Andrewerose

Bitcoin Is Dropping Again. This Time, Look to Japan

Solar Tariff Shapes Up As Speed Bump, Not Wall, For Development

Dell Technologies Considering IPO, Other Options

Qualcomm Signs $2 Billion Sales MOUs with Lenovo, Xiaomi, Vivo and OPPO

American, Southwest Post 4Q Profits; Airline Execs Seek To Calm Investors’ Fear Of A New Fare War

Walmart To Launch Online Grocery Delivery In Japan

A Kroger-Alibaba Deal Could Thwart Amazon’s Whole Foods Ambitions

Starbucks Falls Out of Step

‘Riots’ Break Out in France Over Supermarket Chain’s Nutella Promotion

Ackman’s Pershing Square Takes Stake in Nike

FDA Panel Rejects Philip Morris’s Claim That Tobacco Stick Is Safer Than Cigarettes

Howard Lindzon: Robinhood Goes Crypto

Joshua Brown: Bang! & Living That Coin Lyfe

Mark Hines: What Can Traders Learn From Poker AI?

Be sure to follow me on Twitter.

How to Launder $500 Million in Digital Currency

Tech Giants Brace for Europe’s New Data Privacy Rules

London’s Bankers Haven’t Been This Gloomy Since 2008

India Does Not Rule Out Fiscal Consolidation Pause This Year

U.S. Considers Building 5G Network Amid China Concerns

Oil Boom Gives the U.S. a New Edge in Energy and Diplomacy

Tanker Carrying LNG from Russian Arctic Arrives in Boston

Born From Frozen Camel Blood, Ablynx Is $4.8 Billion Prize

Shares in Prince Alwaleed’s Firm Soar, But Banks Remain Cautious

‘Jackpotting’ Targets U.S. ATMs to Make Them Spit Out Cash

VW Customers Don’t Give a Monkey’s About Diesel Cheating

Jeff Carter: Risks For Audit Are Too High

Roger Nusbaum: What The Hell Is Going On With Asset Prices? & Can 80/20 Replace 60/40?

Cullen Roche: 3 Things I Think I Think – Wrong!

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A note from your editor (me): I’m on vacation so no new podcast episode this week. We’ll be back on our regular schedule next week. I’ll maybe even provide some financial tips from my trip to Disney World. In lieu of the podcast, please enjoy this piece I wrote about some money realizations I’ve had in recent years. ******* A few things I’ve come to realize about money as I recently hit the mid-p...

By far the most well-known “game” in game theory is the Prisoners’ Dilemma. Albert Tucker, who formalized the game and gave it its name in 1950, described it as such:

Two members of a criminal gang are arrested and imprisoned. Each prisoner is in solitary confinement with no means of communicating with the other. The prosecutors lack sufficient evidence to convict the pair on the principal charge. They hope to get both sentenced to a year in prison on a lesser charge. Simultaneously, the prosecutors offer each prisoner a bargain. Each prisoner is given the opportunity either to: betray the other by testifying that the other committed the crime, or to cooperate with the other by remaining silent. The offer is:

• If A and B each betray the other, each of them serves 2 years in prison
• If A betrays B but B remains silent, A will be set free and B will serve 3 years in prison (and vice versa)
• If A and B both remain silent, both of them will only serve 1 year in prison (on the lesser charge)

The dilemma is normally presented in a payoff matrix like the following:

What makes the Prisoners’ Dilemma so fascinating is that the result of both prisoners behaving rationally — that is betraying the other, which always leads to a better outcome for the individual — is a worse outcome overall: two years in prison instead of only one (had both prisoners behaved irrationally and stayed silent). To put it in more technical terms, mutual betrayal is the only Nash equilibrium: once both prisoners realize that betrayal is the optimal individual strategy, there is no gain to unilaterally changing it.

TIT FOR TAT

What, though, if you played the game multiple times in a row, with full memory of what had occurred previously (this is known as an iterated game)? To test what would happen, Robert Axelrod set up a tournament and invited fourteen game theorists to submit computer programs with the algorithm of their choice; Axelrod described the winner in The Evolution of Cooperation:

TIT FOR TAT, submitted by Professor Anatol Rapoport of the University of Toronto, won the tournament. This was the simplest of all submitted programs and it turned out to be the best! TIT FOR TAT, of course, starts with a cooperative choice, and thereafter does what the other player did on the previous move…

Analysis of the results showed that neither the discipline of the author, the brevity of the program—nor its length—accounts for a rule’s relative success…Surprisingly, there is a single property which distinguishes the relatively high-scoring entries from the relatively low-scoring entries. This is the property of being nice, which is to say never being the first to defect.

This is the exact opposite outcome of a single-shot Prisoners’ Dilemma, where the rational strategy is to be mean; when you’re playing for the long run it is better to be nice — you’ll make up any short-term losses with long-term gains.

Silicon Valley’s Iterated Game

What happens in Silicon Valley is far more complex than what can be described in a simple game of Prisoners’ Dilemma: instead of two actors, there are millions, and “games” are witnessed by even more. That, though, accentuates the degree to which Silicon Valley as a whole is an iterated game writ large: sure, short-term outcomes matter, but long-term outcomes matter most of all.

That, for example, is why few folks are willing to criticize their colleagues or former companies:¹ today’s former co-worker or former manager is tomorrow’s angel investor or job reference, and memories are long and reputations longer.² That holds particularly true for venture capitalists: as Marc Andreessen told Barry Ritholtz on a recent podcast, “We make our money on the [startups] that work and we make our reputation on the ones that don’t.”

Note the use of plurals: a venture capitalist will invest in tens if not hundreds of companies over their career, while most founders will only ever start one company; that means that for the venture capitalist investing is an iterated game. Sure, there may be short-term gain in screwing over a founder or bailing on a floundering company, but it simply is not worth it in the long-run: word will spread, and a venture capitalists’ deal flow is only as good as their reputation.

The most famous example of this is cemented in Valley lore. From The Facebook Effect:

Facebook’s success was beginning to make waves. And in Silicon Valley, success attracts money. More and more investors were calling. Zuckerberg was uninterested. One of the supplicants was Sequoia Capital. Among the bluest of blue chip VCs, Sequoia had funded a string of giants—Apple, Cisco, Google, Oracle, PayPal, Yahoo, and YouTube, among many others. The firm is known in the Valley for a certain humorlessness and a willingness to play hardball. Sequoia eminence grise and consummate power player Michael Moritz had been on Plaxo’s board and was well acquainted with Sean Parker. It was not a mutual admiration society. Parker saw Moritz as having contributed to his downfall. [Parker was fired from the company he founded by the board, including Moritz] “There was no way we were ever going to take money from Sequoia, given what they’d done to me,” says Parker.

