Part 1 Video Starts 0:13 - Apple Maps gets real about navigation & discovery
Part 2 Video- Starts 7:25 - Twitter’s underperformance & CEO change point to a need for a new business model
Part 3 Video- Starts 16:51 - Fired activist Xooglers claim “Don’t be evil” is an employment contract
- Apple Maps: The Road to Discovery (Part 1) & (Part 2)
- Twitter Has a New CEO; What About a New Business Model?
- Xooglers Sue Google for Abandoning 'Don't Be Evil'
Greg: Hey, everybody. Welcome back to the Near Memo E pisode 43. The post-Thanksgiving, L-Tryptophan, turkey coma edition. We're all back. Hope everybody had a good holiday and more holiday is coming up, but we'll have intervening Near Memos. I'm here, as always, with Mike and David, and we're talking about search, social, and commerce in the big news of the week. There was a lot of stuff that happened over the last two weeks, and one of those items was the local search ranking factors report which David started years, and years ago. Now, almost 15 years ago, and Darren Shaw at Whitespark. Yeah, dates you. Right?
David: Crazy. Thirteen years ago, I think.
Greg: Was it 13?
David: Yeah, 2008. 2008, yeah.
Greg: Oh, okay.
Mike: So, David, you know, at one point we talked about the meaning of OG. Maybe we need to come up with a new acronym like OOGG, like, an Old Original Gangster Guy.
Mike: OOGG. OOGG.
David: I'll leave it to our listeners to vote. You can thumb up or thumb down that suggestion on YouTube.
Greg: Yeah, it's an instant thumbs down, I think. Double O, double G. So, the venerable study, as I called it in the article this week, is really interesting on a number of levels, but we're going to defer our conversation about that to next week when we're going to have Darren Shaw as a guest. Darren Shaw, Whitespark took over shepherding, ownership, if you will, of that study which is really interesting and valuable for everybody. There is an article on the site. If you go into analysis, you can take a look at the piece I wrote this week about it. But look forward to next week where we have Darren live, and we get to pepper him with all sorts of uncomfortable questions. All right. So, I think, Mike, you're going to lead us off this week, and you're going to be talking about your med cap trip across America, right?
Mike: Right. So, as you know, for the past couple of weeks, I've been heads down studying Apple Maps, both for presentation at Local U last Tuesday which was a great event. As well as for several articles and a nice report that David put together at Near Media, and as a note, that report as PDF is available if you subscribe to our newsletter you'll get this free report on Apple Maps as a discovery tool. And so I decided to, as Steve Jobs used to say, eat my own dog food. So I had to rapidly plan a trip where we had to drive from New York to Santa Fe, and I decided to use and my wife agreed, that we would only use Apple Maps as our primary tool for traveling. We wouldn't use Google at all, and we wanted to see how that went.
And what was amazing to me was that...or has been amazing is that it has worked very well. I mean, I know that I've talked about this, but personally, their navigation has been dramatically upgraded. We had the first day serious lake-effect snows on the south shore of Lake Erie through Cleveland, and it's like people in Ohio don't know how to drive in lake-effect snow. Hello? Meanwhile, there was accident after accident on the highway that Apple was accurately alerting us to, and as the cars got removed from the highway, the map was updating in real-time. So, the detail of navigational information has improved dramatically. We then did a bunch of searches for gas stations, and coffee, and lunch on route. All went very well from a discovery point of view. What we couldn't do within Apple Maps was book a hotel.
Greg: I'm curious on that. If I could just interrupt Mike on the coffee and lunch question as you go across America. So, Google, I think does a relatively good job of interspersing true mom-and-pop businesses in pre-packs even in relative mom-and-pop deserts. And I'm curious if that was your experience with Apple Maps as well, or if you were just getting McDonald's, Burger King, and Wendy's?
Mike: No, we were getting a pretty good mix because that particular vertical is primarily Yelp-based for information, and ranking in Apple Maps seems to be proximity is very, very strong, plus reviews. So, if it was well-reviewed, it showed up in the Apple Maps regardless of size. We even found a really nice state park. A historic state park that we explored during one lunch break that way. What didn't work was hotels, and we used hotels tonight for that. And then here, in Santa Fe, we've been using it to find ice cream shops, and etc, and it's been working fine. And it's just interesting to me, given its bad reputation, and that it has really matured to the point of it being a great navigation tool and a reasonably good discovery tool. Not up to Google's [crosstalk 00:05:03.663].
