In this episode, Shawn and Ross take stock of some of the major announcements of I/O, Google’s annual developer event. including how it has answered Apple’s privacy challenge, its latest AI advances, and its new Android device announcements. Our Lightning Round takes on Facebook’s breakup argument, Blue Origin’s literal moonshot, and Redfin’s direct home sales. And our Startup of the Week tackles fake news with machine learning.

Shawn DuBavac 0:11
Hello, everyone,. Welcome back to another episode of Techspansive .I’m Shawn DuBravac at Avrio Institute.

Ross Rubin 0:17
And I’m Ross Rubin at Reticle Research.

Shawn DuBavac 0:20
Thanks for joining us. We’re going to dive right into Google IO and talk about some of the things that are coming out of Google IO. And then we’ve got a few ideas for you for our lightning round to follow. Ross, I really feel like Google IO is becoming one of the defining developer conferences of the year and one of the defining weeks of the year. There’s always a tremendous amount of information that comes out. They’ve done a very good job, at least in the last couple of years, of showing some new ideas and pushing forward some new features. And certainly, we saw that this year,

Ross Rubin 0:55
I think before it used to be more about seeing what kinds of devices and search technologies they were unveiling in many established categories or in in venues that were familiar to consumers. But particularly over the last two years, it has really become more about showing new kinds of technologies, new kinds of capabilities that have never been seen, really, before thanks to their investments in artificial intelligence and machine learning. And there was certainly no shortage of that at this year’s event.

Shawn DuBavac 1:30
So the big news, kicking things off, we saw it and an-op ed. We saw it really throughout the entire conference was Google’s focus on privacy or rather, their perspective on privacy

Shawn DuBavac 1:44
And this was an answer to the challenge that they have been receiving from Apple about how privacy is a fundamental right, which has been something of a swipe against Facebook and Google and Google’s responses that privacy is not a luxury good, which is clearly a reference to some of Apple’s products. But really, the approaches had been very different. And this is something that I wrote about in my ZDNet column this week. When Apple designs products they are—and we saw this in their media products that they introduced a while back—trying to design them so that the question of whether you need to share data just doesn’t come up. The default is that you don’t have to share data. That’s how they’re trying to design them. Even if that means for example, that they need to leave off some degree of personalization, or that they need to rely on a subscription model because advertising would require sharing of that information. For Google, of course, a lot of their businesses based on having that information, whether it be for personalizing ads or a lot of the machine learning work that they’re doing that requires a large database of users. So they’re all about giving you the controls to decide what you want to share. And indeed, a lot of what they showed an IO was about surfacing more of those controls and extending some of those controls. But they are going to pitch as hard as they can, “Here are the compelling reasons why you should be sharing the information with us.” And that was shown and everything from personalization of the new Nest Hub Max experience which has a camera to potentially creating earlier detection of certain kinds of cancer at a rate that even most advanced radiologists can’t necessarily identify or oncologist.

Ross Rubin 1:44
So do you think this is where the privacy debate settles out? So we also saw them intraduce new features or, to your point, extend new features like Google Maps is going to have an incognito mode. So there in the past, if you searched for location, and if you navigate to location, by default, that information was shared with Google and available to Google, primarily to improve the service and to improve the platform. Now, you can go into an incognito mode. Do you think this is where we land when it comes to privacy, that will have a lot of these features of being able to toggle sharing on or off based upon when we’re using it, how we’re using it. And even certain services where maybe we don’t want to share ever at all?

Ross Rubin 4:40
I think that’s the direction. In addition to offering incognito mode for maps and location (which is, of course, one of the most sensitive kinds of information you can share), they also are surfacing controls to allow you to automatically wipe your information after after a certain amount of time, one month, three months, what have you. And again, many of these capabilities have been there for some time or similar capabilities. In fact, they even showed a timeline of, over the course of 10 years, all of the features that they have introduced to help facilitate control over over privacy and security. But what they’re doing now is really surfacing it. And the reason that seems to be the approach that will be prevalent, is for two reasons. One, what it enables in terms of benefit is just very compelling, and is going to just become more compelling. And the second reason it’s going to become dominant is because if you don’t do that, if you’re not relying on that level of personalization, or that level of data capture, you need to find some other way to generate revenue as Apple does. And that’s only going to work for a relatively small segment of the population. We are already seeing it in terms of the music service wars, with Apple Music, essentially being a subscription only service, and Spotify having a massive and expanding tier of free service that operates on advertising in exchange for essentially, you know, an unlimited, or a very broad music experience.