Plaxo raised a total of $19.3 million in the rounds in which Sequoia participated; was whatever percentage of that $19.3 million Sequoia put in worth missing out on the chance to invest in one of the greatest grand slams in the history of venture investing?

The entire point of venture investing is to hit grand slams, and that calls for more swings of the bat. After all, the most a venture capitalist might lose on a deal — beyond time and opportunity cost, of course — is however much they invested; the downside is capped. Potential returns, though, can be many multiples of that investment. That is why, particularly as capital has flooded the Valley over the last decade, preserving the chance to make grand slam investments has been paramount. No venture capitalist wants to repeat Sequoia’s mistake: better to be “nice”, or, as they say in the Valley, “founder friendly.”

Benchmark Sues Kalanick

This is why what happened last week was so shocking: the venture capital firm Benchmark Capital filed suit against former Uber CEO Travis Kalanick for fraud, break of contract, and breach of fiduciary duty. From Axios:

The suit revolves around the June 2016 decision to expand the size of Uber’s board of voting directors from eight to 11, with Kalanick having the sole right to designate those seats. Kalanick would later name himself to one of those seats following his resignation, since his prior board seat was reserved for the company’s CEO. The other two seats remain unfilled. Benchmark argues that it never would have granted Kalanick those three extra seats had it known about his “gross mismanagement and other misconduct at Uber” — which Benchmark claims included “pervasive gender discrimination and sexual harassment,” and the existence of confidential findings (a.k.a. The Stroz Report) that recently-acquired self-driving startup Otto had “allegedly harbored trade secrets stolen from a competitor.” Benchmark argues that this alleged nondisclosure of material information invalidates Benchmark’s vote to enlarge the board.

Moreover, Benchmark alleges that Kalanick pledged in writing — as part of his resignation agreement — that the two empty board seats would be independent and subject to approval by the entire board (something Benchmark says was the reason it didn’t sue for fraud at the time). But, according to the complaint, Kalanick has not been willing to codify those changes via an amended voting agreement.

Giving three extra seats on the board to the CEO was certainly founder friendly; that the expansion happened at the same time Uber accepted a $3.5 billion investment from Saudi Arabia’s Public Investment Fund, which came with a board seat, suggests Benchmark viewed the board expansion as a way to protect its own interests and influence as well. After all, longtime Benchmark general partner and Uber board member Bill Gurley had been pursuing ride-sharing years before Uber came along, and the investor had penned multiple essays on his widely-read blog defending and extolling Kalanick and company.

Then again, by June 2016, when the board was expanded and the Saudi investment was announced, Gurley’s posts had taken a much sterner tone: specifically, in February 2015 Gurley warned that late-stage financing was very different than an IPO, and that it had “perverse effects on a company’s operating discipline.” A year later, in April 2016, Gurley said that the “Unicorn financing market just became dangerous…for all involved”, and that included Benchmark:

For the most part, early investors in Unicorns are in the same position as founders and employees. This is because these companies have raised so much capital that the early investor is no longer a substantial portion of the voting rights or the liquidation preference stack. As a result, most of their interests are aligned with the common, and key decisions about return and liquidity are the same as for the founder. This investor will also be wary of the dirty term sheet which has the ability to wrestle away control of the entire company. This investor will also have sufficient angst about the difference between paper return and real return, and the lack of overall liquidity in the market. Or at least they should.

I suspect this, more than anything, explains this unprecedented lawsuit.

The Uber Outlier

Benchmark is one of those most successful venture firms ever. Founded in 1995 with a commitment to early stage funding, the firm has, going by this chart from CB Insights been an investor in 14 IPOs, 11 in the last five years (the chart shows 13 and 10; I added Snapchat, which IPO’d earlier this year).

The company’s investments include Twitter, Dropbox, Instagram, Zendesk, Hortonworks, New Relic, WeWork, Grubhub, OpenTable, and many more; according to CB Insight, since 2007, the companies Benchmark has invested in have exited (via IPO or acquisition) for a combined $75.96 billion.³

That, though, simply highlights what an outlier Uber is, at least on paper. Uber’s most recent valuation of $68.5 billion nearly matches the worth of every successful Benchmark-funded startup since 2007. Sure, it might make sense to treat company X and founder Y with deference; after all, there are other fish in the pond. Uber, though, is not another fish: it is the catch of a lifetime.

That almost assuredly changed Benchmark’s internal calculus when it came to filing this lawsuit. Does it give the firm a bad reputation, potentially keeping it out of the next Facebook? Unquestionably. The sheer size of Uber though, and the potential return it represents, means that Benchmark is no longer playing an iterated game. The point now is not to get access to the next Facebook: it is to ensure the firm captures its share of the current one.

This, I would note, is a lesson founders should learn: Kalanick was resolutely opposed to an IPO, claiming he would wait “as long as humanly possible”; his delay, though, completely flipped the incentives of Kalanick and his early investors. While in most companies the venture capitalists have to worry about their reputation along with their capital, in the case of Uber there is simply too much money at stake: transforming a $68 billion paper return to a real return (and guaranteeing a per partner return in the nine figures) is worth whatever reputational damage is incurred along the way.

In other words, an iterated game is good for founders: it ensures venture capitalists are nice. Single move games, though, which Uber has become, often end badly for everyone, particularly founders.

Diminished Uber

Understanding that Benchmark is focused on achieving liquidity on its all-time greatest investment suggests two potential outcomes:

• The most straightforward is that Benchmark hopes to push Uber to an IPO sooner-rather-than-later; clearly Kalanick was an obstacle as CEO, and according to reports, has sought to reestablish control of the company via his control of the board, driving away Meg Whitman, who was reportedly Benchmark’s choice for CEO.⁴ This also explains the urgency of this suit: Benchmark is trying to prevent Kalanick from naming two more members to the board, further complicating the CEO selection process.
• The other potential outcome is that Benchmark is looking for an exit. Softbank, which is looking to dominate car-sharing globally, has reportedly had discussions with Benchmark and other investors about buying their shares; reports have been mixed as to who wants to make a deal — Kalanick or Benchmark — but if it is the latter a lawsuit is an excellent way of getting the former to agree to a sale.

