Newsletter #25: The Pegasus spyware hack reminded us that if we're connected, we're vulnerable. Plus BigTech's earnings calls, Dorsey and Bitcoin save the world, plus Robinhood goes public
Wiser! Newsletter: BigTech exceed earnings expectations, Twitter's plans for Bitcoins, Robinhood goes public, and anonymous data isn't so anonymous after all...
In this issue:
- The Pegasus project: if you're connected, "they" can know EVERYTHING!
- BigTech = BigNumbers: Apple, Facebook, Microsoft and Google (Alphabet)
- Bitcoin is big for Twitter's future...and will lead to "World Peace"
- Bitcoin breaks back into the $40k space
- Apple is using AI and Machine Learning to recognise people in photos
- Snap is making a big bet on Augmented Reality shopping
- Revolut: required study for any student of disruption
- Robinhood is going Public
- Japan’s virtual YouTubers have millions of real subscribers and make millions of real dollars
- What are Ghost Nets?
- Burger King is now accepting Dogecoin in Brazil
The Big Story
If you're connected, "they" can know EVERYTHING!
Last week, The Washington Post ($) broke a story about highly sophisticated spying activity "by authoritarian governments".
Called the Pegasus Project, the investigation found that spyware was used in phone hacking attempts on 37 human rights activists and journalists.
The Post alleges that the names on the list were singled out for surveillance by countries who are clients of NSO Group, an Israeli software company that markets its Pegasus spyware to governments to track potential terrorists and criminals.
What is Pegasus? Pegasus is spyware for iOS and Android. It works completely differently on Apple or Android devices, but the outcome is the same.
The intended victim is sent a text message with a link. When they click the link the smartphone gets infected with the Pegasus spyware.
From then on, whoever is doing the spying is able to,
- read text messages and emails,
- listen in on phones calls,
- open the microphone at any time just to listen to what's going on,
- turn on the camera to see what's going on,
- capture passwords, location history, app usage data,
- take screenshots and record keystrokes,
- the spyware has access to all contacts and browser history.
Basically, the spies can see and listen to everything on your phone!
Whistleblower Edward Snowden exposed this level of government spying in 2013 when he revealed how the National Security Agency had spied on the phone data for millions of Americans.
The NSA claimed they were hunting for terrorists but in so doing had illegally accessed the phone data for millions of Americans.
The point being: there's a fine line between terrorism and activism when it comes to deciding who's the good guy and who's the baddy!
Fortunately, Pegasus is a complex and expensive piece of software. And it is designed to spy on individuals of particular interest. Which means that the average user is unlikely to encounter it.
How to check your phone for Pegasus spyware using a tool from Amnesty International.
After the story broke, NSO issued strenuous denials of any involvement in spying or wrongdoing. Then they posted this: Enough is enough!
Pegasus is named after the mythical winged trojan horse, a creature that can fly through the air (to infect your phone).
Pegasus was first identified in 2016 (first, for the supposedly impenetrable iOS, then later, a version for Android was found). It was discovered when an internationally recognized human rights defender called Ahmed Mansoor was sent text messages promising “secrets” about detainees tortured in UAE jails.
The latest story from the Post reminds us that, frankly, in the digital world, if you're on a connected device, then you can be spied upon.
When your data is NOT as "anonymous" as BigTech promises
In a completely separate, but related surveillance story, a public figure has been sacked after de-anonymised mobile phone data was bought commercially and used to reveal compromising details about his private life.
The issue is not the private life of this person, who happens to be the highest-ranking Catholic priest in the US, but how he was identified as a daily user of the gay hookup app, Grindr.
Here's how it happened: US mobile network carriers still sell the location and usage data of their customers, with names and numbers removed, through brokers to a range of buyers, including advertisers, law enforcement, roadside services, and even bounty hunters.
This is in spite of all four major US wireless carriers having pledged in 2018 to stop selling their mobile customers' location information to third-party data brokers.
In this particular case, investigative reporters legally purchased 24 months' worth of “commercially available records of app signal data”, which included records of Grindr usage and locations where the app was used.
When 1+1=3: The reporters zeroed in on addresses where the priest was known to frequent and singled out a device identifier that appeared at those locations. Key locations included his office, his homes, and regular places he frequented. They even identified the homes of his friends and family.
The journalists were able to triangulate the anonymised data to reveal a recurring mobile device that was most likely the priest's phone. From this 1+1=3 equation, they were able to deduce that he was using Grindr almost daily and when he visited gay bars, including while traveling for work.
As a Catholic priest, he is forbidden from sexual activity. The priest has since resigned.
And the point of the story: when people say "they're selling your data", or "you are the product", this is what it means!
