14: Pouring Champagne Onto Rap Stars
24 May 2013Money and happiness, Tumblr and Yahoo, the Xbox One, and the messy world of TV-connected boxes.
Episode Description:
- Marco visits Siracusa's house and the car-assaulting tree.
- Transcendental Money.
- Square Cash.
- B2W 120 on financial "safety nets".
- Tumblr, Yahoo, and not screwing it up.
- Cloud hosting and moving up the stack.
- The modern game console's role. the Xbox One's hardware design, and the messy world of TV-connected boxes.
Sponsored by:
- Squarespace: Use coupon code ATP5 for 10% off.
- Windows Azure Mobile Services: Get started today for free.
Transcript start
⏹️ ▶️ John Yeah, my default is not to ever accept any invitation to do anything social.
⏹️ ▶️ John So that serves me well at W3C.
⏹️ ▶️ Casey Hey, so you had an interesting week. A little bit.
⏹️ ▶️ Casey Anything happen? Where’s your car?
⏹️ ▶️ Marco That’s the interesting part. I don’t have it yet. I might be getting it tomorrow or the next day or maybe this
⏹️ ▶️ Marco weekend. It’s the same BS. Oh, it’s in transit.
⏹️ ▶️ Casey So yeah, anything else happen?
⏹️ ▶️ Marco Yeah, I guess Tumblr sold.
⏹️ ▶️ Casey Any thoughts on that?
⏹️ ▶️ Marco Yeah, I mean, you know, I don’t want to rehash my blog post too much, but
⏹️ ▶️ Marco I mean, what do you want to know? Like, I don’t know, like, where should I even begin? There’s a lot to cover there.
⏹️ ▶️ Marco There’s practical aspects of who they’re selling to,
⏹️ ▶️ Marco what they might be doing, why they might have sold, why this is good or bad, what this means
⏹️ ▶️ Marco for Tumblr, what this means for me, what this means for you, what this means for the animated GIF format.
⏹️ ▶️ Marco There’s so many things that…
⏹️ ▶️ Marco, Casey Where should I begin?
⏹️ ▶️ Casey How about you start extremely selfishly and myopically, and you can blame me for this
⏹️ ▶️ Casey when you get a lot of flack for it, and then we’ll migrate our way out to whether this is a good
⏹️ ▶️ Casey fit for the two companies. Does that sound fair?
⏹️ ▶️ Casey So you’ve bought how many yachts, how many helicopters, and I do believe I
⏹️ ▶️ Casey speak for John in asking, when is his Ferrari arriving and when is my Aston arriving?
⏹️ ▶️ Marco Well, first of all, I should also mention the other awesome thing that happened this past week, and that is that my wife and
⏹️ ▶️ Marco I visited the Syracusas at their house under that tree.
⏹️ ▶️ John He didn’t park under the tree, though. I warned him off.
⏹️ ▶️ Marco No, no, we visited the house. I stood under the tree. And
⏹️ ▶️ Marco, Casey I managed— Did
⏹️ ▶️ Casey you get bonked in the
⏹️ ▶️ Marco head? to stay conscious and and and dodge all the all the falling acorns however I did witness
⏹️ ▶️ Marco the destruction that they have caused on these cars and and I do agree with John that if he’s going
⏹️ ▶️ Marco to park a car in his driveway it would it would be a shame if it was
⏹️ ▶️ Marco a really awesome car getting all those dents however I will also say that
⏹️ ▶️ Marco one block away from John I passed a brand new black f10 m5 parked
⏹️ ▶️ Casey So that’s where your car is.
⏹️ ▶️ Casey, Marco Yeah. Somebody else has
⏹️ ▶️ Marco it. Exactly. And there were lots of nice cars
⏹️ ▶️ Marco in John’s vicinity that were parked on the street and so I think maybe street parking
⏹️ ▶️ Marco might be good enough.
⏹️ ▶️ John Well you can only do that for half the year. You can’t street park in the winter because they plow.
⏹️ ▶️ Marco Oh they don’t allow it or you shouldn’t?
⏹️ ▶️ John No that’s that you can’t. They don’t allow it overnight anyway.
⏹️ ▶️ Marco, John Yeah. Although
⏹️ ▶️ Marco how How many acorns are there in the winter?
⏹️ ▶️ John Yeah, something could be worked out. But you saw, you weren’t in my garage, but it’s a small
⏹️ ▶️ John garage. Like I could wedge a car in there if I needed to. But the thing about those cars, how they’re both covered with dents,
⏹️ ▶️ John for the most part, all those dents were created like early on before
⏹️ ▶️ John I got wise to what was going on. Certainly the ones on the Civic were all made before I realized what was happening,
⏹️ ▶️ John because you just notice it. And then the Accord, it’s like, well, tried to minimize it, but we didn’t
⏹️ ▶️ John care that much. If I had a fancy car, I would either park on the street all the time or tuck it into the garage. In both places
⏹️ ▶️ John it would be totally safe, but the garage would be tough because you can’t pull the car into the garage with kids because then they can’t
⏹️ ▶️ John get out because they can’t open the doors because the garage is too small. So like I said, I would need an entire new
⏹️ ▶️ John house to go with the new car. Maybe like I said, maybe one of those things like the
⏹️ ▶️ John apartments in Hong Kong or something where the car comes up in an elevator and then you can look at it all day behind a big glass
⏹️ ▶️ John wall. There you go. Yeah.
⏹️ ▶️ Casey So the visit was good though? I am very jealous. You and I had briefly colluded and
⏹️ ▶️ Casey I had thought about perhaps crashing your visit but as it turns out I had
⏹️ ▶️ Casey a very busy week of going to prom amongst other things and or weekend I should say of going to prom amongst other things
⏹️ ▶️ Casey and that’s not a joke and it’s a story that I’m not gonna bother telling but I was very disappointed
⏹️ ▶️ Casey that we couldn’t that Aaron and I couldn’t join you guys that would have been really awesome but it was a good visit?
⏹️ ▶️ Marco I mean the original plan was that I would drive my new car there and that would be fun. New car didn’t
⏹️ ▶️ Marco get here in time, and we were going to Massachusetts for other reasons, so we figured, let’s
⏹️ ▶️ Marco still visit the Syracusas even though I had my old slow car.
⏹️ ▶️ John You had to drive the crappy BMW. It was like torture, practically.
⏹️ ▶️ Casey It’s terrible. First world problems.
⏹️ ▶️ Marco We should probably move on from that topic.
⏹️ ▶️ Casey So let’s talk about how you’re filthy, stinking rich, and never have to worry about money, except you
⏹️ ▶️ Casey do. It’s not quite that
⏹️ ▶️ Marco simple. There’s two things on this topic that were really good.
⏹️ ▶️ Marco Here, this is the link to one of them. I’ll paste it in the chat. I’ll put it in the show notes. It’s by Dave Weiner from back
⏹️ ▶️ Marco in the year 2000, back when all the planes were supposed to fall out of the sky and
⏹️ ▶️ Marco that one guy got a really overdue blockbuster bill accidentally. So in the year 2000, it
⏹️ ▶️ Marco was basically an article about, you know, theoretically thinking about how much money
⏹️ ▶️ Marco do you need to like be set and be fine and be secure,
⏹️ ▶️ Marco and then how happy would that actually make you in practice. And
⏹️ ▶️ Marco he makes a number of good points, like you know, if you don’t spend your money totally irresponsibly, like if
⏹️ ▶️ Marco you only buy things that you’ll actually use. So that rules out things like, you know, 15 different
⏹️ ▶️ Marco cars. You probably not going to use 15 different cars. Like only buy things you’re going to use. And you know,
⏹️ ▶️ Marco don’t be totally crazy about it. Like how much money do you really need before you can
⏹️ ▶️ Marco just live off the interest and you know be be fairly secure? And his
⏹️ ▶️ Marco point is that it’s probably lower than you think once you start realizing like, well if you exclude things
⏹️ ▶️ Marco that you won’t really ever use, use, then it’s not that much.
⏹️ ▶️ John Why would you exclude things that you won’t use? That’s the whole point of being rich.
⏹️ ▶️ Marco One of his points, which I thought was hilariously true and
⏹️ ▶️ Marco I might need to think about it at some point, he said, he’s like, then we get
⏹️ ▶️ Marco more practical. Buying things like second houses, third cars, vacation homes, big things that I wonder
⏹️ ▶️ Marco if most people would be comfortable actually maintaining. cars have to be registered three times a year
⏹️ ▶️ Marco your second home needs to be furnished and maintained even when you’re not there you say you can hire people to do these things
⏹️ ▶️ Marco for you ah then you have to spend your time spend your life dealing with employees is this happiness it might not be
⏹️ ▶️ Marco as happy as you think anything this is so true it’s like I just sold my fun car
⏹️ ▶️ Marco because I didn’t like having multiple cars like it was so inconvenient in so many ways that
⏹️ ▶️ Marco I’d rather just get one great car instead of having one decent car and one fun car.
⏹️ ▶️ Marco I’d rather have one bigger fun car and just combine the roles.” And that’s
⏹️ ▶️ Marco what he’s saying here. If you start limiting yourself to only things that you actually would feel comfortable
⏹️ ▶️ Marco maintaining without being too much of a pain in the butt, then A,
⏹️ ▶️ Marco you don’t need as much money as you think to reach that point, and B,
⏹️ ▶️ Marco money won’t make you happy by itself.
⏹️ ▶️ John The chat room got it. It’s the same thing I was thinking. It’s like you have to break through that barrier so that you can hire people
⏹️ ▶️ John to deal with the people that you hire to maintain your other homes. Like, that’s the breakthrough barrier of
⏹️ ▶️ John being rich, is like, OK, well, no, I don’t want to deal with the second house and worrying about it
⏹️ ▶️ John and dealing with employees. You have to get all the way through to the point where you can hire people to deal with the people that you hire.
⏹️ ▶️ John And then you just have to hire, like, maybe two, three good people, and you’re all set, instead of having to deal with, like,
⏹️ ▶️ John incrementally as you buy more things, having to hire more people to deal with it.
⏹️ ▶️ Marco But I feel like that’s like a whole other level.
⏹️ ▶️ Marco the same reason why like you know there’s this ancient John software article that talks about enterprise software pricing and how
⏹️ ▶️ Marco there’s there’s very little software priced between $1,000 and $50,000 because once you
⏹️ ▶️ Marco cross over that threshold of a thousand bucks or so you need to like start sending salespeople out to businesses
⏹️ ▶️ Marco and everything and your costs go up tremendously by having all this overhead of convincing the business that it’s okay to spend
⏹️ ▶️ Marco this kind of money is the need to raise your price there’s like this big price gap I feel like similarly like there’s like
⏹️ ▶️ Marco this big like you know rich person management gap where like if you
⏹️ ▶️ Marco were like you can’t like it would suck to hire like a person to
⏹️ ▶️ Marco manage your vacation house for you and in my opinion it also sucks to maintain a vacation house like
⏹️ ▶️ Marco my in-laws have always had like their their regular house and their vacation house and my mom has has
⏹️ ▶️ Marco she used to have the same set of now she’s back to one house but maintaining two houses really
⏹️ ▶️ Marco does suck like my mom and my in-laws they they liked doing it, so that
⏹️ ▶️ Marco was fine, you know, they, that was fine for them, but, you know, maybe it’s fine for Merlin, uh, but
⏹️ ▶️ Marco I think, like, the idea of maintaining multiple houses, like, it’s just for the same
⏹️ ▶️ Marco reason why I didn’t want two cars anymore, like, I just, I hate all that crap, and,
⏹️ ▶️ Marco and you’re right, yeah, like, I guess, like, I guess, like, the super rich will then have, have tiers of people
⏹️ ▶️ Marco that are maintaining them, but A, that’s really expensive, And so you have to be like
⏹️ ▶️ Marco substantially rich to even manage that. And B, even if I got that
⏹️ ▶️ Marco kind of money, I don’t think I’d feel good about spending it like that. You know, like Tiff
⏹️ ▶️ Marco and I were talking, you know, once the rumor started spreading about the Tumblr thing on,
⏹️ ▶️ Marco I think it was Friday night when the rumors first came out, we started talking like, okay, what if this is real like you
⏹️ ▶️ Marco know what will we do if we if we get a chunk of money from this
⏹️ ▶️ Marco and we we both you know we were talking through it we’re like you know I don’t think we’re really gonna buy
⏹️ ▶️ Marco anything immediately and I don’t think we’re really gonna make any substantial changes in our life
⏹️ ▶️ John like I think you didn’t tell her about the PCI Express SSD I guess
⏹️ ▶️ Marco I told her about that last night yeah it’s installed I’m for you guys this is this is how much I like you guys
⏹️ ▶️ Marco it’s installed in my computer right now and I’m not using it yet because because the transfer would have taken too long and
⏹️ ▶️ Marco I would have run over into this show.
⏹️ ▶️ Marco, John Yeah, so this is how much I like you guys. You
⏹️ ▶️ John decided to move your email and try to copy all your data at the same time.
⏹️ ▶️ Marco The email, yeah, the email was a separate issue. I was actually deleting 80,000 notification emails from PayPal
⏹️ ▶️ Marco from various instant paper subscription things over the years because every time PayPal
⏹️ ▶️ Marco does anything, they email you. Even if it’s something like that where like an API would be a lot better. Nope,
⏹️ ▶️ Marco nope, somebody has to get an email. So, oh God, PayPal. Oh, they’re so, so bad.
⏹️ ▶️ Marco Please, I pray to the gods of programming out there, don’t let anybody
⏹️ ▶️ Marco ever use PayPal again. By the way, I know this is off topic, well I guess we’ll
⏹️ ▶️ Marco come back to it when it’s launched, but this whole Square Cash thing looks really interesting.
⏹️ ▶️ John thing that your iPad goes into to make a point of sale?
⏹️ ▶️ John, Marco No, that’s the register.
