Welcome to Tech Stuff, a production from I Heart Radio. Hey there, and welcome to tech Stuff. I'm your host, Jonathan Strickland. I'm an executive producer with I Heart Radio and how the tech are you? It is time for the tech news for Thursday, February three, twenty two. So Meta slash Facebook held it's quarterly earnings call yesterday and things did not go well for the company. So a lot of today's news will be about, you know, breaking all of that down. But let's get the big ticket item out the way first. The collective bad news and that earnings call prompted a more than drop in Facebook's stock price and then meant the company lost nearly two hundred billion dollars in value. Uh I'll repeat the way New York Magazine put it because it's mind boggling. So at three pm yesterday Meta the company was worth around nine hundred billion dollars and by four thirty pm, it was worth seven hundred twenty billion dollars. And actually, as I started work on this episode, the valuation of the company was sitting at around six hundred seventy billion dollars. So it's even worse than what was being reported late yesterday afternoon. That's how badly that earnings call went, because a lot of that news was just the kind of stuff investors don't want to hear. Now. One of the many big issues covered during that Meta earnings call was that for the first time Facebook, the platform saw a decline in daily users in North America, which represents the number one market where Facebook rakes in the advertising cash. You know, Facebook has more than a billion user as we hear it all the time, nearly two billion users, but the ones in America are the ones that are really the the profit making, the revenue generating users for the company. Well, it turns out that they recently lost about a million users in North America, which is bad news for Meta because it hasn't seen much success in attracting new young users. Now, there's no doubt in my mind that the whole reason the company was developing Instagram apps for the under thirteen crowd was because the apps that Meta has right now, that being Facebook, Instagram, WhatsApp, are not bringing in new users at a pace that is going to give investors confidence. And this kind of touches on something that drives me nuts when it comes to big business, and that is this. This applies to big business businesses in general, but it's if you are not growing, you're effectively dying. So you need growth quarter over quarter and year over year to demonstrate value to investors who want to return on their investment. Which you know that makes sense, right, Like you invest in something, you're probably doing it because you're hoping to get a return on it. Maybe you're doing it because you believe in whatever the company is or whatever. That's great. If you're doing it for that reason and not because you're hoping for a return, that's a different story. But generally speaking, people are hoping that they get more money out than they put in. But all this means constantly having to find ways to expand, even when you start pushing up against tough borders around your business. You folks probably know that at one time one of the companies that owned Hell Stuff Works was Discovery Communications. So at that time I saw in the cable channel industry that companies tried to get a presence in more countries. They tried to expand, introducing services in countries where they didn't already exist because they had pretty much saturated the markets where they already were, Like in Europe and the United States. They could not expanded to more households because they had pretty much touched everyone they could in those countries, so they had to look elsewhere in order to continue to grow. And pretty much every big industry faces this same challenge, and with Facebook, so much of that gets wrapped into dominating users time and keeping them on the various meta platforms for as long as possible, as frequently as possible. Well, you tend to hit a limit there as well, which means you really do need to get more users into the pool because you know eventually you're going to be dominating as much of people's time as you possibly can, So you need more people in order to continue to grow, and Meta just hasn't been doing a good job at bringing in new users. The Verge published a Great Beast by Alex Heath about Facebook's challenges when it comes to reaching young folks, and he cites a Facebook researcher that found that Facebook's reach with teenagers in the United States declined by between two thousand nineteen to two thousand twenty one. This was specifically with regard to the Facebook app, and that the the researchers were projecting a drop of another forty in teenager reach over the next two years. Heath also says research shows that while Instagram is still popular with younger users, the level of engagement with the app is on the decline. So this is all bad news for the long term and really for the short term too for Meta, but we're not done yet. Another big issue in that earnings call was about how other companies are affecting Meta's revenue and numbers. For example, Apple made a change to its iOS system that introduced new privacy settings, and that has hit Meta hard. Has hit other company is hard to, but Meta in particular was really upset about this. Uh. Those settings allow iOS users to opt out of what is called app tracking. Now, generally speaking, app tracking would let a developer create an app that collects data about the user's activities on that device, and it's kind of like how websites can use cookies to track browser activities across the web, except this was more about tracking what an iOS user was up to. Meta was using that data to build out its massive amount of information about folks, you know, users, Facebook users, and then it could use that information when making ad deals with advertisers and could serve up more targeted ads to those users. So the reason Meta pulls in the big box is because the company knows what it's users like. You just you know, look at their activities on the various platforms or in this case, by tracking what they're doing on their as devices or in their browsers, and then you can draw conclusions about what they like. And that means advertisers can have their ads more effectively reach target audiences. So Facebook is able to command very high ad prices for this service, and the advertisers see their businesses benefit right because they see more activity because people who are more likely to react to their ads are getting their ads. And all of this just costs a tiny bit, okay, let's be fair, a lot of user privacy, and everybody wins. Except then Apple had to go and upset the the Apple cart by letting users actually choose to opt out of those services. When using an app. They could turn off permissions for app tracking and Meta would no longer get that juicy, juicy data that was just so mean of you, Apple, You hurt poor little Meta, which predicts that this change in Apple's policy is going to create a quote unquote headwind. That's quote on the order of ten billion dollars end quote, according to Meta CFO Dave Winner. In other words, because Meta will not have access to those users data, the company will not make ten billion dollars That should rightfully be Meta's all because users want privacy. I mean, how unreasonable, right I guess y'all can probably tell I'm not feeling much empathy for Meta here. The company protested Apple's announcement about this numerous times, taking out full page ads in newspapers to cry out about it, and also using the argument you're gonna hurt small businesses because they won't be able to reach their customers because we can't track everything that their potential customer are doing, and using small business to be like your straw man argument is pretty low. Not surprising, but low, and uh, you know, keep in mind, app tracking is not totally gone. It's not like Apple got rid of it. It's just that users will be presented the option to opt out of it, and some people won't opt out, so I mean it's not totally drying up though. Um. You know, if you are presented with the option to opt out of app tracking, I recommend you do that. Anyway, let's talk about something else. Let's talk about Meta's division called Reality Labs. That's the part of Meta that's actually focused on building out Meta's version of a metaverse, whatever