This Week in Tech 460 (Transcript)

Mike Elgan: It’s time for TWIT, This Week In Tech. Leo’s out today, I'm Mike Elgan filling in for him. We have the Technologizer, Harry McCracken, he’s here. Along with CNET’s Lindsey Turrentine and Katie Benner from The Information. We talk about major moves by Apple including Beats, Healthbook, Smarthomes and what's going to happen at WWDC this week. Plus, Google’s crazy car and Microsoft’s crazy Smart Watch. It’s all coming up right now on TWIT.

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Mike: This Is TWIT, This Week In Tech episode 460, recorded June 1^st 2014

Drones Delivering Diapers

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Harry McCracken: Thanks Mike, it’s great to be here.

Mike: Now before we introduce the other people in the show in want to ask you about the Technologizer because this site is now reborn. You've been famously with Time.com for quite a while, bringing a lot of street cred with that publication in my opinion and now you're branching back out on your own. You're re-energizing the Technologizer, tell us what you're going to do with that site.

Harry: Well I'm kind of going back to basics. I was that time for a little over 2 years and Technologizer was part of Time.com so it was a tiny island in an extremely large ocean of content. And I decided to leave Time recently and the cool thing was I was able to take Technologizer back with me and I put it back on Wordpress. One of the cool things with being a journalist today is you can work for a large media company and also reach a lot of people on your own. So I put together a new design. It’s not going to be completely different from what I did that time or what I did when Technologizer was a standalone brand but I'm going to try even less hard to kind of be a news destination. There are all kinds of sites such as CNET and The Verge and others who are better for news than I can ever be on my own. But then I came through an analysis, an insight and – so I call it slow cooked content. I'm not going to try to do 40 plus a day. I'm going to point people towards good posts elsewhere and I’ll do relatively little content but hopefully of high enough value that people will notice it.

Mike: And that's really one of the uber trends that's making Tech Journalism and Journalism in general so great these days because people like you are leaving the big mainstream publications and they're branching out into sort of these kind of start-up mode of operations, ranging in size from you know The Information, we’re going to talk about The Information in a sec, Technologizer and then doing the more in depth reporting and it’s getting to the point where I think Technology Journalism is actually becoming one of the best forms, the highest quality forms of Journalism. Also, there's a lot of garbage out there, let’s face it but there's such good Journalism these days. So I'm really excited about that. The truth is that people don't go to Time.com and say “I want to go to Time.com because they have the best technology coverage”, they go “I'm going to go read Harry McCracken”. The individual columnists and analysts are the brand these days. And so you know it’s great, you're going to bring your audience with you and I'm going to be looking forward to seeing what you do.

Harry: And an awfully high percentage of them, when they go to content it’s because their friends or people they trust told them about it on Twitter or Facebook or Google Plus. So although Time was a great place to be, I feel like the entire web is the front door to Technologizer if my content is good enough.

Mike: Absolutely and it will be I'm sure. I've been following you for a long time. You and I go way back to the PC Magazine Wars.

Harry: The old magazine days.

Mike: You and I were both competing against PC Mag, which was the 800 pound gorilla. But anyway, welcome and congratulation.

Harry: Thank you Mike.

Mike: All right, also joining us today is Lindsey Turrentine, Editor-In-Chief of CNET Reviews. Lindsey came all the way from slightly south.

Lindsey Turrentine: From Berkeley, yeah just a little ways.

Mike: Yeah, Berkeley. And so what have you been working on lately? You've been in the business for a while, and we've had you on Tech News Today a bunch of times and you are fantastic on that show.

Lindsey: Thank you, thank you.

Mike: You seem to know everything.

Lindsey: Well, that's my job. I have to know everything. We’re working on a lot of exciting things. Some of the most exciting things that we've done recently is launch CNET En Espanol close to a year ago. Getting close to a year ago and it’s growing and growing and now is the largest tech site in Spanish.

Mike: That's fantastic.

Lindsey: …in the US which is really exciting. It’s been a fun project and we're doing a lot of interesting stuff about the connected home. So we cover appliances already in a big way. We have this big facility in Kentucky where we do that and we're doing some really interesting stuff that we're going to be talking about soon.

Mike: Yeah, I bet in the sort of home automation world is really about to take off. And I think that's really going to be a launch into the stratosphere tomorrow. And we’ll talk about that later in the show.

Lindsey: Yes.

Mike: But that's really exciting that you guys are all over that because that's really going to be a major, major thing that all of are going to be talking about over the next few years.

Lindsey: Yeah it’s a very exciting time.

Mike: All right, well welcome to TWIT.

Lindsey: Thank you.

Mike: And we also have Skyping in all the way from San Francisco, California, a few miles south Katie Benner who’s a reporter for The Information. Welcome Katie.

Katie Benner: Hey, thanks for having me.

Mike: Now you're with one of the entrepreneurial poster children of the new age of technology journalism, The Information launched by Jessica Lessin. How is that going for you guys, you seem to be cranking out some pretty awesome stories and sort of getting a lot of tension and generating a lot of scoops. What’s it like to work for one of these entrepreneurial tech journalism start-ups?

Katie: It’s really, really great. The pace is incredibly fast because not only are we reporting on news that's changing all the time and the tech industry, it’s so innovative and changing all the time. As anybody who has ever worked at a start-up can tell you the actual business itself seems to become a new company kind of every four weeks. You know you grow and you learn and you're always incorporating new information and new ideas about how to run your business so this is incredibly good. It’s a good bootcamp for anybody who really wants to understand how to make the media industry a better place and more profitable etcetera, etcetera. I'm writing exciting stories, we love it.

Mike: Yes you are and you personally have a background in Financial and Business Journalism, is that right?

Katie: That's right, so I was at Fortune Magazine for seven years covering Wall Street so it started out as kind of a you know fun beat – actually much like covering tech today is where it’s exciting and things are changing a lot and you just hear about new, new, new, growth , growth, growth. And then suddenly the financial crisis happened and it became this extraordinarily fascinating thing to look at. You know to re-examine all the assumptions, the people that had leading in 2008 and late 2007 and you know the things that people had missed because they were just awash in growth and optimism about what's happening on Wall Street. So this feels like a very interesting time to be covering tech. There are some similarities for sure.

Mike: Yeah, absolutely it is a fascinating time and I'm really enjoying what you guys are doing at The Information. Well, let’s launch into the show shall we. Let’s start with the wackiest story I think of the week, which is Google’s funky little clown car. Harry McCracken what do you think? Why did they actually trot out a car that has no steering wheel as a way to make people feel more comfortable about self-driving cars?

Harry: Well, I was kind of fascinated by it because a couple of weeks before that news came out they had their first bit of that for their earlier self-driving cars which were converted Lexus SUVs which had steering wheels and brakes and everything. And so I was up to date on what they were doing and then it turned out that actually no, they had concluded that was never really going to work as a model for this and they have been secretly building an entire car from scratch to be self-driving. Which I have to say, I haven't been in that yet but one of the things that was comforting about being in the Lexus was because there were two Google engineers in the front seat—

Mike: Licensed drivers, what a concept.

Harry: … yeah and they frequently explained to us that the whole was whenever the car came into danger or something where you kind of did not want your car making decisions, no problem there was somebody at the wheel who could take over in the blink of an eye and steer you through it.

Mike: And of course these cars are going to have – they're going to build a hundred prototypes they say and those prototypes will have steering wheels and brakes. You know the kinds of things that you want to be in a car. And the video I thought was kind of disingenuous in a way. It has a single button so in this particular prototype you push a button and it goes somewhere and you push a button if you want it to stop if a squirrel runs out the road or something like that. And it’s like “Wait a minute, how do you even tell it where to go?” I understand that you can do this in a parking lot but it just seems like they didn't really raise the basic issues of how this thing works. They just showed how cool it is for people getting excited driving in a parking lot. Lindsey Turrentine, what do you think? Was this – yeah, I mean they're obviously excited but—

Lindsey: Well, this is Google’s way right, to just start with an idea and kind of just throw it out there and say “Start thinking about this”, start to think about what this could be like and get people imaginations going and I think, you know Google is at it’s very basis all about the data. So they're seeing a future in which data drives your car, you tell it where you want to go and it just does all the thinking for you. I think that this is – there's a very long list of cultural problems that Google has to get over and they know that so they're trying to start early. But the thing that I've been thinking about a ton is that like – let’s say that this gets used in the small capacity right, and we start using these for essentially Uber.

Mike: Yeah.

Lindsey: You call one and it takes you across the city. Not on a 50 mile trip but just to the grocery store. But what happens if you do need to take over at some point and if this became a huge cultural norm, how do people get the hundreds of hours behind the wheel that they need to be able to take over safely when they have to?

Mike: Yeah.

Leo: Because I don't think we’re all going to be in self-driving cars in ten years. It’s going to take a lot longer than that.

Mike: Yeah, well I tend to think that this is going to be a gradual thing. We’re looking at super cruise control you know.

Lindsey: Yeah, exactly.

Mike: We've already got that to a certain extent. The high end cars, the rich people are much safer than poor people because they can buy one of these high end cars and if somebody slams on the brake in front of you, in fact Vic Gundotra of all people did a commercial for one of the big car companies. I don't know if you remember that, where he said “Oh, this car saved my life because I wasn't paying attention and the car in front of me slammed on the brakes and the car automatically slammed on the brakes”.

Lindsey: Yeah, for sure.

Mike: And so that kind of thing, that kind of thing is actually easy to do relative to the self-driving car thing because the self-driving car thing is all about maps and sophisticated maps. Yes, Google has completely mastered Mountain View, California.

Harry: Oh it’s great in Mountain View.

Mike: Yeah.

Harry: Petaluma, probably not so much.

Mike: Yeah and you know we’re talking about a couple of thousand you know miles of road that they've mapped, in fact there are millions of millions of millions of miles of roads yet to map. And of course lots of companies are working on this kind of technology. All the car companies are working on it. I personally think that this car has two purposes. The first is to show that you can't just slap electronics on the roof of a Lexus or a Prius. You need sensors down below. You need the whole car purpose built for self-driving if you really want to do it right. And the second thing is, I mean look at this thing, it has a face on it. I mean who can stay mad at this car? It’s like, you know they're trying to make it so warm and fuzzy that when they go to you know—

Lindsey: This is the not – it’s the opposite of you know the sort of muscle car experience that we all get advertised to all the time.

Mike: Yeah.

Lindsey: And I think this is what Google’s trying to go after, like “Hey this is not – we’re not trying to replace your amazing driving experience. This is functional, it’s something that'll make things easier for you and it’ll be fun. Like if you're not a person who loves driving or you're a person who need convenience and you want to just text in the car, you can do that safely because you're not driving.

Mike: Yeah, exactly and of course anything that the self-driving car does, you run over an old lady, you hit a dog, whatever it is that you do, whatever the car does, whatever it is, Google’s algorithms do frankly, you're going to be liable. When these things hit the road, you're not going to be able to sit there and drink Scotch and playing Backgammon and just like not even worrying about what's going on. You can be liable—

Lindsey: That's a bummer.

Mike: …I know, that's the bad news.

