Recode Daily: Obama hits Russia with sanctions and expulsions for election hacking

Russia vows to retaliate.

In response to Russian hacking and interference with the presidential election, President Obama ordered the expulsion of 35 suspected Russian spies from the U.S. and sanctions against Russian intelligence agencies and individuals. Russia vowed to retaliate. — [David E. Sanger / New York Times]

Donald Trump, who has been skeptical of evidence connecting Russia to the hacking, reiterated his desire to “move on,” but said he would get a briefing from U.S. intelligence officials. — [Michael D. Shear / New York Times]

The cyber espionage efforts of Russia’s military and intelligence agencies are supplemented by teams of civilian hackers recruited from universities and businesses and through ads on social media. — [Andrew E. Kramer / New York Times]

Jason Shellen, Slack’s head of platform products, has left the company. Shellen had been leading Slack’s efforts to add new third-party integrations and automation to make the service more valuable to businesses. — [Kara Swisher / Recode]

Twitter CEO Jack Dorsey asked users what features they wanted to see in 2017, and among the top requests (along with curbing abuse) was the ability to edit tweets. Dorsey said, “We’re thinking a lot about it,” but such a move presents its own set of problems. — [Kurt Wagner / Recode]

On the latest episode of Too Embarrassed to Ask, Recode’s Kara Swisher and Lauren Goode and Casey Newton of The Verge recap 10 of 2016’s biggest stories in tech, including Samsung’s flaming phones, Pokémon Go, the implosion of Theranos and, of course, Donald Trump. — [Eric Johnson / Recode]

Top Stories From Recode

Uber expects to give 15 million rides this New Year’s Eve

That’s three times more than last year.

Amazon beat competitors in a new way this holiday season: Money spent on TV ads

Amazon spent around $135 million on TV spots during October and November.

This Is Cool

The winners of this year’s National Geographic nature photographer of the year contest

Some remarkable images, as always.


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Recode and The Verge count down the 10 biggest tech stories of 2016

On the latest episode of Too Embarrassed to Ask: Samsung phones, Pokémon Go, Snapchat Spectacles, Theranos, Trump and more.

Normally on Too Embarrassed to Ask, we pick episode topics based on questions sent in by our readers and listeners. But this week, Recode’s Kara Swisher and The Verge’s Lauren Goode chatted with fellow Verger Casey Newton to answer one big question: What the hell happened in 2016?

The trio counted down the top 10 tech products and trends of the year, ranging from Pokémon to self-driving cars to fake news. You can listen to the full discussion in the podcast player embedded above, but here are a few highlights from the conversation:

10) Apple lost its headphone jack


Apple

In a stunning show of courage, one of the biggest changes in Apple’s annual iPhone refresh was the removal of the standard 3.5mm headphone jack. Instead, Cupertino now wants customers to use wireless headphones and earbuds, audio gear that plugs into the phone’s proprietary charging port, or a $9 dongle.

“I bought an iPhone 7 and it is both the least consequential and most infuriating iPhone upgrade in my entire life,” Newton said. “I am constantly having to swap out my charging cable for my Lightning earbuds, and it makes me unhappy. Brother, can you spare a dongle?”

“All signs point towards 2017 hopefully being the year where the iPhone gets really reinvented, because this year’s upgrade was, ehh, sort of incremental,” Goode said.

9) Samsung’s Galaxy Note 7 is a literal garbage fire


Shawn Minter via The Verge

As you’ve no doubt heard in the news (or on an airplane), a rash of Samsung Galaxy Note 7 phones had severe battery overheating problems that caused a few of them to catch fire, and a botched recall effectively killed the Note brand. Goode said Samsung has released a software update to disable the remaining Galaxy Note 7s in the wild.

“I like that December was when they decided to do that,” Newton said. “What’s the rush, Samsung?”

“It’s hard to have a more catastrophic incident for a brand than to have your products literally bursting into flame,” he added. “Samsung found that out the hard way.”

Heading into 2017, then, the big question is how Samsung bounces back. Do consumers still trust it? Will it duck out of the phone business?

