How Dubsmash revived itself as #2 to TikTok

Lip-syncing app Dubsmash was on the brink of death. After a brief moment of virality in 2015 alongside Vine (R.I.P), Dubsmash was bleeding users faster than it could recruit them. The app let you choose an audio track like a rap song or movie quote and shoot a video of you pretending to say the words. But there was nowhere in the app to post the videos. It was a creation tool like Hipstamatic, not a network like Instagram. There’s a reason we’re only using one of those today.

So in 2017 Dubsmash‘s three executives burned down the 30-person company and rebuilt something social from the ashes with the rest of the $15.4 million it’d raised from Lowercase Capital and Index Ventures. They ditched its Berlin headquarters and resettled in Brooklyn, closer to the one demographic still pushing Dubsmashes to the Instagram Explore page: African-American teenagers posting dances and lip-syncs to indie hip-hop songs on the rise.

Dubsmash stretched its funding to rehire a whole new team of 15. They spent a year coding a new version of Dubsmash centered around Following and Trending feeds, desperately trying to match the core features of Musically, which by then had been bought by China’s ByteDance. It’s got chat but still lacks the augmented reality filters, cut transitions, and photo slideshows of TikTok. But Dubsmash has the critical remix option for soundtracking your clip with the audio of any other video that sets it apart from Instagram and Snapchat.

“We realized to build a great product, we needed a depth of expertise that we just didn’t have access to in Berlin” Dubsmash co-founder and CEO Jonas Druppel tells me. “It was a risky move and we felt the weight of it acutely.  But we also knew there was no other way forward, given the scale and pace of the other players in the market.”

Few social apps have ever pulled off a real comeback. Even Snapchat had only lost 5 million of its 191 million users before it started growing again. But in the case of Dubsmash, its biggest competitor was also its savior.

The pre-relaunch version of Dubsmash

In August 2018, ByteDance merged Musically into TikTok to form a micro-entertainment phenomenon. Instead of haphazardly sharing auto-biographical Stories shot with little forethought, people began storyboarding skits and practicing dances. The resulting videos were denser and more compelling than content on Snapchat and Instagram. The new Dubsmash, launched two months later, rode along with the surge of interest in short-form video like a Lilliputian in a giant’s shirt pocket. The momentum helped Dubsmash raise a secret round of funding last year to keep up the chase.

Now Dubsmash has 1 billion video views per month.

Dubsmash rebuilt its app and revived its usage

“The turnaround that we executed hasn’t been done in recent memory by a consumer app in such a competitive marketplace. Most of them fade to oblivion or shut down” Dubsmash co-founder and President Suchit Dash tells me. “By moving the company to the United States, hiring a brand new all-star team & relaunching the product, we gave this company & product a second life. Through that journey, we obsessed only on one metric: retention.”

Now the app has pulled 27% of the US short-form video market share by installs, second only to TikTok’s 59%, according to AppAnnie. Sensor Tower tells TechCrunch that TikTok has about 3X as many US lifetime installs as Dubsmash, and 11X more between when Musically became TikTok in August 2018 and now.

In terms of active users outside of TikTok, Dubsmash has 73% of the US market, compared to just 23% on Triller, 3.6% on Firework, and an embarrassing 0% on Facebook’s Lasso. And while Triller began surpassing Dubsmash in downloads per month in October, Dubsmash has 3X as many active users and saw 38% more first-time downloads in 2018 than 2019. Dubsmash now sees 30% retention after a month, and 30% of its daily users are creating content.

It’s that stellar rate of participation that’s brought Dubsmash back to life. It also attracted a previously unannounced round of $6.75 million in the Spring of 2019, largely from existing investors. While TikTok’s superstars and huge visibility could be scaring some users away from shooting videos while a long-tail of recent downloaders watch passively, Dubsmash has managed to make people feel comfortable on camera.

“Dubsmash is ground zero for culture creation in America—it’s where  the newest,  most popular hip-hop and dance challenges on the Internet originate” Dash declares.  “Members of the community are developing content that will make them the superstars of tomorrow.”

Being #2 might not be so bad, given how mobile video viewing is growing massively thanks to better cameras, bigger screens, faster networks, and cheaper data. Right now, Dubsmash doesn’t make any money. It hopes to one day generate revenue while helping its creators earn a living too, perhaps through ad revenue shares, tipping, subscriptions, merchandise, or offline meetups.

One advantage of not being TikTok is that the app feels less crowded by semi-pro creators and influencers. That gives users the vibe that they’re more likely to hit the Trending or Explore page on Dubsmash. The Trending page is dominated by hot new songs and flashy dances, even if they’re shot with a lower production quality that feels accessible.

Dubsmash tries to stoke that sense of opportunity by making Explore about discovering accounts and all the content they’ve made rather than specific videos. While popular clips might have tens of thousands of views rather than the hundred-thousand or multi-million counts on TikTok’s top content, there’s enough visibility to make shooting Dubsmashes worth it.

TikTok has already taken notice. Shown in a leak of its moderation guidelines from Netzpolitik, the company’s policy is to downrank the visibility of any video referencing or including a watermark from direct competitors including Dubsmash, Triller, Lasso, Snapchat, and WhatsApp. That keeps Dubsmash videos, which you can save to your camera roll, from going viral on TikTok and luring users away.

TikTok’s content moderation guidelines show it downranks content featuring the watermarks of competitors like Dubsmash

TikTok also continues to aggressively buy users via ads on competing apps like Facebook thanks to the billions in funding raked in by its parent ByteDance. In contast, Dash says Dubsmash has never spent a dollar on user acquisition, influencer marketing, or any other source of growth. That makes it achieving even half to a third of as many installs as TikTok in the US an impressive fete.

Why would creators choose Dubsmash over TikTok? Dash clinically explains that its a “decoupled audio and video platform that enables producers and tastemakers to upload fresh, original tracks that are utilized by creators and  influencers alike” but that it’s also about “Its role as a welcoming home for a community that’s underrepresented on social platforms.”

If Dubsmash keeps growing, though, it will encounter the inevitable content moderation problems that come with scale. It’s already doing a solid job of requiring users to sign up with their birthdate to watch or post videos, and it blocks those under 13. Only users who follow each other can chat.

