This Week in Tech 593

Leo Laporte:  It's time for TWiT, This Week in Tech!  We've got a great panel for you.  Stephen Levy from Backchannel and Wired Magazine.  Georgia Dow from iMore, and Steve Kovach from Business Insider.  We're going to talk about the week's tech news, the big tech summit at Trump Tower, and why everybody looks so sour.  Steve was actually in the lobby, waiting for them to come out, what's going on at Google.  Nobody knows better than Steven Levy, and Georgia Dow will explain why fake news appeals to your lizard mind.  It's all coming up next, on TWiT.

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Leo: This is TWiT, This Week in Tech, episode 593, recorded Sunday, December 18, 2016.

Coulrophobia

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It's time for TWiT, This Week in Tech, the show where we cover the week's tech news.  I guess this episode will be covering the year's tech news too, because it's our last show, normal show of 2016.  Next week we'll be doing a holiday episode with Steve Gibson, Denise Howell, and Renee Ritchie.  It'll be a look back at 2016, the top big stories that we talked about in 2016, everything from the exploding Samsung Galaxy Note 7 to wow.  Was that me making that sound?  To why your computer makes strange sounds.  This is the... I'm using my new computer for 2017 already.  This is the very nice Surface studio from Microsoft.  I'm going to say the computer of the year 2017.  The following week we'll do a best of.  The January first episode.  Christmas day will be the round up, New Year's day will be the.. I won't have to sit in the seat those days.  Meanwhile, for the last show, I thought it would be fun to bring in my favorite people, starting with somebody we haven't seen in a long time. Steven Kovach is here from New York still, yes?  Senior business correspondent to Business Insider.  Great to see you and your cat.

Steve Kovach:  He's sitting here next to me.

Leo:  That's nice.  Welcome.  Haven't seen you in ages. 

Steve:  Here's Larry.  I was on in October maybe?  Good to be back.

Leo:  Also joining us from Back Channel, Steven Levy is here, one of the great tech journalists of all time.  stevenlevy.com.  He's got a lovely Christmas tree behind him.  very festive.  Hi, Steven.  Good to have you. 

Steven Levy:  Good to be here.

Leo:  From Montreal Canada, it's Georgia Dow from iMore.com.  Hi, Georgia!

Georgia Dow:  Thanks for having me today.

Leo:  You're in the white white room today.

Georgia:  I'm in the white room. 

Leo:  Johnny Ive padded cell.  You are not in the room where it happens. On Wednesday, President elect Trump met with the tech titans.  Everybody above the billionaire line, except Jack Dorsey, in Trump tower.  I love the pictures of Tim Cook who went along with Elon Musk and Jeff Bezos.  There was some debate over whether these guys should go.  Sheryl Sandburg, or whether they should stay at home.  Mark Benihoff seems to have stayed at home.  Travis Callineck of Uber stayed at home.  Bryan Chevsky of Air BnB did not go.  Jack Dorsey was not invited because it turned out, I didn't believe this.  I thought this was fake news for sure.  Until it was confirmed by the Trump campaign; Twitter had refused to make a custom emoticon for crooked Hillary.  Apparently that failed emoji deal was enough to keep Jack Dorsey from getting an invite.  Not sure if that's a good thing or a bad thing.  So.. I guess the question, Carol Switcher is going to be on in a couple weeks.  She said you should absolutely not go.  They interviewed Chris Saca and said it was in effect endorsing Fascism.  I disagree.  I think it was probably a good thing to go.  It didn't mean you had to smile.  Here's Tim Cook not smiling. 

Steven:  I don't think anyone smiled.

Leo:  They said Jeff Bezos was voluble.  So was this a bad idea to go, or was it a good idea to go?

Steve:  I was there.

Leo:  You were in the tower standing on fifth avenue?

Steve:  I was in the lobby, standing there with the pressed screen, waiting for a chance to have one of the executives come by and talk to us. I got the impression they didn't want to be there.  Many of them swooped through the lobby and I missed them.  I never saw Tim Cook.  He had some stealthy ninja skills. He got on that elevator before anyone could catch him.  Same with Bezos, same with Musk. 

Leo:  I said before this happened that the thing to look at was what they say and how they act afterwards.  That's when you'll know if they got spanked, if they got to say something.  It's interesting they snuck out of there, pretty much. 

Steve:  Nudello ran out of there, pretty much.

Leo:  Maybe he was late for a plane. 

Steve: He has a private jet.  It was clear they didn't want to talk to the Press about it.  A lot of times when people meet with Trump they'll come and talk to the scrum and say it's a great meeting and some platitudes about that.  It was none of that.  They were in and out, all of them.  A lot of them came in through a different entrance, so they could sneak on the elevators easier.  It was an interesting day, standing in Trump tower for six hours. 

Leo:  For no apparent purpose.  Most of them were Clinton supporters during the campaign.  But I think...  I would guess their chief interest was not making this a media opportunity for Trump. 

Steve:  They did that whole thing.  They had cameras in the room and stuff.

Steven: They had cameras in the room for the first couple minutes.  The protest I would like to see them launch is the protesting again saying that the meeting was going to be off the record.  OF course it wasn't.  Cara got them to talk, and I think other people will hear what happened, which wasn't so remarkable, judging from the rumors coming out of there.  I think the protest would have been saying, "Yeah.  I'm going to go, but I'm not going to hide this from the public.  We're not going to be collaborating in secret to be doing something behind the public's back.  We're going to talk about what happened in there.  This is the people's business.  If you're going to be talking about what the direction of the Trump administration is in the most important Industry in this country, maybe the people need to know about this.  To me, the two big things coming out of it were they weren't talking with whatever it was and that Trump's kids were in the room.  Four seats.

Leo:  Four seats went to the family.

Steven:  To me, we've seen this before.  It's a shocking circumstance to me.  When you have a meeting like this, you have these four people, so maybe Jared Kushner, OK.  He's a consigliere  unofficially, but to have your other kids in the room, there's no security there.  There's no official point in the transition for them.  It's just what you see in countries that aren't democracies with stuff like this.  I think that's disappointing, and I can't imagine that the big brains in the room were impressed by that.

Leo:  It's not unprecedented for a President to use his power in some degree.  Hillary Clinton worked on health reform for Bill Clinton. 

Steven:  To be honest, it could be more easily justified.  She was a distinguished person in her own right that achieved quite a lot without having to...

Leo:  Here are some of the quotes.

Georgia:  It also shows a huge conflict of interest as they're still running his businesses.  Then they're also sitting in on meetings that could influence the way that people are going to be doing business with them. 

Leo:  As Ivanka Trump sat in with the prime minister of Japan earlier.  These are some quotes from sources.  One source said the meeting was weird, but not as awkward as it could have been.  Another said Trump was reasonable and fair the whole time.  Clearly several reasons why the CEOs go.  One is the President Elect asks you, you go.  There's also the carrot of repatriating... I would love to see the math for how many billions of dollars their off shore dollars are represented by these CEOs.  Apple alone... is it 18 billion?  Trump has promised repatriation of that money for a lower tax rate.  That's one of the things they'd like.  Satina asked for better H1B Visa situation.  Trump has been consistent on.  Acknowledging that they're often misused, bringing in less skilled tech employees to replace American tech workers.  But of course Silicon Valley argues we need to bring in the smart ones.  H1B visas are for the most educated workers that we can't get here in the United States.  Elon Musk apparently brought up climate change, or at least did in another meeting.  There was some head shaking about Larry Page.  Here's an outlier I personally liked.  Alphabet CEO Page brought up about infrastructure spending.  The need to re-jigger the electrical grid. Something about AC current versus DC current.  Everyone I spoke to was a little confused by this.  That's what you'd expect Larry Page to come in and say we should convert this all to DC.  No one would say who brought up the repatriation issue, but it  was brought up.  I don't see a problem with it, and I understand why they skipped out quickly so as to not make it a photo op.  But I think it was reasonable that they go and try to build a bridge, right? 

Georgia:  They don't have a choice.  This is the administration that they're going to be having. 

Leo:  They could say no.  Kalanick said no.  Chefsky said no.  Mark Benihoff said no. 

Steven:  Kalanick is going to be on the team.  As Steve said. 

Leo:  That's interesting.  Travis Kalanick, the CEO of Uber.  Uber is interesting, because they've been in a constant battle with local Governments, at first to get in the cities, because Taxi commissions and medallion owners didn't want Uber in there.  Now they're fighting with the state of California, and the city of San Francisco.  The City of San Francisco said they never paid the autonomous vehicle license for those autonomous Volvos that Uber has started to drive around on Wednesday in San Francisco.  Uber says you don't make people drive Teslas with auto pilot, so we're not going to. 

Steven:  This is an interesting pattern.  We did a story a couple weeks ago.  We broke a story where Auto, which is the self-driving truck company--

Leo:  Also owned by Uber.

Steven:  Right before they went to Uber, they did a big test run in Nevada.  As it turns out, they didn't have a proper license or authorization to do that.  There was actually, our reporter found some heated correspondence beforehand where the Nevada DMV said you can't do this without the authorization, and they did it anyway.  The irony was the regulation was pretty much written by the cofounders of Auto.  Google's lobby got in there and wrote the regulation.  They violated it anyway.  I guess they wrote the regulation, and knew there was no penalty for violating the regulation.  This particular fellow is the head of the Uber self-driving car unit, and apparently he likes going on and asking forgiveness rather than permission.

Leo:  By the way, Uber bought them for 680 million dollars.  I can see why Travis Kalanick might want to get into the corridors of power and bypass this whole regulation thing.

Steven:  Trump is good for them. Trump is anti-regulation.  The Trump administration might be the best thing to happen to Uber in terms of the regulation.

Leo:  That's what is interesting about all this.  Even though these CEOs are all for the most part Clinton supporters, they stand to make some major gains.  It's hard to know what a Trump administration will look like, but he's probably good for big business, and that's what these guys run, is big businesses.  So maybe there isn't this natural antipathy.  Maybe there's some partisan antipathy, but these guys could get more than repatriation from a Trump administration. 

Steve:  But then you see silly things like him promising they're going to start building iPhones in the United States.  It's untenable stuff like that.

Leo:  He hasn't said anything about that since the election. Part of the problem is there's a big red line, pre-election, post-election.  Already they've repudiated many of the things they said pre-election.  I haven't heard anything about bringing iPhone production back in the United States.  I think what would happen pretty quickly is you'd find out it's not practical.  It wouldn't bring jobs.  All you're doing is bringing the robots back. 

Steve: When it comes to jobs, which was the main topic of this thing, the repatriation plays into that.  They dangle we'll give you a better tax rate, in exchange we need to see more jobs created here.  Again, those aren't the kinds of jobs Trump has been promising.  They're not blue collar jobs.  They're not manufacturing jobs, they're high skilled highly educated jobs. 

Leo:  here's some more confusion. Here's an article from November 20, 2015.  Donald Trump's plan for a Muslim database in an Iowa Campaign stop he said i would certainly implement that, there should be lots of systems beyond databases.  We should have a lot of systems.  The Trump team a year later says he never advocated for a Muslim database.  Now Silicon Valley tech workers planning to not build the database that Donald Trump does or doesn't want.  We live in interesting times, do we not? 

Steve: This whole Muslim database thing was a strange story this week, because these tech companies are getting cheered for vowing not to do it. 

Leo:  No one has asked them to. 

Steve:  No one has asked them to.  They didn't start falling in line until... I think it was Twitter.  Only one major company came out and said flat out no.  We're not doing this when asked.

Leo:  Remember Gina Romanti of IBM wrote an open letter to President elect Trump a couple weeks ago pledging her support, the support of IBM, and of course people reported that IBM had made a database for the Nazis.  So there was some clamor over that.  Who was it?  Oracle promised to do anything that the Trump administration wanted.  This is in response to that.  neveragain.tech, we the undersigned employees of tech organizations: engineers, business executors, designers, we commit to refuse to participate in the creation of databases.  600 people have signed, including most of the big companies at that table.  Good.  Right on, don't.  Clearly that's a bad idea.  It's a pledge anybody can get behind.  It feels like right now there's a lot of confusion and wheels spinning.  I wonder what these tech executives at this table really think.  Wouldn't it be reasonable, as in most cases CEOs of publicly traded companies that they look to find any advantage that they can for their business, and if you're talking to the future President of the United States, that's where you go to lobby for the stuff that's good for your business. 