8) The Pokémon Go phenomenon

An Eevee looks on as cousins David and Kurt Wendler hunt for Pokémon on Thanksgiving 2016 at Santa Rosa’s Howarth Park.
Ina Fried for Recode

Finally, some good news! Despite some issues with the game’s servers at launch, Goode and Newton agreed that Pokémon Go was a win because of its social benefits.

“Walking around San Francisco playing it, I had more conversations with random San Franciscans than I did in six years of living here,” Newton said. “It was one of the first truly social mobile games, ‘social’ in the old-school sense of human beings talking to each other in person.”

But as Swisher pointed out, Pokémon Go has seen a drop-off in players, and it’s hard to get those people back once they’ve left. For more about the behind-the-scenes story of Pokémon Go, check out her interview with Niantic CEO John Hanke from Recode Decode:

7) Uber’s self-driving cars are here


Uber

Uber CEO Travis Kalanick alarmed his company’s drivers when he first spoke about autonomous vehicles at the 2014 Code Conference, but said at the time that it would be a “decades-long process.”

Two years later, Uber had self-driving cars on the streets of Pittsburgh (and, very briefly, San Francisco), and bought autonomous trucking company Otto.

“For Uber, from a business perspective, they’ve described this as an existential issue, because they know that the minute you don’t need a driver, that is Uber’s only real advantage these days,” Newton said. “The drivers are at the heart of what’s made Uber successful, so when you don’t have drivers, what do you do?”

However, it may still be years before fully autonomous vehicles — without a driver ready to take over, just in case — are as safe as companies like Uber, Google and others want them to be. Swisher said sensors in all roads that can talk to the cars may be the answer, which would be a massive undertaking.

6) Snapchat gets into hardware

Snapchat Spectacles
YouTube Screenshot

The company that makes Snapchat is now calling itself Snap and also making hardware. Its first physical product, the sunglass-camera combo Snapchat Spectacles, generated hours-long lines wherever it popped up for sale, via vending machines in most places and at a pop-up retail store in New York.

“I think people have gotten a little bit carried away with describing how important this could be,” Newton said. “This is a very limited production run for Snapchat. But they do have some pretty big business implications.”

“They’re not Google Glass,” Swisher pointed out.

“The reception has been 10 times better than Google Glass,” Newton said. “Let’s face it, technology is often more popular the second time it comes around. Nobody wanted a Newton MessagePad, but then the iPad comes out and people are like, ‘This is brilliant.’”

5) Lots of big M&A … but not for Twitter


Microsoft

In 2016, Microsoft bought LinkedIn for $26 billion, Dell completed its deal to buy EMC for $67 billion and AT&T said it intends to buy Time Warner for $85 billion. But one of Recode’s most-anticipated deals, the attempted sale of Twitter to companies such as Disney and Salesforce, never materialized. What gives?

“What would be a good thing to happen to Twitter? Google buying it?” Newton asked.

“Somebody who’s going to keep it alive,” Goode replied.

“Well, someone’s going to keep it alive,” Swisher said. “It’s a very valuable property. It’s just a question of how it runs, how you make money and how you control the cesspool of [abuse]. What do you do with Donald Trump?”

More on that later in this list!

4) The San Bernardino iPhone case


A shooting and attempted bombing in San Bernardino, Calif., last year left 14 people dead and 22 seriously injured. Months later, one of the ripples of the terrorist attack hit the tech world, as the FBI locked horns with Apple over the locked iPhone of one of the shooters.

President Obama sided with the FBI, which wanted a way to get past Apple’s encryption to get to the phone’s data. But others within his administration — including Defense Secretary Ash Carter — leaned toward Apple’s side.

“It’s really interesting to think about this in the context of a Trump administration,” Newton said. “I wonder if there were some people who supported Obama in this case who are now glad that Apple stood up to the president, and will continue to do so.”

Ultimately, the FBI found an alternate method for getting into the locked phone. But Newton characterized this clash as the “opening battle in a war” that will escalate in coming years.

“It’ll be interesting to see how much Apple can stand up and who else does, and a lot of them are being a little squishy on it,” Swisher said.

