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What matters in tech, in your inbox every morning.

This algorithm is not for sale

Image: x6e38 / Protocol
Algorithm

Good morning! This Monday, China wants its say in the TikTok deal, Amazon may be responsible for third-party products, and Medium has some big plans.

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The Big Story

What TikTok's buyers might not get

Let's say Microsoft buys TikTok. What does it get for its $20 billion or so? A brand, certainly. An app, for sure. A team, yeah. But the essence of TikTok, the thing that makes it different from Reels or Triller or any other social video app, is the algorithm that seems to know users better than they know themselves. And that, it turns out, may not be for sale.

  • China added a number of new technologies to its export rules, The New York Times reported, "including technology that sounded much like TikTok's personalized recommendation engine."
  • Then, in case the message wasn't clear enough, the state-run media ran a story that explicitly applied the new rule to TikTok and said ByteDance might need a specific license to sell the tech to an American company.

China has been frustrated for weeks about the way this sale is going down. It's said to be especially irritated by the Trump administration's involvement with the deal.

  • The new rules could slow down any deal being made to buy TikTok or derail it entirely. And they seem to urge ByteDance to engage with the Chinese government before doing anything else. Because if the White House gets a say, why shouldn't Beijing?

Every company interested in TikTok ought to be crystal clear on the fact that without its algorithm, TikTok isn't TikTok. It's Google without PageRank, Coke without the secret recipe. It's decidedly unspecial. The recommendation tools are everything, and China clearly knows it.

Ecommerce

Who to blame at the Everything Store

"We're just platforms!" has been the cry of every tech company of sufficient size over the last few years, and it's both basically true and an extremely convenient way to hide from all the bad things happening on those platforms. The argument has more or less worked for a long time, but it seems to be crumbling.

  • A court in California ruled earlier this month that Amazon can be held liable for faulty products sold on the platform. And cases testing that theory are starting to pile up all over the country.
  • California Assemblyman Mark Stone is also working on legislation to put that idea into law, The Washington Post reported, though he pulled it on Friday before the legislative session ended.

Amazon is now earnestly seeking to apply the rules to every seller on the internet. "Injured consumers should be able to seek compensation regardless of how a particular online marketplace makes money," the company wrote last week.

  • Amazon obviously sees a silver lining here: It's huge, and has effectively limitless resources, and can figure out the messiness of compliance.
  • Most other retailers won't be able to keep up. In fact, some of those other retailers have already said that they think this will empower Amazon.

In a weird way, this, too, is about China. Most of the "we're just a platform!" argument falls apart when the products being sold come from a country that can't be regulated or punished. Amazon's the only possible responsible party for those kinds of sales, and there needs to be a responsible party.

  • As the Post reported, there's about to be a flood of new cases, appeals of old cases, and even fights with insurance companies about defective products. The recent cases and potential legislation in California might set powerful precedent.

Publishing

Medium's extra-large plans

Did you know Medium is huge? Medium is huge! Ev Williams wrote on Friday that the site has had more than 1.25 billion page views in the last three months, and as a seasoned member of the publishing industry I can tell you that's a pretty good number.

Williams also announced a bunch of upcoming features, a sort of grab-bag of ideas about the future of publishing. More newsletter stuff, simpler paywalls, custom domains. But one thing really stuck out to me:

  • Medium's leaning into user profiles, making it possible for individual users to spruce up their sites or create ad-hoc publications with their friends. As Coda CEO (and former YouTube exec) Shishir Mehrotra pointed out, it sounds a lot like YouTube's long-ago decision to lean into channels and creators.
  • "There was a time when the YT game was 'get on the most viewed page,'" Mehrotra tweeted, "& no one cared for the rest of your videos. We made a choice to emphasize subscriptions and it had a great long term effect. YTers now measure success in # of subs, & that loyal audience drives their viewership."

There's a clear trend here. I've talked to a lot of folks recently about the return of blogging, the rise of Substack, and what it means that people are branching out on their own again. Medium clearly understands the underlying goal behind that trend, which is that creators want a place that feels like it's theirs.

Every Instagram and TikTok profile looks like every other one, but even small things like vanity URLs and header images help someone make their stuff feel more personal. And for Medium, betting on subscriptions — and the relationship between creators and viewers, not just viewers and an algorithm — goes a long way toward making something sticky.

I'd be lying if I said I've always been a Medium believer, but this feels like it's going to work.

