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Technology
The Stories War has officially killed Snapchatgrowth, leading to its first user count decline ever. In Q2 2018 earnings today, Snapchatdaily active users number shrank 1.5 percent to 188 million this quarter, down from 191 million and positive 2.9 percent user growth last quarter.
Snapchat did beat earnings expectations with $262.3 million in revenue and a loss of $0.14 while Wall Street estimated an EPS loss of $0.17 with $249.8 million in revenue. Snap net loss decreased by 20 percent year-over-year, so it only destroyed $353 million this quarter compared to $385 million last quarter. Snap will have some extra cash to extend its runway despite its still-massive losses thanks to a $250 million investment from Saudi PrinceAl-Waleed Talal in exchange for a 2.3 percent stake in the company.
Despite its user count shrinking for the first time since its launch in 2011, the improvement to revenue (up 44 percent year-over-year) and reduced losses led Wall Street to give Snapshares an immediate 11 percent pop in after-hours trading. But after dodging multiple questions about how it would improve revenues and when its optimized Android app would arrive, shares fell back to just below the dayclosing price of $13.12.
Snapchat is coming off a disastrous Q1 earnings with its slowest-ever user growth rate that led to a 24 percent plunge in its share price in May. But the company has been highly volatile, seeing a 37 percent boost in its share price after surprisingly positive Q4 2017 earnings. Now itproving that Facebook isn&t the only social network with growth troubles.
In hopes of distracting from the shrinking DAUs, Snapchat shared a monthly active user count for the first time: 100 million monthly active users in the U.S. and Canada. Snap says this is the highest itever been, yet the reveal highlights that teens are as addicted to daily Snapchat use as they once were. DAUs are a much more accurate way of measuring engagement and ad revenue potential, as opening a single notification and never returning can still register someone as an MAU.
CEO Evan Spiegel blamed the DAU shrinkage on &a slightly lower frequency of use among our user base due to the disruption caused by our redesign.& But since, he believes &we have now addressed the biggest frustrations we&ve heard& so heoptimistic about future growth. On the other hand, he credits the redesign as producing an 8 percent increase in retention among users older than 35, demonstrating the new design is more obvious and well labeled.
During the earnings call, Snapnew CFO Tim Stone mentioned that itinterested in monetizing every part of the app, including &communication.& That could foreshadow more ads in the messaging inbox beyond the sponsored lenses users can play with to send augmented reality Snaps to friends. Snap is also hoping that after a decline in ad prices as it moved to self-serve auctions, ad prices and revenue will climb.
One big bright point for Snap was that its average revenue per user in the Rest Of World region grew 65 percent just this quarter to reach $0.96. Figuring out how to monetize these developing countries where buying power is lower will be key to the companyoutlook. Snap says itstill working to re-engineer its Android app to boost performance and reduce churn, since thatwhere most of its new users are coming in.
The quarter saw Snapchat escape much of the scrutiny facing other social networks regarding fake news and election interference. But it clearly still has issues with security, as Snapchat accidentally leaked its own source code, which was archived by someone who then posted it to GitHub today, though it was eventually taken down.
Snapchat started running un-skippable ads in its Shows that could be a big money maker if extended to Stories. It began experimenting with e-commerce in earnest, allowing brands to sell things people can buy without leaving the app. It also opened self-serve buying of its augmented reality lens ads that people not only post, but play with for extended periods of time. And it launched its privacy-safe Snap Kit developer platform in hopes that alliances and referral traffic would help revive its user growth.
But problematically, its competitors like Instagram Stories continued to surge, with it now having 400 million daily Stories users and WhatsApp Status now having 450 million. Combined, Facebook has over 1.1 billion daily (duplicated) Stories users across its family of apps. That reach could make it tough for Snap to compete for ad dollars. And with its user count actually decreasing, that could make for a grim future for the teen sensation.
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Read more: Snapchat shrinks by 3M users to 188M despite strong Q2
Write comment (98 Comments)Oracle executive chairman and CTO Larry Ellison first introduced the companyautonomous databaseat Oracle Open World last year. The company later launched an autonomous data warehouse. Today, it announced the next step with the launch of the Oracle Autonomous Transaction Processing (ATP) service.
