Nov 17, 2020

Axios Login

Sorry for bothering everyone. I just wanted to send a brief note to the one reader for whom 2020 has been a little extra challenging and say, I hear ya. To everyone else, "Hi."

Situational awareness: Twitter on Tuesday morning announced the global rollout of Fleets, its name for ephemeral posts in the vein of Instagram Stories or Snapchat snaps. Twitter started testing Fleets, which disappear after 24 hours and can't be liked, retweeted or publicly commented on, earlier this year.

Today's Login is 1,386 words, about a 5-minute read.

1 big thing: Airbnb's IPO bets on the post-pandemic future

Illustration: Sarah Grillo/Axios

In filing for a $1 billion stock offering Monday, Airbnb is betting investors will look past the company's COVID-19-induced struggles and see a brighter future.

Between the lines: Airbnb faces pressure to go public despite the pandemic so it can deliver liquidity both to investors and to early employees, whose options will eventually expire.

The big picture: Airbnb was losing money but growing quickly until the pandemic hit early this year. COVID took a tremendous toll on the company, especially in March, as cancellations outpaced bookings (see chart).

Source: Airbnb S-1 filing

Yes, but: While the broader travel industry is still reeling, Airbnb has partly recovered by providing a market for those looking for a nearby getaway or even just a more scenic backdrop to do remote work and school.

  • "Airbnb IPO is the perfect market hedge," Box CEO and tech gadfly Aaron Levie tweeted. "If you believe the vaccine is coming quickly, people want to travel again. If you don't believe it's coming quickly, people want to work remotely in different locations longer."

The catch: Airbnb could face another rough period if the current explosion of coronavirus cases leads to a second round of widespread lockdowns.

  • Any wave of cancellations puts Airbnb in a difficult and costly position as it tries to be flexible with travelers' needs while not leaving hosts high and dry, either.

By the numbers:

  • Airbnb has raised approximately $6.4 billion from venture capital and private equity firms. It was valued at $31 billion in a late 2017 round, but that fell to only $18 billion when the company secured an emergency equity and debt round in the pandemic's early days.
  • In its filing, Airbnb reports a nearly $700 million net loss on $2.5 billion in revenue for the first nine months of 2020, versus a $322 million net loss on $3.7 billion in revenue for the year earlier period.
  • But it also reports $219 million in profits for the third quarter of 2020, as bookings rebounded.
  • It's unclear whether Airbnb plans to raise around $1 billion, or if that's just a placeholder figure that will be fleshed out more in an amended filing.

Of note: Airbnb has carved out the rare niche in travel that doesn't rely heavily on advertising to generate bookings.

  • The company noted in the filing that roughly 91% of its traffic came through direct or unpaid channels in the nine months ending Sept. 30.
  • However, in a section Airbnb probably hopes gets noticed by regulators, the company added, "We believe that our SEO results have been adversely affected by the launch of Google Travel and Google Vacation Rental Ads," which it said has hurt its prominence in organic Google search results.

Why it matters: How Airbnb's stock offering fares this winter will be one good indicator of whether investors think the U.S. economy is stuck in a COVID-dug ditch or ready to take vaccine-powered flight.

2. Facebook and Twitter's Senate hearing game plan

Photo: Michael Reynolds/Pool via Getty Images

At a Senate hearing this morning, Facebook's Mark Zuckerberg and Twitter's Jack Dorsey plan to tout their companies' efforts to limit online misinformation and will also endorse updating tech's prized liability shield as long as Congress doesn't blow it up, Axios' Kyle Daly reports.

Why it matters: Section 230 of the Communications Decency Act protects online platforms from lawsuits over moderation calls and user-posted content, and many policymakers view amending or even eliminating the law as their best lever to change how companies govern online speech.

Driving the news: The two chief executives will appear before the Senate Judiciary Committee via video conference for a hearing entitled "Breaking the News: Censorship, Suppression, and the 2020 Election."

  • Democrats have slammed the platforms for letting President Trump spread misinformation about voting processes and results before and after Election Day.
  • Republicans have cried censorship over labels that Facebook and Twitter have added to posts such as Trump's repeated false claims that he won the 2020 election.

Dorsey, per advance testimony shared by Twitter, will:

  • deny that Twitter's employees and content moderation choices are biased against conservatives;
  • run down actions Twitter has taken against misinformation before and since the election, noting that this work remains ongoing; and
  • encourage lawmakers to work with industry and civil society groups to explore modifying Section 230 or writing additional legislation to address concerns, but not eliminate, erode, or add speech-chilling moderation mandates to the law.