Steven:  You're absolutely right on that, but there's two tracks here.  The bottom line track, and then there's the morals track, the vision track.  Most of these Silicon Valley CEOs believe that their companies aren't just money machines, that they're doing things that are good for the world.  In two major areas, the Trump administration is diverging core values of these companies in a good for the world category.  One is diversity, which a lot of these companies, even though their employment roles may not reflect it, they like to talk about how they're going to do better at achieving diversity among their ranks, and the second is climate change.  Companies like Google and Facebook, even though they're software companies.  They work very hard to prove their data centers are green.  Climate change is something they believe in.  Apple has a head of environment that used to be head of the EPA.  I doubt she's going to join the Trump administration.  So, I think there's this tension there whereas, one hand it might be good for their bottom line, they didn't vote for the guy, and they don't like this guy. 

Leo:  I have to point out that at least in diversity it's more about public relations than actually doing anything.  I do think companies are doing a lot about climate change.  Google announced this year that they're going to be 100% solar powered in 2017 for everything.  Network centers, business operations.  I think that they're serious about that, but it seems to be about optics more than anything else.  If Twitter is worried about that, we better put out an open letter.  All right.  We don't want to do too much politics.  That's a big tech story.  They're all there, and I don't know what to say about it.  I thought it was interesting Elon Musk has added Tunnel drilling as one of his things he's interested in, after tweeting he hated traffic so much, he wanted to drill a tunnel to drive to work..  What's interesting, wouldn't the tunnel become exactly as congested as anything else.  Tesla Space X tunnels.  He wants to call it the boring company.  Traffic is driving me nuts, I'm going to build a tunnel boring machine and start digging.  I'm actually going to do this.  I thought at first this was the fake Elon Musk.  This is the real Elon Musk.  Tunnel to work, forget helicopters, I'm going underground.  We're going to take a break, when we come back, airpods are finally for sale.  Apple released them.  Where were they?  What was happening/  Are any of you getting them?  Mine isn't coming until next year.  I didn't order fast enough.  Are those pre-production?  Or are they actual...?

Steve:  These are the actual ones.  They sent me a review, the real ones too. 

Leo:  I'll ask you about that in a moment. Amazon Echo is going into 4.7 thousand Las Vegas rooms starting in the summer.  Congress moves to ban Ticket scalping, coming up.  Our show to you today brought to you by stamps.com.  This is basically like Tunnel boring for the post office. Why even go to the post office when you can do everything you do at the Post Office right at your own desk with your computer and your printer at stamps.com?  Stamps.com lets you buy and print real US postage, it lets you label and print on envelopes.  It will help you choose the right form.  You get a USB scale, which makes it easy to make sure you have the right postage, neither too little or too much.  It makes you look more professional.  I want you to try stamps.com.  We got a good trial for you.  If you go to stamps.com, click the microphone in the upper right hand corner and use the offer code "TWiT" at stamps.com.  You don't have to go to the post office.  Holiday season is the worst time of year to go to the Post Office.  Amateur hour.  Now you can do it all, right from the comfort of your own desk.  You'll get a trial of stamps.com, you'll also get 55 dollars in postage coupons you can use for the first few months of your account.  5 dollars, supplies get... and a free digital scale, you plug into the USB port.  This is so awesome. Automatically weigh and give you the right amount of postage.  In fact, you'll see on the screen, this is how much it weighs and the different ways you can mail it.  It'll even recommend medium mail if it's appropriate.  It is awesome.  I know you're going to love it and it's going to make you look more professional, whether you sell on eBay, Amazon, Etsy.  Flyers or bills, stamps.com.  If you do use, if you are an eBayer, Amazon, or Etsy seller, you'll love this, because it takes the information for your buyer from the website.  Fills it in, any express mail forms.  It fills in automatically.  Try it free right now and get the special $110 bonus of postage and digital scale.  That's stamps.com.  We thank them for their support of This Week in Tech.  Steven Kovach is here from Business Insider.  He's senior correspondent.  Steven Levy, one of the original, the best computer journalist.  Is it the 30th anniversary now? 

Steven:  32.  1984. 

Leo:  Holy cow.

Steven:  John Markov recently retired from the New York Times.

Leo:  So now you're the longest standing senior.

Steven:  There's a few others.  Larry Mag is, a few others from that era are around, but I know that, there is at one point, Microsoft did this thing at the hood canal, which is Bill Gates's vacation complex, his family, and they pulled together some of the porters of that era to go and... Steve Ballmer and Bill.

Leo:  A pajama party?

Steven: That's what we jokingly called it.  We went from c planes to the hood canal, which looks like a lake to me.  It's the hood canal, it's a salt water body east of Seattle.  We spent two days, two years in a row, taking to Steve, Bill.  They gave us  download on the company. Went deep.  We didn't peel off.  Bill's family usually vacations there.  Guys slept in Bill's sister's rooms there.  Markhoff and I... we were working from that trip.  He's still going to be working.  He's going to be a historian from the University.

Leo:  I saw that.  I think that's great.

Steven:  Yeah.  But no longer the Times.

Leo:  You never worked on a newspaper.  Did you, Steven?

Steven:  Not full time. 

Leo:  You've always done more long form feature length stuff, like books.

Steven:  I started writing for weekly publication.  The later Newsweek.

Leo: Wired.  You're back at Condi Nast.  You wrote Rolling Stone too?

Steven:  I started writing about technology. 

Leo:  No kidding? 

Steven:  Yeah.  Hackers was started with an article about computer hackers with Stanford that I wrote in 1982. 

Leo:  I salute you, Sir.  Of course all the old guys have been on the show.  I love John, and he's great.  I'm glad he's found something that he wants to do.  The computer history museum will be a good place for him. I'd love to see him writing long form stuff.  That would be cool.  Let's see.  What other stories do we have here.  Pebble.  You wrote a good story, Steven, on the end of Pebble and what happened.  You both wrote that story.  Between the two of you.  What happened?

Steve:  I'll let him go first.

Steven:  They didn't sell enough watches.  Basically.  They were not profitable, and when you're not making money, bad things happen.  You outspend the money you have.  They started out.  There's this fascinating story, they were my company in 2011, and they were the only hardware startup of the bunch.  They were the lowest funded company in that whole bunch, then they came out of it, and since they didn't have much funding, they decided to do a Kickstarter for their first watch.  Great.  Yeah.  For a couple years they were going well.  Last year, they had a bad second half, didn't make the numbers, and never were profitable again.  Steve, who is able to nail down something I didn't get on the record.  They almost got bought by a company, but this year, they tried to make it and they could not. They had some interesting new products that they did a Kickstarter on because they couldn't get funding to do it normally.  As the year went on, it became clear.  They had some whacky ideas, they explored weird, private equity companies, and they had an idea, they would cut down to ten people and keep going. 

Leo:  Steve, tell me about that.  People were surprised to see they had at one point an offer of 75 million dollars?

Steve:  That wasn't true.  That was, I spent a week trying to dig at that.  It seemed really funny that someone told Tech Crunch there was 740 million dollar off from the table from Citizen, the Japanese watch maker.  That didn't make sense.  You look at Citizen's market cap, it's almost half of Citizen's market cap.  I heard that was someone disgruntled, literally lying to the Press.  

Leo:  Why did they stop at 74? 

Steve:  740 million.

Leo:  740.  Oh.

Steve:  That's insane.  Oh man, how could they turn down that acquisition?  That would have been such a nice exit for them, they would have had this cushion of a traditional watch maker, which was Fossil.

Leo: The traditional watch makers don't they want to find new markets, the watch sales have to be down overall. There was actually a collaboration between the two companies.  Pebble paid Citizen about 50 grand to help them design the round, which is that circular watch that launched a year ago or so.  It turned out they ended up not using Citizen's design.  Citizen submitted ten designs.  Pebble found them too thick and chunky, they were looking for something slimmer.  They went with their own design, that was the end of their relationship with Citizen.  There is no offer, there is no acquisition taunts.  Maybe internally Citizen discussed it or something, but there is certainly nothing formal, and there wasn't anything for 740 million.

Leo:  thank you for doing the leg work in debunking that.  It really made the rounds.  I repeated that number!

Steve:  Then it became this thing.  It made Erik Jikovsky look like an idiot, which he is not.  So the real acquisition that fell through was the Intel one.  Late spring of this year.  That was for approximately 70 million, there's a little debate internally at the company as to why that fell through and ultimately withdrew and the offer was higher than 70 million, so they went down to 70 million.  It's unclear who exactly said no.  Some people think Erik was trying to get more than 70, some people say no.  It is a he said she said situation.  Once that deal fell through, everyone at the company knew things were on the way out, and the employees were offered a chance saying, "Hey, we know things look bad.  You guys can leave now.  We'll give you a severance package, or if you guys want to stay on and try to see this thing through to the end, we'll double your sales in the company."  And some people laugh, but a lot of people did stay on, hoping those new products like the core, and the Titan two would reinvigorate interest in the company.  Ultimately that didn't happen. 

Leo:  The core was interesting.  The idea was you'd have Amazon Echo built into a little worry bead in your pocket.

Steve:  I wish that thing actually...

Leo:  A lot of people wish they would refund your money.  One of the reasons this is an interesting story, and people assumed Pebble was doing better than they were is they did a good job of raising money on Kickstarter.  Three separate campaigns raising many millions of dollars.  They were the first breakout Kickstarter campaign. 

Steven:  Even 12 million dollars, really to be successful, they have to sell through their channels.  You really get your table money, from getting money in advance. the real money comes when you build out the channels.  Many millions of people.  24, thousand buyers for the Pebble Core  That is a product that if it was successful would have been a million buyers.

Leo:  That's the problem with being a success on Kickstarter.  It seems like a lot. It really isn't.  It's a pre-order.  Yeah. 

Georgia:  I think from an emotional standpoint, people are sad to see Pebble go, it was one of the first Smartwatches that were hitting the ground running.  Everyone that I now has a lot.  All of my tech friends have a Pebble, so it's really sad when the end it's survival of the fittest.  They just couldn't keep their momentum going with that.

 Leo:  Here's the real question.  People combined this with the announcement by Motorolla, they're not going to work on any more 360 Android wear watches for the time being, and looked at sales for the Apple watch where you believe... or you believe Tim Cook.  They don't look like a significant amount.  FitBit is the only one that seems to be doing well in the market, and it's mostly selling low end inexpensive style. 

Steven:  Its stock is way down.

Leo:  Is this category dead? 

Steven:  When I talked to Eric and he was nice enough to sit down with me, because I like the company, I've been following them pretty closely over the last couple years, we even had a series that we called the adventures of Pebble ever couple times a year I would check in and they'd add something new and we'd write about it early.  He told me that his big mistake was not saying early on that it was all about Fitness for these things.  That was the number one thing people wanted to do.  These Wrist wear-ems.  They wouldn't call it a watch.  The last products had increased fitness features, they had a heartbeat monitor, they all had GPS that worked off line.  He was hoping that would align them.  General, the transition from watch to smartwatch has not been gangbusters.  Apple professes to be happy in what they're doing.  If you look at what they've done, they've doubled down on fitness, they don't talk about it as a fashion item any more.

Leo:  Eliminated the expensive gold one.

Steven: The gold watch is now obsolete, which you probably know if you gave it ten minutes' thought before you sprung $20,000.

Leo:  I guess anybody who had that kind of money to spend didn't care.

