Brendan Eich Steps Down as Mozilla CEO →

For those not keeping score, Brendan Eich is a long-time Netscape/Mozilla employee, the inventor of Javascript, and a guy who gave $1000 to California’s “Proposition 8” a few years ago, the one that banned gay marriage. One of the previous facts about Eich caused a loud outcry against his recent appointment to CEO. Not the Javascript one.

Eich’s defense — from himself and others — largely boiled down to “well, you have to include all viewpoints if you’re going to call yourself inclusive,” which is a fine argument until one considers that including the side that says you can’t include the other side is the rhetorical equivalent of a division by zero error. Given how strongly Eich had been digging in his heels, one suspects he didn’t step down as much as had the ladder yanked out from under him.

And the guy invented Javascript. Isn’t that damage enough?

Facebooking the future

The net is abruptly abuzz with news that Facebook bought Oculus VR, the partially-Kickstarted virtual reality company backed by game engine wunderkind John Carmack. And, it’s abuzz with a lot of fairly predictable hair-pulling and shirt-rending.

It’s certainly interesting news, and on the surface bemusing—although no more so than half of what Google buys these days. Facebook seems to be pretty interested in keeping abreast or ahead of Google, too. Hmm. Does Google have any VR product that sort of like Oculus Rift? Something that rhymes with “crass?” I’m sure there’s something along those lines I’ve been hearing about.

Frankly, despite all the hair-pulling I don’t think this is going to make a lot of difference to Oculus Rift users. When it comes to handling acquisitions Facebook seems to be more like Microsoft than Google or Apple. And that’s actually a good thing. Microsoft has certainly done in good products through acquisitions, but look at Bungie and, before them, Softimage, one of the leading high end 3D animation programs of the 1990s. In both cases, the companies were given a great deal of autonomy—what Microsoft wanted them for actually required that. Bungie’s Halo essentially defined the Xbox gaming platform, and Softimage got NT into animation and movie studios. (I suspect this was a much bigger nail in SGI’s coffin than it’s usually given credit for.)

Facebook needs the Rift to be a successful product, and for it to be a successful product they have to not screw with it. They don’t want to take it away from gamers—what they want is, well, pretty much what Zuckerberg wrote:

Imagine enjoying a court side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face — just by putting on goggles in your home.

What Facebook wants, ultimately, is to build the kind of communication device that up until now only existed in science fiction. I’m not sure any company can actually pull that off, but I can’t think of another company that genuinely has a better shot. And as much as many things about Facebook continue to exasperate me, I’ve been coming to a somewhat reluctant admiration not only of their ambition but their engineering.

I can’t say this purchase makes me more likely to use either Oculus products or Facebook, but it’s a very interesting milepost. I’ve thought for years that Facebook the product has a limited lifespan, but Facebook the company may have a much longer—and far more interesting—one than I would ever have guessed.

If only GnuTLS had been open source! Wait.

Dan Goodin, Ars Technica:

Hundreds of open source packages, including the Red Hat, Ubuntu, and Debian distributions of Linux, are susceptible to attacks that circumvent the most widely used technology to prevent eavesdropping on the Internet, thanks to an extremely critical vulnerability in a widely used cryptographic code library.

Goodin argues that the bug is worse than Apple’s highly publicized “goto fail” bug, as it appears that it may have gone undetected since 2005.

I’d like to pretend I’m above feeling a bit of schadenfreude given that some of the loudest critics of Apple tend to be the open source zealots, but I’m not. One of the more religious aspects of Open Sourcitude is the insistence that all software ills stem from proprietary, closed source code. If the code is open, then in theory there should be fewer bugs, more opportunity for new features, and a lower chance of the software dying due to abandonment by its original developers for whatever reason.

But in actual, real world practice, software with few users tends to stagnate; software that becomes popular tends to keep being developed. This holds true regardless of the license and access to the source code. There are a lot of fossilized open source projects out there, and a lot of commercial products with vibrant communities. Being open source helps create such communities for certain kinds of applications (mostly developer tools), but it’s neither necessary nor, in and of itself, sufficient. And no one—not even the most passionate open source developer—ever says something like, “You know what I’d like to do tonight? Give GnuTLS a code security audit.”

