China Roundup: Tencent’s NBA test, TikTok parent deepens education push

Welcome to TechCrunch’s China roundup, a digest of events that happened at major Chinese tech companies and what they mean to tech founders and executives around the world.

The talk about U.S.-China relationships over the past two weeks has centered heavily on the NBA controversy, which has put the interest of some of China’s largest tech firms at stake. Last week, Houston Rockets general manager Daryl Morey voiced support for Hong Kong protests in his since-deleted tweet, angering China’s NBA fans and prompting a raft of local tech companies to sever ties with the league. But some businesses seem to be back on track.

Tencent, which is famous for a slew of internet products, including WeChat and its Netflix-like video service, has been NBA’s exclusive streaming partner since 2009 and recently renewed the deal through the 2024-25 season. As many as 490 million fans in China watched NBA programming through Tencent in just one season this year, the pair claims.

The basketball games are clearly a driver of ad revenue and subscribers for Tencent amid fierce competition in China’s video streaming market, but following Morey’s statement, the company swiftly announced (in Chinese) it would suspend portions of its broadcast arrangements with the NBA. Popular smartphone brand Vivo and Starbucks’s local challenger Luckin also promised to pause collaboration with the NBA.

It was a tough call for businesses having to choose between economic interest and patriotism, and Tencent was tactful in its response, pledging only to “temporarily” halt the streaming of NBA “preseason games (China).” As public anger subsided over the week, Tencent resumed airing NBA preseason games on Monday. After all, the content partnership reportedly cost Tencent a heavy sum of $1.5 billion.

Entertainment giant turns to education

TikTok is probably the Chinese Internet service being most closely watched by the world at the moment. Its parent firm ByteDance, last reportedly valued at $75 billion, has ambitions beyond short videos.

This week, more details emerged on the upstart’s education endeavors through a WeChat post by Musical.ly founder Lulu Yang, whose short-video startup was acquired by ByteDance and subsequently merged with TikTok. Yang confirmed he was helping ByteDance to develop an education device in collaboration with phone maker Smartisan’s former hardware team, which ByteDance has absorbed. The product, which leverages ByteDance’s artificial intelligence capabilities, will be a “robotic learning companion” for K-12 students to use at home.

The news arrived in the same week that ByteDance’s flagship video app TikTok announced producing educational content for India, where it’s used by 200 million people every month. The move is designed to assuage local officials who have vehemently slammed TikTok for hosting illicit content, as my colleague Manish Singh pointed out.

Diving into education appears to be a sensible move for ByteDance to build relationships with local authorities, which can at times find its entertainment-focused content problematic. The multi-billion-dollar online education industry is also highly lucrative. ByteDance, with 1.5 billion daily users across TikTok, Douyin (TikTok for China), Toutiao news aggregator and other new media apps, is in a good position to monetize the enormous base by touting new services, whether they are educational content or mobile games.

Also worth your time

• A total of 53 major video streaming services in China have introduced a “safe mode” for teenagers as of this week, state media reported (in Chinese). During the controls mode, underage users won’t be able to search for content, send real-time comments or private messages, upload or share videos, or reward live streaming hosts with virtual gifts. It’s part of China’s national effort to protect young people from consuming harmful digital content and internet addiction, which has also spawned age checks processes in Tencent games. 
• Xiaohongshu, a fast-growing social commerce app in China, is back in Android app stores nearly three months after it was banned by the government for undisclosed reasons. Rumors had it that the service, which was reportedly valued at more than $2.5 billion last year, was used to spread pornography and fake reviews. It’s hardly the first tech company hit by media regulation, and it can probably learn a thing or two from ByteDance, which has aggressively ramped up its content moderation force following a sequence of crackdowns by the government.
• Meituan will partner with 1,000 vocational schools in the country to train as many as 100 million workers from the service industry over the next ten years, the Hong Kong-listed company announced (in Chinese) this week. Food delivery makes up the bulk of the on-demand services giant’s business but its footprint spans a wide range. The classes it provides to prepare workers for a digital era will also touch upon skincare, hair styling, manicure, plastic surgery, hospitality and parenting, a program highlighting the extensive reach of technology into Chinese people’s every life.
• Chinese workers turn out to be big advocates for the application of AI. According to a survey by Oracle and research firm Future Workplace, workers in India (60 percent) and China (56 percent) are the most excited about AI. Japan, where the labor force is shrinking, ranks surprisingly low (25 percent), and the U.S. has an equally mild reaction (22 percent) toward the technology.

