HuffPost is reportedly on the auction block

Late last night the Financial Times reported that HuffPost, arguably one of the crown jewels of Verizon Media Group’s remaining network of media properties (which includes TechCrunch), is up for sale.

Verizon has been shedding media properties in a retreat from the strategy that it had begun to execute with the acquisition of AOL for $4.4 billion back in 2015. Through the AOL deal, then-chief executive Tim Armstrong became the architect of the telecommunications company’s media and advertising strategy.

Armstrong’s vision was to roll up as much online real estate as he could while creating a high technology advertising architecture on the back-end that could better target consumers based on their media consumption (which the telecom company would also own).

The idea was to provide a broad-based competitor to the reach of ad platforms on Google and Facebook which were also targeting users based on their browsing history and interests. The benefit that Google and Facebook had was that they had a more holistic view of what consumers did online and they positioned themselves as a distribution channel between media companies and users — essentially redistributing their articles and videos and hoovering up the ad dollars that had previously gone to those media companies.

The multi-billion dollar land grab continued when Verizon paid $4.5 billion for Yahoo in 2017.

Now it appears that Verizon has a multi-billion dollar case of buyer’s remorse. Part of the billions that Verizon spent on Yahoo was for the early social network Tumblr, which Yahoo had acquired for $1.1 billion back in 2013.

Earlier this year Verizon unloaded Tumblr for the cost of a luxury Manhattan apartment. That $3 million sale was presaged by the significant fall from grace of other former high-flying media and tech properties.

Vice was once worth $5.7 billion at the height of the media investment bubble, but earlier this year Disney wrote down its stake in the company to virtually nothing.

At least Vice is emerging as a survivor. the company has rolled up Refinery29. Vox Media is also doing well in the new world of media. It bought Recode back in 2015 and recently acquired the publisher behind New York Magazine to expand its purview into paper publications and get its hands on the popular New York websites Intelligencer, The Cut, Vulture, and Grub Street.

Other publications like Hello Giggles, which was founded by the actress Zooey Deschanel, were sold to Time Magazine. High-fliers like Buzzfeed, HuffPost, Vice and Vox have all had to lay off staff in recent months.

It’s been a wild ride for HuffPost, which began in 2005 as a collection of celebrity bloggers brought together under the auspices of Arianna Huffington, from whom the site took its name.

AOL acquired The Huffington Post back in 2011 in a deal that was valued at $315 million less than a year after picking up TechCrunch for $25 million.

Verizon announced layoffs across its media properties at the beginning of the year. It cut roughly 7 percent of its staff — or around 800 jobs — including some at HuffPost.

In a statement to the Financial Times, Verizon said that it would not comment on rumors and speculation.

Neither Verizon Media nor HuffPost responded to a request for comment by the time of publication.

The portrait of an avatar as a young artist

In this episode of Flux I talk with LaTurbo Avedon, an online avatar who has been active as an artist and curator since 2008.  Recently we’ve seen a wave of next-gen virtual stars rise up, from Lil Miquela in the west to pop-stars like Kizuna AI in the east. As face and body tracking make real-time avatar representation accessible, what emergent behaviors will we see? What will our virtual relationships evolve? How will these behaviors translate into the physical world when augmented reality is widespread?
LaTurbo was early to exploring these questions of identity and experimenting with telepresence. She has shape-shifted across media types, spending time in everything from AOL and chat rooms, to MMOs, virtual worlds and social media platforms. In this conversation she shares her thoughts on how social networks have breached our trust, why a breakup is likely, and how users should take control of their data. We get into the rise of battle royale gaming, why multiplicity of self is important, and how we can better express agency and identity online.

An excerpt of our conversation is published below. Full podcast on iTunes and transcript on Medium.

***

ALG: Welcome to the latest episode of Flux. I am excited to introduce LaTurbo Avedon. LaTurbo is an avatar and artist originating in virtual space, per her website and online statement. Her works can be described as research into dimensions, deconstructions, and explosion of forms exploring topics of virtual authorship and the physicality of the Internet. LaTurbo has exhibited all over the world from Peru to Korea to the Whitney in New York. I’m thrilled to have her on the show. Metaphorically of course. It’s just me here in the studio. LaTurbo is remote. 

When we got the demo file earlier I was excited to hear the slight Irish lilt in your robotic voice. As a Brit I feel like we have a bond there.

LaTurbo: Thank you for the patience. It is like a jigsaw puzzle, our voices together.

ALG: Of course it’s all about being patient as we try out new things on the frontier. And you represent that frontier. This show is about people that are pushing the boundaries in their fields. A lot of them are building companies, some are scientists. Recently we’ve had a few more artists on and that’s something I believe is important in all of these fields. Because you’re taking the time to do the hard work and think about technology and its impact and how we can stretch it and use it in different ways and broaden our thinking. You play an important role.

LaTurboWe will get things smoothed out eventually as my vocalization gets easier and more natural with better tools. Alice I appreciate you trekking out here with me and trying this format out.

ALG: I love a good trek. Maybe you can give a brief intro on who is LaTurbo. I believe you started in Second Life. I’d love to hear about those origins. Phil Rosedale was one of the first people I interviewed on this podcast, the founder of Second Life. Shout out to Phil. I’d love to hear what’s been your journey since then. Oh and also happy 10th birthday.

“I’ve spent decades inside of virtual environments, in many ways I came of age alongside the Internet. My early years in my adolescence in role-playing games. From the early years I was enamored by cyber space”

LaTurboI know that it is circuitous at times but this process has made me work hard to explore what it takes to be here like this. Well I started out early on in the shapes of America Online, intranets, and private message boards. Second Life opened this up incredibly, taking things away from the closed worlds of video games. We had to work even harder to be individuals in early virtual worlds using character editors, roleplaying games, and other platforms in shared network spaces. This often took the shape of default characters — letting Final Fantasy, Goldeneye, or other early game titles be the space where we performed alternative identities.

ALG: If you’re referring to Goldeneye on N64 I spent considerable time on it growing up. So I might have seen you running around there.

LaTurbo: It was a pleasure to listen to your conversation with Philip Rosedale as he continues to explore what comes next, afterwards, in new sandboxes. What was your first avatar?

