Judge in Collusion Case: Silicon Valley Was Afraid of Steve Jobs

Steve Jobs Introduces iCloud Storage System At Apple's Worldwide Developers Conference
Bloomberg—Bloomberg via Getty Images Steve Jobs, CEO of Apple Inc., unveils the iCloud storage system at the Apple Worldwide Developers Conference 2011 in San Francisco on Monday, June 6, 2011.

Jobs was the central figure in tech companies' collusion over hiring policies, a district court judge said Friday

Silicon Valley feared late Apple CEO Steve Jobs before his death in 2011, a judge in a collusion lawsuit brought against Apple and three other top tech companies said Friday.

The suit was brought on behalf of 64,000 tech workers against Apple, Google, Intel and Adobe for allegedly agreeing not to poach each other’s employees, a precedent that some say was set after Jobs reached a no-poaching deal for Pixar.

That deal became the model for all the tech companies, said Judge Lucy Koh. Silicon Valley companies’ “fear of and deference to” Jobs was a large reason for the willingness of other tech companies to join in the alleged conspiracy in which major players are said to have agreed not to hire each others’ employees, the Financial Times reports.

“There is compelling evidence that Steve Jobs … was a, if not the, central figure in the alleged conspiracy,” Koh wrote as she rejected a proposed $324.5 million settlement in the case.

Google co-founder Sergey Brin was more succinct. He was quoted as saying, “I think Mr. Jobs’ view was that people shouldn’t piss him off. And I think that things that pissed him off were — would be hiring, you know — whatever.”



There’s a “Right To Be Forgotten” Industry—and It’s Booming

Google on iPhone 5
Iain Masterton—Alamy

The E.U.'s decision requiring search engines to remove some links from search results has spawned a nascent market

Ever since the European Union’s top court ruled in May that individuals have a “right to be forgotten,” Google has been working to abide by the new rules. The company has received over 70,000 takedown requests from individuals who want 250,000 webpages removed from Google’s search results. Google’s team individually reviews each application, and the company plans to hire more employees to handle the extra workload. Changing the way people think about the Internet is an overwhelming task.

But Google is not the only company scrambling in the wake of the E.U.’s decision. As Internet users begin requesting that unsavory parts of their pasts or personal contact information be erased from Google’s search results, so-called reputation management companies are seeing a flood of new business. Traditionally confined to creating new web content about their clients—laudatory blog posts, celebratory articles, swooning social media updates—these companies are now trying to help their clients erase content as well. “Online image management has long been in the business of producing new content so you have a better persona online,” says Cayce Myers, a professor at Virginia Tech and legal research editor for the Institute for Public Relations. “Here they’re doing the reverse.”

Online reputation management is a growing business that is now being boosted by the E.U. ruling. For a fee that can amount to thousands of dollars a month, companies take on clients and scrub clean their search results by creating search engine-optimized content that hog up the first few pages of search results on Google. Clients ranging from CEOs, major corporations, celebrities down to doctors and restaurateurs who use the services to whitewash their online presence. Media consultant BIA/Kelsey forecasts that small and medium-size businesses will spend $3.5 billion managing their online reputations in 2014.

Now, the E.U.’s court ruling has changed the dynamics of the industry, expanding these businesses’ client base and making it easier for them to delete content rather than just create it. “The number of our inbound leads”—new referrals—“has gone up about 50 percent since the beginning of May,” says Simon Wadsworth, managing director of the U.K.-based online reputation management firm Igniyte. The E.U. ruling “has raised awareness of the industry. You can change how you do things online.”

Bertrand Girin, the founder of a France-based reputation management company, Reputation VIP, has created a spin-off service that specifically to designed to help people make “right to be forgotten” requests to Google. Aptly named Forget.Me, it lets users choose from one of 40 boilerplate requests in nine separate categories in order to send Google a pre-formulated request. The service, which is free, allows users to bypass some of the thorny legal questions and the difficulty of properly structuring a request. “When Google put its form online, we looked at the demand from the public and we saw a gap,” says Girin. “We said, ‘let’s help people understand what their problem is.’”

