Oct 26, 2018

Axios AM

☕️ Happy Friday!

Situational awareness: "Fixated on the migrant caravan moving north through Mexico, President Trump is weighing a plan to shut the U.S. border to Central Americans and deny them the opportunity to seek asylum, asserting similar emergency powers used during the early 2017 'travel ban.'" (WashPost)

1 big thing: Big Tech’s year of reckoning

Illustration: Rebecca Zisser/Axios

Constant Washington shocks have resulted in the underplaying of one of the most consequential stories of our time: Big Tech is facing rising scrutiny and controversy, with many Americans rethinking their online relationships.

  • With tech having lost its luster, the industry is now facing more skepticism from all directions, Axios chief tech correspondent Ina Fried points out.
  • This week was a microcosm of that.
  • And stories about unhappy employees have emerged from all of the social media companies in the past month, Sara Fischer says.

We're getting more peeks inside tech's machinery and culture. And data now shows some people turning away from ubiquitous platforms. Just yesterday ...

... In the financials:

  • Snap beat revenue forecasts but reported that daily active users (186 million) were down 1% from the previous quarter, and predicted the decline would continue next quarter.
  • Google's parent, Alphabet, reported surging profit but "slightly slower growth in revenue ... at a time when it is also dealing with a growing backlash from regulators and turmoil in its own corporate culture." (Wall Street Journal)
  • Twitter, which has been trying to purge spammy accounts, reported a 1% decline (4 million) in monthly active users (to 326 million) but outperformed Wall Street expectations for revenue and profit.
  • Amazon "posted its second straight quarter of record profitability, but its recent string of blistering revenue growth is cooling." (WSJ)
  • Why it matters, from Sara: Data shows that the growth of many digital services is plateauing in North America, due mostly to saturation.  

... And in the culture:

  • Under the headline "How Google Has Protected Its Elite Men," the N.Y. Times reports that the search giant handed Andy Rubin, creator of Android mobile software, a $90 million exit package when he left the company in 2014 after being accused of sexual harassment by an employee.
  • The Wall Street Journal interviewed more than 70 current and former Netflix employees for a fascinating front-page article that reported a "culture of fear" about firings and "radical transparency," but also a study showing Netflix has some of the happiest employees among large U.S. corporations.

I asked the Axios tech team for their quick thoughts, and these smart bombs came pinging back:

  • The Google and Netflix culture stories both show the tech companies' confident exceptionalism colliding with the real world of human flaws and hyper-charged culture-war passions. (Tech Editor Scott Rosenberg)
  • A common theme is that these big public tech companies are being pushed to acknowledge their responsibilities in the workplace and society, and can no longer hide behind the idealism of "changing the world." (Kia Kokalitcheva)

Be smart: There are no signs that the tech giants' season of scrutiny will abate.

  • Privacy will be one of Capitol Hill's biggest debates next year, Axios' David McCabe notes, as the companies push for federal regulations to preempt California's new rules before they take effect in 2020.
  • And Google CEO Sundar Pichai is to testify later this year before skeptical House lawmakers.
  • But Dan Primack points out that amid terrible P.R. + hearings + user complaints + hacks, new federal regs are nowhere near passage.
2. The nation's mood, 11 days from midterms

"The final stretch of the midterm campaign is increasingly dominated by debate over one of the most sensitive issues in American culture: race," writes Errin Haines Whack, AP's national writer on race and ethnicity.

  • "In Florida, accusations of racism are playing a central role in the hotly contested campaign for governor. Ron DeSantis, a Republican former congressman, chafed at questions about his ties to supporters who have made inflammatory comments."
  • In Georgia, where Democrat Stacey Abrams is seeking to become the first black woman governor in America, reports surfaced of her "involvement in a protest more than 25 years ago in which the old state flag — which contained a Confederate symbol at the time — was burned."
3. Mail bomb manhunt focuses on Florida
FBI via AP

"The nationwide manhunt for the person or people who sent 10 potential bombs to critics of President Donald Trump and CNN's office in New York led authorities to a mail facility in South Florida" last night, CNN reports.

  • "Several of the packages went through a US Postal facility in Opa-locka, Florida," in Miami-Dade County.
4. Pic du jour
Rodrigo Abd/AP

Honduran migrants from the caravan of 4,000 bathe in a river in Pijijiapan, Mexico, after setting out before dawn to travel 45 miles of the 1,000 miles ahead.

5. Cameras in self-driving cars make you keep your eyes on the road

Illustration: Rebecca Zisser/Axios

Driver monitoring systems will spy on you in semi-automated cars, because drivers still have to stay engaged, reports Axios' Joann Muller, our expert on autonomous vehicles.

  • Why it matters: The arrival of these system is going to lead to a big privacy debate about how much monitoring consumers will tolerate in the name of safety.
  • Nose-pickers and cursers, take note.

