How Did the 'Freedom From Facebook' Campaign Get Its Start?

In July, executives from YouTube, Facebook, and Twitter testified before Congress about their company’s content moderation practices. While Facebook’s head of global policy Monika Bickert spoke, protesters from a group called Freedom From Facebook, seated just behind her, held signs depicting Sheryl Sandberg and Mark Zuckerberg’s heads atop an octopus whose tentacles reached around the planet.

Freedom From Facebook has garnered renewed attention this week, after The New York Times revealed that Facebook employed an opposition firm called Definers to fight the group. Definers reportedly urged journalists to find links between Freedom From Facebook and billionaire philanthropist George Soros, a frequent target of far-right, anti-semitic conspiracy theories. That direct connection didn’t materialize. But where Freedom From Facebook did come from—and how Facebook countered it—does illustrate how seemingly grassroots movements in Washington aren’t always what they first appear.

The point here isn’t to question Freedom From Facebook’s intentions. Their efforts seem to stem from genuine concern over Facebook’s outsized role in the world. But the labyrinthine relationships and shadowy catalysts of the efforts on all sides of that debate show just how little involvement actual Facebook users have in the fight over reining the company in.

Since the 2016 presidential election, Facebook has confronted an onslaught of scandals, many of which drew scrutiny from federal lawmakers. First, Russian propagandists exploited the social network, using duplicitously bought ads to sway US voters. This March, journalists revealed data firm Cambridge Analytica had siphoned off information belonging to tens of millions of users. In the wake of this second controversy, Freedom From Facebook was born.

The initiative wasn’t formed by everyday Facebook users. It’s instead the product of progressive groups with established records of opposing tech companies, whose own relationships illustrate just how tangled these connections can be.

Specifically, Freedom From Facebook is an offshoot of the Open Markets Institute, a think tank that operated under the auspices of the New America Foundation until OMI head Barry Lynn publicly applauded antitrust fines levied against Google in Europe. Google is a major New America donor; Lynn’s entire team studying tech market dominance and monopolies got the ax, and spun out Open Markets as an independent body.

Earlier this year, former hedge fund executive David Magerman approached Lynn’s group with the idea to start to start a campaign in opposition to Facebook. Magerman poured over $400,000 into what became Freedom From Facebook, according to Axios. His involvement wasn’t known until Thursday. The connected between Freedom From Facebook and OMI was also not entirely explicit.

Freedom From Facebook has done more than stage protests on Capitol Hill. During Facebook’s annual shareholder meeting in May, the group chartered an airplane to fly overhead with a banner that read “YOU BROKE DEMOCRACY.” When Sandberg spoke at MIT in June, Freedom From Facebook took out a full-page advertisement in the student newspaper calling for the social network to be broken up. On Thursday, the group filed a complaint with the Federal Trade Commission asking the agency to investigate a Facebook breach disclosed in September that affected 30 million user accounts.

Freedom From Facebook also formed a coalition with a diverse set of progressive organizations, like Jewish Voice For Peace, which promotes peace in Israel and Palestine, and the Communications Workers of America, a labor union that represents media workers. The coalition now comprises 12 groups, who “all organize around this fundamental principle that Facebook is too powerful,” says Sarah Miller, the deputy director of Open Markets Institute. Confusingly, according to Freedom From Facebook’s website, the coalition also includes Citizens Against Monopoly, a nonprofit Miller says was set up by Open Markets itself.

Eddie Vale, a progressive public affairs consultant, also confirmed in an email that Open Markets hired him to work on the Freedom For Facebook Initiative. He led the protest in July featuring the octopus signs.

Definers began lobbying journalists, including those from WIRED, to look into Freedom From Facebook’s financial ties this past summer. The effort was led by Tim Miller, a former spokesperson for Jeb Bush and an independent public affairs consultant, according to The New York Times. “It matters because people should know whether FFF is a grassroots group as they claimed or something being run by professional Facebook critics,” Miller wrote in a blog post published Friday. He added that he believes the push to connect the group to Soros does not amount to anti-semitism, especially if it contains a modicum of truth. Facebook itself asserted much the same in a statement it released Thursday.

The extent of the Soros relationship seems to be that the billionaire philanthropist does provide funding to both Open Markets and some of the progressive groups who constitute the Freedom From Facebook coalition. There’s no indication, though, that he has any direct involvement with the initiative. Open Markets’ Miller says the think tank wasn’t aware Facebook was paying an opposition firm to ask journalists to look into its work. “I just think knowing Facebook as we do, I don’t know that I would say that we were surprised, but I do think the Soros angle was surprising,” she says.

After The Times published its report Wednesday evening, Facebook severed its ties with Definers. “This type of firm might be normal in Washington, but it’s not the sort of thing I want Facebook associated with,” CEO Mark Zuckerberg said on a call with reporters Thursday. Both Sheryl Sandberg and Mark Zuckerberg claim they didn’t know Facebook was working with Definers until the The Times published its story. This is not the first time Facebook has employed an opposition research firm. In 2011, the social network hired a public relations firm to plant unflattering stories about Google’s user privacy practices.

By distancing itself from Definers, Zuckerberg and Sandberg are putting space between themselves and how the sausage gets made in Washington. As they have grown more powerful, tech organizations including Facebook, but also Google, Amazon, and others, have poured millions into lobbying on Capitol Hill. Those efforts include fighting back against well-funded and sometimes secretive campaigns, like Freedom From Facebook. Meanwhile, the social network’s over two billion users mostly sit on the sidelines, watching the high-stakes battle unfold.


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The Legacy of Stan Lee and the Marvel Characters That Inspire Us

Stan Lee, the patriarch of Marvel Comics, died this week at 95. Lee created hundreds of characters including Spider-Man, the Incredible Hulk,  X-Men, the Avengers, Fantastic Four, Black Panther, Daredevil and Iron Man just to name a few. Lee has been credited with revitalizing the comic book industry beginning in the 1950s, and helped usher in a new age of silver screen comic book heroes — brought to life in mega-budget movies.

It wasn’t just the larger than life physiques and powerful abilities that made Lee’s characters so special in the hearts and minds of his fans. It was also the way he infused the human element into their super-human personas. They were at once fearless and mighty — and at the same time vulnerable, in some way or another. This duality afforded these superheroes some real emotional connections to their lives — some even experiencing everyday dilemmas such as how they would pay the bills. Lee was often able to weave a thread of humanistic emotional intelligence into his comic-book heroes, and was once quoted as saying, “America is made of different races and different religions, but we’re all co-travelers on the spaceship Earth and must respect and help each other along the way.”

Within Lee’s super-human realms of fantasy tinged with realism, he was able to break barriers, tackling off-limits subjects such as diversity, equality and other taboo issues of the day — but entertainment was his constant objective. He has been quoted as saying, “And then I began to realize: entertainment is one of the most important things in people’s lives. Without it, they might go off the deep end. I feel that if you’re able to entertain people, you’re doing a good thing.”

Rest in peace, Mr. Lee, you will never be forgotten.

Here are some quotes inspired by Lee’s vision that are sure to live on in perpetuity:

“Just because someone stumbles and loses their path, doesn’t mean they can’t be saved.” — Professor Charles Xavier, X-men

“A true Defender never raises arms against an innocent, no matter how they threaten you.” — Doctor Strange

“Whatever life holds in store for me, I will never forget these words: ‘With great power, comes great responsibility.’ This is my gift, my curse.” — Spiderman.

“The failures of my generation are the opportunities of yours.” — Franklin Storm, The Fantastic Four

“We can’t change the past but we can change the future.” — Sue Storm, The Fantastic Four

“Heroes are made by the path they choose, not the powers they are graced with.” — Iron Man

“Something is coming your way — something big.” — Bruce Banner, The Hulk

“Just because something works doesn’t mean it can’t be improved.” —  Princess Shuri, Black Panther

“You’ve got to feel what’s not there as much as what is.” — Daredevil

“Intelligence is a privilege, and it needs to be used for the greater good of the people.” —  Doctor Octopus

“When you decide not to be afraid, you can find friends in super unexpected places.” — Ms. Marvel

“The door is more than it appears. It separates who you are from who you can be. You do not have to walk through it… You can run.” — Franklin Richards, The Fantastic Four

“All we can do is our best, and sometimes the best we can do is start over.” — Agent Carter, Captain America

“In times of crisis, the wise build bridges, while the foolish build barriers. We must find a way to look after one another as if we were one single tribe.” — T’Challa, Black Panther

 “This is saying our generation will never matter. But we have to matter. If we don’t, there is no future worth saving.” — Ms. Marvel

The Afrotech Conference Captured in One Powerful Quote

One of the biggest discussions came from a Grammy-award winning panel featuring rapper Common, producer Karriem Riggins and musician Robert Glasper, collaborators in the new supergroup August Greene. All of them had outgrown their defining monikers, expanding into acting, music scoring, and so on. Glasper shared his own key to success:

Other people don’t know what your lane is, so they can’t tell you what your lane isn’t.

Sure, it’s about defining yourself and not relying on the acceptance of others. It also means not being afraid to fail until you get it right – even while others are watching. This challenge becomes more important for minority entrepreneurs who may have a vision less understood by the mainstream public.

What is uniquely yours?

I recently interviewed TED Speaker and RETI founder DeAndrea Salvador. She wasn’t focused on engineering, but she saw a need in her community for fair energy use and distribution. That desire planted the seed for RETI, the energy equity company that now educates and spreads insight into low-income communities.

Get comfortable with being a fool

As Glasper mentions, your lane is only defined by you – and, often, is defined by only your own insecurities.  So, the ability to be comfortable with being uncomfortable directly dictates your ability to grow.

Serial entrepreneur Naveen Jain said it recently: When you don’t know, you can ask dumb questions.” And dumb questions allow true breakthroughs. Sitting with Glasper and Riggins, Common shared how coming from a hip-hop background actually helped him make an impact on Hollywood, as he didn’t automatically follow the traditional Hollywood rules or pathway. Instead, he questioned long-held beliefs and was able to bypass the classic barriers to success.

So pay attention when a new arena is calling you. It may not be your lane, but it may be the area where you can make an even deeper impact.

Apple finds quality problems in some iPhone X and MacBook models

The new Apple iPhone X are seen on display at the Apple Store in Manhattan, New York, U.S., September 21, 2018. REUTERS/Shannon Stapleton

(Reuters) – Apple Inc said on Friday it had found some issues affecting some of its iPhone X and 13-inch MacBook pro products and said the company would fix them free of charge.

The repair offers are the latest in a string of product quality problems over the past year even as Apple has raised prices for most of its laptops, tablets and phones to new heights. Its top-end iPhones now sell for as much as $1,449 and its best iPad goes for as much as $1,899.

Apple said displays on iPhone X, which came out in 2017 with a starting price of $999, may experience touch issues due to a component failure, adding it would replace those parts for free. The company said it only affects the original iPhone X, which has been superseded by the iPhone XS and XR released this autumn.

The screens on affected phones may not respond correctly to touch or it could react even without being touched, the Cupertino, California-based company said.

For the 13-inch MacBook Pro computers, it said an issue may result in data loss and failure of the storage drive. Apple said it would service those affected drives.

Only a limited number of 128GB and 256GB solid-state drives in 13-inch MacBook Pro units sold between June 2017 and June 2018 were affected, Apple said apple.co/2AXkeEw on its website.

Last year, Apple began a massive battery replacement program after it conceded that a software update intended to help some iPhone models deal with aging batteries slowed down the performance of the phones. The battery imbroglio resulted in inquires from U.S. lawmakers.

In June, Apple said it would offer free replacements for the keyboards in some MacBook and MacBook Pro models. The keyboards, which Apple introduced in laptops starting in 2015, had generated complaints on social media for how much noise they made while typing and for malfunctioning unexpectedly. Apple changed the design of the keyboard this year, adding a layer of silicone underneath the keys.

Reporting by Ismail Shakil in Bengaluru and Stephen Nellis in San Francisco

The House Science Committee May Soon Become… Pro-Science

For the past eight years, climate science has been under a sort of spell in the House of Representatives. Instead of trying to understand it better or even acknowledging some of the field’s current uncertainties, House Science Committee Chairman Rep. Lamar Smith (R-Texas) used his position to harass federal climate scientists with subpoenas while holding hearings on “Making the EPA Great Again” or whether “global warming theories are alarmist” and researchers are pursuing a “personal agenda.”

But Smith retired this year and Democrats won control of the House on Tuesday. Now some on Capitol Hill say that the anti-climate science spell may be broken.

“Hopefully we will no longer see the science committee used as a messaging tool for the fossil fuel industry,” says Rep. Bill Foster, an Illinois Democrat and science committee member. “I look forward to hearings with a balance of witnesses that reflect mainstream scientific hearings instead of a small group of industry players.”

Foster, who was a particle physicist before being elected to Congress in 2008, said he also wants to see more appearances from cabinet members like Energy Secretary Rick Perry or EPA Administrator Andrew Wheeler to explain both their budget and their rulemaking on environmental and science issues. Neither agency head was called before Smith’s committee during his tenure, Foster says.