There is a third possibility: that Uber broadly and Kalanick specifically are in big trouble when it comes to Waymo’s lawsuit against the company, and that Benchmark is making clear that it is not culpable. A full six pages of Benchmark’s lawsuit were dedicated to describing Kalanick’s role in the Otto acquisition and Benchmark’s obliviousness to alleged wrongdoing; I noted when the lawsuit was filed that it, more than any of Uber’s scandals, had the potential to be Kalanick’s doom, and apparently Benchmark agrees (although, of course, one should question why Gurley, then an Uber board member, apparently declined to do more digging on a $680 million acquisition).

What is without question, though, is that whatever outcome results from this mess will be a suboptimal one; most Uber critics still fail to appreciate that the ride-sharing market is demand driven, which meant Uber really did have a chance to be the transportation behemoth of much of the world. Now the company is retreating throughout Asia, is on the regulatory run in Europe, and stuck in a fight it should have never drawn out with Lyft in the United States. Perhaps Benchmark will get its all-time great return, reputations be damned. It seems unlikely its return will be what it once might have been.

1. Above and beyond problematic arbitration agreements
2. This isn’t always a good thing: one reason serious issues like sexual harassment by venture capitalists go underreported is that the harassed worry about the long-term effect on their reputation — will future investors simply see them as trouble?
3. According to CB Insight, IPO valuation is based on first day closing price; acquisition valuation is based on public pronouncements or whisper valuations
4. Whitman is most famous for her stewardship of eBay, Benchmark’s first big breakthrough investment

The single biggest misconception about iOS is that it’s good digital hygiene to force quit apps that you aren’t using. The idea is that apps in the background are locking up unnecessary RAM and consuming unnecessary CPU cycles, thus hurting performance and wasting battery life.

That’s not how iOS works. The iOS system is designed so that none of the above justifications for force quitting are true. Apps in the background are effectively “frozen”, severely limiting what they can do in the background and freeing up the RAM they were using. iOS is really, really good at this. It is so good at this that unfreezing a frozen app takes up way less CPU (and energy) than relaunching an app that had been force quit. Not only does force quitting your apps not help, it actually hurts. Your battery life will be worse and it will take much longer to switch apps if you force quit apps in the background.

Here’s a short and sweet answer from Craig Federighi, in response to an email from a customer asking if he force quits apps and whether doing so preserves battery life: “No and no.”

Here, from the official support document on forcing applications to close, is Apple’s own advice on when to use this feature:

When you double-click the Home button, your recently used apps appear. The apps aren’t open, but they’re in standby mode to help you navigate and multitask. You should force an app to close only when it’s unresponsive.

Update: MacDailyNews quotes a 2010 email from Steve Jobs:

Just use [iOS multitasking] as designed, and you’ll be happy. No need to ever quit apps.

Just in case you don’t believe Apple’s senior vice president for software, Apple’s own official support documentation, or Steve Jobs, here are some other articles pointing out how this habit is actually detrimental to iPhone battery life:

• Fraser Speirs (back in 2012!): “Misconceptions About iOS Multitasking”
• Thorin Klosowski: “Quitting All Your Apps in iOS Can Actually Worsen Battery Life”
• Kendall Baker: “Stop Force Quitting Your iPhone Apps”
• The Wirecutter: “What You Should (and Shouldn’t) Do to Extend Your Phone’s Battery Life”
• Kyle Richter: “The Force Quit Fallacy”

This thing about force quitting apps in the background is such a pernicious myth that I’ve heard numerous stories from DF readers about Apple Store Genius Bar staff recommending it to customers. Those “geniuses” are anything but geniuses.

It occurs to me that some of the best examples proving that this notion is wrong (at least in terms of performance) are YouTube “speed test” benchmarks. There’s an entire genre of YouTube videos devoted to benchmarking new phones by running them through a series of apps and CPU-intensive tasks repeatedly, going through the loop twice. Once from a cold boot and the second time immediately after the first loop. Here’s a perfect example, pitting a Samsung Galaxy S8 against an iPhone 7 Plus. Note that no apps are manually force quit on either device. The iPhone easily wins on the first loop, but where the iPhone really shines is on the second loop. The S8 has to relaunch all (or at least almost all) of the apps, because Android has forced them to quit while in the background to reclaim the RAM they were using. On the iPhone, all (or nearly all) of the apps re-animate almost instantly.

In fact, apps frozen in the background on iOS unfreeze so quickly that I think it actually helps perpetuate the myth that you should force quit them: if you’re worried that background apps are draining your battery and you see how quickly they load from the background, it’s a reasonable assumption to believe that they never stopped running. But they did. They really do get frozen, the RAM they were using really does get reclaimed by the system, and they really do unfreeze and come back to life that quickly.¹

An awful lot of very hard work went into making iOS work like this. It’s a huge technical advantage that iOS holds over Android. And every iPhone user in the world who habitually force quits background apps manually is wasting all of the effort that went into this while simultaneously wasting their own device’s battery life and making everything slower for themselves.

This pernicious myth is longstanding and seemingly will not die. I wrote about it at length back in 2012:

Like with any voodoo, there are die-hard believers. I’m quite certain that I am going to receive email from people who will swear up-and-down that emptying this list of used applications every hour or so keeps their iPhone running better than it would otherwise. Nonsense.

As Fraser mentions, yes, there are exceptional situations where an app with background privileges can get stuck, and you need to kill that app. The argument here is not that you should never have to kill any app using the multitasking switcher — the argument is that you don’t need to do it on a regular basis, and you’re not making anything “better” by clearing the list. Shame on the “geniuses” who are peddling this advice.

And don’t even get me started on people who completely power down their iPhones while putting them back into their pockets or purses.

Setting Sobering Records

The National Centers for Environmental Information (NCEI), part of the National Oceanic and Atmospheric Administration (NOAA), just released a report detailing the United States’ climate and weather patterns for the first half of 2017.

The report indicates that June 2017 was third warmest June on record, behind only 2016 and 2015. It also states that the average temperature for the year-to-date in the contiguous U.S. was 10.5 degrees Celsius (50.9 degrees Fahrenheit), roughly 1.8 degrees Celsius (3.4 degrees Fahrenheit) above average. This makes the first half of 2017 the second warmest on record, behind only 2012.

2017 is still unfolding, so it still may be the warmest year on record. If it isn’t, all indications point to it being in the top three.

New NOAA data show this June was the third warmest June on record, trailing only 2016 and 2015 pic.twitter.com/7D1MQ7n0S0

— Brian L Kahn (@blkahn) July 18, 2017

As for precipitation, the total for 2017 in the contiguous U.S. has been 2.55 inches above average. That means the first six months of 2017 were the wettest since 1998 and the sixth wettest on record.