that ends up being. Reality Labs also covers hardware like the meta quest VR system. Well, in the Reality Labs division brought in about two point to seven billion dollars in revenue, and that is a lot of money. Two point to seven billion. However, it had a net loss of ten point one nine billion dollars Yoza so in and in that loss of six point six two billion dollars, and then a year earlier in twenty nineteen that had a loss of four point five billion dollars. So Reality Labs is growing in terms of how much money it's losing the company year over year. However, we have to keep in mind we are talking about division that's trying to build something totally new, and there are only a few avenues for revenue right now out of that division. So the whole value proposition four Reality Labs is that the metaverse is presumably going to be the future of online activity, and it will cover everything from commerce to entertainment, to socializing to how businesses conduct themselves. But for that to happen, it has to be built first, and that means you should expect to see losses from that kind of division because Meta the Company has to pour in the resources to actually make the ding darn thing first. So the ten billion dollars, while a shocking number, makes sense, it would have been far more perplexing if Reality Labs had reported a profit because they don't really have anything to sell yet apart from some hardware. Dave Winner, remember that's metas CFO or chief financial officer, said that the losses will quote likely increase meaningfully in the quote this year because they're still building this thing, So that I'm guessing scared off some investors as well. Because the metaverse is most likely a long term project. It's not something that we're going to see launched by the end of two A lot of folks are pegging it as being another decade or so before we get anything, you know, significant in the space of Metaverse. Meanwhile, Meta the company is showing a decline in users. As we just mentioned people fewer people are using at least Facebook. Some of the other apps are doing fine, but in the North America of kind of flatlined. Uh. Then you also have the problem that Meta is seeing difficulty in reaching new users, and you've got these massive losses building out the next big thing like they're accumulating, and the next big thing is probably not gonna be ready for ten years or so. This collective message probably told a lot of investors, you know, that this was a dangerous or at least a very long term plan, and a lot of them probably just said, Yeah, I think I'm just gonna peace out for now and I'll check back later. Okay, let's wrap up the meta Facebook stuff before we go to break. Nikita Beer posted a great tweet which The Verge shared in an article about this earnings call, and in that tweet, Nikita laid out some of Facebook's big challenges, a couple of which we have actually touched on already, and Zuckerberg and his fellow executives covered a few of these during that earnings call. One of those challenges is that a lot of folks have turned to alternatives when it comes to spending their time online, uh namely the TikTok platform. When we'll talk more about TikTok much later in this episode. So Meta has tried to fight back against that trend by introducing TikTok like features on platforms like Instagram, but it hasn't really made a huge difference for younger users in particular. This also seems to mark a shift in user preferences in general. Zuckerberg said that people are showing more of a tendency to shift away from interacting with their friends online, which is kind of the bedrock of Facebook's model, and more toward consuming content that's made by others, which is something you might expect on a platform like TikTok or YouTube. So, in other words, instead of sharing stuff with friends, folks are watching TikTok stars do whatever folks are doing on TikTok. Now, I don't know. I deleted TikTok off my phone ages ago because I'm old and I don't understand kids, which we understand is the law. Nikita also pointed out that a tried and true method of growth among big companies, that is mergers and acquisitions like the stuff we're seeing with Microsoft. Will talk more about that a bit too. That kind of thing is a lot more difficult for Meta because we're now in an era where antitrust measures have regained some importance. We're seeing more regulatory bodies around the world examined proposed acquisitions and push back against big companies, particularly big tech companies, So that avenue isn't really accessible to Facebook, right. If Facebook made a move to buy up another competitor like TikTok, they would likely face strong opposition among regulators around the world. So, oh, that's one method of growth Facebook just can't can't touch. Uh. And as we've seen in lots of different companies, especially like cable companies. I remember when I talked about Comcast. Comcast's main method of growth through most of its history has been to acquire other cable companies. That's how Comcast really grew. It wasn't so much organically growing the business as it was gobbling up regional competitors. So that's something that Facebook can't really do anymore because of this increased level of scrutiny. So yeah, Meta has got some big obstacles in the way. Now. I am not saying that the company is at the beginning of the end, because it's still raked in thirty nine billion dollars in profit in one not revenue profit nearly forty billion dollars. It would be ludicrous to suggest a company that has that kind of profit is really in danger of going under. But it's definitely at a point where the company is possibly too big to get much bigger, and that's not great from an investor standpoint. Well, we've got a lot more to talk about, but let's take a quick break. Okay. Over in Europe, there's a little thing called g DPR that stands for General Data Protection Regulation and it applies across the European Union. Now, the purpose of this regulation is to provide protections to EU citizens with regard to how companies can collect and use those citizens private data, uh, you know online, particularly like the idea being we want to give citizens more control over their personal information and not unknowingly just hand that over to various parties on the internet. So, generally speaking, g d PR requires companies to give citizen in the EU the opportunity to opt out of data collection, and the companies are also supposed to be transparent about how they use you know, user data. So if a company does collect data through things like cookies, it's supposed to say, well, we collect your your information and this is how we use it and if you're cool with that, just consent. And if you're not cool with that, hit this other button and you know, well, part as friends well. The Interactive Advertising Bureau of Europe or i a B Europe represents advertisers and marketers with businesses in the EU, and as part of i a B Europe's services, the group developed the Transparency and Consent Framework or TCF, which essentially acts as a liaison for various companies, including big ones like Google, Microsoft and Amazon, and creates methods too. You know, present pop ups, and those pop ups are designed to get those users consent for data tracking and such. But now the Belgian Data Protection Authority or d p A says that the TCF is not doing a good job, that it is violating gdp R. The d p A says that the pop up notifications designed to get consent are not sufficiently clear or transparent enough, so a visitor is unable to make an informed decision about granting their consent in regard for data tracking, which is a big no no. Like. The idea is that the average person should understand immediately what is being requested and be able to make a decision about whether or not they're cool with it, and according to the dp A, they're saying these pop ups are not doing that. In addition, the d p A argues that the TCF serves as a data controller. Now that's just kind of a formal designation within g d p R. It would mean that TCF would be held accountable for keeping personal data safe. And tc f A said, well, well, well we are. We're not a data controller. All we're doing is facilitating these consent requests. But one of the things TCF has been doing is that it records user responses to consent requests and shares that information with other