Facebook isn’t free speech, it’s algorithmic amplification optimized for outrage

This week Mark Zuckerberg gave a speech in which he extolled “giving everyone a voice” and fighting “to uphold a wide a definition of freedom of expression as possible.” That sounds great, of course! Freedom of expression is a cornerstone, if not the cornerstone, of liberal democracy. Who could be opposed to that?

The problem is that Facebook doesn’t offer free speech; it offers free amplification. No one would much care about anything you posted to Facebook, no matter how false or hateful, if people had to navigate to your particular page to read your rantings, as in the very early days of the site.

But what people actually read on Facebook is what’s in their News Feed … and its contents, in turn, are determined not by giving everyone an equal voice, and not by a strict chronological timeline. What you read on Facebook is determined entirely by Facebook’s algorithm, which elides much — censors much, if you wrongly think the News Feed is free speech — and amplifies little.

What is amplified? Two forms of content. For native content, the algorithm optimizes for engagement. This in turn means people spend more time on Facebook, and therefore more time in the company of that other form of content which is amplified: paid advertising.

Of course this isn’t absolute. As Zuckerberg notes in his speech, Facebook works to stop things like hoaxes and medical misinformation from going viral, even if they’re otherwise anointed by the algorithm. But he has specifically decided that Facebook will not attempt to stop paid political misinformation from going viral.

I personally disagree with this decision, but I think it’s something about which reasonable people can disagree. However I find it deeply disingenuous to claim that this is somehow about defending free speech. If someone were to try to place a blatantly false political ad on any platform or network, would anyone seriously consider a decision not to run that ad an attack on free speech? Of course not. And they shouldn’t take the converse argument seriously either.

The larger issue, though, is that Facebook seems to think that if an algorithm is content-agnostic, it is therefore fair. When Zuckerberg talks about giving people a voice, he really means giving those people selected by Facebook’s algorithm a voice. When he says “People having the power to express themselves at scale is a new kind of force in the world — a Fifth Estate,” what he actually means is that Facebook’s algorithm is itself that Fifth Estate.

The belief is apparently that any human judgement based on content beyond the absolute minimum required by law and implied by the social contract — i.e. filtering out hate speech, abuses, or dangerous medical misinformation, all of which he stresses in his speech — is dangerous and wrong, and that this goes for both native content and paid advertising. According to this belief, Facebook’s algorithm, so long as it is content-agnostic, is definitionally fair.

And that belief is just flat-out wrong. As we’ve all seen, “optimizing for engagement” all too often means optimizing for outrage, for polarization, for disingenuous misinformation. True, it doesn’t mean favoring any side of any given issue; but it does mean favoring the extremes, the conspiracy theorists, the histrionic diatribes on all sides. It means fomenting mistrust, suspicion, and conflict everywhere. We’ve all seen it. We’ve all lived it.

Facebook’s decision to accept political ads regardless of content is essentially a logical extension of how their algorithm optimizes for engagement. It speaks to their belief that as long as they don’t pass judgement based on content, their ongoing, ceaseless editing of what people see and don’t see — and please call it censorship if you think this is any way about freedom of speech — is therefore fair and just. This belief was defensible ten or even five years ago. It is not defensible today.

But it is also not going to change. Facebook’s original sin is not political ads; it is optimizing for engagement so that their users see more ads of all kinds. That’s what needs to change for Facebook to become a positive force in the world … and it’s also what never will, because that engagement is the fundamental engine of their business model.

IPOs are the beginning, not the end

Earlier this month at TechCrunch Disrupt San Francisco, we sat down with Box’s Aaron Levie and PagerDuty’s Jennifer Tejada to discuss their respective companies’ paths to an IPO, the general IPO landscape and the pros and cons of going public. With a lot of recent IPOs faltering and increased pressure on startup valuations, now is as good a time as ever to think about the role IPOs play in a company’s lifespan.

“I think it’s really important to think of the IPOs, the beginning, not the end,” said Tejada. “We all live in Silicon Valley and that can be a little bit of an echo chamber and you talk about exits all the time. The IPO is an entrance, right? It is part of the beginning of a long journey for a durable company that you want to build a legacy around. And so, it is a moment — it’s the start of you really sharing a narrative backed by financial data to help people understand your current business, the potential for your business, the market that you’re in, etc. And I think we tend to talk about it like it’s the be-all end-all.”