This latest autonomous database tool promises the same level of autonomy — self-repairing, automated updates and security patches and minutes or less of downtime a month. Juan Loaiza SVP for Oracle Systems at the database giant says the ATP cloud service is a modernized extension of the online transaction processing databases (OLTP) they have been creating for decades. It has machine learning and automation underpinnings, but it should feel familiar to customers, he says.
&Most of the major companies in the world are running thousands of Oracle databases today. So one simple differentiation for us is that you can just pick up your on-premises database that you&ve had for however many years, and you can easily move it to an autonomous database in the cloud,& Loaiza told TechCrunch.
He says that companies already running OLTP databases are ones like airlines, big banks and financial services companies, online retailers and other mega companies who can&t afford even a half hour of downtime a month. He claims that with Oracleautonomous database, the high end of downtime is 2.5 minutes per month and the goal is to get much lower, basically nothing.
Carl Olofson, an IDC analyst who manages IDCdatabase management practice says the product promises much lower operational costs and could give Oracle a leg up in the Database as a Service market. &What Oracle offers that is most significant here is the fact that patches are applied without any operational disruption, and that the database is self-tuning and, to a large degree, self-healing. Given the highly variable nature of OLTP database issues that can arise, thatquite something,& he said.
Adam Ronthal, an analyst at Gartner who focuses on the database market, says the autonomous database product set will be an important part of Oraclepush to the cloud moving forward. &These announcements are more cloud announcements than database announcements. They are Oracle coming out to the world with products that are built and architected for cloud and everything that implies — scalability, elasticity and a low operational footprint. Make no mistake, Oracle still has to prove themselves in the cloud. They are behind AWS and Azure and even GCP in breadth and scope of offerings. ATP helps close that gap, at least in the data management space,& he said.
Oracle certainly needs a cloud win as its cloud business has been heading in the wrong direction the last couple of earnings report to the point they stopped breaking out the cloud numbers in the June report.
Ronthal says Oracle needs to gain some traction quickly with existing customers if itgoing to be successful here. &Oracle needs to build some solid early successes in their cloud, and these successes are going to come from the existing customer base who are already strategically committed to Oracle databases and are not interested in moving. (This is not all of the customer base, of course.) Once they demonstrate solid successes there, they will be able to expand to net new customers,& he says.
Regardless how it works out for Oracle, the ATP database service will be available as of today.
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Read more: Oracle launches autonomous database for online transaction processing
Write comment (94 Comments)Earlier today, Tesla CEO Elon Musk tweeted about how heconsidering taking Tesla private. Now, Tesla has published an email Musk sent to employees today that describes his rationale. However, no decision has been made yet, Musk wrote in the email.
Musk says it&the best path forward& because taking Tesla private would help minimize some of the distractions that come as a result of &wild swings in our stock price.& Going private would also enable Tesla to make decisions that are best for the long-term, rather than the short-term, he said.
&Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company,& Musk wrote in the email.
He later adds, &This proposal to go private would ultimately be finalized through a vote of our shareholders. If the process ends the way I expect it will, a private Tesla would ultimately be an enormous opportunity for all of us.&
Following Musktweet announcing his desire to take Tesla private, Tesla shares jumped before getting halted on the stock exchange. Tesla shares have since reopened.
You can read the full email below.
Earlier today, I announced that I&m considering taking Tesla private at a price of $420/share. I wanted to let you know my rationale for this, and why I think this is the best path forward.
First, a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best. As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term. Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company.
I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we&re all trying to achieve.
This is especially true for a company like Tesla that has a long-term, forward-looking mission. SpaceX is a perfect example: it is far more operationally efficient, and that is largely due to the fact that it is privately held. This is not to say that it will make sense for Tesla to be private over the long-term. In the future, once Tesla enters a phase of slower, more predictable growth, it will likely make sense to return to the public markets.
Herewhat I envision being private would mean for all shareholders, including all of our employees.
First, I would like to structure this so that all shareholders have a choice. Either they can stay investors in a private Tesla or they can be bought out at $420 per share, which is a 20% premium over the stock price following our Q2 earnings call (which had already increased by 16%). My hope is for all shareholders to remain, but if they prefer to be bought out, then this would enable that to happen at a nice premium.
Second, my intention is for all Tesla employees to remain shareholders of the company, just as is the case at SpaceX. If we were to go private, employees would still be able to periodically sell their shares and exercise their options. This would enable you to still share in the growing value of the company that you have all worked so hard to build over time.