Editorially shutting down →

While I only used the service briefly, this is still unfortunate news. Editorially is (was) a collaborative online writing tool using Markdown that I was planning to use for—yes—editorial work.

I’m not sure what to take away from this; Editorially was one of those free services they were planning to figure out how to make money from later, and that’s always a dicey business. Yet as Everpix’s failure demonstrated, being a paid service from the get-go isn’t automatically a win. Editorially’s management concluded that “even if all our users paid up, it wouldn’t be enough”; would it have been if they been a paid service from the beginning? Maybe, but of course they’d have had fewer users—probably far fewer—and so that might not have been sustainable, either.

“Apple in Talks to Revamp Set-Top Box” →

While I was going to express some dubiousness about the headline of this WSJ article—it at first suggests revamping a mythical set-top box that Apple has yet to produce, rather than the one that they’ve been producing for years—but that probably isn’t fair. It could be the actual Apple TV that they’ve been selling.

So instead, knock them for the first sentence.

"Apple Inc. appears to be scaling back its lofty TV industry plans."

Um, okay.

In theory what this means is that Apple “envisages working with cable companies, rather than competing against them.” Well, yes. As much as some may dream of Apple displacing cable companies, that’s going to be pretty hard to do in the near-to-mid term for financial reasons alone. Netflix and Amazon are starting to compete with cable networks by paying for original content, but they established themselves first. Apple will need to do the same thing. (If they even want to get into that side of the business.)

If the WSJ report is correct, Apple’s service sounds like it will be nerfed to the point of bringing nothing new to the table—but that doesn’t mean it will remain nerfed forever. Even so, for right now they have the same problem that always faced Hulu: a profound disconnect between what their customers want to get, and what the media companies are comfortable giving. Apple got nearly everything they wanted when they launched the iPhone because Cingular was desperate enough to agree to their demands. As much as techies believe Hollywood should be that desperate, they’re not.

Did Apple ban a Bitcoin wallet because they fear competition?

(Spoiler: no.)

Apple pulled Blockchain, a Bitcoin “wallet” app, from their store, and Blockchain’s CEO is sure this is because Apple sees them as a potential competitor. “I think that Apple is positioning itself to take on mobile payments in a way they haven’t described to the public and they’re being anti-competitive,” he told Wired.

As usual, though, this comes up because it fits into the default narrative about What Apple Is Like, not because there’s either direct or even circumstantial evidence to support it. While Apple may not welcome competition with open arms, there are dozens of applications on both the iOS and Mac app stores that directly compete with Apple’s products and services. Pandora, Netflix, Hulu, just about every app Amazon makes—by this logic, shouldn’t these all be gone?

For that matter, there are already mobile payment applications in the store that are far more direct competition for this still-hypothetical Apple payment system than Blockchain is. I can walk into (some) stores and pay directly with the Square or Paypal apps, but I can’t walk into a store and pay directly with Blockchain; it has no infrastructure specifically designed for point-of-sale, and even if the store took Bitcoin, I’d rather just swipe a credit card than diddle around with paying by SMS.

So why did Apple pull Blockchain? As usual, we don’t know, because Apple is about as communicative as a sack of flour. But given that they pulled Coinbase a couple months ago, the signs point to this having little to do with competition and a lot to do with Bitcoin. Apple has a rapidly expanding presence in China—whose antipathy toward Bitcoin is crystal clear—and they’re a strikingly conservative company when it comes to financial and legal matters; Bitcoin’s reputation as a haven for illegal activity may not sit well with them.

Profit, loss, to-may-to, to-mah-to

After (my) lunch today, Techmeme lit up with articles about Twitter’s earning report that contain headlines or subheads like:

Okay, so their user growth is slowing, but they’re bringing in a lot of money! They’re even making small earnings! Yet here comes the New York Times with:

Wait, what? What page is the NYT on?

Twitter reported a net loss of $511 million, compared with an $8.7 million loss a year ago.

However, using a closely watched measure of income that excludes stock-based compensation and other expenses, the company reported a profit of $9.7 million, or 2 cents a share, in the quarter, compared with a loss of $271,000 a year ago.