That’s something Levie definitely agrees with. “I think we have too much of a fixation on the IPO moment versus just building durable business models and how do they end up translating into valuations. The valuation that you get at an IPO is due to variety factors.”

SAN FRANCISCO, CALIFORNIA – OCTOBER 02: (L-R) PagerDuty CEO & Chairperson Jennifer Tejada, Box Co-Founder/Chairman & CEO Aaron Levie, and TechCrunch Writer Frederic Lardinois speak onstage during TechCrunch Disrupt San Francisco 2019 at Moscone Convention Center on October 02, 2019 in San Francisco, California. (Photo by Steve Jennings/Getty Images for TechCrunch)

It’s no secret that Box and PagerDuty had very different experiences as they got ready to go public. Box announced its S-1 only a few days before a major market crash back in 2014. PagerDuty, on the other hand, went public earlier this year, with solid financials and very little drama.

Tejada, in many ways, attributed that to the work she and her team did to get the company ready for this moment. “I get asked a lot by CEOs that are thinking about getting ready to go public, ‘you know, what was your playbook? How do you do this?’ And I think instead of thinking about what’s the playbook, you need to be intellectually honest about what your business looks like,” she said. In her view, CEOs need to focus on the leading indicators for their business — the ones they want the market to understand. But she also noted that the market needs to understand a company’s potential in the long run.

“You want to make sure that the market understands where you think the business can go and gets excited about it, but that they don’t over-rotate in their expectations, because dealing with really high expectations creates a lot of downstream difficulty.”

Neurons hide their memories in their imaginary fluctuations

Enlarge / This is your brain. Well, not your brain. Presumably your brain isn't being photographed at this moment. (credit: Adeel Anwar / Flickr)

The brain is, at least to me, an enigma wrapped in a mystery. People who are smarter than me—a list that encompasses most humans, dogs, and possibly some species of yeast—have worked out many aspects of the brain. But some seemingly basic things, like how we remember, are still understood only at a very vague level. Now, by investigating a mathematical model of neural activity, researchers have found another possible mechanism to store and recall memories.

We know in detail how neurons function. Neurotransmitters, synapses firing, excitation, and suppression are all textbook knowledge. Indeed, we've abstracted these ideas to create blackbox algorithms to help us ruin people's lives by performing real-world tasks.

We also understand the brain at a higher, more structural, level: we know which bits of the brain are involved in processing different tasks. The vision system, for instance is mapped out in exquisite detail. Yet the intermediate level in between these two areas remains frustratingly vague. We know that a set of neurons might be involved in identifying vertical lines in our visual field, but we don't really understand how that recognition occurs.

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eMarketer: Google will take 37.2%, or $48.05B, of all US digital ad spend this year, down from 38.2% in 2018, while Amazon will take 8.8%, up from 6.8% in 2018 (Laurie Sullivan/MediaPost)

Laurie Sullivan / MediaPost:
eMarketer: Google will take 37.2%, or $48.05B, of all US digital ad spend this year, down from 38.2% in 2018, while Amazon will take 8.8%, up from 6.8% in 2018  —  Google dominates the search ad market today, but eMarketer's latest forecast shows that within the next two years, Google's revenue share will fall and Amazon's will rise.

Amazon Great Indian Festival sale: OnePlus 7, iPhone XR and other smartphones available at discount

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How meme culture changed the PSAT

Enlarge (credit: Caiaimage/Paul Bradbury/Getty)

Thank you for coming and welcome to the College Board’s Preliminary SAT and National Merit Scholarship Qualifying Test, the internet age edition. You must bring two No. 2 pencils, a photo ID, and an approved calculator. You must not smuggle in a protractor, or scarf down a sandwich, or post memes on Twitter that reveal test content. No, really: The penalty for such illicit memes could be the cancellation of your test score. And now, an inspiring message from Youth Icon, former boy band member, and British person Harry Styles:

Thanks for your support @Harry_Styles. pic.twitter.com/PlwG5s6c0j

— The College Board (@CollegeBoard) October 15, 2019

All over the US, high school juniors and sophomores are now taking the PSAT, which has been the norm for the past half-century. The contemporary trouble for test administrator the College Board is that the test’s ubiquity, the age of participants, and the high emotional stakes these days make the details of the exam guaranteed meme fodder—and, well, standardized tests are standardized. Posting memes about them could lead to teens getting hints about their contents. So the organization has taken to Twitter to try to salvage some semblance of their normal testing conditions. Teens are, as always, unimpressed.

