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Bull Session
The Top Tech Stories of 2016
December 8, 2016
Episode Summary
On The Digital Life this week, we chat about the top tech stories of this year. From Twitter’s acquisition woes to exploding batteries in the Galaxy Note7, Apple vs. the FBI to the Wikileaks influence on the US presidential election, it’s been an eventful and notable year with plenty of surprises.
Resources:
Theranos Debacle Triggers an Avalanche of Lawsuits by Investors Who Should Have Known Better
Who will buy Twitter? We ranked all the possible buyers.
Samsung Galaxy Note 7 users’ phones are blowing up, literally
Verizon is buying Yahoo for $4.8 billion
WikiLeaks grilled on Trump, Assange in rowdy Reddit AMA
Apple vs FBI: All you need to know
This is The Digital Life, episode 185 in three, two, one. Welcome to episode 185 of The Digital Life, a show about our insights into the future of design and technology. I’m your host, Jon Follett, and with me is founder and co-host Dirk Knemeyer.
Greetings, listeners.
For our podcast this week, we’re going to chat about the top tech stories of 2016. There’s been a lot going on this year, especially as the US presidential election happened and all the tech around that. We wanted to highlight those stories that were the tops of this year. Of course, this is our opinion, and feel free to let us know any of the top stories that we missed.
I’m going to start with number six on my list, which is that our friends at Twitter cannot get acquired to save their lives, unfortunately. This is despite, as I mentioned, the US presidential elections, where our president-elect has really raised the profile of Twitter internationally, mainly because during the election, he was communicating that way with all of his followers. Now, after the election, apparently it’s his preferred way to communicate with the world at large, because he still continues to use it, much to the chagrin, probably, of his handlers. Nonetheless, Twitter is sort of his top communication tool. He is, you know, the most powerful man on the planet, so Twitter has that.
Almost. Almost. Not yet. Not yet.
Elect, right? Twitter has that in its reputation-building profile. Despite that, and perhaps this is just sort of a sign of what Twitter is, despite all of the publicity, all of the use that it gets, it can’t grow the number of users like its competitor, Facebook, and it also can’t quite figure out the right business model that would monetize all this usage and fame. It appears like Twitter will not get acquired, whether it’s someone like Google, or the aforementioned Facebook, or even Apple. I could see Google or Facebook having a good reason to acquire Twitter, but maybe not for the $18 billion valuation. Dirk, you’re a Twitter user. Do you think they’ll ever get acquired, or do you think they’ll just fade into the sunset or figure out a business model, maybe?
Certainly, at some point, they’ll get acquired. There’s too much money to be lost to not sell for at least something well below what they hoped and their investors were driving for, at some point that I don’t think they’re at yet. Business model, they haven’t found it yet. I’m not seeing an obvious business model in the current sort of Internet technologies stack for Twitter. I mean, look, there’s theoretical business models. They have a business model now, quote-unquote “business model,” with promoted tweets and other rubbish, which is following sort of the old-school commercial approach to attempting to monetize. That is a business model, but it’s not a very successful one.
The question is how will Internet technologies evolve in the years ahead and how could that meta-platform and the platforms within it better enable a product like Twitter based on ease of use, free information, network effects, access to celebrity, among others, not just celebrities, of course, for that to be brought together in a way that it can make money. Right now it can’t, because they’ve given it away for free. Maybe they had to give it away for free in this environment. The reality is if now they yanked it, somebody else would give it away fro free. Even if you can’t find a business model around it, the power of the platform is immense. The fact that we are all essentially directly connected to everyone else, except for the very few who don’t opt for Twitter at all, even though they’re famous and would benefit from it or the people who are unknown and not sort of relevant to a networked effects conversation at that level. I mean, we’re connected to everyone, within those exceptions.
Super powerful. Super valuable in non-capitalist ways, but not super valuable relative to the investment, relative to the expectation, relative to the scale of their burn within a normal business structure.
Yeah, Twitter is the sort of news-breaking method. Reporters are all over Twitter looking for what’s happening right now. I remember when that plane landed on the Hudson River.
Sully.
That’s right, landed that plane. There were photos around that event up on Twitter fairly quickly, which is pretty astonishing. I don’t know that any news organizations would necessarily be able to purchase or really benefit from … They benefit from the news feed, not necessarily from owning the feed. It is one of the more important news-breaking channels that we have. I really enjoy Twitter, so I hope it finds a way to make it.
