How Google and the Big Tech Companies Are Helping Maintain America’s Empire


Military, intelligence agencies and defense contractors are totally connected to Silicon Valley.

Silicon Valley has been in the media spotlight for its role in gentrifying and raising rents in San Francisco, helping the NSA spy on American citizens, and lack of racial and gender diversity. Despite that, Silicon Valley still has a reputation for benevolence, innocence and progressivism. Hence Google’s phrase, “Don’t be evil.” A recent Wall Street Journal/NBC News poll found that, even after the Snowden leaks, 53% of those surveyed had high confidence in the tech industry. The tech industry is not seen as evil as, say, Wall Street or Big Oil.

One aspect of Silicon Valley that would damage this reputation has not been scrutinized enough—its involvement in American militarism. Silicon Valley’s ties to the National Security State extend beyond the NSA’s PRISM program. Through numerous partnerships and contracts with the U.S. military, intelligence and law enforcement agencies, Silicon Valley is part of the American military-industrial complex. Google sells its technologies to the U.S. military, FBI, CIA, NSA, DEA, NGA, and other intelligence and law enforcement agencies, has managers with backgrounds in military and intelligence work, and partners with defense contractors like Lockheed Martin and Northrop Grumman. Amazon designed a cloud computing system that will be used by the CIA and every other intelligence agency. The CIA-funded tech company Palantir sells its data-mining and analysis software to the U.S. military, CIA, LAPD, NYPD, and other security agencies. These technologies have several war-zone and intelligence-gathering applications.

First, a little background to explain how the military has been involved with Silicon Valley since its conception as a technology center. Silicon Valley’s roots date back to World War II, according to a presentation by researcher and entrepreneur Steve Blank. During the war, the U.S. government funded a secret lab at Harvard University to research how to disrupt Germany’s radar-guided electronic air defense system. The solution — drop aluminum foil in front of German radars to jam them. This birthed modern electronic warfare and signals intelligence. The head of that lab was Stanford engineering professor Fred Terman who, after World War II, took 11 staffers from that lab to create Stanford’s Electronic Research Lab (ERL), which received funding from the military. Stanford also had an Applied Electronics Lab(AEL) that did classified research in jammers and electronic intelligence for the military.

In fact, much of AEL’s research aided the U.S. war in Vietnam. This made the lab a target for student antiwar protesters who nonviolently occupied the lab in April 1969 and demanded an end to classified research at Stanford. After nearly a year of teach-ins, protests, and violent clashes with the police, Stanford effectively eliminated war-related classified research at the university.

The ERL did research in and designed microwave tubes and electronic receivers and jammers. This helped the U.S. military and intelligence agencies spy on the Soviet Union and jam their air defense systems. Local tube companies and contractors developed the technologies based on that research. Some researchers from ERL also founded microwave companies in the area. This created a boon of microwave and electronic startups that ultimately formed the Silicon Valley known today.

Don’t be evil, Google

Last year, the first Snowden documents revealed that Google, Facebook, Yahoo!, and other major tech companies provided the NSA access to their users’ data through the PRISM program. All the major tech companies denied knowledge of PRISM and put up an adversarial public front to government surveillance. However, Al Jazeera America’s Jason Leopold obtained, via FOIA request, two sets of email communications between former NSA Director Gen. Keith Alexander and Google executives Sergey Brin and Eric Schmidt. The communications, according to Leopold, suggest “a far cozier working relationship between some tech firms and the U.S. government than was implied by Silicon Valley brass” and that “not all cooperation was under pressure.” In the emails, Alexander and the Google executives discussed information sharing related to national security purposes.

But PRISM is the tip of the iceberg. Several tech companies are deeply in bed with the U.S. military, intelligence agencies, and defense contractors. One very notable example is Google. Google markets and sells its technology to the U.S. military and several intelligence and law enforcement agencies, such as the FBI, CIA, NSA, DEA, and NGA.

Google has a contract with the National Geospatial-Intelligence Agency (NGA) that allows the agency to use Google Earth Builder. The NGA provides geospatial intelligence, such as satellite imagery and mapping, to the military and other intelligence agencies like the NSA. In fact, NGA geospatial intelligence helped the military and CIA locate and kill Osama bin Laden. This contract allows the NGA to utilize Google’s mapping technology for geospatial intelligence purposes. Google’s Official Enterprise Blog announced that “Google’s work with NGA marks one of the first major government geospatial cloud initiatives, which will enable NGA to use Google Earth Builder to host its geospatial data and information. This allows NGA to customize Google Earth & Maps to provide maps and globes to support U.S. government activities, including: U.S. national security; homeland security; environmental impact and monitoring; and humanitarian assistance, disaster response and preparedness efforts.”

Google Earth’s technology “got its start in the intelligence community, in a CIA-backed firm called Keyhole,” which Google purchased in 2004, according to the Washington Post. PandoDaily reporter Yasha Levine, who has extensively reported on Google’s ties to the military and intelligence communitypoints out that Keyhole’s “main product was an application called EarthViewer, which allowed users to fly and move around a virtual globe as if they were in a video game.”

In 2003, a year before Google bought Keyhole, the company was on the verge of bankruptcy, until it was saved by In-Q-Tel, a CIA-funded venture capital firm. The CIA worked with other intelligence agencies to fit Keyhole’s systems to its needs. According to the CIA Museum page, “The finished product transformed the way intelligence officers interacted with geographic information and earth imagery. Users could now easily combine complicated sets of data and imagery into clear, realistic visual representations. Users could ‘fly’ from space to street level seamlessly while interactively exploring layers of information including roads, schools, businesses, and demographics.”

How much In-Q-Tel invested into Keyhole is classified. However, Levine writes that “the bulk of the funds didn’t come from the CIA’s intelligence budget — as they normally do with In-Q-Tel — but from the NGA, which provided the money on behalf of the entire ‘Intelligence Community.’ As a result, equity in Keyhole was held by two major intelligence agencies.” Shortly after In-Q-Tel bought Keyhole, the NGA (then known as the National Imagery and Mapping Agency or NIMA) announced it immediately used Keyhole’s technology to support U.S. troops in Iraq at the 2003-2011 war. The next year, Google purchased Keyhole and used its technology to develop Google Earth.

Four years after Google purchased Keyhole, in 2008, Google and the NGA purchased GeoEye-1, the world’s highest-resolution satellite, from the company GeoEye. The NGA paid for half of the satellite’s $502 million development and committed to purchasing its imagery. Because of a government restriction, Google gets lower-resolution images but still retains exclusive access to the satellite’s photos. GeoEye later merged into DigitalGlobe in 2013.

Google’s relationship to the National Security State extends beyond contracts with the military and intelligence agencies. Many managers in Google’s public sector division come from the U.S. military and intelligence community, according to one of Levine’s reports.

Michele R. Weslander-Quaid is one example. She became Google’s Innovation Evangelist and Chief Technology Officer of the company’s public sector division in 2011. Before joining Google, since 9/11, Weslander-Quaid worked throughout the military and intelligence world in positions at the National Geospatial-Intelligence Agency, Office of the Director of National Intelligence, National Reconnaissance Office, and later, the Office of the Secretary of Defense. Levine noted that Weslander-Quaid also “toured combat zones in both Iraq and Afghanistan in order to see the tech needs of the military first-hand.”

Throughout her years working in the intelligence community, Weslander-Quaid “shook things up by dropping archaic software and hardware and convincing teams to collaborate via web tools” and “treated each agency like a startup,” according to a 2014 Entrepreneur Magazine profile. She was a major advocate for web tools and cloud-based software and was responsible for implementing them at the agencies she worked at. At Google, Weslander-Quaid’s job is to meet “with agency directors to map technological paths they want to follow, and helps Google employees understand what’s needed to work with public-sector clients.” Weslander-Quaid told Entrepreneur, “A big part of my job is to translate between Silicon Valley speak and government dialect” and “act as a bridge between the two cultures.”