Ranking member Eddie Bernice Johnson (D-Texas) issued a statement after the election results Tuesday night stating that, if elected chairwoman, she wants to restore the credibility of the science committee “as a place where science is respected and recognized as a crucial input to good policymaking.” Johnson said that includes acknowledging that climate change is real, “seeking to understand what climate science is telling us, and working to understand the ways we can mitigate it.”

House Minority Leader Nancy Pelosi, who is in line to become Speaker of the House, hinted recently that she may push her members to form a new select committee on climate and renewable energy issues similar to one that operated from 2007 to 2011.

Capitol Hill observers and advocacy groups, however, say it’s not clear that a more science-friendly House will result in any new legislation getting passed or in stopping Cabinet heads that report to President Trump. “The attempt to embarrass the Trump White House isn’t going to work,” says Jeff Ruch, director of the Public Employees for Environmental Responsibility, an advocacy group representing federal workers in several scientific and environmental agencies. PEER has been litigating the EPA over the enforcement of pollution rules as well as the disclosure of ethics violations during the tenure of former administrator Scott Pruitt.

Ruck says environmental and science policies need to be changed with votes, not hearings. He foresees some Democratic House members introducing what he calls “green riders,” climate- or energy-related amendments to larger, unrelated pieces of legislation that might be able to pass both the House and a Republican-controlled Senate.

Others predict greater congressional oversight as well over issues including pollution enforcement, vehicle emissions standards, and the localized effects of climate change. “Too many people are seeing the impact of climate change in their communities, whether it’s wildfires or drought or storms,” says Andrew Rosenberg, director of the center for science and democracy at the Union of Concerned Scientists, a Washington-based advocacy group. “So at some point members have to respond to their constituents.”

If nothing else, there will be a greater representation of scientists and members with STEM degrees in the next session of Congress. Of the 14 House and Senate members endorsed and backed by the pro-science group 314 Action, eight won their general election race on Tuesday, while one, Seattle-area pediatrician Kim Schrier, holds a 52-48 percentage point lead with absentee ballots still to be counted.

This mini-wave of STEM-trained politicians might result in more evidence-based policymaking, according to Shaughnessy Naughton, the founder and president of 314 Action. “They have a lot of credibility, whether it’s on the environment or health care, and it resonates with voters,” she says.

Of course, climate deniers might still have a home on the north side of the Capitol, where the Senate meets and where Texas’ Ted Cruz is expected to keep his gavel as chairman of the Senate Science Committee.


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A changing New York neighborhood wonders how Amazon would fit

NEW YORK (Reuters) – It was the lunch-hour rush at the Court Square Diner in New York’s Long Island City on Wednesday, and co-owner Nick Kanellos pointed to the elevated subway tracks that rattle overhead as he fretted over the news that Amazon may build a major outpost in the neighborhood.

People wait for the arrival of 7 train in Long Island City, where Amazon.com is reportedly considering as part of its new second headquarters, New York, U.S. November 7, 2018. REUTERS/Eduardo Munoz

Like many long-time inhabitants, he worries how this once-sleepy enclave in Queens would absorb the up to 25,000 people the online retail giant may employ here as it expands outside its Seattle home base.

“It’s a whole soccer stadium at 8 a.m. each day coming in,” Kanellos said, gesturing at the narrow metal staircases leading from the subway platform to the street, already crowded with commuters at rush hour.

Amazon announced in September last year that it was seeking a site for a second corporate headquarters that would eventually employ up to 50,000 people. But it now plans to split its new headquarters between two sites, including Long Island City, according to a New York Times report.

Amazon again declined on Wednesday to comment on its selection process.

Kanellos’ apprehension was shared by other long-time residents interviewed on Wednesday on their home turf, a rapidly gentrifying area that sits just across the East River from Midtown Manhattan.

Few, if any, objected to Amazon.com itself: Many conceded they were happy customers of the world’s largest online retailer, some paying for its Prime membership service. They just fear that their neighborhood is already bursting at the seams, with scores of glass apartment towers transforming an area long characterized by a mismatched jumble of low-rise buildings.

The cost of this rapid development, residents say, is that local hardware stores and pharmacies have been priced out and an aging sewer system is often overwhelmed by the more than 10,000 new apartments and 1.5 million square feet of office space built in recent years, according to city data.

Kanellos, 50, took over the Court Square Diner in 1991, when it was one of the few places where the artists then using old factory buildings as studios could sit down for a cheap meal.

The neighborhood’s cinematic views of Manhattan only heightened the sense it was a quiet village overlooked by the rest of New York City, residents say.

“We felt like we had the place to ourselves,” said Pat Irwin, a musician and composer who for years played with The B-52’s and settled in Long Island City in the mid-1980s.

The 50-story, blue-glass tower that Citigroup built in 1990 was an early harbinger of the transformation. The reports this week that Amazon had decided to build part of its “second” headquarters here, along with an outpost in northern Virginia’s Crystal City, feels to some residents like the death knell for a neighborhood they love.

“It feels like we’re being walled in and it’s out of control and the neighborhood can’t handle it,” Irwin said.

Irwin’s wife, Terri Gloyd, is the co-owner of the LIC Corner Cafe, which sits around the corner from MoMA PS1, a major outer-borough arts museum, and sells coffee, cookies and a pastry confection described as “a guava goat cheese Pop-Tart.”

Some of the residents who moved into the new apartment towers have become welcome regulars, even while some artist friends have been priced out of the area, she said. But construction and the ubiquitous film and television shoots, thanks to the proximity of Silvercup Studios, sometimes make the streets barely navigable to pedestrians.

“It already feels so oversaturated,” said Gloyd, who moved here in 1987.

Even so, if Amazon’s arrival brought with it a decent supermarket or helped bring a much-needed school to an underserved area, then perhaps that could soften its landing, she said.

Slideshow (17 Images)

If there is one constant in the crane-filled neighborhood these days, it is Manducatis, a white-tablecloth, Italian restaurant that Vincenzo Cerbone, 88, has presided over since 1974, after moving to the area in the 1950s. His wife, Ida, still cooks there most days, walking from their home around the corner.

“My husband, in the ‘50s, he predicted this,” she said with a proud smile, explaining their decision to acquire property in an area so close to Manhattan, no matter how unprepossessing it seemed at the time.

As for Cerbone, he shrugged at the Amazon news: New York City has always been changing. “These days, everything is new,” he said. “I don’t know if it’s an upgrade or a downgrade.”

Reporting by Jonathan Allen; Additional reporting by Hilary Russ in New York and Jeffrey Dastin in San Francisco,; Editing by Frank McGurty and Leslie Adler

US Accuses Chinese Company of Stealing Micron Trade Secrets

The Chinese government has made manufacturing computer chips that store data—memory—a major priority of its centralized science and technology strategy. According to the US Department of Justice, China plans to do it not just through research and development, but through old-fashioned espionage.

In an indictment unsealed Thursday, DOJ accused China’s Fujian Jinhua Integrated Circuit, Taiwan’s United Microelectronics Corporation, and employees including Jinhua’s president, of economic espionage—of stealing proprietary technology from US-based Micron Technology to make dynamic random access memory chips, which are found in just about every gadget. It’s not clear how the companies will respond, nor whether the individuals accused of espionage could ever be extradited to the US. So think of this as a virtual shot in the cold-but-warming trade war between China and the US. “Chinese espionage against the United States has been increasing—and it has been increasing rapidly,” US Attorney General Jeff Sessions said in a statement. “I am here to say that enough is enough.”

How much was enough? In 2013, Micron bought a Taiwanese chipmaker and formed Micron Memory Taiwan, where it planned to build DRAM, the mostly commoditized “short-term memory” in computers and related things that go beep. The DOJ indictment alleges that the president of MMT, Stephen Chen, quit and moved to UMC, set up a $700 million joint agreement with Jinhua (owned by the Chinese government), and then hired two more MMT employees, who starting in roughly 2016 began to bring over Micron trade secrets.

Micron is one of just a handful of companies making DRAM, and the only American one—it’s worth $45 billion and has a fifth of the global market. The technology is essentially a commodity; Micron and its two competitors, both Korean, differentiate themselves through being able to construct smaller and smaller features on their chips and the facility with which those chips talk among themselves and to other components. Jinhua, says the indictment, acquired the processes to build a range of chips, including those that use Micron’s “1x-nm” technology. Over the past year, Micron management has been touting that advance as a major piece of its business.

Until Jinhua started cranking them out, China didn’t have the technology to make tiny-featured DRAM, even though factories there make and assemble a wide swath of the planet’s gadgetry. But China’s government had tabbed developing the capacity as a priority in its most recent Five-Year Plan … which, in retrospect, looks to the US government as an invitation to stochastic espionage. Their ears were open, in other words, if DRAM technology should happen to fall off the back of a truck.

That may well be what happened. It’s possible that Chen, JT Ho, and Kenny Wang realized that their access to Micron’s proprietary technology meant a financial windfall if they took it to the government-owned chipmaker. But the US government hasn’t laid out that part of their case; Chinese economic espionage on the US mainland has typically involved a more elaborate process of spotting and recruitment of assets in advance of their access to information.

In this case, Micron complained; In August 2017, Taiwan filed criminal charges against UMC, and in December, Micron sued UMC and Jinhua. So in January, Jinhua turned around and sued Micron—for infringing on Jinhua’s DRAM patent. Meanwhile, the Taiwanese Ministry of Justice had pinged the San Francisco Division of the FBI, which has made something of a franchise of handling technology-related economic espionage.

That tripped another breaker; in late September, after two years of investigation, the FBI indicted the companies and the employees. (The indictment was only unsealed Thursday.) And last week the Department of Commerce added Jinhua to its “Entity List” of companies presumed to pose a national security threat to the United States (on the grounds that like everyone else in the world, the US military uses a lot of DRAM). That means US companies need a license, which they probably won’t get, for all “exports, re-exports, and transfers of commodities, software and technology” to Jinhua—including components and materials crucial to making DRAM.

From the US perspective, that’s about as tough a move as it can make, because redress through the courts is unlikely. “I don’t want to say we can never extradite people. We’ve seen time and again where somebody goes on vacation and they forget this country has extradition,” says John Bennett, special agent in charge of the FBI’s San Francisco division. “We’re not saying these people are guilty of anything but we’ve been able to provide enough evidence to a court to indict them. If they would like to argue that point, that’s what the American justice system is designed to do.”

In a release, UMC representatives say that the company “takes seriously any allegation that it may have violated any laws and fully intends to respond to these allegations.” The company said it “regrets that the US Attorney’s Office brought these charges without first notifying UMC and giving it an opportunity to discuss the matter.” Jinhua’s website is offline, and the Chinese Consulate General in San Francisco did not return a call asking for comment.

Whether any of this action will protect Micron’s position in the global market is an open question. The US government is operating under the assumption that, since Jinhua is owned by the state, the technologies for making DRAM may well find their way to other companies in China. It’s possible that the resulting chips will be recognizable as Micron-derived. “We appreciate the US Department of Justice’s decision to prosecute the criminal theft of our intellectual property,” said Joel Poppen, Micron’s general counsel in a press release. “Micron has invested billions of dollars over decades to develop its intellectual property. The actions announced today reinforce that criminal misappropriation will be appropriately addressed.” But company representatives did not answer questions about what impact increased Chinese DRAM production might have.

Whatever effects the indictments have on DRAM and the companies that make it, they might make broader geopolitical noise. An agreement between China and the US to not engage in trade-secret theft seems to have mostly collapsed under the Trump administration (even though the president tweeted Thursday morning that trade talks with China are going swell), so it makes sense that its agents are talking tougher. And the FBI’s San Francisco division hopes to further solidify relationships with Silicon Valley, a frequent victim of Chinese economic espionage. “A lot of times, they have this close hold [on information] because they don’t want to impact stock prices,” Bennett says. But he hopes that the fact that his office was able to investigate the alleged Micron theft for two years with no leaks will help show that his office is trustworthy. “Whether that’s being used as [political] chips or not, we don’t see that in the FBI. This is cases for us. We have economic loss,” Bennett says. “They broke American law, and we’re going to bring them to justice.”

Here is the indictment in the case:


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Investors bristle as Apple's iPhone data goes the way of its headphone jacks

(Reuters) – First Apple Inc took away the headphone jack on its iPhones. Then it took away the home button.

FILE PHOTO: The Apple iPhone 7 and AirPods are displayed during an Apple media event in San Francisco, California, U.S. September 7, 2016. Reuters/Beck Diefenbach/File Photo

And now, it has taken away a closely watched performance metric that it has disclosed to investors for 20 years.

The Cupertino, California-based company on Thursday said that it will stop reporting unit sales data for its iPhone, iPad and Mac computer products, the latter of which it has given out since 1998. Analysts and investors use the figures to calculate the average selling price of Apple’s devices and gauge the health of the company.

Apple said the data is less relevant to the strength of its business as customers bundle products, such as an iPhone paired with its wireless AirPods headphones, along with paid subscription services like Apple Music to listen to songs and iCloud storage for photos. Analysts were skeptical.

