HeartFlow is the newest unicorn after a new $150 million financing round

The medical company is now valued at $ 1.4 billion.

The medical technology company HeartFlow is now valued at over $ 1 billion, the latest company to hit the category threshold for the most highly valued startups.

HeartFlow is expected to collect $ 150 million in a new fundraising round, according to a new regulatory filing in Delaware uncovered by PitchBook. At a price of about $ 25.33 per share, HeartFlow will have a valuation of $ 1.4 billion.

The company did not immediately respond to a request for comment. It last raised money at a $ 760 million valuation in May 2016, according to PitchBook.

HeartFlow, founded in 2010, sells a product to doctors to detect coronary artery disease.

Investors have included U.S. Venture Partners, GE Ventures and the venture fund of insurer Blue Cross Blue Shield. The new backers of this funding round are not immediately known.


Recode – All

Bitcoin is at $10K — and that’s just the beginning of how it will revolutionize money

For the first time, we have a truly global technology revolution on our hands, fueled by smartphones, sensors and blockchain tech.

A version of this post was originally published at thebarefootvc.


The price of bitcoin reached $ 10,000 on Tuesday. This just in: Make that $ 11,000. Over the years, I have seen a significant change in conversations around virtual currencies, from “It’s for drug dealers!” “There’s no underlying asset!” and “It’s a fraud!” to “How do I buy bitcoin?” and “Can you help me look at this ICO?” And we are no doubt at the cusp of more widespread acceptance of the concept. It’s important to note that a fair amount of the recent capital in the market is driven by speculation from the astronomical returns that cryptocurrencies have achieved in 2017, and a “fear of missing out.”

True alpha returns have been difficult to achieve in the globally low interest-rate environment and softening of many real estate markets, all factors that have been fuel for cryptocurrency market cap growth. Many of these investors have not experienced the price volatility that many earlier investors have, and it remains to be seen how a significant shock to the market will be handled by these investors. However, there are other, newer investors who are believers in the concept of a more decentralized transaction system, particularly in light of increased cybersecurity risks, as well as widespread geopolitical uncertainty. Additionally, many early investors in bitcoin and ethereum have either held or reinvested profits into other cryptocurrencies.

I believe that these cryptocurrencies (which are built on blockchain tech) emerging as an asset class are just one application of blockchain technology. Bitcoin at $ 10K and a cryptocurrency combined market cap of $ 300 billion is only an introduction to what the underlying technology means in terms of value creation.

I went to my first bitcoin conference in 2013. I knew that decentralized technology would form the thesis of the new venture capital fund I was launching, and I was interested in learning more how bitcoin would contribute to the thesis. That conference reminded me of the first time I logged into the internet in 1994 — I literally got goosebumps thinking of how revolutionary the technology could be.

I bought my first bitcoins after Mt. Gox imploded and China first shut down bitcoin exchanges in April 2014, when the price hovered around $ 400. Early in 2014, I launched FuturePerfect Ventures, an early-stage venture fund, to invest in the infrastructure and early use cases around blockchain and other decentralized technology.

While similar to the internet in many ways, I viewed the buildout and new business models that would emerge as exponentially larger in potential. For the first time, we have a truly global technology revolution on our hands, fueled by smartphones, sensors and blockchain tech. In 2000, there were only 415 million internet users in the world, only 8 percent of which were in developing markets. By 2017, the number of internet users had grown to 3.9 billion, 40 percent of which are now in those same developed markets.

Imagine what will happen when the next three billion people come online and the opportunities for value creation that will follow — particularly in markets where there is no legacy infrastructure in place and decentralized technology can leapfrog financial institutions, real estate, capital markets, identity platforms (and more) as we know them in the developed world.

I broke down the first fund’s investment thesis into four categories that I believed represented opportunity in the first phase of the technology: Infrastructure (the blockchain wallet); emerging-market use cases (including payments; for example, Abra); enterprise migration (including supply chain management — see Everledger); and identity management (for example, Civic). Our second fund builds on these areas as we see new protocols and applications continue to emerge, with the added thesis of tokens as a new asset class.

The combined market cap of Google, Amazon, Apple, Facebook and Microsoft is now at $ 3.4 trillion. Given the inherently global, accessible and nonlinear nature of decentralized technology, I would not be surprised if we quickly exceeded this number. The real excitement — from established investors to bootstrapped businesses in far-flung places — comes from the palpable potential that the next phase of this new market buildout has to create value by, and for, all seven billion people in the world.


A technology veteran with over 20 years as an entrepreneur and VC, Jalak Jobanputra founded FuturePerfect Ventures in 2014. She has invested in more than 80 early-stage companies over the past 15 years, resulting in several multibillion dollar acquisitions and IPOs. She is widely renowned as a blockchain thought leader, and was one of the first investors in the blockchain space in 2013. She was recently named one of Institutional Investor’s Most Powerful Fintech Dealmakers. Previously, Jobanputra was a director at Omidyar Network, managing mobile investments in emerging markets, and SVP at the New York City Investment Fund, where she launched a seed tech fund and the Fintech Innovation Lab. She was also at Intel Capital in Silicon Valley from 1999-2003, on the founding team of a web startup in 1997, and a tech/media/telecom investment banker at Lehman Brothers in NYC and London. She has served on multiple advisory boards for the White House, NYC Mayor’s Office and the U.S. State Department, and serves on the board of directors for the Center for an Urban Future. Reach her at @jalak.


Recode – All

Full transcript: The Hollywood Reporter’s Kim Masters on Recode Media

Her publication is on the forefront of the cascading sexual harassment scandals.

On this episode of Recode Media with Peter Kafka, veteran journalist and editor at large at the Hollywood Reporter Kim Masters calls in to talk about her reporting on the ongoing sexual harassment scandals that are toppling powerful men in the media industry.

You can read some of the highlights from the interview here, or listen to it in the audio player above. Below, we’ve provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Media on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.


Peter Kafka: This is Recode Media with Peter Kafka. That’s me, I’m part of the Vox Media podcast network. I’m not at Vox HQ, this is a special episode we’re taping in Standup, New York, home of Cadence 13. That’s a lot of information for you.

More information: I’m talking to Kim Masters, who is not in the studio either, she is in Los Angeles, via phone. Hello, Kim.

Kim Masters: Hello, Peter.

Kim is … What’s your title at the Hollywood Reporter, Kim?

Editor at large.

Editor at large of the Hollywood Reporter, chief muckraker on the West Coast. You host a podcast for KCRW?

Yes, I have The Business, which is a KCRW radio show and podcast.

You are a veteran Hollywood entertainment media journalist.

Yes, that’s euphemism for been around a really long time.

Well-regarded, that’s another euphemism for been around a long time. But you’re great, and I wanted to have you on because you’re great, and two because you’ve been doing really important work on a story that has transfixed everyone for the last few months: The sexual harassment in the entertainment business. And obviously we’re now seeing stories spreading throughout various industries.

You’ve written several important stories but you had one of the first, right, of the newest crop, when you wrote about Roy Price and Amazon this summer?

Yeah, I think Roy Price was the first executive to be called out in the wake of the Harvey Weinstein story breaking.