Another is Shannon Sullivan, head of defense and intelligence at Google. Before working at Google, Sullivan served in the U.S. Air Force working at various intelligence positions. First as senior military advisor and then in the Air Force’s C4ISR Acquisition and Test; Space Operations, Foreign Military Sales unit. C4ISR stands for “Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance.” Sullivan left his Air Force positions to work as Defense Director for BAE Systems, a British-based arms and defense company, and then Army and Air Force COCOMs Director at Oracle. His last project at Google was “setting up a Google Apps ‘transformational’ test program to supply 50,000 soldiers in the US Army and DoD with a customized Google App Universe”, according to Levine.

Google not only has a revolving door with the Pentagon and intelligence community, it also partners with defense and intelligence contractors. Levine writes that “in recent years, Google has increasingly taken the role of subcontractor: selling its wares to military and intelligence agencies by partnering with established military contractors.”

The company’s partners include two of the biggest American defense contractors — Lockheed Martin, an aerospace, defense, and information security company, and Northrop Grumman, an aerospace and defense technology company. Both Lockheed and Northrop produce aircraft, missiles and defense systems, naval and radar systems, unmanned systems, satellites, information technology, and other defense-related technologies. In 2011, Lockheed Martin made $36.3 billion in arms sales, while Northrop Grumman made $21.4 billion. Lockheed has a major office in Sunnyvale, California, right in the middle of Silicon Valley. Moreover, Lockheed was also involved in interrogating prisoners in Iraq and Guantanamo, through its purchase of Sytex Corporation and the information technology unit of Affiliated Computer Services (ACS), both of whom directly interrogated detainees.

Google worked with Lockheed to design geospatial technologies. In 2007, describing the company as “Google’s partner,” the Washington Post reported that Lockheed “demonstrated a Google Earth product that it helped design for the National Geospatial-Intelligence Agency’s work in Iraq. These included displays of key regions of the country and outlined Sunni and Shiite neighborhoods in Baghdad, as well as U.S. and Iraqi military bases in the city. Neither Lockheed nor Google would say how the geospatial agency uses the data.” Meanwhile, Google has a $1-million contract with Northrop to install a Google Earth plug-in.

Both Lockheed and Northrop manufacture and sell unmanned systems, also known as drones. Lockheed’s drones include the Stalker, which can stay airborne for 48 hours; Desert Hawk III, a small reconnaissance drone used by British troops in Iraq and Afghanistan; and the RQ-170 Sentinel, a high-altitude stealth reconnaissance drone used by the U.S. Air Force and CIA. RQ-170s have been used in Afghanistan and for the raidthat killed Osama bin Laden. One American RQ-170 infamously crashed in Iran while on a surveillance mission over the country in late 2011.

Northrop Grumman built the RQ-4 Global Hawk, a high-altitude surveillance drone used by the Air Force and Navy. Northrop is also building a new stealth drone for the Air Force called the RQ-180, which may be operational by 2015. In 2012, Northrop sold $1.2 billion worth of drones to South Korea.

Google is also cashing in on the drone market. It recently purchased drone manufacturer Titan Aerospace, which makes high-altitude, solar-powered drones that can “stay in the air for years without needing to land,” reported the Wire. Facebook entered into talks to buy the company a month before Google made the purchase.

Last December, Google purchased Boston Dynamics, a major engineering and robotics company that receives funding from the military for its projects. According to the Guardian, “Funding for the majority of the most advanced Boston Dynamics robots comes from military sources, including the US Defence Advanced Research Projects Agency (DARPA) and the US army, navy and marine corps.” Some of these DARPA-funded projects include BigDog, Legged Squad Support System (LS3), Cheetah, WildCat, and Atlas, all of which are autonomous, walking robots. Altas is humanoid, while BigDog, LS3, Cheetah, WildCat are animal-like quadrupeds. In addition to Boston Dynamics, Google purchased eight robotics companies in 2013—Industrial Perception, Redwood Robotics, Meka, Schaft, Holomni, Bot & Dolly, and Autofuss. Google has been tight-lipped about the specifics of its plans for the robotics companies. But some sources told the New York Times that Google’s robotics efforts are not aimed at consumers but rather manufacturing, such as automating supply chains.

Google’s “Enterprise Government” page also lists military/intelligence contractors Science Applications International Corporation (SAIC) and Blackbird Technologies among the companies it partners with. In particularly, Blackbird is a military contractor that supplies locators for “the covert ‘tagging, tracking and locating’ of suspected enemies,” according to Wired. Its customers include the U.S. Navy and U.S. Special Operations Command. SOCOM oversees the U.S. military’s special operations forces units, such as the Navy SEALs, Delta Force, Army Rangers, and Green Berets. Blackbird even sent some employees as armed operatives on secret missions with special operations forces. The company’s vice president is Cofer Black, a former CIA operative who ran the agency’s Counterterrorist Center before 9/11.

Palantir and the military

Many others tech companies are working with military and intelligence agencies. Amazon recently developed a $600 million cloud computing system for the CIA that will also service all 17 intelligence agencies. Both Amazon and the CIA have said little to nothing about the system’s capabilities.

Palantir, which is based in Palo Alto, California produces and sells data-mining and analysis software. Its customers include the U.S. Marine Corps, U.S. Special Operations Command, CIA, NSA, FBI, Defense Intelligence Agency, Department of Homeland Security, National Counterterrorism Center, LAPD, and NYPD. In California, the Northern California Regional Intelligence Center (NCRIC), one of 72 federally run fusion centers built across the nation since 9/11, uses Palantir software to collect and analyze license plate photos.

While Google sells its wares to whomever in order to make a profit, Palantir, as a company, isn’t solely dedicated to profit-maximizing. Counterterrorism has been part of the company’s mission since it began. The company was founded in 2004 by investor Alex Karp, who is the company’s chief executive, and billionaire PayPal founder Peter Thiel. In 2003, Thiel came up with the idea to develop software to fight terrorism based on PayPal’s fraud recognition software. The CIA’s In-Q-Tel helped jumpstart the company by investing $2 million. The rest of the company’s $30 million start-up costs were funded by Thiel and his venture capital fund.

Palantir’s software has “a user-friendly search tool that can scan multiple data sources at once, something previous search tools couldn’t do,” according to a 2009 Wall Street Journal profile. The software fills gaps in intelligence “by using a ‘tagging’ technique similar to that used by the search functions on most Web sites. Palantir tags, or categorizes, every bit of data separately, whether it be a first name, a last name or a phone number.” Analysts can quickly categorize information as it comes in. The software’s ability to scan and categorize multiple sources of incoming data helps analysts connect the dots among large and different pools of information — signals intelligence, human intelligence, geospatial intelligence, and much more. All this data is collected and analyzed in Palantir’s system. This makes it useful for war-related, intelligence, and law enforcement purposes. That is why so many military, police, and intelligence agencies want Palantir’s software.

U.S. troops in Afghanistan who used Palantir’s software, particularly the Marines and SOCOM, found it very helpful for their missions. Commanders liked Palantir’s ability to direct them at insurgents who “build and bury homemade bombs, the biggest killer of U.S. troops in Afghanistan,” the Washington Times reported. A Government Accountability Office report said Palantir’s software “gained a reputation for being intuitive and easy to use, while also providing effective tools to link and visualize data.” Special operations forces found Palantir to be “a highly effective system for conducting intelligence information analysis and supporting operations” and “provided flexibility to support mobile, disconnected users out on patrols or conducting missions.” Many within the military establishment are pushing to have other branches, such as the Army, adopt Palantir’s software in order to improve intelligence-sharing.

Palantir’s friends include people from the highest echelons of the National Security State. Former CIA Director George Tenet and former Secretary of State Condoleezza Rice are advisers to Palantir, while former CIA director Gen. David Petraeus “considers himself a friend of Palantir CEO Alex Karp”, according to Forbes. Tenet told Forbes, “I wish I had Palantir when I was director. I wish we had the tool of its power because it not only slice and dices today, but it gives you an enormous knowledge management tool to make connections for analysts that go back five, six, six, eight, 10 years. It gives you a shot at your data that I don’t think any product that we had at the time did.”