Zuckerberg will similarly detail the actions Facebook has taken on misinformation, a company spokesperson said, as well as reiterate the company's support for updating Section 230, such as to add language requiring tech firms to be more transparent about moderation practices or work together to combat problematic material.

  • He'll also call for new federal regulations on privacy, elections and data portability.

Reality check: Whatever Dorsey and Zuckerberg say to kick things off, the hearing is bound to tumble quickly into political theater — likely over litigating claims of censorship in individual instances of tweets that contain voting misinformation being labeled or hidden from view.

Between the lines: Close Trump ally Sen. Lindsey Graham will preside over the hearing as Judiciary chair.

  • Other Judiciary Republicans include some of the most vocal proponents of the bias-against-conservatives charge, including Sens. Josh Hawley, Ted Cruz and Marsha Blackburn.
  • Watch for confrontations that will play well with the GOP base in clips from the hearing that members will share online afterward.

The hearing begins at 10am ET.

3. TikTok beefs up parental controls

TikTok is expanding the ways parents can control how their children use the video-sharing app, Axios' Margaret Harding McGill reports.

The big picture: TikTok has sought to position itself as a fun and safe portal in the face of political headwinds over its Chinese ownership and in contrast to other, more established companies that are wrestling with content moderation challenges.

Driving the news: The new tools, announced on a company blog post Tuesday, build on TikTok's "Family Pairing" feature, which allows parents to control how long their kids spend on the app and who can message them. The new features include parental controls over:

  • Whether teens can search for content.
  • Whether their accounts are private, or discoverable to any user.
  • Who can comment on their videos.

Flashback: TikTok this spring disabled direct messages for users under 16 and rolled out its Family Pairing tool.

  • The focus on beefed-up protections for underage users follows a 2019 fine from the Federal Trade Commission over allegations that TikTok's predecessor app, Musical.ly, collected data from minors in violation of federal law.
4. Americans spend more on entertainment amid pandemic

Illustration: Eniola Odetunde/Axios

American consumers are spending more on entertainment content as they try to binge-watch their way through the pandemic. Nearly three quarters of adults say they are spending more on entertainment each month, according to a new survey.

Why it matters: The pandemic coincided with a flood of new streaming service options, including HBO Max, Peacock and Disney+. While consolidation is still expected, for now a rising tide is helping keep most boats afloat. (The S.S. Quibi has already sunk.)

By the numbers:

  • Millennials are spending the most, with their average entertainment spending up an average of 38%, according to the survey conducted by Wakefield Research on behalf of Dolby.
  • Nearly half of those surveyed said they had upgraded at least one of their streaming services to a premium version in the past six months.
  • Upwards of three-quarters of those surveyed (77%) said the news impacts what they watch, with nearly half saying they use entertainment to escape current events.
  • More than two-thirds of U.S. adults (69%) said they plan to purchase new hardware in the next six months to beef up their home entertainment experience, with 54% specifically mentioning living room gear such as a new TV, soundbar or speakers.
5. Take Note

On Tap

Trading Places

  • Twitter hired noted hacker Peiter "Mudge" Zatko as its new head of security. Zatko previously did work for Google and the Defense Advanced Research and Projects Agency.
  • AI Now has hired its co-founder Meredith Whittaker as its faculty director. Whittaker, who helped organize an employee walkout at Google, left that company after saying she believes her role was reduced in retaliation for her organizing effort.

ICYMI

  • An investigation showed the U.S. military is among the buyers of mass location data gathered on smartphones. Location data was grabbed from a variety of apps, but included weather services and an app for Muslim prayers. (Vice)
  • President Obama says online misinformation and the resulting lack of agreed-upon truth is the greatest threat facing our democracy. (The Atlantic)
  • Huawei is selling its Honor budget smartphone business to a consortium of dealers. (Reuters)
  • Destination VR operator The Void has encountered major financial issues amid the pandemic. (Protocol)
  • Amazon is opening an online pharmacy, selling prescription medication with free two-day delivery for Prime members. (Recode)
  • Internal Facebook data suggests the platform’s labels on false Trump posts only reduce their spread by 8%. (BuzzFeed)
6. After you Login

Usually I try to wait until later in the week to just be like, "Here's a cute baby. Enjoy." But it's already been a long week. So, here's a cute baby. Enjoy.