Any piece of content that’s flagged by users is hidden from the network until it passes a review by its human moderation team that works around the clock, and it does proactive takedowns too. However, brigading and malicious takedown reports could be used by trolls to silence their enemies. Dubsmash is working off of a common sense model of what’s allowed rather than firm guidelines, which will be tough to keep consistent at scale.

“Being a social media app in 2020 means you need to take greater responsibility for the well being of the community” says Dash. “We decided upon relaunch to take a strict perspective. Our goal is to be intentional and proactive early, and invest in safety and healthy growth rather than growth at all costs. This may not be the most popular approach amongst the market, but we believe this is the most effective way to build a social platform.”

Dubsmash proves that short-form video is so compelling to teens that the market can sustain multiple apps. That will have to be the case given Instagram is preparing to release its TikTok clone Reels, and Vine’s co-founder Dom Hofmann just launched his successor Byte. The breakdown could look like:

• TikTok: A slightly longer-form combo of comedy, dance, and absurdity
• Dubsmash: Mid-length dance and music videos with a diverse community
• Byte: Super short-form comedy featuring slightly older ex-Vine stars
• Triller: Mid-length life blogging clips from Hollywood celebrities
• Instagram Reels: International influencers making videos for a mainstream audience

Perhaps we’ll eventually see consolidation in the market, with giants like TikTok and Instagram acquiring smaller players to grow their content network effect with more fodder for remixes. But fragmentation could breed creativity. Different tools and audiences beg for different types of videos. Make something special, and there’s an app out there to enter your into pop culture cannon.

For more on the short-form video wars and the future of micro-entertainment, read:

Zuckerberg misunderstands the huge threat of TikTok

Instagram Stories launches TikTok clone Reels in Brazil

source https://techcrunch.com/2020/01/31/dubsmash-songs/

Twitter suspends notorious UK hate preacher for violating abuse rules

Twitter has confirmed it has temporarily suspended the account of controversial rightwing commentator, Katie Hopkins. The move was reported earlier by the BBC.

Hopkins, a former MailOnline columnist and presenter on LBC radio, is a veteran of the social media platform, joining Twitter just under a decade ago — and using it amplify her brand of far-right leaning, liberal-baiting politics. She regularly tweets anti-immigration and anti-Islam sentiments, and has claimed that white British people are now a discriminated against minority.

It’s not clear which of Hopkins’ tweets led Twitter to finally pull the trigger, although she had recently targeted black British rapper Stormzy for a series of abusive tweets.

In a statement confirming the account suspension, Twitter told us:

Keeping Twitter safe is a top priority for us — abuse and harassment have no place on the service. We take enforcement action against any account that is violative of our rules – which includes violations of our hateful conduct policy and abusive behaviour policy. These rules apply to everyone using our service — regardless of the account involved.

At the time of writing Hopkins’ account is still visible — although all but one of her tweets has been deleted.

It is not clear whether Hopkins herself deleted the majority of her tweets. Twitter pointed out that users may choose to delete their own Tweets at any time, including by using third-party services which provide the option of deleting all tweets

Two non-visible tweets on Hopkins’ feed are listed as ‘no longer available’ for violating Twitter’s rules.

The remaining visible tweet is a retweet of another user accusing her of inciting racial hatred — which contains a screengrab of a number of abusive tweets Hopkins made targeting Stormzy.

If Katie Hopkins’ latest tweets on Stormzy don’t constitute incitement to racial hatred I really don’t know what does. She is a criminal. @Twitter needs to act… pic.twitter.com/CbUO5CGl48

— Nitin Sawhney (@thenitinsawhney) December 23, 2019

Hopkins’ Twitter biog lists her as “Milo’s Mum” — a reference to Milo Yiannopoulos, another controversial rightwing troll who Twitter banned in 2016 after he incited his followers to harass Ghostbusters actress Leslie Jones.

source https://techcrunch.com/2020/01/31/twitter-suspends-notorious-uk-hate-preacher-for-violating-abuse-rules/

Daily Crunch: Facebook’s profits disappoint

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. Facebook hits 2.5B users in Q4 but shares sink from slow profits

In its latest quarterly earnings report, Facebook said it now reaches 2.5 billion monthly users, up 2% from Q3 2019. And it brought in $21.08 billion in revenue, up 25% year-over-year.

But profits aren’t growing as quickly as Wall Street would like. One big source of those expenses? Headcount grew 26% year-over-year to 44,942, and Facebook now has over 1,000 engineers working on privacy.

2. Avast shuts down marketing analytics subsidiary Jumpshot amid controversy over selling user data

It was recently revealed that the Czech-based cybersecurity specialist was cultivating another controversial revenue stream: harvesting and selling user data, some of it amassed by way of its security tools.

3. Study of YouTube comments finds evidence of radicalization effect

The study, carried out by researchers at Switzerland’s Ecole polytechnique fédérale de Lausanne and the Federal University of Minas Gerais in Brazil, found evidence that users who engaged with “Alt-lite”/”Intellectual Dark Web” right-wing content migrated to commenting on the most fringe far-right content.

4. Microsoft shares rise after it beats revenue, profit expectations, Azure posts 62% growth

Microsoft reported its fiscal 2020 second quarter (calendar Q4 2019) results yesterday, including revenue of $36.9 billion (up 14%), net income of $11.6 billion (up 38%) and diluted earnings per share of $1.51.

5. Snapchat launches Bitmoji TV: zany 4-min cartoons of your avatar

Snapchat is betting that narcissism will drive viewership for its new weekly videos that put you and your friends’ customizable Bitmoji avatars into a flurry of silly animated situations. Bitmoji TV will premiere on Saturday morning.

6. Practice Fusion, once backed by top VCs, pushed doctors to prescribe opioids in kickback scheme

According to the U.S. Department of Justice, Practice Fusion solicited and received pay from an (unnamed for now) major opioid company in exchange for using its EHR software to influence doctors in the act of prescribing opioid pain medications.