Shawn DuBavac 6:24
It feels like our generation and the generations older than us are not going in and deleting data. And that’s one of the frustrations I think that’s being voiced broadly about some of the privacy settings that Facebook has implemented in past years is there’s confusion over who you’re sharing information with and when you’re sharing it with them. But as I look at younger generations, Gen Z and below, my kids are very comfortable going in and deleting information and deleting data. And you and I have talked about how they’ll go into Instagram and delete all of their past photos at different intervals, simply when they want a fresh reset or don’t feel like those photos represent who they are, who they want to be. So that it feels like they’re much more comfortable as a generation, as a group of individuals, willing to go in and control their data and delete it. They recognize the data is there is being used, but that they have some control over it. And they’re willing to exert that control where it feels like older generations, as a stereotype here, aren’t necessarily predisposed to going in and doing that.

Ross Rubin 7:29
To your first point, Sjawn, there’s only I think so much you’re going to be able to do to expose the controls. And, of course, ultimately, it comes down to what is in these companies’ interest. And I think that’s one reason why Facebook in particular is struggling so mightily with this. And Zuckerberg says, “Look, it’s not going to be about creating a few new features.” as Google does, as Google has. It’s going to be about a fundamental cultural shift at the company. And you can argue that, from the beginning, or certainly over the past 10 years, Google has been savvier about exposing these controls, and has been more aggressive in providing consumers the tools to control their privacy than Facebook has. Perhaps in some way, Google has set an example for the kind of approach that Facebook may aspire to. Because, of course, they’re not going to abandon the advertising model for the foreseeable future.

Shawn DuBavac 8:28
Well, and looking at some of the other things that were announced at Google IO, because there were tremendous number announcements, we saw that they’re bringing Google Assistant to the phone. And so that will speed things up. And this is something we’ve been seeing the on the horizon for a little while. Qualcomm, for example, at CES was talking a lot about being able to bring AI functionality to the end nodes of a network so that you can do AI applications. And Google Assistant is one example of that on the phone as opposed to having to send it up to the cloud. Not only does that accelerate things and speed things up, but then that also, in some ways could create some privacy as well. And some security of data if it’s being held on the phone. And that’s arguably some of Apple’s model is keeping information siloed on a device.

Ross Rubin 9:19
Yeah, absolutely. I think that Qualcomm has been more vocal about the privacy implications of keeping the voice recognition local. And they’ve already done some things in smart speakers for more limited kinds of response that keep the voice recognition local. For Google, it was really more about the experience. And I would say this was a good example of them doing things that are trying to get us past today’s user interfaces. So it wasn’t just the idea that it was local, which they achieve by massively shrinking the database that they need to go through, the data set that they need to go through. But it was about having a more natural kind of exchange, not only in the speed of the response, but also the need, or the removal of the need, to have to consistently address the phone with with “Hey, Google,” you know—just being able to let out a series of commands, one after another, that would essentially operate the phone. I mean, you’re seeing the apps respond in response to the commands. But that almost seems, or starting to seem, more optional. And so you can see, as we start to roll out more smart headsets, you know, next generation kinds of things like the AirPods, we’ll be able to do far more to interact with the services than we had previously without the service of a screen. Another good example of that was this idea of Duplex on theWeb, which really slices through the complex screens of an application on your phone the same way that Duplex for phone calls, which they showed off last year, in which allows you to put simple appointments with hairdressers and so forth does for a human conversation. So the example they showed was being able to book a car with a combination of intelligence about the steps needed to get through the interface and your personal preferences, many of which have been picked up by your previous actions. So again, this is an example of where sharing your data with Google Assistant, in this case, can offer personalization and ultimately time saving benefits.