Georgia:  They weren't really caring about whether their watch was going to be obsolete or not.  IF you can shell out that much money for a Smartwatch, you can probably afford to get another one.  I think the problem when people talk about wearables dead because of the prices, you cannot compare it to a laptop or a phone.  Odds are, if you're going to get a Smartwatch, you're going to buy one, and that's going to be good for many years.  You're not going to be upgrading it every single year.  If they did sell over 12 million year one, that's a lot of wearable Smartwatches Apple has sold.  You're not going to upgrade it, and it's something that you have and it's good and you're still using it.  Most of the people who were interested and wanted to get in board right away have probably already bought one, and they're probably not going to be upgrading for three or four years.  So only then will we be able to see.  When watches become more autonomous and you're able to use them without your phone, that's when you're going to see a huge spring in wearables, because FitBit is going to take the low-end market for something that is going to be cheap, easy, and just deal with fitness, whereas Apple's is going to take that high end market, where you'll be able to replace it eventually for your phone.

Leo:    Steve, you wrote a couple weeks ago, Wearables are dead.

Steve:  I totally disagree with that.  People were pitching this thing, and all smart watches as a new kind of computing platform.  From the very beginning the Apple watch was pitched as it decreases your reliance on the phone, and you're going to be able to do everything on your wrist as opposed to on your phone, but that doesn't make sense.  Look at, so many original applications for this Apple watch were shrunken down versions of what you see on your Smartphone. 

Leo:  Unusable.

Steve:  Slowness aside, let's pretend it was super fast.  OK?  You don't want to squint Instagram or New York Times on your wrist. 

Leo:  Plus they needed Scruitable UI. 

Steve:  A lot of that's been fixed now, UI issues.  It's better, but it's better as a fitness tracker, heart rate monitor, maybe notifications and of course time.  Then again, do you need to spend between three and five hundred bucks for that?  No. 

Leo:  It's not just fitness.  It's really casual fitness.  If you're a runner, or a serious fitness buff, you're going to get a serious runner's watch, and it's not going to be one of these, it's going to be from Garment or Polar.  It's going to be a much more serious device.  I don't think these middle ground devices aid into that market, so it's for casual fitness users.  That's a fairly small market. 

Steven:  They took a lot of care to make sure you can swim with a watch.  It' snot the first thing I want to do, but they have this amazing thing, and it shows how an Apple can be fanatical about something. One of the big features of the watch is you can swim in it, and turn that part on, and turn it off.  It spits the water out.  Which is amazing.

Georgia:  Amazing!  Slightly ineffective, but amazing.

Leo:  It's not $50 amazing. 

Georgia:  I think what we're missing is it's not for health, but one of the biggest features of the Apple watch is for safety.  I think the SOF feature, especially if you're doing with someone you don't know might fall down or get hurt and be able to... it's amazing.  You're saving $40 a month, so it saves you actual money if you're going to plan on buying your parent something that's going to be able to track them and they're going to be able to call out for safety for that.  The SOS feature in itself is going to save you money in year one.  So that's why I think it's going to be one of those devices, and it's new and it's out there.  Definitely Steve, you're right.  People thought this would replace your phone.. no.  I think anybody who thought that wasn't thinking about the small interface and the way they could use it.  How do we use our watch and how will it be useful versus not.  I think the Scribble feature has made messaging so much easier, and the dictation is better than it was before.  But again, this is a first generation product, so you can only expect so much from it. 

Leo:  It's interesting that Apple's strategy here has been to find a hundred different things like that, the Breathe app, which are all niches.  They're trying to cobble together enough niche products to make a whole product.  The fundamental problem with the Pebble, with the Apple watch, or the Android Wear watch.  Face it, you don't need it.  I wonder if we're entering into... it's not that economic hard times, it seems like we are and we aren't.  I don't know. The job numbers are good, but Donald Trump says everything is crap.  I don't know what is going on.  I feel like when you are in hard times, or at least people psychologically are reluctant to spend discretionary money, that  a watch is an easy thing to say I'm not going to buy that.  I don't think we're going to spend money on that.  Apple has managed to stay alive in this market, but it feels like they're hanging on by their fingernails.  When you see Pebble and Motorolla and Fitbit struggling, and Google.  

Steve:  What's going on there?  They delayed it and their partners are abandoning the platform. 

Leo:  Nobody needs it, and of course if anybody is going to sell something nobody needs, Apple is probably the best person to do it.  Because they're brilliant marketers, they're brilliant at creating an aura and a mystique around it, but that's not going to be enough in the long run to save the category.  I'm going to have to rule in your favor, Steve Kovach.  I think...

Georgia:  I guess we'll see in two years. 

Georgia:  Two years to find out if the Apple watch is still alive.  My vote is it will be.

Leo:  It's interesting, I was in Vegas, yeah there you go.  I was in Vegas, and  a lot of Chinese people in Vegas were bringing Apple Watches, Apple has become  a fashion brand.  So when you're selling a fashion product, status and look is more important than functionality.  In the rest of the world, when it comes to spending an extra $350 bucks, you can forgo buying the fitness watch with a Smartwatch, that business is going to die, that business is going to tank.  Apple doesn't release numbers, so Apple doesn't say we had the best weekend we ever had for the Apple watch.  It's meaningless.  That means they sold... what?  A few?  I don't know what that means. 

Georgia:  I don't know if it's so much of a fashion brand.  I don't find the watch that beautiful.

Leo:  that's the problem.  It's an ugly fashion.

Georgia:  I think it's a status symbol, definitely  I notice when other people are wearing an Apple Watch.  It also shows their level of technology they enjoy, which i like.  The watch ends up a little bit short for fashion in itself.

Leo:  Ben Thomson of Stratechery had a good article last month on Niche strategies.  Things like the surface studio, which I'm using right now.  These are... he even says the PC market in general is in some respects a niche product.  He says for most people, particularly outside the US, a Smartphone is all they need or care to buy.  The world today is the exact opposite of the world a decade ago, where we bought dedicated devices to plug into our digital PCs.  The smartphone and cloud is now the hub, everything else is optional.  I think that's kind of what we're seeing.  It's too bad.  Pebble was a nice story.  What's going to happen?  Fit Bit is going to acquire them.  Will they keep their employees?  What's going to happen to them?  What's left of Pebble?

Steve:  Half.  Software side.

Leo: So that they can put it into a Fitbit. 

Steven:  The question is how much of the Pebble IOS morphs into the FitBit IOS.  Eric indicated to me that one thing he tried to do in that deal was to give some bridge to developers, so the work that they have done with Pebble might still live on in some way and they'd be able to write in the future the platform that takes over some of the ideas, if not the code of the Pebble IOS.

Leo:  Mitch Mikovsky seems like a good guy.  What happens to him?  He's going to mentor?

Steve:  I think so?

Leo:  That's the end of the line for the entrepreneur.  I'm done starting companies, I'll go be an angel investor and a mentor. 

Steven:  He's 30 years. This is the first time he's not running a company, my guess is eventually he'll be running a company.

Leo:  He's looking for his next thing. 

Steve:  Yeah.

Leo:  I hope so.  Let's take a break.  When we come back, I want to talk about Magic Loop.  What's going on there?  I'm curious what you all think.  I'm not sure what to think. On the one hand it looks like it might be the next Therenos.  On the other hand, maybe it's a hard thing to solve.  I bet Steven Levy has some thoughts on that.  First off, a word from Squarespace.  That's where I make my home on the web.  I think a lot of you are already.  If you're not, let me tell you Squarespace is the simplest, best way to create a beautiful website, whether you're a designer.  If you're a designer, aesthetics are paramount.  Photographer, You gotta have aesthetics and functionality.  A filmmaker, a writer, a freelancer a blogger.  If you sell online, for all of you.  SquareSpace is the place to make your next website.  It's the best hosting, tied with the best software.  It's a great content management system.  Start with a Squarespace template. It's beautifully designed, and beautifully engineered.  You see the design.  But under the hood, incredible engineering, that gives every Squarespace site the modern features that you need on your website.  Things like mobile responsive design, so one site fits any size screen in this day and age, that's what you need. You don't need a separate mobile site.  You need a site that looks good no matter what sized screen your visitors are using.  Every site has ecommerce built in.  I'd venture to say it's the only web hosting software that gives you ecommerce that looks every good as your site.  it is.  It is the same design, the same template.  It's not some afterthought hanging off your site.  It is your site.  All of the features, they have an amazing commerce platform.  You'll definitely want to check that out.  Squarespace is also very fast, reliable, hosting with amazing uptime record.  You cannot bring a Squarespace site down.  You get a free customer domain name, they do sell domain names for $200 top level domains.  You can get your domain name right from SquareSpace.  One of the advantages of that is if you have a design when you buy the domain at Squarespace, you get a beautiful parking page with Squarespace's style and template, so it doesn't look like a janky parking page.  It looks nice.  Squarespace members who have built or contributed three or more active websites, by the way that's a lot of them.  Once you do it once, you want to do it again and again.  There are lot of people who have made a living designing and selling Squarespace sites.  You'll get access to Squarespace Circle membership includes advanced guides, optimized support, six month trial periods for new projects and more.  All of you can try it for free regardless.  Go to Squarespace.com, click the get started button, play with it.  You'll see how it's great.  They got a new magazine style template with grid style landing pages, infinite scroll related posts.  The author profile, integrated search field.  I'm a big fan.  It's where I host my sites where we host our inside TWiT site.  You're going to like it.  Squarespace.com.  If after you try it you decide to buy, use the offer code TWiT and you'll get 10% off.  Squarespace.com, don't forget that offer code TWiT if you decide to buy.  We're talking the week's tech news,  Georgia Dow is here from imore.com.  The lone Apple watch defender.  I've got my watch edition, I love it.  It's beautiful, but it is a little thick and clunky and big and the thing about it, it has that trait where if you leave it behind you go I have to go back and get it. 

Georgia:  I feel differently after work.  Since I use the seven plus, it's huge.  I can leave my phone in my purse, I don't have to worry about missing anything.  Because I'm a psychotherapist, I'm in session the entire time, if someone has an emergency, they're able to reach me.

Leo:  That's one of those niches.  Nurses, psychotherapists.  Doctors. 

Georgia: Definitely.  It's just not a device that can work on its own as of yet.  But that's the beginning of it, right?  That's what it's going to end up being, on the run, you want to be able to travel light.  It's never going to be able to replace a laptop or a phone, and if you're expecting that, you'll be very sorely upset.  It will be something that eventually you'll be able to go and use, and go out when you're running or dealing with something or exercising and you don't have to carry your phone with you, because everyone hates having to carry their phone in their pocket.  They're heavy, they're large, they're clunky.  You end up with that extra real estate, but also that weight and extra luggage that you may not want.  In the end, all of our smart devices are going to be something that is small and easy and wearable.  WE haven't gotten the math right yet. 

Steven:  That's why we needed the Pebble Core. 

Leo:  I know.

Georgia:  I hear you.  I feel sad too about losing Pebble.  I think we need to have a whole bunch of people in the ecosphere.  That competition and new ideas be able to do things.  It's sad when you lose a great company that made different innovations. 

Leo:  Steven Levy of Back Channel.  You did an exit interview.  Right?  You talked to him after.  How is he feeling.  He should feel proud, right? 

Steven:  I think he does feel proud.  He was balancing a lot of emotions the day I talked to him was the day that deal closed.    He was nice enough to spend time with me and talk about it.  I think he was upset for his employees.  He's not walking away like a rich person.  There have been a lot of accidents in Silicon Valley where companies didn't do well, and the executives walked away rich.  They managed to take money, buy Ferraris. 

Leo:  He never took money off the table for any of that? 

Steven:  I can't speak to what he did or didn't take off, but I know he's not driving a ferari.  He's not living in a palace.  If I were starting a hardware company and I could hire him, I would. This is a guy who knows how to go to China and get a product together. 

Leo:  That is an increasingly useful skill, I have to say.  I was talking about websites.  Josh Chapulski is doing something upstream.  He launched his news site, the Outline.com.  Kind of.. content aside, I'm not sure where he's going with the content, but it's an interesting design.  Really targeting mobile, I think, with a lot of scrolling sideways and up and down and animated graphics.  Have you guys played with it?  I was curious what you thought of it.