⏹️ ▶️ Marco This is, Square is apparently beta testing, or by invitation only testing
⏹️ ▶️ Marco a service where you can send anybody what appears to be an ACH payment for 25
⏹️ ▶️ Marco cents, no matter what the amount of the payment is.
⏹️ ▶️ Marco To any email address, and then I guess they log in and they claim it and then it gets deposited into their bank account.
⏹️ ▶️ John You mean their fee is at 25 cents? Yeah,
⏹️ ▶️ Marco and if true, that would make it substantially cheaper
⏹️ ▶️ Marco than almost any other easy way to send amounts of money larger than a few dollars.
⏹️ ▶️ Marco Like it would be very, very nice.
⏹️ ▶️ John Yeah, because Stripe does like 3% or 2.9% plus $0.30 minimum or something like that. Everyone has a percentage. So if you send someone $10,000,
⏹️ ▶️ John all of a sudden it starts to be spendy. Right, exactly.
⏹️ ▶️ Marco And so like if you’re buying something for like $1,000 or $500
⏹️ ▶️ Marco or something online, and if the vendor, or if you are the
⏹️ ▶️ Marco vendor, if somebody’s eating 3% off of that, that actually adds up to be good
⏹️ ▶️ Marco money. And for the most part, there really isn’t a good way to do
⏹️ ▶️ Marco big transfers like that, at least in the US. I know the rest of the country,
⏹️ ▶️ Marco or the rest of the world, has all these electronic payments in very common usage. We really
⏹️ ▶️ Marco don’t in the US. Everything here is backwards. And you can mail somebody a paper check,
⏹️ ▶️ Marco which I don’t even know if people in the rest of the world even know what we mean by that,
⏹️ ▶️ Marco you would spell it with a Q-U-E at the end.
⏹️ ▶️ Marco And I feel like the rest of the world looks at the way we deal with money in
⏹️ ▶️ Marco the U.S. with transferring money the same way we’d look at our parents if all they ever used were those vacuum tube things
⏹️ ▶️ Marco and never used ATMs. It’s just so backwards. Anyway, what
⏹️ ▶️ Marco else do you want to know about Tumblr? I forgot. I lost track.
⏹️ ▶️ Casey not know in advance, you were not briefed. That’s correct. And so, well, so
⏹️ ▶️ Casey I can’t—actually, this is not for the show, this is just for me—what happens when you’re sitting at home on a Friday night
⏹️ ▶️ Casey and you see, holy God, the company that I have at least a shred
⏹️ ▶️ Casey of interest in is going to sell for a billion dollars? Like, what do you think? How do you react to that?
⏹️ ▶️ Marco Well, I was very, very cautious in my emotional
⏹️ ▶️ Marco response, just because it wasn’t definite.
⏹️ ▶️ Marco I didn’t hear about it in any kind of official capacity until after the press release went out on
⏹️ ▶️ Marco Monday morning. So I learned in the press the same way everyone else learned.
⏹️ ▶️ Casey Did that bother you?
⏹️ ▶️ Marco Not at all. No, because think about it, Yahoo’s a public company. So if I knew in advance
⏹️ ▶️ Marco that could cause problems with some kind of trading thing, I don’t want to deal with that crap.
⏹️ ▶️ Marco You know, that’s the last thing I want to do is get into like weird financial regulations and
⏹️ ▶️ Marco putting myself at risk or anything, you know, like So i’m very glad that I that I was
⏹️ ▶️ Marco I was just as informed as the public on this um, but
⏹️ ▶️ Marco You know, so I I didn’t want to um Mentally admit to myself that it was happening
⏹️ ▶️ Marco until I knew for sure that it was happening And i’m still a little bit reserved in my head because like the sale
⏹️ ▶️ Marco hasn’t technically closed yet like I don’t have the money yet. So like,
⏹️ ▶️ Marco you know, that takes, you know, weeks or months of various paperwork and everything. So I don’t think I even
⏹️ ▶️ Marco know when it will close. I know it’s going to happen eventually, but you know. So
⏹️ ▶️ Marco I think once I actually have some kind of tremendous bank deposit, you know, then it’ll feel real.
⏹️ ▶️ Marco Until then it’s still kind of, like now it feels almost real because it’s been confirmed, but over the weekend it was really just
⏹️ ▶️ Marco like, I think this might happen. Because the reports, they
⏹️ ▶️ Marco were from all things D and there were multiple reports and that’s a pretty good sign. They’re pretty well sourced.
⏹️ ▶️ Marco And also, you know, and I wrote a little bit about this in the post,
⏹️ ▶️ Marco from everything I know about David and Tumblr, the reports sounded extremely plausible.
⏹️ ▶️ Marco It was like O.J. Simpson’s, like, If I Did It book. Please say you guys heard about that.
⏹️ ▶️ Casey me a second to realize what
⏹️ ▶️ Casey, Marco talking about, but yes.
⏹️ ▶️ Marco It was like, if they were going to sell it, this is how it would go.
⏹️ ▶️ Marco So I knew, looking at these reports, this looks real.
⏹️ ▶️ Marco So I was pretty sure that they were definitely negotiating this. But just like everyone else,
⏹️ ▶️ Marco it was hinged upon the Yahoo board approving it, and then I didn’t know if Tumblr was going to approve it, because I didn’t
⏹️ ▶️ Marco know what was going on. So I believed 100% that there were
⏹️ ▶️ Marco talks, but I did not know whether it would result in an actual sale or not.
⏹️ ▶️ Marco Because when you have a company that size, there’s always talks. There’s talks all the time with people.
⏹️ ▶️ Casey Right. Now, you didn’t immediately start making a list of where you were going to buy a second
⏹️ ▶️ Casey garage and what cars you were going to fill it with?
⏹️ ▶️ Marco Oh no, that’s the thing. This Great Day of Winter article, I don’t really want
⏹️ ▶️ Marco to make any changes like that of my life because, you know, I’ve kind
⏹️ ▶️ Marco of been lucky in when I’ve made money in my
⏹️ ▶️ Marco life, if I can say that without sounding too much like an arrogant asshole.
⏹️ ▶️ Marco You know, I started out from a pretty modest background and so
⏹️ ▶️ Marco I always had a pretty good sense of money. I always had to
⏹️ ▶️ Marco work for my money. I always had to save my own money. You know, I always bought my own stuff
⏹️ ▶️ Marco with my money. So, and that’s why I have like on my side I have
⏹️ ▶️ Marco things like reviewing the best, like trying to find the best headphone, trying to find the best light bulbs. Like that’s that’s where that
⏹️ ▶️ Marco comes from in me. That’s that’s the part of my personality that this all comes from is like trying to trying to get a
⏹️ ▶️ Marco good buy, trying not to like waste money unnecessarily,
⏹️ ▶️ Marco stuff like that. So it helped that then, you
⏹️ ▶️ Marco know, with Instapaper and for a while having two incomes when I was doing Instapaper and
⏹️ ▶️ Marco Tumblr at the same time, I started getting some extra money. And
⏹️ ▶️ Marco because it happened gradually and because I had come up from that background,
⏹️ ▶️ Marco I was never like blowing money wastefully. I was never like, you know, I don’t think, I mean
⏹️ ▶️ Marco at least excessively. I was never like being totally responsible about it. And so now
⏹️ ▶️ Marco that I have more than that, or that I will eventually have
⏹️ ▶️ Marco more than that, like I’m kind of glad that I had those intermediate steps
⏹️ ▶️ Marco because you see like when people when people win the lottery, it’s and you know usually it’s like
⏹️ ▶️ Marco working-class people who have never had excess money in their lives, they win the lottery, and Merlin
⏹️ ▶️ Marco was talking about this in his show this week, they win the lottery and then like like like statistically
⏹️ ▶️ Marco so many of them are actually not very well off like a year or two later
⏹️ ▶️ Marco or like not very happy or they have problems you know there’s so anyway so like
⏹️ ▶️ Marco I think no matter no matter what I ever end up making in my life no matter how much money I have
⏹️ ▶️ Marco or make in the future I don’t want to do things like have a day
⏹️ ▶️ Marco iPhone and a night iPhone you know and by the way I should point out I got a really nice email from Dave Morin about
⏹️ ▶️ Marco that. Oh, did you? Yeah. I’ve never
⏹️ ▶️ Marco met the guy, but I’ve emailed with him a few times. I really do think he’s a decent
⏹️ ▶️ Marco person who just got caught with a terrible interview. I don’t want to say
⏹️ ▶️ Marco what he said because I think it was private, but it sounds like he was definitely a victim of
⏹️ ▶️ Marco a sensational editor and writer. everything
⏹️ ▶️ Marco he said there was probably taken way out of context and and so yeah
⏹️ ▶️ Marco he’s not as bad as that sounds but anyway
⏹️ ▶️ Marco so you know there’s things like that that I think are just unnecessary and wasteful
⏹️ ▶️ Marco and no matter how much I have or don’t have I think I will always think that and
⏹️ ▶️ Marco so like I already have most of what I want because most of what I want is affordable
⏹️ ▶️ Marco and I’ve been able to afford it. So I don’t really like I don’t this is why this is not really going to change
⏹️ ▶️ Marco like I’m really happy that you know we bought our house back
⏹️ ▶️ Marco when I was working at Tumblr so just on a it was a good job but it was still a regular
⏹️ ▶️ Marco salaried job so we bought you know a mid-priced house for our area
⏹️ ▶️ Marco and we didn’t go crazy we didn’t spend like millions of dollars on some giant mansion.
⏹️ ▶️ Marco And I feel like if I didn’t yet own a house and I suddenly came into a big
⏹️ ▶️ Marco lump sum of money, I might be tempted to spend a big chunk of it on a house. And
⏹️ ▶️ Marco now that temptation is gone because we already bought a house. We already have this house. And move
⏹️ ▶️ Marco the concept, the idea of moving is so unappealing to me that,
⏹️ ▶️ Marco you know, it doesn’t really matter, you know, it doesn’t really matter if
⏹️ ▶️ Marco we come into big sums of money at any point in our lives from this point forward, we have the house we
⏹️ ▶️ Marco want for the foreseeable future, and so I don’t need to blow all the
⏹️ ▶️ Marco money on a big house or something like that.
⏹️ ▶️ Casey You know, it’s interesting to me that a dear friend of the show, David Smith, said in the chat,
⏹️ ▶️ Casey and I completely agree with him, independence is the virtue I value most, some of which money can buy, but moreover
⏹️ ▶️ Casey is about how you make choices. And I think that’s very true and I would build
⏹️ ▶️ Casey onto that that everything is relative. And so I think to my…
⏹️ ▶️ Casey I make a decent living, we’re very comfortable and I think to myself, man, it would be pretty cool to be able to
⏹️ ▶️ Casey go and just buy or lease whatever a brand new M5. I think that’d be neat. It’s
⏹️ ▶️ Casey arguably within reach maybe, but it’s still a stretch if not
⏹️ ▶️ Casey a little bit outside of the edge of my arm, if that makes any sense. Similarly, I’m sure there are people that
⏹️ ▶️ Casey would say, man, I would love to have a lightly used 3-series. And then there are
⏹️ ▶️ Casey people that would say, man, I would love to have a lightly used Accord or whatever.
⏹️ ▶️ Casey And I’m not trying to say that we are ranked in any sort of
⏹️ ▶️ Casey way financially. It’s just that everything is relative and everything is a choice. And I think
⏹️ ▶️ Casey I speak for both of you guys, because I feel like I know both you pretty darn well, that we make choices about how
⏹️ ▶️ Casey we want to spend our money in such a way that we’re not really longing for more. Of course, everyone always
⏹️ ▶️ Casey wants more money, but it’s not the sort of thing where our lives would
⏹️ ▶️ Casey be demonstrably different if any one of us had, say, double the salary that we have today.
⏹️ ▶️ Casey I don’t know, John, does that make sense? Would you agree with any of that, or am I crazy?
⏹️ ▶️ John Mine would be different, but not in any important way.
⏹️ ▶️ John, Casey Right, exactly.
⏹️ ▶️ John But the unimportant way is, would still be cool.
⏹️ ▶️ Casey Oh, it would absolutely be cool. Yeah.
⏹️ ▶️ John Like, I think I always feel like I would be an excellent rich person, which is
⏹️ ▶️ John probably why I will never actually be a rich person, because I think that’s
⏹️ ▶️ John just, you know. But like, when I see those stories of people who win the lottery and do foolish things with money or like recording
⏹️ ▶️ John artists who blow all the money, you’re just like, man, like, you know, money was wasted on them
⏹️ ▶️ John because they had no idea what they were doing. And just, you know, like, and I don’t know what it is. I don’t know
⏹️ ▶️ John if there’s any connection at all between the people who end up getting rich and are smart with their
⏹️ ▶️ John money and the people who aren’t. I think maybe the only thing that I could come up with is that you mostly hear
⏹️ ▶️ John about the people who get a lot of money and screw it up, whereas tons and tons of people get a lot of money
⏹️ ▶️ John and don’t screw it up. That’s boring, so you don’t hear stories about them. They just
⏹️ ▶️ John have a nice life and live within their newly expanded means perfectly fine, and
⏹️ ▶️ John that’s boring. hear about the person who gets a whole bunch of money and does something foolish with it or whatever.
⏹️ ▶️ John But I don’t know if there’s anything you can do with it. Like, Mark, you said it’s nice that you
⏹️ ▶️ John got money gradually so you could learn to deal with it. I don’t think if you got it all of a sudden, you would have
⏹️ ▶️ John blown it anyway. Like, I think it’s just a personality type thing, where it’s no
⏹️ ▶️ John amount of training with gradual. Because what you see with the gradual ramp up of money, and I’m sure we’ve all seen this, is that
⏹️ ▶️ John someone graduates college or something, and they start their first job, and they get a low salary, and they get an apartment, and they
⏹️ ▶️ John keep getting raises, and they get a nicer apartment, and then they get married and get a better job, and have two incomes, and buy
⏹️ ▶️ John a house. And that can just continue to creep up and creep up, where every time people get a little bit more disposable
⏹️ ▶️ John income, they’re like, oh, well now we can afford a better house. Oh, now we can afford a better car. Oh, now we can afford a better this. And they just,
⏹️ ▶️ John they never are content to live within their means, and they just chase their income to the point where they’re like,
⏹️ ▶️ John boy, I need to be making 300 grand a year just to maintain my lifestyle.