I’m sort of a late Twitter user. I wouldn’t say I really enjoy it, but I do see the value in it. Look, Jon, the bigger question is, your Hudson River example was a good one, do we need the news in the way that the news has become accepted as a thing in our lives? Do we need to know that that plane was coming down? Do we need to know that that plane landed on the Hudson River at all? Much less, do we need to know that that plane landed on the Hudson River two minutes within it actually happening? Certainly, the latter is completely unnecessary. I mean, that’s first-world privilege at the max. I would say even the other isn’t necessary. We don’t need that bit of news. That news is not relevant to us. I mean, there are some people in Manhattan or in places where the plane was coming, destinations, very specific people, but for our nation of 300 million-plus people or let’s take the whole world, six billion or whatever the number is now as it continues to spiral upwards, totally unnecessary to know that there was this plane accident on the Hudson River at that time, that it ever happened. It’s unnecessary.
We’ve become conditioned to thinking that all of this stuff is necessary. Oh my god, there’s a child in a well in Guatemala. Oh my god, this, oh my god, that. 99% of what we get on the news we don’t need and, you could argue, is bad for us in a number of different psychological ways. The sort of meta question overall of this Twitter stuff is is this urgency, this notion of how it fits into some view of news in the global world, even relevant? I think no. I think that we’ve been taught it is, we’ve conditioned to it being, but my life would be better if I stopped hearing about the person who sawed somebody’s head off on a bus in Africa or all the crazy rubbish. I mean, it just makes me sad and depressed and fearful and suspicious. It’s not good at all. I don’t know, it’s not good at all.
Well, we’re going to have to do a news show, I can tell, but we’ll move on to our next story, which is also a business-related story. That is of Verizon eating up Yahoo, which is actually the second former Internet giant to be consumed by Verizon, which of course supplies all the big pipes now for its fiber optic connections for Internet and cable television or television over fiber optic. What’s interesting is Verizon has purchased Yahoo for $4.8 billion, and I know that Yahoo’s purchase price kept on dropping. They also acquired AOL last year for $4.4 billion. Verizon has an interesting portfolio of its, we’ll call, Internet 1.0 organizations. Addition, I think this is the reason Verizon picked them up, is they have a lot of advertising and a lot of channels that way.
It’s an interesting move for Verizon. I don’t pretend to know exactly all the reasons for it, but this consolidation of Internet 1.0 companies under the Verizon roof was a notable news story for 2016.
Wow, so I’m going to ignore the main story. You put AOL and Yahoo in the same generation of Internet companies. I don’t know, I’m doing this kind of on the fly, but to me, it started with Prodigy, CompuServe, so that might be 1.0. Then AOL was like 2.0. It’s the big behemoth that killed all those early companies. To me, Yahoo was part of the next wave of the sort of clumsy, browser-based search rubbish that Google went on to kill, essentially. When you called them 1.0 and you put them both in the same bucket, my head exploded. I’m like what? I don’t know. Talk about that more, please.
I’m just thinking 1996, what were the really dominant Internet companies? At that time, AOL was pipes and content, and Yahoo was essentially a giant links library for folks who wanted to find things under specific categories. I do remember watching the Yahoo stock go through the roof.
Specifically in ’96.
In ’96, right. I remember the piles of AOL CDs or whatever they were that came in the mail all the time.
Oh my god.
To get you online. For me, that was the real touchstone of the first Internet boom, where those companies weren’t of the exact same service nature, but they were part of that experience for me, late ’90s Internet boom. I mean, remember, AOL bought Time Warner, that’s how freaking important they were at one point. Same with Yahoo. They were exceptional.
Yahoo never got to a level that AOL got.
Well, that’s true. That is true. Nonetheless, they were important companies in that first wave. Then, I remember the Web 2.0 wave, so I sort of separated those two into separate buckets.
Fair enough. That all sounds reasonable to me. I’m shocked that Yahoo’s selling for more than AOL sold for. Again, AOL was way more powerful than Yahoo. I mean, how far the mighty fall. Yahoo itself has fallen quite a bit. I’m sure that the investors in Yahoo, I guess now it’s just stockholders right, but the people who went long on Yahoo are pulling their hair out. I’m talking to you, Bob Baxley.