Steve:  Not crazy about it.  It's tough to read, even on mobile.  It's very jarring and neon.  It seems unnecessary.  WE saw this when they were experimenting in the early days of the Verge.  They were getting stuff laid out, and onto the web, and it doesn't always make sense in the web.  I want to read it clearly.

Leo:  I wonder, maybe Steven Levy you can talk to this. The idea of creating a site.  These days.  It seems to me nobody goes to a site any more to read stuff.  They get to an article from Facebook or Twitter or friends or whatever via links.  My initial thought is one of the things Josh was trying to do here was make it sticky.  Once you get to this site, because of the interesting design are encouraged to browse around a little. What's your experience with back channel?  Do people enter at the front door?

Steven:  Increasingly, they didn't do it, and when you started, you could go to Backchannel.com.  Eventually we didn't.  Medium changed its policy when they decided to emphasize its publications.  Backchannel.com.  One reason I went to Medium is that I thought it was going to be super tough to start something on its own without some sort of traffic.  That dovetail with F William's theory that there are going to be few platforms, whether it's Twitter or Facebook or something else.  People are going to hopscotch from one place to another.  You're going to get your attention to platforms.  The Medium would be one of those platforms.  Right now, we've got 150 thousand followers just on Medium.  That's a slice of the world that has signed into Medium.  150, thousand people are signed in, and when they open their Medium app they can see there's a story on Back channel.  They get a daily email saying this is what you missed at Backchannel.  We can get a good chunk of traffic and baseline from that, in addition to people coming in with requidations. 

Leo: I find this interesting.  It's a little bit Indie Baseball.  I notice my own habits changing a lot, it's really changed because of two things, Facebook and Twitter.  That is the site most people... I have Medium.com and Backchannel.com bookmarked, but much more likely I'll go to Facebook and follow links into those sites. 

Steven:  don't you follow us on Medium?  Don't you get little emails?

Georgia: Does anyone do that anymore?

Leo:  This is the newest thing.

Georgia: Whenever somebody says  I want to set my site on this and send you notifications, I want to be able to turn that all off. 

Leo:  Jason Calacanis has said the same thing to me.  Email is a much better way to get to people you should have an email.  Again, I think maybe I'm an outlier.  I ignore my email, it's too much.  I feel like I'm drowning in it.

Steven:  Newsletters are coming back big time.  We do a newsletter every Friday, it's either written by me or Jessie Hapgold, who is my colleague, a fantastic writer, or Sandra Hupson, an amazing executive editor. The three of us alternate that. And we try to write something original in there that you might want to read in that newsletter there. And we've been getting a lot of great feedback. It goes out to all our followers unless they choose not to get it in their inbox. A sizable percentage will open those mails. We'll get comments on it. We'll interact on it like a regular story. So that's another way to reach people.

Leo: How does—go ahead.

Georgia: I think that for Topolsky's site, I think that he went for being different and so that you knew that you were at his site which is interesting. But I think that sometimes different is not always better. I think that most people go, they want to search the internet to destress, to get news, but in a way that's really calming and I don't feel comfortable with a site that gives me a sensory overload feeling, that it's almost screaming at me. And I think that's where it fails a little bit too much is sometimes a bad thing.

Leo: This reminds me of the color scheme of the early Wired Magazine frankly.

Steven: Definitely. Definitely. I think that's definitely his model. You know there was just a documentary released by Red Bull of all places about early Wired. And I watched it, a little nostalgia trip.

Leo: Oh, yea.

Steven: And the art director was talking about how they had this deal with the Italian press, printed it on high quality paper and they did all these exotic neon inks. And when they went, the first run came off to test and they said, "That's not intense enough." And they made them pour more ink, more ink, more ink, like more cowbell. And he wanted it until it went beyond the machine's, the printing presses capability to do it without smearing. They got it to the point of smearing then dialed it back a bit.

Leo: Wow.

Steven: So it just wouldn't come off.

Leo: And of course you couldn't read it for love or money (laughing).

Georgia: You couldn't read it without getting a migraine.

Leo: Were you there at the beginning, Steven, with Louis and Jane?

Steven: I was. I was. I wrote the 2^nd cover story for Wired. And I, you know, back then I wanted to show it to people without giving them the whole issue. So I tried to Xerox it and my text did not show good in the Xerox. The whole page was like a flag of red and white.

Georgia: It was probably a smart way to deal with copyright. You have to buy the magazine if you wanted to read it.

Steven: Very good.

Leo: I did not know. I'm going to have to watch that documentary. I did not know that back story that they actually, they wanted to saturate that page. Wow.

Steven: Yea, it's a pretty cool documentary.

Georgia: More is not better.

Leo: Yea. I'll have to see that. What is Business Insider do about all this, Steve? I know you're not responsible for driving traffic and everything, but I'm wondering, do they see it as—you know, I look at BuzzFeed and Vice, I mean BuzzFeed said, "We don't think there is even a home page, won't even exist anymore at some point." They believe that their primary platform is Facebook.

Steve: I mean we have a lot of distribution channels but we were talking about this and I just took a peek at our chart beat and almost always without fail, the top page being read on Business Insider is the main page so people, thousands of people at a time are literally typing in businessinsider.com and seeing what the latest is. And I think a lot of that is a testament to we take great pains to make sure there's always something fresh and new every time you load the home page, that there's something, that you can just always come to businessinsider.com and get a snapshot of what's going on in tech and finance and business and now of course, politics. But yea, Facebook is a huge driver for us. Increasingly Google because of AMP on mobile is a big deal for us now. Twitter is negligible.

Leo: Whoa, really? Interesting.

Steve: Yea, I don't think any publisher would say they get a lot of traffic from Twitter even BuzzFeed and all those guys. And then of course—so I mean it's a mix. I mean we try to be as many places as we can and be kind of platforming-nostic and you know, our goal is to have people enjoy the content where they are. So whether that's Facebook Instant Articles or clicking through from Facebook, or you know I think we built such a powerful homepage that people, like especially during our peak times it's not unusual to have a couple thousand people just on you know, typing in businessinsider.com.

Georgia: I think that also Business Insider has a good deal of trust. I think that it's going to be a rare thing for Business Insider article to get the Facebook scarlet letter.

Steve: Oh, yea, we're not fake news. We don't have to worry about that.

Georgia: Yea.

Steven: I love that you said scarlet letter.

Leo: It's kind of what it is, isn't it?

Steven: Yea, yea.

Leo: So what is, this is the latest on the fake news story. Facebook is going to according to you guys at Backchannel, you said scarlet letter actually, Steven.

Steven: Yea, yea.

Leo: Pin a scarlet letter to fake news. What are they going to do?

Steven: So it's kind of interesting. So they were, they had this dilemma that these phony stories were getting circulation and when you see them on Facebook of course, something created in a Macedonian coffee house looks just as legitimate as a story from The New York Times or Backchannel or Business Insider or wherever. And you know, some people I guess are affected by it and will buy the stuff. And whether they do or not, that's the perception and Facebook had to answer for it. But Facebook does not want to be in a position of being the arbitrator of what truth is or what a legitimate publication is. So they basically outsourced this problem to these fact checking organizations who were happy to take it on for free because that's part of their mission and I think their profile will be elevated if they do this. So there's this little system where now people can report things that they think is fake news. Facebook will algorithmically try to identify some of this stuff. And then if it passes the test, it will get sent on to these places like Snopes or Politifact.

Leo: Help me here because they've had a report fake news for a long time.

Steven: It was buried. It was buried.

Leo: It's buried still on mine. So I'm looking at posts.

Steven: No you don't get—it isn't turned on for you yet.

Leo: So right now, report host and then I don't know what I should do. I don't think it should be on Facebook. Continue. It's annoying. It's pornography. It goes, oh finally, here it's fake news.

Steven: So there it goes. There you go.

Leo: But that's like 4 layers deep.

Steven: But you had to go deep. So that's the current one. But right now it comes up in the first menu. And then as you type in it's a fake news story, they'll ask you whether you want to alert the person who posted it or whether you want to report it as a fake news story, in which case it will be registered as that. And if enough people register it and it passes a couple of tests—

Leo: Are there humans involved? So at that point does it go to a human?

Steven: You know, it's generally an algorithmic identification there.

Leo: I get concerned either way.

Steven: Somewhere along there could be people involved but maybe that's the last step there. Some people are wondering whether you can do a denial of service attack on these fact checking places.

Leo: Exactly. Exactly.

Steven: But I don't think you can. I don't think you can click on a story from the New York Times and if you're, you know, part of some sort of anti-New York Times movement and then make Politifact check the New York Times. It will look at—the algorithm will look at the publication that originated and they'll see how old is this publication? Does this publication have followers? What's the traffic of this publication? And it will be able to like eliminate the New York Times. I'm pretty sure that the way it's set up that even though Facebook says it's not possible, but I don't think any of the New York Times stories or Washington Post are going to get sent off to the fake news fact checkers. It will be interesting to see whether any Breitbart stories eventually pass that test there.

Georgia: I think that the problem--

Leo: And this is a legitimate concern because it's somewhat can be in the eye of the beholder. Go ahead, Georgia.

Steven: Yea, but they're going for the—

Georgia: Yea. I think that you're right. I think that it's difficult who says what is true and what isn't. There's definitely a slippery slope that we deal with. But the reason that fake news is such an issue is that we're naturally such a mimic. So we see a news story, one is most people don't even read the news story/ We just read the title to whatever it is.

Leo: Right, we share before reading.

Georgia: We see something, yea. And so if we see something over and over again, eventually, unconsciously, we will believe that it's true. And I think that a lot of us like to think that we are above that and we're very critical thinkers. But when we run through a decompression mode, we're just kind of passively absorbing things and that's why advertising works so well and it's a billion dollar industry. And so the good part about what Facebook is doing, is it just alerts you to say think twice about this. So right away, we're going to look slightly more critical, especially when we're just kind of surfing the net passively. And so I think that that's a good part to that. But I think that it goes even further because many of us will think that we are beyond having to really look at things critically because we have a certain amount of tech knowledge or we're so educated. And that's when we're more easily swayed is when we don't think that this could be an issue in the first place.

Leo: Let me use this as an example. Citizen is going to buy Pebble for $740-million dollars.

Georgia: Right.

Leo: Not a true story but not fake news. Or is it?

Steve: That's someone getting it wrong. That's different than purposefully—

Leo: I agree that you could probably in many cases say this is factual, this is not factual. But simply not being, this is important, not being factual does not make it fake news.

Steve: Right and still—

Leo: So now what? Because I could, I think you could make a litmus test that would have to do with factuality. The pope, you know, you go call the pope. Did you endorse Donald Trump? No. I did not. Ok, the pope didn't do it. That's fake news. But it's not always just factuality. It's intent, right? And once you get into—

Steven: Yea, Facebook told me this. At this point, they're going for what they call bottom of the barrel hoaxes. You know, things done with no—

Leo: Stuff Snopes would debunk.

Steven: Yea, but Snopes also debunks things that, you know, they might debunk the $740-million dollars.

Leo: That's true. That's not a hoax.

Steven: But at this point, Facebook is saying, "We're going after the bottom of the barrel, intentionally misleading hoaxes." You know, from places that even pretend to be kind of news organization that they're not. So at this point, you can pretty much know it when you see it, what they're talking about. So I don't think that solves the larger problem of truth. But I think there's places you can look at. I'm going to use some right-wing places and maybe people will be unhappy with me, but you know, Breitbart and Fox sometimes will do things that have been debunked before they publish it. People go with it particularly about climate change and you know, they all stack the deck and write things they may know aren't even true. And that's another level of what people are calling fake news or certainly things that people don't want to see on their newsfeed.

Leo: But this is the scarlet letter. This is the little flag they're going to put on here. It's a red square with a triangle and an exclamation mark, Disputed by 3^rd Party Fact-Checkers and learn why this is disputed. I guess that's fair. I mean they're not blocking it, right?