Katie: I think this is where the data comes in to play because I think that one thing that all the self-driving car people are thinking about Google especially and even some of the automakers is how do we make this the norm and I think the way they do it is by getting insurance companies on board. So the insurance companies are very, very concerned about data and if data can prove that it’s cheaper and safer for the insurance companies, they're going to encourage more and more and more automation in vehicles. And so we’ll be pushed along as a public to accept technology that we might not - that we might feel as kind of icky right now just because it will be cheaper. I saw a really fascinating speech given by Dan Geer who’s over at In-Q-Tel and he has done a lot you know he’s just sort of one of these guys who thinks about big tech problems. And he was like “There will probably be a day, someday not now but not too far away where none of us will really be able to afford to own and drive cars that don't have some level of extreme automation because the insurers will demand it.” And so Google wants to make this friendly car and it’s really cute and they want to convince us that we want to drive. And the scariness and that sort of weird sci-fi Orwellianess of a self-driving car we can get over it with the face. But in the background they're also you know thinking very hard about how to not just make us feel better about it but to force us to do another [?].

Mike: I personally want a self-driving car that has a sort of ventriloquist dummy looking Johnny Cab kind of face there that's like talking to me and being crazy. I think that would make it all worthwhile for me personally.

Lindsey: Yeah, would you like it to also speak out?

Katie: I want a sofa in my self-driving car.

Lindsey: A sofa, a dog bowl.

Mike: Sure, yeah absolutely.

Katie: Yeah, I was very disappointed to see that there wasn't more comfortable seating in this thing.

Mike: I know, put a bed in there or something. You know put a hammock or something in there, that would great.

Lindsey: You know the biggest practical thing that I keep thinking about the self-driving car is “Gosh, I work all the time, if I had a self-driving car I would ever have a chance not to work”. Like right now driving is when I just don't work.

Mike: In fact for you I think you should get a self-driving office because imagine if you – you know you could go to like, you could drive to the other side of the country to attend a trade show or something and slave away the entire way. Have a desk in there.

Lindsey: Nirvana.

Mike: Yeah it’ll be fantastic.

Harry: It’s weird being in a place where in can’t do email and whatnot, which is what a car is for me.

Mike: Yeah, yeah exactly. Well remember when airplanes were like that. I used to love flying because it was like “Nobody can call me, nobody can reach me on you know email or whatever.” Those days are gone. Well Google’s up to a lot more than just self-driving cars. They have according to reports, rumors, whatever you want to call it they are working on Android TV to replace Google TV. Harry McCracken what's the different between Android TV and Google TV?

Harry: Well the rumors are a little fuzzy. I mean it sounds like Android TV, A, it plays up the Android brand which has a lot of momentum in and of its own. And B, gaming is a big part of itself. It’s a little reminiscent of what Amazon is doing with Fire TV, which is a TV box but one which was recently serious about gaming and I mean depending on how you count this, this is Google’s third maybe fourth attempt to come into the living room with a device because there was Google TV and there was Google TV 2.0 and there was the Nexus Q which was that magic 8 ball looking thing which I think they gave up on before they actually anybody paying for it.

Mike: Did anybody get that except Google IO attendees?

Harry: They gave it out at Google IO and then they sort of slowly decided that maybe it wasn't going to work out after all and gave up on it. Of course I mean really there are only, I mean depending how you count, there are I think either four companies that have succeeded at TV box. Those companies are Roku, Apple with the Apple TV, and probably Microsoft and Sony with the Xbox and the Playstation which are both used hugely for streaming video. Other than that, there have dozens if not hundreds of TV box, those which have come and gone over the years—

Lindsey: Comcast has been very successful.

Harry: Comcast yeah.

Lindsey: And it’s limited but it’s appealing.

Harry: I guess Comcast has been successful, I mean I think they've managed to sell a lot of them. I kind of curious many are actually in use because there were a lot of people who were like “This is incredibly cheap, I'm going to buy one.” And how many of them stayed in use, I'm not sure.

Mike: So it seems to me that one of the fascinating things about these reports that we’re hearing again, these are – all this information is not something that Google’s announced and is something that I think some of us are expecting at Google IO, which is not for some time. When is Google IO, June?

Harry: End of the month.

Mike: End of the month, that's right it’s June already. End of this month.

Lindsey: Junesanity.

Mike: Almost a month. And one of the big differences between this and the Fire TV is the Fire TV is a product. You go to Amazon.com and you order one and they send you a box and it has gaming and it has apps and it has some other things that are associated with your Prime account. Whereas this is a platform for other people to build a box, for other people to build a TV with the stuff built-in but what they have in common is a strong emphasis on games. So does anybody think that Google is going to become a powerhouse in gaming?

Lindsey: I think that Google wants to set itself up to be a powerhouse in gaming if that opportunity arises and it wants to have an opening in anything. I also think that this is Google’s way of continuing – I mean I am pretty impressed that they keep trying this after the Google TV you know.

Mike: Fiasco—

Lindsey: Fiasco, try and try again. But the different between the two, or at least the rumor difference is that Google TV tried to marry the traditional television and then the streaming television experiences and this is just the latter right. And so it’s really opening up a platform if you can get people in to watch streaming tv seamlessly. And then once those games start to come over the internet, become more powerful, there's already that sandbox for it.

Mike: Yeah, absolutely. And Google IO last year, you were there. I don't know if you went to Google IO last year but they were talking about you know, using Google Plus as the sort of communications medium for their coming game platform for Android. And I wonder how that's going to happen, you know whether it’s going to be Google Plus, whether it’s going to be Youtube.

Harry: Well the latest rumors are that maybe they're moving forward, they're going to be less aggressive about Google Plus being the platform for everything and maybe saying you know Google has all the services and we’re not going to, sorry Mike I know you like Google Plus—

Mike: I do.

Harry: …we’re not going to shove Google Plus into the face of the people who don't necessarily want it.

Mike: Yup, yeah I mean that's essentially my – I guess it’s somewhere between an assumption and sort of an analysis of the situation which is that Vic Gundotra really drove the Google Plusification of everything in the company. And from within Google, what that means is that no matter what division you are in, no matter what division you are in charge of Google Plus is more important than you. And you had to change your product for the objectives of Google Plus rather your own objectives. And so Youtube and so on. And I think there's got to be, and again I'm not a fly on the wall I don't know what's really going on at Google but that's got to be why Vic Gundotra left to a certain extent. He burned every bridge there was because he was the guy, you know forcing everybody to do stuff they didn't want to do. And so yeah, I think that that's the days of forced integration that's widespread and aggressive are definitely over. And it doesn't affect Google Plus at all, I mean as a social network, who cares. Those things were all for the theoretical benefit of other Google properties.

Harry: It might help Google Plus given that among people who don't love Google Plus it doesn't ever create reputation partially because people think of it as something being forced on them. If Google Plus succeeded because it was good, which it is in a lot of ways it might good for everybody.

Mike: Yeah absolutely, well Google is also having an interesting time in Europe these days because they often clash with the Europeans over a variety of things. Things like Street View, car and so on. The most recent clash is over the right to be forgotten. So some guy in Spain had some financial trouble some years ago. And then fast forward he cleaned up his financial act and he got to the point where he was you know, he was doing fine and he didn't have you know all these debt and so on. But when you searched for his name, you could find, you know he looked like a financial basket case and it harmed his reputation. So he took it to court and he won. And what that meant was that Google is now required to enable European users, because of one Spanish judge by the way, to enable European users to submit a proposal that they have their information, the link not the information, the link in Google, in Google search engine and every search engine to be removed. So this affects not only Google, Google lost the case, they were the, I guess the defendant to whatever you want to call it in a law suit. But they now have to comply, they have done so. So this happened some time ago and now they've actually put up their form saying if you want to remove your link, here's the form, fill it out and thousands of people have done that. Now this is a controversial thing, Katie Benner what do you think of all this? I know you have a point of view on this.

Katie: I think initially it feels like a very good idea because I think people are trying to find ways to take back control of their online identity. I mean it’s why things like Snapchat are successful, things that disappear so that we don't feel stuck with everything we do online. It gets into a very tough territory essentially, sort of censoring the web. So I think Google if they decide to take down a link, they're also going to note that a link is disappeared and how many links do they take down, what does that mean, who are they rewriting the history for, is it useful to have some of this information available, how do they decide. This is just such, such tricky territory so I think it will be – I think it will actually be a lot harder than people think for this to be successful.

Mike: Absolutely, I mean does anybody in this counsel of wisdom support the European decision, this idea of right to be forgotten? Is this something that has value that outweigh the complications?

Lindsey: I've been thinking about it a lot because I mean we all probably have links we’d like to take down and I don't think it’s a good idea. For one thing I think that there's an entire industry that will grow up around it, that will be, you know you'll find a consultant who knows the right language to use in the form and all of the right tactics to take to get certain things taken down regardless of whether it’s a good idea or it’s really something that is, you know a link that's no longer relevant. And it doesn't seem like there are very good guidelines yet about what makes a link something that deserves to be taken off of Google.

Mike: Yeah, that's one of the crazy things about this, is the European regulators have constantly told Google “Google we don't trust you, we don't trust you with your Street View car. We don't trust you with your, you know with you listing your competitors on your search engine. We think you're favoring yourselves.” They go on and on about how they don't trust Google and then in this ruling they say “But you know what, you're in charge of deciding what's a good link, what's a bad link, what's a relevant link, what's an irrelevant link. That's all up to you Google, good luck”

Lindsey: Yeah that seems crazy, I mean it seems like if that's going to happen and maybe there's a future in which there's a way that we get certain things taken down so that you know public interest in something that is not true doesn't drive untruths to the top.

Mike: Right.

Lindsey: But there needs to be legislation around that, it can't be up to Google.

Mike: Right, and to me the—

Katie: And also – I was going to say there are also companies already that exist that do reputation scrubbing online and of course I mean what the EU is saying that you shouldn't have be like a really wealthy person who can hire reputation.com or one of these services. But this is something that already exists.

Mike: Yeah absolutely but one of the things that's really – the worst thing about this and let me frame this in a way that sort of reveals it for what it really is, what they're asking Google to do, so there's a beautiful situation that exists, we have an internet right? It exists, we have search engines to help you find the things that are on the internet. So what this ruling does, is it say “Okay Google, we want you to lie. We want you to have your search engine not reflect the actual internet but to reflect whatever’s left over after everybody who has the resources, the time or whatever to scrub it” and by the way this is only for Europe. So to me, Europe is going to have an increasingly inaccurate search engine. And Europeans who are savvy are going to find ways around it. They're just going to use the American version of Google or some other version of Google. And in fact this is what people in China already do, this is what you do when you have a censored internet. You find – you use tools, various tools which are freely available to get around what's there and then the you know, again it’s another digital divide isn't it? Because the tech savvy people, the knowledgeable people, the educated people are going to get the real internet and then the average person is going to get a censored version of the internet. It’s an awful state of affairs and I think Europe needs to revisit this and not just allow one Spanish judge to essentially wreck the internet for an entire continent.

Katie: Well keep in mind this is Europe.

Harry: And who decides what needs to be scrubbed?

Katie: You know, this is very European, this is the same – the EU that regulate the way a tomato can look before it goes to the market. I mean there is such an amazingly rule bound kind of hide bound place. So it’s not entirely surprising.

Harry: And Mike you're right, they sort of have been you know at war with Google for many years over all kinds of stuff. I mean, it may not entirely be a coincidence that Google is this large company had imported in the US which has so much impact in Europe and there have been all these attempts to curate the European Google, none of which have really taken off.