3) Theranos implodes

Fortune Global Forum - Day 1
Photo by Kimberly White/Getty Images for Fortune

Reporting by the Wall Street Journal’s John Carreyrou exposed serious problems at the highly funded blood-testing startup Theranos, leading to a shutdown of its facilities and pending lawsuits from its investors. The stranger-than-fiction story rippled through all levels of tech, but Newton said he personally learned a lot as a journalist from following Carreyrou’s work.

“Listening to [CEO] Elizabeth Holmes try to explain herself, which she did many times both before and after these stories, I always found myself confused,” he said. “But I was likely to just stop and say, ‘Well, this is very complicated science. I clearly just don’t understand.’”

“Sometimes things that sound too good to be true often are, and man, this was a lesson in that,” he added.

“I think sometimes in Silicon Valley, too, there’s this attitude among some entrepreneurs,” Goode said. “They feel like history will absolve them in some way, and so they look to past figures like Steve Jobs, anyone who did something brash or not ethically sound and still managed to succeed.”

“There’s a difference between stock option issues and blood,” Swisher said.

2) Facebook & Google vs. fake news


Justin Sullivan / Getty Images

Search and social platforms are being gamed by fraudsters, who are motivated by politics, profit or both. And the people who run those platforms, like Facebook CEO Mark Zuckerberg, have dragged their feet in addressing the problem.

“Initially, Mark sort of dismissed it, then he modulated and he said ‘one percent’; I don’t know where he got that number,” Swisher said. “I feel like they’re abrogating their responsibility, almost completely. They are media companies, people get their news from them, people have some level of responsibility, and they always go the ‘we’re just a platform’ thing. It drives me mad.”

“They’re happy to tell you that they can build a plane in 18 months, based on ideas that they come up with in that time,” Newton added. “But how do we keep ‘Hillary Is a Lizard Person’ from getting 80 million shares? That’s impossible to them.”

“They’re terrified that if they become perceived as a partisan website, then they will die,” he said.

1) President-elect Donald Trump


Drew Angerer / Getty

There’s no way this wouldn’t be the top story of the year. Trump, who rose in part thanks to his bluntly authentic approach to social media and widespread TV coverage of his rallies, is deeply tied to the tech and media world.

“I think this is going to unfold in a hundred different ways over the next four years,” Newton said.

“What about President Trump tweeting?” Swisher asked. “He insults Boeing and the stock drops; who knows what he’s going to go after? Is this something a responsible person should be doing who’s running our country, using Twitter as a bully pulpit in the worst way possible?”

“I fully expect there will be a time, after he becomes president, that he will direct his mob of followers against an individual citizen for some perceived slight,” Newton said. “He’s done it already, but I think it’s going to become even more powerful and upsetting and scary after he becomes the president of the United States. That’s going to present Twitter with the question: What do we do about this?”

Also in play as we head into 2017: U.S. intelligence agencies have reported that the Russian government attempted to sway the election by hacking the Democratic National Committee. In response, the outgoing Obama administration has imposed sanctions on two Russian intelligence services ˜and ejected 35 Russian operatives from the country.


We’ll be back next year to answer your questions about any tech topic, so start tweeting them to @Recode with the hashtag #TooEmbarrassed. You can also email your questions to TooEmbarrassed@recode.net, in case Twitter isn’t your thing.

Be sure to follow @LaurenGoode, @KaraSwisher and @Recode to be alerted when we’re looking for questions about a specific topic.

You can listen to Too Embarrassed to Ask in the audio player above, or subscribe on iTunes, Google Play Music, TuneIn, Stitcher and SoundCloud.

If you like this show, you should also check out our other podcasts:

  • Recode Decode, hosted by Kara Swisher is a weekly show featuring in-depth interviews with the movers and shakers in tech and media every Monday. You can subscribe on iTunes, Google Play Music, TuneIn, Stitcher and SoundCloud.
  • Recode Media with Peter Kafka features no-nonsense conversations with the smartest and most interesting people in the media world, with new episodes every Thursday. Use these links to subscribe on iTunes, Google Play Music, TuneIn, Stitcher and SoundCloud.
  • And finally, Recode Replay has all the audio from our live events, such as the Code Conference, Code Media and the Code Commerce Series. Subscribe today on iTunes, Google Play Music, TuneIn and Stitcher.

