preferencing is on trial here: The case alleges that Google makes partners sign anti-forking agreements that make it harder to use other operating systems, prevents Android manufacturers and others from preinstalling apps like Bing and DuckDuckGo, and buries search results from other providers below its own stuff.
• Google's response: Users want the best information at the top, and we have it. It even pointed out that Bing offers similar-looking results pages, as evidence that this is simply good product thinking.

Protocol's Emily Birnbaum ranked the five antitrust suits currently in play (three against Google, two against Facebook), in order of their likelihood of succeeding.

• She said the DOJ's case against Google — the one from October, which alleges that Google shouldn't be allowed to pay billions to be the default search engine everywhere — has the best chance. That, of course, is entirely by design: It's the least ambitious and a carbon copy of the 1990s Microsoft case, because the government wants an actual win.

At some point, though, the sheer volume of these suits becomes the story. The authorities are coming for Google and Facebook (and presumably also Apple and Amazon), and they're not messing around.

A MESSAGE FROM SALESFORCE

More than 15 international, federal, state and local agencies, including the State of New Hampshire and the City of Chicago, are using the Salesforce Platform and Work.com for Vaccines to help schedule vaccination appointments and manage their COVID-19 vaccine programs.

Read more about Salesforce's initiatives here.

People Are Talking

The EU tentatively approved Google's Fitbit acquisition, but Margrethe Vestager said there are conditions:

• "The commitments will determine how Google can use the data collected for ad purposes, how interoperability between competing wearables and Android will be safeguarded and how users can continue to share health and fitness data, if they choose to."

The next antitrust target could be Apple Pay, Marqeta CEO Jason Gardner said:

• "Apple Wallet is a killer app — more of a killer app than much of the world really understands right now. And it's absolutely going to become a battleground for regulators in the future."

GitHub got rid of cookies on its site altogether, in part because Nat Friedman hated the incessant pop-ups:

• "It's like having a lawyer tap you on the shoulder every time you visit a new website. This is like, you're gonna go play miniature golf, and you have to sign like a 25-page liability waiver to play. I just think that's kind of slightly corrosive to your soul, as a human being."

President-elect Joe Biden promised to take a harder line against government hackers:

• "A good defense isn't enough; We need to disrupt and deter our adversaries from undertaking significant cyber attacks in the first place."

Number of the Day

808,000

That's how many times an app called Toutiao was downloaded in the U.S, according to SensorTower estimates. That app was collecting data on users, Protocol's Issie Lapowsky found, and sending it straight back to China. Who makes Toutiao? ByteDance. Which also makes GoGoKid and Xigua, which were doing the same thing. While everyone was fighting about TikTok, the real action was happening elsewhere.

In Other News

• Microsoft was hit by the SolarWinds hack but denied reports that its systems were then used to attack customers. Meanwhile, the National Nuclear Security Administration was reportedly accessed, and Austin's city network was reportedly breached in a seemingly separate Russian hack. CISA said there appears to be other malware currently circulating too, beyond the SolarWinds hack.
• SMIC might be added to the entity list today, Reuters reports, along with 80 or so other companies. Separately, the DoD is setting up an incentive program for U.S. foundries to supply the DoD.
• An NLRB investigation found that Amazon illegally fired Gerald Bryson. He was fired after staging a protest about Amazon's COVID-19 working conditions. If Amazon doesn't settle with Bryson, the case could go before an administrative judge.
• Tim Cook will testify in the Apple-Epic lawsuit for up to four hours, a judge ordered. Apple had wanted Erik Neuenschwander, who runs the App Store, to testify instead of Federighi.
• Sony pulled Cyberpunk 2077 from the PlayStation Store. It's a huge blow to developer CD Projekt: Its shares plunged 15% this morning.
• Michelle Zatlyn is Cloudflare's new president. In other moves, Spotify podcast exec Liz Gateley is reportedly leaving the company, and former Ericsson exec Nishant Batra is Nokia's new chief strategy and technology officer.
• Keith Rabois bought a $29 million mansion in Miami Beach. It has a 1,112-bottle wine cellar, and a 5,600-gallon saltwater aquarium that requires a scuba diver to maintain. Congrats, Keith.

One More Thing

The power of tradition

We've loved all of your holiday recipes and traditions so far! Keep 'em coming: reply to this email with your own go-tos.

Today's recipe comes from Microsoft's chief diversity officer, Lindsay-Rae McIntyre: "Every year, ever since I was a little girl, my mom would pause her busy, working single-mother life to make these cookies. I learned about tradition, the science of baking and the importance of following directions from these cookies. It was a special time for us to have our favorite movies on in the background, sing songs or just catch up. We packaged them with love and gave them to friends and family, much to their delight."

If you'd like to try out McIntyre's tradition-filled cookies, you can find the recipe here.

A MESSAGE FROM SALESFORCE

More than 15 international, federal, state and local agencies, including the State of New Hampshire and the City of Chicago, are using the Salesforce Platform and Work.com for Vaccines to help schedule vaccination appointments and manage their COVID-19 vaccine programs.

Read more about Salesforce's initiatives here.