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TikTok means business
Good morning! This Tuesday, the VR business might be here to stay, TikTok snags a Disney bigwig, and Apple's encryption policies are under fire. Again.
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People Are Talking
Uber laid off another 3,000 people and shut down 45 offices, and Dara Khosrowshahi told staff that he's finally facing hard truths:
- "I wanted there to be a different answer. Let me talk to a few more CEOs ... maybe one of them will tell me some good news, but there simply was no good news to hear. Ultimately, I realized that hoping the world would return to normal within any predictable timeframe, so we could pick up where we left off on our path to profitability, was not a viable option."
The House of Representatives has some concerns about Google's rollback of diversity programs:
- "In order to promote effective and inclusive economic practices, Google's workforce should reflect the racial diversity of America. However, Google is still falling short of that goal, and compared to the population of the United States, women and minorities are grossly unrepresented in your ranks."
Is Sheryl Sandberg being pushed aside at Facebook? Is she a flight risk for the company?
- "You know, kind of no and no. I've worked with Mark for 12 years, we're working together as closely as ever, we have an amazing team, and I feel really lucky to get to do this work."
The Big Story
Don't call it a VR comeback
Six years ago, VR was the future and "Ready Player One" and "Snow Crash" were required reading for everyone in tech. Three years ago, VR was dead: Nobody would invest in it, nobody would make content for it, nobody cared.
At least, that's how it felt outside of Facebook. But within the company, and specifically within Oculus, VR never went away. And it finally seems to be working:
- Oculus announced that users have spent more than $100 million on Quest content in the last year, and 10 titles have generated more than $2 million in revenue apiece. They're small numbers in the scheme of things, but they're a sign that there's a real business there.
- As Seth Schiesel wrote in his story yesterday for Protocol, Oculus has succeeded so far with smaller, unique games. But that'll change. "I think you can get some really big, amazingly deep games onto the Quest platform, and I think you're going to see them in the next year or so," Jason Rubin, Facebook's VP for special gaming initiatives, told Seth.
In an interview with Protocol's Janko Roettgers, Facebook hardware chief Andrew Bosworth came just short of saying that, with the Quest, VR is having its iPhone moment:
- "It does feel like the Quest is as close, if not there, to being capable of delivering that kind of experience. But it's also worth noting that the iPhone was a tremendously powerful tool that used a lot of paradigms that were already familiar to consumers … There's a lot bigger of a gap to fill in terms of consumer education when it comes to virtual reality than with the iPhone."
- And the hardware's getting better, too. Quest users will get hand-tracking that doesn't require controllers in the coming months, and there are already rumors of another Quest headset coming soon.
What's next for VR? Well, according to everyone we talked to, games. More games, better games, games you've already heard of. Facebook's also leaning into the enterprise market, working on more productivity and training tools, plus apps for more virtual business collaboration.
There's plenty left to do on all sides — I can't think of any other technology that's been hugely successful while making some percentage of users puke — but there seems to be a business here. Finally.
TikTok's new boss, with serious entertainment cred
On a list of people responsible for Disney's current success, few people would rank above Kevin Mayer. He helped put together the deals for Pixar, Lucasfilm, Marvel, and the other franchises that made Disney the world's preeminent entertainment company. Then he spearheaded Disney+, the smashingly successful streaming service that put all those movies and shows in one place.
And now he's gone. Mayer is the new CEO of TikTok, and COO of its parent company ByteDance.
- TikTok is, if you twist my arm, the Disney of the social world? It's goofy and musical, full of choreographed dancing, focused much more on entertainment than messaging or news or other social features.
- Hiring an American CEO was surely not a coincidence for TikTok, which is trying desperately to shake its identity as a Chinese company. (Though as the company reminded The New York Times, it's actually based in the Cayman Islands. Which is … different, and maybe not quite the point?)
- And the new gig might already mean new headaches for Mayer. "This new executive lives in the USA," Josh Hawley tweeted yesterday. "I look forward to hearing from him. Under oath."
Hiring Mayer seems to indicate that TikTok is more likely to invest in content – more shows, more creators, acquiring media companies, that sort of thing — than in the tech platform alone.
- It also suggests ByteDance is looking to bring more of its apps to the U.S., potentially starting with its Facebook-like Helo platform. TikTok's winning, and now ByteDance wants more.
Disney, meanwhile, increasingly seems to be in turmoil. Bob Iger stepped down as CEO, but then resumed his old job in all but title. Parks are closed, theaters are shut, everybody already forgot about Baby Yoda!
