Ownership

Tech startups live by the rule that speed is paramount. Houseparty, creator of a hot video app, has an extra reason for urgency. Facebook, a dominant force in Silicon Valley, is stalking the company, part of the social network’s aggressive mimicking of smaller rivals.

Facebook is being aided by an internal “early bird” warning system that identifies potential threats, apparently. This fall, Facebook plans to launch an app similar to Houseparty, internally called Bonfire, say people familiar with the project. Both apps let groups of people hang out over live video on a smartphone. “They see we’re having traction,” says Sima Sistani, co-founder of Houseparty, which is based in San Francisco. “That’s why we’re pushing so hard.” Silicon Valley is dominated by a few titans, a development that’s fundamentally altering the nature of America’s startup culture. While it’s as easy as ever to start a company, it is getting harder to grow fast enough and big enough to avoid getting either acquired or squashed by one of the behemoths.

Imagine if you took every single gripe you've had with Verizon over the past five years — the time it blocked Nexus 7 tablets for five months; the time it forced you to pay $20 per month for tethering; the time it tried to make you use a mobile wallet app called "ISIS" — and finally put your foot down. For a year, you spend free moments holed up in library stacks, speaking with experts, and researching and writing a sprawling legal complaint about the company's many, many misdeeds. And then you file it all with the Federal Communications Commission, hoping to get some payback. That's exactly what Alex Nguyen did. And one day very soon, Verizon may have to answer for it.

When he wrapped up in the middle of 2016, Nguyen paid a $225 filing fee and handed his complaint over to the FCC. It would end up being the only formal complaint filed under the net neutrality rules. Now one year after Nguyen's initial filing date, all the arguing is over, and the case is the in hands of the commission's Enforcement Bureau to either shoot down, deliver a fine, or demand Verizon make some changes. "Verizon and I made our cases," Nguyen said. "It looks as though [the FCC's Enforcement Bureau] staff any day now could make a decision."

From that modest start, voice-based AI for the home has become a big business for Amazon and, increasingly, a strategic battleground with its technology rivals. Google, Apple, Samsung, and Microsoft are each putting thousands of researchers and business specialists to work trying to create irresistible versions of easy-to-use devices that we can talk with. “Until now, all of us have bent to accommodate tech, in terms of typing, tapping, or swiping. Now the new user interfaces are bending to us,” observes Ahmed Bouzid, the chief executive officer of Witlingo, which builds voice-driven apps of all sorts for banks, universities, law firms, and others.

For Amazon, what started out as a platform for a better jukebox has become something bigger: an artificial intelligence system built upon, and constantly learning from, human data. Its Alexa-powered Echo cylinder and tinier Dot are omnipresent household helpers that can turn off the lights, tell jokes, or let you read the news hands-free. They also collect reams of data about their users, which is being used to improve Alexa and add to its uses. The ultimate payoff is the opportunity to control—or at least influence—three important markets: home automation, home entertainment, and shopping.

Peter Kern, Tribune Media's CEO said Aug 9 that Sinclair's $3.9 billion bid to buy Tribune's 42 TV stations remains "on track," while acknowledging the Department of Justice had issued a second request for information on the deal from both Sinclair and Tribune. Such requests for additional info are not uncommon. That came in Tribune's announcement of its second-quarter financial results.

Sinclair and Tribune have signaled that on track would be a close by the end for the fourth quarter. The DOJ request came on Aug. 2 and extends the Hart Scott Rodino waiting period for consummating a transaction by 30 days after the companies have "substantially complied" with the request, unless the deal submission gets early termination, meaning DOJ finds no reason to block or condition the deal. The FCC has received numerous petitions to deny the deal, or delay a decision until after the FCC completes a review of media ownership rules, which could affect that timetable. Sinclair and Tribune have until Aug. 22 to respond to those petitions and various comments that were critical but fell short of asking for outright denial.

[Commentary] The mainstream media has suddenly discovered Sinclair. Oh no! cry the media watchdogs -- this company known formally as Sinclair Broadcast Group has a conservative slant to its newscasts. That's a no-no, say the watchdogs, even though many sources of news on TV seem to have a slant these days. But the problem isn't the slant, of course. It's the conservative slant.

Sinclair is in the media watchdogs’ crosshairs because it is the largest single owner of local TV stations in the United States in terms of the number of properties the company owns. Many of the stations have local news. I have seen these “too-powerful” arguments arise time and time again over the course of my 34-year career covering television. As a result, I have come to the conclusion that a company such as Sinclair could own a million stations and the commentaries of Boris Epshteyn would not be any more influential or watched by a bigger audience than any number of other commentators from MSNBC to Fox News Channel.

The culture wars that have consumed politics in the United States have now landed on Silicon Valley’s doorstep.