“Companies typically stop reporting metrics when the metrics are about to turn. This is not a good look for Apple,” said analyst Walter Piecyk from BTIG Research.

The move cost Apple dearly, helping to send shares down about 7 percent in after-hours trading. They later settled at $207.81, about 6.5 percent below their previous close.

“Apple is a complex company with lot of moving parts,” said analyst Ivan Fienseth from Tigress “I think they need to give more transparency to their shareholders and not less.”

But now, Apple will give cost-of-sales data for both its total product businesses and its total services business, which will let investors evaluate a gross margin for both. In the past, Apple gave only an overall gross margin figure for the company.

The new numbers are important for two reasons. First, they will show just how lucrative Apple’s hardware business really is. But more importantly, for the first time they give margin information on Apple’s services business, which reached $10 billion in its fiscal fourth quarter, up 17 percent.

Many of Apple’s fastest-growing businesses are subscription based, like its $9.99 a month Apple Music service. And investors tend to value subscription business through a combination of their revenue growth rate and margins – information that Apple investors will now have, said Tien Tzuo, chief executive of Zuora Inc, a company that helps subscription businesses track their finances.

But one problem Apple investors will face is not knowing what the margin mix is within the services business. Some parts of it, like iCloud storage, are likely lucrative, but others, like Apple Music, are probably less so because Apple has to pay music licenses costs and competes with rival Spotify Technology SA.

“You would value the music business with one (revenue) multiple closer to Spotify, and the cloud business with a (subscription software) multiple,” said Tzuo. “Having some sense of which business is growing faster would be nice.”

Reporting by Stephen Nellis in San Francisco; Editing by Lisa Shumaker

Should You Buy Amazon On The Dip?

Amazon (AMZN) has corrected about 25% from its all-time high of $2,050.50 in September. Following the release of the earnings report on Friday Oct. 26, 2018, the stock fell as much as 9% during intraday trading, and closed 7.82% lower for the day. The company’s 3rd quarter earnings per share came in at $5.75, beating estimates of $5.62. However, Amazon (AMZN) reported sales revenue of $56.6 billion, missing the estimate of $57.08 billion. Nevertheless, revenue still showed YoY growth of 29.33%. The company also forecasted lower than expected revenue for Q4, between $66.5 billion and $72.5 billion. Even though Amazon (AMZN) beat earnings, market was more focused on the company missing revenue estimates. Top-line growth is usually seen as more important than bottom-line growth, because top-line growth is harder to manipulate than bottom-line earnings.

I believe the market has overreacted last week. The real reason we saw shares of Amazon (AMZN) sell-off heavily on Friday was due to short-term traders unwinding their long positions as fast as possible following the earnings release. The stock had climbed 7% on Thursday Oct. 25, 2018 as traders had built up bullish positions while anticipating a strong earnings report, and what we saw was a ‘buy the dip, sell the news’ play out over those two trading sessions. I believe long-term investors have good reasons to stay bullish on the stock.

Since the market has reacted so negatively to the company’s sales miss and guidance, let us take a dig deeper into its main sources of revenue using its latest 10-Q filings for Q3.

Revenue Breakdown

Source: Amazon (AMZN) Q3 10-Q Filing

Online Stores

‘Online Stores’ sales grew by 10.11% YoY. Breaking it down even further, Sales for North America grew by 35% YoY, while international sales grew by 13% YoY, as shown by the charts below from the 10-Q filings.

North America

North America

Source: Amazon Q3 Earnings Slides

International

International

Source: Amazon Q3 Earnings Slides

While North American growth is solid, international growth rate is comparatively quite mediocre. Over the past several years, Amazon (AMZN) has invested heavily to develop its presence in several countries. However, the main two international markets where e-commerce growth is high are India and China. Amazon (AMZN) is clearly struggling to repeat its US growth story in these countries. The chart below shows operating profits for its international segment over the past year.

International

International Operating Profit

Source: Amazon Q3 Earnings Slides

While it is not profitable presently, it is encouraging to see that the losses have narrowed. The e-commerce market is growing in India at an annual growth rate of 51%, and in China at 34.3%. However, the two markets are where Amazon (AMZN) faces the most local competition as well.

In China, Alibaba (BABA) leads the Chinese e-commerce market with a 58.2% market share, dwarfing Amazon (AMZN) China’s market share at 0.7%, as shown in the chart below.

China Market Share

Source: emarketer

Amazon (AMZN)’s current place in China’s e-commerce market and the number and size of competitors it is up against certainly make it an uphill battle for the company. However, Amazon (AMZN) China is nowhere as weak as this chart may show. While Alibaba (BABA) is the biggest e-commerce player in China, and often directly compared to Amazon (AMZN), its business model is remarkably different from that of Amazon (AMZN). Alibaba (BABA) generates majority of its revenue from third-party sellers that use its online marketplace to connect with customers. Unlike Amazon (AMZN), Alibaba (BABA) does not own majority of the merchandise sold on its platform. Amazon (AMZN)’s business model involves high-quality logistics and fulfillment networks with bases in the US, UK and Japan. Alibaba (BABA) is making efforts to shift its business model towards that of Amazon (AMZN) by building it its own logistics and fulfillment networks. However, this will need huge investments and cash flow. While Alibaba (BABA) certainly has the potential and resources for this using its growing stream of cash flows, Amazon (AMZN)’s cash flow stream is just as strong. Amazon (AMZN)’s great leverage over Alibaba (BABA) is that it already has developed such networks and marketplaces in US, UK and Japan. Amazon (AMZN)’s strategy for growing into the Chinese market started with offering Chinese consumers Prime membership since 2016, and gives Chinese consumers the ability to order from its overseas marketplaces with free, cross-border shipping. Demand for international goods among Chinese consumers is strong, and Amazon (AMZN) is well positioned to fulfill these demands, putting it in a strong position to compete with Alibaba (BABA). While Amazon (AMZN) still holds a relatively minor market share regardless of these efforts, one of Alibaba (BABA)’s greatest weaknesses is one of Amazon (AMZN)’s greatest strength thanks to its business model, and that is counterfeit goods. Alibaba (BABA)’s current core business is acting as an intermediary between third-party sellers and customers. While this business model is very profitable, it also allows for many fraudulent retailers to use Alibaba (BABA)’s marketplace to sell counterfeit goods, and this has greatly damaged the company’s image over the past years. Undoubtedly, Amazon (AMZN) has also been dealing with counterfeit goods, but given that third-party transactions are a much smaller part of Amazon (AMZN)’s revenue base compared to Alibaba (BABA), Amazon (AMZN)’s brand image triumphs over that of Alibaba (BABA). Therefore, deteriorating trust in Alibaba (BABA)’s marketplace among Chinese consumers will play into Amazon (AMZN)’s favor, as consumers turn to Amazon (AMZN) to buy goods from international brands and take advantage of the free shipping incentives.

In India, Amazon (AMZN) is in a stronger position, controlling about 31% of the market share as of March 2018.

India Market Share

Source: Forrester/ Bloomberg

Realizing that Amazon (AMZN) had fallen behind in acquiring market share in China, CEO Jeff Bezos has strongly committed to invest $5 billion in India to build out its infrastructure. As a result, Amazon (AMZN) has become a heavyweight player in the market, with 42 fulfillment centers across the country, to be able to effectively deliver and fulfill the growing needs of Indian online shoppers. While these heavy investments have dragged down profitability for Amazon (AMZN)’s international segment, I believe Bezos has wisely targeted the fastest growing e-commerce market in the world. India has a population of 1.3 billion, out of which only 480 million are using the Internet. As a result, the nation has a high Internet usage penetration growth rate of 25% annually. Considering Amazon (AMZN)’s large-scale infrastructure establishment already present in the country, it is well positioned to capitalize on this high growth market and generate future streams of revenue.

Flipkart is presently the leader in the Indian e-commerce market. One huge leverage that Amazon (AMZN) has over Flipkart, is that Amazon (AMZN) is a profitable corporation, with deep pockets and a healthy cash flow. On the other hand, Flipkart is unprofitable and burning through cash to spend aggressively on advertising and offering discounts to consumers to support and grow revenues. Amazon (AMZN) is in a much stronger financial position to engage in price wars and large-scale marketing to grow its market share over that of Flipkart’s. Consequently, India offers many factors to support Amazon (AMZN)’s future revenue-generating potential.

Subscription Services

Amazon (AMZN) Subscription Services revenue mainly refers to its Prime membership fees. This revenue segment showed strong YoY growth rate of 45.70% in Q3. While some analysts argue that growth in prime membership is decelerating, it is undoubtedly still a high-growth revenue source for the company. Nevertheless, the slowing growth rate has put off investors and is building up bearish sentiment for the stock.

However, the Consumer Intelligence Research Partners have discovered an interesting trend in the spending habits of Prime members and non-Prime members. Prime members spend about $1400 on average per year buying merchandise on the website. On the other hand, non-members spend about $600 per year. They found that the gap in spending habits had actually widened from the year before as Prime members are spending more and more to take advantage of the subscription service. So while subscription growth is slowing, spending by existing subscribers is also growing, demonstrating that Amazon (AMZN) has been successfully encouraging Prime members to spend more time and money on the website. Consequently, as subscribers spend more and more, this continues to add to the ‘Online Stores’ revenue stream (which is on top of the subscription services revenue stream).

It is also worth noting that there is no competitor in the market that is able to match up to what Amazon (AMZN) has to offer to its Prime subscribers. Prime membership not only offers subscribers two-day free delivery service on various products sold on Amazon (AMZN), but also includes access to a wide choice of e-books, audiobooks, digital videos and music. The lack of alternatives to Amazon (AMZN) Prime helps the company secure a relatively stable revenue stream, which allowed it to raise its Prime subscription fees this year from $99 to $119 annually. This in my view was a clever move to capitalize on Prime members’ loyalty to the service. Now that Amazon (AMZN) is starting the reach a point where subscriber growth is slowing down, and existing customers are becoming increasingly devoted, I believe this was the right strategic move to increase its stream of top-line revenues from its subscription services segment.

Amazon Web Services (AWS)

AWS is Amazon (AMZN)’s cloud computing unit, which grew 45.7% YoY. This segment is a growing cash cow for the company, as it accounted for 56% of Amazon (AMZN)’s total operating income in Q3. The cloud market is forecast to double in size to $302.5 billion by 2021, and AWS is presently a market leader with over 30% market share. While some investors are fretting about the fact that AWS is growing at a slower rate than its biggest competitors, such as Microsoft Azure growing at 76% in Q3, Amazon (AMZN) is still holding on strong to its market share.

Addressing the increased competition in the market, Amazon (AMZN) cut prices for its Lightsail server by 50%. This had investors worried as this would hit Amazon (AMZN)’s AWS revenue stream, one of Amazon (AMZN)’s fastest growing units. However, strategically I believe this was a necessary and sensible move. Unlike its Prime subscription segment, the cloud sector is a highly competitive market. Hence to retain and continue to grow its market share, AWS needs to be more price competitive. While price cuts lower revenue, I believe this will be compensated for by growth in the overall cloud market. As long as AWS is able to maintain (or even further grow) its market share as the cloud market grows, revenues will continue to increase.

Other (Advertising)

The ‘Other’ revenue segment in Amazon (AMZN)’s 10-Q filings is mainly composed of advertising income. This segment has experienced immense growth, increasing 122% YoY to almost $2.5 billion. Amazon (AMZN) owns a treasure of data and analytics related to consumer shopping habits, allowing for more effective ad placements in front of the right users to increase the click rate. As a result, the company’s advertising revenue is growing strongly as a threat to Google (GOOG) and Facebook (FB).

Facebook (FB) is a social media website, where consumers may, but do not necessarily, come to buy things. Facebook (FB) is a pure ad revenue play, which has faced data scandal issues, such as the Cambridge Analytica scandal earlier this year. As a result, Facebook (FB) is working on self-regulations and giving users more choice and control over their data. There is a genuine threat that advertisers will be less willing to spend ad dollars on Facebook (FB)’s platform. The company had also lowered its revenue guidance in its Q2 earnings report as a result of these developments earlier this year.

Amazon (AMZN) on the other hand is not a pure ad revenue play, but still a genuine threat to Facebook (FB). Amazon (AMZN), as an e-commerce site, is a website where consumers mostly come to buy things. Hence, in view, advertisers will more likely want to spend ad dollars to gain space on Amazon (AMZN), where there is a better chance of consumers adding the items advertised to their carts if they end up liking it. Don’t get me wrong, Facebook (FB) is still a solid company and doing right by their users by focusing on data regulations, but it is not the best time to hold Facebook (FB) when there are other competitors like Amazon (AMZN) that are well-positioned to take away their ad dollars and the genuine possibility of Facebook (FB)’s future revenue streams being compromised by the data scandal and new regulations.

I see a real possibility that Amazon (AMZN) will continue to increase its market share in the $88 billion advertising market, making it another growing source of revenue on top of the company’s existing, well-established revenue-generating units.