companies that are part of the TCF ecosystem. So, in other words, if someone in the EU visits let's say Amazon dot com, and Amazon presents this consent request to the user and the user agrees to it, well, TCF might share that information with say Google, And the d p A argues that this practice, which includes storing a cookie on the end users device, that makes the end user personally identifiable, and that means that the consent data constitutes personal information and TCF has not been a responsible steward of that information. The d p A find I A B Europe two fifty thousand pounds, which the organization can appeal, and the d p A has also demanded that TCF be brought into compliance with g DPR. So many acronyms and initialisms. Anyway, they're saying, you have to get this service in compliance with g d p R within two months, and that all the organizations that are currently using the TCF services have to delete that consent data quote without undue delay end quote. Now, this decision could force some really big changes and how companies have been obtaining consent for the use of cookies and such in the EU, which I imagine will be nearly as disruptive as the actual ratification of g d p R was in the first place. Now Here in the United States, Apple is trying to convince lawmakers to vote against a bill that would force Apple to allow users to download apps that are not in the actual Apple Store app store. Uh So, this is a practice that we usually call sideloading. That you have your you know, standard approved method of getting apps that is going through the official store, but that you can also side load apps that are not in the store onto your device. That's something that Android users can do. Google often advises caution for people to sideload apps because there's no protection system in the way. That means that you might be more likely to encounter malware, but you can do it on Google devices. But Apple has long maintained that the only way was the Apple way. So since the launch of the App Store for the iPhone, which happened way back in two thousand eight, Apple has served as the gatekeeper for all apps on iOS devices. Developers have to submit their apps to Apple for review, and the company can choose to reject submissions for pretty much any reason they like. Sometimes it's practically impossible to figure out what that reason was, or sometimes even if there were a reason in the first place. But Apple says that this practice protects users and that without it, people would develop malicious apps for iOS devices and then try to trick iOS users into downloading those apps, which would compromise those users safety and privacy in the process. It would also mean the Apple would lose a lucrative source of revenue for all those sideloaded apps, because the company in most regions anyway, currently forces app developers to use Apple's own payment system for all in app purchases, and Apple takes a cut out of each and every in app purchase. So if you could sideload apps on your iOS device. Well, the developers of those apps might have their own in app purchasing systems that don't use Apple's approach, and Apple would not get a cut of those transactions. Um. Also, I feel like it's necessary to point out there's already malware for iOS devices that are out there. There are some malicious apps that have made it through the App store, so Apple's argument about protecting privacy loses a little bit of credence there. That being said, I do happen to agree that sideloading will likely mean we'll see a big spike in malware targeting iOS users in the future if Apple is in fact forced to allow it. Uh, that's just gonna happen. So I generally avoid side loading apps. I have done it a few times in the past, usually to use an app that's in an early stage of development and hasn't yet been finalized and released, and I trusted the developers. But I do not, as a rule do it, even though even though I'm aware that I could get access to stuff that wouldn't make it through say the original the actual Android Store. I UH, I don't feel comfortable sideloading a lot of apps, largely because they can be pretty dicey and shady, So that part I actually do agree with Apple with However, I think that the main motivation has always been this, uh, this revenue stream that Apple gets through all the in app purchases. Of course, there are judges that have demanded Apple allow developers to offer alternative payment systems that would side step Apple's process. That's something that the company is currently appealing. So we'll have to wait and see where that goes. And we'll also have to see where this sideloading issue goes. Let's talk about something else that is kind of a malware that involves Apple, but it doesn't involve, you know, people downloading a malicious app. So last year I talked a lot about Pegasus. That's a product from an Israeli company called the ns A Group, and it is a product that compromises iOS devices. Now, again, this is not a malicious app. It doesn't involve tricking someone into downloading an app that's actually a back door vulnerability for that device. Pegasus instead would let someone activate malware on another person's iOS device by sending a message through I message, so the person didn't have to open the eye message. They didn't have to click on a link and they just had to receive it, and this would trigger a vulnerability in the iOS system and the attacker would be able to do everything from track a person's phone activity to even activating the phone's cameras and microphones and turn the phone into a surveillance device from a are And um, yeah, creepy, creepy stuff. That alone was a huge story. But then n S A group was upping the anti by selling this product to various government bodies and figures who many of which would go on to target folks like activists and journalists with this malware. Like it was being sold as an anti terrorist tool, but a lot of these governments are authoritarian in nature, is a kind way to put it, and they were making use of it to try and target anyone who perhaps disagreed with their authoritarian approach. Anyway, recently news broke that a second Israeli company, this one called Quadream that's qu a Dream, was selling a similar tool that also exploited this same I message vulnerability, and that this company was operating at the same time as n s O group. Quadream also developed its product with government clients in mind. Now. According to ns A Group, the two companies didn't coordinate together, and if that's true, it would mean that you had two different companies independently able to develop a tool that leveraged this vulnerability in Apple's iOS. Now. Apple has since pushed out an update last September that neutralized both Pegasus and quadreams surveillance malware. I'm not sure what quadream called its product. That company, like, I said, much lower profile than n s A Group, and Apple is currently suing an s O group for violating the company's user terms and services agreement. But there's no telling if Apple will pursue similar legal action against the lower profile Quadream. We've got a couple more news stories to get through before we get to that. Let's take another quick break. Okay, I've got another story that involves bowl and malware. Microsoft researchers reported recently that a malicious piece of software called update Agent has been out in the world and infecting Mac computers for perhaps as long as fourteen months, so more than a year, and initially the malware appeared to be focused on stealing information like the infected machines, model number and what version of Mac OS it was running and such, which you know, that's concerning, but not not in the grand scheme of things. The scariest outcome of malware. And also it appeared to be fairly simple in its initial form, but over time the malware developers fleshed out update agents, so now it does all sorts of stuff, including giving it the ability to facilitate a payload delivery two infected computers that could potentially allow backdoor access to machines. So, in other words, this was like getting the foot in the door and then a subsequent delivery of a payload, which would be you know, it would be difficult to prevent because the machine has already been compromised, but the subsequent payload would give hackers potential administrative access to infected machines. That's