Mike: That's right and they take a different tact and a tact that doesn't really work. For example there was some years ago, French government has these cultural sort of divisions or whatever you want to call them and they were freaking out that Google was digitizing all the books and sort of kind of becoming this powerhouse in the future of digital books, and so they wanted to do their own. And it flopped and that kind of stuff is hard to do by committee. You need billionaires to do that kind of thing. You need billionaires with Google Glass and VBrooms and private jets to do these things. You can't just do it by fiat. Well we’re going to talk about Apple, it’s going to be a huge week for Apple and there's lots of fact and also not so facts, not so big a facts rumors if you might call them about what Apple is going to be announcing WWDC tomorrow. But first I want to tell you about Stamps.com. Stamps.com is one of our sponsors today and you know who goes to the post office and waits in line at the post office, other people if you have stamps.com. Going to the post office, slogging away through traffic at the end of your work day and then getting in line with a whole bunch of people just to send something or to send a package or whatever is just a terrible idea because stamps.com will let you do all the post office stuff at your house. You can, especially if you have a small business, you want to do whatever it takes to make your business run efficiently and if you want to be efficient waiting in line at the post office is not the way to be efficient. It eats up valuable time you could be spending on growing your business. So you need to go to stamps.com. You can buy and print official US postage for any letter, any package and using what you already have, your own computer, your own printer and then you just hand it to your mailman. It’s that easy to do. Join the 500,000 small businesses that use stamps.com and never have to go to the post office again. There are no long term leases, no hidden fees, no expensive inks, nothing fancy. Stamps.com can give a small business a more professional look. So right now use the promo code TWIT for our special offer, a no risk trial. That's a $110 bonus offer that includes a digital scale and $55 free postage. So don't wait, go to stamps.com, before you do anything else click the microphone at the top, type in TWIT. That's stamps.com and type in TWIT and you will thank stamps.com. It’s a fantastic service. Well Apple is in the news. They of course are doing WWDC and I think Chad don't we have an early look at, you know people are wondering where are they going to watch or not, we've got this early look at a promotional video. Roll it chad.

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Mike: This guy has a great voice.

Susie: …technology to wirelessly communicate with your iPhone. This way, you can answer call with ease even when your iPhone is in the other room. Syncing your iWatch to your iPhone happens all in the background with our iSync technology. All you have to do to set this up is pair your existing iPhone with your iWatch, make sure the confirmation code matches, bump them together then put in the 16 character passcode into each of the devices. It’s really that simple. Repeat after every charge.

Jim: We have taken the iSync technology much farther than it needs to go. You can respond to text messages without your phone leaving your pocket.

[laughter]

Jim: Resume your latest ebook with a flick of a finger. Catch up on the latest news headlines pushed directly to your iWatch.

Cookie: The design that went into the iPhone—

Mike: Suddenly he Johnny Iovine.

Cookie: …is unparalled. It’s hard to believe that we can even fit a battery into this thing but we did, and it will last you one entire hour, stand-by. You have never looked so attractive to the opposite sex. Yeah, it’s that good. You can even use it when it’s plugged in. You can charge it, listen to music and sync in with your iMac all at the same time.

Susie: Gaming has never been more fun. Play your favorite games from your iPhone or iPad right on your iWatch. Every existing game is compatible? We've even added support for your made for iPhone controllers. Never be away from Minecraft again.

Jim: But there is one more thing, the iWatch comes in with a built-in GPS aware pedometer. We take privacy seriously and that's why we've granted a live stream of your location to the NSA. Stop complaining, you love the attention.

Harry: That's only slightly more silly then a lot of actual smart watches which exist today.

Mike: That's right, that's right and speaking of which, everybody expects Apple to launch an iWatch of some kind. A band, something, they're going to do it tomorrow Lindsey Turrentine.

Lindsey: No, no they're not.

Mike: Are they even going to mention it?

Lindsey: I don't know, I mean I think they're going to talk a lot about IOS 8.

Mike: Yeah, I've seen the posters.

Lindsey: And I would assume contains some hints or some direction or there's going to be something that we can sort of see in that experience and some of the other apps and software that Apple will be talking about. They're going to be – the rumor is that Apple will be launching a healthbook app that brings all of your sensor based health kind of data into a single app.

Mike: Be like Passbook maybe.

Lindsey: Yes, very much like Passbook but for whatever you're tracking on your smart watch. So I would assume that there would be some hints in there and I know that the developers conference program has a lot of the program – the later program, the law of the sessions, the names are still blacked out. So there will be something but I don't think there's going to be hardware tomorrow. I really don't, I think they're really focused on developers this year.

Mike: Okay, Harry what do think? What are they going to talk about tomorrow?

Harry: I think that a new version of OS10 and a new version of IOS are a given and that's a lot to chew on right there. It sounds like Healthbook is real. Mark Gurman who writes for 9to5mac is one of the few Apple reporters, if he reports a rumor, you can't have one hundred percent confidence he’s right but he probably right and he’s read an awful lot about this stuff. It would expect some hardware but probably not anything revolutionary. You know there might be new Macbooks. It would be nice to have a new Macbook Air with a retina screen someday. That would be nice but people always think that Apple rolls out huge world changing hardware devices at WWDC and they forget that the original iPod was not at WWDC, the original iMac wasn't, the iPhone was not, the iPad was not. It’s like the second or third device in that category they announced at WWDC and I would expect something along those lines tomorrow.

Lindsey: They don't want to steal attention from the major hardware rollout and they don't want to mess up their supply chain either, right? So unless they're ready to sort of hit the ground and start selling something immediately, they're really unlikely to do it.

Harry: Which they usually don't do in the summer anyway, I mean they did it with the iPhone for a while but the iPhone slept into the fall. And this is an event for software developers and if you are a software developer and you write for Apple stuff, there's nothing you care more about than the next version of IOS or the next version of OS10.

Mike: That's right.

Harry: You don't care all that much usually about the specific hardware that it’s running on unless it’s something like a retina display or an iPhone with a larger screen. Those kind of things do affect you and you care about them.

Mike: Yeah, one of the interesting things about the coming spaceship campus that they're building. I think it’s the current deadline on that, and of course they're already tearing up the ground and laying the foundation for that and so on in Cupertino, is that they have an underground bunker where they're going to do all their announcements. And so we know they're going to launch you know IOS 8 because we've seen the posters already, you know the, what's the name of the conference facility in San Francisco where they do this?

Lindsey: Moscone.

Harry: Moscone West.

Mike: Moscone West, you could just walk in there, you know they can't like kick the public out of those but the underground bunker is going to allow them to summon journalists within short notice, 2 or 3 days maybe and then they'll be able to go on any schedule they like. They don't have to book it and you know, Moscone you have to book probably what a year or two in advance and so on.

Harry: People will that there is a mysterious event happening at Moscone West in a given week in June.

Mike: That’s right.

Harry: And even if it doesn't say Apple, people often can figure it out.

Mike: It’s literally impossible to keep that kind of information secret and they—

Lindsey: Apple already does that actually at their campus. When they have a smaller event for journalists they'll just bring people in. They have a facility.

Mike: Yeah little theatre kind of thing. So that'll be interesting. One of the – you mentioned Mark Gurman, Mark Gurman broke the story this week that Apple’s discussing iPhone service payments. Now he doesn't believe this is going to be a topic of a discussion at WWDC but talking about a payment service. What they're doing is they're talking to retailers about having a way to use your iPhone as a credit card. Now, Katie Benner this is kind of a no brainer for me. I've been writing about this for a long time, that you know when are they going to do this. Thank you have phones that have finger print readers on them. They have Ibeek, which is an indoor location system that's perfect for indoor retail. They themselves have innovated indoor retail stuff at their Apple stores where instead of going to a cash register, they don't have cash registers they have people with blue t-shirts. And so you just walk up to the blue t-shirt and you buy whatever you want, you walk out and they email you your receipt or whatever. That's how Apple wants to remake I think the world of retail and they have everything they need to do it and the one thing that they have that nobody else has is 800 million credit cards. They have 800 million iTunes accounts that have active credit cards associated with them which makes them, to me that makes them the number one company that has the potential to dominate this kind of retail. Katy Benner what do you think – this is going to happen when they actually roll out some kind of mobile wallet system?

Katie: I mean I have no idea what would happen but I think it solves such a big problem for the retailers that I don't think it would be very hard for a company like Apple if they chose the right retail partners to make this happen because at the end of the day, we have these phones that we could go online but we’re not necessarily shopping or buying online. There have been a lot of studies on this. Nobody wants to input all that information into all of those tiny fields. And so if you can make shopping as easy as it is to you know with your thumbprint buy an app from the App Store. That would be great and if you think about the Apple demographic, it tends to be pretty well healed so if they were working with you know the Neiman Marcuses of the world or you know name your retailer who really wants to have, to move goods online that stores just simply do not. Right now we don't do a lot of mobile shopping, it would be a perfect solution.

Mike: Yeah we had Mark Gurman on Tech News Today this week and talking about the story and he was pointing out and emphasized and also emphasized it in his article that it’s actually a really big problem because each of these retailers has its own backend system. And the Apple system would have to be compatible with those system so they have to go on a chain by chain basis. So as he point out, they're going to go for the big high end chains, you know the Neiman Marcuses and so on. And they're not going to go for the Targets and they're not going to go for mom and pop shops either. So they're going to have to start it with the big chains, establish what would amount to a standard and hope presumably that the rest of the world sort of retrofits what they've got to support Apple when – and if this works but it’s a fascinating story to a certain extent but it’s also kind of boring story because this is inevitable. Apple, I believe is going to do that and if this whole system, and if they didn't do it they would be morons because it’s so lucrative you know, there's so much money involved.

Lindsey: Well they need to do it soon because they still dominate market share you know for any single device anyway.

Mike: Yeah.

Lindsey: But that has the potential to wane a little bit right, as these become commodities and a lot of people switch to Android and there's so much choice out there that if Apple doesn't figure it out right now and get it out there with the next iPhone, I think that then it’s in trouble. So now is the time.

Mike: Yeah, absolutely.

Harry: I think it’s been smart they've waited. Apple often does well because it swoops into a category after other people have failed. And like Google Wallet has not really gone much of anywhere, Square had a really cool app which I think they've actually discontinued just because it’s hard to get traction with these things partially because credit cards are actually a really well done way to make payments easy and—

Mike: Well, these people are comfortable with them right?

Harry: Credit cards set the bar high and it’s not easy for a phone to be better than a credit card, it’s actually quite difficult.

Mike: Yeah it truly is and I think that one of the things that to your point Lindsey, that Apple is going to do this sort of deal with the fact that hardware tends to become commoditized and the competition is very intense and markets are very price sensitive, is this purchase of Beats. Now, right off the bat, is this a brilliant move or an idiotic move? What do you think?

Lindsey: I think a lot of people think it makes no sense at all. I actually think that it’s kind of a no brainer because what Apple does is it moves through these sort of pipelines of it’ll launch a very glossy high end product for the well healed as Katie said. And then over time, starts to do it in more colors, starts to do it smaller capacities, you saw this happen with the iPod right. There was this huge, beautiful, expensive, fancy brick that then got smaller and turned into the Nano and a lot cheaper. So Apple is approaching that with the iPhone and is now has multiple models and may have even more in the future and it’s becoming a commodity product that is easily paired with headphones. And it makes sense to put it together with a brand that is really widely loved with a lot of shoppers. Even if we all kind of know or those of us who read about it and we test all these headphones, Beats headphones are not, they're just not the best for quality, they're not but they're the best for brand and Apple loves that.

Mike: Yeah and you wrote about this – yeah go ahead Katie.

