Bill Gates calls Microsoft’s TikTok deal a poisoned chalice

https://www.theverge.com/2020/8/8/21359720/bill-gates-microsoft-tik-tok-deal-comments-interview

by pseudolus • 6 years ago

54 77 6 years ago

Solstinox• 6 years ago

I guess Microsoft may drop ~$30 billion on this poisoned chalice out of goodwill.

topkai222• 6 years ago

I think Bill Gates is worried that assets acquired in a $30B deal may take inordinate amounts of time and attention from senior leadership, at the expense of the rest of a $1600 billion business.

throwaway324343• 6 years ago

He's chairman of the board. He can stop it if he wants to.

foobiekr3• 6 years ago

I can totally see this happening.

This is the pathology of large business executives - once you have a mature business, it is boring, and pretty much anything else seems exciting, and so you focus on this new thing, and worse, start promoting it internally as a model for everything _that's actually successful_.

Due to my career wanderings, I've seen this a few times, and many times the hot new thing has been a mountain of technical debt that has spent the last few years doing everything possible to juice growth and spinning amazing stories to investors, the press, etc. They've been selected for telling a great story. The executives at OldCorp tend to have a natural immunity to the messaging and scheming of their interior ecosystem, but they are not used to these invasive species.

If this is what Gates is getting at, I think that's very astute of him.

topkai222• 6 years ago

They underlying interview is pretty amazing, mostly not about this subject: https://www.wired.com/story/bill-gates-on-covid-most-us-test...

typenil3• 6 years ago

"I personally believe government should not allow those types of lies or fraud or child pornography [to be hidden with encryption like WhatsApp or Facebook Messenger]."

Disappointing to see that Bill Gates isn't concerned about the slippery slope of regulating encryption. It frankly sounds like he'd be on board with the EARN IT act.

As long as we're only undermining freedom for the children or to make sure there's no wrongthink going on, no problem.

ethbro7• 6 years ago

His point is more nuanced than that, and oversimplified complex ideas virally spreading through social media is part of what he talks about.

"Q: As someone who has built your life on science and logic, I’m curious what you think when you see so many people signing onto this anti-science view of the world.

A: Well, strangely, I’m involved in almost everything that anti-science is fighting. I’m involved with climate change, GMOs, and vaccines. The irony is that it’s digital social media that allows this kind of titillating, oversimplistic explanation of, “OK, there’s just an evil person, and that explains all of this.” And when you have [posts] encrypted, there is no way to know what it is. I personally believe government should not allow those types of lies or fraud or child pornography [to be hidden with encryption like WhatsApp or Facebook Messenger].

Q: Well, you’re friends with Mark Zuckerberg. Have you talked to him about this?

After I said this publicly, he sent me mail. I like Mark, I think he’s got very good values, but he and I do disagree on the trade-offs involved there. The lies are so titillating you have to be able to see them and at least slow them down. Like that video where, what do they call her, the sperm woman? That got over 10 million views! [Note: It was more than 20 million.] Well how good are these guys at blocking things, where once something got the 10 million views and everybody was talking about it, they didn’t delete the link or the searchability? So it was meaningless. They claim, “Oh, now we don’t have it.” What effect did that have? Anybody can go watch that thing! So I am a little bit at odds with the way that these conspiracy theories spread, many of which are anti-vaccine things. We give literally tens of billions for vaccines to save lives, then people turn around saying, “No, we’re trying to make money and we’re trying to end lives.” That’s kind of a wild inversion of what our values are and what our track record is."

Vinnl• 6 years ago

It's odd that the part about hiding with encryption was added by Wired - I wonder how clear it was that that was what he meant, or that he just meant that he wanted stronger laws against lies and fraud. Although I guess that wouldn't mesh with the mention of child pornography, which already is disallowed.

adventured2• 6 years ago

Disappointing to see that Bill Gates isn't concerned about the slippery slope of regulating encryption.

