Warning Signs Abound As Snap Barrels Toward IPO

Snap Inc.

As Snap Inc. heads towards its highly anticipated IPO, new data obtained by BuzzFeed News raises questions about the company’s ability to sustain the sort of growth needed to justify its expected $20 to 25 billion valuation.

The emergence of Snapchat clones copying the app’s key features — most prominently Instagram’s knock off of its Stories feature — appears to have hurt Snap’s growth prospects, according to data from app analytics company App Annie. Though Snapchat is still growing, these clones are hampering growth in key markets like the United States, and potential future markets in Asia.

Snapchat once had a strong lead over Instagram on time-spent-in-app per user on Android devices worldwide. But in the spring of 2016 — before Instagram even copied Stories — it started to slip. As of December 2016, Instagram has not only surpassed Snapchat, but claimed a lead of 25%. That's a metric worth noting, because Snap is pitching Wall Street on its ability to maximize average revenue per user, according to Bloomberg. If users spend less time inside Snapchat, the ad supported company stands to make less money per user. As of late last year, Snap was selling major advertisers on the fact that its users spent 25-30 minutes in the app each day.

Snapchat continues to have significant momentum in the United States, but here too its time spent advantage over Instagram is shrinking. In December 2015, before Instagram cloned its popular Stories feature, Snapchat had a 35% lead over Instagram in time spent per user on Android devices in the US, according to App Annie. Instagram debuted its take on Stories in the summer of 2016 and by December, that lead had declined to 20%. A source familiar with the situation said a similar trend is playing out on iOS.

“A large portion of this movement occurred in the second half of 2016 and could have partly been due to the addition of Instagram Stories in August 2016,” App Annie told BuzzFeed News.

Meanwhile, Snap’s growth prospects in big markets like Asia appear fraught. Like Facebook and Twitter, Snapchat is banned in China. A Snapchat-like app called Snow currently dominates that market and outranks Snap in Japan and South Korea when it comes to monthly active users, according to App Annie data.

App Annie

As BuzzFeed News has previously reported, advertisers have been hesitant to dedicate big budgets to the Snapchat since its reach and data targeting capabilities pale in comparison to Facebook’s. The rampant cloning of key Snapchat features has only made the prospect of breaking through that barrier more daunting.

“Snapchat’s still not taken seriously enough to even be on the level of getting the kind of investment that Instagram is getting,” one advertising agency CEO told BuzzFeed News this week. Asked if Instagram’s clone would mean advertisers would direct dollars there instead of Snapchat, the executive said that “there was never enough money earmarked for Snapchat to move to Instagram.”

As Snapchat battles Instagram and its other clones, Snapchat’s top influencers and brands are reporting declines in Story views, as noted by Techcrunch. Talent managers and advertising executives told BuzzFeed News that they’re seeing declines in views of their stories extending from 20% to as high as 50%.

Meanwhile, the overall percentage of internet users watching Snapchat’s live stories has declined as well, falling to 12% in November 2016 from 14% in June 2015, according to UBS. “We think growth has stalled and in particular Instagram including similar features has helped keep people from leaving and going to Snapchat,” Ben Bajarin, principal analyst at Creative Strategies, told BuzzFeed News.

Snap Inc. declined comment.

Creative Strategies

Quelle: <a href="Warning Signs Abound As Snap Barrels Toward IPO“>BuzzFeed

Gorsuch Might Play Key Role In Cellphone Privacy Issues If Confirmed To The Supreme Court

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WASHINGTON — The Supreme Court is one step closer to a full-nine person bench.

With the possible addition of Neil Gorsuch — a federal appeals court judge nominated by President Trump Tuesday night to fill the vacancy left after the death Antonin Scalia — to its ranks, the Supreme Court could soon consider important cases involving cellphone location data and Americans&#039; expectations of privacy.

The Fourth Amendment In The Digital Age

Invisible, silent, and almost always by your side, the signals sent and received from your phone can tell a faithful story of your life, perhaps most intimately about all the places you&039;ve been. As courts around the country wrestle with the privacy implications of always-on data collection, experts tell BuzzFeed News that the Supreme Court in the coming years is primed to grapple with the uncertainty around phone location data and the Fourth Amendment.

Elizabeth Goitein, the co-director of the liberty and national security program at New York University Law School told BuzzFeed News that old legal doctrines are falling flat when it comes to protecting our privacy rights on mobile devices — specifically location information.

The Fourth Amendment prohibits unreasonable searches and seizures. But Goitein and other experts point to what&039;s known as the third party doctrine of the Fourth Amendment, which holds that people give up their expectation of privacy when they share information with third parties, like banks or telephone companies.

“That doctrine simply doesn&039;t work in the digital era, in which you can&039;t go 24 hours without sharing highly sensitive information with third parties,” she said.

Several appeals courts have used the third party doctrine in decisions against defendants in which their phone location information was obtained by law enforcement without a warrant.

“It&039;s impossible to go about your daily life in the digital age without leaving a trail of digital breadcrumbs behind you that can reveal some of the most private aspects of your life — even though you never intended to reveal them,” Nathan Freed Wessler, a staff attorney with the American Civil Liberties Union, told BuzzFeed News.