But you actually wrote about him and sexual harassment issues prior to those Weinstein stories coming out. We can talk about the chronology of that, I wrote a story about it as well.

Yes. I went through a long struggle and I did publish the first story before the Harvey story broke, yes.

So we’ll go backwards in time and talk about that. But I wanted to start off, because people are gonna listen to this over Thanksgiving, I wanted to tape this intentionally as close to the air date as possible, in case someone else was brought down by harassment allegations. It’s 2 p.m. Eastern time, Tuesday, before Thanksgiving. I don’t think anything has happened yet today but there’s still plenty of day left.

Yeah, don’t count on it not happening.

You maybe got one to go. So yesterday we had Charlie Rose, Glenn Thrush from the New York Times, late in the day John Conyer from Congress. Again, we’ve been seeing a wave of these stories come out, and a lot of them are happening on your beat in your backyard, in Los Angeles, in Hollywood.

I wanted to start off by talking about how your job has changed in the last few months, now that it’s become the dominant story. Are you not covering things you would’ve covered, because you’re covering this full-time?

Yeah. There was just such a rush of news right after the Harvey story broke. It opened the door for the Amazon Studios story that we mentioned earlier, and all of a sudden people were calling and emailing and really, I keep saying it’s like that scene in MASH when the helicopters start landing. It’s like triage, we had to have a Kevin Spacey person, and this person who was handling whatever else was coming up.

We were evaluating constantly, what can we get? What stories are the most important? What are the most gettable? Should we try this right away? Should we put this one aside for special concentration because the allegations are so egregious? And everything else started to seem less important.

We’re still interested in things like the Trump administration possibly blocking the AT&T acquisition of Time Warner, that’s important. But a lot of stuff, day-in, day-out coverage just began to feel like not really a priority right now.

How much of this is, “We’ve always had these stories, we’ve always heard rumors, we’ve always been close to reporting a story about so-and-so but we couldn’t get it done, let’s go chase it down,” versus stuff coming in over the transom and people wanting to tell you stories about people that maybe you weren’t thinking about?

It is both. I would say it’s very hard to distinguish. Because some of the stuff that has come over the transom, we’ve maybe had a notion about before. Some we didn’t. And some of this stuff has been people telling their personal essays and recollections. Someone called me early on, or emailed me, and told me this anecdote about something that happened to her years ago on “The Gary Shandling Show.” And it just felt like a really great potential first-person story. So I said, “Can you write that?” And she was like, “Give me half an hour.” And she wrote a really powerful essay. We’ve had several like that.

So it’s this blend of circling back to people we may have heard about before, and just seeing whether we can shake something loose or reacting to tips. I don’t know if I can even begin to separate those things.

So I talked to you this summer about the story we will talk about. And you said, “The Times and the New Yorker are going after this Weinstein story again.”

So you knew it was coming. When those stories hit, first the Times, then the New Yorker, did you go, “Oh, wow. This is going to change everything. This is going to unearth all these stories,” or did you simply go, “That’s an amazing story,” and not consider what might happen after that?

I was thrilled after years that somebody was breaking the Harvey Weinstein story, so that was my primary feeling at that point, was relief. But I also did think, I had a key source in the Amazon Studios Roy Price story who had been deeply ambivalent and not gone completely on the record. She’d given statements, but they weren’t exactly confirming what happened in this incident.

And I had this thought that maybe the sight of Ashley Judd going on the record about Harvey, and all these other women then coming forward, would resonate with this woman Isa Hackett, who had been at the center of that part of the Amazon Studios story. And to be honest, I did not circle back to her, because I had spent months trying to ask her to help us get that story published, but not trying to pressure her to the point where I was just inflicting distress on her.

And a version of that happened with the Harvey story too. At one point I was talking to Ronan Farrow. First of all, he was working on it for NBC, and then when he was working at the New Yorker, and he just wanted me to talk a little bit about the experience I had with Harvey. But I also knew of someone who potentially could help him. And I wanted to help him, so I connected him through a friend of this woman.

And this friend called me after Ronan talked to her and said, you know, he’s kind of put her into such a state of conflict. Because she feels that she’s failing womankind if she doesn’t come forward and speak, but at the same time, she feels like she’s putting herself so much at risk, and it’s really, really … He almost regretted having gotten her involved with the Ronan interview.

And I knew from talking to Isa Hackett that she was going through similar feelings. I think it’s very useful to us as reporters to really get in touch with what these people go through. To us, there’s a little bit of an impulse to say, “Gimme, gimme, gimme, I want the story.” But we have to pause, and we have to say, “How hard is this for these people?” So I had been trying hard not to lean on Isa, to make a long-winded thing, but I was hoping that she would circle back to me, and that’s exactly what happened.

And did you think, again, when the Weinstein story broke, was the story already written about Roy Price? You said you didn’t go back to her initially. But did you think, “Oh, there are a list of well-known people that have had rumors circulating for a long time, I predict that the Louis C.K. story’s gonna come out.”

Well, we had a separate thing with Louis C.K. where we had booked Pam Adlon on the radio show and we knew that story was coming. Some of it had been on the internet. We’d had Louis C.K. on the show when Horace and Pete came out. But we felt like the reporting on it didn’t rise to the level where we were gonna be able to say, “Can you address this?”

But by the time Pam Adlon came on the show just a couple of weeks ago, I felt like, “Okay, we really are gonna have to ask her about this.” And it felt somewhat unfair, because what did she do? We don’t know that she did anything, except there’s a lot of people who are pulled into this, because he is co-creator of her show, he has co-written every episode of the second season of her show “Better Things.”

So I didn’t sandbag her, I told her we were gonna have to talk about it. And she said, “I wouldn’t even have come for the interview if I’d known,” and I said, “Look. You can step out, you can talk to your publicist, you can decide to address it, you can decide to say no, you don’t want to address it, or you can leave. But one thing I can tell you is, you’re gonna be asked this question.”

And just to be clear, this is right before the New York Times story broke. Maybe a week and a half. And I said, “You will be asked about this, so you can decide to do this now, or decide to do this later.” And she did, to her credit, great credit I would say. She did step out, she came back, she said she would talk about it. That’s the first thing we did, just to get that out of the way. And then she pivoted and did a great interview about her show “Better Things.”

So I listened to that podcast last night. The interview’s great. And then it’s fascinating to listen to the beginning, when you do ask her about Louis C.K. And she says, “I feel terrible that all these rumors are out there, they don’t make any sense to me, they don’t sync with the person I’ve been a close collaborator with for a long time.”

I wrote down the quote, “He should be celebrated,” and then within a few days that story’s out, and she had a statement saying, “I feel heartbroken that he has done this.” She’s done equivocating.

You said something interesting, in between the segment where you talk to her about Louis C.K. and then when you get to the meat of the regular interview, you say something to the fact of, “It’s too bad that so many people have these demons that they can’t control.”

And I thought, “Boy, that is the most sympathetic public discussion of the men accused of harassment that I’ve heard to date.” Most of the public discussion on Twitter, the stories, is, “These men are bad.” You can discuss whether it’s structural or symptomatic, but it’s black and white, and no one wants to allow, in most cases, any sort of gray area, or sympathy or empathy you might have for the men.