ALG: I did play a lot of video games growing up. I was born in Hong Kong and was exposed mostly to the Nintendo and Sega side of things, so maybe one of those Mario Kart characters — Princess Peach or really I went for Yoshi if those count as avatars. I’d love to get into your experience in gaming. You said you started off exploring more closed world games and then you discovered Second Life. You’ve spent a lot of time in MMORPGs and obviously that’s one of the main ways that people have engaged with avatars. I’d love to hear how your experiences have been in different games and any commentary on the worlds you’re spending time in now.

LaTurbo: I think that even if they weren’t signature unique identities or your own avatar, those forms of early video games were a first key to understand more about facets of yourself through them. For me gaming is like water being added to the creative sandbox. There is fusion inside of game worlds — narrative, music, performance, design, problem solving, communication, so many different factors of life and creativity that converge within a pliable file. Some of the most Final Fantasies of games are now realities. Users move place to place using many maps and system menus on their devices. The physical world so closely bonded by users like me that brought bits of the game out with us. Recently I spent several months wandering around inside of Red Dead Redemption 2. I enjoyed the narrative of the main storyline though I was far more interested in having quiet moments away from all of the violence. I named my horse Sontag and went out exploring, taking photographs and using slow motion game exploits to make videos. Several months as the weary cowboy named Arthur, and then I carried on my way. I take bits and pieces with me on the way.

LaTurbo’s Overwatch avatar

ALG: As you’ve gone across different games and platforms like Red Dead Redemption 2 are there specific people you’ve made friends with? How have your friendships formed in these different communities and do they travel between games? 

LaTurbo: I have had many gaming friends. Virtual friends overlap between all of these worlds. My Facebook friends are not very different than those I fight with in Overwatch or the ones I challenge scores with in Tetris Effect.

ALG: One thing you’ve said about gaming and I’ll read the quote straight out:

“I love the MMO or massively multiplayer online experience for a lot of reasons but primarily because I want to create works collaboratively with my network, because we are in this moment together. For a long time virtual worlds were partitioned from the public because you either had to be invested in gaming or a chat room/ BBS user to get into them.”

I want to explore that. Gaming has come a long way in the 10 years since you were created. It’s more widespread now. Things like Fortnite. I saw that Red Dead Redemption is introducing a Fortnite like feature where they’re going to have battle royale mode and toss people into a battle zone and force them to search for weapons to survive. I think a lot of people are looking at the success of Fortnite and replicating elements of it. Can you comment on how gaming has become more widespread or more in the public mind and what you think of the rise of Fortnite?

LaTurboOur histories are fluid, intersecting and changing depending on the world we choose to inhabit. Sometimes we are discussing art on Instagram. Other times we are discussing game lore or customization of ourselves. This variety is so important to me. There is a lot exchanged between worlds like Fortnite and the general physical day to day. Expectations are real and high. The battle royale model has pushed people to a sort of edge at all times. A constant pressure of chance and risk, it crosses between games but also into general attention. Video apps like TikTok have a similar model — always needing to have the drop on the creators around you.

ALG: It’s interesting that tension. These games are driven to create competition. They are businesses so they’re supposed to build in loops and mechanics that keep people engaging. But as you describe of your experience in Red Redemption you’ve also found quiet moments of exploration being alone and not necessarily fiercely competing. 

LaTurbo: Red Dead could be a hundred games in one. Yet for some reason we come back to the royale again. It is a maximal experience in a lot of ways. One that uses failure and frustration to keep users trying again perpetually. This is a telling sign as you’ve said about the business of games. The loop. I worry that this is a risky model because it doesn’t encourage a level of introspection very often.

ALG: I love video games but have never been a fan of first person shooters. I don’t enjoy the violence. But I’ve always loved strategy and exploration games. To your point about exploring, I would spend hours wandering on Epona [the horse] in Zelda, running across the fields. But I didn’t feel that a lot of those games were designed for women or people who weren’t interested in the violence or the GTA type approach. I’m excited to see more of that happening now and gaming CEOs realizing there’s a huge untapped market of people that want to play in different modes and experience gaming in different ways. It feels like we are moving towards that future. I do want to get in to how you have expanded beyond gaming. I’ll read some of your quotes from when you started out:

“I’ve been making work in digital environments since 2008 to 2009, though I’ve only been using social media for about a year now since I can’t go out and mingle with people it’s been quite nice to use social platforms to share my work. This way I can be in real life IRL as much as people allow me to be.”

I want to get to the question of how you’ve expanded from gaming to social media, building your Twitter and Instagram presence and how you think about your engagement on those platforms.

LaTurbo: I celebrate the multiplicity of self. Walt Whitman spoke of their contradictions years ago accepting themselves in the sense that they contain multitudes. As I wandered the fields of fictitious Admiral Grant in Red Dead Redemption 2, it occurred to me that I was wondering inside of Leaves of Grass. It made sense that I too was wandering around out in the fields and trees. Virtual life in poetry, song, or simulation gives us a different sort of armor where our forms can forget about borders, rules and expectations that have yet to change outside.

It has been quite a decade. Events of the past 10 years could easily be the plot of a William Gibson novel. A cyber drama and all its actors. With and without consent users have watched their personal data slip away from their control, quick to release in the terms of service. Quick to be public, to have more followers and visibility. Is it real without the Instagram proof? I chose to socialize away from game worlds for a few different purposes. To imbue my virtual identity with the moment of social media. But also to create a symbol of a general virtual self. A question mark or a mirror, to encourage reflection before people fully drown themselves in the stream.

ALG: One of the reasons it’s fascinating to talk to you now is that you’ve come of age as the Internet has come of age. You’ve navigated and shape-shifted across these platforms. And so much has happened since 2008. You’ve been on everything from Tumblr to Pinterest to Vine to Snapchat to Instagram. I’m curious where you think we are in the life cycle of these social media platforms?

LaTurbo: It has been quite a journey, seeing these services pop up, new fields, new places. But it is clear that not many of these things will remain very long. A new Wild West of sorts. They are more like ingredients in a greater solution as we try to make virtual relationships that are comfortable for both mind and body.

ALG: Speaking of these services popping up I want to get to something you tweeted out, your commentary on Facebook:

“If it wasn’t bad already just imagine how toxic Facebook will be when we collectively decide to break up with them. Anticipate a paid web and an underweb. We just start spinning them out on our own, smaller and away from all these analytics moneymakers. The changeover from MySpace era networks to Facebook felt minimal because it hadn’t become such a market-oriented utility. But this impending social network breakup is going to be felt in all sorts of online sectors.”