Shawn DuBavac 11:43
And when it comes to that, booking a rental car and having to fill out the forms, I say yes, please give that to me. Now I hate filling out those forms constantly. So being able to have that, and even just things like signing documents, I think there’s a B2B application that grow out of all this. And a lot of what we seen thus far from duplex was C2B or B2C, and it was booking appointments with a business, finding out what times they were open and available. Now it’s still very consumer-centric and consumer-focused. But I have noticed a move in some of the Google services, and you think of things like GSuite, pushing towards small businesses. And I think that that’s a really compelling area for Google to play. And I think you could easily imagine this accelerating business transaction.

Ross Rubin 12:31
Another example of personalization, we saw through at least one of the hardware announcements that Google made at the show, which was the newly rebranded Nest Home Hub Max. This is essentially a larger version of the Google Home Hub, which saw a name change and a price drop. And the other difference Shawn, as we were talking earlier, is that this one has a camera that can do some the “keeping people in frame” tricks that Facebook’s Portal device has made a claim to fame for. And it’s personalized, so it recognizes you in the room. And that’s how it knows how to present your calendar. And Google is presenting this as something that you would want in a more public part of your home such as the kitchen, (even though they showed off the original Home Hub in the kitchen quite a bit) and the living room. And they went to some length to talk about how, hey, if you want the camera off, there’s a switch in the back that will electrically disconnect it so that is essentially onhackable, I suppose. But it’s a great example of the tradeoff between making a choice for consumers, as the original device did that lacked the camera, and giving them the tools to decide whether they want to share data as the new device does. Some of it comes down to a question of settings as well.

Shawn DuBavac 14:04
And for me, you know, I as you would expect, I’ve got like six or eight of these throughout my house, I’m quickly running out of places to put them. I have a Google Home Hub that I actually have in our dining room. And it’s amazing how frequently we engage with that while we’re having breakfast or whether we’re having dinner and the screen actually provides a compelling aspect of that experience. As opposed to just yelling into the kitchen at Alexa, we’re able to use the screen. And so I like that. And because of where it’s at, implementing and integrating a security feature to it, a security camera aspect to it, would make a lot of sense because it’s in a area of the home where people are are coming and going. So that makes a lot of sense.

Ross Rubin 14:47
That is a good point. On the other hand, for video calls it does use Dup, which has not been among the most popular video chat apps, but of course it is Google’s own. So there’s that. And then the other announcement, on the hardware side was the Pixel 3A—essentially a less expensive, almost half the price version, of Google’s smartphone that manages to retain most of if not all of the excellent imaging quality that it has. And this is going to go head to head against some other strong brands in the midtier, both Motorola and Nokia under their new homes, new corporate homes, focusing on that segment, as well as some of the Chinese brands coming into the US market, such as One Plus, which will be announcing their latest generation, I believe, next week. So to me it just shows that Google is willing to cut deeper into the OEM competition. It’s not just about providing an alternative to Samsung, and it’s not just about providing an old alternatives to the iPhone, because Apple doesn’t even offer anything at that price point.

Shawn DuBavac 16:04
And it used to be the Pixel or whatever hardware Google was bringing out (and they’ve come in and out of that hardware category over time), it used to be the reference design, it was the high priced premium product really positioned to show you all that Android could be on a phone. The first iteration of that really wasn’t to necessarily drive the market. But now you’re seeing them, to your point, come out at lower price points and really offer a compelling phone at a reasonable price at a midtier price.

Ross Rubin 16:37
It was exactly to your point positioned as the purest expression of Google’s vision of Android and its pristine, unskinned state. And what’s happened is that, what it’s really evolved to, is this idea of a place where Google can introduce some of its newest technologies first before expanding them to other Android devices and even iOS, We were talking about Google Lens earlier as a good example. On the other hand, what they have enabled is a far broader number of Android phones to beta test the next version of Android so that, you know, if you bought, for example, (I think LG is one of the phones they support.), you’re not necessarily locked out of getting getting a glimpse of the future. But what hasn’t changed is that the Google devices, the Pixel devices, tend to be the first to officially support the new version and to ship with that version.