really bad. But even before that, the malware was redirecting AD traffic so that infective computers, whenever they were supposed to have ads served up by legitimate you know, servers, they were getting ads from the hackers servers instead, So they were redirecting streams of AD traffic and effectively stealing traffic from legitimate AD servers. Trust me. Using the phrase legitimate ad servers has kind of an irony that is not lost upon me. And according to Microsoft, the malware poses as typically like a legitimate apps such as say a video app for the Mac, and it also sounds like a user. A Mac user first has to be tricked into installing the malware first, Like this isn't a zero click vulnerability. It's more like you get a pop up ad that says, hey, we've got this new video app that will work great on your Mac. Download it blease, and it turns out that this is just the gateway to download and install the Update Agent malware. Um. You know, it's interesting because I remember a time when Mac enthusiasts. One of the big things they would uh say was made Max a superior platform to Windows based machines was that the Mac was effectively immune to malware. Now, it's true that very there was very little malware that was designed for Mac computers, especially compared to Windows based computers. However, you also have to remember that back in those days, the Mac market share of you know, computer users was really small. I guess there were lots of people who loved Mac computers, but they were dwarfed in number by Windows machine owners, which meant that if you were developing malware and you wanted to target as many people as possible, you were going to be developing for Windows based machines. So a lot of the immunity was through what we sometimes call security through obscurity. Uh, not that you know, Mac didn't have other anti malware systems in place, but you know, it just it didn't make sense to develop malware for the Mac platform if you really want to hit as many people as possible. Now Max have enough of a user base where the that immunity is gone. Uh. Doesn't mean that Mac is incredibly vulnerable to malware, but rather it's now worth the time to develop malware that can affect a Mac computer. So we're likely to see those kinds of things continue in the future. Now. Earlier in this episode, I mentioned TikTok, and if you'll remember here in the United States, TikTok was under a ton of scrutiny during Donald Trump's administration. TikTok's parent company is byte Dance and that is based out of China, and the Trump administration began to push for bite Dance to sell TikTok to an American company, citing concerns that a popular social networking app in the United States, which presumably would end up collecting a lot of personal information of US users, might send that data on back to China, something TikTok denied, and several analysts also pointed out that Trump's administration at the time was deep in a trade war with China and that perhaps the pressure on TikTok had more to do with the trade war than a genuine concern for US citizen private to see. But either way, it looks like the government was dead set on TikTok saying bye bye to byte Dance or shutting down, except people kept pointing out that there might not be any legal grounds or legal enforcement that can make that happen, and ultimately the whole thing fell through. But there is pressure on TikTok again, this time from the Biden administration and not just TikTok. There's a proposed regulation of the Commerce Department here in the US that, if past, would require apps that originate out of foreign countries to share source code and datalogus with a third party auditor named by the Commerce Department in order to make sure that the app is not, you know, siphoning US citizen data for nefarious or exploitative purposes, because come on, that's a right that we reserve for US companies to do to US citizens. We don't cotton to ding dang furriners doing it to us too. No, we want American companies stealing our information. That was my sad attempt at satire. Anyway, the Commerce Department identifies China as a quote unquote foreign adversary, so presumably any app originating from China would qualify for this kind of regulation. I'm looking at you, ten cent now. Earlier this week, I talked about how Sony is acquiring video game studio Bungee for more than three point five billion dollars. And of course, Microsoft is currently biting its nails as it waits for approval from regulators around the world so that it can close its deal on Activision Blizzard. But whither, I hear you ask goes Nintendo. Is Nintendo also gearing up to purchase various game companies around the world in an attempt to keep pace with Sony and Microsoft In a word, No, that's according to Nintendo president Shintaro Fukawa, who said the company's philosophy is to pursue organic growth rather than growing through acquisitions. He said, quote our brand was built upon products crafted with dedication by our employees, and having a large number of people who don't possess Nintendo DNA and our group would not be a plus to the company. End quote. Now, dismissing for a moment that this particular phrasing, which I should add could be the result of interpretive translation, gets a little bit creepy. I mean, it kind of sounds like Nintendo has some sort of genetic purity issues going on from that phrasing. We can put that aside. I think that this is an interesting approach to business. So way back in the day, before I was a podcaster or even a writer for How Stuff Works, I was employed at a human resources consulting firm. If you've seen office space, you might remember the characters of the Bob's, the consultants who come into help clear out the infotechs employee list or whatever. I worked for a company that was effectively the Bob's, and through that company, I saw a lot of cases where you would have, say, a big company acquiring a smaller company, and the two companies would have very different corporate cultures. So inevitably you had a culture clash following that would be an awkward period in which the two entities tried to find some common ground, and it almost always went poorly, or at least it created lots of rough patches. There's a lot of friction. So from that perspective, I do see how focusing on your in house workforce and growing that way by hiring more people, and you're just constantly feeding into a uniform corporate culture that can make a lot of sense. It removes the need to find that common ground with another company that has its own history and its own culture, because if you just keep it all in house, everyone's already on the same ground to start with. Anyway, I also feel like this is the most Nintendo of Nintendo approaches, so it makes sense from that perspective. Now, I also think that Nintendo is like you could say, yes, Nintendo, Sony, and Microsoft are all in the video game space, which makes them all competitors with each other, But in many ways I don't think of Nintendo as competing with Sony and Microsoft. There it's almost like they're playing a different kind of game to Sony and Microsoft, and that they focused more on creating uh unique user experiences, some of which appeal to me and some of which don't. But that seems to be their their course of action, as opposed to Sony and Microsoft, which are constantly pushing like the bleeding edge of what is possible on video game platforms. Two very different approaches. I'm not saying one is automatically better or worse than another. I like a lot of Nintendo's approaches, um, but I also like a lot of what Sony and Mike so typically do as well. So I think there's a place for everybody anyway. That wraps up the tech news for Thursday, February three two. This was a long one. I blame Facebook, because I blame Facebook for everything. Let's be honest. If you have suggestions for topics I should cover in future episodes of tech Stuff, whether it's a trend in tech, a company, a person who's important in tech. Maybe it's a specific technology and you just want to learn about its history and how it works. Let me know. Send me a message via Twitter to handle for the show is tech Stuff hs W, and I'll talk to you again really soon. Tech Stuff is an I Heart Radio production. For more podcasts from my Heart Radio visit the I heart Radio app, Apple podcasts, or wherever you listen to your favorite shows.