Have you reconsidered that, or is that still how you feel about the men like Louis C.K. who are accused of this stuff?

There’s a continuum of conduct. On one end there’s the Harvey Weinstein, Kevin Spacey, seemingly criminal misconduct. And I don’t have a lot of sympathy for those people at all. I think they deserve whatever befalls them.

And then at the other end — and I’m not addressing Louis C.K. specifically here, because he’s somewhere in the middle of the two extremes of that continuum for me. But far extreme on the other end, there are people who are obviously, in my opinion, borderline pathetic, but also sick.

Some of these people, and this does include Louis C.K. and other names that haven’t become public yet, but I can tell you there are names you wish to unhear. I think Charlie Rose is a name a lot of people would wish to unhear.

And you can see from just the morning-after presentation on the CBS “Morning Show,” how excruciating it is for people who worked with him, maybe did or did not know. Say they did not know, may have had an inkling, whatever.

I don’t want to say I’m sympathetic to an abuser. I’m saying, it’s not so black and white, like, “Okay, you are a terrible person, you’re gonna be thrown into a cell for the rest of time, all of you.: There are people who are brilliant, who do things for women, like Louis C.K. did. Louis C.K. made Pam Adlon’s show possible, made Tig Notaro’s show possible. Imagine the conflict that stirs up in people like Pam Adlon and Tig Notaro, to know that this person who’s been a critical, critical mentor in their lives is also this compulsive, sick … obviously an element of misusing power, and victimizing women.

How do you sort that out? It’s not easy in some of these cases.

Right. Even as we’re speaking, I’m picking my words carefully. I’m finding that there are people I’ll talk to privately if we’re comfortable enough with each other, and it’s women, I’m not usually talking to men about this. And they’ll express that yeah, there is a continuum like you just said, or all sorts of nuance and complexity that goes into this.

And then publicly, I think people don’t want to engage in that discussion, even now I feel like I’m gonna trip something. Lena Dunham got caught up in this, right?

Well, this morning, as we’re recording, there was a letter signed by women of “Saturday Night Live” to defend Al Franken. And I saw the Twitter attack on those women by feminists who feel, how dare they rise up to help this terrible abuser?

Now, as we speak, I haven’t heard enough to convince me that Al Franken is a serial, terrible abuser. And whatever the case, I tweeted myself that bashing the women who signed that letter does not feel like feminism to me.

There’s so much rage out there, at the years and years of abuse, that I think some of it can spill over where it’s not entirely appropriate.

I feel like if I smoked, I would take a break and go have a cigarette right now. So instead of doing that, let’s hear from our sponsors. We’ll be right back with Kim Masters.

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We’re back here with Kim Masters. I have not smoked, I don’t know about Kim, but I don’t think she smoked.

I don’t smoke.

I want to have a little more about your job, and how you do it, and how it has changed. In a lot of ways, this isn’t new ground for you. You’ve always been a serious journalist who’s written about unpleasant people in a lot of ways and shown them things they didn’t want to see.

In general, though, in trades … the Hollywood Reporter’s a trade, their bread and butter is telling people that so-and-so is signed onto a new project, or so-and-so has a new agent, transactional stuff. It serves an important role in that industry.

There was a great piece in the Ringer a couple weeks ago, about the shift in the coverage and variety, where you’ve got a lot of folks spending time doing this much more aggressive reporting. How are you talking about the rest of the staff about that? Have you had that experience or has it done much of this?

Well, let me just say that first of all, I joined the Hollywood Reporter when Janice Minn became the editor. And from the jump she was very serious about doing that kind of journalism. And we immediately reported that the head of ABC, who had just been fired, Steve MacPherson, was fired for sexual harassment, which nobody else had reported at these other publications.

And we had been threatened with a lawsuit, we’re gonna be sued, so on and so forth. And Janice did not … well, we batted an eye. We talked to our lawyers, and then we published. So I didn’t join that type of publication. Hollywood Reporter does report industry news, but we have certainly been all over … my colleague Gary Baum, a lot of us have been doing exposes and serious journalism since the rebirth of the Hollywood Reporter.

Now, some of the younger people or people who are less seasoned here, have that reporter’s instinct, and I have definitely tried to encourage that in them. There are certain reporters, and not just at the Hollywood Reporter, I mean the same thing is true everywhere I’ve ever worked: At the Washington Post, at NPR, they don’t want to deal with a hostile situation where somebody’s yelling at you and threatening you. And they don’t do that kind of stuff. And the kind of stuff they do is not valueless, some of it is really great, interesting work. But it’s not that warfare, in-the-trenches stuff.

So you can tell on our staff here, who’s got that … I always think it’s like the racehorse, you’re happily munching your oats in the stall and then you hear that little bugle and you suddenly are up and ready to go and you want to run. And I see that among certain of our reporters. And I tell them, go for it.

It’s sort of a fun thing for me to watch them learn that they can do this. One of them in particular I’m thinking of came to me on some story or another, and said, “I’ve got this, this, this and this. What do I need to do now?” And it was like, “You need to write it. It’s done, you’re there.” And I can just remember that look on her face, like, “Really? I’ve got this?” Yes, you have this. Do it.

I’m glad to say, we’ve got several people coming up now, even some of them who have been with us for a long time, but were never in an environment that encouraged that kind of “go get it.”

“I didn’t realize that I could do this, or that people would want me to do this kind of work, and now I can and now I enjoy it.”

Do you imagine that this is a transformative thing for the reporter, and for the other trades? Or do you think this is a moment in time and, at some point, it goes back to something similar to where it had been, where this isn’t the story?

We’re trying to prevent that by keeping the discussion going, and by pursuing these stories, regardless of people starting to whine that they’re tired of these stories. I don’t care, and I think a lot of people are not tired of these stories. Many of them are men, and most women.

So we’re going to keep doing this. We tried to get the Harvey story out two or three years ago at the Hollywood Reporter, and I guarantee you if we could’ve gotten people on the record, we would’ve gone. So I don’t know that it’s so much a change of climate, except now there’s this focus on this and much more cooperation from sources.

But even to this moment, some of these sources … Harvey was not at the peak of power when he was taken down this way by a multitude of women. There are men in jobs right now, very powerful, and there’s a lot of resistance. Sources are terrified, so it’s changed, but it hasn’t completely changed.

Can we talk about the mechanics of reporting these sort of stories, why they’re so difficult, why they have been historically so difficult? When the Weinstein story came out, you mentioned you’d been working on it for years. Canaleta tried to do it nearly 20 years ago, David Carr tried to do it. They couldn’t get through the people, lots of resources. What up until now has made reporting a story like Harvey Weinstein, or even some of the lesser players, so difficult to get into print?

Well, you know, fear. It’s simply fear, and in the extreme case of Harvey, we have read now how he hired ex-Mossad agents and fake reporters, or co-opted reporters. What these guys want to do in these situations, in many cases, is to completely smear the person making the allegation. These people faced a pretty stark choice, going on the record, of potentially getting their reputation smeared.

“We’re gonna destroy you, we’re gonna destroy your business,” if it’s a publisher.

Well no, I’m talking about people in the industry, the would-be sources.

Oh, potential sources. Got it.