High-tech militarism

Silicon Valley’s technology has numerous battlefield applications, which is something the U.S. military notices. Since the global war on terror began, the military has had a growing need for high-tech intelligence-gathering and other equipment. “A key challenge facing the military services is providing users with the capabilities to analyze the huge amount of intelligence data being collected,” the GAO report said. The proliferation of drones, counter-insurgency operations, sophisticated intelligence-surveillance-reconnaissance (ISR) systems, and new technologies and sensors changed how intelligence is used in counterinsurgency campaigns in Iraq and Afghanistan and counterterrorism operations in Pakistan, Somalia, Yemen, and other countries.

According to the report, “The need to integrate the large amount of available intelligence data, including the ability to synthesize information from different types of intelligence sources (e.g., HUMINT, SIGINT, GEOINT, and open source), has become increasingly important in addressing, for example, improvised explosive device threats and tracking the activities of certain components of the local population.” This is where Palantir’s software comes in handy. It does what the military needs — data-mining and intelligence analysis. That is why it is used by SOCOM and other arms of the National Security State.

Irregular wars against insurgents and terrorist groups present two problems— finding the enemy and killing them. This is because such groups know how to mix in with, and are usually part of, the local population. Robotic weapons, such as drones, present “an asymmetric solution to an asymmetric problem,” according to a Foster-Miller executive quoted in P.W. Singer’s book Wired for War. Drones can hover over a territory for long periods of time and launch a missile at a target on command without putting American troops in harm’s way, making them very attractive weapons.

Additionally, the U.S. military and intelligence agencies are increasingly relying on signals intelligence to solve this problem. Signals intelligence monitors electronic signals, such as phone calls and conversations, emails, radio or radar signals, and electronic communications. Intelligence analysts or troops on the ground will collect and analyze the electronic communications, along with geospatial intelligence, of adversaries to track their location, map human behavior, and carry out lethal operations.

Robert Steele, a former Marine, CIA case officer, and current open source intelligence advocate, explained the utility of signals intelligence. “Signals intelligence has always relied primarily on seeing the dots and connecting the dots, not on knowing what the dots are saying. When combined with a history of the dots, and particularly the dots coming together in meetings, or a black (anonymous) cell phone residing next to a white (known) cellphone, such that the black acquires the white identity by extension, it becomes possible to ‘map’ human activity in relation to weapons caches, mosques, meetings, etcetera,” he said in an email interview. Steele added the “only advantage” to signals intelligence “is that it is very very expensive and leaves a lot of money on the table for pork and overhead.”

In Iraq and Afghanistan, for example, Joint Special Operations Command (JSOC) commandos combined images from surveillance drones with the tracking of mobile phone numbers to analyze insurgent networks. Commandos then used this analysis to locate and capture or kill their intended targets during raids. Oftentimes, however, this led to getting the wrong person. Steele added that human and open source intelligence are “vastly superior to signals intelligence 95% of the time” but “are underfunded precisely because they are not expensive and require face to face contact with foreigners, something the US Government is incompetent at, and Silicon Valley could care less.”

Capt. Michael Kearns, a retired U.S. and Australian Air Force intelligence officer and former SERE instructor with experience working in Silicon Valley, explained how digital information makes it easier for intelligence agencies to collect data. In an email, he told AlterNet, “Back in the day when the world was analog, every signal was one signal. Some signals contained a broad band of information contained within, however, there were no ‘data packets’ embedded within the electromagnetic spectrum. Therefore, collecting a signal, or a phone conversation, was largely the task of capturing / decoding / processing some specifically targeted, singular source. Today, welcome to the digital era. Data ‘packets’ flow as if like water, with pieces and parts of all things ‘upstream’ contained within. Therefore, the task today for a digital society is largely one of collecting everything, so as to fully unwrap and exploit the totality of the captured data in an almost exploratory manner. And therein lies the apparent inherently unconstitutional-ness of wholesale collection of digital data…it’s almost like ‘pre-crime.'”

One modern use of signals intelligence is in the United States’ extrajudicial killing program, a major component of the global war on terror. The extrajudicial killing program began during the Bush administration as a means to kill suspected terrorists around the world without any due process. However, as Bush focused on the large-occupations of Iraq and Afghanistan, the extrajudicial killing program was less emphasized.

The Obama administration continued the war on terror but largely shifted away from large-scale occupations to emphasizing CIA/JSOC drone strikes, airstrikes, cruise missile attacks,proxies, and raids by special operations forces against suspected terrorists and other groups. Obama continued and expanded Bush’s assassination program, relying on drones and special operations forces to do the job. According to the Bureau of Investigative Journalism, U.S. drone strikes and other covert operations have killed nearly 3,000 to over 4,800 people, including 500 to over 1,000 civilians, in Pakistan, Yemen, and Somalia. During Obama’s five years in office, over 2,400 people were killed by U.S. drone strikes. Most of those killed by drone strikes are civilians or low-level fighters and, in Pakistan, only 2 percent were high-level militants. Communities living under drone strikes are regularly terrorized and traumatized by them.

Targeting for drone strikes is based on metadata analysis and geolocating the cell phone SIM card of a suspected terrorist, according to a report by the Intercept. This intelligence is provided by the NSA and given to the CIA or JSOC which will then carry out the drone strike. However, it is very common for people in countries like Yemen or Pakistan to hold multiple SIM cards, hand their cell phones to family and friends, and groups like the Taliban to randomly hand out SIM cards among their fighters to confuse trackers.

Since this methodology targets a SIM card linked to a suspect rather than an actual person, innocent civilians are regularly killed unintentionally. To ensure the assassination program will continue, the National Counterterrorism Center developed the “disposition matrix,” a database that continuously adds the names, locations, and associates of suspected terrorists to kill-or-capture lists.

The Defense Department’s 2015 budget proposal requests $495.6 billion, down $0.4 billion from last year, and decreases the Army to around 440,000 to 450,000 troops from the post-9/11 peak of 570,000. But it protects money — $5.1 billion — for cyberwarfare and special operations forces, giving SOCOM $7.7 billion, a 10 percent increase from last year, and 69,700 personnel. Thus, these sorts of operations will likely continue.

As the United States emphasizes cyberwarfare, special operations, drone strikes, electronic-based forms of intelligence, and other tactics of irregular warfare to wage perpetual war, sophisticated technology will be needed. Silicon Valley is the National Security State’s go-to industry for this purpose.

Adam Hudson is a journalist, writer, and photographer.

http://www.alternet.org/news-amp-politics/how-google-and-big-tech-companies-are-helping-maintain-americas-empire?akid=12149.265072.iCZIs-&rd=1&src=newsletter1016284&t=6&paging=off&current_page=1#bookmark

Not Content To Ruin Just San Francisco, Rich Techies Are Gentrifying Burning Man Too

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Artist Dadara‘s Facebook like altar from Burning Man 2013. Photo: Bexx Brown-Spinelli/Flickr

This will come as news only to people who have not attended Burning Man in the last couple of years, but the New York Times has just caught on to the fact that Silicon Valley millionaires (and billionaires) have been attending the desert festival in greater numbers and quickly ruining it with their displays of wealth. While we used to call Coachella “Burning Man Lite for Angelenos,” Burning Man itself is quickly becoming Coachella on Crack for rich tech folk who want to get naked and do bong hits with Larry Page in Elon Musk’s decked-out RV.

Burners won’t just be sharing the playa with Larry and Sergey, Zuck, Grover Norquist, and at least one Winklevoss twin this year. There will also be a legion of new millionaires, most of them probably Burning Man virgins, who will be living in the lap of luxury and occasionally dropping in on your parties to ask for molly.

Per the Times piece:

“We used to have R.V.s and precooked meals,” said a man who attends Burning Man with a group of Silicon Valley entrepreneurs. (He asked not to be named so as not to jeopardize those relationships.) “Now, we have the craziest chefs in the world and people who build yurts for us that have beds and air-conditioning.” He added with a sense of amazement, “Yes, air-conditioning in the middle of the desert!”His camp includes about 100 people from the Valley and Hollywood start-ups, as well as several venture capital firms. And while dues for most non-tech camps run about $300 a person, he said his camp’s fees this year were $25,000 a person. A few people, mostly female models flown in from New York, get to go free, but when all is told, the weekend accommodations will collectively cost the partygoers over $2 million.

“Anyone who has been going to Burning Man for the last five years is now seeing things on a level of expense or flash that didn’t exist before,” said Brian Doherty, author of the book “This Is Burning Man.” “It does have this feeling that, ‘Oh, look, the rich people have moved into my neighborhood.’ It’s gentrifying.”