In terms of disasters, 2017 is even more notable. Between January and June, the U.S. experienced nine separate billion-dollar climate and weather disasters. These include six severe storms, a freeze, and two floods, which caused 57 deaths in total. Only 2011 and 2016 had more billion-dollar weather and climate disasters by this point in the year, with ten events each.

Climate in Context

Higher levels of precipitation in many places must be seen in the context of drought in others — both extremes are part of the massive chain reaction caused by upheaval in the climate. While there were floods and major storm fronts with high levels of precipitation along the Gulf Coast, for example, some of these areas had previously been experiencing drought conditions.

These significant fluctuations will cause unpredictable and destructive weather patterns, and experts like James Hansen, former NASA climate research head, see rising sea levels as a looming threat that could render much of the world ungovernable.

The American South is likely to be hit particularly hard by climate change in the coming years, and in places like Louisiana, the coastline is already rapidly disappearing, forcing entire towns to relocate.

We’ll have to wait to see what the second half of 2017 holds, but the awful records being set do little to ease worries about the climate.

The post New Data Shows 2017 Has Been One of the Hottest, Wettest Years on Record in the U.S. appeared first on Futurism.

Say hello to Amabrush, the world’s first automatic toothbrush, and goodbye to brushing your teeth for minutes at a time twice a day. Amabrush resembles a mouthguard with soft silicone bristles in it, and it is magnetically attached to a round handle. Put the mouthpiece in, and don’t worry about the toothpaste, it’ll do that for you. It will then go to work, brushing your teeth in the way that your dentist tells you to, in every location in your mouth, all at the same time.

Using this device, brushing all of your teeth to perfection only takes about 10 seconds from start to finish, so it’s no surprise that the Amabrush is doing really well on Kickstarter. As this article is being written, they have 25 days to go and have already raised $935,891, surpassing their $56,972 goal.

The Amabrush is just one more example of automation doing what it does best: taking over mind-numbingly dull daily tasks, freeing up humans to think about and do more compelling things. Whether it’s a significant step in automation, like self-driving cars, or just a piece of the puzzle, it’s all progress in the same direction. By extension, automation can free us from repetitive, dull jobs and free us up for more challenging careers, hobbies, passions, etc. All we have to do is be willing and ready for this change to happen.

The post The First Fully Automated Toothbrush is Here. And it Cleans Your Teeth in 10 Seconds. appeared first on Futurism.

Editor’s Note: This article was originally published as a Daily Update for Stratechery members. To receive the Daily Update please subscribe here.

David Chavern, the president and CEO of the News Media Alliance, a trade association representing 2,000 North American newspapers, has an op-ed in the Wall Street Journal that I’m going to take a longer-than-usual excerpt from:

The rapid growth of digital connectivity has pushed demand for information to unprecedented heights. Never in history have so many people consumed so much news. This is a boon for democracy. Although reporting is often an irritant to those in power, high-quality news and analysis is essential to any political system that depends on giving citizens the facts so they can draw their own conclusions.

The problem is that today’s internet distribution systems distort the flow of economic value derived from good reporting. Google and Facebook dominate web traffic and online ad income. Together, they account for more than 70% of the $73 billion spent each year on digital advertising, and they eat up most of the growth. Nearly 80% of all online referral traffic comes from Google and Facebook. This is an immensely profitable business. The net income of Google’s parent company, Alphabet, was $19 billion last year. Facebook’s was $10 billion.

But the two digital giants don’t employ reporters: They don’t dig through public records to uncover corruption, send correspondents into war zones, or attend last night’s game to get the highlights. They expect an economically squeezed news industry to do that costly work for them.

The only way publishers can address this inexorable threat is by banding together. If they open a unified front to negotiate with Google and Facebook—pushing for stronger intellectual-property protections, better support for subscription models and a fair share of revenue and data—they could build a more sustainable future for the news business.

But antitrust laws make such coordination perilous. These laws, intended to prevent monopolies, are having the unintended effect of preserving and protecting Google and Facebook’s dominant position. The digital giants benefit from legal precedent against collective action that has a chilling effect on publishers. Yet each newspaper or magazine on its own has only limited negotiating power.

Chavern’s solution is twofold: one, that regulators should do a better job of enforcing antitrust laws against Google and Facebook, and two, that Congress should grant publishers a safe harbor to negotiate collectively with Google and Facebook.

That a safe harbor is necessary to negotiate collectively was made apparent in the Apple ebooks case; while reasonable people can disagree as to whether or not Apple was rightly found to be guilty, no one disputes that the publishers colluded to raise prices, a per se violation of the Sherman Antitrust Act.¹

Aggregation Theory Redux

That publishers feel the need to pursue the same strategy is driven by the reality of Aggregation Theory. To quickly recap, in a world of abundance, as long as the aggregator controls demand, suppliers have no choice but to commoditize themselves according to the strictures of the aggregator, which is another way of saying that suppliers have no choice but to engage in perfect competition. This is extremely ruinous for publishers in particular:

• In a perfect market, the price of an undifferentiated commodity will be its marginal cost
• The marginal cost is the cost to produce one more item (as opposed to the total cost, which includes the fixed costs necessary to create the item; those fixed costs, though, are already spent whether or not an additional item is created)²
• The marginal cost of a digital item is zero, which means in a perfect market the inevitable price of a digital item is zero

In short, aggregators are market makers, and the markets they make — thanks to the aforementioned lack of distribution costs and transactions costs — are pretty darn close to perfect, particularly in the case of purely digital goods. The problem is that publishers have huge fixed costs, even if you ignore old world infrastructure like printing presses and delivery trucks; specifically, publishers have to pay salaries, but those costs, by virtue of being fixed, not marginal, have zero impact on a publication’s pricing power in a perfect market.³

The end result is dire for newspapers in particular: in commodity markets the winning companies have superior cost structures, which means they can sustainably sell at the market-clearing price; newspapers, though, by virtue of being built for a world of print, will never have the cost structure or mentality to succeed in the long run.

Thus this solution: Chavern and the big publishers want permission from Congress to escape the perfect competition fostered by Aggregation Theory via collusion. The theory seems to be that, were the 2,000 newspapers party to this proposal able to present a unified front, they could force concessions from Google and Facebook that would make their businesses viable.