It's much worse than that. Over the last several years he has been increasingly arguing against encryption. People should not be charitable toward him regarding his anti-privacy, anti-encryption, pro-authoritarian position, call it what it is. He's arguing for tyranny, plain and simple.

He isn't just not concerned about the slippery slope, he's fully aware of what he is arguing for. This isn't a naive, technologically or politically oblivious person.

NicoJuicy• 6 years ago

I've met a couple of really smart people ( like CEOs), who are very good for their company + employees and have a very strong opinion about this.

They are pro security for sure, but...

Security shouldn't be abused by malicious actors. And those malicious actors shouldn't be able to hide behind encryption.

In the same sense, privacy is important but I'm not sure if it's that important in Covid times ( eg. The decentralized requirements from Europe).

In short: he's not saying security is bad. He's saying government spying isn't that bad IF the government can be trusted.

aSplash0fDerp• 6 years ago

/It frankly sounds like he'd be on board with the EARN IT act./

"Infinite Retail Networks Invalidate Technology" can easily be achieved by segregating dot.com to its own "Internet/Network".

"Snowglobe or be snowglobed" is a better analogy than "everybody lives in a glass house except them".

ISH(water) and IRN(oil) don`t mix without constant agitation, so who better to add "business cycle" to archived knowledge and put a price on bits and bytes?

dang• 6 years ago

It's here: https://news.ycombinator.com/item?id=24100491.

Normally we'd merge the threads but most comments here are responding to the narrow title of the knockoff article.

hombre_fatal• 6 years ago

Shame about the title that Wired gave it which is why I skipped out on it at first. Makes the interview sound like yet another boring Covid chit chat. Glad I went back to read it.

lingxiaoling• 6 years ago

could someone parse the analogy for me. Does he mean a deal like this will undo MS slowly over time?

blihp• 6 years ago

Not necessarily undo MS, but rather that the deal looks attractive but may actually not be any good. In other words, it could end up being one of those deals where a few years down the road MS has to write the purchase price off as a loss.

torbital• 6 years ago

Given the opportunity though, it still seems like a risk well worth it.

Businesses rarely (if ever) fail because of an acquisition gone wrong. But a acquisition gone right can have great returns.

If Instagram flopped when Facebook bought it, Facebook would still be doing just fine. But since it did go well.. yeah.

So I believe that it's still probably in the investor's best interest if MS does the deal even if it's only like a 35% chance that it isn't a complete failure.

rhema• 6 years ago

I'm just speaking based on my interpretation. I think the "chalice" is a jeweled cup that seems valuable, but the poison is not what you would expect to drink. So, the deal seems like a big prize, but comes with hard-to-understand disadvantages that make it a poor choice. E.g. someone bought tumblr and tried to make it advertiser friendly by removing NSFW content. As soon as they did, the community that was still flourishing there abandoned it and they had no eyeballs to sell.

arkitaip2• 6 years ago

He's saying that managing TikTok might be more difficult than Microsoft can imagine. Here is the relevant part from the interview:

-----

As you are the technology adviser to Microsoft, I think you can look forward in a few months to fighting this battle yourself when the company owns TikTok.

Yeah, my critique of dance moves will be fantastically value-added for them.

TikTok is more than just dance moves. There’s political content.

I know, I’m kidding. You’re right. Who knows what’s going to happen with that deal. But yes, it’s a poison chalice. Being big in the social media business is no simple game, like the encryption issue.

So are you wary of Microsoft getting into that game?

I mean, this may sound self-serving, but I think that the game being more competitive is probably a good thing. But having Trump kill off the only competitor, it’s pretty bizarre.

Do you understand what rule or regulation the president is invoking to demand that TikTok sell to an American company and then take a cut of the sales price?

I agree that the principle this is proceeding on is singly strange. The cut thing, that’s doubly strange. Anyway, Microsoft will have to deal with all of that.

-----

wwarner• 6 years ago

From the Oxford English Dictionary [0]: "An award or honour which is likely to prove a disadvantage or source of problems to the recipient; the phrase is found originally in Shakespeare's Macbeth (1606), in a speech in which Macbeth flinches from the prospective murder of Duncan."