(Emphasis mine.)

Oh, they’re on the page that looks at actual numbers. Must be some old media thing!

Revenue, of course, isn’t profit, so the headlines arguably aren’t contradictory. But they’re telling of what the different media outlets are focusing on. To the tech press, slowing user growth is the real concern—a per-quarter loss of over half a billion dollars, no big deal. Most of it’s just stock-based compensation, right?

The NYT goes on to report that Twitter projects full year revenue in 2014 to be $1.15B, and adjusted EBITDA (the “closely watched measure of income”) to be $150–180M. That does sound promising, but I honestly can’t tell whether it means they’ll still actually be losing money. I’m fairly sure most network providers don’t accept payment in EBITDAcoin yet.

Microsoft’s new CEO

As expected, white smoke came out of Microsoft’s chimney early this morning and the board named Satya Nadella their new CEO. Microsoft watchers, both inside and outside the company, all seem to like him and agree he’s the best choice, but I’m not sure that’s actually a good sign. Microsoft may not have needed a “turnaround artist” like some had suggested, but they do need someone willing to make risky, potentially unpopular moves—something the company historically tends to bungle through half-measures when they attempt it (Windows 8).

Nadella is deeply steeped in Microsoft’s current company culture, promoted to CEO from being EVP of “Cloud and Enterprise.” Is this a guy who’s really willing to make bold moves? If they are, I’d be surprised if they aren’t moves toward doubling down on what he knows best: business services. Earlier I wrote:

While picking [Nadella] might be a statement about re-invigorating Microsoft’s engineering culture, it might also be a statement about re-invigorating their focus on big business: all of Nadella’s background seems to be in enterprise computing.

In that same article, I wrote about my favorite also-ran, Stephen Elop. Those who felt sure that an Elop-led Microsoft would crash and burn are no doubt breathing a sigh of relief, but I still wonder about this:

The big difference Elop might bring to Microsoft is—I’d like to find a word that’s both less polarizing and less squishy than this one, but I can’t—a sense of taste. Elop understands the importance of user experience. I’m not sure there’s anyone at Microsoft who would have come up with devices as, well, cool as the Nokia Lumia line. Not even the Surface tablets have the same quality industrial design.

I don’t want to imply that Nadella is tasteless, but I would be honestly surprised if user experience is something he really gets. It’s not a prized skill in the enterprise world. We’ll see.

The value of Motorola’s patents

Google selling Motorola Mobility to Lenovo for a substantial loss seems to say something significant about Google, but nobody seems to be entirely sure what. Short attention span? Finally coming to their senses? That they no longer need Motorola’s hardware expertise now that they have Nest’s? (Bingo.)

One aspect that’s been widely reported is that Google is keeping Motorola’s patents with them, which seems to be yet another baffling move. From the standpoint of “patents as offensive weapons,” Motorola’s are certainly a failure, and it seems Google put a lot more stock in that aspect than they should have.

But that’s a new fashion, pushed by the rise of companies whose business model is essentially to flood the patent office with claims of dubious “inventions” that examiners have neither the time nor training to evaluate properly. Whether you approve of patents conceptually or not, the vast majority of the ones owned by a company like Motorola—in the mobile communications space from the very beginning—aren’t the dippy kinds we roll our eyes at when they get in the news. They really did create a lot of the technology in widespread use in the industry.

Yet this is a double-edged sword. It turns out that it’s the stupid patents that are most easily weaponized. Patents that are so valuable they define industries tend to get quickly and widely licensed. Such patents are subject to FRAND, “fair, reasonable and non-discriminatory” licensing rules, and companies that Google could plausibly sue—excuse me, defend against—likely already have license agreements.

So what is Google left with by hanging onto these patents? Nothing? Well, no. It’s still nearly 25,000 patents. It’s hard to figure out how much licensing they’re already bringing in because it doesn’t seem that Google breaks out their income that way, but when Motorola Mobility was an independent company it was in the neighborhood of $250 million a year. Is it possible they could get more money of that by carefully reviewing the portfolio? Sure. They couldn’t increase it ten-fold, but doubling it isn’t wildly unreasonable.