News Versus Advertising

There’s just one problem with this analysis — and that problem extends to Chavern’s proposal as a whole: it’s based on a myth. Specifically, newspapers have never succeeded by selling news, a point I made explicitly in The Local News Business Model:

By owning printing presses and delivery trucks (and thanks to the low marginal cost of printing extra pages), newspapers were the primary outlet for advertising that didn’t work on (or couldn’t afford) TV or radio — and there was a lot of it. Maximizing advertising, though, meant maximizing the potential audience, which meant offering all kinds of different types of content in volume: thus the mashup of wildly disparate content listed above, all focused on quantity over quality. And then, having achieved the most readership and the ability to expand to fit it all, the biggest newspaper could squeeze out its competitors.

Too many newspaper advocates utterly and completely fail to understand this; the truth is that newspapers made money in the past not by providing societal value, but by having quasi-monopolistic control of print advertising in their geographic area; the societal value was a bonus. Thus, when Chavern complains that “today’s internet distribution systems distort the flow of economic value derived from good reporting”, he is in fact conflating societal value with economic value; the latter does not exist and has never existed.

This failure to understand the past leads to a misdiagnosis of the present: Google and Facebook are not profitable because they took newspapers’ reporting, they are profitable because they took their advertising. Moreover, the utility of both platforms is so great that even if all newspaper content were magically removed — which has been tried in Europe — the only thing that would change is that said newspapers would lose even more revenue as they lost traffic.

This is why this solution is so misplaced: newspapers no longer have a monopoly on advertising, can never compete with the Internet when it comes to bundling content, and news remains both valuable to society and, for the same reasons, worthless economically (reaching lots of people is inversely correlated to extracting value, and facts — both real and fake ones — spread for free).

A Better Solution for Publishers

I just said that “good reporting” has never had economic value; this wasn’t quite right. Rather, the articles that result from “good reporting” don’t have economic value: once published on the Internet they have zero marginal cost in a world of perfect competition. This is why publishers have to shift their mindset about their product and their market.

Specifically, publishers should be selling “good reporting”, that is, the commitment to the regular production of content that the buyer would like to see. This is a slight distinction but a critical one: successful subscription products do not sell content but rather the production of the content, and that production, unlike the articles themselves, can be differentiated and sold as a scarce product. That, though, means knowing who the buyer is: it’s not advertisers, but rather readers.

Moreover, this approach addresses the Facebook and Google problem: the issue with Aggregation Theory from a supplier perspective is that the aggregator owns the consumer relationship; however, because Facebook and Google are advertising companies, they are not even competing in the subscription market. They, like advertisers, only care about content that has already been produced, not how it came to be.

In fact, this is the single most ridiculous part of this proposal: one of the issues Chavern wishes to collectively bargain with Facebook and Google about is “better support for subscription models”. In other words, Chavern wishes to bring in Facebook and Google as an aggregator in the one market — subscriptions — where newspapers actually have a viable business model.

It’s easy to envision how this could play out: Google and Facebook set up subscription offerings for publishers, eventually create the bundle of the future, and, by virtue of owning the consumer, skim off most of the profits, leaving publishers desperately pursuing page views to get their minuscule share of revenue. Sound familiar?

The fundamental issue is this: there is a business model that works for publishers, but it requires a dramatic shift in mindset and the long hard slog of building a business. That means understanding what customers want, building a product that appeals to them, reaching them, moving them down a sales funnel, and retaining them. What it does not mean is the suffocating sense of entitlement and delusion that underlies not just this proposal but the majority of commentary from newspapers themselves that expects someone — anyone! — to give journalists money simply because they are important.

That’s the thing: journalism is important. It is so important that the sooner publishers let go of a long-gone world where publications earned advertising simply by existing, and actually build publications that can not just survive but thrive on the Internet, the better off society will be. And, in that fight, this move by the News Media Alliance is actively hurting the cause.

1. Apple was ruled to have been a co-conspirator which meant they were per se guilty; the company argued their relationship with the publishers was a vertical one, which would have led to a rule of reason analysis that I suspect would have exonerated the company. I wrote more about the case here
2. Technically all costs, at least in the long-run, are marginal costs; however, in the short-run, the determination of whether or not to produce one more item is based purely on the cost of that item alone; a useful overview of the difference is here
3. Salaries are fixed costs in terms of producing one more article; they are much closer to variable costs, though, than something like a printing press

There’s so much more to explore.

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This futuristic airport Singapore is building will leave you breathless

The post This Futuristic Airport Singapore Is Building Will Leave You Breathless appeared first on Futurism.

Climate Change

Earth’s climate is changing rapidly. We know this from billions of observations, documented in thousands of journal papers and texts and summarized every few years by the United Nations’ Intergovernmental Panel on Climate Change. The primary cause of that change is the release of carbon dioxide from burning coal, oil and natural gas.

One of the goals of the international Paris Agreement on climate change is to limit the increase of the global surface average air temperature to 2 degrees Celsius, compared to preindustrial times. There is a further commitment to strive to limit the increase to 1.5℃.

Earth has already, essentially, reached the 1℃ threshold. Despite the avoidance of millions of tons of carbon dioxide emissions through use of renewable energy, increased efficiency and conservation efforts, the rate of increase of carbon dioxide in the atmosphere remains high.

International plans on how to deal with climate change are painstakingly difficult to cobble together and take decades to work out. Most climate scientists and negotiators were dismayed by President Trump’s announcement that the U.S. will withdraw from the Paris Agreement.

But setting aside the politics, how much warming are we already locked into? If we stop emitting greenhouse gases right now, why would the temperature continue to rise?

Basics of Carbon and Climate

The carbon dioxide that accumulates in the atmosphere insulates the surface of the Earth. It’s like a warming blanket that holds in heat. This energy increases the average temperature of the Earth’s surface, heats the oceans and melts polar ice. As consequences, sea level rises and weather changes.

Since 1880, after carbon dioxide emissions took off with the Industrial Revolution, the average global temperature has increased. With the help of internal variations associated with the El Niño weather pattern, we’ve already experienced months more than 1.5℃ above the average. Sustained temperatures beyond the 1℃ threshold are imminent. Each of the last three decades has been warmer than the preceding decade, as well as warmer than the entire previous century.

The North and South poles are warming much faster than the average global temperature. Ice sheets in both the Arctic and Antarctic are melting. Ice in the Arctic Ocean is melting and the permafrost is thawing. In 2017, there’s been a stunning decrease in Antarctic sea ice, reminiscent of the 2007 decrease in the Arctic.