The blockaded camps of the tech gentrifiers have tended to be in the outer rings of Black Rock City, as was previously reported in 2011 when a guest of Elon Musk’s spoke to the Wall Street Journal. “We’re out of the thick of it,” he said, “so we’re not offending the more elaborate or involved set ups.”

But as Silicon Valley assumes more and more of a presence on the playa, what’s to stop them from claiming better and better real estate, closer to where the action is?

You won’t see any evidence of this on Facebook, though. All of this happens without the tech world’s usual passion for documentation, since they do abide by at least that one tenet of Burning Man culture that frowns on photography. And at least, as of 2014, they seem to understand that their displays of wealth aren’t all that welcome, and should probably be kept on the down-low.

But seriously? Models flown in from New York? Gross.

[NYT]

 

http://sfist.com/2014/08/21/not_content_to_ruin_just_san_franci.php

Israel’s Most Important Source of Capital: California

The New Gold Rush

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by DARWIN BOND-GRAHAM

 

Last Saturday between one and two thousand protesters marched on the Port of Oakland to blockade one of its busy marine terminals and prevent an Israeli ship from docking. After confronting a line of police guarding the waterfront the protesters declared victory; the Zim Lines vessel hovered offshore, afraid to dock, they said, and port workers wouldn’t be unloading its cargo.

One protester, looking beyond the line of police guarding the port, explained that the purpose of the action was to “impede the flow of capital.” Stopping one of Zim’s ships—the company’s vessels arrive in Oakland about four times a month, according to Zim’s web site—was a small, but real economic blow against Israel.

But if it’s a matter of stopping the flow of capital, the ports are a relatively small conduit of trade between California and Israel. For over 20 years California’s technology industry has been channeling billions of dollars to finance the growth of Israeli tech firms. In that time, tech has become a key sector for Israel’s economy. The flow of capital between California and Israel is digital, transmitted as currency and intellectual property. And this flow of capital occurs mostly through the decisions of a small number private equity firms and perhaps as few as a dozen large corporations. These flows of capital supporting Israel’s economy are less susceptible to social movement pressure.

The amount of support of for Israel’s economy originating from Silicon Valley’s private equity firms is especially large. In 2001, during the first year of the Second Intifada, Sequoia Capital Partners, a private equity company headquartered in Menlo Park, raised $150 million to invest in Israeli technology companies. This was Sequoia’s second Israel-focused venture capital fund. Last year Sequoia raised its fifth Israel-dedicated fund, totaling $215 million. Since 1999 Sequoia Capital has injected over $789 million into Israel’s software and electronics industries. Much of this money managed by Sequoia Capital was contributed by California investors, including major tax-exempt institutions like the J. Paul Getty Trust, and the Gordon and Betty Moore Foundation.

Accel Venture Partners, another one of the giants of Silicon Valley private equity, set up its first Israel-focused investment vehicle in 2001. Joseph Shoendorf of Accel told the Haaretz newspaper in 2007 that Accel has invested over $200 million in 20 Israeli companies. He added that many of Accel’s investments in Israel are not the run-of-the-mill consumer apps and gadgets that are so popular in the Bay Area’s tech scene. Although Israeli engineers produce plenty of that, Shoendorf said, “the world’s security situation is expected to get worse, and as a result, inventiveness will increase. The armies of the world are seeking solutions to a problem, and will encourage technological answers.”  Last March, Accel successfully raised $475 million for a fund that will burn a lot of its powder supporting Israeli tech companies.

You’re starting to get the picture. Billions flow from California’s Bay Area into Israel to support chip manufacturers, Internet startups, and telecommunications companies.

A lot of California’s venture capital has been exported to Israel to fund military and cybersecurity startups. Israeli society, constantly mobilized for a counter-insurgency war and occupation, creates an environment in which the nation’s hi-tech firms see their main role as contributing to the security of the Jewish state.

But the U.S. tech industry is also steeped in surveillance and weapons companies, and even the big consumer and enterprise brands like Google, Microsoft, and Cisco produce militarized software and hardware for use in the “homeland” and abroad. The contributions of Hewlett Packard in creating Israel’s biometric tracking system to control the movements of Palestinians is well known. Hewlett Packard also maintains the Israel Defense Ministry’s server farms, a job IBM previously held.  What makes the California-Israel economic connection powerful, however, isn’t so much the nature of the technologies being traded, and the capabilities they provide the Israeli state and military, but more so the sheer economic value of these transactions.

According to the Organization for Economic Cooperation and Development (OECD) Israel received $1.846 billion in direct investment from U.S. investors in 2012, the most recent year for which statistics are available. This is about two thirds of the total military aid the U.S. government provided Israel the same year.

U.S. investors have built up large positions in Israel’s economy, mostly through ownership of stock in Israeli corporations. In 2012 U.S. investors held a $19.7 billion stake in Israel’s economy, more than double the interest owned by all European countries combined. And corporations registered in the Cayman Islands, a tax shelter where thousands of American investors establish offshore funds, owned another $8.6 billion of Israel’s economy. For example, the Sequoia Capital Partners venture firm of Menlo Park raised $215 million last August to invest entirely in Israel. The legal place of incorporation for this fund? The Cayman Islands.

California investors own and manage stakes in Israeli companies like Mellanox Technologies, Ltd.. In 2002 Silicon Valley venture capital firms and several U.S. tech companies provided Mellanox with $64 million in funding. The American investors included three Menlo Park private equity firms, Sequoia Venture Partners, U.S. Venture Partners, and Bessemer Venture Partners, as well as technology giants IBM and Intel. Using this capital, Mellanox, headquartered in Yokneam, Israel, grew from a small company into a transnational technology giant valued today at $1.8 billion. It’s a key supplier of hardware to Hewlett Packard, IBM, and Intel. It’s main office in Yokneam looks like any other tech campus you can see in San Mateo County off the 101 Highway with gleaming glass mid-rise buildings tucked among trees and grass.

Yokneam is in the heart of Israel’s Silicon Wadi (“wadi” being a dry stream bed in Arabic, meaning “valley” in colloquial Hebrew). Prior to 1948 Yokneam was called Qira, the site of a Palestinian village and farms, but the area was “depopulated” and occupied by Israeli forces, and later settled and transformed into one of Israel’s most affluent cities.

Lots of Silicon Valley venture capital firms have set up offices in Israel. The location of choice for California investors seems to be Herzliya Pituach, a posh ocean side district of the city of Herliya. North of Tel Aviv, Herzliya is named after Theodor Herzl, considered by many to be the intellectual father of Zionism. The Herzliya Pituach is one of the wealthiest spots in all of Israel, home to many of the nation’s elite families. Bessemer Venture Partners’ Israel office is located just a few blocks from the Marinali Marina yacht harbor, and a short drive from million dollar beachfront homes. Sequoia Venture Partners maintain an office on Ramat Yam in one of the high rise towers with views of the azure Mediterranean Sea.

The business links between Silicon Valley and Israel aren’t apolitical. Many of California’s venture capital investors and technology executives are staunch supporters of pro-Israel causes. They have established numerous nonprofit organizations to strengthen economic and political ties between California and Israel.

The California-Israel Chamber of Commerce, located in Sunnyvale in an office park filled with software firms, is funded by Silicon Valley investors, corporations and law firms including Intel, Paypal, Silicon Valley Bank, and Morrison Foerster. Executives from these companies sit on the Chamber’s board of directors. Their ties to pro-Israel political groups are numerous.

Zvi Alon, a director of the California-Israel Chamber, runs a family foundation out of his Los Altos Hills home. Alongside a donation of $9,900 in 2011 to the California-Israel Chamber, Alon also made donations worth $36,000 to the Friends of Israeli Defense Forces. Alon is also credited as being a founder of Israel21C, an “online news magazine offering the single most diverse and reliable source of news and information about 21st century Israel to be found anywhere.”

Operating out of offices on Montgomery Street in downtown San Francisco, across the Street from Israel’s consulate, Israel21C produces media promoting Israel’s technology companies. Recent articles published by the group include “20 top tech inventions born of conflict,” and a profile of the “maverick thinker” behind the creation of Israel’s Iron Dome missile defense system. A recent film produced by the organization promotes Tel Aviv as a startup epicenter similar to San Francisco.