That became clear after Google fired a software engineer, James Damore, who had written an internal memo challenging the company’s diversity efforts. The firing set off a furious debate over Google’s handling of the situation, with some accusing the company of silencing the engineer for speaking his mind. Supporters of women in tech praised Google. But for the right, it became a potent symbol of the tech industry’s intolerance of ideological diversity. Silicon Valley’s politics have long skewed left, with a free-markets philosophy and a dash of libertarianism. But that goes only so far, with recent episodes putting the tech industry under the microscope for how it penalizes people for expressing dissenting opinions. Damore’s firing has now plunged the nation’s technology capital into some of the same debates that have engulfed the rest of the country.

Such fractures have been building in Silicon Valley for some time, reaching even into its highest echelons. The tensions became evident with the rise of President Donald Trump, when a handful of people from the industry who publicly supported the then-presidential candidate faced blowback for their political decisions.

Disney unveiled plans on Aug 8 for Netflix-style streaming services for sports programming from ESPN and Disney movies. It is a striking, multibillion-dollar bid to reposition Disney, the world’s largest entertainment company, for growth and to address worries of cord-cutting in the traditional television business. Disney’s direct-to-consumer services will start in 2018. The first one will offer ESPN programming, including baseball, hockey, tennis and college sports — about 10,000 regional and national events in its first year. By 2019, Disney plans to start a separate entertainment service, which will include Pixar movies, Disney Channel television series and film library content.

For the last two years, Disney has not been to convince investors that ESPN, its longtime growth engine, will keep chugging away — albeit more slowly — even as the network deals with the subscriber erosion that is buffeting the broader cable television business. Its efforts have included paying $1 billion last year for a 33 percent stake in BamTech, which handles streaming for baseball teams and HBO. At the time, Disney said it was working on an ESPN-branded streaming service. On Aug 8, the company said it would pay $1.58 billion for an additional 42 percent stake in BamTech. Robert A. Iger, Disney’s chief executive, said the acquisition would help his company compete with streaming giants like Netflix and Amazon by introducing a video home base for all things Disney. “The media landscape is increasingly defined by direct relationships between content creators and consumers,” Iger said. “This acquisition and the launch of our direct-to-consumer services mark an entirely new growth strategy for the company.”

One America News CEO Charles Herring blasted the Federal Communications Commission’s recent decision to relax media ownership rules, a move that could pave the way for Sinclair’s $3.9 billion purchase of Tribune Media and allow the broadcast company to extend its reach into more than 70 percent of U.S. homes. “Utilizing the ‘UHF discount,’ which is an antiquated, irrelevant regulation, is really politics at its worst,” Herring said Aug 7, referring to a loophole around a federal cap limiting ownership to 39 percent of the national audience.

While the proposed deal has faced challenges from progressive groups, media consolidation critics and Democratic senators, it’s is also being opposed by conservative media voices, like Herring, who are typically aligned with the president. Christopher Ruddy, a President Donald Trump friend and CEO of conservative Newsmax, in July called for a delay in the government approval process of the Sinclair-Tribune deal. And Glenn Beck’s The Blaze joined several independent media outlets in a June letter to the chairs of the Senate Commerce and Judiciary committees. “Regardless of political affiliation, we should agree that robust democracy demands a variety of viewpoints from a myriad of sources; yet, the Sinclair/Tribune merger threatens this core value,” the letter read.

[Commentary] Many tech execs that I know hate and do not trust our government, but are starting to come to the conclusion that a president, senator and congressmen and congresswomen need to have a greater grasp of how technology will shape our world and country, and be tech-savvy enough to keep America moving forward now. I am told behind the scenes that some very high-powered, forward-thinking tech execs who really understand how technology is going to drive so many major things tied to America’s growth and world position are starting to contemplate running for office in many states around America. Their goal would be to gain a stronger position of influence when it comes to the role government must play in guiding how technology is applied and integrated into all of our business and personal lives fairly and equally.

I have no clue whether Zuckerberg will or will not eventually move into politics, but I am willing to bet that as more and more tech execs understand the magnitude of what has to be called the great tech revolution of this century, we will see some of them trying to find a greater way to influence our current politicians, and we’ll even see some begin to run for office in order to influence our government from within as much as possible.

[Tim Bajarin is the president of Creative Strategies Inc.]

We’ve heard lots about Silicon Valley’s toxic culture this summer — its harassing venture capitalists, its man-child CEOs, its abusive nondisparagement agreements. Those stories have focused on how that culture harms those in the industry — the women and people of color who’ve been patronized, passed over, pushed out and, in this latest case, told they’re biologically less capable of doing the work in the first place. But what happens in Silicon Valley doesn’t stay in Silicon Valley. It comes into our homes and onto our screens, affecting all of us who use technology, not just those who make it. It’s bad enough for apps to showcase sexist or racially tone-deaf jokes or biases. But in many cases, those same biases are also embedded somewhere much more sinister — in the powerful (yet invisible) algorithms behind much of today’s software.