[0] https://www.oxfordreference.com/view/10.1093/oi/authority.20...

arkitaip2• 6 years ago

I totally see Microsoft ruining TikTok simply because of their corporate culture. Microsoft has had an astonishing history of destroying billions of dollars in value simply because they can't manage their products better. Internet Explorer, Bing and their mobile phones represent entire industries where Microsoft has been totally decimated despite enormous advantages in terms of resources and monopolies.

adventured2• 6 years ago

Your premise is very obviously false on the face of it: the notion that a company can own everything, always succeed, and generally dominate every major segment it enters.

Your criticism is that Microsoft isn't a $5+ trillion company, doesn't have five plus monopolies (desktop OS, mobile, browsers, search, and a few others that would go along with those positions including advertising), and basically isn't all knowing and all powerful.

What you're projecting is impossible of course. No company could ever accomplish all of those things. What you're holding up as a supposed indication of incompetence, is in fact unavoidable: failure will happen, you will not always win, your products will not always succeed, and most likely you will fail the majority of the time; it doesn't matter who you are, or how big you are.

vikramkr• 6 years ago

I wasnt aware that the bar for having a good corporate culture was to be so utterly successful at everything you try ever that you end up with a monopoly in every single sector you ever compete in and become the most successful company in human history. Somebody should tell Nadella that the new corporate culture he is building at Microsoft that has led to their enormous turnaround in share performance and public perception is all in vain and has failed because ballamer laughed at the iPhone once.

scarface742• 6 years ago

You realize that Microsoft is the third most valuable company in the US? It was the most valuable in 2001.

The browser wars are old. The only thing having dominance in browser market share is good for is advertising.

As far as mobile, it hasn’t been that great for Google either. It came out in the Oracle trial that Android had only made Google $22 Billion in profit from inception through 2016 (https://www.theverge.com/2016/1/21/10810834/android-generate...), much less than it paid Apple during the same time period to be the default search engine for iOS.

There is no reason to believe that the economics are any better now.

thekyle2• 6 years ago

I do expect TikTok to lose users after Microsoft acquires it. But not because of anything Microsoft might do. TikTok just seems like a fad social network that will inevitably lose the cool factor eventually.

miketery3• 6 years ago

Not to mention the psychological effects it has. Research has shown Instagrams rise strongly correlated with rise in teen suicide rates. TikTok seems worse. Only a matter of time before people realize it's like cigarettes if not worse.

playeren2• 6 years ago

Could you please point me towards said research?

seppin• 6 years ago

Most users will never feel any change despite who owns it, unless MS pull a FB and inject multiple streams of ads into it overnight.

axaxs3• 6 years ago

I'm not so convinced. Let me first say, I can't stand TikTok and find its constant stream of annoying music angering.

That out of the way, my wife and daughter love it, and I can see why. It made it easy for anyone and everyone to share clips, with a touch of social. It makes YouTube look like a slow bloated dinosaur. I just don't see people giving it up.

bobthepanda5• 6 years ago

I mean Vine was the same concept and died due to lack of profitable monetization model.

How does TikTok earn money?

Closi• 6 years ago

It’s hard to tell, the same could definitely have been said for insta and snapchat, but also loads of apps that didn’t make it, so it’s a bit of a crapshoot.

thekyle2• 6 years ago

I'm not sure but I get the feeling that Snapchat is on the decline. Their killer feature was stories but now every app has those (notably Instagram stories seem very popular).

Firebrand• 6 years ago

TikTok has become too top heavy with its current creators. Its most popular stars not only live together but have conglomerated to form their own talent agency as well.

You may not see it on your feed, but millions of middle schoolers seem to be highly invested in the drama that goes on between these people. These creators and their followers is what as known as “straight TikTok”.