Valuation

While Amazon (AMZN) clearly holds strong, multiple streams of revenue income, its rich valuation is an aspect that easily puts off many investors. The stock has corrected by around 20% from its all-time high, and following its recent earnings report, the stock is trading at about 86.2x trailing earnings, and 55.2x forward earnings (at time of writing), according to data from Morningstar. While these numbers are admittedly high in comparison the overall market, it is worth noting that it is certainly not unusual for high growth stocks to trade at high earnings multiples. In fact, in 2015 the stock was trading at levels as high as 909.10x earnings. Compared to those levels, paying for the stock at 92x earnings seems more reasonable. Moreover, the Price/Sales (P/S) ratio for the stock presently stands at 3.5. While this is definitely not a low ratio, it is also certainly not an atrocious level to buy the stock at, especially considering that one of its biggest competitors on a global scale, Alibaba (BABA), is trading at a P/S ratio of 8.6.

Furthermore, Amazon (AMZN) is currently trading at 28.8x its cash flow, which admittedly is very expensive, especially given that the industry average is only 6.9x. However, one should note that Amazon (AMZN) is also in a stronger position to generate and grow free cash flow compared to the rest of the industry, thanks to the monthly/annual fees it receives from its Prime subscription service. This strength became especially apparent when earlier this year it was able to raise the annual price of its Prime service by $20, and still continue growing its Prime membership subscription base. This additional income will continue to foster its free cash flow going forward, which makes me more willing to pay a higher multiple for its current cash flow, given its incredibly strong future cash flow generating potential.

Expecting and/or waiting for Amazon (AMZN) stock to come down to trading at dirt cheap multiples before entering, is not something I would recommend. My personal strategy is, when a correction like this comes along, long-term investors should definitely start taking positions in the stock. What if the stock goes even lower from here? In that case, investors should stay ready to buy more stocks, and gradually build up exposure overtime. How you choose to go about it obviously depends on your personal budget, risk appetite and patience.

Bottom Line

Amazon (AMZN) stock has come down 25% from its all-time high. This correction comes amid record earnings, but slowing revenues. I believe that over the long-term, the company has multiple, strong sources of revenue to drive future growth. The company is also making strategically wise decisions by raising prices in segments where it holds competitive strength (Prime Subscription Services), and cutting prices in more competitive markets to hold on to its market share (AWS/Cloud). Investors that are looking to get in for the long-term should take advantage of the recent pullback in the price.

Disclosure: I am/we are long AMZN.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Facebook Sketches a Future With a Diminished News Feed

For most of the past year, Mark Zuckerberg has been trying to convince the world that Facebook was fast becoming a very different company—one that accepted its enormous role shaping public opinion worldwide and would spend what it took to exercise its power responsibly. Many still have trouble believing him, and it’s easy to understand why.

Every time it seems as if Facebook is making progress against the hackers, spammers, and trolls hell bent on turning it into a cesspool of hate speech and fake news, new problems surface. It’s gone to huge lengths, for example, to tout its work to bring more transparency and reduced fraud to political ads. But Tuesday, just before Facebook released its results, Vice News reported that it had attempted to place ads on Facebook while posing as each of the 100 US senators. Facebook approved them all.

Screwups like this have felt like a twice a month event for the past year, seemingly unending. Zuckerberg and his executives and engineers at Facebook are some of the smartest, most experienced and well-funded talent in the world tackling these problems. Yet they keep looking like villagers who are using their fingers to keep their dam from leaking.

Holding Facebook accountable is critical. But that discussion obscures an equally important transformation going on at the company: For most of its existence, users associated Facebook with News Feed—that scrolling list of stories and ads that appears when you first visit the site. That’s changing, and fast, Zuckerberg said as the company reported third-quarter financial results on Tuesday.

He said traffic to new platforms like Stories on both Facebook and Instagram, which Facebook owns, and its messaging platforms WhatsApp and Messenger, is growing so fast that they are diluting News Feed’s cultural force and may eventually challenge it as the company’s dominant revenue generator. “People feel more comfortable being themselves when their content is seen by smaller groups, and (the posts) don’t stick around forever, ” Zuckerberg said, referring to two Stories features he said users like.

Facebook is still a financial juggernaut. It reported profit of $5.1 billion in the third quarter on revenue of $13.7 billion. But as it telegraphed when it reported earnings three months ago, its growth has slowed precipitously. Investors had gotten used to double-digit percentage growth in everything at Facebook every quarter. But in the third quarter, Facebook’s profit increased 9 percent over the same quarter a year earlier, the slowest rate of increase in more than three years; moreover, third-quarter profit increased a scant 1 percent from the second quarter.

Why is this happening? In addition to the billions it is spending to better police its platforms, more of its users’ time is being spent outside of News Feed. Facebook doesn’t yet show as many ads on those newer platforms, so those eyeballs generate less money. Investors seemed prepared for, and willing to accept, the explanation: Facebook shares rose 3 percent in after-hours trading.

Zuckerberg said the self-imposed splintering of Facebook’s audiences is as big as the shift the company underwent about six years ago when it realized users primarily wanted to interact with Facebook on a smartphone, not a laptop or desktop. “If the last 10 years at Facebook have been about connecting friends and family, the next 10 will be about building communities,” he said. He talked about how Facebook would soon be a bigger player in helping people find jobs, buy and sell things, create events, fund-raise and find a date. He said that the shift was happening so fast that in the coming months user engagement with Facebook Stories would surpass that of News Feed.

He also said now that users were gravitating to video on Facebook’s Watch platform, rather than News Feed, that he’d changed his position about video’s negative impacts on the Facebook user experience. In News Feed, he said too much video promoted passivity, and did not promote social behaviors. He said that when video is distributed in its own section—where users actively seek it out—it did not have that impact as much.

It all sounded positively prosaic coming from the man who previously sketched grand—now despised—visions like “making the world more open and connected” and “move fast and break things.” That’s a good thing, because the new Facebook won’t matter much if it can’t convince people that the old Facebook—the place where hackers, spammers and trolls run wild—is dead.


More Great WIRED Stories

Google CEO Sundar Pichai Plays Up U.S. Hiring During Earnings Call

During Google’s latest earnings call, CEO Sundar Pichai emphasized that the search giant is hiring U.S. workers.

“This year to date, we have added over 9,000 new employees in the U.S.,” Pichai said in a call with analysts on Thursday coinciding with fiscal third quarter earnings report for Google parent company Alphabet.

Pichai’s comments come amid President Donald Trump’s criticism of U.S. companies hiring workers and conducting major operations overseas. In September, Trump said that the prices of Apple products could increase because of increased tariffs on China and urged the company to “make your products in the United States instead of China.” The Trump administration then exempted some Apple products from being affected by the tariffs.

The Google CEO spent time discussing how the search giant is “investing closer to home,” reporting that Google spent over 80% of its total capital expenditures for the third quarter on data center facilities and offices in the U.S. This means that of the roughly $5.3 billion Google spent on capital expenditures in the third quarter, about $4.24 billion were dedicated to U.S. facilities.

“They have a strong, positive impact on the communities around them, supporting thousands of jobs,” Pichai said of the company’s spending on U.S. data centers and offices.

Pichai’s comments come after U.S. lawmakers criticized and demanded more information from Google regarding the existence of a censored search engine for China, dubbed Project Dragonfly. Pichai confirmed earlier in October that Google was testing a search engine for China, but said it was only “exploratory” in nature.

When an analyst asked Pichai about a possible Chinese search product during the earnings call, the executive did not reply specifically about Project Dragonfly, saying that Google is “constantly looking for ways to better service Chinese users.”

“That is where we are today,” he added.

Overall, Google said its third quarter revenue increased 21% year-over-year to $33.74 billion in the third quarter. Analysts, however, were expecting $34.05 billion in third-quarter sales.

Google shares were down 3.8% in after-hours trading $1,054.

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The search giant’s third-quarter earnings coincided with the publication of a major New York Times investigation that detailed how Google paid the creator of the Android operating system, Andy Rubin, $90 million to resign quietly after the company found credible allegations by a female employee that the executive had forced her into a sexual act. Google later released a memo on Thursday signed by Pichai and the company’s HR chief, in which the two executives said the report was a “troubling read,” and that the company had fired 48 employees for issues related to sexual harassment over the past two years.

Pichai did not mention Rubin or the Times story during earnings call, nor did any Wall Street analyst ask him to comment on it.

Amazon's holiday season sales outlook misses views; shares sink

(Reuters) – Amazon.com Inc (AMZN.O) forecast holiday season sales and profit that missed Wall Street targets on Thursday, projecting revenue growth that would be the slowest in years, sending shares of the world’s largest online retailer down 8 percent in after-hours trade.

Amazon’s third-quarter sales lagged estimates as well. Analysts said international results were disappointing and online competition was increasing. The company blamed accounting changes and cautioned that it was being conservative with its outlook.

For years, Amazon has made expensive bets on new technology and programs, like its $13.7 billion acquisition of Whole Foods in 2017 to storm the U.S. grocery industry. That has resulted in rollercoaster profits in the past, but revenue has largely grown at a breakneck pace as consumers shifted shopping online and away from brick-and-mortar stores.

“Weak revenue growth stuck out like a sore thumb,” said George Salmon, analyst at Hargreaves Lansdown. “And when you’re trading on 70 times expected earnings, it doesn’t take much to jolt the share price.”

Amazon’s more subdued expectations for this year’s holiday shopping season, which runs from the U.S. Thanksgiving holiday in late November through New Year’s, was a particular surprise. It forecast that fourth-quarter sales will rise between 10 percent and 20 percent, or up to $72.5 billion, while analysts were expecting $73.9 billion, according to Refinitiv data.

That would be Amazon’s lowest quarterly sales growth since at least the start of 2016. In the last four quarters, sales increased between 29 percent and 43 percent.

Brian Olsavsky, Amazon’s chief financial officer, said no fundamentals had changed, just some holiday timing in India and accounting differences.

Packages go on an automated conveyor line to be scanned, weighed and labeled at the Amazon fulfillment center in Kent, Washington, U.S., October 24, 2018. REUTERS/Lindsey Wasson

“We’re expecting a strong holiday season, so there’s no message in our forward guidance against that,” he said on a conference call with media. “We have everything ready to roll.”

The company moved the recording of $300 million in Prime subscription revenue from the fourth quarter to earlier periods in the year, he said. In addition, Amazon faces a tougher year-over-year comparison because the Whole Foods deal closed in the third quarter of 2017, and the different timing of the holiday Diwali affected sales patterns, he said.

“Amazon saw a meaningful slowdown in their international division. They had been hitting on all cylinders so this is something investors weren’t ready for,” Chaim Siegel, analyst at Elazar Advisors, said.

Amazon forecast fourth-quarter operating income between $2.1 billion and $3.6 billion, below the $3.87 billion expected by analysts, according to FactSet.

Neil Saunders, managing director of GlobalData Retail, said the results reflected a shifting landscape with retailers holding their own against Amazon.

“Others are now getting better at nibbling away at its dominance,” he said, citing Walmart (WMT.N), Target TFT.N and Macy’s (M.N).

PROFITS AND THIRD-PARTY GOODS

Slideshow (7 Images)

Despite slower sales growth, Amazon has steadily become more profitable.

Third-quarter net income rose to $2.88 billion, or $5.75 per share, from $256 million, or 52 cents per share, a year earlier.

Up to 53 percent of goods sold on Amazon now come from third-party merchants, the company said on Thursday, marking a steady shift away from traditional retail where Amazon is the seller of a product.

That means the company is collecting less revenue but taking in a lucrative cut of others’ sales – all the more profitable when merchants pay Amazon to handle their shipping. Seller services grew 31 percent to $10.4 billion in the third quarter.

“They’re indifferent if they sell us their own merchandise or third-party merchandise, so they shouldn’t be punished for the latter,” said Michael Pachter, an analyst at Wedbush Securities.

More sellers are looking to Amazon to market their products, too – another highly profitable business. Amazon appeals to advertisers because individuals generally are using the site to shop, unlike users browsing Alphabet Inc’s (GOOGL.O) Google, the ads sales leader, to find general information or rival Facebook Inc (FB.O) to see updates from their friends.

Amazon said revenue from the category and some other items grew 122 percent to $2.5 billion in the third quarter. Analysts were expecting $2.4 billion, according to Refinitiv data.

Olsavsky, the CFO, also said the company is operating more efficiently, hiring less than in the past and adding less warehousing space.

“We’ve really been able to cut back in a number of key areas,” Olsavsky told reporters, citing cost improvements for cloud unit Amazon Web Services as well.

The world’s No.1 cloud business by revenue saw sales up 45.7 percent to $6.68 billion, narrowly edging past estimates of $6.67 billion.