Welcome to Tech Stuff, a production from I Heart Radio. Hey there, and welcome to tech Stuff. I'm your host, Jonathan Strickland. I'm an executive producer with I Heart Radio and how the tech are you? It is time for the tech news for Thursday, February three, twenty two. So Meta slash Facebook held it's quarterly earnings call yesterday and things did not go well for the company. So a lot of today's news will be about, you know, breaking all of that down. But let's get the big ticket item out the way first. The collective bad news and that earnings call prompted a more than drop in Facebook's stock price and then meant the company lost nearly two hundred billion dollars in value. Uh I'll repeat the way New York Magazine put it because it's mind boggling. So at three pm yesterday Meta the company was worth around nine hundred billion dollars and by four thirty pm, it was worth seven hundred twenty billion dollars. And actually, as I started work on this episode, the valuation of the company was sitting at around six hundred seventy billion dollars. So it's even worse than what was being reported late yesterday afternoon. That's how badly that earnings call went, because a lot of that news was just the kind of stuff investors don't want to hear. Now. One of the many big issues covered during that Meta earnings call was that for the first time Facebook, the platform saw a decline in daily users in North America, which represents the number one market where Facebook rakes in the advertising cash. You know, Facebook has more than a billion user as we hear it all the time, nearly two billion users, but the ones in America are the ones that are really the the profit making, the revenue generating users for the company. Well, it turns out that they recently lost about a million users in North America, which is bad news for Meta because it hasn't seen much success in attracting new young users. Now, there's no doubt in my mind that the whole reason the company was developing Instagram apps for the under thirteen crowd was because the apps that Meta has right now, that being Facebook, Instagram, WhatsApp, are not bringing in new users at a pace that is going to give investors confidence. And this kind of touches on something that drives me nuts when it comes to big business, and that is this. This applies to big business businesses in general, but it's if you are not growing, you're effectively dying. So you need growth quarter over quarter and year over year to demonstrate value to investors who want to return on their investment. Which you know that makes sense, right, Like you invest in something, you're probably doing it because you're hoping to get a return on it. Maybe you're doing it because you believe in whatever the company is or whatever. That's great. If you're doing it for that reason and not because you're hoping for a return, that's a different story. But generally speaking, people are hoping that they get more money out than they put in. But all this means constantly having to find ways to expand, even when you start pushing up against tough borders around your business. You folks probably know that at one time one of the companies that owned Hell Stuff Works was Discovery Communications. So at that time I saw in the cable channel industry that companies tried to get a presence in more countries. They tried to expand, introducing services in countries where they didn't already exist because they had pretty much saturated the markets where they already were, Like in Europe and the United States. They could not expanded to more households because they had pretty much touched everyone they could in those countries, so they had to look elsewhere in order to continue to grow. And pretty much every big industry faces this same challenge, and with Facebook, so much of that gets wrapped into dominating users time and keeping them on the various meta platforms for as long as possible, as frequently as possible. Well, you tend to hit a limit there as well, which means you really do need to get more users into the pool because you know eventually you're going to be dominating as much of people's time as you possibly can, So you need more people in order to continue to grow, and Meta just hasn't been doing a good job at bringing in new users. The Verge published a Great Beast by Alex Heath about Facebook's challenges when it comes to reaching young folks, and he cites a Facebook researcher that found that Facebook's reach with teenagers in the United States declined by between two thousand nineteen to two thousand twenty one. This was specifically with regard to the Facebook app, and that the the researchers were projecting a drop of another forty in teenager reach over the next two years. Heath also says research shows that while Instagram is still popular with younger users, the level of engagement with the app is on the decline. So this is all bad news for the long term and really for the short term too for Meta, but we're not done yet. Another big issue in that earnings call was about how other companies are affecting Meta's revenue and numbers. For example, Apple made a change to its iOS system that introduced new privacy settings, and that has hit Meta hard. Has hit other company is hard to, but Meta in particular was really upset about this. Uh. Those settings allow iOS users to opt out of what is called app tracking. Now, generally speaking, app tracking would let a developer create an app that collects data about the user's activities on that device, and it's kind of like how websites can use cookies to track browser activities across the web, except this was more about tracking what an iOS user was up to. Meta was using that data to build out its massive amount of information about folks, you know, users, Facebook users, and then it could use that information when making ad deals with advertisers and could serve up more targeted ads to those users. So the reason Meta pulls in the big box is because the company knows what it's users like. You just you know, look at their activities on the various platforms or in this case, by tracking what they're doing on their as devices or in their browsers, and then you can draw conclusions about what they like. And that means advertisers can have their ads more effectively reach target audiences. So Facebook is able to command very high ad prices for this service, and the advertisers see their businesses benefit right because they see more activity because people who are more likely to react to their ads are getting their ads. And all of this just costs a tiny bit, okay, let's be fair, a lot of user privacy, and everybody wins. Except then Apple had to go and upset the the Apple cart by letting users actually choose to opt out of those services. When using an app. They could turn off permissions for app tracking and Meta would no longer get that juicy, juicy data that was just so mean of you, Apple, You hurt poor little Meta, which predicts that this change in Apple's policy is going to create a quote unquote headwind. That's quote on the order of ten billion dollars end quote, according to Meta CFO Dave Winner. In other words, because Meta will not have access to those users data, the company will not make ten billion dollars That should rightfully be Meta's all because users want privacy. I mean, how unreasonable, right I guess y'all can probably tell I'm not feeling much empathy for Meta here. The company protested Apple's announcement about this numerous times, taking out full page ads in newspapers to cry out about it, and also using the argument you're gonna hurt small businesses because they won't be able to reach their customers because we can't track everything that their potential customer are doing, and using small business to be like your straw man argument is pretty low. Not surprising, but low, and uh, you know, keep in mind, app tracking is not totally gone. It's not like Apple got rid of it. It's just that users will be presented the option to opt out of it, and some people won't opt out, so I mean it's not totally drying up though. Um. You know, if you are presented with the option to opt out of app tracking, I recommend you do that. Anyway, let's talk about something else. Let's talk about Meta's division called Reality Labs. That's the part of Meta that's actually focused on building out Meta's version of a metaverse, whatever