What’s to stop them from demanding the big bucks from Microsoft or leaving for another platform?

bobbydreamer2• 6 years ago

Name is Charlie da melio. Thank me later

cvhashim• 6 years ago

Tumblr did just fine for years after the Yahoo acquisition

bobthepanda5• 6 years ago

Til the part where Yahoo asked Tumblr to clean up its act in a gambit to make it actually profitable with advertising.

MivLives• 6 years ago

Instagram is also in the process of knocking them off. That didn't work out so well for Snap.

bobthepanda5• 6 years ago

Eh, Snap managed to kneecap themselves with an extremely controversial UX redesign shortly after Instagram stories, and this was an app that had a notoriously bad UX to begin with.

Snap was also not doing well outside the US, but I haven't heard anything like that about TikTok.

panarky• 6 years ago

Snap seems to be doing just fine, with a share price up 150% since the virus lockdowns began. FB shares are also up, but only half as much.

xoxoy2• 6 years ago

I agree in the sense that TikTok is a trust and safety disaster at the moment and I’m not sure Microsoft realizes the investment required to clean it up and make it truly safe.

One of the most disturbing features to me is that you can be logged out and download nearly any video to your phone. It would be naive to think pedophiles are not actively downloading videos of minors dancing provocatively and sharing it.

dcow3• 6 years ago

Videos of minors dancing is by no means native to tiktok or in any way illegal. If you think those videos are socially problematic (which many do), then you need to attack the incentive structure that breeds that type of content.

xoxoy2• 6 years ago

agreed the algorithm is especially geared to minors to make mini music videos that are highly sexualized

rchaud• 6 years ago

Microsoft in talks to buy TikTok's operations in 5 Eyes countries only strikes me as strange. Why not their European operations as well?

Was this acquisition even on their roadmap before talks of a ban started making the rounds? It seems completely out of sync with the type of acquisitions MS makes, like Github or Linkedin.

What do MS shareholders have to say about forking over $30b or thereabouts to bankroll POTUS' China panic?

siliconc0w• 6 years ago

Can someone explain how encryption comes in play with social media moderation? I'd understand that from less technical 'thought leaders' but I imagine Bill is still a pretty technical guy so I was kinda surprised to see that.

skybrian• 6 years ago

Facebook has announced that they want to move to end-to-end encryption for messaging, similar to Whatsapp. This would mean that any moderation being done would have to happen on the device. But a company that's promising end-to-end encryption presumably wouldn't do that.

That's kind of the point; switching to end-to-end encryption means the company is (supposedly) getting out of the moderation business, at least for these messages.

The kind of thing to worry about is social media's role in encouraging mob violence, massacres, and genocide. I assume Bill Gates is taking a global perspective on this.

Havoc• 6 years ago

President Trump suggesting the US Treasury will need some type of cut from any acquisition.

uhm what? Has Mr ArtOfTheDeal still not understood that he's a president not profit seeking CEO? How bizarre.

bobbydreamer2• 6 years ago

Tiktok is better than YT new 15-30 sec videos and far better than fb as well in content and keeping the user in. Entire thing deal and stuff it's a waste of time or distracting people. Somebody figured out something better, newer algorithm. At this point in world you have a mobile you are being tracked.

In last one week YT reco is all about bomb after watching couple of Beirut videos. That clearly says algo is broke. Tiktok was on fire during BLM protests but still keep regularly showing other contents then and then.

Microsoft first has to figure out and tell why have Teams and Skype. At this point people are migrating from SharePoint to confluence or other s/w to manage documents. Shrpnt GUI pretty much suck. New IE copy of chrome for the first week, it was consuming less CPU, now I could hear CPU fan just like chrome. MS should focus on improving software rather than media or unrelated things. Right now only s/w I like in Win10 is task manager, I use it soo much, thank god that UI has not changed.

Google never had luck with social media platforms. Fb came tookout Orkut, so many other things they started all closed down. Google search also needs improvement, it's fast but content is not as good as how it used to be 5yrs back or before.

Bill Gates calls Microsoft’s TikTok deal a poisoned chalice

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