If you like what we’re doing, please write a review on iTunes — and if you don’t, just tweet-strafe Kara and Lauren. Tune in next Friday for another episode of Too Embarrassed to Ask!


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Twitter’s Jack Dorsey is ‘thinking a lot about’ an edit-tweet button

He also wants to know what else you want him to build.

You’ve probably dreamed of directing Twitter’s product strategy — well, here’s your chance!

CEO Jack Dorsey took to his Twitter account Thursday to ask users what the company can do to “improve or create in 2017” — an idea he borrowed from Airbnb CEO Brian Chesky, who tweeted something similar on Christmas day. Dorsey posed the same question about his other company, Square.

//platform.twitter.com/widgets.js

The responses flooded in. The top requests, based on an unscientific scan of @jack’s replies:

  • An edit tweet button
  • A bookmark button
  • Better safety and reporting options for bullies.

We at Recode don’t like to toot our own horn, but we may have suggested something similar to Twitter back in October.

Good news for Twitter users: Dorsey says Twitter is considering all of these things, including the edit-tweet functionality.

“Is it more important to edit for spelling/corrections? 5 minute window to edit mistakes or do you need to be able to edit anytime?” Dorsey asked a few users who suggested it.

“We’re thinking a lot about it,” he added.

Dorsey also said that Twitter is thinking about other suggested ideas, including a bookmarking tool, better threading for conversations, and multiple timelines based on people’s interests.

Twitter has never offered an edit button, in part because the company was concerned that tweets might be changed after a long period of time and after they’d already been embedded or used on other parts of the web. But allowing an edit option for a short time after publishing a tweet seems like a good compromise.


Twitter

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Slack platform product head Jason Shellen out

He came to the high-profile collaboration startup from Google and Pinterest

Jason Shellen, who has done stints at both Pinterest and Google, has left Slack, where he was head of product for its platform efforts, said sources. He only joined the San Francisco-based startup at the beginning of the year.

Shellen was charged with getting all kinds of services and automation, called Slackbots, on Slack from partners to help businesses and to make its ecosystem robust. At an event this summer, Shellen said in an interview that the goal was to make Slack the “the place where work happens.”

Slack has made a big deal of its platform roadmap, including the creation of an $80 million fund to encourage the development of more third-party apps and bots to make the service more useful to teams. But the company, which has had several acquisition offers from larger players, is facing increased competition from those very same companies now.

At Google, Shellen was best known for his work on Google Reader, the RSS feed product. He has also worked at AOL via Thing Labs. It’s not clear if he is going anywhere.

I pinged Slack CEO Stewart Butterfield about the departure, but got no reply.

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Uber expects to give 15 million rides this New Year’s Eve

That’s three times more than last year.

If you’ve ever tried to hail an Uber on New Year’s Eve, you know it’s either impossible to get a ride or it will cost you. This year should be a little different, mostly because Uber now shows you what the total cost of the ride will be up front. In other words, there won’t be any surprised New Year’s Eve revelers waking up to receipts for short rides that cost upwards of $100.

It’s typically the busiest night of the year for the ride-hail company, and Uber predicts that this year, it will hit more than 15 million rides across the 450 cities it operates in. That’s three times as many as last year.

Unsurprisingly, it’s a really important night for the company — and it’s a hard one to get right. The demand is unlike what Uber sees even on the busiest weekend nights, which means the company spends most of the evening and New Year’s Day fielding an onslaught of user complaints about the resulting surge pricing.

In past years, even Uber CEO Travis Kalanick has been on deck and spent his night either on Facebook or Twitter either triaging user complaints or updating his followers on the demand in certain markets.