- Disney+ has been about the only stable thing in the House of Mouse recently. Rebecca Campbell's now in charge of the service, as part of a big restructuring at the top of the company — and there will be big expectations for her going forward.
A MESSAGE FROM WALMART
Walmart Continues to Launch COVID-19 Testing Sites
To increase access to COVID-19 testing, Walmart is partnering with Quest and eTrueNorth to bring mobile sites to underserved areas of America and make tests available at no cost to the individual.
Back to the backdoor arguments
The FBI said yesterday that, after months of trying, it managed to get into the two phones used by a shooter in Pensacola last year. (How? It didn't say, but it noted that what it did won't work for everything.)
Attorney General Bill Barr said the phones contained important evidence, and eviscerated Apple for not helping get it:
- "Thanks to the great work of the FBI – and no thanks to Apple – we were able to unlock Alshamrani's phones … The bottom line: Our national security cannot remain in the hands of big corporations who put dollars over lawful access and public safety. The time has come for a legislative solution."
- And that was just the beginning! Barr accused Apple of enabling authoritarian regimes and kowtowing to dictators, and of building exactly the same kinds of backdoors for other countries and governments that it refuses to give the U.S.
Apple, meanwhile, has not changed its story. "The false claims made about our company are an excuse to weaken encryption and other security measures that protect millions of users and our national security," the company said in a statement.
The thing about this fight is neither side is going to budge, and nothing is going to change until one does.
- With the EARN IT Act on the table, Barr indicated that he might have ways to force Apple to play along. But it won't be easy, and it won't be quick.
Google Cloud has two new execs: Lori Mitchell-Keller, formerly of SAP, and George Nazi, from Accenture. Both will be vice presidents of industry solutions, trying to tempt customers in specific industries, including telecoms and entertainment, to use Google Cloud.
Zach Dunn is leaving SpaceX for Relativity Space. He'd been SpaceX's SVP of production and launch, and now will be Relativity's vice president of factory development. His job: to build the factory that can 3D-print a rocket capable of getting to space.
Benedict Evans is joining Entrepreneur First, which invests in individuals to help them found startups. The former Andreessen Horowitz partner will be a venture partner at EF, advising its portfolio companies and cohorts.
In Other News
- Protocol's Mike Murphy sends this in: Plaid is launching a new product called Plaid Exchange, an API system that makes it easier for smaller banks to go digital. The pitch: Big banks spend millions on apps and digital infrastructure so customers can check their balance or send money through Venmo — but Plaid's Global Head of Policy, John Pitts, said many smaller ones can't afford to. That leaves behind the 100 million-plus Americans who rely on regional banks or credit unions. "We want a world where there's a level playing field," Pitts said.
- Microsoft and FedEx plan to "transform commerce." The companies announced a multiyear partnership to move FedEx onto Azure, starting with a tool called FedEx Surround for real-time shipping analytics. All your "Where the hell is my package!?" questions might soon get answers.
- Jack Dorsey is all in on WFH. Square's remote-work culture is now permanent, just like Twitter's — anyone who can and wants to will be able to work from anywhere from now on.
- Tesla is allowed to restart full production in its Fremont factory, and will apparently face no consequences for re-opening against Alameda County's earlier wishes. Meanwhile, Elon Musk spent the weekend Twitter-chatting with JK Rowling and The Matrix creator Lilly Wachowski. Like you do.
- Some restaurants oppose the fee caps cities are placing on delivery apps, supposedly to protect them. More than 20 LA restaurant owners signed a petition saying caps will cause higher fees to diners and worse service from the apps.
- Instagram has a new feature: Guides, a way for users to "more easily discover recommendations, tips and other content from your favorite creators, public figures, organizations and publishers on Instagram." Right now it's focused on well-being content, but this kind of curation is a smart way for Instagram to manage feed overload.
One More Thing
Juror #8, can you mute please?
Last time I had jury duty I spent the whole day in a freezing-cold room reading a book. Next time, I might get to do it in my PJs. Yesterday marked the first U.S. trial by jury via Zoom, as a Texas district court heard an insurance case. You can actually watch the process of virtual jury selection — filled with tech advice, people doing weird things on camera, and a judge with a delightfully appropriate courtroom Zoom background. Can't wait for the Grisham novel about this one.
A MESSAGE FROM WALMART
Walmart COVID-19 testing: 100+ sites by the end of May
By the end of May, Walmart is working toward more than 100 sites, which will allow the company to deliver 20,000 tests a week to people who need them, especially in underserved areas and hot spots.
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