Shawn DuBavac 17:45
Now you’re getting all of that at a much lower price. So it’s a really interesting proposition. I’d like to see Google in the hardware space. And so I’d like to see them launching these hardware categories. I think that they can differentiate their products and still maintain strong relationships with their OEM partners. And that’s always been the struggle, and probably will continue to be a struggle. But I think it’s good for them to be in that hardware space. And I think it’s great to bring out a mid-priced, midtier phone that will have access to all of these news features.

Ross Rubin 18:19
Yeah, and maybe it’s just an attempt to boost revenue. I mean, pretty simply, lower priced product should result in stronger sales. And maybe they’re looking to build a little bit momentum since, after all, this is not an R&D project.

Shawn DuBavac 18:37
And they’re doing a lot to also drive Android into the market quicker and to get the most recent updates quicker. So they have this Project Mainline, which they talked about, which is really designed to modulate the updates so that they can get specific updates out quicker, and hopefully have more consumers on the newest iterations of Android, but also the most up-to-date as well. And that’s a privacy and security aspect as well. Just some just some other quick things as we close out news on Google IO. We saw that Android is bringing live captions to all videos, which means you’ll now be able to read all of those videos that you wanted to watch while you’re in your office meetings, but couldn’t because of the volume. Now you can just still consume those videos, but you can read them.

Ross Rubin 19:27
And there’s smart replies to all messaging apps. So that’s another good example of their technology filtering and spreading out.

Shawn DuBavac 19:34
And you’re really seeing them to make life easier, quicker, whether it’s filling out forms replying, consuming video on your on your phone. All of this is designed to accelerate that. We saw a lot of those, you mentioned Google Lens, we saw a lot of those in the Google Lens update. So for example, you can use your camera and point to a receipt, a calculator will pull up so you can add a tip. You could split the bill. You can do real time translations with foreign language or text-to-speech. So there’s a lot of things that are designed to streamline communication and streamline interactions. So a lot of great things coming out of Google IO. Now let’s roll over to the Lightning Round. We’ll jump in quickly with three stories. First, the breakup of Facebook or the constant calls to break up Facebook were driven a little bit higher this week. Jeff Bezos’ Blue Origin had some major announcements. And finally Redfin launches Redfin Direct, which is a feature that lets homebuyers make offers on homes directly without the use of an agent. They’re starting that in Boston. So let’s jump in, Ross. Your take on the breakup of Facebook?

Ross Rubin 20:44
So, epic op-ed piece in The New York Times by one of Facebook’s cofounders that simultaneously says that Zuckerberg is a well-intentioned guy but just has too much absolute power. So if you think about how Facebook would be divided up off the top of my head, I’d say maybe four divisions, the social network, all the messaging apps, YouTube, and maybe Oculus. And of those four, three are very strong, robust businesses that have very high market share, if not outright monopolies in their space. So I’m not necessarily convinced that it would open the market to many new entrants. I mean, trying to launch a social network to compete with Facebook would be very daunting and very difficult even if they didn’t have the Instagram and WhatsApp pieces. You might have to prevent Facebook from launching a messaging function for, whatever, a period of five years. The benefit, I suppose, would be that Zuckerberg really couldn’t be CEO of all three or four of those companies. So that might be the opportunity to reduce his personal influence, even if it wouldn’t necessarily change the market in at least the short term.

Shawn DuBavac 20:45
I’m not sure that it really matters. I mean, it’s not clear to me, what you break it up into. We can think about those historic divisions of the companies that existed before they were acquired by Facebook, Instagram, WhatsApp, and then Facebook by itself, some breaking off the messaging piece. But even as separate entities, we could still integrate communications across those platforms, which is something I think that they should do, so that you can more easily communicate across those platforms, and that then competes more head-to-head with IMessage. And then, I’m just not sure that it really matters. You can compete with these platforms—the ability to scale up quickly, the ability to enter these markets exists there. So from a traditional antitrust standpoint, it’s not clear to me that they’re inhibiting competitors from entering the market. If you look at younger generations, they’re using other social networks, not in that Facebook portfolio, like Tick Tock and other ways of messaging. Yes, they have gravitated towards Instagram, but none of my kids and none of their cohorts have any interest in having a Facebook account. And I’m not sure that will ever change. I don’t know that they’ll ever feel compelled to move to that platform, I think it’s much more likely that their parents will move to whatever platform they’re on. And that’s been true in the past. Our parents got on Facebook because we were there and we were sharing photos of kids and they followed others on to Instagram. Those younger generations are going to define the meaningful platforms. And it isn’t clear to me that Facebook has any monopoly power over what those younger generations do.