Third, the intention is not to merge SpaceX and Tesla. They would continue to have separate ownership and governance structures. However, the structure envisioned for Tesla is similar in many ways to the SpaceX structure: external shareholders and employee shareholders have an opportunity to sell or buy approximately every six months.
Finally, this has nothing to do with accumulating control for myself. I own about 20% of the company now, and I don&t envision that being substantially different after any deal is completed.
Basically, I&m trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible.
This proposal to go private would ultimately be finalized through a vote of our shareholders. If the process ends the way I expect it will, a private Tesla would ultimately be an enormous opportunity for all of us. Either way, the future is very bright and we&ll keep fighting to achieve our mission.
Thanks, Elon
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Read more: Elon Musk explains why taking Tesla private is ‘the best path forward’
Write comment (91 Comments)An unprecedented flood of citizens concerned about net neutrality is what took down the FCCcomment system last May, not a coordinated attack, a report from the agencyOffice of the Inspector General concluded. The report unambiguously describes the &voluminous viral traffic& resulting from John OliverLast Week Tonight segment on the topic, along with some poor site design, as the cause of the systemcollapse.
Herethe critical part:
The May 7-8, 2016 degradation of the FCCECFS was not, as reported to the public and to Congress, the result of a DDoS attack. At best, the published reports were the result of a rush to judgment and the failure to conduct analyses needed to identify the true cause of the disruption to system availability. Rather than engaging in a concerted effort to understand better the systematic reasons for the incident, certain managers and staff at the Commission mischaracterized the event to the Office of the Chairman as resulting from a criminal act, rather than apparent shortcomings in the system.
Although FCC leadership preemptively responded to the report yesterday, the report itself was not published until today. The OIG sent it to TechCrunch this morning, and you can find the full document here.
The approximately 25 pages of analysis (and 75 more of related documents, some of which are already public) relate specifically to the &Event& of May 7-8 last year and its characterization by the office of the Chief Information Officer, at the time David Bray. The investigation was started on June 21, 2017. The subsequent handling of the event under public and Congressional inquiry is not included in the scope of this investigation.
As the report notes, Bray shortly after the event issued a press release describing the systemfailure as &multiple distributed denial-of-service attacks.& A variation on this was the line going forward, even well after Bray left in October 2017.
However, internal email conversations and analysis of the traffic logs reveal that this characterization of the event was severely mistaken.
Here it ought to be said that in the chaos of the moment and with incomplete time and information, an accurate diagnosis of a major systematic failure is generally going to be an educated guess at first — so we mustn&t judge Bray and his office too harshly for its mistake, at least in the immediate aftermath.
But what becomes clear from the OIGinvestigation is that the DDoS narrative first advanced by Bray is not backed up by the evidence. Their own analysis of the logs clearly shows that the spikes in traffic correlate directly with activity from John OliverLast Week Tonight, which that evening and the following morning posted tweets and videos that garnered an immense amount of traffic and directed it at the FCCcomment system.

Chart showing traffic spikes correlating with John Oliver (JO) related events.
&These spikes in traffic are singular rather than sustained, that is, the unique IP addresses that visited the FCC domain and ECFS did not do so over a sustained period of time, at regular intervals (as would be expected during a DDoS),& the report explains in the caption for the graph above.
&The traffic observed during the incident was a combination of &flash crowd& activity and increased traffic volume resulting from [redacted] site design issues,& reads the report. I&ve asked for more detail on these design issues and how they contributed to the systemfailure.
Interestingly, it appears some at the FCC were aware that Oliver was planning a segment on net neutrality for that time period, but no one thought to brace for it. According to a colleague interviewed for the report, &Bray was furious that he had not been informed about the John Oliver episode.&

Email excerpts from the time of the event, collected by the FCCOIG.
In fact, however, even confronted with the fact that Oliversegment was likely directly driving traffic, Bray suggested that &trolls& and 4chan were the more likely culprit.
We&re 99.9% confident this was external folks deliberately trying to tie-up the server to prevent others from commenting and/or create a spectacle.
Jon Oliver invited the &trolls& & to include 4Chan (which is a group affiliated with Anonymous and the hacking community).
His video triggered the trolls. Normal folks cannot manually file a comment in less than a millisecond over and over and over again, so this was definitely high traffic targeting ECFS to make it appear unresponsive to others.