That’s an interesting opinion. The delete Facebook movement is strong right now. But I wonder how far it will go and how many people really follow it?

LaTurbo: Business complicates this as companies extend too far and make use of this data for personal gain or manipulation. In the same way that Google Glass failed because of a camera, these services destroy themselves as they breach the trust of those who use them. These companies know that these are toxic relationships whether it is on a game economy or a social network. They know that the leverage over your personal data is valuable. Losing this, our friends, and our histories is frightening. We need to find some way to siphon ourselves and our data back so we can learn to express agency with who we are online. Your data is more valuable than the services that you give it to. The idea that people feel that it is fair to let their accounts be inherently bound to a single service is disturbing. Our virtual lives exceed us and will continue to do so onward into time. Long after us this data may still linger somewhere.

ALG: I’m going to throw in a Twitter poll you did a few months ago. “If you had the choice to join some sort of afterlife simulation that would keep you around forever at the expense of having your data used for miscellaneous third party purposes would you?” 35% said yes and 65% said no in this poll. I bet if you ask that every two years, over time the answers will continue to change as we get more comfortable with our digital identities and what that really means. You’re pushing us to ask these questions.

LaTurboWe see in museums now torn parchments, scrolls, ancient wrappings of lives and histories. As we become more virtual these documents will inherently change too. A markup and data takes this place. However we consent to let it be represented. If we leave this to the Facebooks and Twitters of this period, our histories are in many ways contingent on the survival of these platforms. If not we have lost a dark ages, it is a moment that we will lose forever.

ALG: I’m curious what you think of the different movements to export your personal data, own it, have it travel with you across platforms and build a new pact with the companies. Are you following any of the movements to take back personal data and rewrite the social technological contract?

LaTurboIt would be sad to have less record of this period of innovation and self-discovery because we didn’t back things up or control our data appropriately. Where do you keep it? Who protects it? Who is a steward of your records? All of this needs to begin with the user and end with the user. An album, a solid state tablet of your life, something you can take charge of without concern that it is marketing fodder or some large shared database. As online as we are as a society, I recommend people have an island. Not a cloud but a private place, plugged in when you request it. A drive of your own where you have a private order. Oddly enough in an older world sense you can find solitude in solid states, when you have the retreat to files that are not connected to the Internet.

ALG: And have it backed up and air-gapped from the internet for safety and possibly in a Faraday cage in case you get EMP’ed. One thing that leads on from that — Facebook has capitalized on using our real data, our personal data. I have the statement on authentic identity from their original S-1 here:

“We believe that using your real name, connecting to your real friends and sharing your genuine interests online creates more engaging and meaningful experiences. Representing yourself with your authentic identity online encourages you to behave with the same norms that foster trust and respect in your daily life offline. Authentic identity is core to the Facebook experience and we believe that it is central to the future of the Web. Our terms of service require you to use your real name. And we encourage you to be your true self online enabling us and platform developers to provide you with more personalized experiences.”

LaTurbo: The use of a real name, authenticity, and Facebook’s message of truth. It is peculiar that Facebook used this angle because it was such a gloved gesture for them to access our accurate records. The verification is primarily to make businesses comfortable with their investment in marketing. I wish it came to celebrate personal expression not to tune business instruments.

ALG: Over the last 5 to 10 years we’ve seen a movement towards Facebook and being our real selves. Now there’s kind of a backlash both to the usage of Facebook but perhaps also to the idea that your real identity, your true self that you have offline, that that’s what you should be representing online. You are an anonymous artist and there’s precedent for that. There have been many writers with nom de plumes over centuries and in the present day we’ve got Daft Punk, Banksy, Elena Ferrante, fascinating creators. I’m curious your thoughts as we move away from real selves being represented online to expressing our other selves online. We’ve been living in an age of shameless self-promotion. Do you think that the rise of people representing themselves with digital avatars is a backlash to that? Society usually goes through a back and forth, a struggle for balance. Do you think people are getting disenchanted with the unrelenting narcissism of social media, the celebrity worship culture? Do you think this is a bigger movement that’s going to stick?

LaTurbo: I see this as an opportunity and I am wary of this chance being usurped by business. If I had the chance to see all of my friends in the avatar forms of their wishes and dreams I believe I’d be seeing them for the first time. A different sort of wholeness against the sky, where they had the chance to say and be exactly what they wished others to find. If you haven’t created an avatar before please do. Explore yourself in many facets before these virtual spaces get twisted into stratified arenas of business.

A full talk from LaTurbo Avedon is available here

I don’t seek to be anonymous but to represent myself in this strand of experiences, fully. That’s who I have become. As an artist I will continue to change with what surrounds me. Each step forward. Each new means of making and learning. I celebrate this and who I will become, even if I continue to find definition over a period of time that I right now cannot fully comprehend.

I am often in the company of crude avatars of the past. As I read journals, view sketches and works from artists past, if they understood their avatar identities and how they would be here now in 2019. I wonder what they would have done differently. What would they think of their graphic design and exhibitions? How their work is shown in other mediums? How their work is sold?

ALG: Taking that with your earlier point, you said if you had the chance you would love to see all your friends in their avatar forms “express all their wishes and dreams.” It fascinates me, the idea that we persistently remain one to one with our offline/online identities. It doesn’t make sense. I feel like everyone has multiple selves and multiple things to express. Do you feel that most people should have a digital identity or abstraction? Do you think it’s healthy to have an extension of something that’s inside of you, especially since as you say some of these avatars are pretty crude. How do you feel about most people creating a digital avatar? People have been doing this for a while without realizing through things like a Tinder bio or Instagram stories. They’re already putting out ideas of themselves. But creating true anonymous digital avatars, is that something people should pursue?

LaTurbo: Avatars remain in places that we often don’t even intend them to. Symbols of self. For those that pass or those we never had the chance to meet, there seems to be importance here. To need to take this seriously so that it isn’t misunderstood. The most beautiful experiences I’ve had online are when I feel I am interacting with a user how they wish to be seen. Whether this is in the present or for people later, finding this inward representation feels essential especially for those exposed to oppressive societies. Whether it’s toxic masculinity, cultural restrictions, or other hindrances that prevent people from showing deeper parts of their identity.