Katie: Oh I was going to say, Jessica Lessin my editor as The Information, she wrote a great piece also saying that one of the things that Apple has to do because of the commoditization effect on the phones is that they have to keep things new and cool and make people want to come. And so by bringing Jimmy Iovine on board, they have somebody who could do sort of amazing deals with the record labels. And who knows, I mean that could be – who know what form it could take. It could be free music or could be the right to share music or something else we don't know in terms of in the entertainment space. But he is a very good deal maker. He’s worked with Eddie Cue for like ten years, you know they've known one another for a long time. He could be a good cultural fit there and that would actually bring to Apple sort of an intellectual property and a steady stream of great entertainment that a lot of other brands don't have.

Mike: As Eminem would say, you forgot about Dre. Is he a good cultural fit with Apple? I won’t make you answer that.

Katie: Please.

Mike: So you know here's my view of it, from where I sit which is far away from Hollywood as far as away as I can get, there seems to be that the music business has had two big shifts in this business in the last fifteen years or something like that. The first is the iTunes and the iPod but the iTunes model of selling songs individually, digitally and this has a positive benefit for the music industry and what they considered a negative benefit. The positive benefit is people are actually paying for music instead of stealing it, which is super easy to do. And the negative business is that people are not buying albums. I mean I remember when you’d go to a record store and you'd buy an $18 CD. And you only wanted the one song but $18 was the price to get that song. And that was a model that the music industry really seemed to love. So Steve Job’s iTunes model was a nuclear bomb in the music business where everybody used to get rich selling song. The second one was called the 360 deal. This is something that hit around 2007 or so, which is that everybody realized because of digitization, music is worth less because there's no scarcity with music. You have a digital, you can download it a billion times and it’s the same file. It’s very difficult to impose scarcity for the purpose of imposing revenue associated with that. So they came up with these 360 deals. Instead of going to a superstar, a musician and saying “Okay, here's the record contract, we’re going to make this much money. We’re going to make platinum records and you get this percentage of the music sales”, they instead go “Okay, here's the deal, you're going to promote this, and you're going to sell this and you're going to have a cold brand with that, and you're going to have this concert thing and that's the deal. Forget about the music—

Lindsey: It’s all about the t-shirts at the end of the day.

Mike: That's right so – that's right and so the poster child for this concept of the 360 deal who’s probably done better than anybody is Lady Gaga. And her original business manager actually said that music sells everything except music. In other words, music is a great marketing vehicle and so let’s use that and that's the new model. And Jimmy Iovine has been personally involved in that whole recreation. So the two people most associated, maybe the three people, most associated with transforming and evolving the music business are Steve Jobs and Jimmy Iovine. And to a certain extent Lady Gaga and her business manager and so on. So I think that to a certain extent, iTunes music is the real prize here and although it doesn't exist now in terms of having the 360 deal stuff, they have been working on getting Beats music to the point where that's the 360 deal service. In other words, while everybody else is trying to sell subscriptions to streaming music, I think that Beats music has been working on a system where that’s the place where musicians and artists can sell everything except the music. You give the music away even to a certain extent but then you know you sell – and of course Beats has been at the center of this. If you look at what Lady Gaga has been making money on, it’s been headphones. And concert tickets and all these things that have nothing to do with music. So I really think that's what it’s all about. They bought somebody who’s like the Johnny Ive of music business right. A special person who’s super knowledgeable and irreplaceable and if he doesn't come with Apple he’s going to work for somebody else. Probably Google or somebody like that so I think that has a lot to do with this whole thing. So you know Katie Benner, I don't know what the future of music is going to be but it’s going to involve very cheap music and very expensive headphones.

Katie: Sure.

Mike: You know.

Katie: I agree.

Mike: And if you look at how they've selling Beats, it’s been like you know there's a Lady Gaga version of Beats and these this and that and the other and I think that's really the future of what Apple’s going to do. And Apple want to be at the forefront of that so we’ll see how that goes.

Harry: Well I mean, no matter what you think of the quality of Beats products, it’s one of the few consumer electronics brand that's been created in the last 10 or 20 years that matters. And it went from not existing to dominating that category amazingly quickly. And it sort of feels now that like Beats has been around forever even though I think it’s about 6 years old.

Mike: That's right.

Harry: Almost nobody’s done that in a long time.

Mike: That's right and the conventional wisdom is that you can make Beats for 15 to 17 dollars, sell them for 200 and they own 65% of the so called high end headphones market. I mean what's not to love?

Lindsey: My kids, they don't really know of any other headphones. I mean, they just go straight to it and that's what you have.

Mike: And why? Because it’s associated with celebrity and they really want the music and you know, music fans really want to be into the bands and the singers and the artists and so on. And there's a hardware component to that apparently.

Lindsey: Well there's a design component to it too. I mean, I think it’s worth not forgetting that Apple more than any other electronics manufacturer cares about the design ethos. All their products and Beats is just like that. I'm not saying they have exactly the same design or the same approach, but a lot of the money that you're paying for is for industrial design and for the colors and the shape and the fact that you want to be seen in the airport wearing these.

Harry: Although oddly enough, I mean all of the Beats products to date have designed by this guy, he used to be Johnny Ive’s boss at Apple. And already they've said that that company ammunition group will not be designing Beats products moving forward and it will be intriguing to see who does design them and whether the look and feel changes at all.

Mike: Yeah, they need help on multiple fronts. One is the design and Apple can help with that. And another one is they need help with Beats music because signing up for Beats music is really clunky and really horrible. I tried to over the last couple of days and I tried to get in on this AT&T deals so you could get like the family deal that's five people for fifteen dollars. It’s a great deal but trying to actually make it happen is very, very difficult and so Apple might be able to help them with that. Well, another area where Apple is hoping to sort of create new business is around home automation. And home automation is super, super exciting. We talked about what you're doing with home automation at CNET. And what Apple is doing according to the reports is really not that earth shattering is it? I mean already, if you go to Kickstarter, you look around at what's really happening in home automation, Apple’s kind of already at the forefront to the extent that people create apps that run on IOS first, Android second. And so they're already kind of an accidental leader and they're trying to get in front of the parade a little bit so – but still I think—

Lindsey: What's going on here?

Mike: Well Apple is prepping a platform which is supposed to come out at WWDC tomorrow and they're talking about some APIs and it just sort of a light way getting in front of the parade that already exists for home automation and giving home automation creators a simpler way to embrace Apple’s coming platform for home automation.

Lindsey: Yeah, I mean I think there's a huge opportunity and one of the things that every time somebody from CNET’s on a panel about home automation, one of the things that we end up talking about is the fact that there are so many opportunities out there but you don't want to have a separate app for vacuum and for your light bulb and then another app for your thermostat and an app for your Smart Lock.

Mike: Which is exactly where you are today!

Lindsey: Which is exactly where you are today if you're even ready to sort of invest your time and money in a pretty young category. And so what Apple wants to do I think is just create sort of a Passbook kind of style, let’s wrap it all up into a simple interface. I think as an aside it’s the interesting would sort of create this there's an app for everything you know. Millions of apps out there is now in a position to be like “Well, you don't really need – let’s, maybe you don't need so many apps. Let’s try to kind of get them corralled into a manageable space.” But the other thing that Apple has going for it here is that it has a little bit of a head start with some of this home automation because of its low powered Bluetooth in every single phone. Not all Android phones have that or other phones. And so Apple’s already in early with some of the Smart Locks. And if they can sort of keep all of the third party developers and manufacturers thinking of Apple first, that's another reason to buy into Apple ecosystem because it’s just going to be in a tiny package and so you're a person who’s going to go out and buy a thermostat and buy Smart Lights and buy a vacuum that you control with your phone, then that's sort of an easy choice.

Mike: Yeah and Apple was the first to support Bluetooth low energy, Bluetooth smart. It’s got multiple, Bluetooth 4.0, it’s got a bunch of names but Apple is the first to put that in a phone, the iPhone 4s. And since then every phone, tablet, laptop has supported Bluetooth low energy. Now just about everybody does. The other thing that they have Harry McCracken is really I think an underappreciated resource is iBeacon because if you remember Bill Gates built a revolutionary house years ago and the way his house worked was you would put on this little badge, it says welcome to Bill Gates’ house you get a badge or this little pin or whatever it was. It was a little, I guess it was RFID or something like that. It was some kind of radio thing. And as you walked through the house, or so I've heard he hasn't invited me yet for some reason, you can say “Oh I like Dr. Dre music” and everywhere you go in the house Dr. Dre music would follow you and the lighting preferences would follow you all around. That's totally great with iBeacon, that's how you want home automation to work. You want to walk up to the thing and have the porch light go on and the door to unlock and you know have it know where you are.

Harry: iBeacon has very quietly been very important in retail and things like stadiums. That's how a store or a stadium knows where you are and it’s able to push stuff to your phone in a way that you know actually does maintain your privacy because they only do it if you already have a relationship with them and give them permission. And I think there are potentially a lot parallels to what Apple might do in the home because iBeacon is mainly the fact that all the Apple devices support Bluetooth L8. And Apple worked on standards and stuff so that other companies can sell the Beacon equipment in stores and be confident that it will work with Apple devices. So Apple doesn't necessarily have to build enormous amounts of stuff on its own. Maybe all it does is it makes its devices the best platforms for other companies to build home automation on which they already sort of are already even without Apple having too much yet.

Mike: And I think that iBeacon is a seriously underappreciated or misunderstood or you know – it’s kind of below the radar. People don't understand how it works. For example, people don't seem to know that Android supports Androids. So if you're an Android phone – and Beacon’s really no big deal, it’s also seen as sort of an NSA spy thing that sort of reaches into your phone, it doesn't do anything of the kind. iBeacons are, to the best of my knowledge, incapable of receiving information. thank you simply broadcast here’s where I am and then you—

Harry: I'm here, I'm here, I'm here.

Mike: That's right and then the app is the thing that goes out to the internet if the app has developed that capability. The app is the thing that knows you know the “Oh you're Beacon xyz, Beacon xyz is in this particular location”, the Beacon doesn't even know where it is. It just knows who it is to a certain extent. So it’s a really fascinating technology and one of the things that's most fascinating about it is that it’s cheap. You can put Beacons all over the place. Small business can put ten Beacons in it would cost them a hundred bucks or something like that. You know so it’s a pretty exciting technology and I think it’s really underappreciated for home automation and a no brainer. I'm also curious about when the Googles and the Apples and the Amazon are going to build home automation into their TV set boxes. Seems like an obvious place for them.

Lindsey: So if I think, and this is just pure speculation, but if Apple is actually developing a television, wouldn't it make sense for them to start with one that's sort of small and beautiful in a way that a Mac Pro’s screen is, where you've got the retina. And then all of this home automation technology built right in to that interface, into that television so the first places that you would think of putting that is in your kitchen or some place that you would – or you would already go to sort of check in and see what's up, who came in the back door, when and are my back porch lights still on and all of that sort of built-in to a sort of a smaller screen that's really beautiful and something that you want to be part of the décor of your home. It might make a ton of sense.

Mike: Yeah, absolutely. Well in just a sec were going to look at the latest outrage by the NSA and what they're harvesting now. That's going to be exciting. Can't wait to talk about that one. But first, I want to tell you about Audible.com. Now Leo Laporte always says that he has been an audio listener for a long, long time. I think I was an Audible.com customer before he was. I think I signed up in the year 2000, believe it or not. When Audible was actually a hardware – you were in high school Lindsey.

Lindsey: Thank you, thank you for that.