Georgia: No, they're just letting you say, "Be a little bit more conscience of that." And I think that—

Leo: I don't think this is going to change anything though because I think, chiefly people share fake news not because they want it to be true or they believe it to be true, but because it reflects a world view they believe and it's like, it's a nod. It's a pat on the back. It's—so it has nothing to do really with the content of the story in my opinion. It's a more cultural thing which of course, this doesn't hurt I guess.

Georgia: Well I think that what—

Steven: Would the guy who shot up the pizzeria have gone if he had seen that whole thing on the bottom? I don't know.

Leo: Yea, I don't think this is going to stop that guy, right? He's just going to say, "Well of course they're disputing it because they're in on the whole thing and they're probably child pornographers too."

Georgia: No, well I think that where it becomes important is that how does fear based or spiteful news work on our brain? So when you read something and it makes you feel emotion of fear or worry and you feel protectionistic, you're activating your limbic system which is like that middle reptilian part of your brain. And the problem with the reptilian system is it's highly emotional but it's not really connected to your analytical, cognitive center of your brain. And so it almost like goes into a belief system that is past analytical thought. And that's where fears and phobias come in. You might be scared of the dark but know that nothing bad is going to happen in the dark. Yet you still have this irrational fear towards it. So news stories that say, you know, this person is dangerous or this type of media is going to melt your children's brains, without having that little, tiny moniker of saying, "This might not be true," immediately it creates an emotional reaction that supersedes analytical thought. And then we are a little bit more fearful of that, or at least cautious to that. You hear that enough, it becomes belief because that part of your brain says, "You know what? We might as well be safe than sorry." And that's why this is so important is that even the most rational of people, if you hear something, and not that I should be scared of this, you might start to be cautious. And then with enough repetition, you might actually believe it.

Leo: Yea, that's a small number of people though.

Steve: You also have to keep in mind that—

Georgia: Actually it's not though, Leo. It's actually all of us. We have already proven that you can make—

Leo: I think that that's a misunderstanding of why this stuff gets shared. I think many of the people share this stuff, it's not whether they believe it or not. It reflects a world view that they believe. I also worry about what—

Georgia: It reflects a world view usually a fear or protectionism or insightfulness. And there's a reason, probably from their own upbringing that they have that belief system in the first place without critically thinking about it.

Leo: Do you want Facebook to start telling you that and you poor little person. You're living out of your limbic system. We've got to help you here. That bothers the hell out of me. The last person I want telling me what my beliefs are is Mark Zuckerberg.

Georgia: No, but when you have other people crowdsourcing, maybe you should think twice about something isn't a bad thing. Now I'm not saying that maybe Mark Zuckerberg should be the one who's doing it, but I think that you would be greatly, you know, it makes it easier.

Leo: Crowdsourcing it is also fraught with peril.

Georgia: For sure.

Leo: And I worry about the Andy Borowitz's at The New Yorker and The Onion because I think a lot of satire is also fake news.

Steve: So I disagree with that to a degree because you know, should Facebook be doing this? Should Mark Zuckerberg have the say of what's true and what's not true and what's a hoax and what's not a hoax? Of course they should because they are a major distributor of information and news and with that comes an awesome responsibility to make sure people are getting accurate information and not just, you know, it's dangerous as we learned with the pizza-gate thing. It can be dangerous otherwise. And it took them a long time, or too long rather to kind of admit to themselves, "Wow. We really do have this responsibility. We really do have an effect on how people think and work and possibly have an effect on elections and so forth." And it's the stuff that traditional media has done forever. You know, us here as the journalists here on this panel do it every single day. Every single day we're vetting stories for truth. We're vetting stories for accuracy. We're vetting stories for hoaxes you know, we're vetting Trump's tweets whether or not he's lying about millions of people illegally voting and you name it. And you know, there's always that discussion, is Facebook a media company? Is Google a media company? Whether they want to be or not, you know, as a distributor of news, and a curator of news, you have a responsibility to make sure it's right. And so what this fake news button or whatever you want to call it does, it kind of deemphasizes the algorithm too, so you know, hopefully it doesn't go quite as viral on the platform. And then it's also saying hey, you know, we edited this. We tried to vet this and it might be fake so take it with a big grain of salt. So I think it's nice to see them at least attempting to take some responsibility for all of this media they're putting out there.

Steven: Yea, I think that Google really is the model for dealing with this. And I wrote a book about Google. I'm writing one about Facebook now. And Facebook is undergoing a lot of the things that Google did when it realized that its search engine had such power that they're logical view of how it worked and how it was fair really wasn't enough for people when they felt that it wasn't treating them fairly either. And in this case, people feel that there's consequences from the newsfeed circulating these stories that don't fit Facebook's engineering response which would be well, why shouldn't you feel. You should basically know to take everything with a grain of salt because it's just these people leaking, right? And it isn't all discerned by an editor and of course can add a billion stories a day. The difference between Business Insider and these other places and Facebook is that no human being can vet all the stuff that goes through Facebook there. So they're trying to find that balance on how to do things while not stifling the voices and the desires of the people who are their customers who come to that newsfeed and spend time there which is what Facebook wants.

Leo: I worry that we get out of this an impression that every story is either true or fake and that we can tell the difference. I mean there are people in our chatroom right now who are saying, "And you believe that the CIA says about Russian hacking. When did we start believing the CIA?" Who's going to determine whether that's fake news or not? I just worry about algorithmic solutions. And I have to point out, Steven, that Google is as much a responsible for this as Facebook is even to this day, partly because of AdSense. That's where these fake news sites get their revenue. And partly because search results to this day continue to pull up all sorts of spurious stuff, right?

Steven: Right, right. Well I mean—

Leo: Google didn't solve it, did they?

Steven: Well they didn't solve it but there was a case—you know, the solution that Facebook has, this bottom of the barrel, after you get to the bottom of the barrel places is very similar to me than the one that Google used when it turned out that if you typed in Jew, J-E-W, in the search engine, you know, Google didn't want to take down the site and block the site. It was this anti-sematic holocaust denier site that came up at towards the top of the results. But instead, they automatically took out an ad that would appear whenever someone pulled this up, explaining why this site showed up and what kind of site it was there. So in this case Facebook, you could still share something once it gets a scarlet letter, but you get a warning saying, "Hey, you're sharing something like that." And you might like to share in which case then other people also see the scarlet letter which is like sewn very tightly at the link that you can't get rid of.

Leo: Wow. Well, I see potential problems. I'll have to watch and see how it's—

Steven: It's a very difficult problem because again, you know, you don't want to close the newsstand down because things on the newsstand are there that you don't like.

Leo: There's a lot of fake news.

Georgia: Yea, because in the end, in the end that could be the same thing that would happen to your point of view.

Leo: Right.

Georgia: And so the danger runs both ways.

Leo: My point exactly. That censorship is always a problem.

Georgia: I fully agree with you on that. I think that just giving a little moniker to think about it is a minor inconvenience and it's not actually shutting down thought. In the end, the only thing that really helps us against group think would be education in learning how to critically think. And right now that's not happening enough in our school systems and we're becoming almost the worst. We're kind of like just wanting to get that little bytes of information and having them be as easily digestible as possible. So most people are just really reading the headline anyways.

Steven: There's a couple of interesting efforts to try to increase news literacy on line. Walt Mossberg and Karen Wickre formerly of Google and Twitter are involved in one. My fear though is anyone who would be interested in becoming more media literate is probably not the kind of person who's consuming these fake news articles.

Georgia: Yea, that's wonderfully said. I think that's why it has to be in the school system. It's so important.

Leo: Well, there's also—I wish I could remember the name of this theisis, that people, the evidence—you're a psychologist. You probably have read these studies, Georgia. That the evidence is the people who consider themselves well-read and literate are in fact more easily swayed.

Georgia: Yes. That's the problem. They think they're so smart.

Leo: Because they think that I've read all, I've studied it up. I'm so smart. What is that called?

Georgia: It won't happen to me.

Steven: I'm so smart I don't need—

Leo: I don't fall for fake news (laughing).

Georgia: We all have. We all have. Yea. Yea.

Leo: Ok. Tomorrow we're interviewing Tim Wu. His new book The Attention Merchants. In his book he talks about the first fake news which actually goes back to the first newspaper in 1862 where there was a real newspaper war going on in New York. Newspapers didn't, were expensive at first, didn't make a lot of money and a couple of publishers came along. I don't remember the names. I'll have it for you tomorrow because it's in the book. The New York Sun.

Steven: Benjamin Day I think it was.

Leo: Benjamin Day who said, "Well first of all we're going to charge a penny which is a loss, at a loss, but we're going to make the money up in display ads." And in order to boost circulation started, made up a story about telescopes seeing the people on the moon and describing the people who lived on the moon and the houses that they had. And it was a sensation, sold papers like crazy. Fake news is as old as mass media. Literally.

Georgia: I would say it's even older because you can take a look at cave paintings of unicorns and aliens coming down and if you take a look at the graffiti in Pompeii which is a fascinating read, it is all spreading of certain belief systems of different people and anger towards the government. And so I think that fake news is as old as humanity really.

Leo: And so I, ultimately I fear that this is another witch hunt. And it really is about censorship, censorship from the left as opposed to censorship from the right, but censorship all the same. And I really worry that that opens a slippery slope, a bad precedent. But and I also think that there is a problem with fake news. I think you're right. I think it does influence people. So I don't know what the, I don't know what the answer is. I also wish we didn't get so much of our news from Facebook. But that's another problem entirely. Where are you going to go, though? See, I'm one of those people who reads all the different sources, so I know I know what's going on.

Steven: I'm waiting for the first report of someone who said, "Man, if I had known that Hillary was not a demon, I would have voted for her."

Leo: (Laughing). Here's the article. Thank you, Bleek in the chatroom. Why Smart People Are Stupid. This is Jonah Lehrer of The New Yorker. Jonah Lehrer was writing originally for The Wall Street Journal.

Steven: Jonah Lehrer?

Leo: Yea. Is that interesting?

Steven: Wow.

Leo: This goes back to 2012.

Steven: Right. I guess they believed him, right?

Leo: He was a famous, famous fabricator, right (laughing)? That's a good point. But he does talk about Daniel Kahneman, who is a professor of psychology at Princeton who was the one who came up with this evidence that people who think they're smart, suggested that smart people are more vulnerable to thinking errors because we think intelligence is a buffer against bias. But it's actually a subtle curse. And consider the source though because Jonah Lehrer was also involved a little bit in fake news.

Steven: Well, not fake. But apparently—

Leo: Enhanced.

Steven: Apparently Michael Lewis' book on Kahneman and his partner is fantastic.

Leo: That's where I just read this was Michael Lewis. That was what I was trying to remember, yea. Very interesting. And it was also done at The University of Toronto. So sometimes bias is very hard to detect. Let's just leave it at that. We're going to take a break. We'll come back with more. We had a great week this week. Lots of fun at TWiT and we've made a little promo to give you a peek at the highlights just in case you missed some. Watch.

Ron Richards: Ok, Google. Turn off the Christmas tree inside.

Jason Howell: Oh, it just happened. Oh my God.

Ron: Ok, Google. Turn on the Christmas tree inside.

Jason: No! It happened again.

Narrator: This Week in Google.

Leo: I have a little something something.

Jeff Jarvis: Oh, you got it. You didn't have to stand in line?

Leo: I took advantage of this thing called eBay. I like the idea. I've heard that streaming live video's all the rage these days. So I was thinking maybe I should do some of that.

Narrator: Know How.

Father Robert Ballecer: The Microsoft Surface Studio is a beautiful computer. But over the last few weeks, one deficiency has become glaringly clear. The storage performance is wanting. Upgrading the drives on the Surface Studio isn't hard but it does require the removal of 32 screws and bolts and about 50 steps. With our new Surface SSD Studio, we benched about 540 MB per second read, at 500 MB per second write. For those keeping score, that's a little bit faster.

