Sep 27, 2018

Axios Login

By Ina Fried
Ina Fried

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1 big thing: Founders keep piling on Facebook

Facebook CEO Mark Zuckerberg. Photo: Alex Wong/Getty Images

First it was the Instagram co-founders leaving. Now WhatsApp co-founder Brian Acton is taking fresh aim at the social network he sold his company to in 2014 for $22 billion.

In an interview with Forbes, Acton provided his first detailed comments since encouraging people to delete Facebook in a March tweet. Acton left Facebook in 2017, and his WhatsApp co-founder, Jan Koum, left earlier this year.

Why it matters: The dramatic back-and-forth underscores the disconnect between Facebook’s leaders and the founders of WhatsApp and Instagram as those apps buoyed the company in the face of stagnant growth on its original platform.

The details: Here's some of what Acton had to say...

  • “I sold my users’ privacy to a larger benefit,” he said. “I made a choice and a compromise. And I live with that every day.”
  • He also said that while Facebook was instructing him to tell European regulators that it would be difficult to link WhatsApp to Facebook's platforms, the company was exploring that very option. (The company was ultimately fined for misleading regulators during the approval process.)
  • Acton accused Facebook leadership of pushing ad-based revenue strategies, when he believed other approaches would have been successful and better for users.

If Acton needed an Exhibit A, it arrived in a Gizmodo story that reported Facebook was using the phone numbers users provide for two-factor authentication to target ads at them.

What they're saying: Acton's comments, meanwhile, provoked a host of reactions, including a strong rebuke from Facebook's David Marcus, who stressed he was speaking for himself, not the company:

“Lastly — call me old fashioned. But I find attacking the people and company that made you a billionaire, and went to an unprecedented extent to shield and accommodate you for years, low-class. It’s actually a whole new standard of low-class.”

Andreessen Horowitz' Benedict Evans offered a similar criticism:

"This is just a thought, but maybe if you don’t want your product to have ads, don’t sell it to an ad company, or find a way to make it worth the ~$18bn they paid without taking ads, or both."

Our thought bubble: Yes, all the sniping between members of Silicon Valley's wealthy founder class is entertaining. But the disagreements underscore the discord growing within Facebook's key acquisitions right when the company needs them most.

2. Oculus debuts powerful portable VR headset

Photo: Oculus

While Facebook took a number of hits Wednesday, its Oculus unit made a big step forward. At its developer conference in San Jose, Oculus unveiled its Oculus Quest headset, a mobile VR headset that offers high-end features similar to the Rift but, like Oculus Go, doesn't need to be tethered to a PC.

The details:

  • Due spring 2019
  • $399
  • 50 titles promised for launch

Also: Oculus announced new titles coming for the Rift and new features for Oculus Go, including support for YouTube VR and the ability to mirror video to a nearby TV.

Why it matters: The VR industry has struggled to take off beyond hard-core gamers. Oculus Quest offers another opportunity to strike the right balance of price, convenience and features.

3. Tech companies want privacy rules on their terms

Sen. John Thune is spearheading a push for privacy legislation. Photo: Aaron P. Bernstein/Getty Images

While major tech and telecom companies told lawmakers Wednesday that they generally support federal privacy rules, they aren't ready to embrace some of the most significant policy changes backed by privacy advocates.

At a Senate Commerce Committee hearing, witnesses from companies including Google, Apple and AT&T expressed reservations about some particularly strong steps lawmakers could take to ensure user data privacy.

Why it matters: Companies are drawing lines in the sand for lawmakers who are under pressure to produce something, thanks to new privacy rules in Europe and a California privacy law that will go into effect in 2020.

What's next: “I think we might have a pretty good idea what a draft would look like [by the end of the year], but I suspect we probably wouldn’t get it acted on until next year," Commerce Chairman John Thune said.

Go deeper: Axios' David McCabe has more on the hearing here.

4. Masa Son sees more Vision Funds ahead

Softbank chief Masayoshi Son tells Bloomberg Businessweek he plans to raise a fresh $100 billion fund every two to three years and to spend around $50 billion a year.

By way of comparison, the Bloomberg article points out that the entire U.S. venture capital industry invested around $75 billion in 2106, per the National Venture Capital Association.

Other revelations:

  • Son initially was going to pitch the first Vision fund as a $30 billion entity, but decided to up the stakes at the last minute. "Life’s too short to think small,” he told a lieutenant.
  • When Son made his first pitch with the $100 billion figure, the potential client laughed, but Son kept going, raising nearly $100 billion, including $45 billion from Saudi Arabia’s Public Investment Fund.

Why it matters: Softbank's Vision Fund has already reshaped the tech industry, inspiring other investors to up their aspirations and fueling a wave of ever more cash-hungry startups.

5. Take Note

On Tap

ICYMI

  • Lyft doubled its revenue in the first half of the year, ahead of an expected IPO filing. (The Information)
  • The FCC approved rules designed to remove local roadblocks to 5G network construction. (Axios)
  • Special Counsel Robert Muller was seen getting tech support at a D.C.-area Apple Store. (Business Insider)
  • Stripe has raised $245 million in additional capital, giving the company a $20 billion valuation. (Axios)
6. After you Login

As a huge fan of women's hockey and love, this story warms my heart.

Ina Fried