that ends up being. Reality Labs also covers hardware like the meta quest VR system. Well, in the Reality Labs division brought in about two point to seven billion dollars in revenue, and that is a lot of money. Two point to seven billion. However, it had a net loss of ten point one nine billion dollars Yoza so in and in that loss of six point six two billion dollars, and then a year earlier in twenty nineteen that had a loss of four point five billion dollars. So Reality Labs is growing in terms of how much money it's losing the company year over year. However, we have to keep in mind we are talking about division that's trying to build something totally new, and there are only a few avenues for revenue right now out of that division. So the whole value proposition four Reality Labs is that the metaverse is presumably going to be the future of online activity, and it will cover everything from commerce to entertainment, to socializing to how businesses conduct themselves. But for that to happen, it has to be built first, and that means you should expect to see losses from that kind of division because Meta the Company has to pour in the resources to actually make the ding darn thing first. So the ten billion dollars, while a shocking number, makes sense, it would have been far more perplexing if Reality Labs had reported a profit because they don't really have anything to sell yet apart from some hardware. Dave Winner, remember that's metas CFO or chief financial officer, said that the losses will quote likely increase meaningfully in the quote this year because they're still building this thing, So that I'm guessing scared off some investors as well. Because the metaverse is most likely a long term project. It's not something that we're going to see launched by the end of two A lot of folks are pegging it as being another decade or so before we get anything, you know, significant in the space of Metaverse. Meanwhile, Meta the company is showing a decline in users. As we just mentioned people fewer people are using at least Facebook. Some of the other apps are doing fine, but in the North America of kind of flatlined. Uh. Then you also have the problem that Meta is seeing difficulty in reaching new users, and you've got these massive losses building out the next big thing like they're accumulating, and the next big thing is probably not gonna be ready for ten years or so. This collective message probably told a lot of investors, you know, that this was a dangerous or at least a very long term plan, and a lot of them probably just said, Yeah, I think I'm just gonna peace out for now and I'll check back later. Okay, let's wrap up the meta Facebook stuff before we go to break. Nikita Beer posted a great tweet which The Verge shared in an article about this earnings call, and in that tweet, Nikita laid out some of Facebook's big challenges, a couple of which we have actually touched on already, and Zuckerberg and his fellow executives covered a few of these during that earnings call. One of those challenges is that a lot of folks have turned to alternatives when it comes to spending their time online, uh namely the TikTok platform. When we'll talk more about TikTok much later in this episode. So Meta has tried to fight back against that trend by introducing TikTok like features on platforms like Instagram, but it hasn't really made a huge difference for younger users in particular. This also seems to mark a shift in user preferences in general. Zuckerberg said that people are showing more of a tendency to shift away from interacting with their friends online, which is kind of the bedrock of Facebook's model, and more toward consuming content that's made by others, which is something you might expect on a platform like TikTok or YouTube. So, in other words, instead of sharing stuff with friends, folks are watching TikTok stars do whatever folks are doing on TikTok. Now, I don't know. I deleted TikTok off my phone ages ago because I'm old and I don't understand kids, which we understand is the law. Nikita also pointed out that a tried and true method of growth among big companies, that is mergers and acquisitions like the stuff we're seeing with Microsoft. Will talk more about that a bit too. That kind of thing is a lot more difficult for Meta because we're now in an era where antitrust measures have regained some importance. We're seeing more regulatory bodies around the world examined proposed acquisitions and push back against big companies, particularly big tech companies, So that avenue isn't really accessible to Facebook, right. If Facebook made a move to buy up another competitor like TikTok, they would likely face strong opposition among regulators around the world. So, oh, that's one method of growth Facebook just can't can't touch. Uh. And as we've seen in lots of different companies, especially like cable companies. I remember when I talked about Comcast. Comcast's main method of growth through most of its history has been to acquire other cable companies. That's how Comcast really grew. It wasn't so much organically growing the business as it was gobbling up regional competitors. So that's something that Facebook can't really do anymore because of this increased level of scrutiny. So yeah, Meta has got some big obstacles in the way. Now. I am not saying that the company is at the beginning of the end, because it's still raked in thirty nine billion dollars in profit in one not revenue profit nearly forty billion dollars. It would be ludicrous to suggest a company that has that kind of profit is really in danger of going under. But it's definitely at a point where the company is possibly too big to get much bigger, and that's not great from an investor standpoint. Well, we've got a lot more to talk about, but let's take a quick break. Okay. Over in Europe, there's a little thing called g DPR that stands for General Data Protection Regulation and it applies across the European Union. Now, the purpose of this regulation is to provide protections to EU citizens with regard to how companies can collect and use those citizens private data, uh, you know online, particularly like the idea being we want to give citizens more control over their personal information and not unknowingly just hand that over to various parties on the internet. So, generally speaking, g d PR requires companies to give citizen in the EU the opportunity to opt out of data collection, and the companies are also supposed to be transparent about how they use you know, user data. So if a company does collect data through things like cookies, it's supposed to say, well, we collect your your information and this is how we use it and if you're cool with that, just consent. And if you're not cool with that, hit this other button and you know, well, part as friends well. The Interactive Advertising Bureau of Europe or i a B Europe represents advertisers and marketers with businesses in the EU, and as part of i a B Europe's services, the group developed the Transparency and Consent Framework or TCF, which essentially acts as a liaison for various companies, including big ones like Google, Microsoft and Amazon, and creates methods too. You know, present pop ups, and those pop ups are designed to get those users consent for data tracking and such. But now the Belgian Data Protection Authority or d p A says that the TCF is not doing a good job, that it is violating gdp R. The d p A says that the pop up notifications designed to get consent are not sufficiently clear or transparent enough, so a visitor is unable to make an informed decision about granting their consent in regard for data tracking, which is a big no no. Like. The idea is that the average person should understand immediately what is being requested and be able to make a decision about whether or not they're cool with it, and according to the dp A, they're saying these pop ups are not doing that. In addition, the d p A argues that the TCF serves as a data controller. Now that's just kind of a formal designation within g d p R. It would mean that TCF would be held accountable for keeping personal data safe. And tc f A said, well, well, well we are. We're not a data controller. All we're doing is facilitating these consent requests. But one of the things TCF has been doing is that it records user responses to consent requests and shares that information with other