Ross Rubin 23:44
First of all, quick correction. I said YouTube, which is of course on by Google, I guess I was thinking of breaking up Google. But what if you took the Facebook social network itself—sort of more like an AT&T breakup—and just divide it into two or three or even more pieces? And told people, you know, they had to pick one or just gave everybody access to all of them at once? Do you think that might do it?

Ross Rubin 24:13
So again, I question, how do you break them up? Do you break them up by geography? Do you break them up by age? Yeah, I mean, you randomly push people into two different things. I mean, it feels like engagement levels are already declining for a traditional Facebook platform, or at least have plateaued. Certainly their, their revenue is continuing to grow from advertising as for the entire organization. But I think engagement on your traditional Facebook platform is stagnant at best. And then I think you’re seeing them roll out other features like the Buy button on Instagram in order to diversify some of that ad-based revenue and offer more compelling reasons for people to be on those platforms. But the history of social medias in the digital world—and it’s a short history—has been one that startups can come in and disrupt that space. One of the things to Facebook’s credit that they’ve done is tried to anticipate what those promising platforms are in the world, and then entered in those spaces by acquiring them and trying to integrate them, I’m still convinced that the future of these platforms is to be more directly tied to commerce. And you saw this week Facebook hiring about 100 people in London, and using that to establish a base to push payments on WhatsApp. I think a lot of what you’re seeing Google announced during Google IO is around payments and trying to drive commerce. There’s no reason why some of these features that they’ve rolled out, like filling out forms for rental cars, couldn’t over time allow them to enter into those markets. And so I’m just not convinced that breaking up Facebook into any number of different entities gets us what we want. Point number two, Jeff Bezos has Blue Origin, had some major announcements here in Washington, DC.

Ross Rubin 26:08
Jeff Bezos becomes yet another billionaire who has visions of space exploration, a very different vision than Elon Musk, who started SpaceX. Whereas Musk believes that it’s only a matter of time…. Well, they both have visions of the Earth not being able to sustain us in the long run. But the difference is Musk believe that we will eventually have to live on other planets and wants to turn Mars into perhaps a second home for humans. Whereas Bezos believes we can address the limited resources and limited natural resources of Earth by essentially mining natural resources from other parts of the solar system or perhaps the galaxy. That said, they’re still going to, we’re still going to reach some kind of population overflow at some point, which is why he foresees these gigantic floating stations that would accommodate up to perhaps a million people. So the size of a pretty recent pretty decently sized city with all the amenities that we take for granted on Earth today: farms and air and you know, recreation, a very Earth-like experience, because it would be very close to Earth. You know, we you’d be able to commute back and forth to Earth. So I think it’s worth noting that Bezos said that he has been investing a billion dollars a year into this endeavor for I’m not sure how many years but it really shows the the long game that this is behind. And I think it rekindled some of the excitement of space exploration from the 50s and 60s, which of course was when Bezos grew up. So obviously it’s going to take decades for this to play out. But it could wind up being his his greatest legacy, I suppose.

Shawn DuBavac 28:29
Well, and I think when you look at San Francisco, and one in, what, every 11,000 individuals is a billionaire. And maybe they’re feeling the pressure to get out of San Francisco. Where to go? Why not just go to space?

Ross Rubin 28:46
Potentially the only place where the real estate prices could be higher.

Shawn DuBavac 28:50
That’s right. That’s right.