⏹️ ▶️ John And my wife needs to also make 300 grand, Because now our lifestyle requires 600 grand a year
⏹️ ▶️ John just to get by, just to pay for all the cars and houses and private schools and fancy clothes
⏹️ ▶️ John and vacations that we’re now accustomed to. And any decrease in my income is now a sacrifice in my lifestyle.
⏹️ ▶️ John And that’s the trap of gradually ratcheting things, if you’re not smart about your money,
⏹️ ▶️ John is that you just constantly, as soon as you get some more disposable income, you want to upgrade everything
⏹️ ▶️ John in your life. So that’s like the more insidious version of the, I’m just gonna blow it all on, you
⏹️ ▶️ John know, fast cars and women and be broken a month. And I don’t know if I definitely know
⏹️ ▶️ John people who are like that, who they’re living within their means, but always just. And that is
⏹️ ▶️ John a foolish way, a foolish way to live.
⏹️ ▶️ Marco I mean, like it also like with me, I like I, I also have, I guess, some personality
⏹️ ▶️ Marco traits that keep this in check. Like one of them is that I hate any kind of debt. I really,
⏹️ ▶️ Marco I prefer to not have any debt if I can and fortunately for most of my
⏹️ ▶️ Marco life I’ve been able to maintain that. Actually that’s not entirely true I had a car
⏹️ ▶️ Marco payment back. Anyway.
⏹️ ▶️ John So a tax shelter for your mortgage interest. Right. You want to keep that
⏹️ ▶️ Marco one. Right and but also you know I have a pretty boring
⏹️ ▶️ Marco lifestyle by most people’s measurements. You know like I don’t go out and party. I’m not
⏹️ ▶️ Marco gonna be buying a thousand dollar bottle of champagne to pour onto rap stars
⏹️ ▶️ Marco or anything. I don’t I you know I’m still like no matter how much
⏹️ ▶️ Marco money I ever have I’m probably always going to wear jeans and a t-shirt most days
⏹️ ▶️ Marco like you know like look at look at Steve Jobs the way he lived he had a
⏹️ ▶️ Marco ridiculous car that he got a new one every few months so he wouldn’t have to have a license plate but
⏹️ ▶️ Marco he lived in a pretty normal house like it was a nice house but it wasn’t like some kind of tremendous estate
⏹️ ▶️ Marco you know with horses and tennis courts and it was like a regular house in a neighborhood. He wore regular clothes.
⏹️ ▶️ Marco He wore regular shoes. You know, he had nice computers, but that’s, you know, understandable,
⏹️ ▶️ Marco and that’s also not that much money, relatively speaking. You know, like, I feel like…
⏹️ ▶️ Marco I feel like, in the way that, John, you say you’d be a really good rich person, I think I’d be a pretty terrible one,
⏹️ ▶️ Marco because I don’t do any of those things that you think of as rich people doing
⏹️ ▶️ Marco and I have no desire to. Like I don’t intend to join a country club.
⏹️ ▶️ Marco I would have to kick my own butt if I joined a country club.
⏹️ ▶️ Marco I don’t intend to like even golf, which
⏹️ ▶️ Marco although my wife actually enjoys golf quite a bit, but I don’t I don’t intend to do that myself. like
⏹️ ▶️ Marco the idea of even like I don’t
⏹️ ▶️ Marco know like I don’t want to do anything that would cause the rest of my working-class
⏹️ ▶️ Marco family to think I’m a dick you know like if that makes sense like that’s
⏹️ ▶️ Marco the the sensibilities of regular people have been so baked into my personality that I never
⏹️ ▶️ Marco even though I have the ability to blow any amount of money on some particular
⏹️ ▶️ Marco thing. I don’t want to do it because I don’t want, I don’t want to do it myself. I don’t want
⏹️ ▶️ Marco to know that I did that, and I don’t want my family to find out and like think I’m a dick for it.
⏹️ ▶️ Casey Yeah, and the thing that struck me was, I don’t remember what day it was, but I
⏹️ ▶️ Casey noticed either Friday or over the weekend or maybe it was Monday night,
⏹️ ▶️ Casey one of you guys, either you or Tiff, posted a picture from the restaurant that
⏹️ ▶️ Casey the four of us have been to a couple
⏹️ ▶️ Casey that’s right near you. And I thought to myself, if I had had some amount
⏹️ ▶️ Casey of windfall, be that a thousand bucks, ten thousand bucks, whatever, it doesn’t matter, but some amount of windfall,
⏹️ ▶️ Casey I think what Aaron and I would probably do is go to a nicer dinner, a nice steakhouse or something like that.
⏹️ ▶️ Casey Not something absurd, not thousand dollar bottles of wine or whatever or champagne or whatever or what have you,
⏹️ ▶️ Casey but a nice dinner. And here it is that you guys have ostensibly just
⏹️ ▶️ Casey earned a significant amount of money. Granted, it’s not there yet, but
⏹️ ▶️ Casey in principle, you’ve earned a significant amount of money. And here it is, you went to the same restaurant that the
⏹️ ▶️ Casey four of us have gone to, I think, if not every time we visited you, then nearly every time. And it is
⏹️ ▶️ Casey not a bad restaurant by any stretch, but it’s an average American restaurant.
⏹️ ▶️ Marco Yeah, it’s a casual family pub. An entree is like 10 bucks. And you know why we
⏹️ ▶️ Marco went there? Because we have your kid.
⏹️ ▶️ Marco, John Yeah, because we have a
⏹️ ▶️ John like them at fancy restaurants
⏹️ ▶️ Marco We we used to go to this place like once a week and ever since we had the kid we now go there like once every Five months
⏹️ ▶️ Marco because I so don’t want to be that guy whose kids are screaming in the restaurant and throws everything on the floor Like I don’t
⏹️ ▶️ Marco I’m so afraid of being that guy that we hardly ever go out to restaurants anymore And
⏹️ ▶️ Marco right so yeah, like that’s like that’s how I spent that day. I Didn’t shower until right before we went to the restaurant.
⏹️ ▶️ Marco I was in a crappy white t-shirt I swept my patio because they were flowers from a tree
⏹️ ▶️ Marco all over it. Like I did I’m a regular person I’m doing regular things like my day-to-day
⏹️ ▶️ Marco life is not going to change
⏹️ ▶️ John Regular people shower before they go to work in the morning. Just
⏹️ ▶️ Marco well, that’s okay. That’s true
⏹️ ▶️ Casey, Marco you want to? But
⏹️ ▶️ Marco I see I’ve been I’ve been showering inappropriately times the day for like a year and a half now
⏹️ ▶️ John Yeah, unemployed people do that too. Oh
⏹️ ▶️ Casey My god, why don’t you do a sponsor then? We’ll ask you about Yahoo and tumblr
⏹️ ▶️ Marco Our first sponsor this evening, well I guess I don’t know when you’re listening to this, but for the live listeners our first
⏹️ ▶️ Marco sponsor this evening is Squarespace. This episode is once again
⏹️ ▶️ Marco brought to you by Squarespace. They’re the all-in-one platform that makes it easy to create your own website.
⏹️ ▶️ Marco For a free trial and 10% off go to squarespace.com and use the offer code ATP5
⏹️ ▶️ Marco for Accidental Tech Podcast in the month of 5. Squarespace is constantly updating their platform with new features,
⏹️ ▶️ Marco new designs, and more support. They have beautiful designs for you to start with, tons of style
⏹️ ▶️ Marco options for you to adjust. You can really create your own space online. Squarespace takes
⏹️ ▶️ Marco care of hosting, SEO, they even make sure your site automatically looks great on any device with responsive
⏹️ ▶️ Marco designs. It’s incredibly easy to use, but if you want some help, they have
⏹️ ▶️ Marco an amazing support team that works 24 hours a day, seven days a week. Squarespace starts at just $8
⏹️ ▶️ Marco a month and That includes a domain name if you sign up for a year in advance.
⏹️ ▶️ Marco So anyway, as we said earlier, you can try Squarespace for free. There’s no credit card required. This is a real free trial where
⏹️ ▶️ Marco you don’t have to give them a credit card. And then if you forget, they’ll auto bill it. No, you don’t have to give them a credit card. It’s a real free trial.
⏹️ ▶️ Marco And then if you purchase it, make sure you get 10% off by using our coupon code ATP5.
⏹️ ▶️ Marco Thank you. That’ll support the show. Squarespace is everything you need to create an exceptional website.
⏹️ ▶️ Casey Cool. Cool. Thank you for sponsoring us for like the 95th time.
⏹️ ▶️ Casey, Marco Can you imagine how
⏹️ ▶️ Marco much the podcast world would suck if Squarespace didn’t sponsor so
⏹️ ▶️ Casey them? Oh God, it would suck so hard. It would be
⏹️ ▶️ Marco They’re seriously supporting like half the podcast industry.
⏹️ ▶️ Casey It’s absolutely true. And I don’t know how they do it, but I’m glad they do. And not just for this show,
⏹️ ▶️ Casey for all the different shows they sponsor. So I’m going to start by
⏹️ ▶️ Casey asking John, and I want to hear Marco, you kind of wrap this stop. John, what do you think about
⏹️ ▶️ Casey the idea of Yahoo and Tumblr being one, sort of,
⏹️ ▶️ Casey but not? Does that make sense to you? Does that fit? Is that a good marriage, if you will, or
⏹️ ▶️ Casey that make no sense?
⏹️ ▶️ John It makes sense in the cynical way that these acquisitions make sense, in that
⏹️ ▶️ John Yahoo is clearly in turnaround, I guess you’d call it, with a
⏹️ ▶️ John new CEO, bold new strategy, cut the fad, re-concentrate on
⏹️ ▶️ John the good things or whatever. So it’s in the mode where it’s trying to turn itself around, and it used
⏹️ ▶️ John to be the hip, cool thing, but isn’t anymore. And it makes sense that it would be out there shopping for something
⏹️ ▶️ John that is hip and cool, and something that has a lot of users. And Tumblr, on the other hand, is insanely
⏹️ ▶️ John popular, tremendous growth, but very little in a way of,
⏹️ ▶️ John you know, a way to turn all that popularity into money. They did, what did they do? They sold premium themes and some sort of
⏹️ ▶️ John promoted post stuff, but not the type of, you know, they have all these users and they want
⏹️ ▶️ John to monetize them and they haven’t quite figured out how to do it in a way that scales with the
⏹️ ▶️ John size of their business. So they’re more than happy to take Yahoo’s money, and Yahoo’s
⏹️ ▶️ John more than happy to give it. What does Yahoo need? Lots of users and cool and hipness. What does Tumblr need?
⏹️ ▶️ John Money, because it hasn’t figured out how to make enough on its own. So in that sense, the marriage makes sense. But
⏹️ ▶️ John then when I think about, OK, what are we left with? is this combination…
⏹️ ▶️ John is Tumblr going to help Yahoo as much? Certainly Yahoo is going to help Tumblr with money,
⏹️ ▶️ John but is it just like, okay, well now we have a sugar day and we can continue to be Tumblr and continue to be cool but also
⏹️ ▶️ John continue not to make money? That’s not really a great outcome. I mean I guess that’s kind of neutral for Tumblr but it’s not great for Yahoo.
⏹️ ▶️ John So I wonder how much Tumblr is really going to help Yahoo? Are they going to…
⏹️ ▶️ John are they going to figure something out together to become more than they were individually? And that remains to be seen.
⏹️ ▶️ Casey I completely agree. And I just don’t understand how this
⏹️ ▶️ Casey really benefits Yahoo, or at least in the near term, in any way other than, hey, look,
⏹️ ▶️ Casey that company, that website that all the kids these days really like, yeah, that’s
⏹️ ▶️ John Well, they get all the users, too, though. Now all of those users are their users. And
⏹️ ▶️ John when you have that number, what is maybe, Marco knows, what is I saw some graphs on it. How many millions
⏹️ ▶️ John of people are on Tumblr now? I don’t know. It’s a big number.
⏹️ ▶️ John, Marco It’s a lot, yeah.
⏹️ ▶️ John And so even if those people, like, well, they’re not Yahoo customers. You have access to them
⏹️ ▶️ John in some way. You have a shot. They’re yours. They’re captive. And so if you come up with some great new
⏹️ ▶️ John idea for some new property or something, or even if you just want to promote the new Flickr to them or something,
⏹️ ▶️ John suddenly you can do that. And you don’t have to pay Tumblr to put one little, hey, check out the new Flickr thing in the upper right-hand corner
⏹️ ▶️ John or anything. You can just do that really easily. That’s a stupid example, but having access to those
⏹️ ▶️ John people. It’s like, oh, it is a big deal. If Yahoo tried to say, we’re going to make a new service,
⏹️ ▶️ John and it’s going to become as popular as Tumblr, good luck with that. But so just getting Tumblr, you get those people. So you still
⏹️ ▶️ John have to figure out how to make money from them, and how not to piss them off, and all those other things. But at least they’re
⏹️ ▶️ John there. And that equals a billion dollars, I guess.
⏹️ ▶️ Casey Yeah, and a friend of the show, David Smith, just said 300 million monthly unique visitors, and 120,000 sign-ups every day.
⏹️ ▶️ Casey David Smith is basically our real-time follow-up guru whenever he’s here.
⏹️ ▶️ Casey Naturally. But I agree, well I’ve said I agree like 13 times this show, which is not surprising.