I have four essential asks of users creating avatars. Though these apply well outside of just this topic. 1/ Be sweet. 2/ Encourage others to explore themselves and all of their differences. 3/ Learn about the history of virtual identities, now, then, and long before. This means going back. Read about identities before the internet, pen names, mythologies. 4/ Celebrate your ownership of self. You, not your services, subscriptions, or products, are the one to decide your way. Don’t become billboards. I’ve been asked by many companies over the years to promote their products, to drop the branded text on my clothing or to push a new service. These are exciting times but brands know this too. Be wary of exploitation. Protect yourself and your heart.

ALG: That’s really beautiful and important. We’re rushing into this future fast and I don’t think people are stopping to pause and think about some of the ideas you’ve spent a long time thinking about. It’s probably a good place to end. I have a million more things I want to ask, hopefully we can continue this chat over Discord, Twitter, Instagram, Second Life or wherever it is. I’m in VR a lot so I’d love to meet you in there. If there’s anything you want to end on, any final comments or projects you’re working on?

LaTurbo: Yes I agree with you very much. Technology moves quickly but we need to take the time to consider ourselves as we move inside this space. We have so much potential to be inside and out simultaneously. I am excited for this new year. I hope it brings positivity to everyone. I am showing a new piece called “Afterlife Beta” in London at the Arebyte Gallery. After this I will be working on my first monograph. I am excited to make something printed that might stick around in the physical world for a while.

ALG: That’s awesome. Love a good physical piece. And congratulations on “Afterlife Beta.” I appreciate your patience with my jumping in at all times in this conversation. I’ve been following your work and hope everyone else will too. You’re a fascinating, critical thinker and artist at this current point in history. Thanks LaTurbo.

LaTurbo: Thank you for your patience with my format. As time goes on I hope it is easier for us to be here together.

Tumblr’s next step forward with Automattic CEO Matt Mullenweg

After months of rumors, Verizon finally sold off Tumblr for a reported $3 million — a fraction of what Yahoo paid for the once might blogging service back in 2013.

The media conglomerate (which also owns TechCrunch) was clearly never quite sure what to do with the property after gobbling it up as part of its 2016 Yahoo acquisition. All parties has since come to the conclusion that Tumblr simply wasn’t a good fit under either the Verizon or Yahoo umbrella, amounting to a $1.1 billion mistake.

For Tumblr, however, the story may still have a happy ending. By all accounts, its new home at Automattic is far better fit. The service joins a portfolio that includes popular blogging service WordPress.com, spam filtering service Akismet and long-form storytelling platform, Longreads.

In an interview, this week, Automattic founder and CEO Matt Mullenweg discussed Tumblr’s history and the impact of the poorly received adult content restrictions. He also shed some light on where Tumblr goes from here, including a potential increased focused on multimedia such as podcasting.

Brian Heater: I’m curious how [your meetings with Tumblr staff] went. What’s the feeling on the team right now? What are the concerns? How are people feeling about the transition?

Axios’ Dan Primack on ‘the most polarizing startup that exists’

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week was a bit special. Instead of meeting up at the TechCrunch HQ to record the episode, Kate and Alex met up in muggy Boston at Drift’s office, where we linked up with Axios’s Dan Primack. And since we were feeling chatty, we went a bit long.

After checking in with Primack (he has a newsletter and a podcast), we first dealt with the latest from Tumblr. In short, Verizon Media is selling Tumblr to Automattic for a few dollars. How did Verizon wind up owning Tumblr? Ah. Well, Yahoo bought it. Later, after Verizon bought AOL, it bought Yahoo. Then it smushed them together and called it Oath. Then Verizon decided that it didn’t like that much and renamed the group Verizon Media. But Verizon doesn’t want to own media (besides TechCrunch, of course), so it sold Tumblr to Automattic, a venture-backed company best known for operating WordPress.

That’s a lot, I know. What matters is that Yahoo bought Tumblr for more than $1 billion. Verizon sold it for around $3 million. Now, Automattic now has a few hundred new employees and a shot at juicing its userbase before it goes public.

After that, we lamented that the WeWork S-1 had yet to appear. This was a tragedy, frankly. We had expected to spend half the show riffing on WeWork’s financials, alas…

So we turned to some normal material, like Ramp’s recent $7 million raise to take on Brex, and, SmartNews’s recent round, which gave it an eye-popping $1.1 billion valuation.

We ran a bit long because we were having fun, fitting in some conversation surrounding the notes from the SEC regarding the now-dead and then-fraudulent Rothenberg Ventures. More on that here if you want to get angry.

And finally, Vision Fund 2. It’s been a big source of interest for everyone on the show, and we expect whatever the second-act Vision Fund winds up becoming to be a big damn deal. The fund will invest in more than just consumer marketplaces, in fact, it’s eyeing more AI businesses and even biotech. That should be interesting.

All that and we have a lot more good stuff coming. Thanks for listening to the show, and we’ll be right back.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

Where are all the biotech startups raising?

Where are all the biotechnology companies raising these days? We crunched some numbers to arrive at an answer.

Using funding rounds data from Crunchbase, we plotted the count of venture capital funding rounds raised by companies in the fairly expansive biotechnology category in Crunchbase. Click the chart below and you can hover over individual data points to see the number of venture rounds raised in a given metro area between the start of 2018 and late May 2019 (as of publication). Although there are biotechnology companies located throughout the world, we focused here on just the U.S.

USA_Biotech_2018-May2019

Unlike in the software-funding business, where New York City (and its surrounding area) ranks second in overall deal volume, the greater Boston metro area outranks the Big Apple in biotech venture deal volume. The SF Bay Area (which includes both San Francisco and the towns in Silicon Valley north and west of San Jose) outranks Boston in biotech deal volume, but, then again, it’s also a much larger geographic area with a higher density of startups overall.

The bio business model breeds big deals

Crunchbase News recently covered a $120 million round raised by immunotherapy upstart AlloVir. In the software business, a raise that large would be notable; however, in the business of biology, not so much.

Just for reference, the average Series B round raised by U.S. enterprise software startups between 2018 and May 2019 was about $22.7 million. The average Series B for biotech companies from that same time period: just about $40 million on the dot.

