Axios Login

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April 05, 2019

Congrats, you've made it to Friday. Let's dive in...

1 big thing: Snap sees a future in services

Snapchat CEO Evan Spiegel speaking at Snaphcat Partner Summit on April 4th in Santa Monica
Snapchat CEO Evan Spiegel speaking at Snaphcat Partner Summit on April 4th in Santa Monica. Screenshot: Axios

A slew of new updates, features and services unveiled by Snap Inc. Thursday capture the Santa Monica-based "camera company" in mid-evolution — from a chat platform to a broker of value-added services modeled on China's tech giants.

Why it matters: Snap has faced investor skepticism that its media model of youth-oriented ephemeral photo and video sharing can support an ad business on the scale of Google's or Facebook's, Sara Fischer reports.

  • The announcements at the first-ever Snapchat Partner Summit show that Snap intends to keep growing its ad revenue while building revenue-generating services that users can access across apps to increase engagement with Snap's products.

The details: Snap announced it will launch the Snap Audience Network, which will allow other companies to run "Snap ads" inside their own apps. Snap will allow advertisers to sell ads through its technology, while keeping a cut of the ad revenue.

  • This is a big deal because it would enable Snap to dramatically expand its ad revenue to compete with the likes of Google and Facebook, which have their own ad networks.
  • Yes, but: It's not set to launch for several months, and details of the ad targeting's workings were scant, as Recode's Kurt Wagner notes.

Snap also announced major updates for developers and its camera, and rolled out a new gaming platform as well as a slate of original shows.

  • A brand new gaming platform called "Snap Games" will allow users to play real-time, multiplayer games with their friends.
  • Be smart: Tencent, one of China's biggest gaming companies, purchased a 10% stake in the company in 2017, which sources say have helped guide Snapchat's foray into gaming.

The big picture: The event comes just days after Apple announced a suite of new software services, including a new gaming platform, and after Google unveiled its new cloud gaming service, Stadia.

The bottom line: Tech giants are rushing to create better software to increase user engagement with their software and to make money off of things like payments, advertising and storage.

2. Google scraps controversial AI advisory board

Google has pulled the plug on an outside advisory group that was intended to guide AI work following a series of controversies, the company confirmed on Thursday.

Why it matters: Google, like Microsoft, had been looking for outside input to help shape its AI efforts. However, Google's panel drew almost immediate outcry for, among other things, including the president of the Heritage Foundation.

Thousands of Google employees and others had signed a petition calling for the removal of Kay Coles James, citing views they said were anti-transgender, anti-gay and anti-immigrant.

What they're saying:

  • Google: "It’s become clear that in the current environment, (the panel) can’t function as we wanted," Google said in a statement. "So we’re ending the council and going back to the drawing board. We’ll continue to be responsible in our work on the important issues that AI raises, and will find different ways of getting outside opinions on these topics."
  • Petition organizers: "So many people (over 2300 Googlers & over 300 supporters from industry, academia and civil society) answered the call to #StandAgainstTransphobia," the petition's organizers said on Twitter. "We thank you for your support & unwillingness to compromise on hate."

A source had earlier told Axios that Google planned to hold firm and keep Coles, citing a desire to hear from a range of voices and draw on Coles' free market perspective.

The group's disbanding was first reported by Vox.

3. T-Mobile and Sprint pitch merger as a way to beat China to 5G

A passenger boards a bus featuring 5G network service in March in Nanning, China.
A passenger boards a bus featuring 5G network service in March in Nanning, China. Photo: Yu Xiangquan/VCG via Getty Images

Sprint CEO Michel Combes and and T-Mobile CTO Neville Ray have a message for Washington: If you want to beat China in the 5G race, you'd better approve our merger.

Why it matters: As Kim Hart reports, the $26 billion deal that would combine the 3rd and 4th largest U.S. wireless carriers and has been waiting on federal approval for nearly a year.

  • The companies seized on the fretting over China's threat to make the following case to regulators: Sure, you'll lose one wireless competitor in the U.S., but you'll gain a stronger global competitor that can help the nation stay ahead of its 5G nemesis.
  • "The race has barely begun. There's going to be an intense phase of running this race and investment in these networks. You've heard about the resources needed to do that. We're up against formidable competition. The Chinese machine has incredible momentum," Ray said in D.C. on Thursday.

Sprint has a boatload of mid-band spectrum that complements T-Mobile's low-band and millimeter wave spectrum — all of which are needed for 5G. Combining financial resources would allow the companies to build faster, Ray said. "It's not '1+1=2,'" he said. "It's 1+1=4."