⏹️ ▶️ Casey I agree. Thank you. I don’t see how Yahoo
⏹️ ▶️ Casey can really capitalize on having all these users without ticking off
⏹️ ▶️ Casey all these users in the sense that if I were a devout Tumblr user, and I do use Tumblr and my blog
⏹️ ▶️ Casey that I write on once every seven years these days is on Tumblr, but that being That being
⏹️ ▶️ Casey said, if I didn’t really know the backstory and I just heard in the news, oh,
⏹️ ▶️ Casey Yahoo now owns Tumblr, and all of a sudden I start seeing links to all these Yahoo properties, immediately
⏹️ ▶️ Casey I’m starting to throw my hands in the air and saying, oh, they sold out, and now I feel like I’m just another eyeball to shove
⏹️ ▶️ Casey to their other properties.
⏹️ ▶️ John Well, they don’t have to do it in a crappy way. Think of the newly revised Flickr. Flickr
⏹️ ▶️ John was a much beloved service that seemed to stagnate, and now they’ve revised it, and the revision is mostly
⏹️ ▶️ John getting a thumbs up. Think about this, all right, so wouldn’t it be great if you could
⏹️ ▶️ John very easily post pictures from Flickr to your Tumblr? Does that hurt you as a Tumblr user? No, now
⏹️ ▶️ John it’s maybe easier for you to get access to pictures. Maybe you didn’t use Flickr, but you’re like, oh, well, since it integrates so well with Tumblr
⏹️ ▶️ John now, maybe I’ll sign up for the Flickr thing. And you suddenly become a Flickr user.
⏹️ ▶️ John Flickr does have a business model, maybe perhaps not a great one or a self-sustaining one, but it does have some way to collect
⏹️ ▶️ John money from you. And it’s kind of, you know, It’s like a halo effect type thing where you like, oh, well,
⏹️ ▶️ John it was free and it’s well integrated with Tumblr and I’ll sign up for it. And now you start, yeah, Flickr is actually
⏹️ ▶️ John pretty cool and you start using it. Like you didn’t feel like it was shoved in your face, but merely because they’re under the
⏹️ ▶️ John same umbrella, they can do deep, you know, really cool integration that wouldn’t be possible
⏹️ ▶️ John just if they were just talking to each other through an API over the internet as two separate companies.
⏹️ ▶️ John That’s one small example, but I think it is possible. Think of the way that all of Apple
⏹️ ▶️ John stuff is integrated with each other. It is possible to do integration in a way that customers see as friendly and
⏹️ ▶️ John beneficial and not as shoving these other services in my face.
⏹️ ▶️ Casey And then that makes me wonder, is it really worth a billion dollars for that
⏹️ ▶️ Casey potential integration and that potential way of making these eyeballs
⏹️ ▶️ Casey look in these other directions? And I would guess Marco says yes, but
⏹️ ▶️ John what does that come out to per user? you know, like divided up like, what is it? The cost of
⏹️ ▶️ John someone in the chat room, the cost of acquiring new customers. And you could do the math and like, how many new potential
⏹️ ▶️ John customers did Yahoo just grab under its umbrella and how much should it pay for each of them? But things
⏹️ ▶️ John are worth what people are willing to pay for them. And so that’s just
⏹️ ▶️ John how capitalism works. So someone who is willing to pay a billion, then it is by definition worth
⏹️ ▶️ Casey Yeah, and it’s certainly, I found it refreshing. and Marco, I promise I’ll give you a chance here in a second, but I
⏹️ ▶️ Casey found it refreshing, although odd, that their press release was so self-deprecating. As a
⏹️ ▶️ Casey self-deprecating guy, I, that made me happy to see somebody else kind
⏹️ ▶️ Casey of talk the way I talk, but it was odd to see that in a press release. That, you know, I think the second, I tweeted
⏹️ ▶️ Casey something like the second line of the official press release. This wasn’t the thing that, that David posted on Tumblr.
⏹️ ▶️ Casey Uh, it was the official Yahoo press release. The second, the sub headline was
⏹️ ▶️ Casey promises not to screw it up. And I thought that was so remarkable. That was awesome. And
⏹️ ▶️ Casey it was awesome. I thought it was awesome anyway. And to me, that was a very
⏹️ ▶️ Casey good sign that they know not to screw it up. But
⏹️ ▶️ Casey on the other side, don’t you kind of by definition need to screw it up in order to get any real
⏹️ ▶️ Casey tangible value out of it? And John, I think your point a minute ago was a great counter argument that no, maybe
⏹️ ▶️ Casey Maybe if you just do a really good and subtle job of integrating with your existing
⏹️ ▶️ Casey properties, maybe you don’t need to screw it up in order to get your money’s worth.
⏹️ ▶️ Casey Maybe I’m just not imaginative, but it’s a very big leap for me to see how you can really get
⏹️ ▶️ Casey a billion dollars worth out of just integrating well with Flickr. I know that was just a silly
⏹️ ▶️ Casey example, but does that make sense?
⏹️ ▶️ John Yeah. Well, Tumblr is a little bit of a puzzle because Tumblr had a long time on its own
⏹️ ▶️ John during which it could not figure out how to get its money’s worth out of its
⏹️ ▶️ John tremendous number of users.
⏹️ ▶️ John, Marco Well, I don’t think that’s true.
⏹️ ▶️ John Twitter has the same type of situation here. Not that they didn’t get money out of them, but
⏹️ ▶️ John you feel like you should be getting Facebook-sized money out of a Facebook-sized
⏹️ ▶️ John number of users, right? Facebook is well over 300 million or whatever by now. But they
⏹️ ▶️ John got surely enough money to keep themselves going and everything like that, but it’s just like, man, this is just so
⏹️ ▶️ John many people. like how do we how do we get the money that we know is there like these people like our product and they’re
⏹️ ▶️ John using it but they’re probably not willing to pay for but like they’re just got to be something locked up in there and and just didn’t feel
⏹️ ▶️ John like tumblr ever figured out how to get the amount of money that it thought it should have out of there maybe Yahoo
⏹️ ▶️ John doesn’t need that kind of money out of these users because the users themselves just having them happy
⏹️ ▶️ John and using it something that Yahoo owns is in itself worthwhile so they don’t need to get more
⏹️ ▶️ John money out of it but I don’t think you can just suddenly they turn on the
⏹️ ▶️ John money faucet from Tumblr and say, now we’ll just bleed these people dry, because that will piss them off and they will go running
⏹️ ▶️ John away. And you’re never going to get that kind of money out of these people that you
⏹️ ▶️ John think you should, just because there’s so many of them. They’re not going to pay to use Tumblr, not that many of them.
⏹️ ▶️ Casey All right, so Marco, let us have it. What do you think?
⏹️ ▶️ Marco Well, I should preface this, first of all, with a tremendous disclaimer that
⏹️ ▶️ Marco I I don’t have any inside information here, really. I left Tumblr in 2010.
⏹️ ▶️ Marco Even then, I hadn’t gone to the board meetings in years. I really wasn’t that
⏹️ ▶️ Marco familiar with the finances of the company or even the growth at that point. I was focused entirely on
⏹️ ▶️ Marco just my job of server stuff. But certainly since 2010, I’ve
⏹️ ▶️ Marco had minimal contact with them. I see the people there, here and there, socially, but
⏹️ ▶️ Marco we don’t really talk business. and uh… i’m really used to that much since then cuz
⏹️ ▶️ Marco uh… my wife you know i spent one of the blog and in some of that so anyway i i should preface this but a lot by
⏹️ ▶️ Marco saying that this is not based on a kind of inside information of either company
⏹️ ▶️ Marco and i’m still a nervous to even comment on this but out all do my best to uh…
⏹️ ▶️ Marco give you some kind of content without getting myself into any kind of trouble uh… i think in in very
⏹️ ▶️ Marco general terms i think that yahoo has
⏹️ ▶️ Marco a lot of money, but they don’t have a lot of relevance. And Tumblr has a lot of relevance,
⏹️ ▶️ Marco and they don’t have a lot of money. And so I think if you look at,
⏹️ ▶️ Marco I think ignore the dollar value for a while, because I don’t think the dollar value matters that much
⏹️ ▶️ Marco for looking at why these companies benefit from each other. I
⏹️ ▶️ Marco think Tumblr, First of all, the discussions
⏹️ ▶️ Marco on whether Yahoo’s going to screw it up,
⏹️ ▶️ Marco I think you have to consider first of all that the alternative is not Tumblr existing as it exists
⏹️ ▶️ Marco now forever. The alternative would be Tumblr screwing it up or Tumblr not screwing it
⏹️ ▶️ Marco up. And so you can look at something like Twitter, where Twitter
⏹️ ▶️ Marco had a similar growth pattern as Tumblr, but about a year and a half before it.
⏹️ ▶️ Marco And rather than get acquired in some kind of massive mega deal like this,
⏹️ ▶️ Marco Twitter has let it to just keep going independently and, you know, try to make
⏹️ ▶️ Marco a profit reliably and, you know, maybe eventually have an IPO, who knows. But
⏹️ ▶️ Marco you can look at what Twitter’s had to do to pull that off, and it’s really angered a lot of people,
⏹️ ▶️ Marco us included. So you have to consider also,
⏹️ ▶️ Marco you know, what if Tumblr didn’t get acquired right now? What would the next few years
⏹️ ▶️ Marco of Tumblr look like? And the company was growing so quickly,
⏹️ ▶️ Marco and as a result, of course, I’m sure, again, this is not based on inside information, I assume
⏹️ ▶️ Marco their costs were growing a lot too. And
⏹️ ▶️ Marco see the problem is right now Facebook’s IPO was a huge disappointment.
⏹️ ▶️ Marco Before that Zynga’s IPO was a huge disappointment and there’s probably been a few others that I’ve forgotten
⏹️ ▶️ Marco about because they’ve been huge disappointments. Big consumer web tech companies
⏹️ ▶️ Marco having IPOs have not done very well recently. And so when your company gets
⏹️ ▶️ Marco really really big to the point where almost nobody can afford to buy you anymore, like
⏹️ ▶️ Marco Twitter is a great example. When you think about what those companies
⏹️ ▶️ Marco have to do, if they have to keep raising money from investors, those investors are going to have to start thinking about, well, what’s
⏹️ ▶️ Marco the exit plan here? How are we ever going to get a good return on this money if we’re going to be dropping
⏹️ ▶️ Marco hundreds of millions of dollars into your company? If the IPO market isn’t very
⏹️ ▶️ Marco good, if our possible outcome is what happened to Facebook with their crappy
⏹️ ▶️ Marco botched IPO, then that’s not very good for the investors. So I think
⏹️ ▶️ Marco it’s probably hard to raise money when you’re that big of a company on any kind of reasonable
⏹️ ▶️ Marco terms. And that’s why I think we see what Twitter’s been doing this past year or two
⏹️ ▶️ Marco is trying to make a lot of money as quickly as they possibly can. So
⏹️ ▶️ Marco again, this is not based on inside information. This is speculation. But I think it’s probably
⏹️ ▶️ Marco worth considering whether Tumblr would have reached that point, and if so, when.
⏹️ ▶️ Marco And now that Yahoo has bought it, if they were going to be anywhere near that
⏹️ ▶️ Marco point, they probably wouldn’t be anymore. Or at least the pressure would be significantly reduced and the timescale would be
⏹️ ▶️ Marco significantly more flexible. Not to say that Yahoo has bottomless pockets, but
⏹️ ▶️ Marco Yahoo can afford for this unit of their business to lose money for a few quarters or for
⏹️ ▶️ Marco a few years before it starts making money. Whereas an independent company can’t really do that very well.
⏹️ ▶️ Marco You know you can but then it messes up your finances and yeah it so this is
⏹️ ▶️ Marco not a great time to be a company like Twitter where
⏹️ ▶️ Marco the hope of an IPO making it big is pretty low and you’re so
⏹️ ▶️ Marco big nobody can buy you and you can’t really raise money on good terms anymore. So that’s why Twitter kind
⏹️ ▶️ Marco of had to do what it did.
⏹️ ▶️ John Twitter is not too big to be bought.
⏹️ ▶️ Marco I didn’t say they’re not too big to be bought, but most people couldn’t afford it. Most people who were likely to
⏹️ ▶️ Marco want to buy Twitter would have a really hard time justifying that kind of purchase.
⏹️ ▶️ John this point, Twitter doesn’t want to be bought. Like you said, that was their decision. That’s different than not being able to.
⏹️ ▶️ John Facebook is the same thing. Facebook is the classic example where Yahoo, speaking of, wanted to buy Facebook
⏹️ ▶️ John for tons of money at various points and Zuckerberg said
⏹️ ▶️ John no. And so that was his call and it seemed dumb at the time, but now Facebook
⏹️ ▶️ John is much bigger than they were then and it worked out for him. Twitter seemed to follow the same playbook.
⏹️ ▶️ John People wanted to buy them. They said, no, we want to go it alone. We’re going to be the next Facebook. And now we’re waiting to see if that’s
⏹️ ▶️ Marco Right. So yeah. So anyway, so I think you can make a pretty good case
⏹️ ▶️ Marco for why Tumblr benefits from Yahoo because
⏹️ ▶️ Marco there’s this whole set of massive financial pressures that, not
⏹️ ▶️ Marco to say that all pressure will be off them, but now they have a lot more flexibility
⏹️ ▶️ Marco in that, presumably. And plus, you look at what Tumblr
⏹️ ▶️ Marco has. has like you know all these users and all this
⏹️ ▶️ Marco relevance all these cool people and all this hip content being created all this engagement and
⏹️ ▶️ Marco they don’t really have much of an ad sales force yet whereas Yahoo has a massive ad sales force
⏹️ ▶️ Marco and they’re kind of desperate for users of engagement so again I think it makes a lot of sense why these companies
⏹️ ▶️ Marco go together and you look at it from Yahoo’s point of view and as an outsider
⏹️ ▶️ Marco I look at Yahoo and think here’s a company that nobody pays attention to anymore and I think
⏹️ ▶️ Marco on their earnings call they said that their average demographic is getting older and that’s not good for ad
⏹️ ▶️ Marco money. So like you see this company kind of losing relevance and
⏹️ ▶️ Marco and just you know like if Yahoo launches a new service hardly anybody even talks about it nobody blogs
⏹️ ▶️ Marco about it none of the geeks like us even try it you know and so
⏹️ ▶️ Marco they have to make drastic moves to get more relevance and and to get back on track.
