The biggest news in digital and technology from August

Digital360 on 1 September 2017

Each month, we take a look at the biggest movements in digital technology and investigate the implications for industry and business. In this month's edition:

  1. Google fires engineer over a controversial memo.
  2. Snapchat pushes back against Facebook.
  3. Ex-Uber CEO sued (and the company's search for a CEO).
  4. Facebook continues to pivot into video content.
  5. Google set to introduce an ad blocker for Chrome.

Let's dive into it.

Google fires software engineer for anti-diversity memo

The document, written by engineer James Damore, was widely circulated inside the company before leaking to the media. As Wired reported, 'The document cited purported principles of evolutionary psychology to argue that women make up only 20 per cent of Google’s technical staff because they are more interested in people than in ideas, which the author considers an obstacle to being a good engineer.'

After the memo was leaked, it created a PR disaster for the company, which incidentally is in the middle of a class action lawsuit surrounding female disadvantage in the workplace. Google CEO Sundar Pichai fired Damore and went into damage control mode. 'To suggest a group of our colleagues have traits that make them less biologically suited to that work is offensive and not OK,' said Sundar Pichai, explaining his decision to fire Damore.

While Damore's document has been widely discredited, it has revealed an emerging cultural divide within Google – a company that brands itself as being progressive and inclusive. According to reports, there were many within Google whom agreed with Damore's argument and see his termination as a form of oppression of free speech.

What's happening with Snap?

The company behind Snapchat has been going through a rough couple of months, with widespread speculation that the company can't innovate at a rate faster than Facebook can copy its features. In fact, it's been one year since Instagram copied Snapchat's story feature, to great success.

Even Google is copying the upstart platform, developing 'Stamp'. The feature will allow publishers to create visually-oriented media content similar to Snapchat’s Discover portal. Evan Spiegel, the 27-year-old CEO of Snap, is becoming more and more secretive about how he operates the company and develops new features for the product.

But the company is hoping to fight back and boost revenue, turning the tables on Facebook by copying its advertising platform as well as open up more data tools to marketers. And despite predictions of doom and gloom, Snap stock increased the day employees were able to sell their equity following the IPO in March.

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Snapchat’s flower crown face filter on the right, and Instagram’s flower crown on the left. Source: Techcrunch. 

Uber's largest shareholder sues ex-CEO Travis Kalanick

One of Uber’s biggest shareholders, Benchmark Capital, is suing co-founder and ousted CEO Travis Kalanick. Benchmark claims that Kalanick has not honoured the terms of his resignation and has attempted to manipulate the makeup of the company board. If Benchmark is successful, Kalanick would be kicked off Uber's board of directors – eliminating any return to the company.

Benchmark Capital has been an investor in a number of high-profile technology companies, including Twitter, Dropbox, Instagram, Zendesk, and WeWork. The suit with Uber reveals just how important control over the ride-sharing company is. Uber’s valuation almost matches the worth of every successful company Benchmark has invested in since 2007.

On the flip side, the company has been successful in attracting a new CEO. After a months-long search, the board selected and announced its new chief executive, Dara Khosrowshahi on Tuesday. Khosrowshahi has been the CEO at travel company Expedia for over a decade and will have to steer the company through a series of scandals and recent missteps.

Facebook continues its pivot into video

Facebook continues its pivot into video with a new feature, Watch. Rather than the typical video content seen in Newsfeed, the new feature focusses on television shows. However, unlike a rival service like Netflix, the revenue model will be based around advertising, rather than subscriptions.

The company is willing to pay up to $3 million per episode for centrepiece shows. As TechCrunch reports, 'Through premium original programming, Facebook is also trying to become a home for deliberate video consumption where people come to view a specific show. While there are already plenty of reasons to visit Facebook, original shows give people a reason to spend longer staring at their screens.'

New ad formats, such as mid-roll video ads, are new sources of advertising for the company, with a greater supply of inventory and the ability to charge higher ad rates. Despite worries of a significant slow down in growth, Facebook still posted a 45 per cent growth rate in July, largely in thanks to video advertising revenue.

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A new platform for shows on facebook, called Watch. Source: Facebook Newsroom. 

Google moves to improve ad experiences online

Google is building an ad blocker into Chrome, to be rolled out in 2018. It's a strategic move to enforce quality guidelines around display advertising and, the company hopes, will stem the rise of third party ad blockers.

It’s estimated that Google lost revenue amounting to $41.4 million due to ad blocking software in 2016. But adblocking has proliferated in part because of web users' distaste for intrusive advertising formats and tactics. In a recent Hubspot survey, web users overwhelmingly listed pop-ups, mobile ads and pre-roll ads as their top three annoyances.

Google's influence should be able to pull advertisers and website in-line with better advertising standards. For businesses and publishers, it means the days of full page pop-ups and auto-play videos are over. But there is still time before the feature rolls out, and Google is providing tools to help businesses make the transition.

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Adblocking continues to increase. Source: Marketing Land

Look out for...

Apple is expected to make its long awaited iPhone announcement in September. The company will reportedly announce multiple variants of the iPhone – a high-spec iPhone 8 as well as incremental models, the 7S and 7S Plus.

While analysts have been speculating about the new phone's features for months, one thing is for certain: Apple is making a shift into augmented reality (AR). The beta release of the new operating system, iOS 11, has been available to developers since June, including the tools for creating AR experiences, dubbed ARKit.

Google, however, is also racing into the AR space, announcing ARCore, which will run on the Android platform. Both are hoping to crack the mainstream AR space, which failed to gain traction until the rise of popular consumer applications such as Pokemon Go and Snapchat. Soon we'll know whether augmented reality will finally live up to its hype.

And that's the latest in technology news. For more digital insights, talk to a digital specialist today.