Spinning up a cluster of cells at a lab bench is costlier, harder to do and the outcomes of experiments are less certain than the results of implementing a new software framework. Add to that the tremendous cost of performing clinical trials and clearing regulatory hurdles — all before costly sales and marketing campaigns to get treatments in front of doctors and end users — and it’s easy to understand why many biotechnology companies need to raise so much money in the early stages of the startup cycle.

Backed by LG, AmazeVR is hoping to resurrect virtual reality’s consumer dreams

For over 100 years entrepreneurs have come to Hollywood to try their luck in the dream factory and build an empire in the business of storytelling.

Propelled by new technologies, new businessmen have been landing in Los Angeles since the invention of the nickelodeon to create a studio that would dominate popular entertainment. Over the past five years, virtual reality was the latest new thing to make or break fortunes, and the founding team behind the Korean company AmazeVR are the latest would-be dream-makers to take their turn spinning the wheel for Hollywood fortunes.

Despite billions of dollars in investment, and a sustained marketing push from some of the biggest names in the technology industry, virtual reality still doesn’t register with most regular consumers.

But technology companies keep pushing it, driven in part by a belief that maybe this time the next advancement in hardware and services will convince consumers to strap a headset onto their face and stay for a while in a virtual world.

There are significant economic reasons for companies to persist. Sales of headsets in the fourth quarter of 2018 topped 1 million for the first time and new, low cost all-in-one models may further move the needle on adoption. Hardware makers have invested billions to improve the technology, and they’d like that money to not go to waste. At the same time, networking companies are spending billions to roll out new, high speed data networks and they need new data-hungry features (like virtual reality) to make a compelling case for consumers to upgrade to the newer, more expensive networking plans.

Sitting at the intersection of these two market forces are companies like AmazeVR, which is hoping to beat the odds.

Founded by a team of ace Korean technologists who won fame and fortune as early executives of the multi-billion dollar messaging service Kakao (it’s the Korean equivalent of WhatsApp or WeChat), AmazeVR is hoping it can succeed in a marketplace littered with production studios like Baobab Studios, Here Be Dragons, The Virtual Reality Company, and others.

The company was formed and financed with $6.3 million from its founding team of Kakao co-founder and co-chief executive, JB Lee, who serves as Amaze’s chief product officer; its head of strategy, Steve Lee, AmazeVR’s chief executive; Jeremy Nam, the chief technology officer at AmazeVR and the former senior software engineer of Kakao; and finally, Steve Koo, who led KakaoTalk’s messaging team and is now head of engineering at AmazeVR.

“What we saw as the problem is the content creation itself,” says Lee.

Encouraged by the potential uptake of the Oculus Go and spurred on by $7 million in funding led by Mirae Asset Group with participation from strategic investors including LG Technology Ventures, Timewise Investment, and Smilegate Investment, AmazeVR is looking to plant a flag in Hollywood to encourage producers and content creators to use its platform and get a significant library of content up and running. 

For LG, it’s strategically important to get some applications up on its newly launched 5G subscription network back in Korea, and AmazeVR is already rolling up new content for its VR platform.

In fact, AmazeVR has already partnered with LG U+, the telecommunications network arm of LG to produce virtual reality content. LG U+ will host AmazeVR content on its service use the company’s proprietary content generation tools to make VR production easier as it looks to roll out 1500 new pieces of virtual reality “experiences”.

AmazeVR sells its content as a $7 per-month subscription, with 3 month bundles for $18 and 6 month bundles for $24. So far, they’ve got more than 1,000 subscribers and expect to add more as consumers start opening their wallets to pick up more devices. The company already has 20 different interactive virtual reality experiences available and is in Los Angeles to connect with top talent for additional productions, the company said.

“We believe cloud-based VR is the future, and AmazeVR has developed elegant technology that enables users to create and share interactive content very easily,” said Dong-Su Kim, CEO of LG Technology Ventures, in a statement. “We are incredibly excited about how the AmazeVR platform will enable innovative, quality content to be generated at unprecedented scale and speed.”

AmazeVR uses a proprietary backend to stitch 360-degree video and provide editing and production tools for content creators in addition to building its own cameras for video capture, the company said.

As it builds out its library, AmazeVR is giving video creators a cut of the sales from the company’s subscriptions and individual downloads of their virtual reality experiences.

“We see no reason that VR content shouldn’t be compelling enough to support a Netflix model. To get there, we must devise mechanisms to inspire, assist, and reward content creators,” said Steve Lee, CEO of AmazeVR. “Our approach, commitment to quality, industry-leading technology, and strategic investors provide a path forward to make VR/AR the next great frontier for entertainment and personal displays.”

Cathay Capital and AfricInvest to raise $168M Africa VC fund

Tunisia based private equity firm Africinvest has teamed up with Cathay Capital — a global private equity firm based in Paris — to launch a new Africa tech fund with a target raise of $168 million.

Details are still forthcoming, but the Cathay Africinvest Innovation Fund will focus primarily on series A to C stage investments in African technology companies, says fund co-founder Denis Barrier.

“We’ll look at investments across several countries in Africa. We’ll focus on areas such as fintech, logistics, AI, agtech, and edutech,” Barrier says.

Barrier could not say when the fund would be closed, but did confirm investments could come as early as summer 2019.  He expects to see strong local showing for startups from across Africinvest’s 10 country offices in Abidjan, Algiers, Cairo, Casablanca, Dubai, Lagos, Nairobi, Paris and Port Louis, and Tunis. The firm will open an office in Johannesburg in the near future, according to a company release.

In the private equity space, both founding companies of the new Cathay Africinvest Innovation Fund  carry considerable capital and scope. Co-founded by Denis Barrier and Mingpo Cai, Cathay Capital has $2.5 billion in assets under management and offices in the U.S., Europe, Asia, and the Middle-East.

Per Crunchbase, Africinvest’s 46 venture and debt investments span the brick and mortar side of many of the sectors the new tech fund looks to target, including education and banking.

With the line between banks and fintech also starting to blur in Africa, that could lead to an advantage for the Cathay Africinvest Innovation Fund in sourcing deal flow.

The new investment group enters during a period when investment rounds and the number of funds focused on African startups continues to grow rapidly. By Shenzen or Silicon Valley standards, the value of VC to African startups—which surpassed $1 billion for the first time in 2018 according to Partech—is minuscule. But by one estimate, that represents more than a one-hundred percent increase in VC to Africa over a four-year period.