The General Consul of Israel in San Francisco, Andy David, is a board member of the California-Israel Chamber, as is the president of Silicon Valley Bank.

Nir Merry, another board member of the California-Israel Chamber, was born and partly raised in Israel in the Ma’agan Michael kibbutz. His father worked in a hidden underground ammunition factory making armaments used by Jewish commandoes in the battles that created the state of Israel. In a talk to students at the University of California, Santa Barabara, Merry elaborated on the links between Israel’s technology companies and its military.

“I volunteered to become a commando. It’s quite related to the topic of innovation,” said Merry. “Because to be a commando we have to be very innovative.”

Silicon Valley’s financial and technological assistance to Israel is by no means only a private sector effort. In March of 2014 Governor Jerry Brown signed a memorandum of understanding with Israeli Prime Minister Benjamin Netanyahu promising to promote economic links between California and Israel. The setting for the signing ceremony, Mountain View’s Computer History Museum, underscored the centrality of the tech industry in the agreement.

On the same trip Netanyahu visited Apple’s Cupertino headquarters where he was ushered into the executive board room for a chat with the company’s leaders. He also toured Stanford University.

Netanyahu’s California appearance was designed to beat back the Palestinian solidarity movement’s boycott, divest and sanction campaigners who, in recent years, have increased pressure on California’s universities and other public institutions to divest from companies that do business with Israel. During the signing ceremony for the MOU that would give Israeli companies access to California’s technology infrastructure, Netanyahu thanked Governor Brown for California’s divestment from Iran. In 2012, California virtually barred insurance companies from owning Iranian assets. Earlier the state passed legislation requiring its pension funds to divest from Iranian companies. As a result of these laws, the state’s teachers retirement fund CalSTRS even consults with the American Israel Public Affairs Committee regarding its investments.

Netanyahu also thanked Brown for the economic benefits that California’s giant public employee pension funds, CalPERS and CalSTRS, provide to Israel. Both are major investors in Israel’s economy.

The California-Israel MOU originated from California assembly member Bob Blumenfield’s office. Blumenfield, the sponsor and author of several Iran sanctions bills, is now a city council member in Los Angeles. Blumenfield is a staunch ally of Israel, and has used his political offices, from Sacramento to the state’s largest city, to strike back against the boycott, divest, sanction movement aimed against the Israeli military occupation of Palestine. Most recently Blumenfield organized LA’s top elected officials, including mayor Eric Garcetti, to make a public statement in support of Israel.

“We stand with Israel against a Hamas regime that terrorizes Israelis from the skies and now, from beneath the ground,” Blumenfield told the public.

Mayor Garcetti called Israel “our strongest ally in a tumultuous region.”

Palestinian solidarity activists inside Israel’s biggest economic and military partner, the United States, and inside one of its biggest investors, California, have struggled for years to build a boycott, divest and sanction movement. They’ve asked pension funds and universities to divest from companies that do business with the state of Israel, and they’ve asked academics and musicians to boycott Israel by canceling concerts and shunning conferences. They’ve had some success, but as California’s continuing links to Israel show, their task is a difficult one.

Their struggle will continue long after Zim’s ship pulls anchor and leaves Oakland’s harbor. Supporters of Israel will be working to strengthen California’s ties to their cause and prevent any economic protest movement from gaining traction. This coming October the California-Israel Chamber of Commerce will be hosting an international business summit at the Microsoft Campus in Mountain View where innovation and investment will be among the topics of discussion. And between now and then another six to eight Israeli vessels will probably also moor along Oakland’s waterfront trading millions in goods.

Darwin Bond-Graham is a sociologist and investigative journalist. He is a contributing editor to Counterpunch. His writing appears in the East Bay Express, Village Voice, LA Weekly and other newspapers. He blogs about the political economy of California at http://darwinbondgraham.wordpress.com/

 

 

http://www.counterpunch.org/2014/08/20/israels-most-important-source-of-capital-california/

Face Time: Eternal Youth Has Become a Growth Industry in Silicon Valley

Tuesday, Aug 12 2014

The students of Timothy Draper’s University of Heroes shuffle into a conference room, khaki shorts swishing against their knees, flip-flops clacking against the carpeted floor. One by one they take their seats and crack open their laptops, training their eyes on Facebook home pages or psychedelic screen savers. An air conditioner whirs somewhere in the rafters. A man in chinos stands before them.

The man is Steve Westly, former state controller, prominent venture capitalist, 57-year-old baron of Silicon Valley. He smiles at the group with all the sheepishness of a student preparing for show-and-tell. He promises to be brief.

“People your age are changing the world,” Westly tells the students, providing his own list of great historical innovators: Napoleon, Jesus, Zuckerberg, Larry, Sergey. “It’s almost never people my age,” he adds.

Students at Draper University — a private, residential tech boot camp launched by venture capitalist Timothy Draper, in what was formerly San Mateo’s Benjamin Franklin Hotel — have already embraced Westly’s words as a credo. They inhabit a world where success and greatness seem to hover within arm’s reach. A small handful of those who complete the six-week, $9,500 residential program might get a chance to join Draper’s business incubator; an even smaller handful might eventually get desks at an accelerator run by Draper’s son, Adam. It’s a different kind of meritocracy than Westly braved, pursuing an MBA at Stanford in the early ’80s. At Draper University, heroism is merchandised, rather than earned. A 20-year-old with bright eyes and deep pockets (or a parent who can front the tuition) has no reason to think he won’t be the next big thing.

This is the dogma that glues Silicon Valley together. Young employees are plucked out of high school, college-aged interns trade their frat houses and dorm rooms for luxurious corporate housing. Twenty-seven-year-old CEOs inspire their workers with snappy jingles about moving fast and breaking things. Entrepreneurs pitch their business plans in slangy, tech-oriented patois.

Gone are the days of the “company man” who spends 30 years ascending the ranks in a single corporation. Having an Ivy League pedigree and a Brooks Brothers suit is no longer as important.

“Let’s face it: The days of the ‘gold watch’ are over,” 25-year-old writer David Burstein says. “The average millennial is expected to have several jobs by the time he turns 38.”

Yet if constant change is the new normal, then older workers have a much harder time keeping up. The Steve Westlys of the world are fading into management positions. Older engineers are staying on the back-end, working on system administration or architecture, rather than serving as the driving force of a company.

“If you lost your job, it might be hard to find something similar,” a former Google contractor says, noting that an older engineer might have to settle for something with a lower salary, or even switch fields. The contractor says he knows a man who graduated from Western New England University in the 1970s with a degree in the somewhat archaic field of time-motion engineering. That engineer wound up working at Walmart.

Those who do worm their way into the Valley workforce often have a rough adjustment. The former contractor, who is in his 40s, says he was often the oldest person commuting from San Francisco to Mountain View on a Google bus. And he adhered to a different schedule: Wake up at 4:50 a.m., get out the door by 6:20, catch the first coach home at 4:30 p.m. to be home for a family supper. He was one of the few people who didn’t take advantage of the free campus gyms or gourmet cafeteria dinners or on-site showers. He couldn’t hew to a live-at-work lifestyle.

And compared to other middle-aged workers, he had it easy.

In a lawsuit filed in San Francisco Superior Court in July, former Twitter employee Peter H. Taylor claims he was canned because of his age, despite performing his duties in “an exemplary manner.” Taylor, who was 57 at the time of his termination in September of last year, says his supervisor made at least one derogatory remark about his age, and that the company refused to accommodate his disabilities following a bout with kidney stones. He says he was ultimately replaced by several employees in their 20s and 30s. A Twitter spokesman says the lawsuit is without merit and that the company will “vigorously” defend itself.

The case is not without precedent. Computer scientist Brian Reid lobbed a similar complaint against Google in 2004, claiming co-workers called him an “old man” and an “old fuddy-duddy,” and routinely told him he was not a “cultural fit” for the company. Reid was 54 at the time he filed the complaint; he settled for an undisclosed amount of money.