companies that are part of the TCF ecosystem. So, in other words, if someone in the EU visits let's say Amazon dot com, and Amazon presents this consent request to the user and the user agrees to it, well, TCF might share that information with say Google, And the d p A argues that this practice, which includes storing a cookie on the end users device, that makes the end user personally identifiable, and that means that the consent data constitutes personal information and TCF has not been a responsible steward of that information. The d p A find I A B Europe two fifty thousand pounds, which the organization can appeal, and the d p A has also demanded that TCF be brought into compliance with g DPR. So many acronyms and initialisms. Anyway, they're saying, you have to get this service in compliance with g d p R within two months, and that all the organizations that are currently using the TCF services have to delete that consent data quote without undue delay end quote. Now, this decision could force some really big changes and how companies have been obtaining consent for the use of cookies and such in the EU, which I imagine will be nearly as disruptive as the actual ratification of g d p R was in the first place. Now Here in the United States, Apple is trying to convince lawmakers to vote against a bill that would force Apple to allow users to download apps that are not in the actual Apple Store app store. Uh So, this is a practice that we usually call sideloading. That you have your you know, standard approved method of getting apps that is going through the official store, but that you can also side load apps that are not in the store onto your device. That's something that Android users can do. Google often advises caution for people to sideload apps because there's no protection system in the way. That means that you might be more likely to encounter malware, but you can do it on Google devices. But Apple has long maintained that the only way was the Apple way. So since the launch of the App Store for the iPhone, which happened way back in two thousand eight, Apple has served as the gatekeeper for all apps on iOS devices. Developers have to submit their apps to Apple for review, and the company can choose to reject submissions for pretty much any reason they like. Sometimes it's practically impossible to figure out what that reason was, or sometimes even if there were a reason in the first place. But Apple says that this practice protects users and that without it, people would develop malicious apps for iOS devices and then try to trick iOS users into downloading those apps, which would compromise those users safety and privacy in the process. It would also mean the Apple would lose a lucrative source of revenue for all those sideloaded apps, because the company in most regions anyway, currently forces app developers to use Apple's own payment system for all in app purchases, and Apple takes a cut out of each and every in app purchase. So if you could sideload apps on your iOS device. Well, the developers of those apps might have their own in app purchasing systems that don't use Apple's approach, and Apple would not get a cut of those transactions. Um. Also, I feel like it's necessary to point out there's already malware for iOS devices that are out there. There are some malicious apps that have made it through the App store, so Apple's argument about protecting privacy loses a little bit of credence there. That being said, I do happen to agree that sideloading will likely mean we'll see a big spike in malware targeting iOS users in the future if Apple is in fact forced to allow it. Uh, that's just gonna happen. So I generally avoid side loading apps. I have done it a few times in the past, usually to use an app that's in an early stage of development and hasn't yet been finalized and released, and I trusted the developers. But I do not, as a rule do it, even though even though I'm aware that I could get access to stuff that wouldn't make it through say the original the actual Android Store. I UH, I don't feel comfortable sideloading a lot of apps, largely because they can be pretty dicey and shady, So that part I actually do agree with Apple with However, I think that the main motivation has always been this, uh, this revenue stream that Apple gets through all the in app purchases. Of course, there are judges that have demanded Apple allow developers to offer alternative payment systems that would side step Apple's process. That's something that the company is currently appealing. So we'll have to wait and see where that goes. And we'll also have to see where this sideloading issue goes. Let's talk about something else that is kind of a malware that involves Apple, but it doesn't involve, you know, people downloading a malicious app. So last year I talked a lot about Pegasus. That's a product from an Israeli company called the ns A Group, and it is a product that compromises iOS devices. Now, again, this is not a malicious app. It doesn't involve tricking someone into downloading an app that's actually a back door vulnerability for that device. Pegasus instead would let someone activate malware on another person's iOS device by sending a message through I message, so the person didn't have to open the eye message. They didn't have to click on a link and they just had to receive it, and this would trigger a vulnerability in the iOS system and the attacker would be able to do everything from track a person's phone activity to even activating the phone's cameras and microphones and turn the phone into a surveillance device from a are And um, yeah, creepy, creepy stuff. That alone was a huge story. But then n S A group was upping the anti by selling this product to various government bodies and figures who many of which would go on to target folks like activists and journalists with this malware. Like it was being sold as an anti terrorist tool, but a lot of these governments are authoritarian in nature, is a kind way to put it, and they were making use of it to try and target anyone who perhaps disagreed with their authoritarian approach. Anyway, recently news broke that a second Israeli company, this one called Quadream that's qu a Dream, was selling a similar tool that also exploited this same I message vulnerability, and that this company was operating at the same time as n s O group. Quadream also developed its product with government clients in mind. Now. According to ns A Group, the two companies didn't coordinate together, and if that's true, it would mean that you had two different companies independently able to develop a tool that leveraged this vulnerability in Apple's iOS. Now. Apple has since pushed out an update last September that neutralized both Pegasus and quadreams surveillance malware. I'm not sure what quadream called its product. That company, like, I said, much lower profile than n s A Group, and Apple is currently suing an s O group for violating the company's user terms and services agreement. But there's no telling if Apple will pursue similar legal action against the lower profile Quadream. We've got a couple more news stories to get through before we get to that. Let's take another quick break. Okay, I've got another story that involves bowl and malware. Microsoft researchers reported recently that a malicious piece of software called update Agent has been out in the world and infecting Mac computers for perhaps as long as fourteen months, so more than a year, and initially the malware appeared to be focused on stealing information like the infected machines, model number and what version of Mac OS it was running and such, which you know, that's concerning, but not not in the grand scheme of things. The scariest outcome of malware. And also it appeared to be fairly simple in its initial form, but over time the malware developers fleshed out update agents, so now it does all sorts of stuff, including giving it the ability to facilitate a payload delivery two infected computers that could potentially allow backdoor access to machines. So, in other words, this was like getting the foot in the door and then a subsequent delivery of a payload, which would be you know, it would be difficult to prevent because the machine has already been compromised, but the subsequent payload would give hackers potential administrative access to infected machines. That's