7. Where top VCs are investing in travel, tourism and hospitality tech

To get a temperature check on the state of the travel market, the outlook for fundraising and which sub-sectors might present the most attractive opportunities for startups today, we asked five leading VCs at firms spanning early to growth stages to share what’s exciting them most and where they see opportunity in travel, tourism and hospitality tech. (Extra Crunch membership required.)

source https://techcrunch.com/2020/01/30/daily-crunch-facebooks-profits-disappoint/

Social media boosting service exposed thousands of Instagram passwords

A social media boosting startup, which bills itself as a service to increase increase a user’s Instagram followers, has exposed thousands of Instagram account passwords.

The company, Social Captain, says it helps thousands of users to grow their Instagram follower counts by connecting their accounts to its platform. Users are asked to enter their Instagram username and password into the platform to get started.

But TechCrunch learned this week Social Captain was storing the passwords of linked Instagram accounts in unencrypted plaintext. Any user who viewed the web page source code on their Social Captain profile page could see their Instagram username and password in plain sight, so long as they had connected their account to the platform.

Making matters worse, a website bug allowed anyone access to any Social Captain user’s profile without having to log in — simply plugging in a user’s unique account ID into the company’s web address would grant access to their Social Captain account — and their Instagram login credentials.

Because the user account IDs were for the most part sequential, it was possible to access any user’s account and view their Instagram password and other account information with relative ease.

A security researcher, who asked not to be named, alerted TechCrunch to the vulnerability and provided a spreadsheet of about 10,000 scraped user accounts. (A recent court ruling found that scraping websites does not fall foul of U.S. computer hacking laws.) The spreadsheet contained about 4,700 complete sets of Instagram usernames and passwords. The rest of the records contained just the user’s name and their email address.

The data also showed if the accounts were free trial or paid premium accounts. Only about 70 accounts were paying customers, the data said, but many of those premium accounts also contained the customer’s billing addresses.

We verified the bug by creating a dummy Instagram account and connecting it to a new Social Captain account, and viewing the web page source code of our profile page on Social Captain.

Users were asked to connect their Instagram accounts to the service by entering their username and password. Despite the claim it was “secure,” passwords were collected and stored in plaintext. (Image: TechCrunch)

After TechCrunch reached out, Social Captain confirmed it had fixed the vulnerability by preventing direct access to other users’ profiles.

But passwords and other account information are still visible in the web page source code of a user’s profile page.

“Early analysis indicates that the issue was introduced during the past weeks when the endpoint, meant to facilitate integration with a third-party email service, has been temporarily made accessible without token-based authentication,” said Anthony Rogers, chief executive at Social Captain.

“As soon as we finalize the internal investigation we will be alerting users that could have been affected in the event of a breach and prompt them to update the associated username and password combinations,” he said.

Rogers did not say how long that investigation would take.

Instagram said the service breached its terms of service by improperly storing login credentials.

“We are investigating and will take appropriate action. We strongly encourage people to never give their passwords to someone they don’t know or trust,” said an Instagram spokesperson.

Users who signed up to Social Captain should change their Instagram passwords immediately.

It’s the latest security incident to hit Instagram users, even if Facebook-owned social media giant was not directly culpable for the lapse. Last year, Instagram expanded its bug bounty to include misuse of account data just months after an Indian social media firm scraped the contact information of Instagram influencers on a massive scale. Instagram also last year cut off a trusted ad partner for secretly collecting and storing the locations and other data on millions of users.

Instagram kills off fake followers, threatens accounts that keep using apps to get them

source https://techcrunch.com/2020/01/30/social-captain-instagram-passwords/

Snapchat launches Bitmoji TV: zany 4-min cartoons of your avatar

If you were the star of every show, would you watch more mobile television? Snapchat is betting that narcissism drives resonance for its new weekly videos that put you and your friends’ customizable Bitmoji avatars into a flurry of silly animated situations. Bitmoji TV premieres on Saturday morning, and it’s remarkably funny, exciting, and addictive. Think cartoon SNL on fast-forward with you playing a secret agent, a zombie president, or a Moonlympics athlete.

It’s a style of content only Snapchat could pull off that relies on ubiquitous personalized avatars only Snapchat owns. The company says 70% of its daily active users, or 147 million of its 210 million, have made themselves a Bitmoji. Snapchat bought Bitmoji’s parent company Bitstrips in 2016 for a steal at $62.5 million, and it’s paying off. Amidst a sea of premium video and haphazard Stories that blur together across streaming services and social apps, Snapchat finally found something Facebook can’t copy.

“We really believe that we have invented a new category of entertainment. It’s scripted but it’s personalized. You could take that in a million directions” says Bitmoji co-founder and CEO Ba Blackstock who wrote and directed Bitmoji TV. “First and foremost, I hope that everyone who watches this has kind of a mind blowing experience that they’ve never had before.”

Bitmoji TV, which TechCrunch was first to report Snapchat was building last month, will have its own Snapchat Show page where users can subscribe to get notifications and see new episodes on the Discover Page. Users can visit this page on mobile or tap and hold on the Snapcode below while pointing at it with the Snapchat camera to open Bitmoji TV.

The show is designed to be PG-13 with some bleeped out swearing and a little bloody violence. The shows are made out of Bitmoji’s Toronto office and are based on North American TV, film, and advertising. Each episode cuts away and back to a main story, with the first two centered around an America’s Best Bitmoji game show and a Mime Cops hostage negotiation. Interspersed are ‘channel flips’ between shorter single-gag clips that take your avatar into sit-coms, soap operas, action movies, and informercials.

The gags are ridiculous. At the basketball “Moonlympics”, a player jumps up for a dunk, but low gravity causes him to crash through the glass dome and suck all the other players into space. At Cannibal High, an school announcement says “Attention students, we’re all deeply saddened by the sudden passing of Vice Principal Schneider. To honor his legacy, today the cafeteria will be serving Vice Principal Schneider.”

You’re not alone it Bitmoji TV. There’ll be occassional celebrity guests like Randy Jackson, Andy Richter, and Jon Lovitz. But your co-star in these segments is the Bitmoji of whichever person you last interacted with on Snapchat. That lets you control whether you want your best friend, your significant other, or some rando alongside you. That decision will change the way you interpret the jokes and scenes. Your Bitmoji won’t talk, but their’s will.