The number of Africa focused VC firms globally has also grown, topping 51 in 2018 per TechCrunch and Crunchbase research.

The Cathay Africinvest Innovation Fund takes the number of to 52.

Yahoo spinout Altaba is selling its entire Alibaba stake and closing down

Bye bye, Altaba . The Yahoo spinout created to house Yahoo’s lucrative stake in Alibaba and Yahoo Japan, announced today that it will sell its lucrative stake in Alibaba and shut up shop.

The entity has long existed as a proxy to Alibaba — some might argue Yahoo was the same in its final years — and the sale is expected to net shareholders around $40 billion.

Altaba was formed following AOL’s 2017 acquisition of Yahoo to create Oath — disclaimer: that’s TechCrunch’s parent, and it is now called Verizon Media Group — to keep hold of the 15 percent stake in Alibaba and a 35.5 percent stake in Yahoo Japan that Yahoo owned.

Those Yahoo Japan shares were unloaded in September for over $4 billion, and now Altaba will shift its remaining Alibaba holdings — that’s around 11 percent of the company following a partial sale last year; Altaba is Alibaba’s second-largest stakeholder — and disappear from the world by Q4.

The sale is expected to generate a net return of around $40 billion for Altaba stockholders — the provided range is between $39.8 billion and $41.1 billion based on share prices and associated expenditure — and it’ll happen in two parts. The first will see up to 50 percent of the stake sold, the rest will be traded if Altaba receives approval from its stockholders.

Therein Altaba — and Yahoo’s long association — with Alibaba will be over. The reality is that this essentially happened following the Oath deal, Altaba was merely created to hold the asset and at some point that would mean liquidating it. That day is now confirmed and on its way.

“Since June of 2017 we have taken a series of aggressive actions designed to drive shareholder value and these have yielded measurable results as our trading discount has narrowed and our stock has meaningfully outperformed a composite of its underlying assets. The right next action for shareholders is the plan we are announcing today as it represents the most definitive step, generally within our control, that we could take to reduce the discount to net asset value at which our Shares trade,” said Altaba CEO Thomas J. McInerney in a statement.

“Stocks are for trading. Any shareholder has the right to deal stock anytime on the market, for any purpose. We’re happy to have had Yahoo invest in Alibaba in the past and to see it now collecting a strong return on its investment,” an Alibaba spokesperson told TechCrunch.

The story of Yahoo’s involvement with Alibaba is a legendary one.

Yahoo invested $1 billion for 30 percent Alibaba back in 2005 through a (now famous) story between Yahoo CEO Jerry Yang and Alibaba president Jack Ma. Ma, a former English teacher who was then a government employee, was assigned to accompany Yang on a planned trip to see the Great Wall of China and their relationship went from there.

Yahoo infamously sold half of its stake back to Alibaba in 2012 through a deal that valued the shares at $13. Just two years later, Alibaba went public in a record-breaking U.S. IPO. Shares were $68 at the bell, and today they are worth around $181 so Yahoo missed out on an even greater fortune.

Former Oath CEO Tim Armstrong is exiting Verizon with a payout worth more than $60 million

Tim Armstrong will leave Verizon Communications with an awards and benefits package worth more than $60 million. The Wall Street Journal calculated the total amount based on a securities filing from last Monday by combining Armstrong’s compensation in 2018, severance and a special incentive package he was given by Verizon when it acquired AOL in 2015. Armstrong was head of Oath (now called Verizon Media), which took a write down of $4.5 billion last year and laid off seven percent of its workforce as it struggled to compete with other digital media companies.

Oath, the company’s digital media unit, was created in 2017 by merging AOL and Yahoo, two companies acquired by Verizon Communications. (Disclosure: TechCrunch was part of AOL, then Oath and now Verizon Media).

Verizon Communications announced Oath’s $4.5 billion after-tax write down at the end of last year. It said the sum, which basically cancelled out the benefits of the merger, was due to increased competition in digital advertising and other market pressures last year had resulted in lower-than-expected 2018 results and that it expected those issues to continue.

The business unit also announced in late January that it would lay off seven percent of its workforce, or about 800 employees.

After months of rumors, Verizon Communications announced that Armstrong would be succeeded as CEO of Oath by Guru Gowrappan last September. Armstrong formally left the company at the end of 2018.

TechCrunch has contacted Verizon for comment.

EU gov’t and public health sites lousy with adtech, study finds

A study of tracking cookies running on government and public sector health websites in the European Union has found commercial adtech to be operating pervasively even in what should be core not-for-profit corners of the Internet.

The researchers used searches including queries related to HIV, mental health, pregnancy, alcoholism and cancer to examine how frequently European Internet users are tracked when accessing national health service webpages to look for publicly funded information about sensitive concerns.

The study also found that most EU government websites have commercial trackers embedded on them, with 89 per cent of official government websites found to contain third party ad tracking technology.

The research was carried out by Cookiebot using its own cookie scanning technology to examine trackers on public sector websites, scanning 184,683 pages on all 28 EU main government websites.

Only the Spanish, German and the Dutch websites were found not to contain any commercial trackers.

The highest number of tracking companies were present on the websites of the French (52), Latvian (27), Belgian (19) and Greek (18) governments.

The researchers also ran a sub-set of 15 health-related queries across six EU countries (UK, Ireland, Spain, France, Italy and Germany) to identify relevant landing pages hosted on the websites of the corresponding national health service — going on to count and identify tracking domains operating on the landing pages.

Overall, they found a majority (52 per cent) of landing pages on the national health services of the six EU countries contained third party trackers.

Broken down by market, the Irish health service ranked worst — with 73 per cent of landing pages containing trackers.

While the UK, Spain, France and Italy had trackers on 60 per cent, 53 per cent, 47 per cent and 47 per cent of landing pages, respectively.

Germany ranked lowest of the six, yet they still found a third of the health service landing pages contained trackers.

Searches on publicly funded health service sites being compromised by the presence of adtech suggests highly sensitive inferences could be being made about web users by the commercial companies behind the trackers.

Cookiebot found a very long list of companies involved — flagging for example how 63 companies were monitoring a single German webpage about maternity leave; and 21 different companies were monitoring a single French webpage about abortion.