That’s why we couldn’t do it. It’s not that we didn’t have the will. We didn’t do it because we couldn’t get cooperation from sources. I would call every so often, a former Miramax executive who ultimately did go somewhat on the record in the New York Times piece, Mark Gill. He didn’t deny any of this, he said, “Yes, there are people who are famous, there are people who are not famous.” We knew who the famous people were. Not all of them, some. And the famous people were not ready to take on Harvey Weinstein.

Gwyneth Paltrow has described the stark choice of success in the industry or potential downfall. So we’d be like, “Give me a name. Who can I call? Who can I find who’s left the company?”

First of all, we couldn’t get any names in that era. And second of all, as we now know, many of them had signed nondisclosure agreements and feel handcuffed by those. And that is a huge policy problem right now, and it is, I believe, right now, I’m trying to break a story. I know an alleged victim and I am almost 100 percent sure there’s a nondisclosure and that’s what’s blocking her.

It’s good you’re pointing that out. Because after Weinstein and several of these stories, people said, “Oh, it was an open secret. Everyone knew,” and then there would be a round of, “Well, if everyone knew, why didn’t you write it?”

And partly, it’s people weren’t talking publicly on the record. And then partly I do think there was some publications didn’t have the appetite, or some reporters didn’t have the appetite.

I’m sure that’s true, but I can tell you that’s not the case here. We were inches away from breaking this, and then our source backed out.

Have you seen — either at the Reporter or other publications — business ramifications from this? I’m sure readership is ticked up, but I’m wondering about advertising. Are people less likely to advertise? Awards season is kicking up, is that stuff dropping off?

We’re gonna be finding that out as we go forward, I think, if these companies … I am unaware of any threat to pull ads. And I think if there were a threat to pull ads, it would be highly inappropriate for the reporter to even be aware of that, because that is not the reporter’s business. We don’t want to know. Whatever, threaten to pull ads.

Speaking of awards season, what do you think happens at the Oscars, and the other lesser awards?

Wow. It’s going to be interesting at the Oscars this year, and the Globes, to see … I can’t imagine it won’t be addressed. But I just feel like we can’t pick and choose, if we have an allegation.

And as I said before, some of these people that have not yet been publicly discussed, and may never be, or may be very soon, they are not … they’re popular. I’m sure it broke a lot of hearts of Louis C.K. fans to hear he had engaged in that kind of behavior.

So whether there’s a backlash, if we are exposing stuff about popular people, companies themselves. I do think threats against a publication at this point, if I heard of a threat to pull ads, I would be very inclined to publicize it, just as the LA Times was banned for its reporting on Anaheim and how Disney related to the city of Anaheim. Disney called a boycott of the LA Times, and it was a complete backlash against Disney. So I would say they should threaten very quietly if they want to threaten.

Maybe threat is a good place to take one more quick break to hear from a fine advertiser who does not threaten Recode Media. We’ll be right back with Kim Masters.

[ad]

We’re back here with Kim Masters, who as we speak is waiting for a source to call her back so she can break a story, so her time is precious.

We started off by talking about the Roy Price story that you’ve wrote about twice now, and I wrote about once. I wrote about the first version of your story. You wrote about Roy Price in a story that came out, he was a former Amazon Studios executive. You wrote a story originally published in The Information, which is not where you work.

I wrote about the fact that you had tried to write this story at various publications including the Hollywood Reporter. I think I mentioned BuzzFeed, the Daily Beast had looked at it as well. I think others as well. What made that story hard to publish last spring and this summer?

Well, the aggressiveness of Roy Price’s personal lawyers. Roy Price is the head of Amazon Studios. Obviously Amazon is a big, powerful company, and many people are intimidated just by that.

But Amazon wasn’t threatening us. Roy Price personally was threatening us. And his lawyers were Charles Harder, who had handled the Hulk Hogan case that ultimately completely bankrupted Gawker and took down Gawker over the Hulk Hogan sex tapes. This is not a sex tape, as I repeatedly said. But the mere fact that that had happened, I think, was very disturbing to the lawyers that vet these things for various publications.

And then there was Lisa Blum, self-proclaimed defender of oppressed women, who was actually representing not only Harvey Weinstein, but, as it turned out, Roy Price as well. And they were threatening to sue. And at one point I said to one of these editors, “What do these people say to you that is so absolutely terrifying?” Because I couldn’t understand it. Roy Price is a public figure. The only way he could really sue me is for malice, which I did not have against him, I hardly knew him; or for being recklessly negligent, which I would not do either.

So to me, he also would be very vulnerable if he sued. Because there was material that we couldn’t get on the record, but if he sued us, we could go into discovery and subpoena people and make them tell us their stories. Things, in my opinion, would only have gotten worse for him. So this threat seemed like such a saber-rattling exercise to me.

But every publication was petrified, I think, because of the reputation of Hulk Hogan and because of the relentless Trump-bashing of the media. There was this fear that we could get a judge who didn’t really want to obey the law, or if it went to a jury they would be hostile to the media, and that everything would be against the publication. And that’s a sad situation that we’re in, in a country that values the First Amendment, the freedom of speech.

And to be fair, both BuzzFeed and the Daily Beast had talked to editors there, and they said, you can go look at the story, there’s on the record quotes of them saying, “We passed on it, but not because we were afraid of Roy Price or Amazon, we’ve published other hard-hitting stories.”

You published that story in, I think, August of this year? It comes out, gets some attention. You can see, if you’re used to reading this sort of stuff, there’s another story there you didn’t report there but you report it. And the Weinstein story breaks, and you go back to Isa Hackett eventually, and she provides more detail about the same incident. It’s the same story published before, but now basically what you’re able to say is, “Roy Price said the following to me. And these are the details surrounding the incident that I complained about.”

Yeah. I knew those details before and they were included in the draft I gave to all of these publications. And I didn’t, to be clear, I actually didn’t get those details from Isa. There were other sources who knew about this, because she had talked to other people. It had been reported to Amazon. They all could’ve published those allegations exactly, but the difference was that Isa put them on the record herself.

So that story comes out, within a week or so the first Weinstein stories come out. And within a few days, Amazon says, “Roy Price is on leave.” It’s quite clear that he’s not gonna come back. Within a couple days, he’s resigned.

It was hours. Three hours.

Three hours of that story, there you go.

Of Isa’s interview of what happened, yeah, with him.

So what do you make of that? Clearly if you worked at Amazon, if you were Roy Price’s boss, Jeff Bezos, you either knew or certainly could have known what he had done. And by the way, he doesn’t deny that.

So again, you weren’t disclosing information that was new to Amazon. So why did Roy Price leave immediately after that story came out?

I think he had to leave. I think it’s baffling why Amazon had known about this, not only for months but in fact for years, because they had investigated him and then that investigator had returned this past spring, when I started reporting my piece. And why they waited. I wrote a piece about this. Why would you wait until the worst possible … all of this is now publishable and Isa Hackett is so upset that she’s ready to go completely on the record, and then get rid of him?

I just don’t understand why you would wait for that. But I’m sure he was pressured to resign. They suspended him first. Within three hours of the Isa interview they suspended him, then there was more reporting that came out, and they finally said he was resigning.