Getting philosophical, Blackstock explains that “When you say words to me, it’s not just your words in a vacuum. They’re coming from you. You’re the medium . . . In any narrative fiction you learn about the characters, they have a back story, they have relationships that exist under the story that color it.” Who you make your supporting actor lends personal subtext that enriches each story. That’s one reason you can’t download or easily share clips of your version of Bitmoji TV, and Snap instead just lets you share a link to watch the real thing. Blackstock says it just doesn’t have the same effect if you’re not in the spotlight.

One thing you won’t find in Bitmoji TV, at least at first, are advertisements. The initial 10 episode season won’t have them. But that does seem to be the plan. When I asked Blackstock about monetizing the show, he said “You can imagine. Discover has a business model of showing ads.” Since it make Bitmoji TV, Snapchat would get to keep that ad money rather than paying it out with revenue shares to partners or by buying content. Just as we’ve seen music and video streaming apps move to cut royalty expenses by creating content in-house, Snap seems to have the same idea.

Snapchat has yet to monetize Bitmoji directly beyond its merchandise store where you can get yours on t-shirts and mugs. Surprisingly, it doesn’t sell premium or branded clothes and looks for Bitmoji, nor does it allow brands to pay to have their apparel featured.

Snap did recently start letting people mix-and-match clothes for their Bitmoji, and when asked if that could foreshadow a revenue opportunity, Blackstock said “You gotta build the store before you start selling the clothes . . . this was a foundational evolution designed to not only improve the experience for users but to set the stage for things to come.” You and your friends seeing your avatar’s fresh outfit on Bitmoji TV might make people care more about what their digital mini-mes wear.

Having watched the first three episodes, I’m pretty certain Bitmoji TV is going to be a hit. The show embodies the whimsy of Snapchat and the youth culture of the community who uses it. It’s rare to see something so premium but so unabashedly kooky. It’s remininscent of the Rick & Morty ‘Interdimensional Cable’ episodes that similarly feature rapid-fire snippets of fake and absurd TV shows.

Yet “the idea for Bitmoji TV actually precedes Bitmoji. It’s something I’ve been thinking about since those days [before Snapchat acquired it.] In a way it precedes Bitstrips. I’ve been making comics and cartoons since I was a little kid” Blackstock tells me. “How I met two of the co-founders of Bitstrips was passing them comics in class. Even after school when we had jobs I would draw comics of my co-founder that were very compromising and I would fax them to his office to try to get him fired” he recalls with a hearty laugh. Now he has the budget to make them TV-worthy but just as crazy.

Snapchat has a good hunch it’s going to work because it’s been testing a comic-stripped down version called Bitmoji Stories. These still or lightly-animated slide shows use the same idea of starring the avatars of you and your friends, but without full-motion video or constant audio. 130 million people have watched Bitmoji Stories since they launched in late 2018.

Blackstock tells me “They were easier to make at a high volume and release ongoingly, which we could put out as a prelude to get our audience ready for personalized content — but also for us to learn from and see how people responded and figure out our own processes in terms of production.” Snapchat had animators and engineers work hand in hand to build a rendering system for Bitmoji Stories and TV. That helps it rapidly produce the personalizable content that can flex to accomodate any shaped avatar without them clipping into their surroundings.

Tonight, Bitmoji TV will receive an in-person ‘silent disco-style’ premiere at Los Angeles’ Soho House. Guests will scan a code on the big screen, don headphones, and each watch on their own phone with themselves as the star.

Snapchat’s head of original content Sean Mills tells me that “New technology will unlock new kinds of storytelling” citing “the power of bringing a user into the experience with their best friends.” Bitmoji TV has certainly found a way to turn vanity into engagement. It’s more compelling than the mediocre originals on Facebook Watch. And it’s technologically innovative, unlike the planned lineup for Quibi.

If the modern era of visual communication began with the selfie, Snap honed it into a messaging tool. A few words were more interesting with a friend’s face behind it. The original Bitmoji chat stickers let your face say whatever you wanted even without having to get on camera. Snapchat’s new Cameo feature grafts your face into GIFs to express even more complex feelings. And now with Bitmoji TV, an animated version of your face can live out your wildest fantasies or weirdest dreams. That’s something worth tuning into.

Snapchat Cameos edit your face into videos

source https://techcrunch.com/2020/01/30/bitmoji-tv/

Facebook will pay $550 million to settle class action lawsuit over privacy violations

Facebook will pay over half a billion dollars to settle a class action lawsuit that alleged systematic violation of an Illinois consumer privacy law. The settlement amount is large indeed, but a small fraction of the $35 billion maximum the company could have faced.

Class members — basically Illinois Facebook users from mid-2011 to mid-2015 — may expect as much as $200 each, but that depends on several factors. If you’re one of them you should receive some notification once the settlement is approved by the court and the formalities are worked out.

The proposed settlement would require Facebook to obtain consent in the future from Illinois users for such purposes as face analysis for automatic tagging.

This is the second major settlement from Facebook in six months; an seemingly enormous $5 billion settlement of FTC violations was announced over the summer, but it’s actually a bit of a joke.

9 reasons the Facebook FTC settlement is a joke

The Illinois suit was filed in 2015, alleging that Facebook collected facial recognition data on images of users in the state without disclosure, in contravention of the state’s 2008 Biometric Information Privacy Act (BIPA). Similar suits were filed against Shutterfly, Snapchat, and Google.

Facebook pushed back in 2016, saying that facial recognition processing didn’t count as biometric data, and that anyway Illinois law didn’t apply to it, a California company. The judge rejected these arguments with flair, saying the definition of biometric was “cramped” and the assertion of Facebook’s immunity would be “a complete negation” of Illinois law in this context.

Facebook stalls in lawsuit alleging its facial recognition tech violates Illinois law

Facebook was also suspected at the time of heavy lobbying efforts towards defanging BIPA. One state senator proposed an amendment after the lawsuit was filed that would exclude digital images from BIPA coverage, which would of course have completely destroyed the case. It’s hard to imagine such a ridiculous proposal was the suggestion of anyone but the industry, which tends to regard the strong protections of the law in Illinois as quite superfluous.