Ecosystems on both land and in the sea are changing. The observed changes are coherent and consistent with our theoretical understanding of the Earth’s energy balance and simulations from models that are used to understand past variability and to help us think about the future.

Slam on the Climate Brakes

What would happen to the climate if we were to stop emitting carbon dioxide today, right now? Would we return to the climate of our elders?

The simple answer is no. Once we release the carbon dioxide stored in the fossil fuels we burn, it accumulates in and moves among the atmosphere, the oceans, the land and the plants and animals of the biosphere. The released carbon dioxide will remain in the atmosphere for thousands of years. Only after many millennia will it return to rocks, for example, through the formation of calcium carbonate – limestone – as marine organisms’ shells settle to the bottom of the ocean. But on time spans relevant to humans, once released the carbon dioxide is in our environment essentially forever. It does not go away, unless we, ourselves, remove it.

If we stop emitting today, it’s not the end of the story for global warming. There’s a delay in air-temperature increase as the atmosphere catches up with all the heat that the Earth has accumulated. After maybe 40 more years, scientists hypothesize the climate will stabilize at a temperature higher than what was normal for previous generations.

This decades-long lag between cause and effect is due to the long time it takes to heat the ocean’s huge mass. The energy that is held in the Earth by increased carbon dioxide does more than heat the air. It melts ice; it heats the ocean. Compared to air, it’s harder to raise the temperature of water; it takes time – decades. However, once the ocean temperature is elevated, it will release heat back to the air, and be measured as surface heating.

So even if carbon emissions stopped completely right now, as the oceans’ heating catches up with the atmosphere, the Earth’s temperature would rise about another 0.6℃. Scientists refer to this as committed warming. Ice, also responding to increasing heat in the ocean, will continue to melt. There’s already convincing evidence that significant glaciers in the West Antarctic ice sheets are lost. Ice, water and air – the extra heat held on the Earth by carbon dioxide affects them all. That which has melted will stay melted – and more will melt.

Ecosystems are altered by natural and human-made occurrences. As they recover, it will be in a different climate from that in which they evolved. The climate in which they recover will not be stable; it will be continuing to warm. There will be no new normal, only more change.

Best of the Worst-Case Scenarios

In any event, it’s not possible to stop emitting carbon dioxide right now. Despite significant advances in renewable energy sources, total demand for energy accelerates and carbon dioxide emissions increase. As a professor of climate and space sciences, I teach my students they need to plan for a world 4℃ warmer. A 2011 report from the International Energy Agency states that if we don’t get off our current path, then we’re looking at an Earth 6℃ warmer. Even now after the Paris Agreement, the trajectory is essentially the same. It’s hard to say we’re on a new path until we see a peak and then a downturn in carbon emissions. With the approximately 1℃ of warming we’ve already seen, the observed changes are already disturbing.

There are many reasons we need to eliminate our carbon dioxide emissions. The climate is changing rapidly; if that pace is slowed, the affairs of nature and human beings can adapt more readily. The total amount of change, including sea-level rise, can be limited. The further we get away from the climate that we’ve known, the more unreliable the guidance from our models and the less likely we will be able to prepare.

It’s possible that even as emissions decrease, the carbon dioxide in the atmosphere will continue to increase. The warmer the planet gets, the less carbon dioxide the ocean can absorb. Rising temperatures in the polar regions make it more likely that carbon dioxide and methane, another greenhouse gas that warms the planet, will be released from storage in the frozen land and ocean reservoirs, adding to the problem.

If we stop our emissions today, we won’t go back to the past. The Earth will warm. And since the response to warming is more warming through feedbacks associated with melting ice and increased atmospheric water vapor, our job becomes one of limiting the warming. If greenhouse gas emissions are eliminated quickly enough, within a small number of decades, it will keep the warming manageable. It will slow the change – and allow us to adapt. Rather than trying to recover the past, we need to be thinking about best possible futures.

This article has been updated from an original version published in December 2014, when international climate talks in Lima were laying the foundation for the 2015 Paris Agreement.

The post If We Stopped Emitting Greenhouse Gases Right Now, Would We Stop Climate Change? appeared first on Futurism.

Elizabeth Weise, writing for USA Today:

Of printed books, about 38% of the 800 million sold in 2016 were sold on Amazon. For ebooks it’s about 75% of the 400 million sold. And for audio books it’s close to 95% of the 50 million sold.

Looks like it’s time for the Department of Justice to open another investigation of Apple’s e-book business.

Via Jim Coudal, who summarizes this perfectly: “Poetry, in data”.

The New York Times has is keeping track since Inauguration not only how often the President lies, but also the content of the lies and the corresponding facts.

It is baffling but mostly nauseating that this is the new normal.

#

The shamelessness was breathtaking.

Having told a few jokes, summarized his manifesto, and acknowledged the victim of the so-called “Facebook-killer” in Cleveland, Facebook founder and CEO Mark Zuckerberg opened his keynote presentation at the company’s F8 developer conference like this:

You may have noticed that we rolled out some cameras across our apps recently. That was Act One. Photos and videos are becoming more central to how we share than text. So the camera needs to be more central than the text box in all of our apps. Today we’re going to talk about Act Two, and where we go from here, and it’s tied to this broader technological trend that we’ve talked about before: augmented reality.

If that seems familiar, it’s because it is the Explain Like I’m Five summary of Snap’s S-1:

In the way that the flashing cursor became the starting point for most products on desktop computers, we believe that the camera screen will be the starting point for most products on smartphones. This is because images created by smartphone cameras contain more context and richer information than other forms of input like text entered on a keyboard. This means that we are willing to take risks in an attempt to create innovative and different camera products that are better able to reflect and improve our life experiences.

Snap may have declared itself a camera company; Zuckerberg dismissed it as “Act One”, making it clear that Facebook intended to not simply adopt one of Snapchat’s headline features but its entire vision.

Facebook and Microsoft

Shortly after Snap’s S-1 came out, I wrote in Snap’s Apple Strategy that the company was like Apple; unfortunately, the Apple I was referring to was not the iPhone-making juggernaut we are familiar with today, but rather the Macintosh-creating weakling that was smushed by Microsoft, which is where Facebook comes in.

Today, if Snap is Apple, then Facebook is Microsoft. Just as Microsoft succeeded not because of product superiority but by leveraging the opportunity presented by the IBM PC, riding Big Blue’s coattails to ecosystem dominance, Facebook has succeeded not just on product features but by digitizing offline relationships, leveraging the desire of people everywhere to connect with friends and family. And, much like Microsoft vis-à-vis Apple, Facebook has had The Audacity of Copying Well.