So don’t ask me. I feel like that is a sign of Amazon not knowing … they live in their world to some degree, these digital companies. And they are young, and the guys that run them are very rich. And they are sometimes more tech-oriented than human-being-oriented, and I think this is all new to them.

We’ve seen it with Uber and so many Silicon Valley companies, they think they can make their own rules and then they find out that they can’t.

Right. I mean, we are seeing, it makes sense if you step back and think about it, that these problems exist in every industry. Congress is going to go through this now. But I guess the tech industry has a patina of goodness about it.

What I’ve been told about the Amazon thing is, whether or not they wanted to keep Roy Price after that, they couldn’t, because talent wouldn’t work with him. Not to mention, I think a lot of the people who worked under him were so unhappy. So it wasn’t new information, it was that it was newly disclosed to people outside of a certain tier at Amazon.

Right. It put someone like Jill Soloway in a tough spot. Her show is “Transparent,” and she’s been treated really, really well by Amazon, but she also has feminist ideals. So yeah, that was an awkward situation.

I’ve asked a bunch of people this, I’m curious on your take. We start with the Harvey Weinstein story, that’s in Hollywood. Obviously we’ve seen a bunch more Hollywood stories come out, we’ve seen a bunch of stories about media companies. There’s lots of industries where we haven’t heard these stories yet. Obviously they exist. So do you think they will also come to light, or do you think there’s something about media, about Hollywood, that makes these stories more likely to be aired publicly?

Well, obviously people are interested in Hollywood and interested in these celebrity stories. And in Washington, powerful politicians or hypocritical politicians are also tempting for reporters. There’s a huge press corps covering Hollywood, there’s a huge press corps covering Washington. So you’re going to hear a lot about those.

But I believe that in any industry where power gets very concentrated, power and money, in a small number of male hands, as is true in Congress, as is true in Hollywood, you’re gonna see this kind of conduct. I’m sure it’s rampant in academic settings. I believe this will continue to come out. It’s spreading around the world now. So we’re seeing a moment, and I think the hope is it’s a turning point.

It’s interesting some of the things that fit those criteria, you were just discussing, include sports and the music industry. Lots of power concentrated in the hands of a few men. Haven’t heard those stories really, yet.

Well, we have. I mean, we’ve heard it in gymnastics, abuse from coaches. I believe we’ll hear more of that, and I think we’re gonna hear … I think in music, you already had Ke$ ha saying she was attacked by Dr. Luke, and I think we’re going to see more. I mean, we’re hearing tips, our company owns billboards. So there’s a little bit of interchange of information.

And there’s a Weinstein-like figure out there that no one talks about and no one is reporting, that one I assume is coming?

From what I hear, I don’t know much about music, but there may be some big names that are gonna face some problems.

Yeah. No, I think there’s at least one of those. It’s interesting they haven’t come out yet in that same pace. It’ll be interesting.

Again, back to that Ringer story I was looking at, that quotes you as saying, “Right now we’re in a laboratory figuring out,” you’re talking about the mechanics and ethics of reporting these stories. That was a few weeks ago, we’re moving at a very fast pace. Do you feel like you’ve got a handle on what a story is when it comes to harassment, what a story isn’t?

No, it’s really hard, I have to be honest. We have a person we’re looking at very hard right now. And we have multiple sources … again, they won’t go on the record because the fear is real. And what I’ve noticed with these companies in a couple of cases now, these big media companies, they have this thing they’re trying to pull, which is their spokespeople go off the record and deny things.

And they think that that’s going to be the end of the story. And what we have to do is demand an on-the-record answer. And I’ve had this experience now twice in the past couple weeks, where they say, “Off the record, that’s just not true.” And I’m just like, “I’m sorry. What?” Why would this be persuasive to me? If it’s not true, big public company, then deny it on the record. And that’s where they can’t, because they’d be lying, and they can’t lie about these people who are so important to their business.

And I think it’s up to us to just not ever accept an off-the-record denial from a major media company, or any major institution.

So, that’s not a difficult thing for you to figure out, right? You can’t take an off-the-record no, right? If you’re gonna say no, you gotta say it on the record.

Well, you can say that it’s not difficult, but the implied threat, that you’re gonna screw this up and you’re gonna look bad, and we’re gonna expose how stupid you are, it’s like so there. Some of these people, I’m sure you know, they’re very contentious, very aggressive.

Look at Fox News. I’ve never dealt with the woman there, but she’s infamous. They come at you and it takes some nerve to stay the course and demand on-the-record answers.

When did Weinstein break, was it September or October? It feels like it’s been going on for months now.

Oh gosh, I would guess it was September?

So do you need a break?

Yes. No, I mean, I feel an obligation to continue doing this. It’s been kinda a life-crusher. Weekends and evenings, people are contacting you at all hours. I just feel like we have to do this, this is what we’re here for.

Do you think this is a … pick your metaphor, but this is a thing we’re going to do for x number of months, maybe years, and then at some point we’re going to go back to … you’re going to keep doing very serious work, but we’ll have gone through all the stories. Or do you think this is just a permanent feature of media reporting, Hollywood reporting now?

We hope we’re reaching a turning point. My concern is, the statistics certainly in Hollywood for women in front of the camera, behind the camera, in the corporate offices, they’re not good. They’re really, really bad. And it’s become increasingly clear to me, the pervasiveness of misconduct, and not necessarily just confining that to sexual harassment. There’s a frat boy thing going on at a bunch of these companies and they don’t want women in the mix. They want to go and go to Vegas and do their thing without women making them feel like they can’t.

So this is one of the reasons women are excluded. And to my way of thinking, until they start actually deciding, “Maybe we’re gonna hire more women and promote more women,” the risk of this kind of abuse is there. And that’s why, I think the conversation has to continue until we start to see some changes in the way hiring is handled and the way these complaints are handled.

Because you do hear men, and some of them are considered to be serious people, saying, “Well, we’re gonna have to Mike Pence it now.”

That’s absolute nonsense. I find that the most offensive thing.

And I’ve talked to women in your business and they say, “Yeah, I’m afraid this is going to happen, I’m afraid I’m going to be cut out of the meeting entirely now. I just got my foot in the door and now they’re gonna close it, they’re gonna say ‘We cannot have you in here.’”

Well I certainly wish that we were in an era where the EEOC was open for business and we could see some aggressive enforcement of discrimination laws. Because that’s not the answer, and I hope we have women with the courage to try to bring class actions or sue, if that’s what happens. Because that’s sex discrimination, plain and simple, and it perpetuates the system and it’s not okay.

Kim Masters, this is our Thanksgiving episode. It’s kinda a heavy episode. Can we conclude by asking you what you’re thankful for this year?

Are you gonna Sarah Sanders me? I’ll tell you what I said …

No, we did it in reverse order. You tell me.

Well, you know, when she asked reporters in the White House to say what they were thankful for, my response was, “I’m thankful that even the most evil people in the world are mortal.”

But I am thankful that the Harvey story broke and that this moment has arrived. I waited a long time, and banged my head against the wall, and I’m really, really glad that at least some of the most serious offenders in this business are no longer just free to do whatever.

Kim, appreciate your time. Thankful for your time. Go get ’em.