All this, and the description put in the press release and some subsequent communications, is ¬ accurate,& as the OIG put it.
As a result, &we determined the FCC, relying on Brayexplanation of the events, misrepresented facts and provided misleading responses to Congressional inquiries related to this incident.&
Itworth noting that this has already been looked at by federal prosecutors:
Because of the possible criminal ramifications associated with false statements to Congress, FCC OIG formally referred this matter to the Fraud and Public Corruption Section of the United States AttorneyOffice for the District of Columbia…On June 7, 2018, after reviewing additional information and interviews, USAO-DC declined prosecution.&
In a way, as Chairman Ajit Pai wrote yesterday, this does somewhat exonerate his office for its year-long campaign of stalling, half-truths, and outright refusals to answer questions. If they took Braycharacterization as gospel, they had to stick to that analysis. Furthermore, with an investigation ongoing, what they could and couldn&t say was likely limited at the request of the OIG.
But thatonly a partial pardon. In the year and change since the event there has been ample time for reflection and revisiting of the data. Bray left in October; why did the new CIO not use the occasion to take a fresh look at a report that was plainly doubted by many in the agency
The CIOoffice, as the report notes, never actually issued a substantive report showing that its DDoS narrative was true. And shortly after the event, it was, as one staffer put it, &common knowledge& that the analysis was flawed. This knowledge was arrived at through &further research& after the fact — but then it turned out no &further research& was conducted.
What kind of operation is this Why was FCC leadership not foaming at the mouth asking for better information The Chairman was under fire from all sides — no one bought the story he was selling — why not walk over to the CIOoffice, now rid of its Obama administration&tainted head (Pai mentioned this association twice in his statement yesterday), and demand answers
Pai denies that he or his office was aware of these shortcomings and opted not to rectify them because they were advantageous to his plan to reverse 2015net neutrality rules. But how could such a demonstrably shoddy and undocumented analysis persist for so long, under such close scrutiny This wasn&t a minor technical glitch unworthy of leadershipattention. It was national news.
The optics of a confusing and incomplete DDoS report aren&t good. But the report, if it was wrong, as everyone seemed to consider it even day-of, could always be disavowed and its author blamed on Obama.
Whatworse are the optics of a wave of public opposition to a controversial proposal, so strong that it literally took down the system created — and recently upgraded! — to handle that kind of feedback. This narrative, of a flood of pro-net-neutrality commenters so large that not only did it break the system, but many of their comments were arguably unable to be posted and (notionally) included in the FCCanalysis — that, my friends, is a bad look.
Although this investigation has concluded, another by the Government Accountability Office is ongoing and may have a wider scope. If not, however, it seems unthinkable that the FCC and its current leadership can walk away from this unscathed. Ultimately this entire debacle took place under Ajit Paiwatch, and his handling of it is at best dubious. Citizens and no doubt elected officials are almost certain to ask hard questions — and this time, the Chairman might actually have to answer them.
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Read more: Net neutrality activists, not hackers, crashed the FCC’s comment system
Write comment (97 Comments)Apple appears to be working on another personalized playlist for Apple Music subscribers & this time, one that shows you what your friends are listening to on its service, as opposed to a personalized playlist filled with editorial or algorithmic recommendations. The new &Friends Mix& playlist includes 25 songs and is updated on Mondays, according users who have gained access to this new feature and screenshots of the playlistdescription.
News of the playlist was first spotted by a user on Reddit, then reported by 9to5Mac,AppleInsider and several others, as a result.
Apple has not yet formally announced the addition, and many other Apple Music subscribers are not seeing the playlist at this time.
Apple isn&t commenting, but we&ve learned that the &Friends Mix& is rolling out toApple Music subscribers who are using a device with beta versions of iOS 12, macOS Mojave, or tvOS 12. It will become available to all Apple Music subscribers this September. (The exceptions will beChina, Russia, and Turkey because creating a profile to share music with friends is also unavailable in these countries.)
According to the original poster on Reddit, the playlist appeared in their Apple Music app on a device that was running iOS 12 beta & this could indicate itsomething that won&t launch to the public until the general release of iOS 12 later this fall.
The tester also noted they had just installed the iOS 12 beta, which could explain why they saw it first.
We reached out to the tester, Brad, who confirmed herunning iOSbeta 6, dev build16A5345f. He added that of the 25 songs on the Friends Mix, 7 were already in his library. But the playlist was largely music from the genres he listened to, with no weird additions.
