July's digital news
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:
- A ransomware attack sweeps the globe, hitting Australian companies.
- Google receives a record fine in the European Union.
- Cryptocurrencies tumble from last month's lofty heights.
- A culture of harassment exposed in Silicon Valley venture capital.
- Google refines its products for mobile experiences.
- Facebook increases revenue growth despite predicted slow down.
Let’s dive into it.
July started with businesses recovering from another high profile cyber attack
Back in May, the world was rocked by a massive cyber threat called WannaCry. A similar attack, dubbed Petya, went global at the end of June. High profile victims were claimed in Australia by Petya, including Cadbury’s chocolate factory in Tasmania and TNT Australia. Businesses are still recovering from the attack this month, including TNT, who lost critical business data.
Large businesses are not the only targets. Recently, the ACCC found that ransomware is one of the most significant scams to affect Australians SMEs, along with false billing and overpayment. And the data suggests that scams are on the rise. The ACCC's Scamwatch program found reported business scams were up more than 30 per cent last year.
Research reveals that 9.9 per cent of Australian PC users had unpatched Windows operating systems in the first quarter of 2017, a rise from 5.9 per cent. Both WannaCry and Petya exploited a known vulnerability in Windows, allowing the malware to spread quickly around the globe.
Read our full investigation into SME cyber threats in Australia.
Google prepares to change its EU search product after record ruling
Google started the month facing a record €2.4 billion ($3.6 billion) fine handed down by the European Commission. After emerging in 2010, the case investigated whether Google was favouring its own services in search engine results, specifically Google Shopping and whether it was in breach of EU antitrust rules. In addition to the fine, the EC has given Google 90 days to rectify the issue.
The case poses interesting questions about the nature of digital monopolies. The company asserts its products are only designed to deliver better experiences to users, saying in a blog post that the feature is "the result of hard work and constant innovation, based on user feedback."
For most companies, the record fine would have been a crushing blow. But Google continues to grow. Their cloud services business, Google Cloud Platform, is believed to be outpacing the company’s advertising business in terms of new growth.
Cryptocurrencies and ICOs stumble after a period of rapid growth
Cryptocurrencies such as Bitcoin and Ether, the latter being the primary currency of the blockchain technology Ethereum, took a tumble over July. Last month, we saw unprecedented growth in the digital currency space as speculative investors flooded emerging markets, particularly novel currencies built using Ethereum.
A method of capital raising through blockchain technology, called initial coin offerings or ICOs, reached new heights. As the Bloomberg reports, there was more money raised through ICOs than early stage US venture capital funding. Security has also been a concern for Ethereum after a series of hacks in July, the largest stealing over $30 million of Ether.
Regulators are now moving to act on ICOs. The SEC, the commission in charge of regulating and enforcing financial securities rules in the US, has concluded that ICOs will be regulated as securities. This move signals a SEC crackdown in the cryptocurrency space.
Backlash against venture capitalists in latest Silicon Valley scandal
Since February, Uber has been the poster child for Silicon Valley's problematic culture towards women, after ex-Uber employee Susan Fowler published an expose revealing her experiences at one of the largest technology companies in the world.
However, this month, a systemic problem of sexual harassment in the start-up and venture capital space was revealed. A number of high profile venture capitalists, including Dave McClure from 500 Startups, were forced to publicly apologise and resign from their positions after a series of harassment claims came to light.
A spotlight swept the industry as more female entrepreneurs came forward with their own experiences. The issue reached Australia, with the local industry acknowledging a global problem and condemning the behaviour. Meanwhile, Victorian government start-up body LaunchVic distanced itself from 500 Startups and Dave McClure.
Google copying Facebook in a mobile-first world
Google has been shifting its products to meet a mobile first world for a number of years now. With mobile interfaces, users are switching to apps as part of an integrated mobile experience. And Google is focussing on what it does best in this space: sorting the information of the web and delivering it to users.
Google is moving to combine search with a ‘Facebook style’ newsfeed experience. The newsfeed takes in browsing and search data from Google Chrome and delivers relevant information to the user within an app interface. However, the Android version is being hampered by technical issues, due to the level of integration of Google into the operating system.
Google seems to be taking product cues from the king of mobile experiences: Facebook. The search giant is even trying to replicate the runaway success of Facebook’s Messenger platform – one of the largest social networks in its own right – by allowing businesses to reach out to customers via a messaging feature found directly in search engine results.
Facebook continues growth thanks to successful pivot into video
For some time, analysts have predicted a slowdown in Facebook's revenue growth. The problem has been one of optimisation: Facebook has neared saturation for advertising on its key product, Newsfeed. Serving additional ads to users, Facebook figures, would be detrimental to the long term user engagement on the platform.
That’s why Facebook has been aggressively shifting the Facebook platform into video content and rapidly building out Messenger as a product for advertisers. New ad formats mean 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, largely in thanks to video advertising revenue. Twitter, meanwhile, experienced a stall in user growth. Unlike Facebook, the rival social network has been struggling to grow its user base and generate new revenue streams.
Keep a lookout for...
You may start seeing more and more QR codes. Remember, those square barcodes? They were considered a failed technology but their use case might be just maturing. Thanks to the success of social media network WeChat, many in China are using QR codes to great effect. Everything from payments to business cards are being replaced by QR codes.
Could the same thing happen in Australia? Some think it's possible. Apple’s upcoming operating system, iOS 11, will come with an inbuilt QR scanner in the native camera app. A better user experience may just revamp the technology, allowing for renewed interest in the space for advertising and digital payments.
And that's the latest in technology news. For more digital insights, talk to a digital specialist today.