Greg: I think you're single-handedly changing Apple Maps' reputation, Mike. Given all the tweets from Local U that I saw.
Mike: Well, I mean, you know, my exploration of it is that it's becoming significant and from a marketing point of view. Even if it's a pain in the ass to deal with, it is significant.
Greg: Did you see any native reviews for any of the... Just in your organic-looking searches for coffee shops, etc. Did you see any of the Apple native reviews?
Mike: Mostly in restaurants we were seeing it, yeah. So, like, not so much in coffee shops, but at restaurants, I'm starting to see native reviews. One of the big questions that they have is, like, how many... Mostly they had six. A minimum of six. So, the question though, is that they're not being replaced...like, Yelp reviews aren't being replaced automatically. There's some number you have to have for Apple to replace Yelp reviews. I don't know what that number is. So, it's a transition.
Greg: It seems like that would be a valuable number to report because I'm sure there are a ton of businesses out there that would like to bump their Yelp reviews from their Apple profile.
Mike: Exactly. I mean, it certainly would look a whole lot better because even if you only have four or five, it still shows you as 100% or 95% satisfaction.
Greg: And it's a lot easier to ask for an Apple thumb than it is for a Yelp review. Let alone, to get the Apple thumb to stick, so...
Mike: And I know, anecdotally, I've heard from a number of sophisticated users. Both of you have started to use Apple Maps, I believe.
Greg: Yeah, I've been using it for years.
David: Yeah, I mean, I'm using it almost exclusively now for navigation.
Mike: And that's a shift. Right? I mean, historically, it's only been default users by people who didn't know any better. They thought they were on Google Maps. They're actually using Apple Maps, but over the past several years, I've heard a number of these anecdotal stories of more sophisticated users switching. It was either for privacy reasons, or actually, the navigation experience which is quite good, or perhaps had an Apple Watch. So, there's a number of reasons people have switched. Don Campbell, you know, is another one that switched, and so, hearing that more and more. So, it's just interesting. It's taken 9 years, 10 years, or [inaudible 00:07:06] here. Yeah, nine years. It was released in 2012, and obviously, it takes a long time to overcome the stain on their reputation, so...
Greg: Yeah. So, speaking of tweeting about Apple Maps.
Mike: Speaking of reputational stains, maybe.
Greg: Yeah. Okay. All right, better. So, David, you wanted to talk about Twitter and the transition from Jack Dorsey who left, resigned, stepped down, whatever statement you want to use.
Mike: Was asked to step down by the board, it sounds like.
Greg: Well, it was probably a mix of factors involved, you know? The activist investors were really frustrated with the lack of revenue growth, and Dorsey was probably fed up, and also, the two CEO. The dual role that he has with Square, now Block, and Twitter you know, all those things undoubtedly contributed. So, now, Twitter has a new CEO, and there was a very interesting article about their business model and some of the challenges that they face that you wanted to talk about.
David: Yeah. So, I think Mike was the one who actually brought this to all of our attention, and Greg, you included it in a newsletter earlier this week. But, Ben Thompson, one of the Buck's largest celebrity fans, also tech luminary and thought leader from Stratechery published his sort of suggestion for Twitter's new business model, and it's one that I think a lot of people have suggested over time. That they have this, you know, fairly flat user base, but a very highly engaged segment of that user base which is something like 120 million daily active users or something like that. And it certainly resonates anecdotally with my usage, and I think probably most of our usage is that it is our primary social network outside of, in Mike's case, I know texting is kind of the main social network for him.
But it is, I think, for a certain segment of the population, the primary social network, and it's also the place that news breaks. I mean, literally, this is where you go, you know, sort of as a source of news. And so, Thompson's sort of suggestion was that Twitter turn itself into a pay to subscribe service because those 120 million users are addicted, he used the term. Twitter gives you the ability to mainline information which I loved, and that we're not going anywhere. We'll happily pay a nominal fee, and you'd cut down on a whole bunch of, you know, SPAM, and potentially, propaganda accounts, or at least make it a lot more expensive to spread propaganda. So, that was, you know, A, not a very, you know, a suggestion. I think, you know, I would happily pay it as a user.
Man: Are you subscribing to Twitter Blue? Are you thinking about subscribing to that?