It turns out the patterns of demand are fairly consistent across the markets the company is in — at least as of 2013. So the company is also suggesting a few ways to get around on New Year’s Eve without paying too much: In addition to sharing your rides and checking the up-front fares, Uber is also reminding users to plan around the most expensive time frame, between midnight and 3 am.

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Recode Daily: Trump applauds Sprint’s plan to add 5,000 jobs in the U.S.

Part of parent company SoftBank’s pledge to create 50,000 U.S. jobs.

With Donald Trump serving as cheerleader (and taking some of the credit), Sprint said it plans to “create or bring back to America” 5,000 jobs. Trump, also noting satellite startup OneWeb’s previously announced plans for 3,000 U.S. jobs, cited the efforts of Masayoshi Son, CEO of SoftBank, the majority owner of Sprint and an investor in OneWeb. — [Jennifer Epstein, Justin Sink and Michelle Jamrisko / Bloomberg]

Startups working on self-driving cars and related technology will get a lot of attention in 2017, as investors look for potential acquisition targets and companies that can challenge the big-name players. Here are some of the startups to watch. — [Johana Bhuiyan / Recode]

No e-commerce companies went public in 2016, but three hot startups could take the plunge in 2017: Pet supply retailer Chewy.com, apparel and styling service Stitch Fix and mattress maker Casper. — [Jason Del Rey / Recode]

Why does Apple build its iPhones in China? It’s not just cheaper labor. A clever customs operation set up just outside the factory where they’re built and tax breaks make it much more cost efficiient. — [David Barboza / New York Times]

Facebook won’t say it’s worried about Snapchat, but it doesn’t have to. Just look at all the Snapchat-like features it added this year. — [Kurt Wagner / Recode]

On the latest episode of Recode Media with Peter Kafka, LinkedIn Executive Editor Daniel Roth says human editors, peer pressure and a business orientation help his site avoid Facebook’s problems with fake news and personal political attacks. — [Eric Johnson / Recode]

Top Stories From Recode

Twitter’s Periscope adds 360-degree live videos

Periscope is still plugging along.

Facebook’s Oculus has acquired an eye-tracking startup called The Eye Tribe

The companies aren’t sharing deal terms.

Full transcript: Chief Data Scientist DJ Patil of the U.S. Office of Science and Technology Policy on Recode Decode

His mission: To responsibly unleash the power of data to benefit all Americans.

This Is Cool

A TV guide to the cultural divide

The New York Times put together 50 maps showing the fan distribution for the 50 most “liked” television shows among Facebook users, illustrating the geography of the nation’s cultural divide.


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Amazon beat competitors in a new way this holiday season: money spent on TV ads

Amazon hasn’t historically been a big spender on TV commercials for a company of its size. But that has started to change recently, as the company has been more aggressive in pushing its Prime membership program and new gadgets like the Echo voice-controlled speaker.

Here’s some data to prove it. In October and November this year, Amazon outspent every brick-and-mortar retailer on TV ad spending, according to estimates from MediaRadar, a startup that tracks ad spending to help publishers court the right advertisers. Amazon spent around $135 million on TV spots during those two months, coming in $16 million ahead of Walmart and about $32 million ahead of Target.

The Amazon total marks an increase of 76 percent in holiday TV ad spending for the e-commerce giant over the same period in 2015, MediaRadar says. Target’s spending was also up big at 54 percent, while Walmart’s TV numbers fell by 10 percent.

Want a few more numbers? OK! Just five years ago Amazon spent only $156 million on ads in an entire year. And that total included digital video, banner ads and billboards in addition to TV commercials.

So, yeah, Amazon used to let its products and services do most of the talking. Now, as it looks for new avenues of growth for the already super popular Prime program, it’s going to tell you about them too.

One caveat here is that MediaRadar’s numbers are indeed estimates; the company has several hundred people manually monitoring TV ads across more than 140 channels and then uses available data on advertising rates to project total spending.

But if you’ve watched any TV this holiday season, I think you’ll agree that these stats certainly pass the eye test. There’s been a whole of Amazon during commercial breaks.

Here’s one of the most recent Amazon spots. And it’s one that’s pretty hard not to enjoy.

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