TIME Internet

Reddit’s Ellen Pao and Alexis Ohanian Explain Site Shut Down

Ellen Pao
Eric Risberg—AP Ellen Pao, the current interim chief of the news and social media site Reddit, has alleged she faced gender discrimination from former employer Silicon Valley venture capital firm Kleiner Perkins Caulfield and Byers.

Protests rippled through much of the popular message board on Friday

Reddit moderators shut down hundreds of the online message board’s most popular sections on Friday. The outages were part of an apparent protest by users after the surprise removal of a popular employee, Victoria Taylor, Reddit’s director of talent and a facilitator of the Ask Me Anything feature.

The move affected nearly 300 individual discussion areas, or subreddits that focus on various topics ranging from technology to art. Subreddits are moderated by community members, not Reddit employees. The shutdowns began on Thursday evening and expanded quickly on Friday.

“I want to apologize to our community for yesterday,” Reddit’s interim CEO Ellen Pao told TIME on Friday. “We handled the transition in a way that caused some disruption, and we should have done a better job.” Pao said the company’s management should have informed moderators earlier about planned personnel changes. Pao declined to comment further on Taylor’s departure.

Alexis Ohanian, one of Reddit’s co-founders and the company’s current chairman, said the site has appointed a dedicated point of contact on staff to communicate with the site’s moderators. Kristine Fasnacht, a long-time Reddit user and current employee, will take on the role, he said.

Ohanian said the plan was to have an email alias available for moderators who needed to contact Reddit employees, but that was not widely communicated after Taylor’s departure. “Unfortunately, we did not announce the transition right after that happened,” he said.

Ask Me Anythings, or AMA for short, are the tumbling question-and-answer sessions hosted on the site that have become very popular over the past few years. They are an entirely user-created genre—any Reddit moderator can host one. In instances with famous participants, like President Barack Obama’s 2012 AMA, the site has an employee help with planning and managing the logistics. “They existed before we had anything to do with them,” said Ohanian. The company is looking into appointing an staffer to continue doing that kind of liaising in the future.

Reddit users speculated Taylor’s dismissal was connected with her moderation of Rev. Jesse Jackson’s AMA on Wednesday, which became disorganized after a flurry of questions about racial issues. “That definitely had nothing to do with it,” said Ohanian.

Ohanian, who has tight bond with the community, said he spent the last 24 hours communicating with the site’s moderators and other users, much of it over Reddit itself. He was fielding questions on the site until about 3 AM Thursday night, he said, and made about a half-dozen phone calls to users. “Some people are understandably skeptical,” he said, “but at the very least it’s a step in the right direction.”

“Now it’s on us to act,” Ohanian continued, “to use Reddit to create a dialogue to better keep our community and user base informed.” He said the discussions so far had been fruitful. “They made some very good points. The first thing we could do was get a moderator like Christine to be the point person just for moderators. So if users have a question or want someone to talk to, we’re there.”

Pao and Ohanian said the site had returned to almost normal as of Friday evening. “Of the 50 default subreddits, 48 of them are up and that’s what most people see on the front page,” said Pao. The site’s homepage—the content on which is generated by the number of up-votes on threads throughout the site, a measure of activity and popularity—contained several threads on Taylor’s dismissal. One pointed out that Google searches for “Reddit alternative” had spiked in the wake of the protests.

After years under the ownership of Advance Publications, parent of the Conde Nast magazine empire, Reddit was spun off and raised $50 million in funding last year. It is reportedly valued at about $250 million. The company is currently trying to kickstart a major expansion but has weathered a series of hiccups over the last few months including policy changes to address bullying and “involuntary pornography.”

“We have a responsibility to [users] to figure out how we can be better stewards,” Ohanian said. “There have been times when we made mistakes. The important thing is that we learn from them.”

TIME Aviation

JetBlue Launches Direct Flights From New York to Cuba

JetBlue JFK Cuba
Bloomberg via Getty Images Passengers exit a JetBlue Airways Corp. plane at Long Beach Airport in Long Beach, Calif., on July 22, 2013.

First major airline to fly from the Big Apple to Havana since restrictions lifted

JetBlue became the first major U.S. carrier on Friday to launch direct flights between New York City and Havana, Cuba, since the White House eased travel restrictions earlier this year.