David: No, I don't even know... I mean, I have some vague notion of what it is, but it wasn't interesting enough to me to subscribe. But I thought that there were a number of interesting points that he raised. One statistic that I didn't realize just how bad it was which is where the reputational stain comment came from. That Twitter's quarterly revenue is, like, 10% of Facebook's, or excuse me. Four percent of Facebooks', you know, basically, a billion dollars a quarter or something like that. As opposed to 29 billion from Facebook. So, you can certainly see why the activist investors are angry.
Somebody that I know that many of us read, Scott Galloway, has been kind of banging this drum for a long time. Not that he's an activist investor, but just like, you know, this is pathetic given Twitter's place in sort of the cultureverse, and the number of dedicated users they have. So, that was an interesting stat. Number one, I didn't realize is just how bad it was. But as I thought more about his comment, and he sort of compared Twitter's user base to Instagram's, to Facebook's, to Snapchat. That sort of thing. And as I thought about, you know, kind of what makes Twitter unique for me. As opposed to Instagram, where it's sort of this visual medium, and there's sort of all this aspirational stuff happening with...
Greg: Yeah, David, I think we've lost your...
Mike: But I think he's being recorded locally.
David: Oh, I'm sorry.
Mike: Oh, there you go.
Greg: Yeah. Okay.
David: No, I wasn't actually. Where did you lose me?
Greg: At the most. The crescendo of your... Yeah, you were saying all this is aspirational stuff.
David: Oh, I bumped my mute button by mistake. So with my [crosstalk 00:11:55.652]...
Greg: With your animated...
David: ...gesturing, yes. So, Instagram has all this aspirational content. And with Twitter, it's much more about consuming information, in my case, anyway, much, much faster than I can do it on any other social network. I can scroll through my curated tweet stream. At least that's how I use Twitter as, you know, a set of lists, and I can get a whole bunch of information very, very quickly. And it seems like that's what Twitter should be focused, you know, primarily on monetizing the speed of information.
And Thompson brings us up at the very end that why not just focus on potentially as a sister sort of business line to the subscription. License the API for developers to actually build on. Developers and other companies to subscribe to. I'm sure that if Twitter enforced a subscription, that Google would happily pay them more than a billion dollars to understand what content people were sharing, what links were getting liked, and responded to, and all those sorts of things. So, there has to be a much bigger business in licensing the mainline of information, as Thompson says. I think, certainly then, Twitter's advertising play today which is only a billion dollars a quarter, and potentially even more than their subscription monetization might be, so...
Greg: Wasn't there originally a licensing business? I mean, there was a lot of third party. There was a whole developer ecosystem around them. I don't know if they were charging for that.
David: But they essentially shut down because they didn't want people building better clients than they could produce themselves. But I think that there's got to be ways, either with terms of service or with, you know, how you filter the information, or that sort of thing that they could get around that. I just think that the information stream of Twitter and the speed of it, and the lack, like, there's so much fluff on every other social network. And the ability to just get to the point on Twitter is, I think, what they should be trying to monetize, so...
Mike: It's the asymmetry of Twitter which is there's some good producers, and most people are consumers. Really it would strike me that having alternative clients would not be a huge problem. They need to just take care of the publishers, the producers from a membership point of view, and the rest could read. And it would, in fact, perhaps improve that because when they added advertising to my timeline, which had never been in because I was a whatever. I had, you know, a number, enough followers, it didn't have it. Now, it's really annoying because every third tweet is an ad that I don't care about.
Greg: Well, I mean, I think there's probably a whole bunch of stuff that could be done if they reopened a developer ecosystem that would be interesting to them. So, I think that that's [crosstalk 00:14:46.468].
Mike: They have been slowly reopening the API, have they not? I mean, that's my understanding. There is an API that is available now and...
David: There is an API. I'm not an expert in the Twitter developer ecosystem. I will say that cuttings, you know, for a long time has been part of the Facebook developer ecosystem, and it's been a pretty big pain in the butt, to be honest. And so, I think that there must be a play to start to attract developers. LinkedIn has a, I would say, notoriously tight control of its API. And so, there is potentially a play also for Twitter to sort of position itself as the developer-friendly social network here.
Mike: Right. Yeah, if Google is paying Apple 15 billion. You'd think they would pay Twitter even more than a million, but...