While establishing probable cause is the legal threshold to obtain a warrant, many jurisdictions allow law enforcement to satisfy a lower standard, known as reasonable suspicion, if they request a person&039;s cellphone location information from a mobile provider. Wessler said that the uneven standard creates a patchwork of laws where citizens have fewer protections depending on what state they live in. The Supreme Court, he said, could provide much needed clarity.

In fact, lawyers involved in cellphone location cases in the 4th and 6th Circuits have petitioned the Supreme Court to rule on the issue. Experts say that the high court is likely to review such a case — because of the uncertainty in the federal court system and the national importance of defining privacy rights as technology increasingly shapes our lives.

Others see encryption on the Court&039;s horizon. While Apple and the Justice Department were poised for a high-stakes courtroom showdown last year, over an encrypted iPhone, the FBI was able to get into the device without Apple&039;s help, ending the case, but leaving the larger question of lawful access unresolved.

“We will see technical assistance to decrypt communications or facilitate access find its way to the Court,” Albert Gidari, the director of privacy at Stanford’s Center for Internet and Society, told BuzzFeed News. “Trump spoke to this issue during the campaign, and I think there are a number of cases in the works for the Department of Justice that would be good candidates.”

President Trump&039;s Supreme Court Pick

President Donald Trump announced Neil Gorsuch as his nominee for the Supreme Court Tuesday evening, and said the “image and genius” of the late Justice Antonin Scalia “was in my mind throughout the decision making process.” During his acceptance speech, Gorsuch, who still awaits confirmation by the Senate, offered a window into his judicial thinking.

“I respect … the fact that in our legal order it is for Congress and not the courts to write new laws.” Gorsich said in his acceptance speech. “It is the role of judges to apply, not alter, the work of the people&039;s representatives.”

If Gorsuch is confirmed by the Senate, how might a new justice, in the mold of Scalia, rule on Fourth Amendment cases?

“Judicial decisions on Fourth Amendment rights in the digital age do not break down cleanly along ideological lines,” Wessler said. For instance, in recent years the Court has ruled unanimously in favor of requiring warrants for searches of cell phones and for the GPS tracking of cars. And in 2001, Justice Scalia wrote an opinion requiring police to obtain a warrant before surveilling a home using a thermal-imaging camera. To allow the search without a warrant, he wrote, would “permit police technology to erode the privacy guaranteed by the Fourth Amendment.”

“The framers were not concerned about the internet — that&039;s one way to look at it,” Blake Reid, the director of the Technology Law & Policy Clinic at the University of Colorado told BuzzFeed News. Another approach, he said, could focus on the Fourth Amendment&039;s protections of people&039;s “papers and homes” with an eye on the new ways that police can surveil a person&039;s residence.

While it remains unclear what cases the Court may consider, Goitein said the shifting politics of the Trump era gives urgency to these Fourth Amendment cases. “The privacy threat gets more acute in the atmosphere we have right now, where I think there are those who view the results of the election as a mandate for law enforcement to get tougher than ever.”

Quelle: <a href="Gorsuch Might Play Key Role In Cellphone Privacy Issues If Confirmed To The Supreme Court“>BuzzFeed

A Jury Ordered Facebook To Pay $500 Million In Damages For Copyright Infringement

Glenn Chapman / AFP / Getty Images

A Dallas jury has ruled that Facebook owes $500 million in damages to a Dallas-based game maker that complained its inventions were stolen by Facebook&#039;s Oculus VR division.

Facebook, which acquired Oculus for $3 billion in 2014, said it plans to appeal the ruling.

ZeniMax claimed in its lawsuit that it had been the first to develop much of the technology used in the Oculus virtual reality headsets, and that one of its former employees, John Carmack, had given it away to Oculus&039;s founder Palmer Luckey. Carmack later became the chief technical officer at Oculus.

ZeniMax sought several billion in damages, claiming Facebook stole its trade secrets.

While the lawsuit is over two tears old, it attracted national attention a few weeks ago when Facebook founder Mark Zuckerberg was put on the stand in a Dallas courtroom. “The idea that Oculus products are based on someone else’s technology is just wrong,” Zuckerberg said in response to questions from a ZeniMax attorney.

The jury, however, concluded that Oculus and its founders Luckey and Brendan Iribe had infringed on ZeniMax&039;s copyrights. The jury further ruled that Carmack had contributed to ZeniMax&039;s infringement. Iribe was recently moved from the head of Facebook&039;s virtual reality group.

The jury ruled against claims that Oculus had stolen trade secrets.

“The heart of this case was about whether Oculus stole ZeniMax&039;s trade secrets, and the jury found decisively in our favor. We&039;re obviously disappointed by a few other aspects of today&039;s verdict, but we are undeterred. Oculus products are built with Oculus technology,” a spokesperson for Facebook&039;s Oculus division said in a statement. “We look forward to filing our appeal and eventually putting this litigation behind us.”

During his testimony, Zuckerberg — whose legal battles over Facebook&039;s origins are now Silicon Valley legend — tried to cast doubt on ZeniMax&039;s claims. “It is pretty common when you announce a big deal or do something that all kinds of people just kind of come out of the woodwork and claim that they just own some portion of the deal,” he said.

Quelle: <a href="A Jury Ordered Facebook To Pay 0 Million In Damages For Copyright Infringement“>BuzzFeed