Narrator: TWiT. Tech just like you like it.

Leo: But you didn't have the black hard rubber Western Electric phones that we all had.

Stacey Higginbotham: Yea, yea.

Leo: And we had the dial (dial noises).

Stacey: Nor did I have telegrams.

Leo: I have Snapchat Spectacles. I know I'm old. I'm Snapping right now. My God, what more do you need? I'm cool! Ok, let me upload that to my story (laughing).

Leo: A great week ahead. Let's see what they'll be covering on TNT this week.

Megan Morrone: Thanks, Leo. This week we celebrate Festivus, the holiday that's been around since the ancient Seinfeld times. Among other things, Festivus is a time to air your grievances, so it's only appropriate that this week's big stories include some of the largest tech grievances of the year. First, for all you Galaxy Note 7 loyalists out there, Samsung is pushing out an update on Monday, December 19^th that will prevent your recalled device from charging and eliminate the ability for it to work as a mobile device. Depending on your carrier, that update might not be pushed out until the end of December or early January. But either way it's time to bring it back to the store, my friends. It's time. According to Mac Rumors, Apple will begin selling their wireless AirPods in stores on Monday, December 19^th just in time for the holidays. If you've waited until the last minute to shop for the holidays. And don't forget to use NORAD's Santa tracker this week to track the old man on his way to delivering all the good stuff. And speaking of holidays, TNT will be here all week and Jason Howell and I will cover all this news and a whole lot more every day at 4:00 PM Pacific. That's the week ahead. Back to you, Leo.

Leo: Thank you, Megan Morrone. TNT, Monday through Friday, 4:00 PM Pacific, 7:00 PM Eastern, 2400 UTC. By the way, there is a Santa tracker schism. I hope you know that. NORAD and Google went their separate ways and Google now has its own Santa tracker that is not with NORAD. So pick your—

Steve: Drama.

Leo: Drama. Pick wisely. Decide which Santa tracker. I think the results are roughly the same though. Just want to point that out. I want to ask you about those AirPods. Shut up. I'm not asking you, computer. Stupid computer. I want to ask about those AirPods.

Steve: I thought that was me.

Leo: No. It's this, it's this.

Georgia: Everyone's checking.

Leo: Windows just doesn't like to be ignored for too long. Have you noticed that?

Steve: You have an update. Come on. Do it.

Leo: Hey, hey, hey. Come on. Touch me. Touch me. I dare you to touch me.

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Leo: We're talking about the week's tech news. Steven Levy is here from Backchannel.com. One of the last 2 people who used to go to Bill Gates' pajama party or something if I'm misunderstood it. Mark Hoffman's now retired too. The last one. The last one stand standing, Steven Levy. Also with us, Georgia Dow from iMore.com. Great to have you. She's a psychotherapist so you can trust her when she talks about your brain. And Mr. Steve Kovach from the Business Insider. Great to have all three of you. All from the East Coast where you're being vortexed. Are you from the West Coast? Why did I think you're in New York?

Steve: No, no, I'm in New York.

Leo: That's the East Coast.

Steve: East Coast is not the West Coast though. Nope, we're done with the polar vortex. It was like almost 60 today, yea.

Leo: Whoa. Good. I'm flying out there to see my mom in a couple of days after Christmas. Verizon has decided (laughing)—by the way, Megan had the story on Monday, your Note 7, if you still have one, and apparently over 100,000 people in the United States have not turned in their Note 7. Samsung's sending out an update that will mean you can't use it unless it's plugged in. Verizon said at first, "No, we're not going to do that. It's Christmas. Everybody has the right to have a fire at Christmas." Even Cee-Lo. Did Cee-Lo's Note 7 blow up? Somebody was saying that. Verizon was going to block that update. Now they're saying, "All right. All right. We'll do it." Verizon's going to brick your Note 7 January 5^TH. T-Mobile December 27^th. AT&T January 5^th. Sprint will be the one that keeps your Note 7 going the longest, January 8^th. Imagine the liability though if you're Sprint and somebody has  fire on New Year's Night.

Georgia: You don't need a Yule Time Log.

Leo: Yea. Keep it in the fireplace. That's actually a good idea. Just keep your Note 7 in the fireplace. It's kind of—that was really one of the big stories of the year was—

Steven: You could give it to someone that you don't like, right?

Leo: Yea.

Georgia: Right.

Leo: Here's a Note 7.

Georgia: You get a Note 7, you know that that person doesn't really care about you.

Leo: So I had said that I don't think that these are exploding anymore. But apparently Cee-Lo, Cee-Lo Green who is a well-known musician and producer, according to surveillance footage, security footage, was nearly killed. Is this fake news? Fake!

Steve: I don't even know what site that is.

Leo: It was staged. Oh, man. I fell for fake news. But look, I have video.

Steve: I would call that satire.

Leo: Yea. That's the problem. What is it? Satire? Here he is. He's in his studio. Security cameras on. Cee-Lo Green. He's there. He's talking on his Note 7. When watch. He's got it right up to his head. This looks real to me, folks. Well, wait a minute. Now he's rolling closer to the camera. That worries me. Maybe it's—oh, my God! It exploded and he's lying on the floor motionless. Ok, apparently this was staged (laughing).

Georgia: That's when someone needs more press.

Leo: Why didn't Facebook flag this? We have a game we play at home with the kid when we watch YouTube videos, real or staged? And I notice he gets it wrong every time. Although occasionally I will think it's real and it's staged. Most of it, almost all of it's fake by the way.

Georgia: How do you, how do you find out?

Leo: I don't know.

Steve: The scarlet letter.

Leo: I don't know. How do you find out?

Georgia: Without that scarlet letter, what do we do?

Leo: I mean—

Steven: If you have to ask, it's fake.

Leo: Yea. Maybe that's true. So some big changes at Google.

Georgia: That's the problem. People are getting better at making things look really authentic.

Leo: Yea. Yes. Well, you saw (laughing) the very funny, there were a couple of funny take offs on—what was the holiday, Love Actually, where he goes at the end of the movie and he says, he comes and knocks on the door and she comes to the door and he says, "Shh. Tell him it's carolers." And he plays Christmas carol music and then shows her the title cards. So there have been a number of fakes. One was Putin coming to see Donald Trump. And Putin says, "Shh. Tell her it's crooked Hillary." Trump shouts to Melania, "It's ok. It's crooked Hillary." And then I saw another one.

Steven: Saturday Night Live did one last—

Leo: Saturday Night Live did one with Hillary coming to an elector's door.

Steve: That was good. That was hilarious.

Leo: That was very funny. I believed them both. I thought they were real. I didn't know. So let's talk about what's going on at Google since we've got Steven Levy who knows everything. He's got very good sources inside of Google. One thing I'm hearing a lot of Googlers and people who know Googlers is, I'll put it bluntly so to speak, that Larry Page and Sergey Brin are off kind of in space, not paying that much attention, that Ruth Porat the new CFO is just cutting and slashing and hacking and hewing and reorganizing Google on better financial basis. Does that sound accurate to you because we do see a lot of changes over there.

Steven: Well there's a lot of changes. You know the Alphabet thing, I think the jury's still out. I never was in love with it. I think that—

Leo: Splitting Google up into one big holding company called Alphabet with lots of little companies, Google being its own company run by Sundar Pichai.

Steven: Yea, yea. Google is the alpha company and the rest of them are bats, right? And it just changes the character of those companies. It used to be that the wholes weren't the sum of the parts.

Leo: Right, right.

Steven: Now parts all have to be accounted for there so they almost went in the direction there. There was something like fiber, it had a mission before. Its success was in term of building the number of people who kept the internet and used Google. Now they're asking it to sort of be a business on its own. It isn't doing that great. So that's a key example. And then the other thing they were supposed to do was give the CEO's more time, money and power. And now we're seeing all these CEO's falling off because maybe Google didn't like the way they used the power. And they're ticking off people there. So I don't think Larry has totally checked out from what I hear. I think that in some ways he likes the structure. He can zoom in and pay attention to the things that he cares about but you know, I think Google itself has sort of recreated, you know the Google part of Google has sort of recreated itself by taking on aspects that used to be part of say, X, right? So now there's like a research division within Google itself and the virtual reality is in Google itself so. You know, eventually will Google be spinning off companies of its own? Will they become Alphabet Bets or will they be just part of an uber-Google there? Of course Sundar doing such a good job, everyone things he's killing it there. So it's an interesting time for the company. But meanwhile, but the revenue and the business model still keeps everything afloat.

Leo: Google's a great engine, right? There's no question about it. They're going to spin off the self-driving car. They've got a name for the company. It's going to be called Waymo. Apparently the change here is that Google's not going to build their own. They're doing a deal with Fiat Chrysler to make cars. And the cars will probably have steering wheels.

Steven: They have to. They have to.

Steve: By law.

Leo: Say again, Steve.

Steve: Oh, I was just saying it was by law.

Leo: By law, yea.

Steven: Yea, Google's very unhappy they have to build steering wheels in there. They have this plan that they would send those little bugs out there around Mountain View and take people from one campus to another. And they're very unhappy that to put steering wheels in them.

Leo: The information also says that Google wants to launch a company called Chauffeur, which will be a taxi or commercial ride sharing service by the end of next year.

Steven: Chauffeur was actually the code name for the whole Google Car project.

Leo: Ah. Robotaxi service. That's what Uber—maybe that's why Uber is rushing to get Robotaxis out. Maybe they see Chauffeur coming up behind them. Also, let's see. What else has changed at Google? Calico which is the anti-aging spinoff. That one seems to being ok. They have $1 and a half billion dollars in the bank according to Antonio Regalado writing for the MIT Technology Review.

Steve: I think it's interesting how they measure success for different Bets because obviously Fiber they see as more of a shorter term, you know, they want to see something material in the shorter term, whereas something like Calico where they're literally trying to stop us from dying or you know, get us to living to age 400 or whatever, you know, they realize that's not going to happen tomorrow. That's going to take years or decades of research and they might not even get there. So it's kind of interesting to hear like how—you want to talk about Ruth Porat digging into these companies and setting goals and so forth. Like Calico's not making any money. But their mission is more way out there. So that's pretty interesting too. And I kind of want to hear what Steven has to say about this, just like you know, what are Larry and Sergay focused on out of all these other Bets? What's your impression of—are they more—they're clearly just totally disconnected from regular Google. You know, are they more into things like Sidewalk Labs? Are they more into these crazy other Bets like curing death? What's your impression, Steven?

Steven: Well they, you know, Sergay spends most of his time at X. And—

Leo: The Moonshot.

Steven: Yea, and Larry from what I hear is also super interested in that. I know he has an interest, he watches things like Sidewalk. Calico's interesting because like the life sciences, which does have some revenue stream, what Calico possibly could do is if some of the scientists make one breakthrough that maybe won't make us live to 1,000 years old but could make us look better 10 years, for 10 more years as we get older, because it's all about stopping aging, that's like a multi-billion dollar drug, right? So just the prospect of one of those things could wind up being a pretty hefty revenue stream.

Georgia: It's the holy grail, right? And I love to—

Steven: Yea, you know, you don't have to get the grail in order to make some money there. Even something you can stave off the reaper or make you feel younger for like a decade or 2, little pieces of the grail could be pretty profitable.

Georgia: Exceptionally profitable.

Steven: Maybe they'll find the new Viagra or something.

Georgia: It's one of those areas where you can't—time is one of those things that we can't stop. It comes for all of us. So yes, the same thing with aging or just looking better. Though it's funny that you said that because the naked mole rat is probably one of the least attractive creatures on the planet. I'm sure there's some worse. But they're at least in contention for it. But they also have like cancer resistant properties and they're also impervious to certain types of pain so it's not even just that. It's also quality of life that they can improve upon.

Steven: I'd rather die than look like a naked mole rat.

Georgia: (Laughing).

Leo: Don't they have interesting social—

Steven: They have a high quality of life I hear actually.