Shawn DuBavac 28:52
I hate commuting into the city. So let alone commuting to the moon and back. I don’t know. But sign me up

Ross Rubin 28:59
Or at least our kids or grandkids.

Shawn DuBavac 29:02
That’s right. I’ll get on the waiting list. Now I might as well get on the waiting list. It’s like Red Sox season tickets. Just put yourself on the waiting list.

Shawn DuBavac 29:09
Final story in our Lightning Round. Redfin lunches Redfin Direct. This is a feature that they’ve tested in the past. It allows home buyers to make offers directly on homes and forego agents. They obviously didn’t make a big splash about this because big part of Redfin’s business model is Redfin agents who are live in person realtors that help unlock doors and help you navigate the challenge of making an offer on home. So while they are competing and undermining their their realtors, they didn’t want to make a big splash about it. Obviously, though, when you think about streamlining services, this is one that could be streamlined. It’s expensive, arguably more expensive than it needs to be in many instances. And this is is a way of moving around some of those expenses. And it seems like this type of service is perfectly positioned for digital platforms like Redfi, or Zillow, Zillow, or any of the others. And just one example of ways that we can streamline making transactions on digital platforms now.

Ross Rubin 30:22
Absolutely. I mean, Redfin already has very low listing fees. And at least initially, this is going to be an appeal, I think, for a different kind of customer who really wants that disintermediated experience, but I’m sure they’re thinking that we have to do this because “If we don’t, it’s only a matter of time before perhaps {one of the other companies that you mentioned) launches something like it.” So it’s a classic example of cannibalizing your own product rather than take the risk of someone else cannibalizing.

Shawn DuBavac 31:01
And Redfin was quick to note that it wasn’t a bunch of low offers that came in have 122 listings in the on Boston Redfin, that accepted an offer since March 28. They said that five were direct offers, and 12 had been rejected, but they were all within about 5% of the asking price. So these aren’t people just throwing out prices. But it does drive the question of, in a world where everyone’s connected and information dissemination is easy, you could create essentially many auctions for your your home. And that could make a lot of sense in markets that have tight, tight supply of homes. And right now that’s most urban settings. So will be interesting to see how this develops both within Redfin and, to your point, Ross, outside of Redfin.

Ross Rubin 31:56
So our startup of the week is Factmata. They’ve been around for some time, and they are looking to address the fake news issue through a combination of crowdsourcing and machine learning. So it is potentially a way to offer fact checking without some of these accusations of bias that some of the existing fact checking sources are sometimes labeled with. They claim they have been able to achieve a 90% success rate in terms of the fact verifying, rather, whether a story is true. And just like we discussed last week, Sean, I think this is a great example of technology addressing an Ill that technology created. And I know that you mentioned several times about how we have all but solve the spam problem. And there’s a there’s a reason to be optimistic that an offering such as this would help us reduce or potentially neutralize this problem of fake information spreading.

Shawn DuBavac 33:21
When I look at the younger generation, this seems to be one of the biggest issues that they will have to deal with: is not access to information, but access to reliable information and being able to decipher reliable information. And this is an area that I think education should be highly focused on right now—not just teaching the tools of the trade, but helping them understand how to decipher right information. So this is the critical reasoning that is needed for the next generation. And so I think it’s interesting to see services rise up that will essentially automate some of that. We’ll see how well they do. Anything that’s crowdsourced in an area that that tries to tackle fake news could be a very challenging area, because there’s some fake news that is debated by by two sides.

Ross Rubin 34:16
Sure, I agree that i think it’s it’s a tool. It’s part of the solution to your point. Walt Mossberg, the well-known columnist for The Wall Street Journal and Recode later in his career, is one of the people working in a group called the News Literacy Project, which is trying to do exactly what you say, Shawn: educate younger people and hone their BS meter, if you will, to be more savvy about the information they consume.

Shawn DuBavac 34:53
Good. Well, with that, let’s close out another episode of Techspansive. Thanks again for joining us. Shawn DuBravac, you can find me on Twitter at @shawndubravac

Ross Rubin 35:04
And I’m Ross Rubin. You can find me on Twitter at @rossrubin.

Shawn DuBavac 35:08
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