Reporting by Jeffrey Dastin in San Francisco and Arjun Panchadar in Bengaluru; Editing by Leslie Adler

What It's Like to Fly the WWII-Era Plane That Crashed on LA's 101 Freeway

Watching the flames devour the wing of a World War II-era aircraft that crash-landed on the 101 Freeway in Los Angeles, a few questions come to mind. How did the pilot escape unharmed? How’d he manage not to whack any cars as he came down around 2 pm on Tuesday? Why was the plane, a T-6 Texan, dressed up like a German fighter aircraft (sans swastikas)? And, most pressing of all, what is anybody doing flying a 70-year-old plane over northwest LA?

That last one, at least, is easy enough to answer.

“The T-6, out of all the airplanes I’ve flown, is one of my favorite aircraft to fly. It’s a beautifully handling aircraft, it’s extremely well built, very powerful, and it’s just a lot of fun,” says Dave Whitcomb, a professional pilot who has logged about 500 hours in the T-6 while working with a group called History Flight, which takes members of the public out flying in old-timey planes.

The crashed plane, a North American T-6 Texan, currently belongs to Condor Squadron, KTLA reports. (The Van Nuys-based non-profit’s pilots fly the vintage aircraft for parades and other events, according to its website.) In its previous life, the aircraft saw some combat during World War II and the Korean War, but mostly served as a trainer for pilots preparing to climb into the cockpits of Mustangs and Corsairs. Like a driver’s ed car, the two tandem seats each have a full set of controls. Forty-two feet from wingtip to wingtip, the plane can hit 205 mph at 5,000 feet, thanks to its single engine.

The joy of flying a vintage aircraft is similar to that of driving an old race car, Whitcomb says. Without any of the automated systems that pilots now spend most of their time monitoring, operating the T-6 requires constant adjustments to the stick in your right hand, the throttle and propeller controls in your left.

“You’re always flying the airplane,” he says. “In a smaller aircraft like that, it feels like it’s a part of you. Whereas big heavy jets today, you’re not manipulating the controls as much, because they’re so stable.”

Throw in the joy of reliving history, and it’s easy to see why you’d want to climb into the T-6’s cockpit, slide open the canopy, and slide through the air like the pilots of old.

Most of the folks flying T-6’s today are very experienced, Whitcomb says, largely because insurance companies aren’t in the business of covering rookies who want to zip about in a relatively rare and expensive plane. (Someone in Italy’s selling one for $28,735.) Most of the aircraft now have GPS navigation systems; they all have modern radios.

And while the T-6 is generally reliable, it only has a single engine, meanings that if that one craps out, you’re gonna make like Icarus. (This is why Whitcomb avoided flying the T-6 over large bodies of water or unlandable terrain.) That’s where the experience comes in. When an engine failure turns your plane into a glider, it’s time to look for a long, smooth landing surface—like the 101— steadily drop altitude, float down gradually, and hope everybody in their 21st century car can get out of the way.


More Great WIRED Stories

Their Flight Wasn't Until the Next Morning. Passengers Slept on the Floor. Then Airport Security Prodded Them to Stay Awake

Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek. 

Have you ever noticed that there are never enough seats for passengers at airports?

Many are forced to mill around because, well, what else are you going to do?

You don’t expect, however, airport staff to instruct you on the milling-around rules. Nor, indeed, on the sleeping-at-the-airport rules.

Last weekend, though, passengers at Stansted Airport near London had a difficult time.

Some passengers flew in from elsewhere late at night and didn’t have a connecting flight until the next morning.

What are passengers supposed to do all night? Wouldn’t you try to get some sleep?

The UK’s Metro describes how passengers tried to find any perch they could to get a few winks.

But when there are only 50 seats and perhaps 500 passengers, there’s only one option: the floor.

I’ve done it before. Perhaps you have too. You try and find a corner, lie down, grip your valuables and hope no one bothers you.

At Stansted last weekend, however, airport security patrolled the scene.

As one passenger, Ricardo Gavioli, told Metro: 

I even saw a young couple sitting together on the ground and when the woman tried to rest her head on her boyfriend’s chest and stretch her legs security came up and prodded her into an upright position.

Gavioli likened it to “sleep deprivation torture.” He said: 

The security were passing every ten minutes to tell people to sit upright and not to lie down.

Why would the airport behave this way?

The airport offered a simple statement: 

We don’t allow people to sleep on the floor or come with sleeping equipment (camp beds, hammocks, sleeping bags etc), and people sleeping on the floor will be asked to sit up or move if necessary. 

There is a caveat, says the airport:

However, nobody is stopped from sleeping or woken up while sitting in a chair.

How very reasonable when there’s hardly a chair to be had.

Why, in fact, doesn’t the airport start charging for chairs? I’m sure U.S. airlines can offer them software for that.

I wonder how Stansted executives fall asleep in meetings. Does security prod them awake, too?

Stansted has banned sleeping on the floor between midnight and 2 a.m. This, it claims, is to accommodate renovation work and, as the airport told the Telegraph:

Feedback shows passengers don’t like arriving at the airport for an early flight to find lots of people blocking access and getting in the way of both staff and those traveling.

They also don’t like having nowhere to sit.

Still, perhaps many will find this approach reasonable. 

Is it also reasonable, though, to prod people awake when they have nowhere else to go and they’re not doing any harm?

Stansted says too many travelers deliberately decide to sleep on the floor, so they don’t have to pay for a hotel.

On the people’s foghorn, Twitter, passengers offered reasonable arguments. There’s just nowhere to go in that airport.

Of course, the airport says passengers should arrive at a time nearer their scheduled departure. 

Many know, however, that this can also provide a crush not worth tolerating.

This airport security’s prodding behavior isn’t exactly unique.

The airport insisted this was to allow cleaners to do their jobs.

Perhaps one idea for passengers is to avoid Stansted altogether.  

Until, that is, the renovations are done and the reception is gloriously welcoming. 

Should both things ever occur, that is.

Gadget Lab Podcast: Pinterest’s Evan Sharp on What Makes Good Software

Why did Apple’s Jony Ive name Pinterest co-founder Evan Sharp as one of the figures in technology who he believes will change the future?

If you were wondering about that, here’s a great chance to learn a little bit more about Sharp and make the call yourself. During the 25th anniversary festival for WIRED last week, the Gadget Lab team had the chance to interview Sharp on stage, among other high-profile technologists. Over the next few weeks we’ll be publishing these taped conversations as a part of the podcast.

In this particularly interview, Mike and Arielle ask Sharp what it’s like to receive praise from Ive, how machine learning is changing software design, and whether Pinterest can remain once of the internet’s last happy places.

Show notes: Click here to read more about Jony Ive’s nomination of Evan Sharp for our 25th anniversary issue. And here’s Lauren’s WIRED 25 interview with Kevin Systrom, which we mentioned in this week’s show.

Recommendations this week: Lauren recommends the Dakota backpack from Dagne Dover. Mike recommends these awesome smartphone accessory lenses made by Moment.

Send the Gadget Lab hosts feedback on their personal Twitter feeds. Arielle Pardes can be found at @pardesoteric. Lauren Goode is @laurengoode. Michael Calore can be found at @snackfight. Bling the main hotline at @GadgetLab. Our theme song is by Solar Keys.

How to Listen

You can always listen to this week’s podcast through the audio player on this page, but if you want to subscribe for free to get every episode, here’s how:

If you’re on an iPhone or iPad, open the app called Podcasts, or just tap this link. You can also download an app like Overcast or Pocket Casts, and search for Gadget Lab. And in case you really need it, here’s the RSS feed.

If you use Android, you can find us in the Google Play Music app just by tapping here. You can also download an app like Pocket Casts or Radio Public, and search for Gadget Lab. And in case you really need it, here’s the RSS feed.

We’re also on Soundcloud, and every episode gets posted to wired.com as soon as it’s released. If you still can’t figure it out, or there’s another platform you use that we’re not on, let us know.

Jack Dorsey Has Problems With Twitter, Too

It contributes to filter bubbles, he said. It risks silencing people, he said. And when it’s not silencing them, it might be incentivizing them to behave badly, or basely, he said. His biggest criticism of the social media site he runs was that it could be nudging its users in the wrong directions.

“What does the service currently incentivize?” asked Twitter CEO Jack Dorsey on stage at the WIRED25 summit today. It’s the question he and his whole team are asking themselves right now—about every aspect of the site “Right now we have a big Like button with a heart on it and we’re incentivizing people to want it to go up” and to get more followers, he pointed out. “Is that the right thing? Versus contributing to the public conversation or a healthy conversation? How do we incentive healthy conversation?”

When he co-founded the website 12 years ago, it was meant as a place for friends to share pictures of their lunch. “Now it’s become a place to launch nuclear war,” said Wired editor in chief Nick Thompson. That evolution, from innocuous late-night destination for cryptic jokes to lubricator of social movements to a cesspool of outrage and the platform for geopolitical discourse was not a result of Twitter’s code, Dorsey’s argued. But it was inevitable.

From the second it launched, Twitter was a free app with which anyone could text message the entire world. “Once the world saw that, there was no taking it back,” Dorsey said. “Once they saw it, they needed it. Our job now is to make sure we are actually serving that need.” By which he means the need for a global public square, a place for a global conversation to discuss the most important topics—he cited climate change and poverty as topics that can only be tackled in a global discussion—which he feels it is Twitter’s responsibility to facilitate.

If that means not being an absolutist about free speech, so be it. “We can only stand for freedom of expression if people feel safe to express themselves in the first place,” he said, adding, “A lot of people come to Twitter and they don’t see a service. They see what looks like a public square and they have the same expectation as they have of a public square, and that is what we have to get right.”

Twitter CEO Jack Dorsey (right) on stage with WIRED editor in chief Nick Thompson.

Amy Lombard

To get it right, Dorsey indicated everything was on the table. Twitter, he indicated, may need to be radically changed. He noted right now the service only allows you to follow accounts, not topics. It only allows you to like or retweet. What should it allow you to do instead? He’s not sure, but he’s considering every option.

And he’s open to your ideas. “When we started the company, we weren’t thinking about [any of] this at all,” he said. “One of the interesting things about Twitter has been this amazing experiment in creating with others—the hashtag, the thread, the retweet—have all been invented by the people using our service, not us.” So if you have ideas for how to fix Twitter, make it known. Dorsey is listening.


More Great WIRED Stories

Robert Mueller Has Already Told You Everything You Need To Know

With the exception of President Trump’s legal team, no one has been watching the Mueller investigation more closely than Garrett Graff. Graff, a historian and journalist, wrote the book on Robert Mueller (literally), has interviewed him probably more than any other journalist, and covers the investigation for WIRED. He sat down with WIRED features editor Mark Robinson at the four-day WIRED25 anniversary event in San Francisco to decode the Russia probe and answer the question: What happens next?

A lot. As even a casual follower of the Russia investigation knows, questions have swirled over whether Donald Trump and his campaign colluded with Russia to influence the 2016 election by hacking the DNC and launching a massive disinformation campaign. Though numerous indictments of Trump associates have already come out of the investigation, Mueller has yet to finish it, or release a conclusive report.

A more hotly anticipated government report there may never have been. As Trump’s legal teams prepare their defenses—arguing as recently as last week that it was perfectly legal for the campaign to use materials stolen by Russia to further Trump’s chances—the nation waits.

“Everyone is so focused on ‘When is Mueller going to release the Mueller Report?’, and I think that what people miss is that Robert Mueller has been writing the Mueller Report in public through all of these court filings,” Graff said.

In the short year and a half that Mueller has been investigating Russia’s attack on the 2016 election and the Trump campaign’s ties to it, he has indicted some of Trump’s most senior campaign officials. In each of those court filings he has included far more information than he needed to, notes Graff. For example, when Mueller indicted officers of Russia’s military intelligence GRU agency for hacking, he noted in the criminal filing that the night that Donald Trump went on live TV and invited Russia to hack Hillary Clinton and find her missing emails, the GRU “returned to the office and attacked Hillary Clinton’s personal email server for the first time,” Graff says, emphasizing that last phrase.

“Mueller uses that phrase ‘for the first time’ in the indictment, which is totally unnecessary, unless Muller wants us to know that further down the road,” he says. “Mueller is making claims that I think point to breadcrumbs he is leaving us for where this going to go.”

Graff says that once you factor in the information hidden in plain sight in the indictments, as well as what is pointedly left out of them, you begin to see that Mueller is carving out the negative space where the heart of investigation lies. “He is staying very, very focused,” Graff explains, “And anything that he’s finding that is not directly related to Russia he is handing off to other prosecutors in a really interesting way because it gives us almost a negative relief of how to view Mueller’s investigation.”

That blank space can tell us where the investigation is going. And where is that? Straight toward Roger Stone, Graff surmises, pointing out that no one is more implicated by the information in the indictments that have already come out of the investigation. Short of that, Graff is hesitant to make predictions.

Garrett Graff is the author of The Threat Matrix: Inside Robert Mueller’s FBI and the War on Global Terror.

Amy Lombard

Normally, he says, as a reporter you always expect a story to end up being less weird than you are originally told. “You get these weird tips as a reporter, and it’s never that good. It ends up being like 75 to 80 percent as weird as the tip. That’s not true about any part of this story. Every single thing ends up being about 140 percent as weird as original reporting,” he says.