I wrote The Audacity of Copying Well when Instagram launched Instagram stories; what was brilliant about the product is that Facebook didn’t try to re-invent the wheel. Instagram Stories — and now Facebook Stories and WhatsApp Stories and Messenger Day — are straight rip-offs of Snapchat Stories, which is not only not a problem, it’s actually the exact optimal strategy: Instagram’s point of differentiation was not features, but rather its network. By making Instagram Stories identical to Snapchat Stories, Facebook reduced the competition to who had the stronger network, and it worked.

Microsoft and Monopoly

Microsoft, of course, was found to be a monopoly, and, as I wrote a couple of months ago in Manifestos and Monopolies, it is increasingly difficult to not think the same about Facebook. That, though, is exactly what you would expect for an aggregator. From Antitrust and Aggregation:

The first key antitrust implication of Aggregation Theory is that, thanks to these virtuous cycles, the big get bigger; indeed, all things being equal the equilibrium state in a market covered by Aggregation Theory is monopoly: one aggregator that has captured all of the consumers and all of the suppliers. This monopoly, though, is a lot different than the monopolies of yesteryear: aggregators aren’t limiting consumer choice by controlling supply (like oil) or distribution (like railroads) or infrastructure (like telephone wires); rather, consumers are self-selecting onto the Aggregator’s platform because it’s a better experience.

This self-selection, particularly onto a “free” platform, makes it very difficult to calculate what cost, if any, Facebook’s seeming monopoly exacts on society. Consider the Econ 101 explanation of why monopolies are problematic:

• In a perfectly competitive market the price of a good is set at the intersection of demand and supply, the latter being determined by the marginal cost of producing that good:¹

  

• The “Consumer Surplus”, what consumers would have paid for a product minus what they actually paid, is the area that is under the demand curve but over the price point; the “Producer Surplus”, what producers sold a product for minus the marginal cost of producing that product, is the area above the marginal cost/supply curve and below the price point:

  

• In a monopoly situation, there is no competition; therefore, the monopoly provider makes decisions based on profit maximization. That means instead of considering the demand curve, the monopoly provider considers the marginal revenue (price minus marginal cost) that is gained from selling additional items, and sets the price where marginal revenue equals marginal cost. Crucially, though, the price is set according to the demand curve:

  

• The result of monopoly pricing is that consumer surplus is reduced and producer surplus is increased; the reason we care as a society, though, is the part in brown: that is deadweight loss. Some amount of demand that would be served by a competitive market is being ignored, which means there is no surplus of any kind being generated:

  

The problem with using this sort of analysis for Facebook should be obvious: the marginal cost for Facebook of serving an additional customer is zero! That means the graph looks like this:

So sure, Facebook may have a monopoly in social networking, and while that may be a problem for Snap or any other would be networks, Facebook would surely argue that the lack of deadweight loss means that society as a whole shouldn’t be too bothered.

Facebook and Content Providers

The problem is that Facebook isn’t simply a social network: the service is a three-sided market — users, content providers, and advertisers — and while the basis of Facebook’s dominance is in the network effects that come from connecting all of those users, said dominance has seeped to those other sides.

Content providers are an obvious example: Facebook passed Google as the top traffic driver back in 2015, and as of last fall drove over 40% of traffic for the average news site, even after an algorithm change that reduced publisher reach.

So is that a monopoly when it comes to the content provider market? I would argue yes, thanks to the monopoly framework above.

Note that once again we are in a situation where there is not a clear price: no content provider pays Facebook to post a link (although they can obviously make said link into an advertisement). However, Facebook does, at least indirectly, make money from that content: the more users find said content engaging, the more time they will spend on Facebook, which means the more ads they will see.

This is why Facebook Instant Articles seemed like such a brilliant idea: on the one side, readers would have a better experience reading content, which would keep them on Facebook longer. On the other side, Facebook’s proposal to help publishers monetize — publishers could sell their own ads or, enticingly, Facebook could sell them for a 30% commission — would not only support the content providers that are one side of Facebook’s three-sided market, but also lock them into Facebook with revenue they couldn’t get elsewhere. The market I envisioned would have looked something like this:

However, Instant Articles haven’t turned out the way I expected: the consumer benefits are there, but Facebook has completely dropped the ball when it comes to monetizing the publishers using them. That is not to say that Facebook isn’t monetizing as a whole, thanks in part to that content, but rather that the company wasn’t motivated to share. Or, to put it another way, Facebook kept most of the surplus for itself:

In this case, it’s not that Facebook is setting a higher price to maximize their profits; rather, they are sharing less of their revenue; the outcome, though, is the same — maximized profits. Keep in mind this approach isn’t possible in competitive markets: were there truly competitors for Facebook when it came to placing content, Facebook would have to share more revenue to ensure said content was on its platform. In truth, though, Facebook is so dominant when it comes to attention that it doesn’t have to do anything for publishers at all (and, if said publishers leave Instant Articles, well, they will still place links, and the users aren’t going anywhere regardless).

Facebook and Advertisers

There may be similar evidence — that Facebook is able to reduce supply in a way that increases price and thus profits — emerging in advertising. In a perfectly competitive market the cost of advertising would look like this:

Facebook, though, will soon be limiting quantity, or at least limiting its growth. On last November’s earnings call CFO Dave Wehner said that Facebook would stop increasing ad load in the summer of 2017 (i.e. Facebook has been increasing the number of ads relative to content in the News Feed for a long time, but would stop doing so). What was unclear — and as I noted at the time, Wehner was quite evasive in answering this — was whether or not that would cause the price per ad to rise.

There are two possible reasons for Wehner to have been evasive:

• Prices will not rise, which would be a bad sign for Facebook: it would mean that despite all of Facebook’s data, their ads are not differentiated, and that money that would have been spent on Facebook will simply be spent elsewhere
• Prices will rise, which would mean that Facebook’s ads are differentiated such that Facebook can potentially increase profits by restricting supply

To put the second possibility in graph form:

Note that Facebook has already said that revenue growth will slow because of this change; that, though, is not inconsistent with having monopoly power. Monopolists seek to maximize profit, not revenue. Alternately, it could simply be that Facebook is worried about the user experience; it will be fascinating to see how the company’s bottom line shifts with these changes.

Monopolies and Innovation

Still, even if Facebook does have monopoly power when it comes to content discovery and distribution and in digital advertising, is that really a problem for users? Might it even be a good thing?