Bitcoin is big for Twitter's future...and will lead to "World Peace"
Twitter CEO Jack Dorsey just said that Bitcoin will be a "big part" of the company's future. This is the first time Dorsey has publicly spoken in such depth about how the world's largest cryptocurrency could be integrated into Twitter's products.
On Twitter's second-quarter earnings call last week, Dorsey said Bitcoin is the "best candidate" to become the "native currency" of the Internet. He added that it will mean "people and companies can freely trade goods and services anywhere on the planet."
It's no secret that Dorsey is a huge Bitcoin aficionado. He subscribes to the POV that Bitcoin will become the native currency of the Internet and the digital economy. (Whilst others subscribe to the Ethereum/Ether view of the world).
He said of Twitter, with Bitcoin as "a global currency, we are able to move so much faster with products such as Super Follows, Commerce, Subscriptions, Tip Jar, and we can reach every single person on the planet."
Dorsey is not alone to think in this direction. It's not a million miles from Zuckerberg's vision for Facebook and its crypto project called Diem (formerly Libra). Bitcoin enables speed, more innovation, and opens up entirely new use cases, according to Dorsey.
Dorsey, who is also CEO of payment platform Square, already bets big on crypto. Square's Cash App allows users to buy and sell Bitcoin. They generated $3.5 billion in Bitcoin revenue during the first quarter of 2021.
Dorsey eventually hopes that Bitcoin will help create "world peace."
Source: The Block
Bitcoin breaks back into the $40k space
Bitcoin broke the $40,000 barrier for the first time since June on rumors that Amazon planned to accept BTC as a payment method. The retail giant later issued a denial and that took some heat out of the upturn.
Bitcoin has gained 26.4% over the past 7 days as it continues to trend upwards.
Burger King is now accepting Dogecoin in Brazil
The fast-food chain says Dogecoin can be used to purchase Dogepper, a snack that has been purposely designed for four-legged friends.
Buying one of the dog treats will set you back 3 Dogecoin, which is worth about $0.62 at the time of writing. Source: Alexandria
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BigTech = BigNumbers
This has been a week of quarterly earnings calls by the BigTech BigBoys. The combined revenues of Microsoft, Apple, and Google alone are $200bn for the latest quarter! It's been a week of exceeded expectations with BigNumbers, BigMoney and BigVisions.
Facebook's numbers were better than expected, largely driven by the pandemic-accelerated shift towards digital advertising.
Facebook's net income was $10.4 billion for the 2nd quarter on revenues of $29 billion. That's over 50% topline growth and a near doubling of profitability. Both numbers far exceeded market expectations.
On average, Facebook earned $10 for every user on the platform, 98% coming from advertising. (Remember: if the product is free, you are the product!)
There are now 2.9 billion monthly active users on Facebook!
CEO Mark Zuckerberg outlined his vision for the future, aka, Facebook as a Metaverse.
I'll be covering this in more detail in a post shortly, but in a nutshell, Zuckerberg's vision for Facebook is to transform it from a social media platform to a metaverse.
The Zuck's vision for a Facebook metaverse focuses on 3 things:
- creators (like me, although you'll never get me on Facebook),
- commerce (in a battle with TikTok), and
- the next computing platform (aka, mixed reality, which I covered here).
Apple reported its most profitable quarter ever!
Between April and June, Apple earned $81.6 billion in revenue (up 36% year-on-year) and reported $21.7 billion in profit.
Almost half the revenue, $39.6 billion, came from sales of the hugely successful iPhone 12, which has enjoyed a 50% growth in sales year-on-year.
Geographically, 44% of Apple’s sales came from the Americas and 18% from Greater China, primarily due to the adoption of 5G.
To put all of this into context, if the Apple product lines were standalone companies in the Fortune 500;
- the iPhone would be the 16th largest firm and bigger than JP Morgan, Walgreens or Verizon,
- Apple Services would be 59th, larger than Goldman Sachs, Pfizer, or Tesla,
- Wearables and Home would be 101st, bigger than Netflix or HP,
- followed at 102nd by Mac, beating Starbucks and KraftHeinz,
- and the iPad on its own would be bigger than PayPal or Visa.
Strategically, the key numbers to watch are Services as Apple continues to reposition to a recurring revenue model.
Apple booked $17.9 billion in Services revenue in the last quarter with a massive 33% growth. They reported more than 700 million people are paying for Apple’s services that include, Apple Music, iCloud, Apple Arcade, and Apple TV+.
Read this Wiser! Insights piece on Apple as the most valuable company in the world.
Google's parent company Alphabet also blew past Wall Street expectations with revenues of $61.88 billion, up 61% year on year.
Google still dominates when it comes to online search ads. The firm reported a 68% growth in advertising revenues from its Search business.
Meanwhile, YouTube reported an 84% growth in advertising revenue to $7 billion for the quarter, which is almost as much as Netflix's revenues for the same quarter.