As I noted in 2018, the Illinois Chamber of Commerce proposed the amendment, and a tech council there was chaired by Facebook’s own Manager of State Policy at the time. Facebook told me then that it had not taken any position on the amendment or spoken to any legislators about it.

2019 took the case to the 9th U.S. Circuit Court of Appeals, where Facebook was again rebuffed; the court concluded that “the development of face template using facial-recognition technology without consent (as alleged here) invades an individual’s private affairs and concrete interests. Similar conduct is actionable at common law.”

Facebook’s request for a rehearing en banc, which is to say with the full complement of judges there present, was unanimously denied two months later.

At last, after some 5 years of this, Facebook decided to settle, a representative told TechCrunch, “as it was in the best interest of our community and our shareholders to move past this matter.” Obviously it admits to no wrongdoing.

The $550 million amount negotiated is “the largest all-cash privacy class action settlement to date,” according to law firm Edelson PC, one of three that represented the plaintiffs in the suit.

“Biometrics is one of the two primary battlegrounds, along with geolocation, that will define our privacy rights for the next generation,” said Edelson PC founder and CEO Jay Edelson in a press release. “We are proud of the strong team we had in place that had the resolve to fight this critically important case over the last five years. We hope and expect that other companies will follow Facebook’s lead and pay significant attention to the importance of our biometric information.”

source https://techcrunch.com/2020/01/29/facebook-will-pay-550-million-to-settle-class-action-lawsuit-over-privacy-violations/

Facebook hits 2.5B users in Q4 but shares sink from slow profits

Facebook beat Wall Street estimates in Q4 but slowing profit growth beat up the share price. Facebook reached 2.5 billion monthly users, up 2%, from 2.45 billion in Q3 2019 when it grew 1.65%, and it now has 1.66 billion daily active users, up 2.4% from 1.62 billion last quarter when it grew 2%. Facebook brought in $21.08 billion in revenue, up 25% year-over-year, with $2.56 in earnings per share.

But net income was just $7.3 billion, up only 7% year-over-year compared to 61% growth over 2018. Meanwhile, operating margins fell from 45% over 2018 to 34% for 2019. Expenses grew to $12.2 billion for Q4 2019, up a whopping 34% from Q4 2018. For the year, Facebook’s $46 billion in expenses are up 51% vs 2018. One big source of those expenses? Headcount grew 26% year-over-year to 44,942.

While Facebook’s user base keeps growing rather steadily, it’s having trouble squeezing more and more cash out of them with as much efficiency.

Facebook’s earnings beat expectations compared to Zack’s consensus estimates of $20.87 billion in revenue and $2.51 earnings per share. Facebook shares fell over 5% in after-hours trading following the earnings announcement after closing up 2.5% at a peak $223.23 today. Still, Facebook remains above all previous share price highs before this month.

Facebook CEO Mark Zuckerberg had previously warned that addressing hate speech, election interference, and other content moderation and safety issues would be costly. Still, expenses grew and profits shrunk faster than Wall Street seems to have expected. Facebook will have to hope its promise of using scalable AI to handle more of these jobs comes to fruition soon. But some might see today as the proper reckoning for Facebook — penance for years of neglecting safety in favor of growth.

Facebook’s executives are apparently bullish on its value despite the share price being at a peak, as today Facebook announced plans to grow its share-repurchase program by $10 billion, adding to its previous authorization of buying back up to $24 billion worth.

Facebook managed to add 1 million daily users in the U.S. & Canada region where it earns the most money after returning to growth there last quarter following a year of slow or no growth. Facebook’s stickiness, or daily to monthly active user ratio remained at 66% amidst competition from apps like TikTok and a resurgent Snapchat.

Facebook notes that there are now 2.26 billion users that open either Facebook, Messenger, Instagram, or WhatsApp each day, up from 2.2 billion last quarter. The family of apps sees 2.89 billion total monthly users.

Facebook released a new stat with this earnings report: Family Average Revenue Per Person. That’s essentially the company’s total revenue divided by total users on Facebook, Messenger, Instagram, and WhatsApp. Clearly, the company is trying to use Instagram’s growing ad revenue to make the rest of the company look stronger. This might help mask changes in the Facebook app’s own revenue as teens look to more youthful content feeds.

 

 

 

 

 

The business aside, Facebook had another tough quarter under the scrutiny of journalists and regulators. Democratic presidential candidates have railed against CEO Mark Zuckerberg’s decision to continuing allowing misinformation in political ads. The company dropped out of the top 10 places to work, and pledged $130 million to fund an Oversight Board for its content policies. The FTC continued its anti-trust investigation and weighed an injunction that would halt Facebook intermingling its messaging app infrastructure.

But those headwinds didn’t stop Facebook’s march forward. Its four main apps took the top four spots amongst the most downloaded apps of the 2010s. It’s acquiring gaming companies like Playgiga and the studio behind VR hit Beat Saber. And its share price remains at an all-time high despite today’s tumble. While the world may be increasingly uncomfortable with Facebook’s access to private data, there’s no debate about how incredibly valuable that data is.

source https://techcrunch.com/2020/01/29/facebook-earnings-q4-2019/

How the world’s largest cannabis dispensary avoids social media restrictions

Planet 13 is the world’s largest cannabis dispensary. Located in Las Vegas, blocks off the Strip, the facility is the size of a small Walmart. By design, it’s hard to miss. Planet 13 is upending the dispensary model. It’s big, loud and visitors are encouraged to photograph everything.

As part of the cannabis industry, Planet 13 is heavily restricted on the type of content it can publish on Instagram, Facebook and other social media platforms. It’s not allowed to post pictures of buds or vapes on some sites. It can’t talk about pricing or product selection on others.

 

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A post shared by Morgan Celeste https://techcrunch.com/2020/01/29/how-the-worlds-largest-cannabis-dispensary-sidesteps-social-media-restrictions/

HeyMama, a premium social network for working moms, raises $2 million

As we spend more and more time on our phones, working busier and busier jobs, and leading more and more overwhelming lives, personal connection with others is harder and harder to come by. HeyMama wants to change that.