Nothing unites high schoolers than the memes that are borne out of the PSAT and honestly, it's beautiful

— Anna (@bananadaccache) October 8, 2019

The College Board has been on meme watch for years. The earliest signs of PSAT meme movements likely date back to 2014, when users on subreddit r/teenagers decided to “illegally discuss the PSAT,” and others took to Twitter and Tumblr to post their own reactions to test questions. The College Board has made it clear that it disapproves, sometimes posting stern messages warning test takers about the potential consequences and making frequent requests for students to delete tweets pertaining to the test.

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Xiaomi launches 64MP quad camera phone, Google’s ‘bad news’ for Pixel fans in India, latest-generation iPad launches in India and other top tech news of the week

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Twitch is testing Watch Parties, a feature that allows streamers to screen Prime Video content that their viewers can watch along if they have Amazon Prime (Owen S. Good/Polygon)

Owen S. Good / Polygon:
Twitch is testing Watch Parties, a feature that allows streamers to screen Prime Video content that their viewers can watch along if they have Amazon Prime  —  This is fargin' awesome!  —  Twitch is now testing out a long-requested “watch parties” feature, which means that streamers …

Redmi Note 8 Pro Review

Redmi Note 8 Pro is the successor to the popular Redmi Note 7 Pro, but is it good enough to take the name forward? We put it through the test in our review to find out. https://ift.tt/32uzEv2

Redmi Note 8 Pro, Realme X2, Google Pixel 4, and More Tech News This Week

Redmi Note 8 Pro price in India starts at Rs. 14,999. 6GB RAM/ 128GB storage is priced at Rs. 15,999, while 8GB RAM/ 128GB storage variant price in India is Rs. 17,999. https://ift.tt/2pwqqzT

ESET details a hacking campaign, active for the past 6 years, by the Russia-linked group the Dukes or Cozy Bear, which was thought to be dormant since DNC hack (Andy Greenberg/Wired)

Andy Greenberg / Wired:
ESET details a hacking campaign, active for the past 6 years, by the Russia-linked group the Dukes or Cozy Bear, which was thought to be dormant since DNC hack  —  Largely out of the spotlight since 2016, Cozy Bear hackers have been caught perpetrating a years-long campaign.

David Sacks' Craft Ventures, which led Bird's Series A round, has closed its second fund with $500M, up from the $350M it had closed for its debut fund (Connie Loizos/TechCrunch)

Connie Loizos / TechCrunch:
David Sacks' Craft Ventures, which led Bird's Series A round, has closed its second fund with $500M, up from the $350M it had closed for its debut fund  —  Craft Ventures, the venture firm launched in 2017 by serial entrepreneur David Sacks, has closed its second fund with $500 million …

AT&T raises the price of its streaming service AT&T TV Now, with the basic Plus package up $15 to a $65/month; the move follows a similar increase in March (Bloomberg)

Bloomberg:
AT&T raises the price of its streaming service AT&T TV Now, with the basic Plus package up $15 to a $65/month; the move follows a similar increase in March  —  - TV Now service will rise to $80 a month for 65 channels  — Phone giant is under pressure from activist to boost returns

Update your old iPad and iPhone before November 3 to avoid issues with location, date, and time

On its support page, Apple has requested users to update their old iOS devices to the latest version before November 3, 2019. The company says, “Starting just before 12:00 a.m. UTC on November 3, 2019, some iPhone and iPad models introduced in 2012 and earlier will require an iOS update to maintain accurate GPS location and keep the correct date and time. This is due to the GPS time rollover issue that began affecting GPS-enabled products from other manufacturers on April 6, 2019. Affected Apple devices are not impacted until just before 12:00 a.m. UTC on November 3, 2019.”

It is advisable to update your device as soon as possible as Apple’s support page says that after November 3, 2019, the device might not be able to receive over-the-air software updates. 

If you would like to check the software version of your iOS device, you can do so by opening the Settings app, tap General, then tap About. Look for the number next to Software Version. The updated software version number should be 10.3.4 or 9.3.6, depending on your device.

The iPhone 5 and the iPad (4th generation) Wi-Fi + Cellular need to be on iOS 10.3.4. The iPhone 4s, iPad mini (1st generation) Wi-Fi + Cellular, iPad 2 Wi-Fi + Cellular (CDMA models only) and the iPad (3rd generation) Wi-Fi + Cellular need to be on iOS 9.3.6. Apple says that the issue does not affect iPod touch or any iPad models that have Wi-Fi only. It also doesn't affect iOS devices newer than those listed above.

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