What is surprising, perhaps, is that a 57-year-old man was employed at Twitter at all. “Look, Twitter has no 50-year-old employees,” the former Google contractor says, smirking. “By the time these [Silicon Valley] engineers are in their 40s, they’re old — they have houses, boats, stock options, mistresses. They drive to work in Chevy Volts.”

There’s definitely a swath of Valley nouveau riche who reap millions in their 20s and 30s, and who are able to cash out and retire by age 40. But that’s a minority of the population. The reality, for most people, is that most startups fail, most corporations downsize, and most workforces churn. Switching jobs every two or three years might be the norm, but it’s a lot easier to do when you’re 25 than when you’re 39. At that point, you’re essentially a senior citizen, San Francisco botox surgeon Seth Matarasso says.

“I have a friend who lived in Chicago and came back to Silicon Valley at age 38,” Matarasso recalls. “And he said, ‘I feel like a grandfather — in Chicago I just feel my age.”

Retirement isn’t an option for the average middle-aged worker, and even the elites — people like Westly, who were once themselves wunderkinds — find themselves in an awkward position when they hit their 50s, pandering to audiences that may have no sense of what came before. The diehards still work well past their Valley expiration date, but then survival becomes a job unto itself. Sometimes it means taking lower-pay contract work, or answering to a much younger supervisor, or seeking workplace protection in court.

CONTINUED: http://www.sfweekly.com/sanfrancisco/silicon-valley-bottom-age-discrimination/Content?oid=3079530

Tech Industry Believes it Invented San Francisco, Burning Man, and Sex

Posted By on Tue, Aug 12, 2014 at 7:30 AM

Inspired by Bay Area tech industry - FLICKR/CROWCOMBE AL

According to reports, the Silicon Valley-based tech industry has convinced itself that it invented everything it enjoys, including Democracy, rule of law, San Francisco, Burning Man, and sex.

“Techies are really innovative, so it’s only natural that they would hack human sexuality by coming up with a pleasurable use for what was previously just a reproductive process,” Google employee Miles Davidson said. “You’re welcome.”

Brent Sternberg, a Facebook engineer who started attending Mission Control sex parties a year ago, said that blow jobs simply wouldn’t have been possible without social media. “How could you have ever told someone that you like it?” he asked. “It would never work.”

Futurist Ray Kurzweil, Google’s Director of Engineering, said he believes that the tech giant is on track to invent S&M by 2025. “It will be incredibly pleasurable,” he said, “unless it hurts too much. Until we develop it, there’s just no way to know.”

Apple vice president of design Louis Harris is especially proud of the tech industry for inventing Burning Man, a 27-year-old annual arts event, in 2008.

“Prior to the tech industry, no one had really considered creating experimental communities, or going camping,” Harris said. “But then thousands of tech workers disrupted the desert and invented DJs.”

Not everything has gone well since then, Harris admitted. “The problem with Burning Man is that since the tech industry invented it, it’s gotten so popular that all these artists are showing up, and they don’t know anything about the culture.”

That’s also a problem with what many see as the tech industry’s crowning achievement: the city of San Francisco.

“We really knocked that one out of the park,” said Twitter Vice President Larry Johnson. “When we got here there wasn’t a single unaffordable building, there were musicians in lofts, and the place was just filled with women. But we’ve really turned that around.”

LinkedIn Senior Data Analyst Rod Suchet agreed. “San Francisco is famous the whole world over as a city of art, and art was originally an App for the iStore. It’s famous for its restaurants, and restaurants were originally developed so that Google’s cafeteria could telecommute. Honestly, was there even a music scene in San Francisco before Pandora digitized it? Did this town even have an economy before we started to displace it?”

As of press time, Suchet had meant to Google the answer but had been distracted by a cat video. Cats, for those not in the know, were invented by YouTube in 2006.

Benjamin Wachs is a literary chameleon. 

http://www.sfweekly.com/thesnitch/2014/08/12/tech-industry-believes-it-invented-san-francisco-burning-man-and-sex

The Man Who Gave “Yo” $200,000

The Man Who Gave "Yo" $200,000

 

This week, a group of otherwise mentally sound adults agreed to go fucking insane all at once. The object of their manic episode was Yo, an app that sends the word “Yo” to other people with the app installed. It’s garnered over a million real dollars from investors. I talked to the one in charge.

Yo is exactly the kind of thing that techies adore. The story—intentionally stupid app nets $1.2 million in venture funding—is eminently bloggable. The app itself is clever on an 8th grade level, simple enough to tweet about, and proof that truly, money is a pastry puff, a trifle that can be scooped and bent and mushed around without any tethers to reality. On its own, Yo is just evidence of what we already know: that people are silly, and that TechCrunch is the kind of publication that will write an earnest essay on Yo. But Yo isn’t just another viral migraine—it’s an insincere idea, but it’s received very real money. If money still means anything anymore—and I’m not sure it does!—we need to insist that a million dollars is not a trifle, and that giving this amount of money to an app that does literally one thing is worth scrutinizing. We’re supposed to be talking about businesses here, right?

Israeli investor Moshe Hogeg is the CEO of Mobli, an Instagram clone, and led the $1.2 million angel investment round with $200,000 from his own pocket. He declined to list the other investors, but was nice enough to speak with me as I asked why someone would ever spend $200,000 on a joke app. The answer, basically, is why would you ever not?

“You need to be nuts to regard the numbers,” Hogeg tells me. “It’s crazy, it’s viral, the engagement is unbelievable.” This occult metric of “engagement” is something every startup craves more than Teslas and stock options, an end in itself that’s defined roughly as “how much are people clicking your shit instead of someone else’s shit?” In the case of Yo, it’s a lot: Hogeg says he’s literally never seen anything that’s engaged users more. But are people tapping single button that does one thing really “engaged” with anything? Is it a problem that this app doesn’t really do anything? Hogeg says I’m being shortsighted:

“I like to do things in the easiest way. We are always looking for the easiest way. My secretary, I love her, but I hate to tell her to come.” Now Hogeg can send her a message that says “Yo” instead, using a specialized app for this purpose alone. “My wife, she complains I don’t call her enough during the day. Now I can send a push notification anytime I want.” When I ask if this is enough to build an entire company on top of, Hogeg speculates about Yo’s future: he can imagine Starbucks baristas, McDonald’s cashiers, and Virgin America flight crews all getting your attention with Yo. Nevermind that many service companies have their own apps that send out their own push notifications. “Yo is more than a yo,” Hogeg says, like a software yogi. “I have no idea if it’s going to succeed.”

OK, so again, why invest so much money in this thing that took, by its founder’s admission, eight hours and zero dollars to code? “It’s a stupid app,” Hogeg admits. But “it’s not responsible to not give it a chance.” He cites its virality again, and points out that Marc Andreessen recently praised the app. Marc Andreessen is never wrong, right?

Hogeg demurs when asked if he thinks $200,000 is even a lot of money: “200 is a lot of money, but it’s not a lot of money at the same time.” But why does it need any money at all, if it took zero money to create? Hogeg points out that Yo now has a staff of five, and it’ll need office space. Office space for what, he doesn’t say. Will Yo make money? “Yeah, I guess.” He compares it to Google, which in its early days was doubted as a viable business.

But even if $200,000 isn’t a lot of money to you, is there any moral element to promoting a deliberately joke-y app when so many people are working—in vain—on software with a purpose?

Does Yo deserve a million dollars? What could someone more earnest have done with even Hogeg’s $200,000 slice? “The world doesn’t work on deserve,” replies Hogeg. He’s worked just as hard as his father back in Israel, he explains, and has far more money. So much for the glimmering Silicon Meritocracy. “I’m not a hater,” Hogeg elaborates. “I never was. But I can understand the criticism: I was a young engineer, I worked my ass off. If back then I could see an app like Yo getting a million, I would go nuts.” I feel like I’m on the verge of a moral breakthrough with Hogeg, but he drifts back into software zen-speak. “[Success] is not about the technology, it’s about the execution.” “Execution” here is a euphemism, I think.

To anyone struggling in Startupland who might wince at Yo’s 24 hour attention spree, Hogeg has a message of hope: “I hear you. We love you. You need to be creative, disruptive, think outside the box. You need to be a lover, not a hater. The energy you send into the world, you get back.”