Oh no. Verizon has consumed Yahoo, and we’ll see where Verizon takes it. Our next top story is a hardware story, and that’s the poor folks at Samsung released the Galaxy Note 7, which had all kinds of problems with its battery basically blowing up, to the point that in September of this year, the US Consumer Product Safety Commission issued a recall of these phones. It said that the Galaxy Note 7 had been linked to 26 reports of burns and 55 reports of property damage, including fires in cars and a garage, not to mention if you get on a plane and you have one of these phones, they won’t let you fly with it because it could cause all sorts of problems in-flight.
This is exceptionally notable, because Samsung has been really starting to do battle with Apple.
They’ve been doing battle. I mean, they’ve been mortal enemies, hammer and tong, at the top of this industry for a while.
Not just in terms of their products but also their patents and for dominance over this hardware space. Because of this, Samsung has taken such a hit and has really given Apple some breathing space. As we noted on the show, Apple hasn’t really progressed along the same lines of innovation and product design that it had during Steve Jobs’ tenure, and it was looking like Samsung might really be starting to take something away from Apple, but no longer when you have supply chain problems that involve including a battery that overheats to the point of causing a fire. You’re not going to dominate the mobile hardware space with that.
No. For Samsung, of course, it’s super unfortunate. I’m surprised these things don’t happen more often. I mean, the last … Let me make sure I get this number right and I’m not just throwing rubbish out there. The last four cars I’ve owned have had recalls on one part or another. Now, cars are much more complicated products than phones, but they’re also much more mature than handheld digital devices. Still, when you get into complex products, there’s problems. I mean, car recalls are all about there’s this problem with this one thing. We need to take that one thing out and replace it with another thing.
I guess I’m more surprised there’s not more stuff like this with handheld devices. Bad luck for Samsung to be the ones that are getting smoked by it.
Next on our list is a fairly recent story, which is WikiLeaks really dominating the conversation in the US election. I mean, to the point where you could argue that WikiLeaks really cost Hillary Clinton the presidency.
You think so? You want to make that argument? Should we talk about that?
I think within the context of this being a top story, yes. Just the sheer amount of embarrassing material that was parceled out there on a weekly basis sort of added to the … if you look at the number of votes by Hillary lost by, it’s just in the tens of thousands in very specific states that basically tipped certain states so that the Electoral College was won by President-Elect Trump. If you think there’s, I don’t know, call it somewhere between 50,000 and 70,000 votes that needed to be swayed one way or the other, it’s conceivable that WikiLeaks, with its drumbeat of anti-Clinton leaks …
Whether that was part of their strategic profile, which it very well could be. They claim that they’re just putting information out there that shows up, right? WikiLeaks was definitely a focal point for negative Clinton exposure, whether it came from her campaign manager, Podesta, about that whole mess with the DNC hacks. It all came from WikiLeaks. It very well could have cost her the presidency.
I think that’s all reasonable. Reflecting back on the election, it felt like narrative to me. What I mean by narrative is Trump, he would have one thing after another that was ridiculous. Things that in past years, past elections, past candidates, they would have just been out. Go way back in the campaign, like to when he said John McCain was a loser for being a prisoner of war as opposed to a hero. I don’t know if loser was the exact word that he used, but that’s basically what he said, and he stood by it all the way through. Other candidates would have been dead, DOA, the moment that that escaped their lips.
Trump had this critical mass of all this crap that came out of his mouth. I think at the end of the campaign, the New York Times even did a giant spread with a huge list of all the Twitter shenanigans of Trump, just to show there’s a million problems with this guy. Wake up, people. People didn’t care, right? I don’t know if gaffes had much impact at all on this election. It felt like there was just this narrative who were going to vote for Donald Trump come Hell or high water who just bowled their way through it, regardless of all the ludicrous stories that came out of him.
You may be correct, but I tend to think it’s less about Hillary’s problems and more about there was just a narrative going on this time where a lot of people were pulling him forward as a candidate. No matter what he did, no matter what Hillary Clinton did, there weren’t minds being changed. There was just a mass of people who were exerting their will and power on the political process.
Yeah, I do think that all you said there is true about the Trump side of things. There also is the getting out the vote problem, which Hillary had, which you could directly, or at least you could argue, negative aspects that were highlighted about Hillary may not have done any more than convinced Democrats to stay home. If Democrats stay home, then that’s effectively helping out Donald Trump. I think if there was a negative effect for Hillary for her gaffes, just enough to create some doubt in the minds of voters and have them stay home, I think that certainly had a negative effect on the voting, at least as far as Hillary was concerned.