The premium social network is aimed squarely at working mothers, looking to give them a space to connect, communicate, and learn from each other. The company has today announced the close of a $2 million in seed funding, with investors that include Rebecca Minkoff, Kori Estrada, Kathryn Moos, Janna Meyrowitz Tuner, Divya Gugnani, Alison Wyatt, Sari Azout, Kymberly Marciano, and Karen Cahn, who were HeyMama members pre-investment. Keith Billing also invested in the round.

HeyMama has several moving pieces, but the biggest and most important is the platform itself. The premium network gives members the chance to post to forums, as well as join and communicate with groups like “Tech Moms”, “Single Moms,” and “Moms Who Are Fundraising.” Perhaps most importantly, all members get access to the full HeyMama membership database, giving them the ability to learn more about other members and even email them directly.

Interestingly, HeyMama is a bit of a hybrid in terms of the value proposition. Moms can come in and ask about baby food recommendations and hunt for an engineer to join their company all in the same session. Founders Katya Libin and Amri Kibbler say that many members are looking for recommendations, whether they’re for professional or personal purposes.

Another piece of the business is HeyMama events. The company holds events in 11 cities across the country and earns revenue via brand partnerships. For example, Lincoln Motor Company is a sponsor for the 2020 mentorship event series.

Libin said that the offline component is a huge reason why many moms join, as there is no substitution for face-to-face connection.

As an added bonus, HeyMama negotiates membership perks for users, giving them a discount on interesting products and services.

The company says that 85 percent of its members come via word-of-mouth referrals to the network. When new users do submit an application, those applications are vetted by humans. The founders said that the acceptance rate is about 85 percent, with HeyMama primarily focused on bringing on new members that can also offer help, not just ask for it.

HeyMama membership costs $35/month or $349/year.

The company did not disclose specific numbers around membership, but did say that it has ‘thousands’ of members on the platform.

HeyMama actually came onto the scene in 2014 in the form of a social media account and online magazine. After realizing that working moms weren’t being served in the best way possible, the company pivoted to a premium social network in 2017 and the rest is history.

“This community is for ambitious women who are coming together to support each other,” said Kibbler. “These women are so incredibly busy, and on HeyMama they can give and get vetted recommendations on everything and know that the responses are coming from women that are like them.”

source https://techcrunch.com/2020/01/29/heymama-a-premium-social-network-for-working-moms-raises-2-million/

Product Hunt launches beta of YourStack, a home for your favorite things

The team behind Product Hunt is launching a new social network called YourStack, a platform aiming to connect people that are passionate about products and help them discover what things their friends love.

“It’s super simple, you just search through and create a stack of products you love,” Product Hunt founder Ryan Hoover tells TechCrunch. “We wanted to make sure it wasn’t just software, but also games and books and beauty products, you name it.”

YourStack’s catalog doesn’t have every product under the sun, but if it’s a tech object, startup service, app or direct-to-consumer thing, chances are you can “stack” it. Once you add it to your profile, you can write a quick little descriptor and also share some tips and tricks you’ve learned about the product in question.

Product Hunt was acquired by AngelList just over three years ago, and since then Hoover and company have grown the platform into a go-to hub for makers looking to launch tech products. The team of 20 is now splitting their time between Product Hunt and YourStack, hoping that the new venture can lead to a platform that’s more centered on people and the products they use. While a social network based entirely around the multi-national brands that people love is something I’d love to hear Bernie Sanders’ thoughts on, it’s clear there’s an open opportunity here.

Social media platforms like Instagram have given influencers a huge platform for paid product endorsements, but because there’s so much schilling, consumers can’t put a ton of trust in the recommendations. Platforms like Twitter have been great for this inside the tech industry, but there’s no UI for it, so you sort of have to be at the right place at the right time, and, furthermore, the tech folks who have these great product insights are too busy being thought leaders.

If YourStack takes off, who knows what it could eventually become, but the goal seems to be to let users gain access to more personal product recommendations. On the product creator side, Hoover believes YourStack could give some great qualitative data that allows makers to understand how customers are using what they’ve built.

The product is in beta right now with a waitlist that’s already a few thousand users deep, but Hoover says the goal right now is to gather feedback.

“With a lot of social products, you don’t know how people are going to use them when they first start,” Hoover tells TechCrunch. “We actually had a very similar approach when we launched Product Hunt, where we let more and more people onto it each day and that was really effective in letting it slowly grow rather than leading people to a bad experience.”

source https://techcrunch.com/2020/01/28/product-hunt-launches-beta-of-yourstack-a-home-for-your-favorite-things/

Study of YouTube comments finds evidence of radicalization effect

Research presented at the ACM FAT 2020 conference in Barcelona today supports the notion that YouTube’s platform is playing a role in radicalizing users via exposure to far-right ideologies.

The study, carried out by researchers at Switzerland’s Ecole polytechnique fédérale de Lausanne and the Federal University of Minas Gerais in Brazil, found evidence that users who engaged with a middle ground of extreme right-wing content migrated to commenting on the most fringe far-right content.

A March 2018 New York Times article by sociologist, Zeynep Tufekci, set out the now widely reported thesis that YouTube is a radicalization engine. While follow up reporting by journalist Kevin Roose told a compelling tale of the personal experience of an individual, Caleb Cain, who described falling down an “alt right rabbit hole” on YouTube. But researcher Manoel Horta Ribeiro, who was presenting the paper today, said the team wanted to see if they could find auditable evidence to support such anecdotes.

Their paper, called Auditing radicalization pathways on YouTube, details a large scale study of YouTube looking for traces of evidence — in likes, comments and views — that certain right-leaning YouTube communities are acting as gateways to fringe far-right ideologies.

Per the paper, they analyzed 330,925 videos posted on 349 channels — broadly classifying the videos into four types: Media, the Alt-lite, the Intellectual Dark Web (I.D.W.), and the Alt-right — and using user comments as a “good enough” proxy for radicalization (their data-set included 72 million comments).

The findings suggest a pipeline effect over a number of years where users who started out commenting on alt-lite/IDW YouTube content shifted to commenting on extreme far-right content on the platform over time.

While the rate of overlap between consumers of Media content and the alt-right was found to be far lower.