A few weird things he thinks Mueller is particularly interested in, that linger in that negative space carved out by the public indictments so far: A Trump campaign meeting with Betsy Devos’ brother Erik Prince in the Seychelles in 2016, the role of the nation of Qatar in Russia’s disinformation campaign, the Trump tower meeting, the Trump money trail, and “weirder questions about money,” says Graff.

“I think almost certainly the bombshell—if there is a bombshell—is about money,” he says.


More Great WIRED Stories

This Survey of 1,300 Harvard Business School Alumni Reveals the 5 Skills You Need to Succeed as an Entrepreneur

Do you admire leaders like Steve Jobs and Bill Gates who have turned their ideas into world-leading public companies? I certainly do. But it is one thing to admire such leaders and another thing to have the skills needed to become a successful entrepreneur.

Which raises an important question: What skills do successful founders have that other business leaders lack? Thanks to a survey of 1,300 Harvard Business School alumni, here are the five key skills — out of 11 examined by the researchers — at which entrepreneurial leaders distinguish themselves compared to non-founders.

1. Identification of Opportunities

Founders excel in skills and behaviors associated with the ability to identify and seek out high-potential business opportunities, according to the research. This should come as no surprise. But what makes for a great business opportunity? 

My interviews with hundreds of entrepreneurs reveal four tests:

  • Does the product relieve deeply-felt customer pain that other companies are ignoring?
  • Does the founder have a passion for doing a market-beating job of solving that problem?
  • Does the startup’s founding team have the critical skills to build that solution?
  • Is the market opportunity large enough — e.g., at least $1 billion? 

2. Vision and Influence

Founders have strong abilities to influence all internal and external stakeholders that must work together to turn a strategy into action and results.

Harvard researchers found that entrepreneurial leaders have more confidence of their abilities to provide vision and influence than the average leader — and that leaders working within established firms actually rated themselves much lower.

As I wrote in my 2012 book, Hungry Start-up Strategy, a successful entrepreneur is able to attract and motivate talent by creating what I called emotional currency — rather than paying people more money than Google does, they offer a powerful mission which gives work at the startup much more meaning.

3. Comfort with Uncertainty

Entrepreneurial leaders are better able to “move a business agenda forward in the face of uncertain and ambiguous circumstances,” according to the researchers.

You’ll know whether you share this skill if you are willing to start a company even though you have no money, no product, and no customers — but you do have a clear idea of what problem you are trying to solve and what your solution will look like.

Starting there, successful entrepreneurs are far more comfortable living with the uncertainty needed to go from there to building a large company. 

4. Building Networks

One reason for founders’ comfort with uncertainty is that they are good at assembling the resources the startup needs because they can create professional and business networks that will help them realize their vision.

Indeed, many of the CEOs I’ve interviewed have told me that they often find themselves not knowing how to solve problems — but they are able to get advice from CEOs who have been there before.

5. Finance and Financial Management

Being able to raise capital and control cash flow are essential to a successful startup. The founders HBS surveyed were “much more confident in their skills at managing cash flow, raising capital, and board governance — than were non-founder alumni.”

My interviews this year with CEOs for my forthcoming book on scaling startups highlights that successful entrepreneurs are great at persuading investors to write them checks.

The most successful sales pitches for money emphasize the size of the market the company is targeting, the value that the company’s product provides for customers, and the rapid rate at which the company is winning new customers and retaining old ones who spend more on the company’s products.

Not surprisingly, there is one area where founders are not as good as non-founders — preference for established structure.

Entrepreneurial leaders have a lower preference for operating in more established and structured business environments and would rather “adapt to an uncertain and rapidly changing business context and strategy,” according to the HBS researchers.

If you are great in these five skill areas, you may just have what it takes to be a successful entrepreneur.

7 Strategies to Maximize Your Productivity While Traveling

Whether you hate the idea of traveling or you actually look forward to it, it’s hard to deny that travel can sabotage your productivity–at least temporarily. It takes hours of planning and coordination to prepare for some trips, and hours to navigate airports, not to mention the actual time you spend traveling.

It can make a full day of responsibilities feel like a waste, and put you behind on achieving your goals. Fortunately, there are some helpful strategies that can make you more productive–no matter how you’re traveling.

Try using these tactics to get more done when you’re setting course on a major trip:

1. Get used to a different sleep cycle.

One of the biggest sources of productivity disturbance while traveling is the disruption in your sleep cycle. Depending on where you travel to, you could be dealing with timezone changes and jet lag, and you may not be able to get a comfortable eight hours of sleep when you’re used to getting it.

Instead, you can try a biphasic cycle or an everyman cycle, which rely on split patterns to break up your time sleeping; that way, travel may not have as big of an impact on you. The caveat here is that it takes time to get used to a new sleep cycle, so it’s best for frequent travelers only.

2. Take a private jet.

One of the biggest sources of time delay while traveling is navigating the airport; going through customs, waiting to board the plane, dealing with delays, etc., can add several unnecessary hours to your trip.

Taking a private jet allows you to circumvent most of these problems–and it’s cheaper than you think. If a few hundred dollars can save you literally hours of time, and afford you a better workspace when you’re flying, it’s likely worth the extra money.

3. Look for coworking spaces when you arrive.

Coworking spaces are popping up everywhere, so you shouldn’t have trouble finding one at your destination. Instead of going straight to a hotel or meeting, check into one of these productivity hubs; you’ll be able to get coffee, work in a peaceful environment, and if you’re up for it, socialize with other people who may be in similar situations. It’s a great way to both decompress and get more work done, so take advantage of it.

4. Rely on audio.

While you’re driving, navigating the airport, or dealing with a lack of lighting or Wi-Fi, you won’t be able to work on your most important heads-down tasks–but that doesn’t mean you can’t be productive.

Try focusing on audio-specific tasks when you can, listening to recordings of old meetings to prepare for the future, catching up on your favorite industry podcasts, and listening to audiobooks that can improve your skills or expand your professional horizons. There’s no shortage of audio content to plunder, so make good use of it.

5. Prepare travel-specific tasks.

While traveling, you won’t be able to do tasks that require multiple monitors, or meet with your teammates in person. You’ll have limited space, and in some cases, limited Wi-Fi connectivity.

Prepare tasks that you can work on under these conditions, so you don’t run out of things to do. As long as you have a few days’ heads-up, you can handle your least travel-friendly tasks in advance, and set yourself up to work offline for the next several hours.

6. Say “no” and delegate.

New things are going to come to your attention before and during your travel; for example, you might get a client email requesting a change to a piece of work you submitted. If this is the type of work that can’t be done efficiently when traveling, don’t bend over backwards trying to do it; instead, tell them you’re traveling, and not able to do it right now.

If it’s an emergency, or if you won’t be able to get to it for a while, consider delegating it to someone who can handle it.

7. Rest (if you can).

To some people, sleeping may seem like the opposite of productivity. But in reality, sleeping is one of the best things you can do for your mental energy and cognitive capacity. It can even reduce your susceptibility to illness and improve your overall physical health.

Accordingly, if it’s possible for you to take a nap during a long flight or car ride, take advantage of the opportunity. Use a face mask, a neck pillow, or some comforting white noise from your headphones–whatever you need to get some extra shuteye when you’re between destinations. You’ll thank yourself later.

Finding Your Own Style

Not everyone is going to travel the same way. For example, some people may not be able to read while in a vehicle, and some may have trouble sleeping on airplanes. The goal isn’t to fall in line with a series of productive habits, but rather to craft your own habits to maximize your personal productivity. Learn which strategies and actions suit you best, and customize your own set of approaches.

The Cars of the Paris Auto Show Reveal a Quirky, Urban, Electric Future

The Renault Ez-Ultimo brings the high-end glitz to the show this year. Just because cities of the future may prioritize ride sharing over private cars doesn’t mean you should have to slum it on the way to opening night at the Opéra national de Paris.

This rounded bronze box is about as far from a production car as a concept can be (could those wheels even turn? where’s the ground clearance for cobbled streets?) but Renault says it shows a vision of an autonomous future, where passengers demand more from vehicles. In particular, the interior “reflects French elegance” with wood, leather, and marble.

Citroën went the opposite direction, unveiling a very real, very modest EV. The DS3 Crossback E-Tense is a fashionable crossover SUV, and an update on Citroen’s tres popular DS3 supermini car. The electric version comes with a 50-kWh battery—about half that of a high-end Tesla—a range of 186 miles on the generous European test cycle, and a 0-60 time of 8.7 seconds. None of those specs are going to blow buyers away, but at the right (to be revealed) price, the quirky car, with sharp angles and odd window cutouts, could rival the Nissan Leaf or Renault Zoe, as a city runabout.

Europe has taken styling cues from the US for the Peugeot E-Legend concept, albeit with a little added flair. There are plenty of muscle car hints in the styling, with a side profile reminiscent of the modern Dodge Challenger, and a Mustang-like front squint. Of course it’s a concept, so it’s electric and autonomous, and supposed to show that those things don’t have to be boring or bland.

The retro theme continues inside with velvet upholstery and fake wood screensavers for the displays when they aren’t in use. It’ll apparently have a 100-kWh battery pack and all-wheel drive, but it’s so concept-y that wise money should be on all that potentially changing, if and when the E-Legend makes it to production.

It wouldn’t be a European auto show without a city car, and Smart is the brand synonymous with cars so small they can be parked end-on to a curb. The Smart Forease moves that theme into an electric age. The rather optimistic concept banks on the future always being sunny, given that it doesn’t have a roof. Not even an optional one. (Have these people been to Europe?)

Smart has already stopped the sales of all internal combustion engined cars in the US, and if this car makes it across the Atlantic (and to reality) it could find a place in some Californian garages. The Golden State has good EV electric rebates, and as close to a guarantee of good weather as you’re going to find.

Infiniti is keeping it real with its Project Black S hybrid, based on a Q60 coupe and its V6 engine. Infiniti engineers turned to electrification, and lessons from partner Renault’s Formula 1 team (there’s the French connection) to give the machine an e-boost.

It’s a hybrid, but one that delivers performance rather than economy. The three motors add 213 horsepower to bring the total to 563, and drop the 0-60 mph time to under four seconds.

Toyota didn’t use the Paris show to unveil radical new concepts, but did introduce a term that will be new to most buyers: self-charging hybrids. This is no magical perpetual motion-type technology: Self-charging hybrids are just cars that can run on battery power, but can’t be plugged in. The type Toyota has been selling for years with the Prius, when they used to be just called “hybrids.” As they’ve gone from being radical, to commonplace, to somewhat lame given the influx of more robust electric options, Toyota is looking to rebrand to remind people that the tech is still quite clever, and does save fuel.

DHS says no reason to doubt firms' China hack denials

WASHINGTON (Reuters) – The U.S. Department of Homeland Security said on Saturday it currently had no reason to doubt statements from companies that have denied a Bloomberg report that their supply chains were compromised by malicious computer chips inserted by Chinese intelligence services.

FILE PHOTO: A U.S. Department of Homeland Security employee stands inside the National Cybersecurity and Communications Integration Center as part of a guided media tour in Arlington, Virginia June 26, 2014. REUTERS/Kevin Lamarque/File Photo

“The Department of Homeland Security is aware of the media reports of a technology supply chain compromise,” DHS said in a statement.

“Like our partners in the UK, the National Cyber Security Centre, at this time we have no reason to doubt the statements from the companies named in the story,” it said.

Bloomberg Businessweek on Thursday cited 17 unidentified intelligence and company sources as saying that Chinese spies had placed computer chips inside equipment used by around 30 companies, as well as multiple U.S. government agencies, which would give Beijing secret access to internal networks.

Britain’s national cyber security agency said on Friday it had no reason to doubt the assessments made by Apple Inc (AAPL.O) and Amazon.com Inc (AMZN.O) challenging the report.

Apple contested the Bloomberg report on Thursday, saying its own internal investigations found no evidence to support the story’s claims and that neither the company, nor its contacts in law enforcement, were aware of any investigation by the FBI on the matter.

Apple’s recently retired general counsel, Bruce Sewell, told Reuters he called the FBI’s then-general counsel, James Baker, last year after being told by Bloomberg of an open investigation of Super Micro Computer Inc (SMCI.PK), a hardware maker whose products Bloomberg said were implanted with malicious Chinese chips.

“I got on the phone with him personally and said, ‘Do you know anything about this?,” Sewell said of his conversation with Baker. “He said, ‘I’ve never heard of this, but give me 24 hours to make sure.’ He called me back 24 hours later and said ‘Nobody here knows what this story is about.’”

Baker and the FBI declined to comment on Friday.

Reporting by David Brunnstrom; Editing by Dan Grebler

Oracle Says Thomas Kurian, Who Oversaw the Company’s Cloud Efforts, Is Stepping Down

Oracle confirmed late Friday the departure of a top product executive from its ranks. Thomas Kurian, a 22-year veteran of the company who most recently served as president of Oracle’s product development, is stepping down from the company.