So why not send $200,000 worth of energy into the world via charity, rather than investing in Yo? “Charity?” Hogeg bristles. “Who says I’m not? I choose my life, I choose to enjoy it.” For Hogeg, enjoying one’s life seems to include this sort of recreational investing, treating business ventures like parlor games, or a kind of thrilling diversion—Hogeg refers to his habit of buying lottery tickets. It’s all a very fun and giggly “maybe” for a man who can afford to play “what if” with large sums. The stakes sound low: “[Yo] is not making the world a better place…[and] I don’t think it’s too much money. It’s surprising we’re on the phone right now. If Marc Andreessen writes what he writes, we should all be very humble. Who knows, there might be something to it.” And even if there’s nothing to it, as there likely is not, Hogeg remains calm: “Don’t be so arrogant to think that Yo can’t make you eat your words. You can look at this interview, years from now. We will never eat our words. We already won.”

http://valleywag.gawker.com/the-man-who-gave-yo-200-000-1593328826/+sambiddle

It’s easy to see where they’re making money with the app. This isn’t an app – It’s a wiretap.

Permissions requested:
This app has access to:
Contacts/Calendar

  • read your contacts
  • modify your contacts

Phone

  • reroute outgoing calls
  • directly call phone numbers
  • read call log
  • write call log
Photos/Media/Files

  • modify or delete the contents of your USB storage
  • test access to protected storage
Camera/Microphone

  • record audio
  • take pictures and videos
Device ID & call information

  • read phone status and identity
Other

  • full network access
  • change your audio settings
  • view network connections
  • prevent device from sleeping
  • run at startup
  • control vibration

Why Online Tracking Is Getting Creepier

The merger of online and offline data is bringing more intrusive tracking.

The marketers that follow you around the web are getting nosier.

Currently, many companies track where users go on the Web—often through cookies—in order to display customized ads. That’s why if you look at a pair of shoes on one site, ads for those shoes may follow you around the Web.

But online marketers are increasingly seeking to track users offline, as well, by collecting data about people’s offline habits—such as recent purchases, where you live, how many kids you have, and what kind of car you drive.

Onboarding: a ProPublica explainer of how online tracking is getting creepier. Follow ProPublica on Vine for more explainer shorts. (Icons courtesy of Lil Squid, André Renault, Gabriele Garofalo and Patrick Morrison, Noun Project)

Here’s how it works, according to some revealing marketing literature we came across from digital marketing firm LiveRamp:

  • A retailer—let’s call it The Pricey Store—collects the e-mail addresses of its high-spending customers. (Ever wonder why stores keep bugging you for your email at the checkout counter these days?)
  • The Pricey Store brings the list to LiveRamp, which locates the customers online when the customers use their email address to log into a website that has a relationship with LiveRamp. (The identity of these websites is a closely guarded secret.) The website that has a relationship with LiveRamp then allows LiveRamp to “tag” the customers’ computer with a tracker.
  • When those high-spending customers arrive at PriceyStore.com, they see a version of the site customized to “show more expensive offerings to them.” (Yes, the marketing documents really say that.)

Tracking people using their real names—often called “onboarding”—is a hot trend in Silicon Valley. In 2012, ProPublica documented how political campaigns used onboarding to bombard voters with ads based on their party affiliation and donor history. Since then, Twitter and Facebook have both started offering onboarding services allowing advertisers to find their customers online.

“The marriage of online and offline is the ad targeting of the last 10 years on steroids,” said Scott Howe, chief executive of broker firm Acxiom at a conference earlier this year.

Last month, Acxiom—one of the country’s largest data brokers, which claims to have 3,000 data points on nearly every U.S. consumer—agreed to pay $310 million to purchase onboarding specialist LiveRamp. Acxiom and LiveRamp declined to comment for this article, citing the need to remain quiet until the acquisition is complete.

Companies that match users online and offline identities generally emphasize that the data is still anonymous because users’ actual names aren’t included in the cookie.

But critics worry about the implications of allowing data brokers to profile every person who is connected to the Internet. In May, the Federal Trade Commission issued a report that found that data brokers collected information on sensitive categories such as whether an individual is pregnant, has a “diabetes interest,” is interested in a “Bible Lifestyle” or is “likely to seek a [credit-card] chargeback.”

Previously, data brokers primarily sold this data to marketers who sent direct mail—aka “junk mail”—to your home. Now, they have found a new market: online marketing that can be targeted as precisely as junk mail.

“Will these classifications mean that some consumers will only be shown advertisements for subprime loans while others will see ads for credit cards?” Federal Trade Commission Chairwoman Edith Ramirez said at a press conference. “Will some be routinely shunted to inferior customer service?”

The FTC has called for Congress to pass legislation requiring data brokers to allow consumers to access their information and to opt out of targeted marketing. Currently, many data brokers don’t offer people either one.

The Direct Marketing Association, which represents the data broker industry, doesn’t offer a specific opt-out for onboarding. It does offer a global opt-out from all of its members’ direct mail databases, but it only requires members to remove people’s data for three years after they opt-out.

Some companies offer their own opt-outs. Twitter allows users to opt out of onboarding by unchecking the “promoted content” button in their account settings. LiveRamp offers a so-called ” permanent opt-out” for users who do not want to be targeted via their e-mail address.

Facebook does not offer a specific opt-out for onboarding. Instead, it suggests users opt out of the data brokers themselves. A Facebook spokesman says that users who don’t like specific targeted ads can avoid seeing them again by clicking an ‘x’ on the top right corner of the ad and following the links to the advertisers’ opt-out page.

Julia Angwin is a senior reporter at ProPublica. From 2000 to 2013, she was a reporter at The Wall Street Journal, where she led a privacy investigative team that was a finalist for a Pulitzer Prize in Explanatory Reporting in 2011 and won a Gerald Loeb Award in 2010.

http://www.propublica.org/article/why-online-tracking-is-getting-creepier?utm_source=et&utm_medium=email&utm_campaign=dailynewsletter

Uber is another unaccountable, massively powerful, transnational corporation

Andrew Ross Sorkin’s vision of the future is terrifying

Andrew Ross Sorkin's vision of the future is terrifying
Andrew Ross Sorkin (Credit: AP/Chris Pizzello)

Last Friday, Uber announced it had raised another $1.2 billion, which means the car service company is now worth a total of $18.2 billion — the highest-ever valuation for a venture-backed start-up. The news prompted a familiar cycle of bubble warnings and skepticism. $18.2 billion for a hopped-up taxi service?! How is it possible that Uber could be worth more than United Airlines, or Avis and Hertz, combined.

On Tuesday, the New York Times’ Andrew Ross Sorkin defended the valuation. If Uber ends up controlling a quarter of the world’s taxi market, he argues, “the investment is a home run.”

But then he goes on to note that the smart money says Uber isn’t just a taxi company — it’s “an extensive software platform for shipping and logistics.”

“Uber is creating a digital mesh — a power grid which goes within the metropolitan areas,” is how Shervin Pishevar, an early Uber investor, described the company last year. “After you have that power grid running, in everyone’s pockets, there’s lots of possibility of what you could build like a platform. Uber is incorporated in the empire-building phase.”

Andrew Ross Sorkin has a well-deserved reputation for seeing things the same way corporate CEOs like to see them, but he is not at all wrong about where Uber thinks it is headed. In December, CEO and founder Travis Kalanick made Uber’s ambitions clear:

“We need to stamp out an urban logistics fabric in every city in the world, then it’s figuring out other things we can do with that fabric,” he said, according to CNET. “It’s going to be interesting for us in 2014.”



Interesting, yes. Also, very scary. If Andrew Ross Sorkin is correct, and, judging by the blue-chip investors who contributed to Uber’s last round, he is hardly alone in his optimism, Uber is positioned to become one of the most powerful companies in the world. Think about it: a single company that controls the dominant logistics platform in every major city on the planet. A company that is to logistics what Google is to information. That’s a company that immediately becomes a major player in the transnational, globalized economy; a company that a pliant Congress ends up crafting legislation specifically for.