“A significant amount of commenting users systematically migrates from commenting exclusively on milder content to commenting on more extreme content,” they write in the paper. “We argue that this finding provides significant evidence that there has been, and there continues to be, user radicalization on YouTube, and our analyses of the activity of these communities… is consistent with the theory that more extreme content ‘piggybacked’ on the surge in popularity of I.D.W. and Alt-lite content… We show that this migration phenomenon is not only consistent throughout the years, but also that it is significant in its absolute quantity.”

The researchers were unable to determine the exact mechanism involved in migrating YouTube users from consuming ‘alt lite’ politics to engaging with the most fringe and extrene far right ideologies — citing a couple of key challenges on that front: Limited access to recommendation data; and the study not taking into account personalization (which can affect a user’s recommendations on YouTube).

But even without personalization they say they were “still able to find a path in which users could find extreme content from large media channels”.

During a conference Q&A after presenting the paper, Horta Ribeiro was asked what evidence they had that the radicalization effect the study identifies had occurred through YouTube, rather than via some external site — or because the people in question were more radicalized to begin with (and therefore more attracted to extreme ideologies) vs the notion of YouTube itself being an active radicalization pipeline.

He agreed it’s difficult to make an absolute claim that YouTube is to blame. But also argued that, as host to these communities, the platform is responsible.

“We do find evident traces of user radicalization, and I guess the question asks why is YouTube responsible for this? And I guess the answer would be because many of these communities they live on YouTube and they have a lot of their content on YouTube and that’s why YouTube is so deeply associated with it,” he said.

“In a sense I do agree that it’s very hard to make the claim that the radicalization is due to YouTube or due to some recommender system or that the platform is responsible for that. It could be that something else is leading to this radicalization and in that sense I think that the analysis that we make it shows there is this process of users going from milder channels to more extreme ones. And this solid evidence towards radicalization because people that were not exposed to this radical content become exposed. But it’s hard to make strong causal claims — like YouTube is responsible for that.”

We reached out to YouTube for a response to the research but the company did not reply to our questions.

The company has tightened its approach towards certain far right and extremist content in recent years, in the face of growing political and public pressure over hate speech, targeted harassment and radicalization risks.

It has also been experimenting with reducing algorithmic amplification of certain types of potentially damaging nonsense content that falls outside its general content guidelines — such as malicious conspiracy theories and junk science.

source https://techcrunch.com/2020/01/28/study-of-youtube-comments-finds-evidence-of-radicalization-effect/

All users can now access Facebook’s tool for controlling which apps and sites can share data for ad-targeting

Facebook is making available to all users worldwide its “Off-Facebook Activity” tool, which allows users to manage and delete the data that third-party websites and apps share with Facebook. The feature was first introduced in 2018 at Facebook’s annual developer conference, but only launched to users in select geographies last year.

When the tool was initially announced in 2018, it had a much more user-friendly name — “Clear History.” But Facebook believed that could confuse users who may think that the tool had something to do with wiping out their Facebook data published to the social network itself. The new name is meant to better clarify what kind of data is getting deleted — “Off-Facebook Activity.”

The name also puts more distance between the data collection processes and the data-sharing bit. But data collection isn’t the real issue. If the apps were careful to protect the data they collected and kept it to themselves, users wouldn’t mind as much — but instead, users’ data is brokered and sold to support the free, ad-supported web.

As Facebook explains today, other businesses send Facebook information about your activity on their sites and apps, which Facebook then uses to show you relevant ads. With the new Off-Facebook Activity tool, you can see a summary of that information and clear it from your account.

Most people don’t understand the intricacies of how the ad-supported web works, which is why they assume Facebook is listening in through their smartphone’s microphone to target them with those frighteningly accurate ads. But, in addition to Facebook’s powerful and granular ad-targeting capabilities, it’s also benefiting from other businesses that are sharing the data they’ve collected through their own apps with Facebook.

Users, meanwhile, aren’t able to keep up with which apps and sites are sharing data or what that data includes, because it’s not just one or two — it’s nearly everything. And this is also difficult on mobile, as people with smartphones now have more than 80 installed apps and use around 40 of them monthly.

The Off-Facebook Activity tool will offer a clear summary of which apps and sites have collected data, how Facebook received the information, how many interactions (logging in, searching, purchases, etc.) it has received and more. You can then choose to break the third-party’s connection to Facebook. (To get the third-party to delete whatever data it has collected on you, you’ll still need to follow its own procedures to delete your account or clear your data there.)

The feature is complicated — it would not be surprising to see hundreds of sites and apps in your list of apps and sites sharing data with Facebook. It also requires Facebook users to enter their password again to view this tool, even if they’re currently logged in. The “clear history” button doesn’t stop the third-parties from future data-sharing — that’s a whole different section. And finally, it warns you that clearing history will log out of dozens of apps and won’t prevent you from seeing ads — warnings obviously intended to get users to reconsider.

This feature’s existence is a direct result of Facebook’s Cambridge Analytica scandal, which compromised the data of up to 87 million Facebook users by way of a Facebook app. Since then, the company has been working on improved privacy controls and tools to offer more clarity and user control over its data collection and sharing practices.

The company says the launch of the Off-Facebook Activity tool has taken this long to arrive because Facebook had to rebuild some of its systems to make it possible. It’s rolling out today to users worldwide. (Here’s how to access it.)

In addition to the global availability of the Off-Facebook Activity tool, Facebook says it also will roll out a prompt over the next two weeks that will encourage users to review their privacy settings. This prompt will show up in users’ News Feed and direct them to the recently updated Privacy Checkup tool.

Facebook already this month rolled out alerts for third-party logins, which let you know when you use your Facebook Login to sign into an app. This allows you to stay informed about which apps are connected to your Facebook account, so you can edit those settings or, now, clear their data if need be.

source https://techcrunch.com/2020/01/28/all-users-can-now-access-facebooks-tool-for-controlling-which-apps-and-sites-can-share-data-for-ad-targeting/

Toothless: Facebook proposes a weak Oversight Board

Facebook’s internal “Supreme Court” can’t set precedents, can’t make decisions about Facebook Dating or Marketplace, and can’t oversee WhatsApp, Oculus, or any messaging feature, according to the bylaws Facebook proposed today for its Oversight Board. It’s designed to provide an independent appeals process for content moderation rulings. But it will only be able to challenge content taken down, not left up, until at least later this year so it likely won’t be able to remove misinformation in political ads allowed by Facebook’s controversial policy before the 2020 election.