Well, thank you for having me.


Recode – All

GM’s robot Cruise car still isn’t better at driving than you are

We went on a ride through the congested streets of San Francisco.

Not many of us have been in self-driving cars. And that’s probably why a lot of people still fear the idea of getting behind the wheel of a car that’s run by a robot.

So when I took a ride in General Motors’ autonomous test car for the first time on Tuesday in San Francisco, Calif., that thought was at the top of my mind: I would be trusting this self-driving car to keep me safe.

In all fairness, this was a test vehicle, not one that GM’s autonomous arm, Cruise, is releasing to the public just yet. The company doesn’t pretend its cars are ready to be deployed without safety drivers, and even Alphabet’s Waymo — which recently rolled out truly driverless cars in a small part of Phoenix, Ariz. — would admit its cars still have more to learn before they are deployed en masse.

There’s also a lot to be said for a car company to take on the busy, congested, pedestrian-heavy streets of San Francisco for its demo, which is what GM boldly did for a small gathering of journalists.

The experience was kind of like hailing an Uber or Lyft, except there were two people in the front ensuring the car navigated safely, and a PR person from GM in the back with you. GM made a point of saying we were not allowed to speak to the person behind the wheel or in the front passenger seat — a particular detail that is different from how other self-driving companies have allowed engagement during test rides.

The app allowed me to “hail” one of the self-driving cars, and I could request a few pre-selected destinations. It was easy for anyone who has used the Uber or Lyft app.

Photo of the app GM uses to hail its Cruise self-driving cars General Motors
GM’s app to hail their self-driving cars

There are a lot of unknowns when you operate in an urban environment, and it was interesting to see how the autonomous cars reacted.

For example: We were not 20 seconds into the ride on Tuesday when a dog, still on a leash, went into the middle of the street in front of us and proceeded to go to the bathroom. That’s not something a self-driving car (or even a human) can plan for.

While a human driver might have gone around the dog, GM’s self-driving car stopped even before the dog was fully in front of it. The dog did its business and then we moved on. For anyone who lives in a densely populated city, the experience was mercifully without a blaring car horn.

Cruise CEO Kyle Vogt has previously argued the best environment for an autonomous system to learn is busy city streets. If a self-driving car can learn to drive in downtown San Francisco, it will more easily be able to navigate less-congested suburban streets. That’s why the company also plans to launch a self-driving pilot in New York City in 2018.

The Cruise car operated relatively smoothly on the busy streets of San Francisco. According to a readout by the car at the end of our trip, in 2.3 miles we encountered 94 people, 12 bikes and 107 cars. (The official readout did not include the dog.)

Obstacles included a construction vehicle that pulled out in front of us quickly, and a large semi truck that turned down a narrow street, causing the car to brake and wait for it to pass. That experience in particular helped define the difference between a human driver and a robot.

As the truck turned toward us, our car waited — it did not use its horn, back up or move to the side. It just remained stopped as the truck passed within what looked like inches. A human driver could have taken it in any number of directions, but it was interesting to see how the car responded (or in this case didn’t) versus what I thought a human would have done.

The biggest difference riding in a self-driving car is getting over those gaps in how you would react versus how the car reacts. This self-driving car was overly cautious, which GM warned in advance. It paused longer than you would think at stop signs. It had a few stops and starts during red lights. And waiting five to 10 seconds to find a way around something is longer than a human would need to avoid obstacles.

Photo from General Motors of what riders see in their Cruise self-driving cars Cruise

Last year, Recode reporter Johana Bhuiyan and I took a ride in Google’s self-driving car, which was my first ride in an autonomous vehicle. Granted, that ride was on the relatively calm streets of Mountain View, Calif., and it didn’t face nearly the number of obstacles as GM’s car, but the experience overall did seem a lot smoother, and Google’s car was a bit more confident in how to handle turns and obstacles that it did encounter.

According to GM, the Cruise car has these helping it drive autonomously:

  • 14 cameras
  • three articulating radars
  • five lidars
  • eight radars
  • 10 ultra-short-range radars.

For comparison, Tesla’s hardware suite, which CEO Elon Musk says will enable fully self-driving capabilities, has eight cameras, 12 ultrasonic sensors, one forward-facing radar and no lidar. Musk is one of the few in the industry who believes lidars aren’t a necessary part of an autonomous system.

GM recently acquired a lidar startup called Strobe, further vertically integrating its autonomous hardware. At Tuesday’s event, a GM spokesperson said Cruise has yet to integrate that lidar into its sensor suite, not surprising given how recent the purchase of Strobe was.

GM has a way to go to make its self-driving cars pleasant for riders to travel in in the city. The goal for GM (rightly enough) is the safety of its passengers, so the car drives very cautiously. But the company has put itself on a fast timetable, reporting that it has released three generations of test vehicles in about 18 months.

And while GM has gone from having no self-driving operation to having test vehicles three years later, as Vogt mentioned during the event Tuesday, “It’s really hard to pass human performance.” So we may have to wait a while longer before those robot cars, from any company, are picking us up in the streets.


Recode – All

FCC Chairman Pai is swiping again at tech, Twitter and social media — this time for the spread of ‘harassment’ and ‘vitriol’

It comes a day after Pai essentially charged that web giants threatened speech online.

FCC Chairman Ajit Pai on Wednesday lamented the “harassment” and “threats” and “unfiltered rage” that often dominate social media, concluding he didn’t have an answer as to whether it had actually resulted in any “net benefit to American society.”

Speaking at an event in Washington, D.C., on Wednesday, the Republican leader of the telecom agency said sites like Twitter do have some positive effects — including the “groundswell” in users recently tweeting #MeToo to shed light on sexual assault.

But he still acknowledged that social media had “downsides,” from the infusion of politics in “everything from entertainment awards shows to natural disasters” to the fact that “anonymity has made our discourse nastier.” It marked the second time in as many days that Pai had taken direct aim at Twitter and other tech giants, questioning the effects of their powerful, all-encompassing platforms.

“In a way, one could say that ‘social media’ is perhaps the most inapt phrase ever coined,” Pai said, per remarks shared early with Recode. “It allows us to stay in touch while keeping a distance. It has sped the breakdown in human interaction. It has fed the unfiltered id at the expense of genuine understanding. And it has to some extent enabled the worst of human impulses — the drive to associate only with one’s own and to exclude the ‘other.’”

“And this drive can spill from the virtual world to the real one,” Pai later added. “If you want to know where it leads, try visiting a college campus these days wearing a ‘Make America Great Again’ hat.”

Pai’s comments — made during an appearance at an event hosted by The Media Institute — come at a time when the whole of Washington, D.C., is grappling with the power of Facebook, Google, Twitter and other tech giants, and the ways they surface content for users or serve as conduits for information, sometimes fake or harmful.

But the FCC chairman’s recent comments about Silicon Valley have been especially sharp. Just a day earlier, Pai charged that Web giants actually posed an immense threat to speech online — particularly because sites like Twitter have “a viewpoint” and they “use that viewpoint to discriminate.” The rebuke came as Pai sought to make the case for repealing the U.S. government’s net neutrality rules.