David: For sure. And, you know, I'm shocked that Twitter hasn't, you know, sort of had that conversation with Google yet. If they have, they're selling their feed for way too cheap, if they're only making a billion dollars a quarter, so...
Greg: I think they're kind of interesting SMB use cases for Twitter as well that, you know, we could talk about at length, but maybe for another time.
Mike: Give me one example.
Greg: Well, just, you know, I mean, you can follow this as [crosstalk 00:16:07.337].
Mike: He's tongue-tied at this moment.
Greg: No, no, no. I mean, people. So, SMEs focus on Instagram and Facebook. Right? Facebook in particular, and they could do a lot of the same things on Twitter, and there's just much less friction on Twitter, you know? I mean, a lot of my challenge in dealing with small business service providers because I'm doing a bunch of stuff to my house is that they're just not responsive, you know, they just don't respond. And so if you could train people on Twitter to be accessible and respond, you know, you could create... I mean, didn't they create a directory of sorts recently? I thought they did. I don't remember.
Mike: It was some country.
David: Twitter placed this long ago which was powered by Infogroup if I recall, but that's [crosstalk 00:16:52.663].
Greg: Yeah. But, I mean, I think there are ways in which you could do small business discovery, and lead gen, and communication on Twitter that might be, you know, I haven't mapped this out in some elaborate product plan, but I instinctively feel like it's possible. And it would be easier to use than, you know, Google, or Yelp, or Facebook, you know, in the current ways in which we use those to interact with small businesses. So, my item to sort of closeout today is kind of a little bit fluffy but interesting. There are a number of former Google employees who were terminated for allegedly leaking confidential information.
They were activists. They were internal employees who were outspoken about certain things that Google was doing with, I guess, immigration authorities, or was contemplating doing. And they're suing Google for several things, among them for violating the pledge to not be evil. And their contention is that this, which was part of the code of conduct, up till a certain point, became a contractual term because employees sign employment agreements, incorporating the code of conduct. And so, they were acting in accordance with the "Don't Be Evil" mantra, and the imperative to alert Google when it's being evil, and they say that they were fired for that behavior, and there's more going on in the lawsuit. But that was kind of interesting to me, and it's a pretty far-fetched claim that that piece of it, the contractual claim, but it's interesting to me on many levels. So, I don't know if you guys read it.
Mike: Great click-bait.
Greg: Yes, it worked on me. Well, I mean, I think what it represents. Right? And this is part of a larger discussion. It represents sort of the early idealism of companies like Google, and Facebook, and Twitter, and others who held themselves out as new kinds of companies that were embracing a certain kind of perspective or value set. And what has happened as they've matured, as you were just discussing, David, is that you get a lot of pressure just to make money, and to maximize the value of the company. To improve the market cap, or to maximize revenue.
And so, there's this tension between these original values and what these companies have become which is mature, you know, really mature, huge capitalist engines. And their employees and people in the world are still kind of adhering to the old values, or many people are and feel that, you know, the move toward more monetization is a betrayal and all the, you know, things like working with the DOD or the, you know, Customs and Border Protection, or whatever it is. And so, you know, I think that that's a kind of [crosstalk 00:19:54.827].
Mike: Our response to that is that it's a naive holding of an old ideal and that capitalism is a very tough taskmaster. If one company is generating super-profits, for example, with AI, and the Department of Defense, and Google's not there then, capital is going to flow to that other company. And capital flows dictate, at least amongst the larger companies, and maybe not amongst really small companies, what VCs call Lifestyle companies. Right? These are companies that put the value of the employer or the value of the customer as high as the value of profit. But in most larger companies, you know, there is one master, and that master has to be served, otherwise, capital will flow in the other direction.
And so, from where I sit, it's interesting that Google is finally being called out. It's interesting that their reputation is finally taking some hits here. But, as I pointed out in the past, I mean, it shouldn't be a company du jour. It shouldn't be this month, it's Google. Last month, it was Amazon. Two years ago, it was Walmart, and before that, it was Microsoft. The reality is that this is an issue with the way capitalism and stock markets work. If you don't like it, change those things. But don't, you know, otherwise, the rest of this is just sort of naive thinking, from my point of view.
Greg: David, do you want to add anything to that?