Oh, and this Board can’t change its own bylaws without Facebook’s approval.

The result is an Oversight Board does not have deep or broad power to impact Facebook’s on-going policies — only to clean up a specific instance of a botched decision. It will allow Facebook to point to an external decision maker when it gets in hot water for potential censorship, differing responsibility.

That said, it’s better than nothing. Currently Facebook simply makes these decisions internally with little recourse for victims. It will also force Facebook to be a little more transparent about its content moderation rule-making, since it will have to publish explanations for why it does or doesn’t adopt the policy change recommendations.

But for Facebook to go to so much work consulting 2,200 people in 88 countries for feedback on its plans to create the Oversight Board, then propose bylaws that keep its powers laughably narrow, feels like an emblem of Facebook’s biggest criticisms: that it talks a big game about privacy and safety, but its actions serve to predominantly protect its power and control over social networking.

For starters, the Board is funded for six years with an irrevocable $130 million from Facebook, but it could let it expire after that. Decisions can take up to 90 days to make and 7 days once made to be implemented, so the Board isn’t designed for rapid response to viral issues.

One major issue is that Facebook is choosing the co-chairs of the Board who will then pick the 40 initial Board members who’ll choose the future members. Facebook has already picked these co-chairs but won’t reveal them until next month. A controversial or biased co-chair could influence all future decisions of the Board by choosing its membership. We also don’t know if Facebook asked candidates for the co-chair positions about their views on issues like misinformation in political ads and if that influenced who was offered the position.

You can expect a lot of backlash if Facebook chooses an overtly liberal or conservative co-chair or one firmly aligned and opposed with the current presidential administration. That will be rightful, considering a single co-chair more motivated by politics than what’s right for Facebook’s 2 billion users could have disatrous implications for its content policies.

In one of the most worrying quotes I’ve ever seen from a Facebook executive in 10 years of reporting on the company, VP of global policy Nick Clegg told Wired’s Steven Levy that “We know that the initial reaction to the Oversight Board and its members will basically be one of cynicism—because basically, the reaction to pretty well anything new that Facebook does is cynical.”

So Clegg has essentially disarmed all criticism of Facebook and crystallized the company’s defensive stance…which is one of pure cynicsm. He’s essentially saying “Why should we listen to anyone. They hate anything we do.” That’s a dangerous path, and again one that embodies exactly what society is so concerned about: that one of the most powerful companies in the world in charge of fundamental communications utilties actually doesn’t care what the public has to say.

Clegg also emphatically told Wired that the Board won’t approach the urgent issue of misinformation in political ads before the 2020 election because the Board needs time to “find its feet”. Not only does that mean the Board can’t rule on perhaps the most important and controversial of Facebook’s policies decisions until the damage from campaign lies is done. It also implies Clegg and Facebook have the ability to influence what cases the Board doesn’t look at, which is exactly what the purported autonomy of the Board is meant to prevent.

In the end, while the Oversight Board’s decisions on a specific piece of content are binding, Facebook has lee-way when deciding whether to apply it to similar existing pieces of content. And in what truly makes the Board toothless, Facebook only has to take the Board’s guidance on changes to policy going forward under consideration. The Board can’t set precedents. Recommendations will go through Facebook’s “policy development process” and receive “thorough analysis”, but Facebook can then just say ‘nope’.

I hope the chosen co-chairs and eventual members refuse to ratify this set of bylaws without changes. Facebook initial intention for the Oversight Board seemed sound. Some decisions about how information flows in our society should be bigger than Mark Zuckerberg. But the devil in the details say he still gets the final say.

source https://techcrunch.com/2020/01/28/under-consideration/

Daily Crunch: Facebook expands privacy options

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. All users can now access Facebook’s tool for controlling which apps and sites can share data for ad-targeting

Facebook is making its “Off-Facebook Activity” tool, which allows users to manage and delete the data that third-party websites and apps share with Facebook, available to all users worldwide. The feature was first introduced in 2018 at Facebook’s annual developer conference, but only launched to users in select geographies last year.

As Facebook explains today, other businesses send Facebook information about your activity on their sites and apps, which Facebook then uses to show you relevant ads. With the new Off-Facebook Activity tool, you can see a summary of that information and clear it from your account.

2. ServiceNow acquires conversational AI startup Passage AI

Passage AI helps customers build chatbots in multiple languages, something that should come in handy as ServiceNow continues to modernize its digital service platform.

3. Flipboard expands into local news

The goal with the new offering is to give Flipboard users an easy way to catch up with local news, sports, dining, real estate, transportation and weather from a variety of sources, including local newspapers, local TV stations, radio stations, college news sites and even blogs.

4. Tech valuations versus tech-enabled valuations: 2020 IPO edition

The value of tech-enabled companies is coming into focus as several American unicorns test the public markets, with data showing that some venture-backed companies that are often grouped with technology companies are in fact worth just a fraction of their tech-first cousins. (Extra Crunch membership required.)

5. With Tony Fadell’s help, Advano is building battery components to power an electric future

The technology was innovative enough to earn the Louisiana-based startup a place in Y Combinator’s accelerator. It has now attracted the attention of Mitsui Kinzoku, which is investing in the company as a strategic partner, and Tony Fadell, the famous product designer known as “the father of the iPod” and the founder of the smart thermostat company Nest.

6. Scroll launches its subscription offering ad-free access across 300 partner sites

CEO Tony Haile previously led analytics company Chartbeat, and he said he founded Scroll because of his frustration with the way news sites were becoming dragged down by ads and trackers — and despite those performance-slowing/privacy-defying practices, publications were still struggling to make money.

7. Filmic’s DoubleTake app brings simultaneous camera shooting to the iPhone 11

The most visually compelling use here is Shot/Reverse Shot, which takes video from both the rear-facing and front-facing cameras at once. Obviously there’s going to be a gulf in image quality between the front and back, but the ability to do both simultaneously opens up some pretty fascinating possibilities.

source https://techcrunch.com/2020/01/28/daily-crunch-facebook-expands-privacy-options/