Facebook board member Peter Thiel certainly thinks so. In Zero to One Thiel not only makes the obvious point that businesses that are monopolies are ideal, but says that models like the ones I used above aren’t useful because they presume a static world.

In a static world, a monopolist is just a rent collector. If you corner the market for something, you can jack up the price; others will have no choice but to buy from you…But the world we live in is dynamic: it’s possible to invent new and better things. Creative monopolists give customers more choices by adding entirely new categories of abundance to the world. Creative monopolies aren’t just good for the rest of society; they’re powerful engines for making it better.

The dynamism of new monopolies itself explains why old monopolies don’t strangle innovation. With Apple’s iOS at the forefront, the rise of mobile computing has dramatically reduced Microsoft’s decades-long operating system dominance. Before that, IBM’s hardware monopoly of the ’60s and ’70s was overtaken by Microsoft’s software monopoly. AT&T had a monopoly on telephone service for most of the 20th century, but now anyone can get a cheap cell phone plan from any number of providers. If the tendency of monopoly businesses were to hold back progress, they would be dangerous and we’d be right to oppose them. But the history of progress is a history of better monopoly businesses replacing incumbents. Monopolies drive progress because the promise of years or even decades of monopoly profits provides a powerful incentive to innovate. Then monopolies can keep innovating because profits enable them to make the long-term plans and to finance the ambitious research projects that firms locked in competition can’t dream of.

The problem is that Thiel’s examples refute his own case: decades-long monopolies like those of AT&T, IBM, and Microsoft sure seem like a bad thing to me! Sure, they were eventually toppled, but not after extracting rents and, more distressingly, stifling innovation for years. Think about Microsoft: the company spent billions of dollars on R&D and gave endless demos of futuristic tech; the most successful product that actually shipped (Kinect) ended up harming the product it was supposed to help.²

Indeed, it’s hard to think of any examples where established monopolies produced technology that wouldn’t have been produced by the free market; Thiel wrongly conflates the drive of new companies to create new monopolies with the right of old monopolies to do as they please.

That is why Facebook’s theft of not just Snapchat features but its entire vision bums me out, even if it makes good business sense. I do think leveraging the company’s network monopoly in this way hurts innovation, and the same monopoly graphs explain why. In a competitive market the return from innovation meets the demand for customers to determine how much innovation happens — and who reaps its benefits:

A monopoly, though, doesn’t need that drive to innovate — or, more accurately, doesn’t need to derive a profit from innovation, which leads to lazy spending and prioritizing tech demos over shipping products. After all, the monopoly can simply take others’ innovation and earn even more profit than they would otherwise:

This, ultimately, is why yesterday’s keynote was so disappointing. Last year, before Facebook realized it could just leverage its network to squash Snap, Mark Zuckerberg spent most of his presentation laying out a long-term vision for all the areas in which Facebook wanted to innovate. This year couldn’t have been more different: there was no vision, just the wholesale adoption of Snap’s, plus a whole bunch of tech demos that never bothered to tell a story of why they actually mattered for Facebook’s users. It will work, at least for a while, but make no mistake, Facebook is the only winner.

1. If any individual firm’s marginal costs are higher, they will go out of business; if they are lower they will temporarily dominate the market until new competitors enter. Yes, this is all theoretical!
2. I’m referring to the fact the Xbox One had a higher price and lower specs than the PS4, thanks in large part to the bundled Kinect

At GDC 2017, Epic Games' Ben Lewis-Evans dispels the "neuromyths" around dopamine and offers devs a deep dive into the psychology behind reward systems in game design. ...

If you manage a remote team, you need to use emojis. You probably should use them more than you think. Why? Because almost everything you write can be taken multiple ways. And when you have a remote team, you’re probably writing more than you’re speaking. Let me illustrate: Imagine you’re working along when your boss…

The post When in doubt, 👍 🙌 😂 😊 😳 it out. appeared first on Marcus Blankenship.

More than a year after its public debut, Sony's mobile game division is releasing its first game in Japan: a free-to-play spin on Everybody's Golf (or as its known in the West, Hot Shots Golf.) ...

Social gaming giant Zynga sue two of its former employees for stealing confidential information on Tuesday, and is alleging the employees in question took the data over to their new company, Scopely, who is also named as a co-defendant in the case.

The two employees are Massimo Maietti and Ehud Barlach. Maietti was working as the creative director on an unannounced title that Zynga have codenamed Project Mars and left in July, while Barlach was the general manage for Hit it Rich! Slots and left in September.

Maeitti has been accused of taking private data and Zynga suggests that Barlach might have done the same, while both are also accused of recruiting former Zynga staff after departure, which is a breach of their employment contracts.

This was picked up by ArsTechnica who also snagged this 28 page civil complaint which lays out all of the allegations and evidence.

Perhaps the most damning part of the document is where Zynga alleges "On July 4, 2016 - during the Independence Day holiday and just one day before he gave notice of his resignation of employment from Zynga - Maietti's internet history shows that Maietti used the Google Chrome browser on his Zynga-issued laptop to access a Zynga-owned Google Drive account. His browser history shows that he proceeded to download ten Google Drive folders that he had permission to access, but only as necessary to perform his duties for Zynga. The Google Chrome browser "zipped" those ten files and downloaded them to his File Downloads folder. Once downloaded, forensic analysis shows that Maietti copied nine of those folders to a connected external USB device."

"The external USB device was disconnected from the computer, and Maietti then placed the zip files in the Trash, while they remained on the USB device. "On July 7, 2016, over 20,000 files and folders were located within the Trash but were subsequently deleted in a failed attempt by Maietti to cover his tracks."

Zynga claims to have discovered this after investigating why its employees had departed the company, and goes on to say that after further analysis "Maietti took over 14,000 files and approximately 26 GB of extremely sensitive, highly confidential Zynga information."

Zynga's suit also mentions Derek Heck, a project manager for Wizard of Oz slots and Willy Wonka Slots. The lawsuit claims that Heck “deleted more than 24,000 files and folders in the last month of his employment with Zynga, and referenced articles entitled ‘How to erase my hard drive and start over’ and ‘How to Erase a Computer Hard Drive - How To Articles.’”

The information taken apparently extends to "wholesale copying of the Project Mars folder."

We've reached out to Scopley and Zynga for comment and will update the story if we hear more.

Niantic's insta-hit has topped Twitter's daily users and sees more engagement than Facebook

In a blast from the past, Nintendo has announced plans to bring back the NES in bite-sized form this November ...

Creator continues campaign to regain rights