David: I mean, there's a lot to unpack there. I would say, I generally agree with the implied advice that Mike gave. If this kind of corporate ethics is really important to you, you should probably go to work for a smaller startup with more control over its own financial destiny, and more influence over its policies, and who it does business with.
Greg: Well, I mean, are we just to sort of throw up our hands and say, "Oh, the whole system is corrupt by definition, and there's nothing to be done past the preferred intoxicants?" You know, party like it's 1999, or whatever?
Mike: Well, it depends a little bit on your point of view. If you believe that capitalism is reformable with appropriate governmental regulation, then government provides a chance in the form of a more aggressive FTC or Department of Justice, to bring some of the worst excesses in line. But that's a big question, whether or not government is independent of capital or totally intertwined with capital. But if you believe that that's the case, then your outlet is, you know, working with the government to increase regulation to remove some of the excesses, the abusive excesses of these companies.
Greg: Well, I'm not quite as... Go ahead.
David: I agree with that. I was going to say, I think you have to fight capitalism with capitalism. I don't think we're overturning the system anytime soon. And, yes, if you have a strong regulatory arm at the government that is preventing monopolies from happening. Theoretically, with good journalism and, you know, I guess in this case, this is sort of more PR than actual journalism, but you can start to... Consumers, if they have a choice, they will start to move to better players.
And I think we're starting to see that. Well, we're at the very early stages of what I hope we're starting to see with consumers actually having an alternative to buy from local businesses instead of Amazon with things like Shopify. Even with things like the Walmart distribution network that we've covered in previous Near Memos. And so, I think if you do have consumer choice. If you have government regulation. Appropriate government regulation of these, essentially, monopolies that consumers will eventually vote with their dollars for issues that they really care about.
Greg: Well, I mean, I tend to be sort of less cynical about the system, perhaps. But I also believe that consumers will do the right thing if that's easy for them and if they're given the opportunity to. Right? And I think, you know, this is a long conversation in itself, and I think we're almost out of time. But I do think that people in Gen Z, especially, care. Millennials, not as much as. The older you get, the less people care about these social concerns in their purchasing behavior, but Gen Z does care. And there are ESG funds out there, you know, BlackRock, one of the biggest hedge funds in the world is trying to direct some of its investing toward more socially responsible things.
And, you know, climate change dictates that we change how we do things in the world. And so, I do think these values matter, and I think that the companies that declare them should be held to them. I think this particular lawsuit is probably destined to fail. It may succeed on some California Labor Code violation grounds, but it's not going to succeed probably on the "Don't Be Evil" conceptual contract term. But I do think these things are important, and I don't think companies should hold out these values, and then, just treat them as, you know, sort of the ethics washing or whatever the equivalent would be. Just pretending like, oh, yes, we can say these words, and they really, ultimately don't mean anything, but we want to use them to attract people who take them seriously, so...
David: Yeah, that's right.
Greg: Go ahead. No, no.
David: No, you said it better than I would've, so...
Mike: The one counterweight that I would add to this. If you want to see how markets get created and controlled through the government being sort of intertwined with Capitol, watch "Dopesick" on Hulu. A great example of how a market literally was created around pain relief that spoke to profit, not people, and how the FDA and largely the legal system was co-opted by that, as well as, all these institutes that studied pain. So, it just shows you how that mechanism works at a meta-level and, you know, it is problematic and it is bigger than just consumers deciding because it's...
Greg: Well, they don't have [crosstalk 00:26:11.414] complete...
Mike: They don't have complete choice. Right. The doctor says, "You need oxycontin."
Greg: [crosstalk00:26:15.721] information.
Mike: Right. So, I mean, "Dopesick," I thought was a really well-done view of how this works. How regulation works or doesn't.
Greg: Yeah, I just started it. I haven't really gotten deeply into it, but I will. Unless, David, you want to make another comment on this point. I will say, apropos of nothing, that a much happier documentary or show is "The Beatles: Get Back" on Disney plus which is at once tedious and totally amazing if you haven't seen it. It's really well worth seeing if you can stand the eight hours of footage, but it's really just a remarkable thing if you're at all a Beatles fan, and I thoroughly enjoyed it. So, we'll be back next week to talk about more TV and movies and...
Mike: And the local search ranking factor.
Greg: ...and the local search ranking factors with special guest, Derren Shaw. It'll be a dedicated episode, and we'll explore that in detail. So, have a good week, everybody.
Mike: Thanks for joining.