How it works: The Super Cruise system, available in the Cadillac CT6, can take control of the car on limited-access highways that GM has mapped.

  • A small infrared camera tracks the driver’s eyes to assess whether they’re watching the road.
  • If not, you get flashing lights on the steering wheel and the seat vibrates.
  • If the driver does not respond, the car will come to a safe stop.

GM says the camera isn't recording anything; it's just a buffered video feed.

6. Trump rarely visits Clinton districts for midterm rallies
Expand chart
Axios reporting, Daily KosGovTrack. Chart uses 2018 Pennsylvania congressional districts. Get the data. Chart: Andrew Witherspoon, Harry Stevens/Axios

Of the 34 midterm rallies President Trump has held or has scheduled, only nine are in congressional districts that voted for Hillary Clinton in the 2016 election, Axios' Andrew Witherspoon, Harry Stevens and Alexi McCammond report.

  • Why it matters: This shows the main GOP strategy in the 2018 midterm elections: deploy the president to energize and encourage the party's base, and don't spend a lot of time trying to win converts.
  • At a rally in Southaven, Miss., earlier this month, Trump said: "I’m not on the ticket, but I am on the ticket ... Pretend I’m on the ballot.”
7. Khashoggi killing complicates Trump's peace plan

The White House is creeping toward Trump’s self-imposed deadline (next few months) to release a Middle East peace plan. But the Khashoggi killing has thrown a wrench into what was already a tumultuous situation, Axios Jonathan Swan reports.

  • The Palestinian leadership won’t deal with the White House after the Jerusalem embassy decision, and there’s no obvious avenue to engage them before the plan’s release.
  • The one thing Kushner’s team has going for it: Expectations of success couldn’t be lower.

Barak Ravid of Israel's Channel 10 news scooped for Axios yesterday that Jason Greenblatt, Trump's special envoy for Middle East peace, will travel to Israel next week to continue talks on the White House plan.

  • Israeli officials said Greenblatt will meet Prime Minister Benjamin Netanyahu.
  • At this stage, it's highly unlikely that Greenblatt will meet with Palestinian officials.
8. LGBTQ TV presence reaches new high

"During the 2018-2019 season, LGBTQ characters accounted for 8.8 percent of all regular characters on broadcast" TV, a record, according to GLAAD (via Variety).

  • Broadcast TV "featured more LGBTQ characters of color than white LGBTQ characters this season, also a first."
9. Megyn Kelly reported out at NBC
Courtesy N.Y. Post

Megyn Kelly, the $17-million-a -year host of the 9 a.m. “Megyn Kelly Today,” is unlikely to return to the NBC airwaves, the N.Y. Times' John Koblin and Michael Grynbaum report:

  • "Bryan Freedman, a Los Angeles litigator just hired by Ms. Kelly, has started negotiations with NBC about her potential exit."
  • "The offstage machinations took place two days after Ms. Kelly suggested, during an on-air round-table discussion, that it was appropriate for white people to dress in blackface as part of their Halloween costume."

"[I]n an indication of how Ms. Kelly’s stock has fallen, she is no longer represented by a talent agent":

  • "Kelly cut ties with the Creative Artists Agency this week, and a rival agency that was poised to sign her on Wednesday, United Talent Agency, backed away in the wake of her 'blackface' comments."
  • Why it matters: "Such a snub would have been unthinkable less than two years ago, when Ms. Kelly was a sought-after free agent looking to leave the Fox News Channel."

Disclosure: NBC is an investor in Axios.

10. 1 🍭 thing
Massimo Gammacurta for The New York Times

Candy tasting can be taken as seriously as wine tasting, writes Samin Nosrat, a chef and the author of the cookbook “Salt, Fat, Acid, Heat,” which has been developed into a new Netflix show:

  • "[A]s snobby as it can seem, wine tasting is an incredibly useful tool: The more wine you taste attentively, the more words you learn to associate with the kinds of wine you like, so the more easily you can choose bottles that will please you regardless of price."
  • "In this age of $12 chocolate bars and artisanal, well, everything, there’s great value in knowing your own palate and letting that, rather than labels or prices or marketing, guide you in the store or through a menu or wine list."

"The point of candy is joy ... [M]atters of taste are highly personal, and often colored by past experience."

  • "Both genetics and childhood exposure shape our earliest culinary preferences. And for adults, nostalgia — a literal longing for home — can also affect the flavors toward which we orient ourselves."
  • "This is why there’s no one candy bar or bottle of wine that is universally beloved."
  • "And yet, because we’re human, we can’t help devoting ourselves to the pursuit."

Behind the cover ... Gail Bichler, design director:

  • "Massimo Gammacurta used a silicon mold to make a lollipop that looks like the earth and then photographed it capturing its beautiful, sticky imperfections and bubbles."