Mike: It was a hardware device that you would buy. It was this weird tear drop shaped thing. And I remember actually demoed it to Regis and Kathie Lee back in the year 2000. And ever since then I've been an Audible.com listener and it’s a fantastic service obviously. Audible has 150,000 titles to choose from. It’s the world’s largest selection of premium audiobooks and spoken word content and to me it’s a no brainer. Stories are an oral medium until very recently. And to be read to by a professional actor, to me is just a source of joy and wonder and enables me to do the dishes and still learn something. And I really love it. Now, we have a special offer for This Week In Tech. We’re offering a platinum plan for Audible.com. This gives you 2 free audiobooks right out of the gate and 2 book credits that month. That means basically you can, on average you can download 2 books under this plan. And it’s a great deal for people who really get a lot out of these books. You could get a free subscription to the Wall Street Journal or the New York Times Daily audio programs. Take your pick and if you want to get more details about the platinum plan, go to audible.com/twit2. That's audible.com twit and the number 2. And you know, there's a couple of new books that just hit in the last couple of days that I wanted to bring our attention to here. The first is Our Final Invention: Artificial Intelligence and the End of the Human Era by James Barrat. Now Leo Laporte interviewed James Barrat on the most recent episode of Triangulation. And this piqued my interest in this book. This sound like a fantastic book and I haven't downloaded it yet or listened to it yet but this sounds like a really, really fantastic book. And Chad, can you play the sample there so we can take a listen.

Being suspicious of AI was painful for two reasons. Learning about its promise had planted a seed in my mind that I wanted to cultivate, not question. And second, I did not doubt AIs existence or power. What was skeptical about was advanced AI safety.

Mike: Yeah, that sounds pretty awesome. I for one welcome our new artificial intelligence overlords. And I can’t wait to listen to this book. So let’s look at another book that, to me, is a source of fascination and I’m going to get this on audible.com. It is called The Man Who Knew Too Much: Alan Turing and the Invention of the Computer. By David Leavitt. This, of course, the life of alan Turing is one of fascination for multiple reasons. He was just a genius as a child, who also, in some way not so bright as a child. He is one of these idiot savant children who grew up to become an amazing code breaker and of course he was a homosexual who was persecuted for that. It is a fascinating story and I hope they do a movie, but in the meantime The Man Who Knew Too Much is an awesome audible.com book. And so these are the kinds of things you get at audible.com and I recommend that everybody sign up if you don’t already have a subscription. For 14 years I’ve had audible.com and that is why I am such a towering genius now. That is why I have fun doing the dishes at least!

Mike: NSA is harvesting something new, I think. The gift that keeps on giving. The Edward Snowden revelations just keep coming from Glen Greenwald, who is the person to whom Edward Snowden gave these documents and he is trickling them out to keep the information hot. Basically the NSA has been harvesting millions of pictures every single day. They harvest, and thousands of them are facial recognition quality and apparently, according to the latest revolutions they are gathering these pictures, they are putting them in their data base and what they are going for is that they want a data base where they can take a picture from a security camera, run it though their system and say, “That is who this is.” It is really quite stunning how many hard drives do you have to get at Best Buy in order to store millions of pictures downloaded every day. It is just incredible.

Harry: Well the government already has tons of pictures of us stored because the state department has all those passport photo’s. They are not saying if they are intermingling with what the NSA is doing with those photo’s or not. I think it would be silly to say this is inherently a terrible idea. If you do it the right way it seems like this could be a good way to find people we want to find. The big question is always how many innocent people might have been caught up in it.

Lindsey: I think the other question is….

Katie: After 911 in New York City put its own counter terrorism unit created a lot of initiatives and one works with businesses all over lower Manhattan basically because all of these businesses have security footage and they are able to access to that a security footage and they do store it and they are basically looking for people they need to find. So this isn’t unheard of. This is a more extreme example but it isn’t unheard of.

Lindsey: I think a lot of whether or not there is extreme concern with this practice is where the images are coming from. If the images are coming from the open web, well those images are out there. You put an image of yourself on the internet it is pretty likely that somebody is going to look at it. That is the risk we take when we publish selfies. The question is if the NSA were intercepting these and pulling them off your phone and they were private images that is a complete different situation. But so far I haven’t seen that come up.

Mike: Well the revelations started with, one of the first or second ones, was about Prism. That the NSA was finding ways to tap the internet connections coming from the likes of Google or Facebook servers or data centers and that stuff all has pictures in it. If you look at Facebook alone I don’t know how many pictures are uploaded to Facebook daily but it is an astonishing high number. And if they’re getting the data, that data includes pictures. I think it is kind of obvious, in retrospect, they are not just going to skim off the text. You might think they would simply because of the scale of this thing. But they are not worried about scale. There is an interesting controversy in Utah with the NSA’s Bluffdale, UT data center which is supposed to just massive. And the scandal is that there are people that are political actors within Utah State politics that are opposing this kind of mass surveillance and they want to shut down the NSA by cutting off their water. A data center like that needs massive amounts of water for cooling and so there has been a political fight within Utah to shut off the NSA’s water. They are probably going to fail but that is one of the interesting things about this whole scenario is that a national organization like the NSA has to exist in a state or in Washington DC. And so essentially they need resources from state governments and that is an interesting way to sort of put the brakes on NSA. We’ll see if it goes anywhere. But this whole story of the NSA collecting images is the outrage Dejour and Harry McCracken was on Tech News Today and I think we talked about the book No Place To Hide, which I think I had just started it when we were talking. I’ve recently finished it and that is a fascinating book. That was really an incredible book because he not only goes and details these sort of story about how he was contacted by Edward Snowden and he kind of blew him off as a hack for many months because Snowden wanted him to install encryption, the whole hotel room thing when they did the video and all that stuff. Glen Greenwald was the person sitting there interviewing him. Then there is the whole chase, cop and robber chase thing, and then in the end he gives the most fascinating parts of the psychological surveillance on the public. Which is that if you know you are being watched, you change your behavior. That is the thing about the argument in favor of the NSA is that if you have nothing to hide, it is okay. Don’t worry about it. But the fact that we know now they are surveilling us makes people stick to what they call social norms of behavior instead of experimenting and trying things, etc.. It is a fascinating book.

Harry: Did you come out of it liking Glen Greenwald more? I find him a little… I admire him in some ways but I also find him to be somewhat grating because he spends so much time complaining about anybody and everybody that doesn’t agree with him on everything. And I have not read the book partially because I’m a little intimidated about spending so much time with Glen Greenwald.

Mike: I guess his personality in general is why Edward Snowden picked him. He is a bit of a bull dog as you guessed.

Harry: When Time did not name Edward Snowden as Person Of The Year, Glen Greenwald was appalled and said so. We named the Pope and there was also a case for.

Mike: The Pope is an unusual character as well. Just like Glen Greenwald and Edward Snowden. You know Glen Greenwald, as an Editorialist yourself, I think you would come out with a similar viewpoint as I did that he makes a lot of good points and it is definitely worth reading. He makes some faulty points as well. He’s got some bad reasoning in there. For example he’s been in debates with people who say, “Oh surveillance is not that big of a deal” so he challenges them with, “Okay why don’t you tell us your phone number and your credit card number and all that kind of stuff”. That is a bad argument, just from an argumentation stand point because there is a difference between the revelation of data that will have a 100% chance of being exploited in a negative way. Which is when a person who is in favor of the NSA publicly gives their information and the NSA when they are harvesting things, chances are nothing that outrageous is going to happen. That is apple and oranges. That is a bad argument. But the rest of it is so interesting. And I just think it is worth reading, even if it is a flawed account. It is the best thing we’ve got and there are few books that have that many revelations. That much information about how the whole thing works. I have to admit I came out with more respect for Edward Snowden, about whom I’ve been on the fence. And I thought he was kind of a shameless whatever but at the end of this book I thought he’s, I guess the way to put it is he’s a more laudable person than I thought. What he is doing is braver than I thought it was and a little bit more selfless thanI thought it was so I came out with a better view of him, probably identical view of Glen Greenwald, who I like. I mean, you know, that is the whole point. You have somebody with strong opinions and you can oppose them with opinions of your own and he will attack you in social media. So it is all fair. Well, speaking of the world of cloak and dagger, True Crypt, had a weird termination this week. Essentially what happened is that TrueCrypt is one of the tools that Edward Snowden personally recommended that Journalists and other people use to escape the clutches of the NSA. And in fact it is one of the ones he wanted Glen Greenwald to use before they had contact, but all of a sudden they went to the true TrueCrypt and you got a re-direct to a page that basically said, “TrueCrypt is not really that secure you should use Microsoft product and never mind we are going to go away”. Goodbye. This is a weird thing. Everybody thought they were hacked. But it turns out that it may not have been. You know this is just one of the most bizarre things I’ve ever read but one of the things that I wonder about is, does this make open source projects look bad? I mean especially after Heartbleed?

Lindsey: I think Heartbleed did that.

Mike: Heartbleed did that and now this is doing that. It turns out that I don’t think they got a lot of attention. It was a tool people used or didn’t use, they either knew about it or they didn’t and now we know all about it and the developers were anonymous. We don’t even know what country they are in, we don’t know if there is one of them or a hundred. We don’t know if they work for the Chinese government. We don’t know anything about them.

Lindsey: We don’t know what their motivations were for maintaining it. Let’s say this is just as simple as they found a flaw that was so big they do this in their spare time, there is no way they could tackle it in a responsible way and they just walked away. Even if it is that simple, well there is no safety net there. And there is no accountability at all.

Harry: On the other hand, if a program does have flaws I want to know about them and I’m far more likely to know about them if it is open source.

Mike: That is true.

Harry: And that is the good and bad of open source.

Mike: There is a group of people who are security researchers who want to continue TrueCrypt. Right now they are trying to see if they can get the rights to do that. As I understand it. If they do, they can sort of do a fork of TrueCrypt and bring it forward and have something like this continue. But it really raises the point that there is not a lot of choice in this kind of encryption. There really should be a lot more offerings out there that people can choose from. We talked to Steve Gibson, who is the Co-Host of Security Now and has been in the industry for a long time and he said he started to write something like TrueCrypt to do something exactly like that. But he stopped because TrueCrypt was so good he didn’t think it was necessary. He is now threatening to bring that off the shelf and keep developing it.

Lindsey: Maybe that is another challenge of open source is that unless an open source project is adopted by a company that is aiming to really make a profit, there is not much incentive for competition. And so it is hard to get redundancy built into an ecosystem if there is just one open source product that takes care of everything.

Mike: Exactly.

Katie: I think that chat room is going nuts right now with TrueCrypt conspiracy theories. But that is obviously a topic people are very interested in. I think a couple of things have come up just in some reporting about this. That people are very curious about the fact that an audit had been conducted. Or was in the works for a few months, before this whole thing shut down. People are wondering if this had anything to do with it. Prof. Greene, who is doing that audit, obviously had very good intentions for it. But people wonder what is happening there. And then also I did speak with a couple of folks in security industry including Dan Kaminsky and I think a lot of people know who Dan is. He, in 2008 discovered a really big vulnerability in the DNS protocol. He has spoken a lot after heart bleed, and of course he has is own company that is doing white hat security stuff. He said he had a completely crazy and baseless theory to all of crypt. But that the software had to have been developed by somebody related to government and he really does believe that they put a stop to it. That people figured out it was a government organization, Or that they had worked on this. They wanted to be anonymous the entire time, they never wanted to give the project over to anybody else. Which often happens in open source things. Look at BitCoin. The people who started it were anonymous but he eventually it was taken over by people who weren’t anonymous. It is maintained. And that never happened. And then sort of the weird references to Microsoft in the notice when it was taken down. I just thought I would throw that out for all the folks watching right now who are really interested in trying to figure out why this happened. Why it was taken down.