Vulnerable citizens who seek official health advice are shown to be suffering sensitive personal data leakage,” it writes in the report. “Their behaviour on these sites can be used to infer sensitive facts about their health condition and life situation. This data will be processed and often resold by the ad tech industry, and is likely to be used to target ads, and potentially affect economic outcomes, such as insurance risk scores.”

“These citizens have no clear way to prevent this leakage, understand where their data is sent, or to correct or delete the data,” it warns. 

It’s worth noting that Cookiebot and its parent company Cybot’s core business is related to selling EU data protection compliance services. So it’s not without its own commercial interests here. Though there’s no doubting the underlying adtech sprawl the report flags.

Where there’s some fuzziness is around exactly what these trackers are doing, as some could be used for benign site functions like website analytics.

Albeit, if/when the owner of the freebie analytics services in question is also adtech giant Google that still may not feel reassuring, from a privacy point of view.

100+ firms tracking EU public sector site users

Across both government and health service websites, Cookiebot says it identified a total of 112 companies using trackers that send data to a total of 131 third party tracking domains.

It also found 10 companies which actively masked their identity — with no website hosted at their tracking domains, and domain ownership (WHOIS) records hidden by domain privacy services, meaning they could not be identified. That’s obviously of concern. 

Here’s the table of identified tracking companies — which, disclosure alert, includes AOL and Yahoo which are owned by TechCrunch’s parent company, Verizon.

Adtech giants Google and Facebook are also among adtech companies tracking users across government and health service websites, along with a few other well known tech names — such as Oracle, Microsoft and Twitter.

Cookiebot’s study names Google “the kingpin of tracking” — finding the company performed more than twice as much tracking as any other, seemingly as a result of Google owning several of the most dominant ad tracking domains.

Google-owned YouTube.com, DoubleClick.net and Google.com were the top three tracking domains IDed by the study. 

“Through the combination of these domains, Google tracks website visits to 82% of the EU’s main government websites,” Cookiebot writes. “On each of the 22 main government websites on which YouTube videos have been installed, YouTube has automatically loaded a tracker from DoubleClick .net (Google’s primary ad serving domain). Using DoubleClick.net and Google.com, Google tracks visits to 43% of the scanned health service landing pages.”

 

Given its control of many of the Internet’s top platforms (Google Analytics, Maps, YouTube, etc.), it is no surprise that Google has greater success at gaining tracking access to more webpages than anyone else,” it continues. “It is of special concern that Google is capable of cross-referencing its trackers with its 1st party account details from popular consumer-oriented services such as Google Mail, Search, and Android apps (to name a few) to easily associate web activity with the identities of real people.”

Under European data protection law “subjective” information that’s associated with an individual — such as opinions or assessments — is absolutely considered personal data.

So tracker-fuelled inferences being made about site visitors are subject to EU data protection law — which has even more strict rules around the processing of sensitive categories of information like health data.

That in turn suggests that any adtech companies doing third-party-tracking of Internet users and linking sensitive health queries to individual identities would need explicit user consent to do so.

The presence of adtech trackers on sensitive health data pages certainly raises plenty of questions.

We asked Google for a response to the Cookiebot report, and a spokesperson sent us the following statement regarding sensitive category data specifically — in which it claims: “We do not permit publishers to use our technology to collect or build targeting lists based on users’ sensitive information, including health conditions like pregnancy or HIV.”

Google also claims it does not itself infer sensitive user interest categories.

Furthermore it said its policies for personalized ads prohibit its advertisers from collecting or using sensitive interest categories to target users. (Though saying you’re telling someone not to do something is not the same as that thing not being done. That would depend on the enforcement.)

Google’s spokesperson was also keen to point to its EU user consent policy — where it says it requires site owners that use its services to ensure they have correct disclosures and consents for personalised ads and cookies from European end users.

The company warns it may suspend or terminate a site’s use of its services if they have not obtained the right disclosures and consents. It adds there’s no exception for government sites.

On tags and disclosure generally, the Google spokesperson provided the following comment: “Our policies are clear: If website publishers choose to use Google web or advertising products, they must obtain consent for cookies associated with those products.”

Where Google Analytics cookies are concerned, Google said traffic data is only collected and processed per instructions it receives from site owners and publishers — further emphasizing that such data would not be used for ads or Google purposes without authorization from the website owner or publisher.

Albeit sloppy implementations of freebie Google tools by resource-strapped public sector site administrators might make such authorizations all too easy to unintentionally enable.

So, tl;dr — as Google tells it — the onus for privacy compliance is on the public sector websites themselves.

Though given the complex and opaque mesh of technology that’s grown up sheltering under the modern ‘adtech’ umbrella, opting out of this network’s clutches entirely may be rather easier said than done.

Cookiebot’s founder, Daniel Johannsen, makes a similar point to Google’s in the report intro, writing: “Although the governments presumably do not control or benefit from the documented data collection, they still allow the safety and privacy of their citizens to be compromised within the confines of their digital domains — in violation of the laws that they have themselves put in place.”

More than nine months into the GDPR [General Data Protection Regulation], a trillion-dollar industry is continuing to systematically monitor the online activity of EU citizens, often with the unintentional assistance of the very governments that should be regulating it,” he adds, calling for public sector bodies to “lead by example – at a minimum by shutting down any digital rights infringements that they are facilitating on their own websites”.

“The fact that so many public sector websites have failed to protect themselves and their visitors against the inventive methods of the tracking industry clearly demonstrates the educational challenge that the wider web faces: How can any organisation live up to its GDPR and ePrivacy obligations if it does not control unauthorised tracking actors accessing their website?”

Trackers creeping in by the backdoor

On the “inventive methods” front, the report flags how third party javascript technologies — used by websites for functions like video players, social sharing widgets, web analytics, galleries and comments sections — can offer a particularly sneaky route for trackers to be smuggled into sites and apps by the ‘backdoor’.

Cookiebot gives the example of social sharing tool, ShareThis, which automatically adds buttons to each webpage to make it easy for visitors to share information across social media platforms.

The ShareThis social plugin is used by Ireland’s public health service, the Health Service Executive (HSE). And there Cookiebot found it releases trackers from more than 20 ad tech companies into every webpage it is installed on.

“By analysing web pages on HSE.ie, we found that ShareThis loads 25 other trackers, which track users without permission,” it writes. “This result was confirmed on pages linked from search queries for “mortality rates of cancer patients” and “symptoms of postpartum depression”.”