The weekly charter flights operate between New York’s John F. Kennedy Airport and Havana’s José Martí International Airport, the carrier said in a statement. The new route, which was announced in May, joins four other JetBlue flights that provide round trips between the U.S. and Cuba, giving the airline an even stronger presence in the Caribbean.

Cuban New Yorkers aboard the maiden flight on Friday celebrated the long-awaited, historic moment, NBC reports, though a smaller airline, Sun Country, has been operating flights between New York and Havana for several months.

TIME Innovation

You Might Soon Be Able to Verify Online Purchases With a Selfie

MasterCard is testing the new technology

MasterCard customers may soon be able to make their online purchases more secure by verifying their identity with a selfie.

The company will soon start testing a new technology that will allow shoppers to use fingerprints and facial scans to prevent fraudulent purchases, according to CNN Money. The trial will begin with 500 customers, who must use the MasterCard app on their phone, either presenting their finger prints or posing for the camera when prompted.

To prevent fraudsters from simply using a photo of the real cardholder, users will be asked to blink to demonstrate that they are really there, not simply a static image. The resulting photo will be converted to code and compared to an algorithm on file.

If the trial run goes well, MasterCard hopes to take the technology to a wider pool of customers.

There are some things money can’t buy. For everything else, there’s selfies.

[CNN Money]

TIME

Chinese Stock Markets Are in the Middle of an ‘Unprecedented’ Slide

A man walks past an electronic board showing the benchmark Shanghai and Shenzhen stock indices, on a pedestrian overpass at the Pudong financial district in Shanghai
Aly Song—Reuters A man walks past an electronic board showing the benchmark Shanghai and Shenzhen stock indices, on a pedestrian overpass at the Pudong financial district in Shanghai, China, June 26, 2015.

State monetary policy has failed to fix the situation, and Beijing is growing desperate

In what analysts are describing as an unprecedented economic situation, China’s stock indexes are currently tumbling into a free fall, with panic taking the place of the brash confidence that, until last month, led these markets to rapidly develop into an unsustainable bubble.

That bubble appears to have now burst: by early afternoon local time on Friday, the Shanghai Composite Index had fallen 3.25% to an anemic 3,785.57 points; in the three weeks since it reached a seven-year high, it has lost 30% of its value.

Monetary authorities in Beijing are currently grasping for straws to remedy the situation, but numerous market interventions, including the fourth cut in interest rates since November, have failed to keep investors from frantically selling their Chinese stocks.

The turbulent situation is not yet catastrophic, but it illuminates the greater volatilities of China’s fraught existential dynamic: between an autocratic Communist government and the currents of free-market capitalism. In a country where stock investors now outnumber Communist Party members, if the market heals, it will likely heal itself. Beijing’s economic policies have thus far proven mostly ineffective.

Meanwhile, state authorities are attempting to blame the economic instability on calculated “foreign forces,” the Washington Post reports. State media outlets have alleged that Morgan Stanley or prominent investor George Soros may be purposely interfering in the Chinese markets. Messages making the rounds on WeChat, the country’s preeminent messaging service, allege that “‘international capital’ — or simply capitalism itself — [is] attacking China,” according to the Post.

In the face of this supposed malfeasance, prominent figures are encouraging their fellow countrymen to have faith in their faltering economy.

“Hold stocks with confidence,” was the advice of Fan Shaoxuan, a executive at microblogging service Sina Weibo, according to the Post. “Win glory for the country even if you lose the last penny.”

TIME Greece

Everything to Know About Greece’s Debt Vote

It could have serious consequences for Europe's future

Q. Why and when are the Greeks voting on this referendum?

A. The Greek government called the referendum because it failed to get acceptable terms for debt relief and further assistance in four months of negotiations with the creditors. It felt it couldn’t agree to the last set of proposals received before the expiry of its bailout, because they couldn’t square it with their election promise to end austerity.

The referendum will be on Sunday, 5th July.

Q. So what are the Greeks actually being asked to vote on?

A. They’re being asked to vote on a set of proposals drafted by IMF, ECB and European Commission officials that were never formally completed or published.

This is the actual ballot. As you can see, the “No” (OXI) option, recommended by the government, is above the “Yes” (NAI) option.

Screen Shot 2015-07-02 at 16.14.12

For the non-Greek readers, (or for those who only know ancient Greek), here’s a translation:

Screen Shot 2015-07-02 at 16.18.50

The two documents referred to can be found here and here (debt sustainability analysis).