Our next story is about Apple and its run-in with the FBI earlier this year, which, of course, stemmed from the San Bernardino tragedy, the shootings there. The FBI was interested in cracking the iPhone that one of the shooters had, and Apple would not bend to the FBI and provide them with the programming help to break into that phone, arguing that they were going to create a master key that could be used for negative purposes across a whole variety of phones once this particular task was done. Of course, the FBI argued that this would be a one-time thing, which I don’t think even the FBI believed. Nonetheless, that was their excuse.
Ultimately, this did not come to a head, although it did build up over a number of weeks, and we were expecting, who knows, Tim Cook getting hauled out of the Apple Campus or something like that.
It’s like a Will McAvoy moment.
Right, but it never came to that, because the FBI found a third party, presumably some NSA-affiliated hacker, who was able to break into the iPhone. Thus, Apple was able to hang onto its position without having it really tested. This is an ongoing debate about data privacy, encryption, and how much can the government get its fingers into our digital life. This sort of face-off is going to happen again, but this was significant, at least, in early 2016.
You know, we talk about a lot of things on this show that might be considered controversial or difficult. Of all of them, this is the one I have the hardest time with, because I think that we need to keep ourselves safe in a lot of different ways. I also believe in privacy and freedom of speech and a lot of things like that. I find it confusing, actually, trying to sort through the things around government, government intrusion into our privacies. Part of me thinks it’s dangerous, and part of me thinks it’s necessary.
Yeah, that’s the tug-of-war there that I think happens for a lot of us. Our last top tech story of 2016 is the fall of Theranos, which, what was it, a $9 billion company. Who knows what their valuation will be at the end of this. There are all sorts of investor lawsuits being queued up now. Essentially, Theranos was this blood test company that claimed it could provide tests, the data from these tests. Not from the vials of blood, which you’d normally expect from a medical test, but basically the equivalent of a pin prick. With so much money invested in this company, it seems too good to be true.
Of course, the Wall Street Journal actually revealed that it was, indeed, too good to be true and that the many patents that were filed, none of them were really working. As these lawsuits unfold I don’t think I’ve ever seen a science and technology company fall as fast as Theranos. I think part of it was due to the hype surrounding the company to begin with. I won’t call this a tragedy, but this sort of wreck is still unfolding as we speak, so we don’t know the end of the story. It definitely feels like an Icarus flying too close to the sun moment for Theranos. That definitely had a significant contribution to the stories of 2016.
You mentioned to me, at one point, about how science can only move so fast. To me, that’s the real big takeaway from this story is science-technology companies, you can’t, at least in late 2016, bend the physics of science to the speed of technology. The technology industry does move very quickly, is the agile, all the business BS that makes that happen. Science simply, at some point, can’t do that. Trying to put the pressures of business technology onto science and drag science through that, it’s not a good fit.
Of course we need science-technology companies, but we need to be really aware of the fact that science and technology are very different things that need to be treated differently. The things that are happening on the science side can’t necessarily be bent to the same culture and velocity as the technology side.
Those were our top tech stories of 2016. Please let us know what your top stories were and if we missed any that were super important. I’m sure we did.
Listeners, remember that while you’re listening to the show, you can follow along with the things that we’re mentioning here in real time. Just head over to thedigitalife.com. That’s just one “L” in thedigitalife, and go to the page for this episode. We’ve included links to pretty much everything mentioned by everybody. So, it’s a rich information resource to take advantage of while listening, or afterward if you’re trying to remember something that you liked. You can find The Digital Life on iTunes, SoundCloud, Stitcher, PlayerFM, and Google Play. If you want to follow us outside of the show, you can follow me on Twitter @jonfollett that’s j-o-n f-o-l-l-e-t-t. Of course the whole show is brought to you by Involution Studios, which you can check out at goinvo.com. That’s g-o-i-n-v-o dot com. Dirk?
You can follow me on Twitter @dknemeyer that’s @d-k-n-e-m-e-y-e-r. Thank you so much for listening.
That’s it for episode 185 of The Digital Life. For Dirk Knemeyer, I’m Jon Follett, and we’ll see you next time.