“Although website operators like the HSE do control which 3rd parties (like ShareThis) they add to their websites, they have no direct control over what additional “4th parties” those 3rd parties might smuggle in,” it warns.

We’ve reached out to ShareThis for a response.

Another example flagged by the report is what Cookiebot dubs “YouTube’s Tracking Cover-Up”.

Here it says it found that even when a website has enabled YouTube’s so-called “Privacy-enhanced Mode”, in a bid to limit its ability to track site users, the mode “currently stores an identifier named “yt-remote-device -id” in the web browser’s “Local Storage”” which Cookiebot found “allows tracking to continue regardless of whether users click, watch, or in any other way interact with a video – contrary to Google’s claims”.

“Rather than disabling tracking, “privacy-enhanced mode” seems to cover it up,” they claim. 

Google did not provide an on the record comment regarding that portion of the report.

Instead the company sent some background information about “privacy-enhanced mode” — though its points did not engage at all with Cookiebot’s claim that tracking continues regardless of whether a user watches or interacts with a video in any way.

Overall, Google’s main point of rebuttal vis-a-vis the report’s conclusion — i.e. that even on public sector sites surveillance capitalism is carrying on business as usual — is that not all cookies and pixels are ad trackers. So it’s claim is a cookie ‘signal’ might just be harmless background ‘noise’.

(In additional background comments Google suggested that if a website is running an advertising campaign using its services — which presumably might be possible in a public sector scenario if an embedded YouTube video contains an ad (for example) — then an advertising cookie could be a conversion pixel used (only) to measure the effectiveness of the ad, rather than to track a user for ad targeting.

For DoubleClick cookies on websites in general, Google told us this type of cookie would only appear if the website specifically signed up with its ad services or another vendor which uses its ad services.

It further claimed it does not embed tracking pixels on random pages or via Google Analytics with Doubleclick cookies.)

The problem here is the lack of opacity in the adtech industry which requires users to take ad targeters at their word — and trust that an adtech giant like Google, which makes pots of money off of tracking web users to target them with ads, has nonetheless built perfectly privacy-respecting, non-leaky infrastructure that operates 100% as separately and cleanly as claimed, even as the entire adtech industry’s business incentives are pushing in the opposite direction.

Also a problem: Certain adtech giants having a long and storied history of bundling purposes for user data and manipulating consent in privacy-hostile ways.

And with trust in adtech at such a historic low — plus regulation having been rebooted in Europe to put the focus on enforcement (which is encouraging a cottage industry of GDPR ‘compliance’ services to wade in) — the industry’s preferred cloak of complex opacity is under attack on multiple front (including from policymakers) and does look to be on borrowed time.

And as more light shines in and risk steps up, sensitive public sector websites could just decide to nix using any of these freebie plugins.

In another “inventive” case study highlighted by the report, Cookiebot writes that it documented instances of Facebook using a first party cookie workaround for Safari’s intelligent tracker blocking system to harvest user data on two Irish and UK health landing pages.

So even though Apple’s browser natively purges third party cookies to enhance user privacy by default Facebook’s engineers appear to have managed to create a workaround.

Cookiebot says this works by Facebook’s new first party cookie — “_fbp” — storing a unique user ID that’s then forwarded as a URL parameter in the pixel tracker “tr” to Facebook.com — “thus allowing Facebook to track users after all”, i.e. despite Safari’s best efforts to prevent pervasive third party tracking.

“In our study, this combined tracking practice was documented on 2 Irish and UK landing pages featuring health information about HIV and mental illness,” it writes. “These types of workarounds of browser tracking prevention are highly intrusive as they undermine users’ attempts to protect their personal data – even when using browsers and extensions with the most advanced protection settings.”

Reached for a response to the Cookiebot report Facebook also did not engage with the case study of its Safari third party cookie workaround.

Instead, a spokesman sent us the following line: “[Cookiebot’s] investigation highlights websites that have chosen to use Facebook’s Business Tools — for example, the Like and Share buttons, or the Facebook pixel. Our Business Tools help websites and apps grow their communities or better understand how people use their services. For example, we could tell them that their site is most popular among people aged 20-25.”

In further information provided to us on background the company confirmed that data it receives from websites can be used for enhancing ad targeting on Facebook. (It said Facebook users can switch off ad personalization based on such signals — via the “Ads Based on Data from Partners” setting in Ad Preferences.)

It also said organizations that make use of its tools are subject to its Business Tools terms — which Facebook said require them to provide users with notice and obtain any required legal consent, including being clear with users about any information they share with it. 

Facebook further claimed it prohibits apps and websites from sending it sensitive data — saying it takes steps to detect and remove data that should not be shared with it.

ePrivacy Regulation needed to raise the bar

Commenting on the report in a statement, Diego Naranjo, senior policy advisor at digital rights group EDRi, called for European regulators to step up to defend citizens’ privacy.

For the last 20 years, Europe has fought to regulate the sprawling chaos of data tracking. The GDPR is a historical attempt to bring the information economy in line with our core civil liberties, securing the same level of democratic control and trust online as we take for granted in our offline world. Yet, as this study has provided evidence of, nine months into the new regulation, online tracking remains as hidden, uncontrollable, and plentiful as ever,” he writes in the report. “We stress that it is the duty of regulators to ensure their citizens’ privacy.”

Naranjo also warned that another EU privacy regulation, the ePrivacy Regulation — which is intended to deal directly with tracking technologies — risks being watered down.

In the wake of GDPR it’s become the focus of major lobbying efforts, as we’ve reported before.

“One of the great added values of the ePrivacy Regulation is that it is meant to raise the bar for companies and other actors who want to track citizens’ behaviour on the Internet. Regrettably, now we are seeing signs of the ePrivacy Regulation becoming watered out, specifically in areas concerning “legitimate interest” and “consent”,” he warns.

“A watering down of the ePrivacy Regulation will open a Pandora’s box of more and more sharing, merging and reselling of personal data in huge online commercial surveillance networks, in which citizens are being unwittingly tracked and micro-targeted with commercial and political manipulation. Instead, the ePrivacy Regulation must set the bar high in line with the wishes of the European Parliament, securing that the privacy of our fellow citizens does not succumb to the dominion of the ad tech industry.”