⏹️ ▶️ Marco They also need a social network. Google has Google Plus, which might or might not
⏹️ ▶️ Marco be actually used, but they at least have it. They have some kind of database table somewhere with a lot of IDs in
⏹️ ▶️ Marco it, so they call themselves users. Facebook has itself.
⏹️ ▶️ Marco Does Microsoft have anything social? Really?
⏹️ ▶️ Marco Okay, that’s something. Skype, sort of. They have a few pieces here and there.
⏹️ ▶️ John That’s not a piece that’s full-fledged social.
⏹️ ▶️ Marco Yeah, a little bit. I don’t know. I think it’s a little
⏹️ ▶️ Marco bit different, but okay. They have some good pieces. I think Yahoo needs something
⏹️ ▶️ Marco like that, and so now they have it. So you can look at all these things. There’s a lot of reasons
⏹️ ▶️ Marco why these companies benefit from each other without even considering the money aspect of how much they bought
⏹️ ▶️ Marco it for. Because how much they bought it for, I have no idea what that’s based on. You have no idea what that’s based on. It doesn’t really matter,
⏹️ ▶️ Marco honestly. Honestly, it matters to the shareholders, but it doesn’t really matter to the world how much
⏹️ ▶️ Marco Yahoo paid for it.
⏹️ ▶️ John It’d be fun to see the slides, though, because you know there is a slide that says, we project the value of our people over
⏹️ ▶️ John this amount of time, this amount of money, so we feel that buying this company, you’re buying their future. You
⏹️ ▶️ John know there’s a BS graph explaining why 1.1 billion is the number, and it’s not 1
⏹️ ▶️ John billion, and it’s not 900 million. But all those are, and all those graphs, like
⏹️ ▶️ John along the x-axis, the thing at the left edge is like the current year and everything else is the future. So it’s just like
⏹️ ▶️ John projections of a fantastical future that may or may not come to pass.
⏹️ ▶️ Marco Well, also, keep in mind too, like there’s also a lot of value here.
⏹️ ▶️ Marco Not just, you know, there’s value to Yahoo in buying this particular social
⏹️ ▶️ Marco network slash publishing thing because they didn’t have a social network and there aren’t that many that are meaningfully sized
⏹️ ▶️ Marco that they can afford. So that’s one big problem that they have, why they really kind of need a Tumblr. One reason why
⏹️ ▶️ Marco Tundra might have needed Yahoo in particular to be the buyer if they were going to sell
⏹️ ▶️ Marco is that Yahoo is in this place of humility and change and progress.
⏹️ ▶️ Marco And I know David pretty well and David is not somebody who wants
⏹️ ▶️ Marco to be told what to do with his product constantly. He’s going to want his own say. And from all the reports
⏹️ ▶️ Marco it sounds like he and Marissa Meyer see eye to eye a lot and he’s locked
⏹️ ▶️ Marco in to work for them for a little while and and and she’s you know she was apparently
⏹️ ▶️ Marco promising some kind of autonomy or at least you know giving him a good a good amount of authority
⏹️ ▶️ Marco so it matters like who buys you like if you look at one of the reasons why
⏹️ ▶️ Marco why you might want to sell to Yahoo instead of say Google is because Google has not shown
⏹️ ▶️ Marco it’s a very good acquirer you know there’s so many things that get bought by Google and then either get stagnated
⏹️ ▶️ Marco or they get shut down or the people get annoyed about internal stuff and they leave
⏹️ ▶️ Marco so you know it matters who buys you and if you care about your future happiness and the future
⏹️ ▶️ Marco health of your product you got to make sure you sell it to somebody I had the same thing with beta works right you got
⏹️ ▶️ Marco to make sure that you sell to somebody who you trust to to be decent to work with
⏹️ ▶️ Marco and to do well by the product you can’t just sell to anybody willing to pay a good price.
⏹️ ▶️ John Yahoo would have been much better off, though, buying the Tumblr as it existed several years ago.
⏹️ ▶️ John What you really want, ideally, is to buy the hip new thing just as it’s kind of breaking.
⏹️ ▶️ John I almost feel like Tumblr, not that Tumblr’s time has passed, but Tumblr has already gotten to
⏹️ ▶️ John the point where you need to spend a billion to get it, right? Because if you look at the graph of their user growth, you would have really loved to have bought
⏹️ ▶️ John it before the little knee in the graph, right? Right. then
⏹️ ▶️ John you’d feel like you got in on something at the ground floor and it just takes off while you have it where the worst
⏹️ ▶️ John case scenario for tumblr is it’s massively popular now it was a big thing everyone has a tumblr
⏹️ ▶️ John it’s really popular and then just like tapers off like you bought at the top of the market like draw something
⏹️ ▶️ John, Marco i mean that was that was an example of also being bought by a
⏹️ ▶️ John by a terrible acquirer that everybody hates that screws everything
⏹️ ▶️ Marco up that’s why we can laugh at it because yeah like who cares if zinga loses money like there’s
⏹️ ▶️ Marco such there’s such horrible people who run that company. Nobody cares if they lose money.
⏹️ ▶️ John Yeah, I mean, in this deal, you had to think, in this deal, Marcos’ stake in
⏹️ ▶️ John Tumblr aside, would you rather be Yahoo that now owns Tumblr, or would you rather be the investors or employees
⏹️ ▶️ John of Tumblr? And you’d much rather be Tumblr. It’s hard for me to look at this in any way other than the Tumblr
⏹️ ▶️ John people got the better half of this deal.
⏹️ ▶️ Marco But see, I don’t know. I really do think that Yahoo needed this, too. I think both
⏹️ ▶️ Marco companies are doing quite well as a result of this.
⏹️ ▶️ John But Yahoo now has to deliver, whereas Tumblr made an amazing product, they got really big,
⏹️ ▶️ John they got sold on terms that seemed to be very favorable to them, and they are a success story
⏹️ ▶️ John no matter what happens from now on. And Yahoo, it remains to be seen. Their future is
⏹️ ▶️ John still to be written, and the pressure is now on them to, as they said, not screw it
⏹️ ▶️ Marco up. Yeah, that’s certainly true. But just looking at who got their money’s
⏹️ ▶️ Marco worth here, it looks like a pretty good mutual benefit.
⏹️ ▶️ Marco Anyway, speaking of business terms, our second sponsor. This is actually
⏹️ ▶️ Marco pretty cool. This is our second sponsor is Windows Azure Mobile Services.
⏹️ ▶️ Marco Now because you’re all probably nerds like us, you probably heard this advertised in other nerdy
⏹️ ▶️ Marco podcasts and other nerdy blogs, but this is this is interesting. Windows Azure Mobile Services by Microsoft.
⏹️ ▶️ Marco Yes, Microsoft. They make it faster and easier to
⏹️ ▶️ Marco build a cloud-powered iOS app. So it’s basically a cloud platform.
⏹️ ▶️ Marco You write the code in JavaScript, actually. I believe they have a node.js
⏹️ ▶️ Marco interface as well as a couple of other languages. Sorry about not knowing that
⏹️ ▶️ Marco offhand. That wasn’t part of the script. But I’ve heard it. So it was pretty cool. They
⏹️ ▶️ Marco take care of the glue code necessary for storing data in the cloud and authenticating users via
⏹️ ▶️ Marco Facebook or Twitter and even sending Apple’s push notifications. And if you’ve ever written push
⏹️ ▶️ Marco notification code and having to deal with all those various certificates and everything, you’ll
⏹️ ▶️ Marco know that this is great to have somebody else do this for you.
⏹️ ▶️ Marco So anyway, mobile services, you can add push to your app. It’s a single command, push.apns.send. You
⏹️ ▶️ Marco can see the API. It’s pretty awesome. You know, you shouldn’t
⏹️ ▶️ Marco need to build your own massive server infrastructure if you don’t want to. You know, it’s nice to have options.
⏹️ ▶️ Marco We’ve talked about this in the show in the past. And one of the people who’s blogged about this before, who we’ve talked about, is Brent Simmons.
⏹️ ▶️ Marco And Brent Simmons actually is kind of a spokesperson for Windows Azure Mobile Services.
⏹️ ▶️ Marco He did a few videos for them. You can see, if you go to the site, go to windowsazure.com
⏹️ ▶️ Marco slash iOS, and you can go see Brent talking in videos, showing you how to do
⏹️ ▶️ Marco this, and what this can do. It’s pretty awesome. It’s it’s
⏹️ ▶️ Marco We think of Microsoft as being this company that we as Mac people can kind of ignore
⏹️ ▶️ Marco But they’re getting into the server business and the services business pretty well And this is
⏹️ ▶️ Marco I’d say this is really worth looking at I’ve checked it out myself, and it looks pretty interesting So anyway
⏹️ ▶️ Marco if you’re looking to build an iOS app or to connect an app you already have to the cloud Take a look at Azure mobile
⏹️ ▶️ Marco services. You can get started today for free so go to Windows azure.com And
⏹️ ▶️ Marco thanks again to Windows Azure for sponsoring the show.
⏹️ ▶️ John I remember when it used to be like when these things like EC2 and other services first came out
⏹️ ▶️ John and it was like, oh, well, this is great. You know, I won’t have to set up my own server and I can try this thing. But people go, yeah, but
⏹️ ▶️ John if you ever want to be like a real player on the Internet, you have to do all this yourself.
⏹️ ▶️ John, Marco Now all the real players use
⏹️ ▶️ John EC2. Right. And now, like I was just reading recently, you know, some tweet or something saying that
⏹️ ▶️ John Netflix has something like 20,000 EC2 instances. Like, there’s no one like, you know, well,
⏹️ ▶️ John if you want to play with the big boys, Netflix is a big boy. They’re like a third of all internet traffic in there
⏹️ ▶️ John or something, whatever that stat was. They’re running an EC2. So like, back in the 90s, you
⏹️ ▶️ John get Mark Andreessen or whatever saying, like, in the future, we’re all going to buy computing services
⏹️ ▶️ John sort of like, you know, at retail and buy compute and storage in
⏹️ ▶️ John the cloud. And like, yeah, yeah, yeah, right? And then, like, without us noticing that, it’s basically happened. So things
⏹️ ▶️ John like Windows Azure and everything. I think a lot of people, or at least people who are my age,
⏹️ ▶️ John look at it and are like, that’s fine and everything. But I really want to,
⏹️ ▶️ John my iOS app is going to be a serious app, so I’m going to do this myself because those things are just for
⏹️ ▶️ John people who are just starting out. No, the biggest companies in the world are using these type
⏹️ ▶️ John of retail infrastructure services. If they’re good enough for
⏹️ ▶️ John Netflix, believe me, They’re good enough for your iOS to-do app.
⏹️ ▶️ Marco Yeah, I feel like a lot of this, we talk a lot about this stuff in development whenever technologies
⏹️ ▶️ Marco kind of move up the stack and get further away from the bare metal in some kind of way. You see it with
⏹️ ▶️ Marco languages going from assembly to C to higher level stuff and
⏹️ ▶️ Marco memory managed stuff. And there’s always these arguments about, oh, this new thing is only for
⏹️ ▶️ Marco x small segment or only for new people to programming or
⏹️ ▶️ Marco, John then you see those things
⏹️ ▶️ Marco always slowly become mainstream, because like, you know, it actually like, you know, you start realizing,
⏹️ ▶️ Marco well, these days it really isn’t worth it for almost anybody to write assembly language. And,
⏹️ ▶️ Marco you know, stuff like server-side stuff, you see like, it’s already almost not worth it for anybody to co-locate
⏹️ ▶️ Marco a server, to actually, you know, to actually buy a physical server and put it somewhere. Like that’s worth doing for almost
⏹️ ▶️ Marco nobody. And even dedicated servers now, I mean, I’ve been a huge dedicated server
⏹️ ▶️ Marco fan for years, and years and years. Just like, you know, just leasing a dedicated server somewhere that’s
⏹️ ▶️ Marco main—the hardware is maintained by somebody else. Even that, though, is really hard to justify today,
⏹️ ▶️ Marco because VPSs are so good and cheap. And now you have all these other platforms. You have Azure, you
⏹️ ▶️ Marco have things like Heroku for Rails, and you have EC2 at
⏹️ ▶️ Marco a lower level, and things that are built on EC2, like I think Heroku. But, you know, you
⏹️ ▶️ Marco have all these new, like, cloud app platforms where you don’t even have to manage server
⏹️ ▶️ Marco instances anymore. You don’t even have to manage virtual servers anymore. Like there’s even these things are getting abstracted away
⏹️ ▶️ Marco and and it’s it’s gone way beyond like tinkering hobbyist territory to the point where as John
⏹️ ▶️ Marco you said there’s a lot of serious stuff that’s built on this and and it’s you
⏹️ ▶️ Marco know it’s it’s no longer like just for newbies to programming but it happens to be really nice if you are a newbie
⏹️ ▶️ Marco because you don’t have to deal with all this crap.
⏹️ ▶️ Casey Well it seems to me like with every movement up the stack all the old-timers
⏹️ ▶️ Casey say, Oh, you whippersnappers and not having to worry about memory management. Oh, you’re a bunch of wimps.
⏹️ ▶️ Casey And then eventually, everyone realizes, you know what, worrying about memory kind of sucks.
⏹️ ▶️ Casey And I don’t want to do that either. Exactly. And so this is just another example of that.