And the recently introduced competitor to TikTok, called YouTube Shorts, surpassed 15 billion global daily views, up from 6.5 billion as reported in the previous quarter!
Amongst all of BigTech, Google’s growth in profit stood out amongst the crowd. At $18.5 billion for the quarter, this was an astonishing growth rate of 203%!
For comparison, Microsoft's profitability grew by 42% and Apple’s by 84%. Alphabet's success, like that of Facebook, can be significantly attributed to the shift to digital advertising.
This was Microsoft's highest Q4 growth numbers in 6 years.
Microsoft posted revenue growth of 21% YoY at $46.2 billion, along with a net income of $16.5 billion.
The Azure business, Microsoft's cloud computing platform, posted a 51% revenue growth.
The other stand-out numbers came from LinkedIn, Microsoft's largest acquisition to date. Fueled by 97% growth in ad sales, LinkedIn grew by 46% overall to make it a business unit with more than $10 billion a year in sales on its own.
LinkedIn’s growth was partly driven by uncertainties associated with the jobs market as users flocked to the website for leads.
Microsoft’s search advertising revenue from Bing was up 53%.
The key takeaway from the Microsoft results is that it is seeing the most growth in the parts of its business where it has been able to make the shift to cloud services and subscriptions.
Do you want a better understanding of Microsoft's strategy?
Read it here: Wiser! Insights on Microsoft's strategy
Watch it here: the Microsoft strategy WiserPod! on YouTube.
Guest Feature (a very important one too!)
What Are Ghost Nets?
Ghost nets are abandoned or discarded fishing gear dumped at sea. Each year, these ghost nets are responsible for trapping and killing huge numbers of marine animals, such as sharks, rays, bony fish, sea turtles, dolphins, whales, crustaceans, and sea birds. They also cause huge destruction to essential habitats, like coral reefs and shorelines.
Please support this massively important environmental charity by donating here.
The full story is here: Olive Ridley Project
Ed Note: this is not a typical story for Wiser! but it's a hugely important one and it's for a personal friend of mine. We only have one planet, please support this great cause and donate here. Thank you.
Snippets of Insight and Information
Apple is using AI and Machine Learning to recognise people in photos
The task of recognising people in photos is inherently challenging. People can appear in different scales, under variable lighting, holding endless poses with numerous expressions, all captured from any camera.
Apple is using deep neural network technology that takes a full image as input, breaks it down, and detects faces and upper bodies. Algorithms then operate on feature vectors, (called embeddings), to identify the person. Awesome stuff! Source: Apple
Japan’s virtual YouTubers have millions of real subscribers and make millions of real dollars
Front row seats cost as much as $150 to see Kizuna AI.
But AI is not like any other Japanese entertainer, because she is an entirely digital YouTube celebrity. An actor provides her voice, but her movements and actions are computer-generated. She’s performed two live concerts on YouTube, TikTok, China’S Bilibili, and VR platform Oculus Venues.
In August, the YouTube financial aggregator, Playboard, reported seven of the world's top 10 Super Chat earners were Japanese VTubers. In a single week, more than $100,000 was made from the top-10 earners, drawing over $800,000 in a single day. Source: RestOfWorld
Snap is making a big bet on Augmented Reality shopping
Snap just bought Vertebrae, a company that lets brands create and manage 3D versions of their goods. The concept is simple. Using the consumer's mobile phone, the AR tech will overlay product and related information to help the buying decision. For example, Snap and Gucci recently partnered to let users virtually try on a limited edition pair of shoes.
If you think this is a bit far out there, remember that Mark Zuckerberg recently said that Mixed Reality (AR and VR) will be the "next computing platform". Source: The Verge
Revolut: required study for any student of disruption
Revolut is now the UK's most valuable private company. Revolut’s go-to-market is a masterful lesson in what the late Clayton Christensen called “disruptive innovation”. When a new player enters the market, it is often by offering a simpler, cheaper product to less demanding consumers and then moving up from there. Read their story. Source: Sifted
Robinhood goes public
The Robinhood IPO went ahead yesterday, starting at a price of $38, ending the 1st day of trading down at $33. Robinhood has split opinion between those who see it as opening up trading to a whole new market to those who see the controversial trading app as "mendacious f**cks".
Here's my view...
Only the headlines
TikTok becomes the first non-Facebook mobile app to reach 3 billion downloads globally. Source: Sensor Tower
Spotify now has 165 million paid subscribers, likely topping Apple and Amazon Music combined. Source: Fast Company
What Einstein Meant By "Time is an Illusion." Source: Interesting Engineering
Intel reiterates chip supply shortages could last several years. Source: Reuters
Project Titan: Apple's car project gets a new leader. Source: Arstechnica
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