Q. What are the key points?

A. The most contentious demand is that Greece squeeze another 1% of GDP in savings out of its battered pension system, specifically by eliminating top-ups that have been desperately needed by poorer pensioners to keep themselves above the breadline in recent years. The other big point is the elimination of VAT exemptions for Greece’s islands. The government argues this threatens the existence of the tourism industry on the islands.

The DSA, meanwhile, almost–but not quite–brings itself to admit that the debt load is unsustainable. If Greece adopts and implements the conditions immediately, it says, then the debt-to-GDP ratio could fall to 124% by 2022 from over 175% right now. That’s the best case scenario, and not one that sits comfortably with the last five years’ experience. It’s also not many people’s idea of sustainability.

Q. What happens if Greece votes ‘Yes’?

A. A ‘Yes’ vote would be the first step towards a third bailout agreement for Greece (the IMF suggested today that Greece will need €50 billion, or $56 billion, in financing to get it through to the end of 2018, as well as a 20-year grace period). The last one expired Tuesday.

Q. Could the Greek government collapse?

A. Probably. It has campaigned for a ‘No’ vote, so the blow to its credibility would be huge. Its electoral mandate–to end austerity while keeping the euro–would be obsolete. Individual ministers have already said they’ll resign in that event. However, the radical left-wing Syriza party is by far the largest in parliament, a large part of its lawmakers won’t sign any new bailout deal, and there is no stable pro-bailout majority without it. That points to new elections. Quite how negotiations could resume, and quite how the banks could reopen, in those circumstances isn’t clear.

Q. If Greece votes ‘No’, what happens?

A. Prime Minister Alexis Tsipras claims that a ‘No’ vote will strengthen the Greeks’ negotiating position by showing the strength of resistance to further austerity. However, the creditors have shown no sign that it would change their position. More likely is that the continued uncertainty will make it impossible for the banks, which have been closed since Monday, to reopen. They would be immediately faced with demands for cash that they can’t possibly meet. In practical terms, the banks couldn’t open again until the bulk of their liabilities–i.e. customer deposits–had been re-denominated in a new Greek currency. This would lead to a large part of the country’s savings being wiped out.

Q. Could this vote result in Greece leaving the Eurozone?

A. Absolutely, because it would be clear that the political will to share a currency with Germany and others was no longer there. How we get from A. to B. is unclear, because there are no precedents and no provisions for it in the E.U.’s treaty. There is a provision for leaving the E.U., but not even Tsipras wants to do that.

Q. Is the bailout deal they’re voting on even still on the table?

A. Not officially, but the creditors will look stupid, merciless and irresponsible if they don’t react to a ‘Yes’ vote with something to relieve the immediate pressure on Greece’s banks and the economy at large, and a large part of the political dynamic in this process is about dodging blame for the whole mess. It’s tempting to think that, once Syriza is out of government, some form of debt restructuring will become politically possible. The creditors would rather eat dirt than reward a party, and individual ministers, that they regard as dangerous charlatans.

Q. What does this mean for the global economy?

A. A ‘Yes’ vote would remove one of the big geopolitical risks that are currently holding back investment in the Eurozone, which would be a clear bonus to global growth (the Eurozone is over two-thirds of the E.U. economy, which about 20% of world GDP).

A ‘No’ vote, could have quite mild consequences if Greece can be kept inside the Eurozone and the ECB douses the flames of market fear with a flood of liquidity. That wouldn’t be as good for the economy, but it would at least contain the damage to financial markets. But a ‘No’ vote that leads to “Grexit” is another matter. Again, one would expect the ECB to throw money at the markets to keep volatility down, but the sight of European integration going into reverse would nix a basic geopolitical assumption of the last 60 years. The resulting political uncertainty could be highly damaging for investment not only in Europe, but also further afield.

 

MONEY Airlines

Why the Era of Airfare Price Wars Is Gone, Perhaps Forever

people in airplane seats
iStock

The airlines have little reason to compete on price.

Airline profits have soared to record highs recently, and the overarching reason why the industry has been so successful is that the few big players that still exist have stressed “discipline.”

The New York Times recently noted that “discipline” is the go-to buzzword for airline executives. It’s most often used in conjunction with “capacity,” and the gist is that airlines have been focused on limiting the number of flights and seats. So long as supply of flights is relatively low, airfare prices—and profits—can remain high.

The question now being asked—not merely by travelers annoyed by high prices, but by a Justice Department investigation—is this: Is the airline industry’s much-heralded “discipline” illegal?