Google estimated the patent portfolio as being worth $5.5B. Again, that doesn’t seem ridiculous; after all, a patent’s total value is what you get from it during the duration of its licensing. (And what you get from it when you’re actually using it, of course; if Google makes products that are covered by these patents, they’re saving money by not paying royalties to Lenovo.) The press has made a big deal about Motorola being smacked down earlier this year in their quest to get Microsoft to pay $4B a year in royalties, but that was pretty clearly a pie-in-the-sky shot: if the estimation of the portfolio had been based on such claims being successful, it’d have been a lot higher. Google probably needs to double the royalty revenue from patents over what Motorola was getting to hit that $5.5B valuation, but it’s not nuts.

The most interesting question to me moving forward from this point is what Google actually does with hardware. It seems certain that the Nest design team will be put to work on more than thermostats and smoke detectors. Stratēchery’s Ben Thompson wrote (quoted by John Gruber) that it’s a “tiresome myth” that Google wants to be more like Apple, i.e., building their own hardware, and that selling Motorola puts that “to bed once and for all.” Really? I normally find Thompson pretty savvy, but I think we’re going to see Nest-designed Nexus phones and tablets within a year.

“Square thinks I don’t exist” →

Columbia University student Kevin Chen attempted to sign up to be able to process credit cards with Square, and was put through one of those somewhat dubious “identity verification” quizzes that credit bureaus provide (“which of the following addresses have you lived at”). It didn’t work—he doesn’t have much of a financial history to draw on—and discovered that when it comes to actually solving problems like this, Square isn’t any better than Paypal and other competitors. (He wrote that Amazon Payments and Citibank required him to fax copies of his driver’s license and Social Security card and sniffed, “how backwards,” although that strikes me as an understandable hoop to jump through when online verification fails for exactly this reason.)

Next, I tried to contact customer service. After all, there’s plenty of evidence that I’m real: I visited their office once, they gave my friends a ton of Square Readers, and I even interviewed for a job there. A week later, nobody had responded.

"I’ve honestly never seen such a user-hostile design in financial services," Chen writes, "and I use PayPal! Design is how it works, not how it looks."

Well… no. As far as financial services go, the design—and I do mean “how it works”—of Square is actually still pretty damn good. And despite all the crap PayPal gets thrown at it, its user experience (UX) design is also pretty damn good.1

PayPal’s weak spot is their policies, which frequently come across as “the customer is always wrong.” You do anything that deviates from their concept of ordinary usage and you get shut down. What tends to get them in news stories as a mustache-twirling villain is how frequently this policy shuts down things like charity drives. It may be unusual to see $40K of transfers from thousands of people stuffed into a single PayPal account, but by now you’d think PayPal would flag those usage patterns and have a human check to see whether it’s the annual Cute Puppies For Cancer-Stricken Orphans drive before pulling the plug.

What Kevin Chen is having an issue with here isn’t the part of UX that people think about when they usually think of UX. The problem is how these services handle failure points. While fraud is a very big deal for financial service companies—to a point where they’re better off being painfully conservative—there are counter-examples extant to show that they’re not required to be jerks about it.

The new banking service Simple rightly touts their design and usability, but what sets them apart is how good the experience is when stuff doesn’t work. It’s rare for them to take more than a couple hours to respond to support requests, and they make it very easy to get an actual person on the phone if you want to. PayPal isn’t as good, but they’ve still got a customer support department. For all of the bitching we do about them they not only work in the vast majority of cases, they’ll at least try to fix things when they don’t, as lumbering about it as they may be.

Square, however, doesn’t have a support phone number, and their official attitude seems to be that if their service works as intended—that is, nothing that you experienced is a result of a bug on their end—then that’s that. This is part of the same attitude I’ve accused Google of having: all problems are ultimately engineering problems. (Google is notoriously bad for customer service, even with their paying customers.) Kevin Chen’s problem is not an engineering problem, and thus might as well not exist.

I suspect this comes across as more disappointing than it might otherwise be because it’s Square, the company that’s supposed to be revolutionizing the payment industry. We expect this from PayPal, but not Square. And it’s grating to realize that we probably have those expectations backward.

  1. Its developer experience is pretty dreadful, although their new REST API looks like it may not suck.