Georgia: They live in a colony ruled by a queen. It's similar to The Borg really.

Leo: Yea, they have an interesting social arrangement.

Steve: Give me death.

Leo: (Laughing) give me death or give me naked mole rats. What else? What else is going on at Google? Android Things is their new name for their IoT stuff, bringing Brillo and Weave together under one roof. I would love to see one company, Android, I mean Google or Apple or somebody kind of make some sort of progress in this IoT space to kind of bring everything together. We have all these protocols and companies and nothing works with anything else and it's just a mess.

Steven: Well now what was supposedly bind them together was all these voice products like Echo and now Google Home, things like that so that the place where you command them might be the glue. But of course there's about 5 companies that want to be that central hub.

Leo: Right. Well, maybe Amazon's got a little lead. Apparently the Wynn Resorts in Las Vegas are putting in Echoes in every room. 4,748 hotel rooms. I was wondering, well if you order something, where does the product go? Apparently it's all Steve Wynn's account so go ahead and buy Steve some cashmere socks and have fun. Actually I think this is a good idea. And, boy, it's good for Amazon because it will introduce people, a lot of people, to the Echo probably who have never tried it before.

Georgia: So am I the only one that thought that the first thing that I would unplug if I was staying in a Wynn—

Leo: Why would you unplug it?

Georgia: Because it's creepy. I don't want—if I go to a hotel, one of the things I want to be unplugged. But two is that I want to have control over what's being listened to while I'm there. That would be the first thing.

Leo: Well at least it's sitting out in the open. You don't know what they've got in the walls.

Georgia: Well, I assume that that would be illegal versus putting something out in the open which would be legal. So there's even a grave chance that they—

Leo: Oh, that's interesting. No, ok, would it be—ok, so if you put an Echo in there, is that presumed consent then if you listen in on the Echo? No.

Georgia: Well, no but it's assumed consent that you don't mind the—you would have to be ok with the privacy policy that Amazon already puts out and in that—

Leo: I literally have Echoes in every room in my house. Am I—

Georgia: Yea, but Leo, you also live most of your life online. Like you're almost always here so you're kind of already very comfortable with people knowing a lot about your private life.

Leo: Nobody's listening to my Echo conversation.

Georgia: Which probably means you're very private when you're off of camera.

Leo: Nobody's listening to your Echo stream. Do you think it's on all the time and somebody at Amazon is sitting there listening? Let's see what's going on in the Dow house.

Georgia: They probably aren't. The thing is if they wanted to, they could. And there's a difference between both.

Leo: Ok, I guess that's true. In fact Evernote got in a little bit of hot water this week because they announced a new privacy policy, something that's always been true, that Evernote employees could look at your notes and might from time to time. That really upset people so they took it back out of the privacy policy without changing the ultimate fact that of course they still can at any time look at your notes because they're storing them. That's called Cloud. Oh, we didn't mention the Yahoo hack. Actually I wanted, before we get to that I do want to, since we were talking about Google, talk about something Google has a big investment in. But of late there may be people saying that the emperor has no clothes and I'm talking about Magic Leap. Have any of you gone to see the Magic Leap demo?

Steve: I wish.

Leo: Yea. Kevin Kelly did a whole story on it in Wired and talked a lot about it and how amazing it was and they raised a ton of money. But now it turns out, according to some, that maybe this technology isn't near ready for prime time. That it looks a little more like this than the HoloLens, another augmented reality project that's a little bit farther along and in fact according to one report, it's not even as good as HoloLens and still requires you're wired up to a massive computer. It looks like apparently, Magic Leap might have made a best bet on a technology that hasn't really paid off.

Steve: Yea, it sounds like the first thing they're going to release is going to be kind of like a watered down version of what they've been showing people in demos and showing investors, and you know, thousands of people or maybe a thousand or so have tried it at NDA so even if they have used it, they can't really talk about the experience publicly. But you know, I hate the Theranos comparison over anything else. So I mean, yea, it's not that.

Leo: Theranos was in all likelihood kind of an intentional ruse. You don't think Magic Leap is tricking anybody.

Steve: I don't think they're intentionally—Yea, go ahead, Steven.

Steven: The Theranos thing is a crazy comparison. I mean the investors in Magic Leap are the most savvy tech investors on the planet. Sundar Pichar's on the board. They have other super knowledgeable tech investors. If Magic Leap doesn't succeed, then you know, look, they went and gave a shot at it. I personally can't say whether or not I've seen it but—

Leo: Ah ha! (laughing).

Steve: You've seen it. You've totally seen it.

Leo: Ah ha, he's on NDA. All right.

Steven:  I can't say. But I think what's happened in the past couple weeks has been a little nuts. The Information did a story on it. The Information story was not a story which was the equivalent to the Wall Street Journal Theranos story. It didn't have wrongdoing. There wasn't like deception. It showed what a lot of people knew, that they weren't moving as fast as they hoped.

Leo: And these things happen. There is one accusation in The Information story that is not great which is this video that was made, and used apparently to recruit employees. Just another day at the office of Magic Leap and it turns out it was created—in fact, it even says on the stamp here at the Weta Workshop, the folks that did the special effects for The Lord of the Rings and The Hobbit and it completely whole clothed. This is not using the Magic Leap technology at all. This is special effects.

Steven: No, I think it's clear to anyone that that's not what happens when you go to work at Magic Leap, that that's the way you do your work. So I think if that's the smoking gun, you know, big deal. It was a solidly written story but I think that was more interesting to me is the way that Magic Leap responded to the story which Rony, Rony is the CEO has gone into a—he's gone a little Twitter mad, trying to defend Magic Leap there. And I think maybe he could do better off holding his pallet and you know, waiting until he has something to show, whatever that is. Contacting his investors and assuring them that he's going to be able to eventually do the launch and improve on it and win the long game which this really is. So I think that right now if you follow him on Twitter, you're going to get a lot of tweets.

Leo: These things happen. In fact as all these investors know, and they've poured more than a billion-dollars into Magic Leap, sometimes you make a bet. It's a high risk, high reward bet. Maybe it takes longer. Maybe it doesn't ever happen. But that doesn't  mean it's malicious, it just means that they're trying something difficult.

Steve: I think it's just also way too soon to judge something most people haven't seen publicly, that they haven't done a public demonstration of. And I think the reason why there's so much interest is they've been hyping it up for years. I mean you know, but beyond the money that they've attracted, cover story in Wired, cover story in Forbes, this is the future and you know, glowing profiles that don't really say very much.

Leo: That's what I mean. It feels a little like it's over-hyped.

Steve: It lumps a lot of expectations on the company between the amount they've raised and you know, these glitzy magazine stories on them that are light on meat. There's no meat as to what's really going on there. So it's no wonder why The Information wanted to poke around and see what the heck's going on. I think it's rightful to be a little bit skeptical but again, no one's really tried it and—

Steven: Yea, they're not asking you to go buy one now.

Leo: Right.

Steve: Right, exactly.

Leo: No, it's no skin off my nose. I just, you know, I also think it's suspicious when a company will show it to people, but then insist that you not talk about it. And it's one of the reasons I don't do any NDAs because I feel like that doesn't help me. It doesn't help my audience if I know something that I can't tell them. It's you know, and it feel like, well, ok. Why are you showing me this then? Whose hearts and minds are you trying to win here? Anyway.

Georgia: They have to walk a very careful line because they want to be able to build up press and interest so that they can make a certain amount of money that they need in order to invest and to develop. But then you also end up with your audience having what could end up be expectational debt and that's when you've oversold something and you under deliver. And then people end up really angry and upset with something they expected would be mind blowing and end up being pretty awesome but for the fact that you expected the world.

Leo: They also have 800 employees which is a lot for a product that may not emerge for years.

Steve: And they're also losing people. They lost—I mean you want to talk about the press coverage that they've had, they've lost their chief marketing officer and they've lost their head of cons in the past. This week they've lost their head of cons and a month or two ago they lost they're chief marketing officer. And you know, there's nothing to even communicate or market yet. So you've got to wonder what's going on there and why are they losing that side of the business. And they've lost a lot of other employees too and those are the people chatting to the press right now.

Leo: Ok, so maybe there's no fire but there's a lot of smoke. I just thought I'd bring it up. You're right. None of us have lost any money and the people that are putting money into it are smart and know what they're doing I would assume. Let's take a break. Final thoughts. I do want to talk about that latest Yahoo news. Holy cow. And whether Verizon is going to keep buying. I don't know what's going to happen and if Verizon does pull out of the deal, which I'm sure at this point it could, what happens to Yahoo? But first a word from our sponsor.

Leo: Audible is my audiobook store. I love it. I've been an Audible listener since the year 2000. That's when I started listening. I've always loved audio books. I love the idea of somebody reading to me. I learn so much and there's always times in the day when I can't hold a book but I can listen to a book. When you're in your commute, when you're in the gym, when you're walking the dog, washing the dishes. Whatever it is you're doing, it's really nice. And talk about the Amazon Echo, it will read to me. I can say, "Echo, read me, read to me." And it picks up where I left off of my most recent book automatically. I love Audible. We're going to get you 2 free books right now if you go to Audible.com/twit and the number 2. There's some really good books in here. Everybody's raving, I haven't read it yet, about Trevor Noah, the host of The Daily Show's new book, Born a Crime. He narrates it. I think that's always great. Leonard Cohen passed this year. This is the biography to read, I'm Your Man. It's available at Audible.com. You want to really get into some heavy history? 57 hours and 13 minutes, The Rise and Fall of the Third Reich. I have to say, I read this in paper. I love this. Audible has so many great books. All the best sellers. Classics, science fiction, history, biography. Here's a little something called Hackers: Heroes of the Computer Revolution. If you haven't read Steven Levy's classic, you've got to read it. They have I think, they have all of your books? I'm sure they do. Let's see here. In the Plex, that's the book about Google. Really a good read. I actually listened to that. Insanely Great, the Life and Times of the Macintosh. I think I listened to that. I know I listened to The Perfect Thing: How the iPod Shuffles Commerce, Culture and Coolness. There's good stuff.

Steven: Yea, I narrated the Insanely Great. That was the one I read.

Leo: The one that you're never going—and you're never going to do it again, right (laughing)? That's a lot of work, isn't it?

Steven: The good thing was it was about 10 years after I wrote it so to me what would have been horrible is you have to read a book you just wrote. It's like torture because you're sick of it by then and you know, you've gone over it 50 times and copy edits and things like that. You think it's horrible. So to sit in a studio for 4 days and read it would be torture to me.

Leo: But this was fun. It was like visiting an old friend. And I should mention, since we were talking about John Markoff I wonder if—yes, Machines of Loving Grace is at Audible. This is a wonderful book. John Markoff's written so many great books about the tech revolution. That's probably the classic. He also wrote What the Dormouse Said. I wonder if they've got that. They've got a lot of his New York Times pieces here as well. That's another thing you get, by the way. If you go to Audible.com/twit2, is the daily digest of The Wall Street Journal or The New York Times read to you. Guess they don't have his book What the Dormouse. That was him, right? Or was it Katie Hafner who wrote that? Anyway, there are great books at Audible and you must join and you must take advantage of our offer. You're going to go to Audible.com/twit2. You'll be signing up for the Platinum account. That's a subscription account that gives you 2 books a month. That's what I do and it's the easiest way to just kind of build up your library. They have- I should show you my library—hundreds of books. In fact, I'm going to do a blog post. I did a blog post a year ago on everything that I had listened to in 15 years of Audible but I have to update it know with the books from this year. And there's so many great books. And I want to give you links to all of them. So I'll do that on my blog. I'm reading right now and I'm sure, Georgia Dow, you've probably read this in  your studies, Man's Search for Meaning by the legendary Viennese psychologist Victor Frankl, the story of his interment at Auschwitz. And it's unbelievable.

Georgia: I haven't actually read it. I followed pieces but I haven't actually read the book. You'll have to tell me how it is.