This week, the Justice Department sent letters to American Airlines, Delta Air Lines, Southwest Airlines and United Airlines—the nation’s four largest domestic carriers, accounting for 80% of flights within the U.S.—concerning “the undesirability of your company or any other airline increasing capacity.” The airlines were asked to turn over flight and capacity data accrued since 2010, with the idea that the Justice Department is investigating whether any “unlawful coordination” on capacity, and by extension on pricing, has been taking place.

The investigation comes a couple of weeks after U.S. Sen. Richard Blumenthal (D-CT) publicly accused the airlines of “potential anti-competitive, anti-consumer behavior and misuse of market power.” In his complaint, which urged the Department of Justice to pursue the matter, Blumenthal quoted a previous DOJ report that summed up how airfares have gone up steadily and largely unchecked by competition in recent years:

“The structure of the airline industry is already conducive to coordinated behavior…the legacy airlines closely watch the pricing moves of their competitors. When one airline ‘leads’ a price increase, other airlines frequently respond by following with price increases of their own.”

This scenario has become all the more common in the post-merger era of oligopoly in the airline industry. With fewer competitors, there are fewer players to worry about having to get on board with each successive fare increase. Considering that unprofitable routes have been cut and flights are fuller than ever, there is little reason for an airline to break ranks and refuse to raise fares, let alone to dare engage in pricing wars.

In lieu of the desperation to fill seats via bargain flight prices like they did regularly in the past, the airlines have focused lately on maximizing the profitability of each route, with higher fares, more add-on fees, and no worries about having to drop fares to match some upstart competitor.

This behavior is undeniably anti-consumer. We’ll have to see if it’s deemed illegally anti-competitive, and what if anything rulings or fines can possibly do to change the (un)competitive atmosphere in the consumer’s favor.

The airlines might point out that the investigation is occurring just as flight prices are, in fact, getting cheaper. Flight search data indicates that, overall, flights this summer are a few percentage points less expensive than they were a year ago. Still, considering that fuel prices have decreased dramatically, it would be reasonable to expect airfare prices to drop significantly further, and for airlines to add capacity to take advantage of lower costs.

But doing so would be exhibiting a lack of “discipline,” and would be seriously frowned upon by many airline executives and airline investors alike. In late May, airline stocks tanked after a move was announced by Southwest Airlines. The airline’s crime? It was bumping up expansion plans slightly. The decision might seem sensible—fuel prices are low, flight capacity is high, so why not add flights and fight for more market share?—but investors punished Southwest, and the entire airline industry, due to concerns that “Domestic capacity discipline has effectively vanished,” as Wolfe Research airline analyst Hunter Keay put it.

On Wednesday of this week, airline stocks took another significant dip. This time, the blame went to the Justice Department’s investigation into “unlawful coordination” among the airlines. It goes to show that there could be something to the concept that when airline stocks take a beating, it’s probably good news for travelers.

The larger, unfortunate truth is that, no matter what the Justice Department finds in its investigation, there’s no getting around that there’s very little legitimate competition left in the domestic airline market. With fewer competitors dominating domestic flights, the age of discipline—and, perhaps, collusion—is here. That’s why the era of flight pricing wars is dead.

TIME Media

Apple Music Is Cheaper Depending on Where You Live

Apple Worldwide Developers Conference Opens In San Francisco
Justin Sullivan—Getty Images Apple's senior vice president of Internet Software and Services Eddy Cue speaks during the Apple WWDC on June 8, 2015 in San Francisco, California.

Apple wants to make its service competitive with other apps available on Android

Apple Music may cost about $10 per month in the United States, but that’s not the case everywhere.

The music streaming service, which rolls out in more than 100 countries this week, is considerably cheaper in parts of Asia and South America. In India, a subscription will cost about $2 per month, according to Quartz. In Brazil, Indonesia and Thailand, the cost is about $5. These countries also have the group membership subscription, which costs $15 in the U.S., offered at a similar discount.

Other streaming services like Rdio already offer competing services in foreign markets at a pretty low price. In the past, Apple hasn’t tried to compete on price in emerging markets, instead positioning the iPhone as a luxury item. But with Apple Music set to launch on Android, the world’s most popular mobile operating system, in the fall, it makes sense for Apple to price its service in a way that makes it affordable to all smartphone users and not just iPhone owners.