  • On Thursday, T-Mobile CEO John Legere pledged to add at least 11,000 more jobs by 2024.
  • Also on Thursday, the FCC restarted the merger review shot clock, which now runs out in early June. (Be smart: The shot clock is just a goal, not a binding deadline.)
  • NEC Director Larry Kudlow also reiterated the Trump administration's support for a market-based approach to deploying 5G.

Reality check: Verizon and AT&T are moving full-speed ahead on their own 5G deployments, and Verizon flipped the switch on commercial 5G service in Minneapolis and Chicago this week.

  • "We have all we need to compete against China," Verizon President Ronan Dunne told Axios when asked about his competitors' pitch. "That's not to say we should be complacent, but I don't see any evidence to say we are hamstrung in our ambitions to lead not just in the U.S. but to lead the world."

4. Facebook hacker markets shut down

A phone with the Facebook logo set against a circuit board.
Photo: Thomas Trutschel/Photothek via Getty Images

Cisco's Talos research team announced Friday it had discovered 74 Facebook groups where hackers bought and sold cybercrime tools and services. The groups networked together as many as 385,000 members speaking a bevy of different languages, Joe Uchill reports.

  • "Tampa — it was basically the size of Tampa," said Craig Willams, director of outreach for Talos.

The big picture: Though this appears to be the largest roundup of criminal Facebook hacker groups in history in terms of total hackers served, it's not the first. Reporter Brian Krebs discovered 120 groups hiding 300,000 members in 2018.

  • But the latest find demonstrates that moderating these groups is difficult. Many had the same or similar names to the groups discovered by Krebs, suggesting they had been restarted after Facebook took them down.

Facebook has dismantled several groups discovered by Talos, according to the report, but some that were taken down have already resurfaced.

  • The groups, each of which served as a flea market for a specific modality of cybercrime, benefitted from how good Facebook is at building communities, said Williams.
  • Some of the groups were as many as 8 years old.

The bottom line: "If something is free, criminals are going to find a way to abuse it," said Williams.

5. Qualcomm open to supplying 5G chips to Apple

Qualcomm President Cristiano Amon
Qualcomm President Cristiano Amon. Photo: Paco Freire/SOPA Images/LightRocket via Getty Images

Qualcomm President Cristiano Amon said Thursday that the company would be happy to consider working with Apple on its 5G plans if their reported struggles to bring a product to market continue, David McCabe reports.

Why it matters: Qualcomm and Apple have been locked in a lengthy, acrimonious legal battle that includes patent, contract and antitrust complaints.

The big picture: Apple is reportedly struggling with its effort to add 5G to next year's iPhones. Apple had used Qualcomm modem chips until 2017, when it started using a mix of Qualcomm and Intel before going all Intel with its 2018 lineup.

What they’re saying: While Amon said that he “can’t really comment on what Apple is doing,” he also said that the longer any company waits to introduce a 5G product, the higher the bar will be for them to meet.

  • On whether Qualcomm would work with Apple on 5G products: “We’re still in San Diego, they have our phone number," he said. “If they call, we’ll support them.”

6. Take Note

On Tap

  • NAB Show, the big broadcasters confab, starts this weekend in Las Vegas.

Trading Places

  • Ian Goodfellow, a top figure in AI circles, is leaving Google and joining Apple. He's known as a pioneer of what are known as general adversarial networks. (Be Smart: GANs are an AI technique that keeps improving on its own output to create impressive results, such as being able to learn from seeing millions of human faces and create entirely new ones.)


  • Microsoft CEO Satya Nadella and other top executives used a scheduled Q&A session Thursday to respond to allegations of widespread sexual harassment that were made in a long e-mail chain that began circulating last month. (Axios)
  • California's Supreme Court ruled that San Francisco has the right to reject cellular gear that it finds does not meet the city's aesthetic standards. (Bloomberg)
  • PatientsLikeMe, a health-tech startup that connects patients with similar medical conditions, is being forced to find a buyer after the Committee on Foreign Investment in the U.S. ordered Chinese firm iCarbonX, its majority owner, to divest its stake in the company. (Axios)
  • Samsung is seeing its biggest earnings drop in four years, with first quarter operating profits down 60 percent from a year ago, amid weak chip sales. (Bloomberg)

7. After you Login

Tim from Cupertino, you're on the air: Apple CEO Tim Cook called in to an ESPN show on Thursday to discuss his alma mater, Auburn, making it to the men's Final Four for the first time.