“And unfortunately, Twitter is not an outlier,” Pai said during the speech. “Indeed, despite all the talk, and all the fear, that broadband providers could decide what internet content consumers can see, recent experience shows that so-called edge providers are in fact deciding what content they see. These providers routinely block or discriminate against content they don’t like.”

On Wednesday, though, Pai continued his onslaught, pointing to other ills on Twitter and social media writ large. The FCC chairman said he and his family recently had felt a great degree of “vitriol” — a reflection, though he didn’t mention it, of the online and physical protests targeting his net neutrality repeal.

“This unprecedented medium for collaboration and connecting people feels like it’s dividing us and driving us apart,” he said.

Pai took great care to note that social media had rescuers respond to Hurricane Harvey in Houston, for example, while tech had enabled “telehealth” services in Virginia. But he still lamented that “everything nowadays is political” — including, to Pai, the pressure on stars like Taylor Swift to talk about those issues. Noting he no longer had a Facebook account, the FCC chairman said that “happy timelines” on the site “changed dramatically in the lead-up to and aftermath of the 2016 presidential election.”

“Where does America go from here? I certainly don’t have a magic solution,” he said. “But what I do know is that we can’t allow the strident rudeness of an angry few to overwhelm what I continue to believe is the quiet decency of most Americans.”


Recode – All

With Snapchat’s new redesign, the company is betting that users want intimacy versus popularity

Its simplified new app looks slicker, but Snap’s longtime focus on personal relationships isn’t going to change.

Snapchat unveiled its much anticipated new redesign today, a change that CEO Evan Spiegel said was necessary after the company acknowledged that its app was too hard for many people to use.

But it’s still not the drastic change that many expected. While Snap is most definitely changing the app’s look and feel to make it simpler and more sleek — such as where you find Stories posted by your friends — it isn’t changing that much in the way of functionality, like how you capture or share a video message.

What is clear is that Snapchat’s redesign means the company has decided to double down on intimacy, the idea that has been at its heart from the start. That is: Snapchat is first and foremost a service for private communication between friends and family, and not a place a place to opine on Donald Trump’s most recent tweetstorm or broadcast photos from your family vacation for everyone to see.

This has been Snap’s identity from the beginning, and, until recently, it’s worked pretty well. So much so that Facebook’s Instagram shifted its own philosophy on user sharing 18 months ago to mimic (some say copy) Snap’s low-pressure philosophy.

The question is: Is focusing on more intimate personal relationships going to work for Snap as a publicly traded company, because it suggests a smaller, although potentially more engaged, audience?

Let’s start with the redesign, which include a number of changes (and non-changes). Two notable ones that reinforce the company’s approach to relationships:

  1. Snapchat didn’t make it any easier for users to find and follow new friends. This has always been, in my opinion, a major obstacle to scaling the app, which is a problem when you’re a publicly traded advertising company. Unlike Facebook, Snap doesn’t bombard users with friend suggestions every time they open the app and seems totally content with users having a smaller number of connections, even if that means fewer total users.
  2. Snapchat eliminated the Stories page inside the app, a section where user posts co-mingled with posts from publishers like NBC or Bleacher Report. Instead, Snap is putting all user posts and messages in one section of the app and leaving all publisher content in a separate section. The idea, according to Snap, is to help lower the bar for what is considered post-worthy, so that people don’t feel the social pressure that might come with posting to a wide network of people.

Those decisions are meant to reinforce Snap’s identity as a place to connect meaningfully with your friends and family, not a place where you need to keep up with the Joneses.

Snapchat said as much on its blog explaining the changes:

Until now, social media has always mixed photos and videos from your friends with content from publishers and creators. While blurring the lines between professional content creators and your friends has been an interesting Internet experiment, it has also produced some strange side-effects (like fake news) and made us feel like we have to perform for our friends rather than just express ourselves. The new Snapchat separates the social from the media.

But it’s not clear that the redesign actually addresses the “hard to use” problem that Spiegel alluded to earlier this month.

It doesn’t change the way people actually record or share posts. It doesn’t change how difficult it is to find or understand Snapchat features, such as face filters or Snap streaks. And while the redesign makes Snapchat more visually appealing — and perhaps that will make it easier to understand for new users — it’s unclear if any of these changes will make it easier to use.

It’s no secret that Snap has struggled since the company went public in early March. User growth has slowed considerably since last summer, and Snap’s business continues to disappoint investors.

Now Snap is betting on a strategy that hasn’t correlated to steady user growth in the way we’ve seen from other network-driven apps like Facebook and Facebook-owned Instagram. At the end of the day, Snapchat is an advertising business, and advertising businesses rely on scale. The idea of a more intimate social experience is laudable, and it offers an alternative to Facebook, but it may not provide the kind of growth investors expect for a social networking app.

Or maybe it will as users become inundated and overwhelmed by a social media environment — primarily on Facebook, but also on Twitter — that has become bloated, noisy, and at times, toxic.

Snapchat has attracted loyal fans — including young people — because it’s different, and the innovative Spiegel is better than almost everyone at giving users unique products and features. And it’s true that this app design is a definite improvement.

That said, it still might not be the solution to Snap’s problems.


Recode – All

Facebook is giving some publishers a ‘breaking’ label for news posts

Facebook is making it easier for people to find actual news in their News Feed.

Facebook will now let some publishers add a “breaking” tag to news stories, making it easier for readers to identify news while scrolling through their feed.

The new label is part of a test, and publishers will have the option to leave the tag on a story for as little as 15 minutes or as long as six hours. Publishers can use the tag once in a 24-hour period.

Facebook now lets users add a “breaking news” label to their posts. Facebook

Right now, adding the tag to a post does not boost that post higher in users’ feeds, though it could in the future. “As part of this test, we’ll be evaluating if breaking news stories should be incorporated into ranking,” a company spokesperson confirmed to Recode.

Facebook has been considering a breaking news tag for a while, as Recode previously reported.

The addition of a “breaking” news label might be helpful for publishers looking for a way to stand out in what has become an incredibly crowded feed, so it’s possible that adding the tag could also drive more traffic.

Facebook periodically shows an interest in delivering timely news and other content, like live video broadcasts, to its readers — an area that has traditionally been Twitter’s specialty.

But generally Facebook is less interested in telling you what just happened and more interested in showing you something it thinks you will like, so publishers often emphasize less time-sensitive stuff when they upload content to Facebook.

Facebook has spent much of 2017 focusing on news and news publishers. The company is still working to identify and suppress so-called “fake news” from user feeds, which may have played a role in influencing last year’s U.S. presidential election. It also built a subscription tool for publishers that usually keeps stories behind a paywall, an incentive for those publishers to continue sharing their work to Facebook.

Facebook is not sharing the full group of publishers in the “breaking” news test, though ABC is included, as you can see from the screenshot above. Vox and The Verge, which are owned by Vox Media, Recode’s parent company, are also part of the test, according to a company spokesperson. Assuming that the test works — and that Facebook and publishers like it — it will be pushed out to more people.


Recode – All

Uber’s quarterly losses jumped nearly 40 percent to $1.46 billion ahead of a massive private stock sale

The company revealed these numbers in tender offer documents it sent to some shareholders.