really bad. But even before that, the malware was redirecting AD traffic so that infective computers, whenever they were supposed to have ads served up by legitimate you know, servers, they were getting ads from the hackers servers instead, So they were redirecting streams of AD traffic and effectively stealing traffic from legitimate AD servers. Trust me. Using the phrase legitimate ad servers has kind of an irony that is not lost upon me. And according to Microsoft, the malware poses as typically like a legitimate apps such as say a video app for the Mac, and it also sounds like a user. A Mac user first has to be tricked into installing the malware first, Like this isn't a zero click vulnerability. It's more like you get a pop up ad that says, hey, we've got this new video app that will work great on your Mac. Download it blease, and it turns out that this is just the gateway to download and install the Update Agent malware. Um. You know, it's interesting because I remember a time when Mac enthusiasts. One of the big things they would uh say was made Max a superior platform to Windows based machines was that the Mac was effectively immune to malware. Now, it's true that very there was very little malware that was designed for Mac computers, especially compared to Windows based computers. However, you also have to remember that back in those days, the Mac market share of you know, computer users was really small. I guess there were lots of people who loved Mac computers, but they were dwarfed in number by Windows machine owners, which meant that if you were developing malware and you wanted to target as many people as possible, you were going to be developing for Windows based machines. So a lot of the immunity was through what we sometimes call security through obscurity. Uh, not that you know, Mac didn't have other anti malware systems in place, but you know, it just it didn't make sense to develop malware for the Mac platform if you really want to hit as many people as possible. Now Max have enough of a user base where the that immunity is gone. Uh. Doesn't mean that Mac is incredibly vulnerable to malware, but rather it's now worth the time to develop malware that can affect a Mac computer. So we're likely to see those kinds of things continue in the future. Now. Earlier in this episode, I mentioned TikTok, and if you'll remember here in the United States, TikTok was under a ton of scrutiny during Donald Trump's administration. TikTok's parent company is byte Dance and that is based out of China, and the Trump administration began to push for bite Dance to sell TikTok to an American company, citing concerns that a popular social networking app in the United States, which presumably would end up collecting a lot of personal information of US users, might send that data on back to China, something TikTok denied, and several analysts also pointed out that Trump's administration at the time was deep in a trade war with China and that perhaps the pressure on TikTok had more to do with the trade war than a genuine concern for US citizen private to see. But either way, it looks like the government was dead set on TikTok saying bye bye to byte Dance or shutting down, except people kept pointing out that there might not be any legal grounds or legal enforcement that can make that happen, and ultimately the whole thing fell through. But there is pressure on TikTok again, this time from the Biden administration and not just TikTok. There's a proposed regulation of the Commerce Department here in the US that, if past, would require apps that originate out of foreign countries to share source code and datalogus with a third party auditor named by the Commerce Department in order to make sure that the app is not, you know, siphoning US citizen data for nefarious or exploitative purposes, because come on, that's a right that we reserve for US companies to do to US citizens. We don't cotton to ding dang furriners doing it to us too. No, we want American companies stealing our information. That was my sad attempt at satire. Anyway, the Commerce Department identifies China as a quote unquote foreign adversary, so presumably any app originating from China would qualify for this kind of regulation. I'm looking at you, ten cent now. Earlier this week, I talked about how Sony is acquiring video game studio Bungee for more than three point five billion dollars. And of course, Microsoft is currently biting its nails as it waits for approval from regulators around the world so that it can close its deal on Activision Blizzard. But whither, I hear you ask goes Nintendo. Is Nintendo also gearing up to purchase various game companies around the world in an attempt to keep pace with Sony and Microsoft In a word, No, that's according to Nintendo president Shintaro Fukawa, who said the company's philosophy is to pursue organic growth rather than growing through acquisitions. He said, quote our brand was built upon products crafted with dedication by our employees, and having a large number of people who don't possess Nintendo DNA and our group would not be a plus to the company. End quote. Now, dismissing for a moment that this particular phrasing, which I should add could be the result of interpretive translation, gets a little bit creepy. I mean, it kind of sounds like Nintendo has some sort of genetic purity issues going on from that phrasing. We can put that aside. I think that this is an interesting approach to business. So way back in the day, before I was a podcaster or even a writer for How Stuff Works, I was employed at a human resources consulting firm. If you've seen office space, you might remember the characters of the Bob's, the consultants who come into help clear out the infotechs employee list or whatever. I worked for a company that was effectively the Bob's, and through that company, I saw a lot of cases where you would have, say, a big company acquiring a smaller company, and the two companies would have very different corporate cultures. So inevitably you had a culture clash following that would be an awkward period in which the two entities tried to find some common ground, and it almost always went poorly, or at least it created lots of rough patches. There's a lot of friction. So from that perspective, I do see how focusing on your in house workforce and growing that way by hiring more people, and you're just constantly feeding into a uniform corporate culture that can make a lot of sense. It removes the need to find that common ground with another company that has its own history and its own culture, because if you just keep it all in house, everyone's already on the same ground to start with. Anyway, I also feel like this is the most Nintendo of Nintendo approaches, so it makes sense from that perspective. Now, I also think that Nintendo is like you could say, yes, Nintendo, Sony, and Microsoft are all in the video game space, which makes them all competitors with each other, But in many ways I don't think of Nintendo as competing with Sony and Microsoft. There it's almost like they're playing a different kind of game to Sony and Microsoft, and that they focused more on creating uh unique user experiences, some of which appeal to me and some of which don't. But that seems to be their their course of action, as opposed to Sony and Microsoft, which are constantly pushing like the bleeding edge of what is possible on video game platforms. Two very different approaches. I'm not saying one is automatically better or worse than another. I like a lot of Nintendo's approaches, um, but I also like a lot of what Sony and Mike so typically do as well. So I think there's a place for everybody anyway. That wraps up the tech news for Thursday, February three two. This was a long one. I blame Facebook, because I blame Facebook for everything. Let's be honest. If you have suggestions for topics I should cover in future episodes of tech Stuff, whether it's a trend in tech, a company, a person who's important in tech. Maybe it's a specific technology and you just want to learn about its history and how it works. Let me know. Send me a message via Twitter to handle for the show is tech Stuff hs W, and I'll talk to you again really soon. Tech Stuff is an I Heart Radio production. For more podcasts from my Heart Radio visit the I heart Radio app, Apple podcasts, or wherever you listen to your favorite shows.