Mike: And you mentioned to weird references to Microsoft. One of those weird references was that they associated the termination of this project to this that that Microsoft was not going to continue to keep XP going. And that is weird. Because it has nothing to do with XP at all. And it is also weird because, we had a lot of conspiracy theories in the chat room and we talked about this on tech news today, because the Chinese Government essentially banned Windows 8 for government use. Using the same reason, that XP was no longer being supported and therefore don’t use Windows 8. Which, I guess the idea was that in 15 years they won't support Windows 8 and we will all be using Windows 8 by then. Totally bizarre reason to do anything. And the other one was that the termination note explicitly recommended that everyone move to Microsoft, and I forgot what the name of it is. But Microsoft’s encryption.

Harry: It is BitLocker?

Mike: BitLocker. And we talked to Steve Gibson about that. And Steve said, no that is not really the best choice. At all. And it is controversial.

Katie: Nobody in this world would ever use BitLocker. It is not on our radar.

Mike: Totally random and you expect better from the makers of TrueCrypt to make a better recommendation. There are much better things out there to use. One of the things about all these NSA spying revelations is that you think well this is just the NSA’s going nuts. They have unlimited resources, they are doing all these things. But another view is that they are just a leading indicator. That the application of big data principles to the collection of internet based stuff is kind of a no brainer if you are an Intelligence Agency. The NSA is just doing what every national government would want to do. It turns out that in Germany the German report saying that the German version of the NSA wants to do something similar to what the NSA is doing. To do mass surveillance and they have actually requested 400 million dollars. But they want to do something similar and of course we have seen the allies of the United States, Britain, Canada, New Zealand and the English speaking Australia eventually were all working on concert on a lot of this espionage stuff but I think we are moving into a world where pretty much what the NSA is doing is a version of what everybody wants to do and will do simply because their job is intelligence. If it the data is there, why not harvest it and store it?

Lindsey: Well certainly. I think if you are in the Intelligence community and I’m not making excuses for this but if that is your job is to find all the information, you’re going to do whatever you can to achieve that. And maybe get a little too far away from the big questions about why we are doing it and whether it is the right thing to do. But you had better bet that China is, I am sure, doing this. I would be shocked if they weren’t. In fact I think there were quite a few people out there when the NSA revelations came out who… and I’m not sure this is a good thing, but the reactions were “Are you surprised that the government is looking at your data?” Didn’t we all think that was happening anyway? So, I don’t know. I think it is not too surprising to hear that other countries are trying to do the same thing.

Mike: Absolutely. And of course the other thing that is interesting about this from a political science perspective is that this is kind of giving espionage a bad name. What is wrong with espionage? We want our government to have information. Let’s take an extreme case like North Korea. You have two choices. You can have espionage and learn things about what they are doing with their missiles and their rockets and their nuke program and their labor camps and all that stuff or you can voluntarily choose to have no idea what they are doing. Those are really the options and so we have espionage to spy on other countries, to find out what they are doing and of course this whole wire-tapping communications thing goes way back. In the cold war the US used to send submarines down in the ocean and clamp these devices onto their underwater cables and we would listen to phone calls within Russia. This was in the 50’s, 60’s and 70’s that the United States used to do this. they used to wiretap telegrams. The telegraph system, and it turns out that the United States had this special, the NSA in fact had a relationship with all the major telegraph companies to hand over data. It is just like today. And so this kind of thing has been going on for a long time. The problem with the NSA spying is that it, in my opinion, clearly unconstitutional to harvest the data of people before they have been suspected or charged with a crime. This is a violation of the fourth amendment.

Lindsay: And history tells us that when we start to serve veil our own people, especially people who are presumed innocent, that information gets misused over time. It just does. The nature of power is to find a reason to use those for unintended purposes.

Harry: And today they can do it upscale. Like spying on one telegraph probably not that huge a deal. With the Internet it is just about as easy to spy on everybody as it is to spy on one person. So by definition people deserve their privacy and that was not true in the old days.

Katie: I think that this, first of all when I read this story I was really actually shocked that Germany was so far behind. Because I think it has been well documented that China, Iran, Israel they are all doing with the NSA is doing. And more. Some would say that China is doing more. I think that all of these conversations have been really important. I think this note and has been very important. I talked to a lot of people that work in security all the time, folks from places like Palo Alton and security researchers and hackers and they really do believe that this is a conversation that had to come. Around the NSA, but that nobody wanted to be the person to force a conversation. And the debate is going to change. This debate that we have with all these ongoing revelations and more news coming up and news stories and countries like Germany saying we need to do these things to, you are finally seeing the security industry change and start to acknowledge and take into account our constitutional rights. Which hadn’t happened since 9/11. After the terrorist attacks it changed the conversation and now we are going to see the pendulum swing back again.

Mike: One of the things that, again espionage in general can be a very, very good thing. And I think clearly with the NSA the problem is a lack of oversight. One of the shocking things we’ve learned from the Snowden revelations is that any list within the NSA can certainly call up an application and search everything. Like searching Google. It may be email, maybe they suspect their girlfriend is doing something so they can just call it up and find out everything there is to know about this person. They absolutely can do that and there is no checks on that. There is no external oversight and there is not a lot of internal oversight within the NSA. So it is a really fascinating thing that we are all going to have to deal with and of course they raise the question are non-Americans protected by the constitution. Is it okay to spy on people as long as they are not American citizens? I think the world has been shocked by the conversation we are having in the US. “It’s constitutional, it’s okay to do it for Germans. You can spy on Germans, just don’t spy on me”. So that is kind of interesting development. So it is really a fascinating thing and I hope these revelations keep coming because we really want to know a lot more about what is happening. It is a great data story as well. The scale at which thing is happening is just absolutely astonishing. So, we’ll keep an eye on that. We’re going to talk about what Microsoft is doing in just a second but we are going to take a break and I want to tell you about one of our sponsors today, who is Personal Capital. One of the biggest barriers to getting ahead of your finances is understanding what is going on with your finances. How much are you really spending on everything? How much are you saving? Are you on track with your retirement? Are you on track with your kids college money. Where are you with all this stuff. We have accounts all over the place, they are all online now days. So the way that Personal Capital works is that you plug in all your different financial accounts. All kinds. Your bank accounts, your 401K, you name it. Stocks, whatever it is that you have that is money related. You plug it in and Personal Capital brings it to you on a single screen with charts and graphs that enable you to really have an intuitive understanding of what is happening with your money. It is very possible that what is actually happening with your money is a little scary and it is good to know that now so that you can plan ahead and make more intelligent decisions about how you are doing. It also shows you how much you are overpaying on fees that you are paying. It will guide you reducing those fees so that will not only let you get a handle on your finances but it will actually materially save you money. Why wait? Signing up takes just a minute and it pays big dividends. Personal Capital gives you total clarity and transparency in making your investment decision right away. I started using this and my wife loves it. Just that total picture of your finances is priceless. To set up your free account go to personalcapital.com/twit and remember that Personal Capital is free and a smart way to grow your money. Just go to personalcapital.com/twit and save your financial picture. Highly recommended.

Mike: Well, Microsoft is doing some interesting things, including possibly, maybe, kind of, a smart watch. This was an exclusive by Parmy Olson over at forbes.com and she says that Microsoft is working on a smart watch. Not surprising that they are working on a smart watch. Microsoft is a company that might want to do that sort of thing. But what was surprising was that her sources say that they could have something on the market by the end of the summer. I would be shocked if they did that. But does the world really want a Windows Phone like smart watch?

Lindsey: Well the reality is that I’m not sure the world really wants any smart watches yet. We saw that little spoof video a little while ago and I think that something will happen, somebody will invent an aspect to smart watches that will make them something you really feel like you need to own but so far I haven’t seen that. that special feature quite yet. In fact, we’ve been doing some interesting tests on heart rate monitors and even the heart rate functionality on most these devices doesn’t really work. I mean, it works. But under very certain circumstances that you have to be holding perfectly stock still. And even then they are not as accurate as an EKG or a test based heart band. It is so young is what I am saying. It is so early.

Mike: So if you die, it is very accurate. It will say, Dead. Because you are holding still right?

Lindsey: Yes, you have to be holding still. It would say zero which is accurate.

Mike: I’ve been kind of stunned. We keep hearing about this revolution in bio-metrics. Everything is either a heart monitor or a pedometer. It is like enough already. My watch, my phone.

Katie: What else are you going to do? Unless you are going to work with the FDA which none of these companies want to do, you can’t make any real medical claims. It is like they are the weight watchers of apps or something. If they make promises, they have to keep them. So it comes down to heart rate, calories, pedometer. Until somebody actually works with the FDA to do something that really does something that is a medical device that will make recommendation about your health that could hurt or help you then you are just going to see these gimmicky things.

Lindsey: And working with the FDA is an incredibly laborious, complicated process for very good reason. And I know this because this is really personal, but I have an insulin pump and a continuous blood glucose monitor that goes under my skin and feeds data about my blood sugar to this pump because I am Type 1 Diabetic. That technology is so not something that you would want on your wrist. It is incredibly complicated. Just the layers of tape and special kinds of adhesives that it takes to do that kind of thing is just very complicated. I think it is going to be a really long time until we get devices that are sort of both medically accurate and useful and things that you want to go over to Target and buy. And put on your body. It is a really complicated set of problems so I think that whatever we get in a smart watch is not… well, there may be some health aspects like the pedometer where a severe activity… but there has to be something that is really not health related that is the killer feature. We haven’t quite seen yet.

Harry: I went to the Samsung event last week for their SIM band which is yet another Samsung wearable device. They are really quite different than the Galaxy Gear stuff because SIM band is, in theory, this open platform for a really futuristic wearable device. In fact they want companies to invent new kinds of sensors. I think they talked about glucose monitoring as a specific example. They want people to invent the technology that works for that and so it is really intriguing. I never thought of Samsung as the kind of company that would lead an open hardware platform. But at least they are giving it a try and they conveniently announced it a few days before WWDC, which I’m sure was intentional.

Lindsey: It sure was. And Samsung has a medical device business right? Samsung is such a huge conglomerate in Korea they’ve got their fingers in everything. I think they even make ships. So they do have an entire business against creating medical technology that I think they are going to try marry some of that with their consumer division.

Mike: The press photos of the prototype band that they showed had 30 sensors on it. It was ridiculous. It had so many things in it. What are they sensing there?

Harry: The first one they are shipping to developers later this year does not look all that exciting and it is not radically different. The idea is that it is a starting point for new technologies. One cool thing about it is they wanted to create a wearable device that you can actually wear 24/7, which generally speaking you can’t because of battery issues. They have like this little shuttle battery where you charge your battery and you snap it on your SIM band so you don’t have to take your SIM band off.

Mike: That sounds like a cool innovation. They also announce the cloud service called Sammy. And I understand that is going to support non-Samsung devices. Is that correct?

Harry: That is also in theory. An open platform. According to Samsung, the great thing about Sammy is that the consumer controls all the data. And there aren’t any privacy issues because if it part of Sammy it’s not going to be anything that they will try to monetize.

Mike: I’ve been stunned by the amount of attention that an association of medical and health related things have been circulating around the smart watch category. Apple, of course, is hiring all these medical experts. They’ve been seen on the campus and been hired and I just don’t understand the attraction to that. It is just, like you say Lindsey, it doesn’t seem like that is the killer app. The real killer app for smart watches is going to be frankly branding and design.