Obviously, there are other companies already in the logistics business: UPS and FedEx will not go quietly into the night. But Uber has some huge advantages over those companies; namely, it owns no fleets of trucks or airplanes. Its operating costs are a fraction of those of its competitors. And anyone who has tried out its app is well aware of how well it works. Press a button, and a car appears. Or maybe some takeout sushi. Or someone to pick up the package you need couriered across town. Or — well, who really knows? Christmas trees? Kittens? True love?

“Uber” is an appropriate name for a company with such built-in grandiosity. But let’s stop to think for a second about what we are trading in return for the convenience that Uber undeniably offers. We will be complicit in the creation of yet another massive corporation with immense economic and political influence. A company with such a huge global footprint would find it easy to outflank municipal regulators. Uber already gave us a sign of what it plans to do with its massive treasure chest when it hired a key New York city taxi and limousine regulator to join the company.

Big is not necessarily better when we are talking about the social fabric. An Uber that is worth $18.2 billion — or more — is an Uber unaccountable to local pressures, an Uber that, like Facebook, and like Google, knows too much.

And it could easily happen.

Who talks like FDR but acts like Ayn Rand? Easy: Silicon Valley’s wealthiest and most powerful people

Tech’s toxic political culture: The stealth libertarianism of Silicon Valley bigwigs

Tech's toxic political culture: The stealth libertarianism of Silicon Valley bigwigs
Ayn Rand, Marc Andreessen, Franklin D. Roosevelt (Credit: AP/Reuters/Fred Prouser/Salon)

Marc Andreessen is a major architect of our current technologically mediated reality. As the leader of the team that created the Mosaic Web browser in the early ’90s and as co-founder of Netscape, Andreessen, possibly more than any single other person, helped make the Internet accessible to the masses.

In his second act as a Silicon Valley venture capitalist, Andreessen has hardly slackened the pace. The portfolio of companies with investments from his VC firm, Andreessen Horowitz, is a roll-call for tech “disruption.” (Included on the list: Airbnb, Lyft, Box, Oculus VR, Imgur, Pinterest, RapGenius, Skype and, of course, Twitter and Facebook.) Social media, the “sharing” economy, Bitcoin — Andreessen’s dollars are fueling all of it.

So when the man tweets, people listen.

And, good grief, right now the man is tweeting. Since Jan. 1, when Andreessen decided to aggressively reengage with Twitter after staying mostly silent for years, @pmarca has been pumping out so many tweets that one wonders how he finds time to attend to his normal business.

On June 1, Andreessen took his game to a new level. In what seems to be a major bid to establish himself as Silicon Valley’s premier public intellectual, Andreessen has deployed Twitter to deliver a unified theory of tech utopia.

In seven different multi-part tweet streams, adding up to a total of almost 100 tweets, Andreessen argues that we shouldn’t bother our heads about the prospect that robots will steal all our jobs.  Technological innovation will end poverty, solve bottlenecks in education and healthcare, and usher in an era of ubiquitous affluence in which all our basic needs are taken care of. We will occupy our time engaged in the creative pursuits of our heart’s desire.



So how do we get there? Easy! All we have to do is just get out of Silicon Valley’s way. (Andreessen is never specific about exactly what he means by this, but it’s easy to guess: Don’t burden tech’s disruptive firms with the safety, health and insurance regulations that the old economy must abide by.)

Oh, and one other little thing: Make sure that we have a social welfare safety net robust enough to take care of the people who fall though the cracks (or are eaten by robots).

The full collection of tweets marks an impressive achievement — a manifesto, you might even call it, although Andreessen has been quick to distinguish his techno-capitalist-created utopia from any kind of Marxist paradise. But there’s a hole in his argument big enough to steer a $500 million round of Series A financing right through. Getting out of the way of Silicon Valley and ensuring a strong safety net add up to a political paradox. Because Silicon Valley doesn’t want to pay for the safety net.

* * *

http://www.salon.com/2014/06/06/techs_toxic_political_culture_the_stealth_libertarianism_of_silicon_valley_bigwigs/

The Valley is a Trough

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Mike Judge, Clovis, and the coming wave of disillusionment

Three short years ago, a little movie called “The Social Network” won a pile of Oscars thanks in part to Sorkinistic mini-monologues like this one:

Mark Zuckerberg: “I think if your clients want to sit on my shoulders and call themselves tall, they have the right to give it a try, but there’s no requirement that I enjoy sitting here listening to people lie. You have part of my attention — you have the minimum amount. The rest of my attention is back at the offices of Facebook, where my colleagues and I are doing things that no one in this room, including and especially your clients, are intellectually or creatively capable of doing. Did I adequately answer your condescending question?

“Take that, Winklevi!” said everybody, simultaneously.

There’s nothing like the perfectly worded tell-off, is there? Especially one delivered on behalf of all the straight-A underdog nerds who were never invited to pledge Skull and Bones.

But that was then. Fast forward a few years and most audiences would gladly join the twins in tying Zuck’s hoodie strings to the nearest passing trolley car for giving such lip.

Of late, the public’s fawning praise for forward-thinking tech companies has turned to annoyed sneers and eye-rolls. Protestors are blocking Google transport buses. Tech luminaries—our Elon Musks and Marc Benioffs—have been outed as run of the mill Gordon Gekkos with Keen shoe-sandles (shandles?) and messiah complexes. Mike Judge has introduced the viewing public to Silicon Valley and, along with it, the special brand of disdain they should have for its deluded inhabitants (honorable mention goes to a recentVeep episode for accomplishing the same feat). It won’t be long before Grandma is using Andressen as a punchline.

In this author’s unqualified opinion, it all makes sense if you look at theHype Cycle, Gartner’s graphical tool. The IT research firm applies it to new technologies (smart glasses, facial recognition software), but I ran across it recently and think it applies to the Silicon Valley contingent pretty well, too.

We seem to have recently crested the hill of Stage 2: The Peak of Inflated Expectations. Scores of failures, few successes, and, obviously, inflated expectations. I don’t know what’s a better sign of that:Twitter’s wildly overvalued stockor companies offering billions to buy start-ups that have no actual way to make money (unless it’s all a tax shelter).

Knocking at our door is Stage 3: The Trough of Disillusionment. Experiments fail. Interest wanes. Producers shake out. Nobody wants to live in San Francisco anymore. Investors get pickier. Someone figures out that only robots and hired teams of Bangladeshis actually click on Facebook ads.

I feel the need to point all this out not because I’d like to watch overvalued tech burn, but because I’m a couple years out of school and am truly worried about my cohort. We’ve had a hard enough time as it is coming out of college jobless and debt-ridden. Now the whole world is telling the poor kids, lured by the sweet stench of VC money, to learn to code right as it’s all about to turn to shit?

It’s like some “Learn to Flip Houses!” huckster ad, except it’s a General Assembly guy in a North Face promising to tear your ticket to Silicon Valhalla for *just* twelve grand. Ping pong tables, yoga ball chairs, 60K starting salaries, kegs at the office—it can all be yours!

Except it won’t. Speculative bubbles aside, if everybody learns javascript, everybody will know javascript, including the experienced Odesk-ers from Lahore who will write it for US $9.73/hr. Companies will need one dev guy onshore for every five offshore, and that one guy is 10x more amazing at all things dev-y than you’ll ever be (sorry).

What you’ll be is a commodity—and you don’t want to be that. Just ask the journalists and lawyers furiously hunting for jobs at your nearest Starbucks. Same as the whole progressive techie company culture is looked upon less fondly by a society over-saturated with them, so too will certain easy(ish)-to-acquire skills be less valued by an over-saturated labor market.

So maybe it is high time for start-ups, and the kids of all ages who work around them, to mature along with the society and market they serve.

It’s scary, I know, but eventually you have to call yourself what you are: a small business. Eventually you have to shelve the ratty hoodie, move out of your Silicon Valley/Beach/Alley bubble, and make friends with people who’ve never taken Glass for a test run. It’s high time to say hello world.

Maybe then we can look ahead to the next phase of the Hype curve, the optimistically named Slope of Enlightenment. Here we find worthy newcomers charging out of the trough, greeted by cautious investors and a reasonable market. For those that have created a business for tried and true reasons—they’ve identified a market need and found a way to fulfill it profitably—this will be the time to shine.

View story at Medium.com

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