Forget.me has 17,000 registered users who have submitted over 2,500 applications to Google. The boilerplate response responses, which were written by lawyers, can be modified by users to address more specific claims. Girin is promoting the service as one that makes it easy for regular people to be forgotten on the internet. Dealing with Google is a “bureaucratic hassle,” says Myers, the legal research editor for the Institute for Public Relations.”You can technically do it yourself for free, but navigating the bureaucracy is in a state of flux.”

“I can see where it could be cumbersome,” he adds.

The buzz around right to be forgotten has given these companies much-wanted attention. Andy Donaldson, the CEO of the reputation management company Hit Search, has invested heavily in building and marketing a search software that allowed users to monitor their own online personas over multiple platforms. But Donaldson said that since the E.U. ruling, the number of his company’s new client leads has increased by “upwards of three or four hundred.” “We invested in post-graduate doctors in computer science and mathematics to help us build our algorithm,” Donaldson said, “But it ends up being something like this that triggers the market that’s really totally out of our control.”

Donaldson gave an example of how the E.U. ruling has been a boon for business. (He couldn’t disclose the names of his clients.) The CEO of a large U.K.-based company was involved in a dispute during a friendly rugby match with a well-known journalist. The journalist wrote a damning story about the incident, blaming the CEO. The CEO’s wife, having just read about the E.U. ruling, sought out Hit Search to get the story removed from Google’s search results. The request is unlikely to be successful—Google is reticent about removing news stories on public persons—but Donaldson won a client lead.

Google has taken a hard-nosed stance toward many of the requests reputation management firms have made, with the overwhelming number of takedown requests coming back with refusals. Donaldson said he has sent hundreds of requests for his clients to Google; of the requests Google has responded to, under ten percent have been accepted, he says. That’s because Google isn’t likely to take down a search result like a newspaper story about a public figure, for instance, or a negative review about a roofing company.

“People think we’ve got some magic button in Google and we press delete,” says Wadsworth, the CEO of Igniyte. His clients often ask for links to be removed that won’t pass Google’s bar. “We’re telling the majority of people, ‘you’ve got no chance,’” Wadsworth says.

Their success rates aside, the right to be forgotten ruling is going to drive business growth for some time to come. “This is a first step into a general public market. It’s a big market,” said Girin. “I think there’s a real demand here.”

TIME technology

This Is GoPro’s Plan to Continue Conquering the World

GoPro goes public on Wall Street
Seth Wenig—AP GoPro's CEO Nick Woodman holds a GoPro camera in his mouth as he celebrates his company's IPO at the Nasdaq MarketSite in New York, June 26, 2014.

IPOs can not only provide startups with new capital, they can also offer a lot of free publicity, especially when the company has a product beloved by its users, a charismatic founder and a backstory of entrepreneurial grit. In that sense, GoPro’s IPO has been nothing short of a boon for the company.

In a year that has seen the allure of the IPO market fizzle early on, GoPro is just the poster child Wall Street needs to reignite interest in new offerings. The company was founded in 2002 by Nick Woodman, the son of an investment banker who saw a need for a portable, durable, and affordable camera to capture surfing footage.

As GoPro’s cameras grew smaller and capable of higher-def video, word of mouth spread quickly. GoPro became the high-definition action camera of choice for sports enthusiasts who shared their filmed exploits through social media. That word of mouth pushed GoPro’s share of the US camcorder market to 45% last year from 11% two years earlier. Revenue grew 87% in 2013 to just shy of $1 billion.

That success explains GoPro’s initial rise in the wake of its IPO. GoPro went public in late June at $24 a share, rose 31% on its first day alone and within its first week had more than doubled its offering price. It was just the spark that the sluggish IPO market needed going into the summer, and GoPro bulls argued that the initial surge was justifiable.