⏹️ ▶️ Casey And Azure, in particular, Gruber posted a link link linked list
⏹️ ▶️ Casey post earlier tonight about how, if you think of and I’m heavily paraphrasing,
⏹️ ▶️ Casey but if you think that Microsoft needs to go forward and it needs to do so
⏹️ ▶️ Casey in arguably two categories. One is services and one is devices. Well
⏹️ ▶️ Casey you could easily argue that Azure is the services component
⏹️ ▶️ Casey and as a hopefully decent segue into our next topic, the Xbox is
⏹️ ▶️ Casey very likely going to be the device that brings Microsoft into the post PC era. So…
⏹️ ▶️ Casey, Marco Now wait, which
⏹️ ▶️ Marco are you talking about? The Xbox One, the Xbox 360, or the Xbox One?
⏹️ ▶️ Casey Yeah, exactly. I’m talking about the good one that’s $359 less
⏹️ ▶️ Casey than the previous one, but it’s still good. In fact, it’s supposed to be better.
⏹️ ▶️ Marco, Casey like the Xbox
⏹️ ▶️ Marco One, despite what John thinks about it. I think it was a great system.
⏹️ ▶️ Casey The first Xbox One.
⏹️ ▶️ Marco The Ferrari love Ferrari.
⏹️ ▶️ John Yeah, they could have called it the Xbox U. They could have been worse.
⏹️ ▶️ Marco before we get into that, We want to talk about the Wii U’s abysmal performance at all.
⏹️ ▶️ Casey What that it hasn’t sold any of
⏹️ ▶️ Marco Yeah, like they’re having major problems over there.
⏹️ ▶️ Marco, Casey I mean, John has
⏹️ ▶️ Casey one, but nobody else, right? I think,
⏹️ ▶️ Casey, John John has the only one. Yeah, I was
⏹️ ▶️ John thinking maybe like it’ll be a collector’s item.
⏹️ ▶️ Marco, Casey is a decent point.
⏹️ ▶️ Marco Like a virtual boy. I did notice in John’s living room that not only did he have the two
⏹️ ▶️ Marco Wiis, of course, still set up, because I believe you mentioned on Hypercritical second to last episode why you’re keeping the old
⏹️ ▶️ Marco Wii for some kind of controller issue, but then on top of your TV, you had both sensor bars perfectly
⏹️ ▶️ Marco stacked on top of each other, centered exactly.
⏹️ ▶️ Casey That is not surprising.
⏹️ ▶️ John Yeah, it would be nice if you could share them, but you know, stacking throws off the balance. I liked it better when it
⏹️ ▶️ John was just one. I’d deal with it.
⏹️ ▶️ John Yeah, now the Wii U, Nintendo just built the wrong thing, so
⏹️ ▶️ John it’s a bummer for them. But the one thing, two things Nintendo has going for
⏹️ ▶️ John it. One, it is owned by people who
⏹️ ▶️ John are not hasty and foolish and like they’re not at the whim of
⏹️ ▶️ John like greedy shareholders who if there’s one bad quarter it’s time to sell the whole company and start making you know
⏹️ ▶️ John fried dough instead or something right. And two, they have a lot of money in the bank. I don’t know is Nintendo privately held?
⏹️ ▶️ John Someone in the chat room can tell me. But it’s not like you know US companies where like you know
⏹️ ▶️ John Apple for instance oh my god your profits didn’t grow at the rate you said they were going to, and now you’re doomed
⏹️ ▶️ John and you need to change something and everyone panics and everything and they get slammed, right? That’s not the way it works.
⏹️ ▶️ John I mean, if that was the way, Nintendo would have sold to a larger company years ago if they thought it that way.
⏹️ ▶️ John But they don’t. They’re sort of, you know, very proud, in it for the long haul, not likely acquisition targets
⏹️ ▶️ John and have money in the bank from all the good years. So hopefully they weather this storm,
⏹️ ▶️ John do terribly this generation of consoles, and come out the other side with
⏹️ ▶️ Casey So what do you think about the Xbox One, the second Xbox One, the Xbox One 2? Is that what we’re
⏹️ ▶️ Casey, Marco calling it? Or 3?
⏹️ ▶️ Marco But you can’t say, it’s the third
⏹️ ▶️ Marco, John Xbox. Just say the Xbox.
⏹️ ▶️ Marco 3 sounds like 360. Yeah,
⏹️ ▶️ John say Xbox ONE. That’s easy.
⏹️ ▶️ Casey Oh yeah, that’s very easy. Really easy.
⏹️ ▶️ John Yeah. You can pull an Apple and call it the Xbox 2. showed like a, you know, it was a Bing search,
⏹️ ▶️ John I think, but like a Google image search or whatever for Xbox ONE. And all you see are pictures of Marco’s
⏹️ ▶️ John beloved bloated black and green thing. That system is awesome. Yeah, but anyway,
⏹️ ▶️ John that’s what comes up because it’s like, oh, I see you’re trying to type Xbox One. Well, that’s this thing, right?
⏹️ ▶️ John, Casey No, actually,
⏹️ ▶️ Casey don’t John, don’t get them started. Don’t do it, man. Don’t do
⏹️ ▶️ John it. So for your framing for your framing of this topic, the whole,
⏹️ ▶️ John like, you know, the future of Microsoft being devices and services. The only reason
⏹️ ▶️ John that that framing comes up, I think, is because Microsoft has done so badly
⏹️ ▶️ John with its desktop Windows and the mobile space, like Windows
⏹️ ▶️ John Phone or whatever. Because that’s where I go, oh, well, OK. So Microsoft has shown that they’ve
⏹️ ▶️ John people losing interest in the desktop in general. And so Microsoft’s strength there is no longer interesting.
⏹️ ▶️ John And in mobile, Microsoft has flailed for years and continues not to get traction, despite the fact that they have a reasonably
⏹️ ▶️ John good product. So it’s like everyone’s looking elsewhere. OK, well, so never mind about
⏹️ ▶️ John that stuff, Microsoft. What else have you got that might be good? Xbox, you’re selling a lot of those. Those are
⏹️ ▶️ John good. And Azure, that’s really good. So it’s like the younger products that are actually doing well
⏹️ ▶️ John are pushed to the forefront mostly by their complete failure to make a crack in the mobile
⏹️ ▶️ John market and the diminishment of the desktop market. So that’s, I guess,
⏹️ ▶️ John a positive spin on it is that those are the future of the company. but I see it as a negative. It’s like, man,
⏹️ ▶️ John shouldn’t they be right in there slugging it out with Android and iOS instead
⏹️ ▶️ John of like a distant third or whatever they are? That’s kind of sad and depressing.
⏹️ ▶️ Casey Yeah, but do we know, to go back just a moment, do we know that Azure
⏹️ ▶️ Casey is making money? Like Xbox, I think it’s probably safe to say they’re making some good money off that, but
⏹️ ▶️ Casey is Azure making money or is Xbox, Windows, and Office basically carrying all of Microsoft?
⏹️ ▶️ John Well, Azure looks like an investment kind of like EC2, where in the beginning, you’re investing in the future, thinking
⏹️ ▶️ John like this business of retailing services is going to be a good one. And by
⏹️ ▶️ John all accounts, Azure is a good product, and people like it, and it is providing something that
⏹️ ▶️ John market is not that crowded. How many people have the ability to provide what Azure provides? You
⏹️ ▶️ John can’t just do a startup in your garage and provide what they do, because especially in their case,
⏹️ ▶️ John it requires such tight integration of they control the OS and the meta platform that weaves it all together. And
⏹️ ▶️ John then you need data centers and you need all that stuff. Amazon bootstrapped its thing by having
⏹️ ▶️ John a very successful, very, very high revenue, if not high profit, online store.
⏹️ ▶️ John And that let them build EC2 because it helped them build the thing. Azure, I’m sure, has been funded by all
⏹️ ▶️ John the profits from Office and Windows and all the other places Microsoft makes their money. But it’s a good investment in the future. So I don’t think
⏹️ ▶️ John Microsoft is like, man, when is Azure going to make money? I think they are just like, just make the product better,
⏹️ ▶️ John get people to use it, because this is clearly a thing that people want, and very few other people are providing it.
⏹️ ▶️ John So if we can make a good product in this space, and there’s only two or three other people in that space, we feel good about it. So
⏹️ ▶️ John I think they’re OK with that.
⏹️ ▶️ Casey so is the Xbox One 2, 2, 1, Xbox the new Xbox? Is that any
⏹️ ▶️ Casey good? Does that excite you at all, or not so much?
⏹️ ▶️ John It’s kind of boring that all of the predictions about what the current generation of console
⏹️ ▶️ John would be came out to be true, but that’s the day. That’s the world of the internet. Everybody guessed what everything is, and we’re right.
⏹️ ▶️ John The spec leaks and all that stuff. So it’s exactly the box everyone thought it would be. It’s got the specs everyone thought it would have.
⏹️ ▶️ John The speculation of why does it have these specs, like way back when, I
⏹️ ▶️ John was like, why does it have eight gigs of RAM when the PS4 supposedly has four? This
⏹️ ▶️ John is when people thought the PS4 was going to have four before the actual announcement that it also has eight. And I said, oh, well,
⏹️ ▶️ John the reason that the new Xbox is going to have eight is because it’s not just going to be a game console. They’re going to
⏹️ ▶️ John also want to integrate all sorts of home entertainment and TV type functionality in it. And that totally
⏹️ ▶️ John made sense because Xbox, it’s not the most popular Netflix platform.
⏹️ ▶️ John I think PS3 is actually more popular than it. But Microsoft likes to sell you stuff through the Xbox.
⏹️ ▶️ John They’ll sell you, you can rent movies, and I don’t know if you can buy movies and music and all sorts of other things. I believe you
⏹️ ▶️ John can. Watch your Netflix like it is it’s it’s a gateway to do things that are not gaming
⏹️ ▶️ John So it made perfect sense that Microsoft’s next console would go further in that direction because why
⏹️ ▶️ John wouldn’t they like they have a popular service? Do people like that? They can sell you things through And
⏹️ ▶️ John that you know and it also happens to play games. They would clearly go forward with that So like I said as
⏹️ ▶️ John it turned out both the ps4 and the Xbox one have the same amount of ran But
⏹️ ▶️ John as predicted the Xbox one does all tons of TV stuff, you know,
⏹️ ▶️ John integrated TV experience with like Skype overlaying on the side of your television and being able to have
⏹️ ▶️ John an electronic program guide and all sorts of other things. And that’s what, like at this whatever this was, press
⏹️ ▶️ John conference thing, that’s what they were promoting. They said we’ll tell you more about the games at E3, which is, you know, the gaming focus conference.
⏹️ ▶️ John Today we’re gonna tell you all about all these great TV features. And they did. And I mean if you look at
⏹️ ▶️ John the thing, the thing looks like an HD Tivo, like it’s a big rectangular square looking thing. It does not
⏹️ ▶️ John look like a dedicated gaming system because it really isn’t.
⏹️ ▶️ John It’s a game console that also does a whole bunch of other things as well. I’m kind of happy that the
⏹️ ▶️ John snail phase of console gaming is over, I’m hoping is over, where
⏹️ ▶️ John everyone had to make their console shape like some weird thing, because boxes you can stack on top of each other,
⏹️ ▶️ John but if everything’s shaped like a snail, you’ve got to find some place to wedge the things in, like, because it’s sideways or vertically,
⏹️ ▶️ John but you can’t put two 360s, a 360 and a PlayStation 3 and, well,
⏹️ ▶️ John the Wii is kind of still box-shaped, all on top of each other. So hopefully the PS4 is also a rectangular shape,
⏹️ ▶️ John then we all have a fighting chance of sticking the things in our home entertainment centers.
⏹️ ▶️ John But for the most part, because it’s what everyone predicted, now it’s kind of like a wait-and-see type
⏹️ ▶️ John thing. Okay, well, can you sell millions and millions of these things because if you can and if it works as advertised
⏹️ ▶️ John now you have a successful game console and a way to sell stuff to people
⏹️ ▶️ John through your little gateway and that sort of leaves the ball on everyone else’s court saying okay well Google
⏹️ ▶️ John you tried to do Google TV and it sucked and no one bought it so tough luck on that Apple you keep there’s these rumors about
⏹️ ▶️ John television stuff and you have Apple TV but so far you know there’s no apps for that
⏹️ ▶️ John and the things you sell through it are you sell things from the iTunes Store but and you have Netflix,
⏹️ ▶️ John but it’s not quite the same thing as it could be where you’re taking over the entire television and providing a program guide and
⏹️ ▶️ John being a gateway for everything else. The Xbox One has HDMI input. If
⏹️ ▶️ John you had to express its philosophy in terms of one hardware feature, that’s what it would be. It doesn’t just send
⏹️ ▶️ John a signal to your television where you can see the output. It takes input. It wants to be the center of your
⏹️ ▶️ John television watching experience.
⏹️ ▶️ Casey Did you see the supercut that somebody did of the press conference
⏹️ ▶️ Casey where it was like a minute and a half long and it was just every time they said the word TV or television then it was every time
⏹️ ▶️ Casey they said sports I believe and then it was every time they said Call of Duty and it lasted like
⏹️ ▶️ Casey a minute and a half and it was hysterical.
⏹️ ▶️ John Yeah I was trying to watch the actual thing before I saw the supercut.
⏹️ ▶️ John, Casey Well now spoiler alert!