Kurian’s bio on Oracle’s corporate site credits him with overseeing Oracle’s transition to cloud-based enterprise software. Prior to Oracle, Kurian worked as a consultant at McKinsey & Co. Last week, Oracle’s stock stumbled after the company’s second-quarter earnings showed revenue from its cloud services came in below analyst expectations.

In a filing with the U.S. Securities and Exchange Commission, Oracle said that Kurian notified the company that he was leaving to pursue other opportunities. “Kurian’s duties and responsibilities have been reassigned to other senior executives in Oracle’s development organization,” Oracle’s filing said.

The announcement comes a few weeks after several news organizations reported on a clash between Kurian and Oracle founder and executive chairman Larry Ellison. According to CNBC, Kurian took a leave of absence from Oracle earlier this month, notifying the company’s staff of his plans in an email. At the time, an Oracle spokesperson said the company expected Kurian to “return soon.”

Kurian has battled with Ellison over the role that cloud-based software will play in Oracle’s future. The two executives faced “growing strife” over the appropriate cloud strategy for Oracle, Bloomberg reported, with Kurian wanting Oracle to make “more of its software available to run on public clouds from chief rivals Amazon and Microsoft as a way to diversify from its own struggling infrastructure.” Ellison reportedly disagreed.

Oracle’s stock was little changed in aftermarket trading, declining 0.3% to $51.40. In official trading Friday before Kurian’s departure was announced, Oracle shares were down 0.3% at $51.56.

Facebook Can Target Your Phone Number for Ads. And You Might Not Be Able to Stop Them

Advertisers have long been able to target their marketing on Facebook using lists of phone numbers, and they can obtain those numbers from legitimate business interactions with existing customers or by leasing or purchasing lists of numbers from data brokers. (That’s one reason why stores ask for your number when you make a purchase.)

On Wednesday, Facebook admitted phone numbers provided to the social network for extra security purposes on user accounts—often referred to as two-factor authentication (2FA)—may be used to target advertising to those people, even if that phone number wasn’t previously disclosed to the company in another way.

In addition, Facebook can also target ads to a user if their phone number only exists in a friend’s uploaded contact list. Gizmodo described this method of using undisclosed phone numbers in its story revealing the practice as “shadow contact information.” Facebook doesn’t offer a setting for opting out or blocking the use of your number if it appears in someone else’s uploaded contact list. Fortune asked Facebook whether another privacy or ad settings would include this and hasn’t immediately received a reply.

But you can prevent the “shadow” use of your number—so long as you’re willing to stop using your phone number for 2FA.

“We are clear about how we use the information we collect, including the contact information that people upload or add to their own accounts,” a Facebook representative told TechCrunch on Thursday. “You can manage and delete the contact information you’ve uploaded at any time.”

With 2FA, Facebook and many other companies make the entry of a password just the first step in a login. After successfully entering an account name and password, you receive or generate a “second factor,” a short code that’s bound to the same account. Only the person who set up 2FA and has access to the account can receive or generate this code.

A second factor proves that you don’t only “know” something (the password), but also “have” something (a phone or an app registered to the account). That physical component deters account cracking even if passwords get disclosed, guessed, or broken.

These second-factor codes, often six digits long, can arrive in different ways. The method varies by service. A code may be sent as a text message to a phone number or generated by an authentication app that has a secret initially provided by the service. Some companies also let you verify a login elsewhere within an installed smartphone app. Apple, meanwhile, has a proprietary approach across its computers and mobile devices as well as using text and voice messages. Using phone numbers and text messages is a preferred method of 2FA for most users because of its convenience.

Facebook always required a phone number as a second factor, even as it added app-based verification. A few months ago, it lifted the phone-number requirement.

To alter your Facebook 2FA settings, select the downward-pointing triangle at the top-right of any Facebook page, choose Settings, then Security and Login, and finally Two-Factor Authentication. If you’ve assigned a phone number, click or tap Remove Number, and then confirm with Remove. Facebook said this will disable its ability to market to your phone number (unless one of your contacts has your number in their address book, which they likely do).

Keppel, SPH offer to buy remaining stake in M1 for up to $930 million

SINGAPORE (Reuters) – Keppel Corp Ltd and Singapore Press Holdings Ltd (SPH) have offered to buy the remaining shares in Singaporean telecom operator M1 Ltd that they do not already own, in a deal worth up to S$1.27 billion ($930 million).

FILE PHOTO: People shop for handsets at an M1 mobile shop in Singapore March 21, 2017. REUTERS/Edgar Su

The companies, through a special purpose vehicle, have offered to pay S$2.06 per M1 share, a premium of 26 percent to the stock’s last closing price, they said in filings to the stock exchange.

Conglomerate Keppel, through its unit Keppel Telecommunications & Transportation Ltd (Keppel T&T), media firm SPH and their related parties have a deemed interest of 33.27 percent in M1, which has a market capitalization of S$1.51 billion.

“With majority control, Keppel Corp and SPH, who are long-term shareholders of M1, would be better able to support M1’s management to implement strategic and operational changes to strengthen its performance and position as a connectivity platform,” Keppel Corp said in a statement.

Mobile telecoms competition is heating up in Singapore, with Australia’s TPG Telecom seeking to launch a new service after winning a license to become the city-state’s fourth telecom operator. M1 is considered to be the most vulnerable to new competition.

Malaysia’s Axiata Group Bhd is the largest shareholder in M1, Singapore’s smallest mobile network operator, with a 28.3 percent stake.

Last year, Axiata, Keppel and SPH considered, and then called off, a strategic review of their M1 shareholding, which sources said was due to a lower-than-expected offer from external parties.

Reuters, citing sources, on Wednesday said Axiata was also open to teaming up with overseas partners to buy out Keppel and SPH’s stakes if a potential offer from Keppel and SPH did not meet its expectations.

Separately, Keppel said it was seeking to privatize Keppel T&T for S$1.91 per share, a 40 percent premium. It already owns a 79.22 stake in Keppel T&T, which provides logistics and data center services.

Trading in shares of Keppel, Keppel T&T, SPH and M1 was halted ahead of the announcements.

DBS Bank is the financial adviser to Keppel, while Credit Suisse (Singapore) is advising SPH.

Reporting by Aradhana Aravindan; Editing by Sunil Nair

Jeff Bezos Just Revealed How the 'Smartest Guy at Princeton' Radically Changed His Life 34 Years Ago. (He Never Knew Until Now)

Do you ever wonder if you’ll have a lasting effect on the world?

But the truth is, your greatest impact might turn out to be something you never realize. 

The kind gesture to someone when he or she needs it most. The example you give to someone that leads them to pursue what turns out to be their calling.

Jeff Bezos just revealed the story behind one such person in his life.

It’s a 34-year-old tale, involving a college classmate he describes as “a humble, wonderful guy … the smartest guy at Princeton.” And as often happens, this classmate had no idea that Bezos even remembered him, until Bezos talked about him this week.

The story goes like this. When Bezos was in high school and college, he had his heart set on becoming a theoretical physicist. He enrolled at Princeton as a member of the class of 1986, one of about 20 students in the elite electrical engineering and computer science (EECS) program. 

Bezos fit right in. But although he was clearly very intelligent (he’d been the valedictorian of his high school class, and a National Merit Scholar), he by no means thought of himself as the smartest student in the program.

That honor, in his mind, went to a fellow student named Yasantha Rajakarunanayake, from Sri Lanka. And Bezos shared the moment that became truly clear.

He and his roommate, Joe, Bezos explained, had been working together for three hours on a particularly difficult partial differential equation, and getting nowhere. So they brought it to Yasantha.

He stared at it for a couple of minutes and came up with the answer without even writing anything down: “Cosine.”

Then he walked Bezos and Joe through the problem, writing three full pages of detailed algebra. Years before, he’d solved a similar problem years, Yasantha explained, and he remembered how he’d done it. So, he’d just “mapped this problem on to that problem.”

To him, the answer had been “obvious.”

“That was an important moment for me, because it was the very moment I realized I was never going to be a great theoretical physicist,” Bezos recalled in his talk. 

People laughed. And it’s funny of course to think that if Yasantha and Bezos hadn’t had that exchange, perhaps Amazon wouldn’t be exactly what it is today.

But of course that’s pretty theoretical. Instead, I think the real lesson from this story is Yasantha Rajakarunanayake’s take on it today.

The two men hadn’t talked since Princeton. Bezos also recalled him as “humble” and “wonderful,” but Rajakarunanayake had no reason to think that Bezos particularly remembered him-;certainly hadn’t known that he’d had any kind of impact that Bezos considered important.

And he was clearly proud.

“Wow! Jeff is talking about me,” Rajakarunanayake wrote on Twitter. “Amazingly he remembers interacting with me 34 years ago. What a memory! Also no Amazon if it weren’t for this, since he decided not to pursue physics!”

He continued: 

“Back in college, Jeff and I were just fellow students, and no one could have predicted what future would hold for us. Jeff remembers me as smart, humble and speaks fondly simply because I helped him with his homework.”

But Rajakarunanayake also had an insight into why Bezos went on to become the world’s wealthiest person.

Because remember-;Bezos had spent three hours trying to solve that problem before asking for help. And Rajakarunanayake recalled another time when Bezos stayed up all night working on another project, ultimately finding a solution that was better than the one Rajakarunanayake had come up with.

“Jeff was an excellent student, and a very persistent, tenacious one. That is unique to him,” he recalled to an Indian newspaper, The Print. He “will not give up like most of us would when presented with a challenge.”

That’s probably the ultimate combination: not just smart, not just tenacious, but both together in a single package. And that’s as good an explanation as any for why Bezos built Amazon, and you and I didn’t.

By the way, Yasantha Rajakarunanayake is doing fine. He went on after Princeton to earn a doctoral degree at ​Caltech, “and received 54 patents in the U.S.” with 40 others currently pending, according to The Print. “Currently, he is based in California and serves as a senior director for MediaTek, a Taiwanese semiconductor firm.”

How the HTC Exodus Blockchain Phone Plans to Secure Your Cryptocurrency

Blockchain phones are coming, that much is certain. The Sirin Labs Finney and the HTC Exodus are both expected by the end of the year, each with its own, sometimes vaguely defined sense of what exactly that term means. HTC’s Phil Chen, who spearheaded Exodus development, has at least started to fill in the blanks of how the Exodus will pull off its most important trick: keeping your cryptocurrency safe.

The Exodus has loftier ambitions than mere storage, of course. “A few years down the road, we see a world where people own their own identities and data, where everyone understands the concept and economics of digital property,” says Chen, HTC’s decentralized chief officer. For the moment, though, the primary concern for the Exodus’s intended audience is how well it works as a hardware wallet.

That had, until now, been a bit of a question mark. After all, a smartphone seems like an inopportune place to stash digital currency. Android phones, in particular, present inherent security risks, subject to a wide assortment of malware and other targeted threats. Smartphones also, as you may be personally and painfully aware, tend to get lost or stolen, at least more than is ideal for what aspires to be a digital bank vault.

In fact, even the mere act of connecting to the internet goes too far for protective cryptocurrency investors, who prefer to keep their assets in so-called cold storage wallets, which remain entirely offline. If anything, cryptocurrency storage has trended toward that extreme, with some deep-pocketed enthusiasts opting for physical vaults with Faraday cage surrounds.

By contrast, putting your cryptocurrency—more specifically, the private keys required to access it—in an Android phone might seem the equivalent to stashing your money not under the mattress but neatly on top of it, and then placing that mattress on a fairly busy street corner.

“Phones are very promiscuous in the sense that they transfer a lot of data, they connect to a lot of networks, we install third-party apps on them. They can be made relatively secure, but they’re not the safest thing to carry around a lot of money,” says Matthew Green, a cryptographer at Johns Hopkins University who is affiliated with a privacy-focused cryptocurrency called Zcash. “And if you’re not carrying a lot of money, you don’t need a special phone.”

And yet tens of millions of people already use software wallets, Chen says, tied to centralized exchanges like Coinbase. “What’s obvious in the old internet model, is centralized cloud systems are very hackable,” says Chen. “Centralized honeypots are continually hacked. The concentration of data in walled gardens increases the cost of security.”

The HTC Exodus aims instead for something of a compromise. It isn’t quite cold storage, but at least it empowers users by allowing them to hold their own keys. It does so by placing them in a so-called trusted execution environment, a part of an ARM chip called TrustZone. The secure enclave sits apart from the operating system, designed to inoculate precious cargo even in the event of a broader breach. Think of it as a smartphone’s panic room.

The concept of a secure enclave isn’t new; Intel has offered one for PCs for some time, and Apple uses one to protect the biometric data—your fingerprint and face—that it uses to unlock the iPhone. Even TrustZone has been around for years, commonly used by studios and such to lock down DRM-protected content.

It’s as good an answer as any right now, and preferable to HTC attempting to built its own solution from the ground up. But TrustZone isn’t a security panacea. “If somebody claims something is secure, a lot of people try to poke into it,” says Simha Sethumadhavan, a computer scientist at Columbia University. “Over the years there have been several attacks on TrustZone.”