This, we&ve also learned, is because the Friends Mix is customized to include only those songs that Apple Music thinks you&ll like, too.
TC editor Matthew Panzarino, whoalso on the iOS 12 beta, now has the feature, as well. However, others here on the iOS 12 beta & and lower versions of iOS & do not yet.
Above: Friends playlist; image credit Reddit user reesyy
Personalized playlists are a key selling point for streaming music services, with Apple, Spotify, Amazon, Pandora, iHeartRadio and others all offering a variety of playlists for their subscribers. In Applecase, it already offers a handful of these, including &Favorites,& &New Music Mix,& and the latest addition, launched over a year ago, &Chill Mix.&
Itlong been time for Apple to expand its lineup of playlists further & especially given Spotifygrowing selection, which now includes its flagship playlist Discover Weekly, its Daily Mixes (plus a new variation, Your Daily Car Mix, apparently, Redditors also spotted), Release Radar, Your Summer Rewind, and Time Capsule.
[gallery ids="1687466,1687467"]Above: More screenshots, including the playlist description: &A selection of songs based on what your friends have been listening to. Refreshed every Monday.&
However, the value of a playlist of your friends& music is a little questionable.
Though social music was Spotifyoriginal aim, through integrations with Facebook and tools to find and follow others, it has stepped away from that in later years. Instead, itmore focused now on making the service feel individualized to each user & after all, your friends could be listening to some awfully terrible stuff, Spotify realized.
The arrival of the new playlist follows the recent news thatApple Music is leading Spotify in the North American market, announced by Apple CEO Tim Cook on the last earnings call. Cook also said Apple Music now tops well over 50 million current subscribers and free trial users; Spotify, by comparison, now has 83 million paying subscribers.
Updated 8/7/18, 9:50 PM ET will additional information.
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Read more: Apple Music users spot ‘Friends Mix,’ a new personalized playlist of friends’ tunes
Write comment (91 Comments)Holy smokes! Disrupt San Francisco 2018, which takes place September 5-7, is less than one month away. We have important news for anyone who purchased Startup Alley,Founder, Investor or Insider passes: CrunchMatch — your gateway to efficient networking — is officially open!
If you haven&t yet grabbed a pass to Disrupt SF 2018, itnot too late to jump on the CrunchMatch train. Startup Alley, Founder and Investor passes are still available. Buy them right here.
Lest you&ve forgotten, CrunchMatch is the free business match-making service at Disrupt. Powered byBrella, this platform curates and connects early-stage startup founders and investors who share similar business interests and profiles.
The matching process is in full swing, so if you&re registered, keep your eyes peeled on your inbox for an invitation to create a CrunchMatch profile. For example, founders provide information about their early-stage startup — its tech category, funding stage, where itlocated and its current funding status. Investor profiles outline specific investment categories, the funding stage and preferred geographic locations. CrunchMatch takes all that information and works a bit of algorithmic voodoo to match compatible founders and investors based on the information they provide.
Once you receive those recommendations, the networking ball lands in your court. Send, receive, accept and decline invitations, set up appointment meetings and reserve private meeting space at the CrunchMatch meeting booth at Disrupt.
CrunchMatch also lets you act quickly in the heat of the moment. Say you see a particularly promising startup compete in Startup Battlefield. Use CrunchMatch to send an invitation and schedule a meeting in minutes. Boom! Hey, it worked for Michael Kocan, an early-stage investor at Trend Discovery.
&I get the most value from Disrupt at the intersection of CrunchMatch and Startup Battlefield. I can quickly schedule a meeting for later that day. I had over 35 meetings with startups that I pre-vetted using CrunchMatch, and I made a significant investment in one.&
Henot the only satisfied customer. Last year at Disrupt SF 2017, CrunchMatch facilitated more than 1,300 meetings and 97 percent of participants said they&d use the service again. With more than 10,000 attendees coming to Disrupt SF 2018, we fully expect to triple the number of meetings.
Disrupt San Francisco 2018 takes place September 5-7. Be sure to fill out your profiles when you receive your invitation. Or buy your Founder or Investor passes now. Youhave only three days atDisrupt SF to make potentially life-changing connections. Let CrunchMatchsimplify your networking — for free.
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Read more: CrunchMatch is open for business at Disrupt SF 2018
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