⏹️ ▶️ John Yeah but yeah like if you’re a gamer and you’re watch it,
⏹️ ▶️ John oh, tell me about the games, right? But Microsoft clearly thinks that it’s not,
⏹️ ▶️ John the gaming part of it is only perhaps equally important
⏹️ ▶️ John to the non-gaming parts of it. And from my perspective, as someone who hates all
⏹️ ▶️ John boxes connected to TV, the Xbox One comes maybe 50% of
⏹️ ▶️ John the way to what I’ve always wanted in the box that no
⏹️ ▶️ John one will ever make, because it doesn’t make any sense economically for them. but it would be great for me, is my omnivorous
⏹️ ▶️ John box, where I want it to take all the millions of places that entertainment
⏹️ ▶️ John can come to me, send them all into this one box, and provide me with a single unified interface
⏹️ ▶️ John to all those things. So I don’t have to change 50 different inputs and have seven different remotes and
⏹️ ▶️ John deal with all these different services. I just want something to paper over that mess for me.
⏹️ ▶️ Marco Actually, modern home theater receivers almost do that.
⏹️ ▶️ John They don’t paper over it. They just provide you a way to automatically switch inputs and do all this other stuff. I wanted to provide
⏹️ ▶️ John a single, unified, really nice interface to hide the fact that these are totally disparate
⏹️ ▶️ John services owned by competing companies that hate each other and that have varying degrees of competence in creating their hardware
⏹️ ▶️ John and their software. Just hide all that from me. Because you want to solve the meta problem of, wouldn’t it be
⏹️ ▶️ John great if you didn’t have a billion different sources for this crap and they didn’t all suck? It’s like, OK, well, we can’t solve that. How
⏹️ ▶️ John about this? How about this? Everything all still sucks. And there’s a bazillion wires behind your TV. But they all go into this one awesome
⏹️ ▶️ John box and it makes it look beautiful. Google TV kind of tried to do that but sucked. And, uh, Xbox One
⏹️ ▶️ John does half of that. It, like, it tries to say, Okay, well, if you want to watch TV, don’t go
⏹️ ▶️ John through your TV. In fact, your cable box input is going to go into the Xbox One. And just talk to your
⏹️ ▶️ John Xbox One or use the remote on your phone or whatever, you know, just say what you want to watch and we’ll switch to it. Uh,
⏹️ ▶️ John that’s good. You’re trying to unify the world of crap I have. I have a cable thing that I have to pay for. I pay for Fios TV and it
⏹️ ▶️ John goes into the back of my Xbox One and it lets me control watching TV. but no DVR functionality
⏹️ ▶️ John in the Xbox One. So if you want to watch something that’s not on right now, what if I have
⏹️ ▶️ John a DVR? Well, could you put the DVR back into the thing? Well, now you don’t really have control
⏹️ ▶️ John of the DVR through the Xbox One, so now you have to at least have two inputs for live television and then
⏹️ ▶️ John your recorded stuff. Netflix, they’re assuming is an application, but what if you use a different
⏹️ ▶️ John streaming service? What about the Amazon streaming service? What about Hulu Plus? They’re
⏹️ ▶️ John not, it’s not, Xbox One is not omnivorous. It’s a picky eater. It will take a couple of
⏹️ ▶️ John select inputs and unify them in a particular way, but I can’t imagine anyone who’s in the market for an Xbox One,
⏹️ ▶️ John especially who’s going to buy it on launch, who is not still going to be switching inputs to get the things done that they want to
⏹️ ▶️ John get done. So it’s a step in the right direction, but the lack of time shifting in particular
⏹️ ▶️ John makes it a non-starter for me. Like, it’s not going to unify my life.
⏹️ ▶️ Casey Steve McLaughlin The thing that struck me about what you just said is that when you were describing this omnivorous box
⏹️ ▶️ Casey that consumes all these different services, for a flash I felt like you were describing the Apple
⏹️ ▶️ Casey TV. I know I’m oversimplifying, and I know Apple TV doesn’t consume traditional terrestrial
⏹️ ▶️ Casey TV and it doesn’t play games or arbitrary apps that you may
⏹️ ▶️ Casey want it to do, but to a large degree I almost feel like the Apple TV is trying
⏹️ ▶️ Casey to do exactly that if you look at the fact that it has Netflix, it has Hulu Plus, it has MLB TV, if I’m not mistaken,
⏹️ ▶️ Casey has NHL TV. It has all these different things, and it’s one interface
⏹️ ▶️ Casey that, you know, that will expose all of them.
⏹️ ▶️ Casey, John But that’s like
⏹️ ▶️ John a quarter of the stuff, though, because
⏹️ ▶️ John, Casey like the vast majority
⏹️ ▶️ John of my television that I watch comes through my stupid bundled cable,
⏹️ ▶️ John even though it’s Fios, subscription. I pay for like all these premium channels, I pay for HBO, pay for
⏹️ ▶️ John Showtime, and all that stuff. And that doesn’t, you know, the Apple TV doesn’t even have an input a video input.
⏹️ ▶️ John It is purely an internet play. And that’s what I was talking about. Like, well, the real solution is not to have all the
⏹️ ▶️ John programming spread all over the place and have these stupid cable TV cartel bundling deals that just
⏹️ ▶️ John force you to have all these channels like yes, that is the real solution. The resolution is to get rid of all these huge
⏹️ ▶️ John entrenched interests with, you know, infrastructure and contracts and but like, it’s
⏹️ ▶️ John not happening. It’s hard to get rid of them. So in the interim, while we’re waiting for the world to realign,
⏹️ ▶️ John it would be nice if someone would make something that could would just
⏹️ ▶️ John tackle the incredibly hard problem of taking in all these things and unifying them and
⏹️ ▶️ John providing me a better experience, you know?
⏹️ ▶️ John maybe that’s just never gonna happen. Maybe maybe the Apple TV is the only possible play. It’s like if it’s not on the internet
⏹️ ▶️ John you deal with it yourself but if it is on the internet we’ll try to bring it through. And the Xbox One is like, okay well we’ll
⏹️ ▶️ John we’ll have our own internet services we’re gonna sell you and we’ll resell you know Netflix and everything through you but I don’t think have a deal with Hulu.
⏹️ ▶️ John I don’t think they have a deal with Amazon. And they’ll take in your cable boxes output,
⏹️ ▶️ John but I don’t think they have any control over your DVR. And I’m not sure how they integrate if you have a DVR with your cable system.
⏹️ ▶️ John And it’s, it’s just one more complication. You know, it’s not,
⏹️ ▶️ John it’s not a simplification of anyone’s life, I don’t think, especially with all
⏹️ ▶️ John of the gestures and voice control and stuff like that.
⏹️ ▶️ Casey So what you’re saying is you want a company to take something
⏹️ ▶️ Casey that’s extraordinarily complex, make it really, really simple,
⏹️ ▶️ Casey and make it pretty. Do we know any companies that may be interested?
⏹️ ▶️ John Well, back in 2005 or 2006, I’m like, boy, you know, Apple, you know,
⏹️ ▶️ John TiVo is really falling down here. I would love it if you would make something like this. But then Steve Jobs
⏹️ ▶️ John went to the All Things D conference, and I think it was 2008 or something. And someone in the audience asked him a similar question
⏹️ ▶️ John and he said flat out we’re not going to make that thing because the business model makes no sense.
⏹️ ▶️ John And I agree with him. His reasoning was perfectly sound. That’s the reason this thing doesn’t exist. One, because it’s super
⏹️ ▶️ John hard. And two, because you can’t, in
⏹️ ▶️ John the US anyway, it can’t be done with all these cable companies are not going to give you their programming
⏹️ ▶️ John and the cable companies buy the programming and these big bundles that that you can’t afford to match the price of if you’re
⏹️ ▶️ John going to sell this thing to people. Like, it just can’t be done in terms of the money.
⏹️ ▶️ John So it’s like, well, why would we ever make that? We would lose money on it, and it would be really hard to make work right. And
⏹️ ▶️ John we would be basically trying to usurp the value from companies that hate us and that have
⏹️ ▶️ John the ability to screw us by changing how they do things. You know what I mean? So that’s why that box doesn’t exist,
⏹️ ▶️ John right? That’s why TV is a big mess. And that’s why we’re all hoping for something better. And so this Xbox thing is
⏹️ ▶️ John a move in that direction, but I don’t buy the
⏹️ ▶️ John simplification they were trying to sell. The reason there’s a one in Xbox One, I’m
⏹️ ▶️ John assuming, is because in some meeting, when they’re talking about the name, and they’re like, well, what about, I know
⏹️ ▶️ John this is crazy, guys, but what about Xbox One? And everyone said, what do you mean, the first Xbox? People call that, no, just listen,
⏹️ ▶️ John listen, because this is one box that will unify your entire television experience, right? You’ll be
⏹️ ▶️ John able to do video conferencing, browse the internet, look at Netflix, play games, watch live TV. one box
⏹️ ▶️ John that does everything like that’s where I assume the one is coming from. I haven’t finished watching the press
⏹️ ▶️ John conference thing, but I assume they’re going to lean on that and it falls short of fulfilling that dream. It
⏹️ ▶️ John is not one box to do everything. You will still be changing inputs just because the world of
⏹️ ▶️ John content that you watch on your television is so Byzantine that it’s almost impossible for one box to do
⏹️ ▶️ John everything for you. Doug
⏹️ ▶️ Casey Biddley, Ph.D.: Yeah, I guess the point I’m driving at is even though it doesn’t make
⏹️ ▶️ Casey business sense to potentially get an antagonistic relationship with content owners.
⏹️ ▶️ Casey It doesn’t make business sense to try to conquer all these disparate systems. On the other hand,
⏹️ ▶️ Casey you take a company like Apple that is used to selling what most would consider expensive products,
⏹️ ▶️ Casey and if Apple said to you, John, for $1,000 or for $1,500,
⏹️ ▶️ Casey we will make all those devices, the TiVo and the Netflix and all that,
⏹️ ▶️ Casey they will all be consumed by this one box and by the way you can run apps on it so no you may not
⏹️ ▶️ Casey be able to play Halo on it but you’ll be able to play you know real racing on it would
⏹️ ▶️ Casey would you pony up $1,000 for that $1,500 for that I know I’m over simple
⏹️ ▶️ Casey, Marco I think that’s the
⏹️ ▶️ Marco wrong question I mean because I don’t think Apple could actually do like if you think about what Apple’s really good
⏹️ ▶️ Marco at Apple’s really good at editing what’s possible deleting options
⏹️ ▶️ Marco saying no to things to make something that’s overall great
⏹️ ▶️ Marco but limited in some way and those limits make it great or enable
⏹️ ▶️ Marco it to be great in other ways with the TV business the TV industry whatever you know
⏹️ ▶️ Marco whatever this is if you say no to anything you’re out you
⏹️ ▶️ Marco know you’re irrelevant and and so imagine you know it’d be like if a cable company
⏹️ ▶️ Marco launched without supporting ESPN like there’s just like there’s nothing that there’s no way it’s gonna
⏹️ ▶️ Marco succeed right and so like people aren’t used to not having everything
⏹️ ▶️ Marco with TV most people have cable TV and they have a billion channels
⏹️ ▶️ Marco and if they want to connect anything else to it they just plug it in and that’s fine if Apple were to come together
⏹️ ▶️ Marco and say here’s a box that does 80% of that
⏹️ ▶️ Marco no one’s gonna buy it or people already will buy it but only people who
⏹️ ▶️ Marco want just what Apple provides. That’s what they already sell. It’s the Apple TV.
⏹️ ▶️ John That’s the play if you’re Apple, is you want to shift people away. You want to shift the value
⏹️ ▶️ John away from these cable packages. Because cable companies have not so much monopolies, but duopolies.
⏹️ ▶️ John But there’s maybe one or two choices for cable companies. And they have all this money and infrastructure, and they’re hard to displace. But
⏹️ ▶️ John their worst nightmare is to become dumb pipes for internet connections. And that’s what Apple wants to do. And all these other companies are like, We’ll
⏹️ ▶️ John just shift the value away from those premium channels and towards content that’s available
⏹️ ▶️ John over the internet. Because the internet is free for everybody or whatever. It’s not tied
⏹️ ▶️ John up with these. So if we can just get House of Cards made on Netflix first, and if we could
⏹️ ▶️ John have Netflix on our box, then we’ve got House of Cards, and that’s popular content. Right? And HBO, well, they
⏹️ ▶️ John can get HBO Go. And finally, we can airplay it to our television. But still, you need a cable subscription to get
⏹️ ▶️ John it. They’re trying to pull the value out of the hands of the cable companies
⏹️ ▶️ John into the realm that they control, rather than trying to say, okay, well, we accept the fact that right now cable companies
⏹️ ▶️ John have this valuable content, and you have to deal with watching one thing in one place, one thing in another. So let’s try to make
⏹️ ▶️ John a box in front of it. And Mark was right. That’s not the Apple philosophy. Apple philosophy is not this world is a big mess,
⏹️ ▶️ John and we will try to hide that from you. It’s we’re going to envision a new world that isn’t a mess, and
⏹️ ▶️ John we’re just going to go there, and yeah, we’ll be out there ahead of you, and not a lot of people will follow us, but hopefully
⏹️ ▶️ John we’ll be able to slowly draw the value out of that ecosystem. And then one day, cable
⏹️ ▶️ John companies will wake up and realize, hey, wait a second. If we don’t have House of Cards
⏹️ ▶️ John or whatever the popular Netflix thing is, we’re screwed. And people don’t want to buy our cable package because they say, hey,
⏹️ ▶️ John what about that popular show that I like? Oh, that’s only available over some internet TV thing? It’s a
⏹️ ▶️ John battle between the same thing with Apple and the phone carriers. Everyone wants the carriers
⏹️ ▶️ John who suck at everything to be dumb pipes, except for the carriers themselves.
⏹️ ▶️ John So cell carriers, cable companies, none of them want to be like utilities
⏹️ ▶️ John where you just, oh, we just bring you the internet over a pipe. And every other company in the entire world says, please, just be a company
⏹️ ▶️ John that brings me fast internet over a dumb pipe. And let everyone else compete with content with apps and channels and
⏹️ ▶️ John stuff like that. So in this transition stage, we just all suffer.
⏹️ ▶️ John And I don’t know who’s going to win that battle, but I really hope it’s not the carriers and cable companies.
