Last Week In Digital - 18th July 2017

Google invests in a new AI, Messenger tests ads, China bans VPNs and Uber in Russian merger


Uber cedes Russian market to Yandex

In a time of internal turmoil, Uber has ceded the Russian and central-asian market to its rival Yandex. The deal covers Russia, Kazakhstan, Azerbaijan, Armenia, Belarus, and Georgia, according to TechCrunch, and will close in Q4 of this year. The terms of the deal are that both companies will invest capital - Uber will give $225 million for a 37% stake and Yandex $100 million for a 59% stake. It's a relatively complex legal arrangement in which a subsidiary of Yandex is created, of which Uber owns a minority stake. The retreat is Uber’s second-biggest in its history, behind its withdrawal from China which gave way to Didi in 2016.

‘This combination greatly enhances Yandex’s ability to offer better quality service to our riders and drivers, to quickly expand our services to new regions, and to build a sustainable business,’ says Tigran Khudaverdyan, CEO of Yandex.Taxi, in a statement. ‘The combined companies currently perform over 35 million rides a month while growing over 400% year-over-year. Since founding Yandex.Taxi in 2011, we have connected tens of millions of riders and drivers to become the largest and most trusted ridesharing business in Russia and neighboring countries. We are excited to expand on this foundation in collaboration with Uber.’ Uber was never quite able to gain an upper hand in Russia, thanks to both Uber’s late arrival and the local rival’s Yandex Maps.

China to ban VPNs

China’s government has gotten serious about VPN use - a major window to the wider global internet for Chinese users - and is ordering telecoms carriers to block access to them by February. The state-run firms include China Mobile, China Unicom, and China Telecom, according to Bloomberg. The move will cut off one of the primary ways that Chinese internet users get around the government’s restrictive, tightly policed policy regarding free internet use. VPN’s were one of the more effective ways of getting through the ‘Great Firewall’ and closing them will tighten President Xi Jinping’s grip on ‘cyber sovereignty’.

The ban would, beyond social media sites like Twitter and Facebook, include other sites deemed unsuitable such as Wall Street Journal and The New York Times. ‘It’s clear that VPNs play a fundamental role in China’s increasingly connected and globalized economy – whether it’s onshore, corporate VPN services like China Telecom’s or offshore services like ExpressVPN. VPNs are a critical tool for secure communication and global connectivity,’ an ExpressNPV company spokesperson told TechCrunch. The suppression of VPNs will be a concern for companies who sell to China. The scope of the regulations will be unclear until they’re actually implemented, but the change is likely to be a significant one.

Google invests in news-writing AI

Perhaps terrifyingly for people such as myself, Google is developing a news-writing artificial intelligence. The tech giant’s Digital News Initiative has committed $805,000 to ‘fund an automated news writing initiative for UK-based news agency, The Press Association, according to TechCrunch. The technology - RADAR, or Reporters And Data And Robots - can generate some 30,000 local news stories every month, and is intended to help deal with tightening budgets and thinning workforces.

Press Association Editor-in-Chief Peter Clifton made it clear that the AI would not be putting journalists out of jobs any time soon, but still described it as a ‘genuine game-changer.’ ’Skilled human journalists will still be vital in the process,’ he explained, ‘but Radar allows us to harness artificial intelligence to scale up to a volume of local stories that would be impossible to provide manually.’ I think most would agree that, until an AI can display the nuance and flair in its writing that a human can, it should get nowhere near their jobs. As the tech develops, though, expect to be reading more and more computer generated pieces.

Messenger tests inbox ads

Earlier this year, Facebook’s wildly successful Messenger hit 1.2 billion monthly active users. Only (Facebook owned) WhatsApp can boast comparable figures, and the world’s largest social media company is looking at ways it can further monetize its reach. According to TechCrunch, after seeing ‘promising results from Australia and Thailand,’ the company is set to expand the testing globally.

The ads will appear in users’ inboxes gradually over the next month, and their placement will depend on factors like how many chats a user has, the size of the phone’s screen, and the pixel density of the display. Essentially, Facebook is running out of ad space on its News Feed and is being forced to chase other ad revenue streams to avoid slowing growth. Sponsored Messages and Click To Message ads have been bled into Messenger slowly and without too much friction, and Facebook will be hoping that further ads don’t spoil their carefully created UX. 


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