The bull case went something like this: GoPro represents the rise of a new consumer gadget brand. Sure, it competed with hoary old camera companies like Canon, Nikon and Polaroid. But it had a shiny, 21st Century feel to it, the way Sonos does and Panasonic doesn’t, or the way Nest does and a General Electric thermostat does not. GoPro was emblematic of a new breed of consumer electronics.

The early rally soon drew the attention of bears, who felt the post-IPO surge in GoPro’s stock was speculative, leaving it at an overvalued price. Even now, the stock trades at nearly 10 times its 2013 revenue and 100 times its net income.

Such a rich valuation overlooks the uncertainties in GoPro’s future. As impressive as the company’s growth in camcorder market share has been, it won’t be long before it starts to reach saturation. At the same time, such rapid success tends to draw emulators. And struggling companies like Olympus and Canon have resources to develop and market similar cameras.

An even bigger threat may come from the wearable cameras being developed by Apple, Google and others. Early videos promoting Google Glass revealed an even more portable video camera, one that is likely to drop in price once it reaches the mainstream market. For many amateur videographers, the increasingly high-definition cameras included in smartphones may also make a GoPro seem obsolete in time.

To counter these competitive threats, GoPro is working to expand internationally, innovate new features in its cameras and promote the GoPro brand as a source of original and user-generated content. The push from gadgets to media is a logical one, but it also highlights some of the barriers the company faces in finding future growth.

GoPro’s prospectus says it’s investing in video programming for partner platforms such as Virgin America and Xbox Live. While welcome partners, these platforms aren’t nearly as big as, say, YouTube. The GoPro channel on YouTube has a little more than 2 million subscribers. Not bad, but also not nearly enough to put it in the top 100.

The biggest benefit of more visible GoPro content may not be to generate media revenue but to market GoPro cameras. The company says it plans to build new marketing relationships, increase its presence inside stores and spend more on advertising – initiatives that may need to draw on the proceeds raised in its IPO. However, the bulk of those proceeds went to pay off loans and pay out insiders. And the increased spending is likely to weigh down margins even as the company’s revenue growth slows.

Such concerns have weighed on the stock in the past two weeks. After reaching a peak of $49.90 on July 1, the stock has since fallen 22%. The initial surge created a demand for GoPro shares available for borrowing by short sellers. Right as GoPro shares peaked, an analyst noted that “borrowers are snapping up all the available GoPro shares they can, and are willing to pay a high price to do so.”

Another analyst at Vertical Group issued a sell rating on GoPro an a price target of $28.50 last Thursday, citing a media strategy that was “fraught with risk” and a “still-questionable competitive moat.” Since that report, GoPro’s stock has fallen 10%. On Friday alone, GoPro fell 7.3%.

The shift in momentum in GoPro’s trading away from the bulls and in favor of the bears doesn’t mean the company won’t have a bright future ahead of it. But it’s a caution for investors hoping to buy the stock of a well-known consumer brand right after its IPO. GoPro needs to show it can fend off competitors and produce a viable media strategy before it can come close to earning its post-IPO price.

TIME Media & Technology

Apple: Your Data Is Safe With Us, China

Apple iPhone China
ChinaFotoPress—Getty Images People wait outside an Apple store all night prior to the mainland release of iPhone 4S on January 12, 2012 in Beijing, China.

Apple insisted Saturday that it does not pass on data collected from Chinese iPhone users to U.S. intelligence services

Apple on Saturday denied claims made on Chinese state media that its iPhone presents a security risk to customers by compromising location data.

“Apple does not track users’ locations – Apple has never done so and has no plans to ever do so,” Apple said on Saturday, the Financial Times reports.

A Friday report on CCTV, the widely influential Chinese state-owned broadcaster, warned that the iPhone could track users using its positioning technology, and “view the user’s home address, unit information and whereabouts.” The report also claimed that information could be passed to U.S. intelligence services.

In an explanation published on its homepage in China, Apple said it has “never worked with any government agency from any country to create a backdoor in any of our products or services,” the Financial Times reports.

Apple also said that users location services can only be accessed by the device’s owner when they enter their passcode.


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