⏹️ ▶️ Marco Going back to the Xbox One for a second, one conversation I’d love to have is
⏹️ ▶️ Marco just the timing of this and kind of the generational aspects of this. Like if you look,
⏹️ ▶️ Marco the Xbox 360 came out in 2005. And if
⏹️ ▶️ Marco you just think about what kind of world this was in 2005, you know, think about, like
⏹️ ▶️ Marco I said on Twitter, that was before Tumblr was started. So it seems like,
⏹️ ▶️ Marco you know, it seems like Tumblr’s been around for a while, But yeah, the Xbox 360 has been around longer.
⏹️ ▶️ Marco And that was before the iPhone came out. That was before the entire smartphone revolution. Like smartphones
⏹️ ▶️ Marco existed, but only rich business people had them because they were really expensive and they sucked. So
⏹️ ▶️ Marco like this, it was such a, that was so long ago that this system was envisioned. This was before
⏹️ ▶️ Marco Netflix streaming existed. It’s before almost any streaming service
⏹️ ▶️ Marco for video existed, I think. Certainly before many people used them. And
⏹️ ▶️ Marco it was before all of these massive changes in how we entertain
⏹️ ▶️ Marco ourselves, how we get our video content, how and where we watch videos and play games.
⏹️ ▶️ Marco And that’s what we’ve been using all this time. And what will we be using? Like, that’s the game
⏹️ ▶️ Marco console type. That’s how game consoles have been designed for a long time.
⏹️ ▶️ Marco And Microsoft has been pretty good about jumping on stuff
⏹️ ▶️ Marco with the Xbox that they need to jump on quickly and well. Like Xbox Live was the
⏹️ ▶️ Marco first good online play service for video game consoles and might still be the
⏹️ ▶️ Marco only good one. I don’t know if the PlayStation one has gotten better, but certainly Xbox
⏹️ ▶️ Marco Live is really good and people love it and people use it all the time. And so, and
⏹️ ▶️ Marco then, you know, once you get Netflix on devices streaming, the Xbox
⏹️ ▶️ Marco was on that and they had that very early on and it is very, very
⏹️ ▶️ Marco common. And if you think about how people are entertaining themselves now, how many people
⏹️ ▶️ Marco are getting these things, using the 360 as a Netflix streaming
⏹️ ▶️ Marco device is an extremely inefficient use of the hardware. And
⏹️ ▶️ Marco you’re sitting there, you’re hearing the big fans, and it’s drawing God knows how many watts and it’s slowly burning itself
⏹️ ▶️ Marco out so you get to the Red Ring of Death and Microsoft has to replace it or you sue them. all these this this whole mess of
⏹️ ▶️ Marco using something of that power level to do something relatively simple like what Netflix is
⏹️ ▶️ Marco but people are sitting there for hours a night doing that and so obviously like the previous
⏹️ ▶️ Marco type of console was designed in a way that doesn’t really mesh with
⏹️ ▶️ Marco how people do things in this day and age and this has been a very long console generation
⏹️ ▶️ Marco so So it’s interesting to see, like, you know, Nintendo with the Wii U attempted to modernize it a
⏹️ ▶️ Marco little bit and just didn’t really go far enough or just didn’t do it well enough or in a
⏹️ ▶️ Marco compelling enough package. I think Sony has done pretty well
⏹️ ▶️ Marco with the PS3 and it looks like the PS4 is going to be really interesting, but we don’t know how they’re going to execute yet.
⏹️ ▶️ Marco I would say Microsoft looks like they’re in the best position to take the next
⏹️ ▶️ Marco eight years and actually have this console be strong, be relevant, be
⏹️ ▶️ Marco well liked, be well bought. I would say looking at these three, we don’t even know that
⏹️ ▶️ Marco much about the PS4 yet, but just looking at, like for instance, there was this great hardware
⏹️ ▶️ Marco analysis today on Antec, which we’ll link to in the show notes as well,
⏹️ ▶️ Marco about the Xbox One announcement and what it means. And they were comparing it to the PS4 announced
⏹️ ▶️ Marco hardware, and it looks Just like, in general, the Xbox One will
⏹️ ▶️ Marco have way less GPU power, but will then also almost
⏹️ ▶️ Marco definitely run way cooler and quieter as a result.
⏹️ ▶️ John Well, I mean, the thing about the power usage is that the Xbox One is meant
⏹️ ▶️ John to be turned on all the time. Exactly. Right? And so they wanted
⏹️ ▶️ John to have lower, sort of, idle power, whereas the PS4 is still, for the most part a pure gaming
⏹️ ▶️ John console and the PS4 has a super low power mode where it looks like it’s basically off, kind of like powering
⏹️ ▶️ John up on a Mac, but it still does stuff like download updates in the background and stuff. So the PS4
⏹️ ▶️ John usage pattern is you go to use it, you turn it on, you do stuff, you turn it quote unquote off, and it’s not really
⏹️ ▶️ John off but it’s like basically, you know, completely dead silent, no fans, anything like that. And that’s its sort
⏹️ ▶️ John of mode to be like, oh, well, you know, the overall power usage I think for your PS4 will be lower because you have it in that
⏹️ ▶️ John fake off mode most of the Whereas the Xbox one is supposed to just be on all the time
⏹️ ▶️ John like on on you know Anytime the television is on that thing is on because aren’t you supposed to be watching your television through it?
⏹️ ▶️ John So it can’t it can’t be like the ps4 Where it’s in some super duper low power mode It’s always
⏹️ ▶️ John got to be on and at least some state and both of these things as the anon tech article said You know are made with modern system
⏹️ ▶️ John on a chips that have power gating in the GPU as well But they just turn off execution units and cores that are not running
⏹️ ▶️ John So they should all have much better kind of not idle power but you know power when they’re not being asked
⏹️ ▶️ Marco the Xbox one had that had has this kind of like Mid-level thing where it has this stripped-down
⏹️ ▶️ Marco OS for for lower power stuff like watching streaming video And and I think
⏹️ ▶️ Marco that’s that’s kind of an acknowledgment that the way people use these things Really often
⏹️ ▶️ Marco these days is not for playing games for hours and turning it off, and that’s it It’s like
⏹️ ▶️ Marco maybe playing a game for a little bit, but then every night watching an hour of Netflix like
⏹️ ▶️ Marco, John that That’s such a
⏹️ ▶️ Marco common use case now that I feel like it’s really, really smart for Microsoft to be optimizing for
⏹️ ▶️ Marco that. And Sony is, like Sony’s background mode seems like it’s more for downloading game content.
⏹️ ▶️ John Yeah, but like that’s the thing is basically off at that point. It’s like auxiliary chips are doing all the work,
⏹️ ▶️ John whereas the Xbox One, the whole system on a chip is powered up and the thing is on. And it’s running, it’s running the two
⏹️ ▶️ John OS’s plus the hypervisor and everything all the time. And if the game OS, you’re not playing a game, the game OS is not doing anything
⏹️ ▶️ John interesting there. But it’s all, you know, on. is powered up and running, you’re just relying on the fact
⏹️ ▶️ John that you can shut down like six of the eight cores that are currently being used. And if you’re not doing anything with the GPU,
⏹️ ▶️ John most of that is in idle state as well. So you’re getting your power down. But it’s not the same as the PS4,
⏹️ ▶️ John which has auxiliary, it might even be like an ARM chip or something, some other little wimpy chip on the motherboard
⏹️ ▶️ John that runs and does the little wimpy background stuff when the thing is basically off.
⏹️ ▶️ Marco Yeah, I don’t know. I feel like, you know, time will tell, but I feel
⏹️ ▶️ Marco like history will look back on the Xbox One’s design as being smarter than the PS4’s design
⏹️ ▶️ Marco people actually use these things.
⏹️ ▶️ John It’s like someone said on Twitter today, or maybe it was in the Annottochker article, it basically depends on whether you think
⏹️ ▶️ John the console for high performance, the market for high performance game consoles has peaked or not. Because if it peaked,
⏹️ ▶️ John then it’s a smart move not to make one that is like super duper powerful, but instead start going
⏹️ ▶️ John off in the new direction, which is to this TV box. But if it hasn’t peaked, the PS4 is a better game console, if all you
⏹️ ▶️ John hear about are games, right? And that’s the bet Microsoft is making, that games are
⏹️ ▶️ John not enough anymore, that having a super duper awesome game console is not a sufficiently compelling product,
⏹️ ▶️ John and that you need to have something else. And by having something else, people will more than forgive the
⏹️ ▶️ John slightly lower game performance because of all this other stuff. I think that
⏹️ ▶️ John definitely remains to be seen, because I think both of these devices, because the Xbox One is not as
⏹️ ▶️ John simplifying and as unifying as Microsoft thinks it is, I think it will still appeal
⏹️ ▶️ John mostly to not just hardcore gamers, but kind of like geeky type people. Like I wouldn’t,
⏹️ ▶️ John I would give my parents an Apple TV, but I would not give them an Xbox One. So I think both of these things are going
⏹️ ▶️ John to end up targeting game console type nerds and early adopters.
⏹️ ▶️ John And in that race between them, I think it seems
⏹️ ▶️ John like it’s probably going to shake out exactly like this console generation did. That Microsoft’s going to win and they’re going to sell more,
⏹️ ▶️ John but that Sony will do pretty well. And I don’t think the television integrated stuff will save
⏹️ ▶️ John Microsoft and give them sort of a runaway success and just bury the PS4. We all just agree that
⏹️ ▶️ John Nintendo is screwed.
⏹️ ▶️ Marco Yeah. Yeah, I think you’re right about that too. Yeah, I don’t see Sony having as rough of a time as Nintendo
⏹️ ▶️ Marco at all. I mean, because obviously, they have a big following. And I’ll also say it’s Nintendo. But
⏹️ ▶️ Marco I think Sony is making almost the right kind of system. And I think it’ll be good enough
⏹️ ▶️ Marco to be successful. I think Nintendo, unfortunately, is still making the GameCube
⏹️ ▶️ Marco, John over and over and over again.
⏹️ ▶️ John There’s also execution. Because how many people are nervous about getting the first Xbox One? Like all the poor Red Ring people. Like
⏹️ ▶️ John, Casey people? It’s
⏹️ ▶️ John true. It’s totally unfair. Because of all the companies in the world, the one that is probably the most careful about heat
⏹️ ▶️ John in its game console is probably Microsoft for this generation.
⏹️ ▶️ John, Marco Yeah, because they’ve
⏹️ ▶️ Marco lost so much money on the 360 warranty repairs and stuff.
⏹️ ▶️ John Yeah, so you think. But the past generation is like, well, you know, Sony made this insane machine
⏹️ ▶️ John with this crazy CPU. And they should have been the one overheating all the time. But like,
⏹️ ▶️ John their hardware has been really reliable. You can say, well, I guess Sony really knows how to make consumer electronics.
⏹️ ▶️ John So right or wrong, coming into this generation, I feel like I have so much more faith
⏹️ ▶️ John in the reliability of whatever the heck the PS4 hardware is going to look like. Maybe we’ll all be proven wrong. And maybe
⏹️ ▶️ John the PS4 will be the thing overheating and screwing up. Like, going into it, I think
⏹️ ▶️ John Microsoft has a lot to prove, especially considering how humongous and ugly and mutant this thing
⏹️ ▶️ John looks. It just looks like it should overheat. Almost certainly will not, right? But it’s just like, oh,
⏹️ ▶️ John you know, Xbox is huge, lol. Lol.
⏹️ ▶️ Marco All right, with that, let’s wrap it up. Thanks to our two sponsors, Squarespace.
⏹️ ▶️ Marco Use coupon code ATP5 to get 10% off at Squarespace. And Windows Azure Mobile Services.
⏹️ ▶️ Marco go to windows azure.com slash iOS to learn more about that. Thanks, guys.
⏹️ ▶️ Casey Now the show is over. They didn’t even mean to begin because
⏹️ ▶️ Casey it was accidental. Accidental was accidental. John didn’t
⏹️ ▶️ Casey do any research. Marco and Casey wouldn’t let him because
⏹️ ▶️ Casey it was accidental. It was accidental. And
⏹️ ▶️ Casey you can find the show.
⏹️ ▶️ John And if you’re into Twitter, you can
⏹️ ▶️ Marco follow them at C-A-S-E-Y-L-I-S-S.
⏹️ ▶️ Marco So that’s Casey Liss,
⏹️ ▶️ Casey M-A-R-C-O-A-R-M, D-N-T, Marco
⏹️ ▶️ Marco Armin, S-I-R-A-C-U-S-A, Syracuse.
⏹️ ▶️ Casey accidental, accidental, they did it in me too.
⏹️ ▶️ John Accidental, accidental, tech podcasts, it’s so long.
⏹️ ▶️ Casey All right, titles. I do like
⏹️ ▶️ Casey David Smith’s leading title, Champagne to Pour onto Rap Stars.
⏹️ ▶️ Marco like it. It’s a little long, though.
⏹️ ▶️ John understand why you’re pouring it on, like the rap stars don’t
⏹️ ▶️ John, Casey pour it on themselves. It’s a joke, John. I know, but it’s like…
⏹️ ▶️ John Turn on the emotion, John.
⏹️ ▶️ John would you pour it on, like, the rap stars?
⏹️ ▶️ Casey, John hypercritical, man. Who would you pour
⏹️ ▶️ Casey it on? Oh, lordy, I
⏹️ ▶️ Casey, John gotta hang up. It’s really
⏹️ ▶️ John expensive, I wouldn’t buy it.
⏹️ ▶️ Casey, John so much. It was like a thousand dollars a
⏹️ ▶️ John bottle. Like, nothing is worth a thousand dollars a bottle, except printer ink, I guess.
⏹️ ▶️ John, Casey Precious printer ink.
⏹️ ▶️ Casey John, I love you so much. I cannot wait for June.