Uber lost more than $ 1 billion two quarters in a row, newly disclosed financials reveal. The ride-hail company widened its net losses to $ 1.46 billion, up from $ 1.06 billion in the second quarter.

That increase in losses could be attributed in part to increased competition from its global rivals. In the U.S., Lyft has been investing a great deal of resources into gaining marketshare, Uber CEO Dara Khosrowshahi recently said at the New York Times DealBook conference.

“The U.S. is very, very competitive right now between us and Lyft, so I don’t see the U.S. as being a particularly profitable market for the next six months,” Khosrowshahi said.

Khosrowshahi also said the company is facing similar problems in regions like Southeast Asia where Uber is competing with Grab.

“The economics of that market are not what we want them to be,” Khosrowshahi said. “I think it’s over-capitalized at this point. We’re going in, and we’re leaning forward. But I‘m not optimistic that market is going to be profitable any time soon.”

Bloomberg first reported the numbers, which were included in a tender offer document a SoftBank-led group of investors sent to shareholders on Tuesday evening. Uber is seeking to sell some new and existing shares to the Japanese giant, though a deal remains tentative.

The company’s net revenue for the third quarter was $ 2 billion, up from $ 1.66 billion in the previous quarter.

One bright spot was a big uptick in demand with $ 9.71 billion in gross bookings in the third quarter, up from $ 8.74 billion in the previous three months.

Khosrowshahi is hoping to take the company public by 2019, which means he has a lot of work to do to fix the business before then.


Recode – All

Benchmark and Menlo have committed to sell shares of Uber to SoftBank in a massive transaction

An early sign of momentum in the long-awaited deal of 2017.

Two of Uber’s largest shareholders agreed on Tuesday to sell some of their shares in the world’s most valuable startup to SoftBank in an early sign of momentum for a massive private stock sale.

Benchmark and Menlo Ventures, two firms that this summer pushed for the ouster of former Uber CEO Travis Kalanick, will sell some of their positions in the company as part of the tender offer, a SoftBank spokesperson said. But the deal, which values Uber on secondary markets at 30 percent less than its last private fundraising round, has already driven away one buyer that had been expected to be part of SoftBank’s consortium: General Atlantic, which felt the price of the deal was actually too high, according to a source familiar with the matter, among other concerns.

Uber alerted eligible shareholders of the long-expected bid on Tuesday evening — these investors and early employees have 20 business days to decide whether they want to sell their ownership in the company at the $ 48 billion valuation, or instead wait for the company to go public in 2019.

“SoftBank and Dragoneer have received indications from Benchmark, Menlo Ventures, and other early investors of their intent to sell shares in the tender offer,” a SoftBank spokesperson said in a statement Tuesday. “Any sales by these shareholders will be pursuant to the same terms and conditions as will be offered to all other eligible holders that participate in the tender offer.”

The deal has taken on enormous importance for the troubled company, which has weathered a difficult year marred by allegations of sexual harassment, lawsuits and infighting that ultimately led to Kalanick’s ouster. If the deal were to fail — and at the current asking price, a number of investors have privately told Recode they would not sell — Uber could once again find itself mired in the same drama.

The deal is attached to governance reforms that amount to a grand bargain for Uber and its shareholders. Alongside the new funding will come a series of changes to Uber’s board and voting structure that are meant to disempower Kalanick and the investors he sparred with, most prominently Benchmark.

Benchmark’s decision to sell is an early sign that the tender offer could succeed despite the low price per share. The venture firm had signaled that it would only sell if Kalanick could be sufficiently restrained; it sued him earlier this year in an unprecedented lawsuit arguing that he defrauded the board, on which Benchmark sits.

The storied firm had also said publicly that it considered Uber to be worth $ 100 billion soon, suggesting that it would not sell shares at a valuation that is merely half that.

Recode reported this weekend that Menlo had been seen as likely to sell.

It was not immediately clear how much Benchmark or Menlo are prepared to sell. Benchmark owns 13 percent of the company, and the deal would be on substantially shakier footing if they decided to hold onto all of their shares.

Other likely sellers include Garrett Camp, Kalanick’s fellow founder, and possibly First Round Capital and Google Ventures. Kalanick’s successor, CEO Dara Khosrowshahi, has been encouraging every major Uber shareholder to part with some of their holdings in order to make sure that SoftBank accumulates a 13.4 percent stake in the company, which is required for the secondary transaction — and the governance reforms sought by Khosrowshahi — to succeed.

The SoftBank-led consortium will also invest about $ 1 billion of new money at Uber’s current valuation should the deal happen — all told, the transaction will value Uber at around $ 54 billion, according to the source familiar with the matter. That consortium also includes Dragoneer Investment Group, but no longer features General Atlantic or DST and some other initial buyers due in part to the price, the source said.

Many early employees — those with at least 10,000 shares — are expected to jump at the chance to turn their on-paper wealth into possibly millions of dollars. But they together only hold a few percentage points of ownership in the company.


Recode – All

AT&T pledged that CNN and TBS channels won’t go dark on any pay-TV services if it’s allowed to buy Time Warner

That’s part of AT&T’s response to the U.S. government’s lawsuit against its proposal to buy Time Warner.

AT&T told a federal judge on Tuesday that its proposed merger with Time Warner would not harm its rivals, pledging that it would strike deals with its cable competitors to ensure that the channels it stands to gain — like TBS and CNN — cannot go dark in future fee disputes.

The commitment came as part of AT&T’s first formal legal response to the U.S. government, which sued the company earlier this month in a bid to block the wireless giant’s roughly $ 85 billion acquisition.

For the Justice Department, a key concern is that AT&T, which also owns DirecTV, could seek to withhold programming from other distributors if it were allowed to buy Time Warner.

The content powerhouse also owns Turner, which houses networks CNN, TBS, TNT and Cartoon Network, and the DOJ fears that AT&T could use that content as leverage to extract higher fees from the likes of Charter, Comcast* or Dish — or threaten them with blackouts.

In its new filing in court, AT&T said that it had already “extended to third-party distributors” a pledge that it would submit disputes over licensing Turner programming to “baseball-style arbitration” for seven years after the deal closes.

In practice, that means a third party would evaluate licensing terms and choose the one with the best “fair market value,” which would have the effect of ensuring that Turner channels do not disappear “on any Turner distributor during the arbitration process,” according to AT&T’s response.

Relinquishing the ability to black out channels is a large concession. Normally, distribution contracts include what are known as “most favored nation” clauses that ensure that each distributor is paying competitive rates with a similarly sized pay-TV service. The blackout is a last-ditch negotiating ploy that a programmer can use to seal terms.

The wireless giant said a similar commitment previously had satisfied regulators who reviewed, then approved, another merger — Comcast’s purchase of NBCUniversal. To that end, AT&T contended that the U.S. government had made “an abrupt departure from precedent” in choosing to block its acquisition of Time Warner.

Both companies slammed the U.S. government for lacking proof that the merger would harm competitors and consumers. While the DOJ pointed to AT&T and Time Warner’s own statements, suggesting they might charge distributors higher prices to carry Turner content, AT&T argued that its comments had been misrepresented and lacked context.

* Comcast, through its NBCU arm, is an investor in Vox Media, which owns this website.


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