TIME Apple

Here’s What Steve Wozniak Thinks of The Steve Jobs Trailer

"I felt a lot of the real Jobs"

Apple co-founder Steve Wozniak says parts of the trailer for the upcoming biopic Steve Jobs are inaccurate—but that doesn’t mean he doesn’t like the direction the movie is taking.

In the trailer, Wozniak (played by Seth Rogen) confronts Jobs (Michael Fassbender) about his lack of technical skills. “What do you do?” the film’s Wozniak says. “You’re not an engineer. You’re not a designer. You can’t put a hammer to a nail. I built the circuit board. The graphical interface was stolen. So how come, 10 times in a day, I read ‘Steve Jobs is a genius?'”

In an interview with Bloomberg, the real Wozniak says he never uttered those exact words, but their spirit “carried the right message” about his relationship with Jobs, who quickly became the face of the company the two men co-founded.

“I felt a lot of the real Jobs in the trailer, although a bit exaggerated,” Wozniak said.

The trailer paints Jobs in a less-than-flattering light, showing him going on tirades against employees and disavowing his own daughter. The movie, written by The Social Network writer Aaron Sorkin, debuts on Oct. 9.

TIME Companies

Donald Trump Deserted By Partners as Immigrant Furor Grows

The billionaire's continued attack on Mexican immigrants has caused some partners to rethink their relationship with him

More partners of Donald Trump have distanced themselves from the billionaire, as he doubled down on remarks Wednesday about Mexican immigrants being “rapists” during an interview on CNN Tonight with Don Lemon.

New York City has vowed to review its contracts, which include an ice-skating rink and golf course, with the mogul while four leading golf organizations distanced themselves from him. “Donald Trump’s remarks were disgusting and offensive, and this hateful language has no place in our city,” said the city’s mayor, Bill de Blasio, in a statement on Wednesday.

Trump had said in an interview with the Golf Channel that the golfing world was in agreement with him on immigration. But the PGA Tour, LPGA Tour, USGA and PGA of America issued a joint statement to counter that assumption. “In response to Mr. Trump’s comments about the golf industry ‘knowing he is right’ in regards to his recent statements about Mexican immigrants, we feel compelled to clarify that those remarks do not reflect the views of our organizations,” it said.

The billionaire first stirred up controversy in a speech last week where he described undocumented Mexicans as “rapists” and “killers”. The fall-out from his comments saw major business partners like Macy’s, Univision and Comcast’s NBCUniversal sever ties with him.

Trump seemed unwilling to back down from his remarks Wednesday evening, telling CNN’s Don Lemon in an interview that the statistics about immigration were “mind-boggling.”

“It’s unbelievable when you look at what’s going on. So all I’m doing is telling the truth,” Trump said. He has also sued the Spanish-language network, Univision, for $500 million when it cut ties with his Miss USA Pageant.

TIME Economy

U.S. Unemployment Rate Drops to 5.3%

Employers Post Most Job Openings In Four Years In June
Spencer Platt—Getty Images A "now hiring" sign is viewed in the window of a fast food restaurant on August 7, 2012 in New York City.

But labor force participation dropped

The United States labor market put in a tepid performance in June, with the addition of only 223,000 jobs, according to a report released by the Bureau of Labor Statistics on Thursday.

That was short of analysts’ exceptions, which put estimates for June job growth in the 225,000 to 230,000 territory.

According to the household survey, unemployment declined to a seven-year low of 5.3% in June, after inching up to 5.5% in May.

Though the jobs report’s top line numbers were not too bad, a closely-watched sub-indicator didn’t show such good news: hourly wages remained flat in June. That stagnation could delay a long-awaited hike in interest rates. After the May jobs report showed that wages had increased by 8 cents per hour, Federal Reserve chair Janet Yellen said at a press conference June 17 that “wage increases are still running at a low level, but there have been some tentative signs that wage growth is picking up.”

Thursday’s report—released a day early because of the observation of the July 4th holiday on Friday—also showed that labor force participation dipped by 432,000 or 0.3% in June after an increase of similar size in May. The share of Americans participating in the labor market fell back from 62.9% in May to 62.6%–its lowest since 1977.

The number of long-term unemployed who’ve been without a job for 27 weeks or more declined by 381,000 to 2.1 million in June. Over the past 12 months that figure—which currently makes up 25.8% of the unemployed—has decreased by nearly 1 million.

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