Lindsey: I totally agree. I think they have to look beautiful and I actually think that the killer feature with the watch is sort of like the Google Cards experience. Which we are going to see later in June at Google IL and I think we are going to see that on some devices. I think that Google really shines in their predictabilities. Like, we know you have an airline ticket sitting in your inbox and you’re watch is just going to flash up and say, “You need to leave the house in five minutes to catch your flight”. I think that passive interaction is where it is really going to shine. Or some really sophisticated voice recognition. But even that would have to be at an arm’s length to be really effective. So that it could just pick up on what you were saying, which is also creepy.

Mike: In fact a Google executive posted some screen shots of Android Wear that showed a number things including a podcasting app and a game. That was interesting. There was an unauthorized leak of a video showing an LG device playing Android Wear type stuff and then that was yanked down by LG. That appeared on YouTube and then was taken down. But it looks pretty much like what you would expect. I do really thing that, I agree with you completely, it is a combination of really good notifications and great design.

Katie: There is one more point on why these hardware companies are all going after the health space and is completely counter intuitive and doesn’t make a lot of sense but there is more data point that you might want. We might want to all bear in mind that 1.9 billion dollars in VC money went into digital health. Mostly apps software. That is double from 2011. It is set to grow say a lot of the venture capitalists about what they are investing in, especially the ones who have raised the billion dollar of funds in the last two years. There was a story about where are you going to put all this money? Digital health came up again and again. So I think some of these companies; Samsung, Apple, they don’t know where it is going to go they just know there is going to be a lot happening there in terms of apps and other devices around digital health as people try to figure this out. So to be able to be the platform for this space that is just receiving tons of money, double from 2011, there is almost 2 billion dollars now. And in 2015 you’ll be able to expect some more growth rates, it is not a terrible place to be when you look at it from that perspective.

Lindsey: Well, as a part of that a health care industry I think you are absolutely right. If we got to a point, and I think it will take quite a while, but if you can get a prescription for one underwritten by insurance and they are part of the health care establishment. That is a great place to be, there is a ton of money there.

Mike: Absolutely.

Katie: Yeah. And there a few companies out there doing stuff like that. Not very many. Proteus is probably the one that is the furthest ahead.       

Mike: Medical industrial complex that is a great source of revenue and it is insurable. Maybe we can get a watch that is covered and paid for by our health plans. Obama Care. We can do it. The website works. Well, Microsoft was not only potentially working on a smart watch they also showed off this week a sort of, I guess a universal translator. Star Trek style. It does instant translation via Skype. So you can have a Skype call with somebody and you can speak English and the person on the other end can hear what you said in German and also read it on the screen and then they speak German to you and you hear in English what they said. It is kind of a no brainer. It seems like something Google would do as well. But this is fantastic technology making the world a better place, unless there is something about it that I missed.

Lindsey: I watched the demo and of all of this conversation about wearables this is the thing that got me the most excited this week. I’ve found it just amazing. And even, I’m sure there is a long way to go and this is one demo with this German in English and I thought it was funny picked German?

Mike: They’ve previously demonstrated in Mandarin or standard Chinese translation and I think a year or two ago there was a famous demo of that.

Lindsey: But I found it incredibly compelling because this is a real challenge. I’ve heard people in the software development industry who worked really closely with companies and India recently and have been pulling back partially because of communication issues, mostly to do with time zones. But if you can imagine the ability to work just seamlessly across languages that is a huge economic opportunity and it is also fascinating.

Mike: It truly is. My wife and I were recently living in Italy. We spent some weeks living in Florence, Italy and I was carrying about what is called WordLands, it is an app that…

Lindsey: Translates an image?

Mike: Exactly. I had Google Glass and I was saying why don’t they have this for Google glass this would be so great? And so you hold this thing up to a sign or a menu or something that is written in some foreign langue and it would show you in English, the same type face and colors and everything. It felt really magical. Truly amazing. This is the world we are going to. That sort of thing will be in your smart glasses and tourists will be able to walk around and no matter what country you are in everything will be in English for you. That is going to be standard. We are on the brink of that world. And then when you talk you are going to hear in your hear the language when people talk to you, you will hear it in English. It is really going to make the world a smaller place. I’ve already taken advantage of the translation feature in Google Plus and you just click a button and boom you see English. It is just, I agree with you. This is a great new world we are going to be living in.

Katie: I like it. A real like Babble Fish. It is like the answer really is 42.

Mike: That is exactly right. People talk about wearables being invasive and annoying, and it is true, but things like smart glasses can really enable you to break down language barriers.

Lindsey: on the other hand, I guess to play the devil’s advocate on my own excitement, I love other languages. I don’t speak any of them very well but I love learning them. I feel the same sadness when I think about a future in which I don’t need to learn another language. The same way I feel about a future in which I don’t need to drive. There is joy in driving, there is joy in learning another language. On a human level I worry about losing that. I feel like languages the fabric of your society. It is closely linked to your culture.

Mike: But if you really want to get depressed, you really want to go down this rathole, a foreign language is knowledge. What do we need knowledge for? Why learn knowledge, why learn facts, if any fact can be conjured up instantly 24 seven.

Lindsay: Somebody has got to put it on the Internet.

Harry: This could be a long long time Before a computer can speak and translate between languages as well as a human. It is like a lot of other technologies, the first 80% is relatively easy the last 20% really does make it magical, that is the hard part. You do get there sometimes, I feel like voice recognition almost got there. After many years. It was amazing but not quite amazing enough to be practical. It actually isn’t. But, translation is nowhere near that.

Mike: It raises a serious issue for education. What do you teach kids? Do you teach them a foreign language now? You teach them to do cursive writing. You teach kids to be able to function without a smart phone that is connected to the Internet.

Lindsay: The cursive writing question is very interesting. I think, lately, I have a fifth grader who is going to be in sixth grade, he did learn cursive and his school district does teach it. Part of the motivation for cursive, a lot of schools have not been teaching it anymore, is for kids who have dyslexia or any sort of trouble writing or interpreting, cursive helps. It actually forces the two sides with a brain to talk to each other. And they can spell better in cursive. It I’ve seen this in my own child. It is very interesting. So there are some skills that I think we don't know what they have until we stop doing them. And then we realize we lost something there. And maybe we should bring it back a little bit.

Mike: I think we have already lost so much. It used to be, 200 years ago, kids would need to know how to milk a cow. They would need to know how to do all these things which kids now days have trouble even recognizing what a cow with. And so…

Lindsey: Not in Petaluma!

Mike: Not in Petaluma. But, this is the trajectory that we are on. And it is accelerating with digital technology. In the education market we have to decide what we are going to teach kids.

Lindsay: I also have, and I find this fascinating, but because of voice recognition and because it has become so sophisticated there is a possible future in which we don’t need to write. At all. We speak. And maybe you can go in and edit, but you are wearing a smart glass, you are wearing some sort of receiver, you simply speak what is you want to communicate and it comes out what you can read. Everybody will need to read. But I think there is a possibility that we won’t get to the point where cursive or print doesn’t even matter.

Mike: Yes.

Harry: Even today there are people that are dictating entire books.

Katie: I was talking to somebody who dictates all of his emails, and all of his correspondence, even a lot of his memos to his staff. He said that because of where the technology is he actually has to speak like a robot for it to work. So he couldn’t have this sort of conversation that we are having with actual inflection. He actually has to sound robot. He does it for four hours a day. And when he comes out it is confusing for his staff because they don’t know what has happened to him. There were definitely people that worked for him and didn’t know him well, who would only see him after these moments and would think that he had some very severe form of autism. It is weird how the technology is changing our personalities. It is bizarre.

Mike: It is bizarre. I have tried to use, I don’t know if you have tried this Harry but I have tried to dictate columns and things like that. It is great at first and then you just get tired of it. It alters your thinking process.

Harry: It is just different. Actually even before voice recognition and people would dictate books on tape and have them transcribed, I read a fair number of books that weren’t all that great that were dictated. But when you write, you polish anything carefully. For most people that is harder to do.

Mike: Absolutely. Well, speaking of books we are going to talk in just a second about Amazon’s war against one major publisher. The first, Chad, don’t we have a look at what happened here in the brick house for this week? Here is what happened here on Twit. That’s outrageous. I did not say that. It has been digitally inserted!! I am going to lose my job! Talking about the future of books, Amazon had a weird glitch Hachette books if you went to preorder some Hachette books you couldn’t. Turns out, that Amazon had been the go skating with hash at Oprah’s something that has shat was publishing. And, a lot of people cried foul saying you are using your monopoly to sort of like crash these publishers, bending them to your will. And this is outrageous. They came out with a rare statement saying, no luck, we are here to negotiate on behalf of the customers who want the lowest possible prices and we don’t know if we are going to be offering these books in the future because that negotiations are going so well, so why should we take preorders if we might not be selling these books? We may be terminating our relationship with Hachette. They may have to go to the other Amazon. Wherever that is. So where do you fall on this? Is this a case of a monopoly sort of dominating and industry and making everybody do things their way? Or is this just a reasonable negotiation and the effect of that negotiation reflected in the catalog itself?

Lindsey: Well, I don’t know if I can say whether or not it is reasonable because he would have to be there to know what the actual argument is about. But what we do know, is that this is been going on for some months. I think it was the New York Times that pointed out that most of these negotiations happened within a month. This has been taking a while. I think this, at the very least, shows how important Amazon has become. It would make logical sense if they take down the preorder button if they think their negotiations may fall through. But I think the entire world cries foul because as they know the negotiations are going to fall through. What would Hachette do if they didn’t have Amazon? In that question right there is why people got so upset.

Mike: How do you function as Hachette without Amazon?

Harry: The part I find fascinating is not the negotiations between Amazon and Hachette, because they are both big companies and this stuff happens all the time. It is the fact that Amazon has always called itself Earth’s most customer centric company. For the most part it is in the level of customer service they offer is kind of astonishing. But they have acknowledged that not only are they not taking preorders, but they are keeping fewer copies on hand. They are intentionally delaying shipments in some cases and essentially customers are getting caught in the crossfire. Of course every company makes decisions and they do things not being as perfect for the customers as they might be, but Amazon has such a history of doing things that seem crazy in order to make life better for their customers. So to sort of have the curtain peeled back and willingly not letting people get the books they want because of this. It is kind of shocking in a way that would not have been if it had been Walden books or whoever.

Mike: They remind me a bit, Katie, at Walmart. Which is that yes people want lower prices, they want people of certain way and so we, Walmart, are going to use our gigantic power in the industry to force everything to happen our way. We are going to change the way people package their products. We are going to change the way they ship them, and we are definitely going to lower the price. Having everybody by everything from Walmart is good for customers. Is Amazon that in a nutshell? I’m sure you’ve heard about the diapers.com scenario where Amazon has this algorithm that automatically changes prices based on what the competitors prices are. And they undercut diapers.com consistently over a sustained period of time to the point where the valuation of diapers.com crashed. And they bought it at a lower price and now they own diapers.com. Is that good for customers? What you think Katie? Is Amazon a force for good or evil?

