Apr 30, 2019

Axios Login

By Ina Fried
Ina Fried

I'm at a secret undisclosed location, but rest assured, we will have plenty of coverage of both F8 and Apple earnings tomorrow. Check out the Axios tech stream and tomorrow's Login for all the latest.

1 big thing: Facebook's position of strength — and weakness
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Note: Twitter did not report daily active users prior to Q2 2018; Data: Facebook, Twitter and Snap earnings reports; Chart: Chris Canipe/Axios

As Facebook’s F8 developer conference kicks off today, the company will face a similar challenge as last year — appearing exciting to developers while sufficiently humble to a world tired of its breaches, apologies and excuses.

The backdrop: Last year the company managed to strike that balance well, announcing its plans to take its responsibilities seriously even as it branched into new areas, including sensitive ones like dating.

Where it stands: A year in, though, the stakes have increased on both fronts. That said Facebook's market position remains enviably strong. As we detailed in Axios AM this morning, the company remains a healthy and vibrant business and a critical platform for both advertisers and consumers.

  • Facebook is still the most powerful digital marketing platform on the planet. Advertisers would love to diversify the digital ecosystem and rely less on Facebook, but no one has come up with a better alternative.
  • Facebook's stock plummeted last fall in the wake of the Cambridge Analytica scandal and CEO Mark Zuckerberg's acknowledgment that hiring legions of human moderators for the platform would cut into profits. But the stock price has recently climbed back to near record peaks.
  • And the company isn't slowing down. Facebook has announced plans to unite its 3 separate messaging platforms and move ahead via its Oculus subsidiary, betting on VR as the future of social technology.

Reality check: The onslaught of bad press has taken a toll on Facebook's reputation, according to a recent Axios Harris poll. But it hasn't sparked any kind of mass exodus from the social network.

  • Yes, some U.S. users have reduced their Facebook time, but many did so by migrating to Instagram — which Facebook has owned since 2012.
  • WhatsApp, the encrypted messaging platform that Facebook acquired in 2014, is the equivalent of the dial tone in many countries, especially emerging markets where other internet services are less mature.

Between the lines: Zuckerberg has never been more fully in control of the company.

  • As one response to Facebook's many privacy-related problems, he is steering the platform toward a new emphasis on WhatsApp-style private messages.
  • The move is right out of the Steve Jobs playbook: Cannibalize your own products before your competitors can.

Our thought bubble: If this is what Facebook looks like when it's back on its heels, it's hard to imagine how dominant the social networking giant would be if it were, say, leaning in.

2. Failed startup Anki shows challenge of kids' tech

Anki's latest robot, Vector, went on sale last October for $249. Photo: Anki

As of last fall, Anki seemed to be winning where other companies had fallen short: Making a go of a consumer robot that was more fun but less powerful than a smartphone.

In the end, though, the maker of Cozmo and Vector suffered the same fate as the others, announcing Monday it was shutting down and laying off its entire staff despite having raised more than $200 million in funding.

What's happening: Anki found itself at the intersection of two very tough businesses — kids' tech toys and consumer robotics. A number of promising startups have gone out of businesses, while others, such as Sphero, are pivoting to the education market.

What they're saying:

  • Anki: "We’ve shipped millions of units of product and left customers happy all over the world while building some of the most incredible technologies pointed toward a future with diverse AI and robotics driven applications. But without significant funding to support a hardware and software business and bridge to our long-term product roadmap, it is simply not feasible at this time."
  • Touch Press CEO Barry O'Neill: "Anki made really good, smart stuff. Kids digital business, robots or not, is really hard."
  • Tech analyst Carolina Milanesi: "As a Cozmo parent I am sorry to see this news but not surprised. This area is a fast moving one and unfortunately many just see it as a toy — and toys go in and out of favor quickly."

The big picture: The company had a long-term vision for a digital robot along the lines of Richie Rich's Irona or the Jetson's Rosie, but knew that was a decade away. They had hoped to amass the technology — fund the path there — by selling robots with more limited capabilities.

The bottom line: This is a space ripe for innovation, but it's going to be tough to get there if startups can't stay in business.

3. Airbnb's growing foray into hotels

Photo: Jens Kalaene/picture alliance via Getty Images

Airbnb used to be seen as a direct competitor to hotels — but the lines between the two are increasingly becoming blurred.

What's new: Not only did Airbnb recently acquire HotelTonight, which is a last-minute hotel booking company, but it’s getting into the business of operating hotels itself, Axios' Kia Kokalitcheva reports.

Why it matters: Airbnb has long presented itself as an alternative to hotels, promoting the idea of experiencing a destination “like a local” by staying in a host’s home.

  • It even expanded on the idea a couple of years ago with its Experiences, which are activities designed and led by hosts to give travelers a greater local experience.

Yes, but: Airbnb has long allowed professionally managed vacation rentals in certain locations onto its marketplace, so it has not been entirely hostile to professional accommodations.

  • And last year it made a bigger push to highlight and attract more boutique hotels in an effort to be more mainstream.
  • Even companies like Lyric and its competitors like Sonder advertise their rentals via Airbnb.

Now, with its acquisition of HotelTonight, investment into Lyric, and deal with RXR Realty, it’s fully embracing hotels.

Our thought bubble: This could be a smart move as Airbnb inches closer to going public, when it will need to show investors a diversified revenue stream.

4. Steve Ballmer: I'll report, you decide

Steve Ballmer's USAFacts is out with its third annual report looking at the world through the eyes of government data. His nonprofit is founded on the belief that, armed with more details, voters will be able to make better decisions.

Among the findings:

  • Rising deficits: "Prior to passage of the (tax reform) law in 2017, the federal government took in $3.2 trillion in taxes while running a $665 billion deficit. According to estimates from the Congressional Budget Office (CBO), deficits could increase over the next ten years by $1.1 to $2.3 trillion, depending on economic growth."
  • Health costs soar but life expectancies don't: "We spend $2.9 trillion, or $9,107 per person, on healthcare in the United States, an increase of 59% since 1999. Over this same period, however, we haven’t seen improvements in our life expectancy.
  • Fire costs surging: In 2018, total federal government expenditures for fire suppression costs reached a record $3 billion in 2018, a nearly 100% increase over 2008. And that pales to the broader economic impact to affected communities.

What they're saying:

"It seems like such a simple thing to bring together the data produced by our own government so we can get a clear picture of how we are doing as a country — but the reality is no one agency is tasked with it, and a lot of it is hard to find."
"We know the solutions to the challenges we identify in this annual report will be the subject of hot debate, but we should all be able to see the facts and agree that these are the challenges.”
— USAFacts founder Steve Ballmer, to Axios
5. Take Note

On Tap

Trading Places

  • Cisco named Stella Low as chief communications officer.

ICYMI

  • Twitter's latest video moves include targeted efforts to reach sports fans, concert goers and Spanish-speaking news watchers. (Axios)
  • Money-losing WeWork has filed to go public. (Axios)
  • Amazon plans to open its first HQ2 offices in Northern Virginia this fall. Meanwhile, it has amassed quite an employee base in the Bay Area. (Axios/San Francisco Chronicle)
  • Google parent Alphabet saw its revenue fall short of estimates as the company saw this year's Pixel smartphone sales fall short of the prior year. (TechCrunch)
6. After you Login

Check out the 2020 presidential candidates, as emoji.

Ina Fried