A MESSAGE FROM PHILIPS

Philips

Stronger care … from anywhere, to anywhere

A strong healthcare system can scale to meet increasing patient demands. At Philips, we're charting a new way forward by moving care beyond the hospital's walls with advanced virtual health capabilities that expand clinical reach and increase care team capacity.

Learn more.

People Are Talking

After Apple rejected a Facebook app update, Mark Zuckerberg went on offense against the App Store:

  • "That's innovation that could really improve people's lives. And Apple's just balking at it."

Patrick Collison predicts a return to semi-normal for tech workers, someday:

  • "If you were to visit Stripe in three years, if you spent a day at our office, I don't think you would necessarily know by physical observation that COVID had happened."
  • Also, don't miss Collison's comparison between Cleveland and San Francisco as VC hot spots.

Enough with the SPACs, Morgan Stanley's Bennett Schachter said:

  • "Just because you've made money doesn't mean you're going to be a successful SPAC issuer. LeBron James or Michael Jordan might be the best basketball player, but if you gave them ice skates, I'm not sure they'd be Wayne Gretzky."

Making Moves

Could we actually get a TikTok buyer this week? Some reports say yes. Governments continue to complicate everything. Personally, I'm not holding my breath.

Apple's share split happens today, and analysts are predicting a bump for the stock. Which is good, because Apple could really use the cash, eh.

Zoom announces earnings Monday, which'll be an interesting check on how the company's doing after its COVID boom and all the associated chaos.

In Other News

  • The White House is looking to replace FTC chair Joe Simons, according to our friends at POLITICO. His term doesn't end until September 2024, but at least one person — Gail Slater — has reportedly been interviewed for the job.
  • Don't miss a new series about life inside Facebook right now from BuzzFeed News. So far: The shooting and protests in Kenosha have renewed debates internally about how Facebook handles problematic content, and employees don't like what Mark Zuckerberg is telling them about the attacks.
  • Facebook's problems continue in India, too. The Wall Street Journal reports that the company's head of public policy, Ankhi Das, made several posts in support of Prime Minister Narendra Modi ahead of his 2014 win, harshly criticizing his opposition. Meanwhile, Time reports that Facebook has commissioned a report on its human rights impact in India.
  • Pinterest canceled its huge 88 Bluxome lease in San Francisco, saying it didn't need the 490,000 square-foot space given the shift to remote work. Construction of the building was set to start this year, but the future of the project is now unclear.
  • Uber employees are suing the company over its restricted stock unit agreement. They say that Uber's decision to accelerate their vesting to its IPO date, designed to save them taxes if the stock had risen, backfired when the stock dropped and led to huge tax bills. It's complicated, but Protocol's Biz Carson has a great explainer.
  • Facebook and Google ditched the Hong Kong portion of their undersea cable, after the White House expressed concerns about its security. It'll still be connected to Taiwan and the Philippines, though.
  • Tesla's former CTO JB Straubel is working on a new EV problem: how to get cheap nickel, lithium and cobalt. His solution? Recycle old smartphones.
  • A former SpaceX intern is suing the company, saying it retaliated after she reported sexual harassment by not offering her a full-time job.
  • The tweet confirming Chadwick Boseman's death is now the most-liked post in the history of the platform, with more than 7 million likes and 3 million retweets.
  • Don't miss this profile of Snowflake CEO Frank Slootman, who's preparing for the third IPO of his career. That's not the only impressive thing about him: He's an award-winning sailer, too.

One More Thing

How to take down the internet all at once

On Sunday morning, my wife texted me asking if our internet was down. Well, yes and no: Our internet was fine, but The Internet was in rough shape. An outage at CenturyLink took down services from Cloudflare, AWS, Twitter, Reddit, Hulu and many others, ZDNet reported, and Cloudflare's post-mortem found that the outage caused a 3.5% drop in global internet traffic. Never forget that the internet relies on a shockingly small number of companies (and sometimes a random person in Nebraska), and it's always the dumbest stuff that brings it down.

A MESSAGE FROM PHILIPS

Philips

Stronger care … from anywhere, to anywhere

A strong healthcare system can scale to meet increasing patient demands. At Philips, we're charting a new way forward by moving care beyond the hospital's walls with advanced virtual health capabilities that expand clinical reach and increase care team capacity.

Learn more.

Today's Source Code was written by David Pierce, with help from Shakeel Hashim. Thoughts, questions, tips? Send them to david@protocol.com, or our tips line, tips@protocol.com. Enjoy your day, see you tomorrow.

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