Katie: I don’t know if they are a force for good or evil but I think Amazon being good for customers is kind of a nice whitewash or veil for Amazon to be good for Amazon. And I think the diapers.com example is great. I think that your Walmart analogy is very interesting because Walmart is a very, very low marking business. They have to do volume because they do not have margins. Amazon, as we know, if you look at their annual report portrait they put out this is not a moneymaking company. So it was very fascinating in the New York Times when they had an editorial around this issue. Saying that they thought it was interesting that this battle happened at a time when Wall Street investors were finally starting to get a little bit restless with Amazon about not being able to produce profits despite all these following businesses and everything that it does. In that statement, from Amazon, essentially what the company said is that we are playing the long game here. We need to deal with publishers like Hachette in a way that is going to be good for customers. But, at the end of the day, good for Amazon. And the New York Times said that maybe Amazon realized they needed to start building margins somewhere. Because you can’t just run 50 low-margin different businesses unless you can do Walmart type volume and all of them. Which, they don't quite yet.

Mike: Their low margin approach to business is yet another questionable thing. It sounds, if you look at it from a certain perspective, as an anti-competitive thing. For example, Amazon famously sells books at below the cost that they paid for them. They essentially say we think this book is going to be a $9.99 book but they negotiate a price that is higher than that from the publisher but they will still sell it at $9.99. This is what the Apple got into trouble when they colluded with other publishers to keep margins high so that publishers could actually make money and so on. It turns out that that was illegal and what they called dumping. If you do it internationally it is dumping. If you sell something below cost in another country that is against the international rules of trade. But if you do it domestically it is okay. And Amazon does that. They also did that with some of their tablets. Where reportedly they were selling tablets at lower cost than it took them to make them. It is really hard to get your brain around whether Amazon should have a more profitable business, whether as they should be kinder or gentler, it is almost impossible to imagine them that way. I think one of the reasons why they have come into a lot of criticism lately is Alibaba is in the news. Alibaba is sort of a Chinese Amazon in a way. Not really, because they do have very different models, but they essentially dominate the Chinese buying things online scene. In a similar way that Amazon does within the United States. And Alibaba is massively profitable. They make a lot of money. They have rock-bottom prices on some of their categories, some of their stories. They have different types of stores. But 40% of their revenue is profit or something. It is very, very high. I don’t know, I doubt would Jeff be results in charge they are ever going to soften.

Lindsay: I don't think so. He has said over and over again that they are there for the long haul. That all the decisions he makes are so that they can build the business they want to build for 15 or 20 years from now. Which is very interesting. You would almost expect them to be softer with that approach. But they seem to be extremely rigid and automatic. I don’t think we will know for 10 years if they are being good or evil.

Harry: Just talking about books specifically, I would be happier if there was someone that seemed like a true archival Amazon in that category. Barnes & Noble is not an arch rival. They are in somewhat difficult shape. Despite Apple getting into in trouble there bookstore is not an arch rival. The day will come when Amazon has an arch rival because it always happens. But right now is a little hard to see that happen because they are so powerful.

Lindsay: Were there will be an antitrust investigation. That really could happen. When you think about it, Amazon has if they get up to 70% market share, and they basically have the entire self-publishing market which is of their own design really. That is not necessarily a negative thing, it is a positive thing in some ways. But that is a huge…

Mike: From an antitrust perspective though they are squeezing the publishers on one end and they are competing directly with them with an entirely different model on the other end. It is not easy to be a publisher.

Harry: There was a small publisher or two who has come out in favor of Amazon and there are stories about small publishers reaching way more people and doing very well because of Amazon. So, I certainly don’t think they are an ogre who is only bad for the publishing business. In some ways they have been wonderful for publishing.

Mike: I think we can all agree on this, which is that Jeff Bazos is a genius. That Amazon is incredibly disciplined company. And that is the source of their success in a very brutal market. As far as I’m concerned if they deliver diapers be a drone all is forgiven. That is all I want. Is that too much to ask? In a second we are going to talk about another company with a bad reputation, Comcast.

Mike: The first and want to tell you about Carbonite, A company that has saved my personal bacon many, many times. Carbonite is an automatic backup solution that backs everything up in the cloud and you really don’t have to do anything. That is one of the really cool things about Carbonite. They were the first backup company that just took all of the necessity of having any sort of technical acumen or basically for site about backing up your files, and adjusted automatically. I first started using this back when I was a Windows user. On the Windows version you just installed it and it figured out which files you pre-much want to backup. It puts a little circle next to every single file in your entire system, that tells you whether we are not ever going to back this up, we are going to back this up but haven’t, we have already backed this up so don’t worry about this file. It is so reassuring. Unfortunately that little user interface doesn’t exist in the Mac version. But essentially it is still that easy. You simply install it, and the default mode is that everything is backed up in the cloud. And when a meteor shower destroys your house and breaks your laptop into multiple pieces, you haven’t lost any data so you don’t have to worry. And so, carbonate is really a fantastic service that I’ve been using for many many years. It backs up all your computers, and not only that , your servers, your external hard drive into the cloud. It is probably a good idea to have a local copy as well, a little hard drive. Because sometimes you may not have any Internet connection and you need a file or whatever so it is good to have redundancy. But you definitely need that cloud-based backup. Because you don’t want all your stuff together. There is the famous story of the film producer of Apocalypse now, Francis Coppola, was in Argentina and he had his screenplay and all of his personal photographs on a laptop and he was backing them up to a hard drive right next to the laptop. The laptop was stolen and the hard drive was stolen and he lost everything. He lost his screenplay, he lost the pictures and he is now the poster child for why you need cloud backup. So start your free trial today Carbonite.com. No credit card is required at all, you can to start using it without a credit card. Use the offer code twit and you get free bonus months, two free bonus months if you decide to buy. That is carbonite.com and offer code is twit.

Mike: Well, let’s talk about Comcast. Because Comcast is getting a lot of bad press lately. They have been embroiled in all this controversy around net neutrality and making matters worse the CEO of Comcast, Brian Roberts, recently came out and said we are going to tell you why everybody hates Comcast. The reason why everybody hates Comcast is that when the people that originate the Comcast, the data, the sort of Netflix of the world, the YouTube’s. When they raise their prices everybody blames us. We are just trying to provide a good service. And therefore, we think we are like the post office. If you want to ship a package through the post office you’ve got to pay the post office. And he is saying that companies that generate a lot of data, like Netflix, should be paying them and paying them quite a bit for the data. Even though the customers are also paying for the delivery of that data. Any thoughts? Does he have a good point here?

Lindsey: Well, I mean the reason that came off as so silly is that I don’t think that is the reason people hate Comcast at all. They hate it because they don’t like dealing with the customer service when they call because there’s a problem with their server. It takes forever, you are stuck at home and all kinds of reasons. I can that is the last of them.

Katie: Yes. Exactly.

Mike: Do you hate Comcast, Katie?

Katie: Yes. Nobody cares about what is happening with Netflix in terms of whether we like the company. It is exactly that. They are horrible to their customers. They have very bad customer service. But in terms of what Roberts is saying too it almost feels like he kind of wants to have it all his way. We are just the pipe and so you just pay the pipe. But he also wants to be able to control the pipeline, and He wants to not be a dumb pipe, and he wants to be more than just the interchange, and he wants to preserve as gatekeeper role too. I don’t really think he can have it all.

Harry: And he owns a lot of content. He is not a dumb pipe he is a dumb pipe that owns NBC and does all kinds of stuff. And makes movies.

Mike: I personally with love to live in a world where the pipes were as dumb as they could possibly be, just really fast. I would love to get content from a company. Google Fiber, which is only in two towns right now and they are looking at more, is probably as fast as it gets in the United States for the delivery of content. That Google is not a disinterested party. They want you to get their ads as fast as you can possibly get them.

Lindsay: They want you to get YouTube.

Mike: YouTube is the second business generator of data after Netflix in the United States. And, yeah, absolutely. There’s got to be some way other than just having these things become common carriers, we could just have the dumbest pipes that have no interest other than to provide the fastest possible data service.

Harry: Sadly there is no such thing as a disinterested large company.

Mike: I guess I am just a dreamer.

Lindsay: Well, it could be government regulated but there are a lot of people who wouldn’t want that either. Australia tried to do that and that fell apart. There are some countries, a few of them, South Korea, that really that is the alternative.

Mike: Absolutely.

Katie: It raises the question. Has the Internet risen to the level of importance that it is the utility and it should be treated like a utility. If that is the case, then that is very different. But until that happens, we are stuck with Brian Roberts.

Mike: Well, we shouldn’t be. The real problem, the root problem, whenever we talk about net neutrality, whenever we talk about whether we hate Comcast are not, is that there is often not much of an alternative. As there are in other countries. When you go to the UK you can choose among four, five, six or seven different ISPs. And, let the best ISP win. And we don’t have that here. In some markets it is just one, in others it is just too. It is very rarely ever three or four. And that is the biggest problem, we need to figure out how to get some competition in this market. I think we can all agree with that. Well, that is today’s twit. The Leo-less version. Before we sign off, I want to invite everyone to tune in to our special coverage tomorrow of WWDC, the developers conference keynote. That is going to be Leo Laporte, he is in the basement tied up right now. We are going to untie him for that. Sarah Lane, Alex Lindsay and me are going to cover it live and heckled the keynote and see what it is they announced tomorrow. So tune in for that. Tech news today which is normally at 10 o’clock will be at 8:30 AM Pacific. So Harry McCracken I want to thank you for coming to twit today. It is always a pleasure to have you on whatever show I happen to be hosting.

Harry: Always good to see you, Mike.

Mike: So tell us more about where people can read your stuff, with your new joint.

Harry: Come to technologizer.com and you will see all my stuff. I’m also @harrymccracken on twitter. I’m also doing technologizer on Flip Board, my technologizer magazine there which will have all my stuff.

Mike: I didn’t know that.

Harry: I just started doing that.

Mike: I’m going to subscribe today.

Harry: I love Flip Board. And I figured why not make the experience as good as possible.

Mike: Why not. It is always great to have a good source of content they are some of the stuff on Flip Board is not great, but I’m sure yours is going to be awesome. Is that just going to be your stuff are you going to curate?

Harry: I’m in a curate too. In fact I’m curating on technology.com too and the stuff I curate there I will also curate on Flip Board.

Mike: Wonderful. We’ll thank you for coming on to twit. And Lindsay Turrentine, Editor in Chief of CNET Reviews, thank you for coming on Twit.

Lindsey: Thank you. Very fun.

Mike: So tell us a little bit more about this secret lab the you have for home automation. Is this going to be generating all kinds of reviews of these products?

Lindsey: Well we actually have this now. We have a 12,000 ft.² facility in Louisville, Kentucky. It is a warehouse that we have converted into an editorial space in a facility where we test larger appliances and small connected appliances. And we rate them, and review them like all the other technology that we review on CNET. So that is great. There is some exciting additional stuff that we will be doing that I can’t talk about quite yet. But that will be coming in the fall.

Mike: Awesome. Wonderful. And Katie Benner with The Information, thank you so much for coming onto Tech News.

Katie: Thank you, this was fun!

Mike: Oops this is Twit. This Week In Tech. Thank you for coming on. Where 10 people find what you write?

Katie: We are theinformation.com. It is a subscription site. It is worth subscribing and I hope that you will join us over at The Information.

Mike: The most important part of that URL is the word the. Information is easy to remember but don’t forget you have to use the word the. Thank you so much Katie Benner, and this has been an exciting adventure for me personally doing the show. I remember, I used to be right where you are sitting. Sitting right in that chair looking at Leo do This Week In Tech and thinking there is no way I could do that. There is no way I could do that. I don’t know how he does it. I still don’t know how he does it. But it has been exciting for me and I want to thank you all for coming. And so I get to say what Leo always says, another TWIT is in the can! I always wanted to say that!