Leo: Yea, he created Logo Therapy and it was based on his experiences shortly after he got out of Auschwitz, based on his experiences there. And it's just, well, it's powerful I guess is the best word for it. But this is the beauty of Audible. You get great experiences. You know it's almost like you're there when you're reading to you. There's something about the way you're taking it in. Here's the book you were talking about, Steven, The Undoing Project: A Friendship That Changed Our Minds. This is about David Kahneman and Amos Tversky's studies about the decision making process. Michael Lewis is so great. He always picks fascinating subjects. This is his most recent. All of his books are also on Audible. So look, pick two and get them free. You can cancel in the first 30 days. You'll pay nothing and the books will be yours to keep. Audible.com/twit2. I've just given you so many books to get (laughing). You know what's funny is now I'm adding that. Because I have a wish list on Audible that's got 80 books on it. I'm going to add that to the list because I want to read that too. That's the book about the economist stuff.

Leo: All right. Yahoo. It's just one thing after another with Yahoo, isn't it? Now they say that one—and I think it's a story just because of the number, one billion user accounts have been breached. This happened a few years ago. Remember that of course Yahoo had revealed that half a billion accounts had been breached in a separate hack. At this point, you've got to wonder, is Verizon going to go through with the deal? What happens to Yahoo next?

Steve: We had the AOL CEO Tim Armstrong who's kind of helping spearhead that deal at our conference a week and a half ago. And this was before the disclosure of the hack. And we asked him, my colleague asked him point blank, "Put a number on this. What's the percentage chance that this happens?" He wouldn't do that but he's like, "I'm cautiously optimistic that the deal's going to go through." A week later this happens. So it's either going to be a discount. You've got to think that—

Leo: Well they asked for a billion off. They already, Verizon asked for a billion off for the first hack. And actually what's really important is what did Marissa Mayer know and when did she know it? Did she hid this material information from Verizon and other suitors when they were selling the company? And there's some evidence that she did on the 2014 hack. This billion account hack happened a year earlier. So it would stretch credulity to think that Marissa Mayer did not know about this billion account hack from 2013.

Georgia: I'm just shocked that that many people still use Yahoo.

Leo: I know that was the other thing. A billion people? Really? Names, addresses, telephone numbers, dates of birth, passwords. The company says it thinks it's distinct from the 2014 hack and it says, oh and the hackers aren't in our network anymore. So they say. I don't, I don't know.

Georgia: Yea.

Leo: What do you think? If Verizon pulls out—maybe they'll just ask for another billion off. What happens?

Steve: There's still a lot of value in Yahoo, right, because of the Alibaba out of Japan and all that kind of stuff. I mean there's—

Leo:  Well you don't get the Alibaba stake with this.

Steve: You don't get Alibaba. Yea, that's true. But there is a lot of value still tied up in there. And they do have a massive user base so I mean, and especially for what AOL wants to do with it, it makes sense.

Leo: Well we do know they have a massive user base but, (laughing) how much longer?

Steve: Yahoo.com, that's how a lot of people get their news. You want to talk about visiting a home page for getting your news, Yahoo is massive. Yea.

Leo: I used my Yahoo for years as my homepage. I'm happy to say I've grown out of it but it was my home page. Ah, I think we can wrap things up. Is there anything I missed that you wanted to talk about? Twitter? Anything to say about Twitter? Anything to say about drones? Virtual reality? Oh, AirPods. You got them.

Steve: Oh, yea, here. Boom.

Leo: You got them. You went to the store. No, they sent you review units.

Steve: Their review unit, yea.

Leo: You've seen the pre-production review units. Rene Ritchie had those and others. You like it?

Steve: Yea, they're ok. I mean, so the production ones had a lot of issues probably mostly related to the software. Apple told me at the time, "Before you try these make sure you have the latest iOS update before you start rocking them." But before I had issues like if I was listening to music and someone called me and I answered the call, like the audio wouldn't carry over and it would just get all screwed up and things like that. That seems to mostly have been fixed. My big problem, I just have two issues with them. One, they look really goofy when you wear them. And two is the control mechanism. It's really annoying to adjust the volume and switch tracks when you're listening to music. You have to enable Sir.

Leo: You're supposed to talk to Siri. Yea, so Siri will do it.

Steve: Yea. So like you know, if I want to turn up the volume, I double tap it, say, "Siri raise the volume." And then the music stops and then plays again with the higher volume. That's just awkward. I mean, yes, you can use your watch and yes you can just physically touch the phone but that little dongle on the wired earphones was so nice. And it seems like they didn't really figure out a solution to replace that. But other than that, they're cool. Battery life is great. Yea, they're neat.

Leo: Apple's getting a little heat to because of their Mac OS update of Sierra 10.12.2. People were complaining about the new MacBook Pro, including Walt Mossberg, about the new MacBook Pro's battery life fluctuating wildly. So Apple did fix that. They removed the time remaining estimate.

Steve: I love this story.

Georgia: Now you just don't know.

Leo: Now you just don't know. You can't trust it so we'll just take it out.

Steven:  It's like the North Carolina legislature has said you weren't allowed, the state employees weren't allowed to talk about climate change, right?

Leo: Just ignore that.

Steven: So the coast got flooded all the time, they'd have to say, it's a little water.

Leo: These things happen (laughing).

Georgia: Right. Can we talk about the new emoji for a second?

Leo: Yes, the iOS 10.2 is out and we now have many attractive new, almost good enough to eat emojis. What are your favorites?

Georgia: Well there's the bacon. The bacon's really cute. I like the face plant. The one that's being sick.

Leo: The face palm.

Georgia: Yea.

Leo: Not a face plant. That's where you put your face in the sidewalk.

Georgia: Yea, face palm. My Canadian, I apologize.

Leo: I don't think they have a face plant emoji although that would be ok. But no, it's like oh, I could have had a V8. I could have had a V8, yea.

Georgia: Right.

Steve: Can we talk about the creepy clown?

Leo: The creepy clown. Whoa.

Georgia: Yes. Yea, that's the thing that emoji used to be a safe place. No more.

Leo: (Laughing).

Georgia: From those of us who are suffering from coulrophobia which is the fear of clowns—

Leo: What's it called?

Georgia: Coulrophobia.

Leo: Spell that.

Georgia: Ok, I'll try. C-O-U-L-R-O-P-H-O-B-I-A. I'm dyslexic, Leo. Don't ask me how to spell anything.

Leo: Coulrophobia. Wow. I never knew that.

Georgia: Yea, it's the fear of clowns.

Leo: There's a disco guy. There's Mrs. Claus. This is from Emojipedia. There's a pregnant lady. Not a pregnant man though.

Georgia: Also a really creepy clown.

Leo: Yea, I don't really understand the creepy clown. Like who was begging for a creepy clown? But maybe that's—most of us have coulrophobia.

Steven: Do they have the crooked Hillary?

Leo: No. By the way that's a funny story. The crooked Hillary emoji the Trump Campaign was asking for was what, a couple of bags of cash? And then they wanted to simplify it to just a person running off with a bag of cash. And Twitter, I think quite rightly, said, "You can't have a custom emoji. What are you talking about?" And then Jack Dorsey's glad he did because then didn't have to go to the tech summit. Here, let me see if I can get the clown for you. This is a video of all of the new emojis. Apple has decided to make these kind of almost realistic, at least with the food. The humans aren't so much. And thanks to Google by the way for creating male and female—whoa. That's a singer looking like Bowie. New male and female for all the occupations, Google kind of demanded that and rightly so. Health worker. Here's the lying face, the Pinocchio nose. Here's sneezing face with a handkerchief to the nose.

Georgia: Oh I thought that that guy was trying to sniff a ghost.

Leo: Yea, I thought so too. Drooling face. Rolling on the floor laughing which is a slightly rolling—face with cowboy—here it comes. Stand back. Watch out. Here comes it. You've got coulrophobia. Ahh!

Georgia: Warning!

Leo: That looks like an ice cream cake. Are you really scared of that? It doesn't look harmful.

Georgia: Not that one but still, you know.

Leo: These are the Apple versions but these are actually part of the new standard. So you will see these on most platforms sooner or later. Georgia Dow—there you go. See, the Google clown is not quite so bad. The Microsoft clown looks like it's made out of Play-do. I think the Apple one is the scariest for sure. Thank you, Georgia Dow. iMore.com don't forget her videos at anxiety-videos.com. Great stuff not just on anxiety but on sleep and getting your head together. Some really great encouraging videos. They do a great job. Always wonderful to see you. Thank you for joining us today. I appreciate it.

Georgia: Thank you so much for having me.

Leo: Steve Kovach is a senior editor, a senior correspondent at Business Insider. That means you don't have to carry a red pencil with you. You just write.

Steve: This is true.

Leo: You let the other people edit.

Steve: Thank goodness.

Leo: (Laughing) @stevekovach on the Twitter and of course Steven Levy, always a pleasure. Thank you so much for joining us. Stevenlevy.com.

Steven: Thank you.

Leo: Backchannel.com Do you all tweet? Should I give your Twitter handles because you all tweet?

Steve: Yea.

Leo: @stevekovach.

Georgia: One thing I do is tweet.

Leo: Really?

Georgia: Yea, I don't use Facebook or Snapchat or Instagram.

Leo: I like Facebook better than Twitter. I feel like Twitter is just too fragmented, too hard to follow. Too strange. But I do follow Donald Trump. I have to say because it's just fascinating. I can't—it's like I can't take my eyes off his Twitter feed.

Steve: That's one word to say, fascinating.

Leo: Well, it is. Don't you find it like wow? I can't stop reading it.

Steve: Yea.

Leo: What—

Steve: It just incites rage in me I think.

Leo: Well I'm trying not to be raging. I'm trying just to be sanguine about the whole thing and just kind of understand but those tweets. Wow.

Steve: Unprecedented.

Leo: I love that. It's a shame the fixed that. You know he tweeted the misspelling where he said the Chinese stole our drones and this is unpresidented with an S. Came from an Android phone in the middle of the night. Next morning, fixed from an iPhone confirming what many have long said which is when Trump tweets it's usually late at night from an Android device. And when his staff tweets it's the next morning on an iPhone (laughing). You know, it's helpful to have these glosses to understand better what's going on. It's unpresidented. Thank you all for being here. We do TWiT—this is our last TWiT of 2016. We'll be back January 8^th. But there will be fresh TWiTs for you. Next week we're going to do a holiday seasonal TWiT where we get some of our favorite hosts in the studio that aren't normally in the studio, Steve Gibson, Denise Howell, Rene Ritchie and we'll talk about all the big tech stories of 2016. And then the following week our best of. Thanks to you, you've been submitting all these great bits from the previous episodes. We've edited them together into a fun couple of hours of The Best of TWiT 2016. That will be—

Georgia: Tell me they have you with the plants.

Leo: Oh, I think they start with that (laughing). You mean where I got naked? Yea. You were there for that.

Georgia: That was so great. That was so great. That was the funniest thing.

Leo: That's one word for it (laughing).

Georgia: No I didn't mean that in—it was just—there's no way I can recover from this.

Leo: It was definitely unpresidential (laughing). So, yea, that's going to be on, that's New Year's Day. Christmas Day of course is the Holiday Show and we'll be back January 8^th. We'll do a fresh TWiT. In fact we'll be talking about CES. We've got some people who were at CES because believe it or not, yes, it's CES time once again. We do TWiT every Sunday afternoon, 3:00 PM Pacific, 6:00 PM Eastern Time, 2300 UTC if you want to join us live on the stream. Live in the studio, just email tickets @twit.tv. We love having a live studio audience. And of course in our chatroom at irc.twit.tv. After the fact our shows are available on demand at twit.tv, on YouTube.com/twit and of course everywhere you get your podcasts. We have audio and video for you. It would be great. It would make me very happy if you would subscribe because I tell you what, this show is interesting every week. And I know it's long but you can take your time listening to it if you download it and listen. Thank you for being here. Have a great holiday, a happy New Year, and I'll see you January 8^th! Another TWiT is in the can. Bye-bye.