That includes one from Sethumadhavan, who along with coauthors Adrian Tang and Salvatore Stolfo published research last year detailing how to not just break TrustZone security but alter the code that’s running in the secure environment.

To be absolutely clear: These attacks are difficult to pull off, and TrustZone generally works as advertised. “It does significantly raise the bar for the attacker,” says Sethumadhavan. “It’s better than putting it in the insecure world, for sure,” he adds, referring to the broader Android operating system.

Even Chen, refreshingly, recognizes the trade-offs involved. “There’s no such thing as 100 percent security. It’s always a balance between security and usability,” he says. “We’re still at the very early stages of educating users that this is not a 100 percent secure solution, but as of right now it’s the best so far. It’s our attempt to do something that’s best from the market.”

Until and unless the industry open sources everything, Chen says, HTC has to take as an article of faith that ARM and chipmaker Qualcomm will deliver the security they promise. He acknowledges that hardening the HTC Exodus will also require input from cryptographers and the broader cryptocurrency community. “It’s really a beta,” he says. “We’re still targeting the 30-35 million people that have software wallets, and this is a much better solution than that.”

And while Chen wouldn’t argue that the Exodus is more secure than cold storage, he does stress that it offers much better usability. There’s no dusting off a hard drive and connecting it with USB to your laptop and struggling through a clumsy interface.

The HTC Exodus will also offer a novel way to recover your keys, which are often a series of words that need to be entered in the event that you lose access to your wallet. If you lose both your wallet and your recovery keys, you’ve officially lost everything.

That dynamic comes into especially sharp relief with smartphones, which, when you aren’t losing or breaking them periodically, you’re actively replacing every two or three years.

HTC’s proposed failsafe: You can split your key among three to five people you trust, all of whom will need to download an app for this to work. You won’t need their help to assign transactions, but you will if you lose your phone. “It revolves around this fundamental principle of users owning their keys. I do want to stress that this is a very, very difficult problem. People aren’t used to owning their keys. People are used to calling up Apple or Google,” says Chen.

Putting that power in the hands of users and their friends is certainly in line with the HTC Exodus philosophy. But it also raises several immediate flags: What if you have a falling out with one of those friends, or they get a new phone, or delete the app, or die? Does the backup have a backup?

Not yet. “This is the 1.0 version,” Chen says. “There are other backup plans that we’ve thought of, but they’re not part of the solution yet.”

That sounds dire, but it’s at least something. If you find yourself in a comparable situation with a cold storage wallet—or the Sirin Labs Finney blockchain phone—you generally have no options at all.

Plenty of questions remain about the HTC Exodus, especially regarding the company’s long-term vision of revolutionizing how people relate not just to their cryptocurrencies, but their data and identity. HTC may still be figuring out how the blockchain smartphone will change the world. But at least it has some answers as to how to make it safe.


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Australian regulator cracks down on misleading digital coin offerings

SYDNEY (Reuters) – Australia’s corporate watchdog said on Thursday it was stepping up scrutiny on “misleading” initial coin offerings (ICOs)targeted at retail investors while adding it has already acted against several such proposals.

Bitcoin (virtual currency) coins are seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, May 27, 2015. REUTERS/Benoit Tessier

The Australian Securities & Investments Commission (ASIC) said consistent problems with proposed ICOs included the use of “misleading or deceptive” statements in sales and marketing materials and not holding Australian financial services licenses.

ICOs, or the selling of digital coins or tokens, are increasingly popular with start-ups as a way to finance projects. The ICO market is relatively small in Australia but ASIC is concerned poor conduct could have a negative impact on investor confidence.

“If you raise money from the public, you have important legal obligations,” ASIC Commissioner John Price said in a statement.

“It is the legal substance of your offer – not what it is called – that matters,” Price said, adding some proposed ICOs operated illegal, unregistered investment schemes.

Since April 2018, ASIC has prevented five ICOs from raising capital. These ICOs have been put on hold and some will be restructured to comply with legal requirements, ASIC said.

The regulator is taking action against one completed ICO, it said without identifying the company.

“ICOs are highly speculative investments that are mostly unregulated, and while there are genuine businesses using this structure many have turned out to be scams,” ASIC noted.

Earlier this year, Moscow-based cyber security firm Group IB found projects which raise funds through ICOs were attacked by cyber criminals 100 times a month on average, underscoring the risks of investment in cryptocurrency ventures online.

Globally, start-up firms have raised millions of dollars online to fund projects, with often little more than a handful of employees and an outline business plan attracting regulatory attention.

Reporting by Swati Pandey; Edtiting by Sam Holmes

With a Few Tweets, This Tiny Coffee Shop Got Ryan Gosling to Walk Through the Door. Here's How They Did It

Toronto coffee shop Grinder Coffee landed a heap of social media attention yesterday when its campaign to attract actor Ryan Gosling  went viral, generating more than 10,000 likes and retweets in a matter of hours.

The social media campaign–which included a cardboard cutout of Gosling–asked the star to stop by while he was in town promoting his latest movie, a Neil Armstrong biopic called First Man, at the Toronto International Film Festival. The shop promised Gosling free coffee, and even offered to pay for his Uber ride from the red carpet to the front door.

While Gosling opted not take the Uber fare, he did arrive at 3:30 on Tuesday afternoon to enjoy a cup of coffee. According to CBC, the campaign cost owner Joelle Murray $50 (not including the cardboard cutout).

Small businesses like coffee shops have neither huge margins nor ad budgets. Most can rarely afford promotions, let alone advertising, so any opportunity to grab 15 minutes in the spotlight needs to be taken–or in this case, created strategically. 

So how can you follow Murray’s example and create a social media campaign that gets celebrity attention? Here are a few tips:

  1. Dream big. This isn’t Starbucks. This isn’t a million-dollar endorsement deal. This is one woman with a big dream and a small budget–and she succeeded.
  2. Be personal. Grinder Coffee’s Twitter account is anything but grand: before this campaign it had fewer than 300 followers and 100 tweets​. But going viral isn’t about getting your content in front of people. It’s about getting your content in front of the right people–in this case, Gosling. To get his attention, Murray used a photo-rich, meme-worthy series of tweets.
  3. Make your ask easy. Murray determined based on the festival schedule when Gosling would be in Toronto. If the actor hadn’t already been in town, it would have been exponentially more difficult to pull off this campaign. So look to your city’s or town’s upcoming events. Look at the bands playing locally, and the movies being shot. Find a star who is already in your area.
  4. Be relentless. This was a well-planned and well-executed 10-day plan. Murray was relentless. She acquired a full-sized cardboard cutout of Gosling and took photos with it multiple times a day.
  5. Empower others to share. People can be lazy. Make it easy for them to help you. Include sharing links to a variety of social media platforms and encourage people to share far and wide. Murray encouraged customers and others (including the mayor of Toronto) to take pictures with the cardboard cutout of Gosling and tweet them.
  6. Engage others as allies. Murray engaged with media outlets that were already promoting the film festival. You can do the same. No venue or festival will say no to free press. By engaging with others already in the same orbit, you help those allies further their own goals. 
  7. Be genuine. Over the entire campaign, Murray balanced her desire and dream with humility and understanding. It was apparent that this was a small business owner trying to make it big and have some fun. She never took herself, or the campaign, too seriously.

The film festival will be over in a few days. Gosling will likely leave the city before then. But while Gosling may have only stayed for a few moment at Murray’s coffee shop, the impact is likely to reverberate for weeks, if not months.

Published on: Sep 15, 2018

Internet group backs 'national' data privacy approach

WASHINGTON (Reuters) – A group representing major internet companies including Facebook Inc (FB.O), Amazon.com Inc (AMZN.O) and Alphabet Inc (GOOGL.O) said on Tuesday it backed modernizing U.S. data privacy rules but wants a national approach that would preempt California’s new regulations that take effect in 2020.

People look at data on their mobiles as background with internet wire cables on switch hub is projected in this picture illustration taken May 30, 2018. REUTERS/Kacper Pempel/Illustration

The Internet Association, a group representing more than 40 major internet and technology firms including Netflix Inc (NFLX.O), Microsoft Corp (MSFT.O) and Twitter Inc (TWTR.N), said “internet companies support an economy-wide, national approach to regulation that protects the privacy of all Americans.”

The group said it backed principles that would ensure consumers should have “meaningful controls over how personal information they provide” is used and should be able to know who it is being shared with.

Consumers should also be able to seek deletion of data or request corrections or take personal information to another company that provides similar services and have reasonable access to the personal information they provide, it said.

The group also told policymakers they should give companies flexibility in notifying individuals, set a “performance standard” on privacy and data security protections that avoids a prescriptive approach and set national data breach notification rules.

Michael Beckerman, president and chief executive officer of the Internet Association, said in an interview the proposals were “very forward looking and very aggressive” and would push to ensure the new rules apply “economy wide.”

He said the group “would be very active working with both the administration and Congress on putting pen to paper.”

The Internet Association wants new rules to be technology and sector neutral, which would mean any new privacy protections would cover anything from how grocery stores or other physical retailers use consumer data to car rental, airlines or credit card firms as well as internet service providers.

The White House said in July it was working to develop consumer data privacy policies and officials had been meeting major firms as it looked to eventually seeing the policies enshrined in legislation.

Data privacy has become an increasingly important issue, fueled by massive breaches that have compromised the personal information of millions of U.S. internet and social media users.

California Governor Jerry Brown signed data privacy legislation in June aimed at giving consumers more control over how companies collect and manage their personal information, although it was not as stringent as Europe’s new rules.

Beckerman said “we definitely want to get this in place prior to California because California got it wrong.”

The U.S. Chamber of Commerce also unveiled privacy principles last week that aim to reverse California’s new rules.

Under the law, large companies would be required from 2020 to let consumers view the data they have collected on them, request deletion of data, and opt out of having the data sold to third parties.

Many privacy advocates have called for robust new U.S. data protections.

Laura Moy, deputy director at Georgetown Law’s

Center on Privacy & Technology, told Congress in July that lawmakers should not overturn new state privacy rules and federal agencies “must be given more powerful regulatory tools and stronger enforcement authority” and more resources.

The European Union General Data Protection Regulation took effect in May, replacing the bloc’s patchwork of rules dating back to 1995.

Reporting by David Shepardson; Editing by Paul Tait

Elon Musk’s Weed-Toking Goodwill Tour Isn't Enough to Save Tesla

The thing to remember about Elon Musk smoking a blunt with Joe Rogan is not that he took just one hit, or that he didn’t seem to know what a blunt was, or that he whiffed on an opportunity to show off just how useful his “not a flamethrower” can be. It’s that it came 130 minutes into his two-and-a-half-hour interview with Rogan, for the former Fear Factor host’s podcast, livestreamed on YouTube.

Two hours in which Musk got to play the most popular version of himself: the far-out thinking engineer who doesn’t conform to the status quo. Two hours in which he whoa’d Rogan with cogent breakdowns of the threat and promise of artificial intelligence, his plan to obliterate traffic with underground tunnels, and his enlightened fear of chimpanzees. Musk talked about his idea for an electric, supersonic airplane, complete with a physics lesson on how it would accomplish vertical takeoff and landing. He used math to argue that we’re all living in a simulation. He did it while remaining relatable, likeable, and interesting. And while the interview had its boring moments, it was, overall, a lot of fun.

That’s because it starred Musk at his best. As the guy who appeared on The Simpsons, turning Homer’s silly musings into world-bettering inventions. The Elon who met Stephen Colbert’s accusation of being a supervillain with a sheepish chuckle. The one who earned a cameo in Iron Man 2.

Cool Elon. Not the version who claimed that the British man involved in the rescue of the Thai cave boys is a pedophile. Not the Musk who sparked shareholder lawsuits and a reported SEC investigation by announcing he might take Tesla private, then recanted a few weeks later. Not the Musk who called a reporter a “fucking asshole” while doubling down on the pedophile claim. That’s the Musk who has seen Tesla’s stock price drop 17 percent since the beginning of the year. So for everyone who doesn’t freak out when someone takes a puff or two, the Rogan interview promised to be a reassuring appearance.

Except that Friday morning, Tesla shares dropped 10 percent in response to news that that human relations chief Gabrielle Toledano, who has been on a leave of absence, won’t rejoin the company, and chief accounting officer Dave Morton had resigned September 4—from a job he started August 6. (CNBC reports Morton was frustrated that Tesla’s leadership was ignoring his advice on the question of going private.) He was the third high-ranking finance executive to leave the company this year.

Tesla finally hit its target of making 5,000 Model 3 sedans a week in June, and Musk, true to form, immediately said they’d hit 6,000 a week this quarter. He has also said this is the quarter Tesla starts—at long last—to turn a profit. We won’t have a better idea of how Tesla is doing on production until early October, or of its financial state until early November, but these departures are just the latest evidence that the automaker is struggling.

Musk’s behavior of late hasn’t helped, of course. But a return to Fun Elon (and the emergence of Blunt Smokin’ Elon) isn’t enough to keep Tesla’s future from going up in smoke.


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