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Big ad agencies are trying to cut out ad-tech middlemen — and justify their own existence

Posted: 28 Apr 2018 01:07 PM PDT

Jeff Bezos

  • Giant ad-buying agencies are exploring direct programmatic ad deals with top publishers.
  • Theoretically, such deals would cut out many of the ad-tech intermediaries inherent in digital advertising and the fees they charge.
  • These arrangements could also bring back more buying power to ad agencies as their futures are increasingly in doubt.
  • "Both agencies and brands are aggressively leaning in [to this concept], and as a top-10 digital publisher, I can tell you the conversations are very real," said Scott Hendrickson, who heads up sales for News IQ, a programmatic unit at News Corp.
  • Top programmatic ad-buying firms are essentially trying to follow Amazon's ad playbook.

Giant ad agencies that want to cement their place in the world are drawing inspiration from two unexpected sources: TV and Amazon.

In an era where marketers can buy ads on thousands of websites and apps using powerful software and data, potentially without using an ad agency, these ad-buying firms are looking to reestablish their value by throwing around their weight.

Specifically, the biggest media-buying firms — including GroupM, Omnicom, and Dentsu — are contemplating big changes to the way they buy digital ads. Some are even in talks with top web publishers about gaining preferred, direct access to ad space using programmatic tools.

The hope would be for these agencies to reestablish the kind of buying clout they've long enjoyed in the TV industry, where ad buyers push for preferred pricing and inventory by pooling together the budgets of dozens of clients.

And interestingly, these ad firms might like to exert this clout using the same sort of software- and code-driven connections with top web publishers that have fueled Amazon's rise in advertising.

Ad agencies are looking to plug directly into websites for ad space, just like Amazon

Roughly five years ago, as Amazon started nudging into the advertising business by building its ad tech, the e-commerce giant (along with several others) started offering a header-bidding product to publishers.

That move with header bidding — technology that enables lots of ad buyers to bid on ad space at the same time and has proved popular among web publishers — plugged Amazon's tech directly into publishers' sites, often giving them the first crack at running ads using its pools of consumer shopping data.

Now Amazon is one of the fastest-growing digital ad companies. Ad agencies would like the same kind of preferential treatment.

This type of arrangement, often referred to as server-to-server integration, would appear to have two benefits for agencies:

"It's early, but what we're seeing is big agencies trying to emulate what Amazon's done over the past few years," a top publishing executive said. "They're trying to integrate directly with publishers to get preferred access to inventory. It's going to be interesting to see how much adoption it gets and how Amazon and other ad-tech companies react."

Plenty of people doubt these tactics, and big publishers aren't necessarily sure they want to play ball with this direct integration. Several ad agencies, like Omnicom, tried to do this a few years ago and never really got anywhere, some publishers say.

And some question whether ad agencies have the technical chops to pull this off without leaning on the very ad-tech providers they'd like to unseat.

money

Dentsu has been leading the charge through its programmatic ad-buying unit

The Japanese ad-holding giant Dentsu has been vocal about the need to weed out the seemingly endless array of ad-tech intermediaries that take a small cut of many advertisers' budgets on the web.

Art Muldoon, the co-CEO of Dentsu's programmatic specialty division, Amnet Group, said the company was in discussions with some publishers about connecting directly with their ad-space supply.

"Right now, this is experimental and exploratory," he said.

Amnet is looking at doing this with some existing technology partners and some of its own tech. It's early, but the idea is that it would directly sync with about 100 top publishers.

"Our driving motivation is to create the most efficient supply chain in the industry, and curate quality at scale," said Matt Greitzer, Amnet's other co-CEO. That would mean pulling back on buying via open exchanges.

Greitzer added: "Publishers with whom we have spoken thus far are very enthusiastic."

Brian O'Kelley, the CEO of AppNexus, says that many of Amnet's ideas date back more than a decade, when programmatic advertising was in its infancy. Over time, venture money poured into ad tech, and the ecosystem became beyond cluttered.

"It's a little bit back to the future," O'Kelley said. "The bell has been tolling for a while."

The media-buying firm Magna, a division of Interpublic, is also exploring forming closer programmatic ties with publishers.

"We've been talking about it for years," said Vin Paolozzi, Magna's executive vice president of innovation. "Right now, we are doing everything we can to mitigate risk and alleviate any pressures for publishers."

There's a growing push in advertising to trim the fat out of programmatic

Recent trends in digital advertising are fueling this desire for advertisers to get closer to top publishers — or being used as a great excuse.

Over the past few years, as more ad budgets have poured into programmatic channels, lots of problems have come to light, leading to closer scrutiny of the entire sector.

For example, marketers have been repeatedly burned by ads ending up in the wrong places. And while ad tech has promised efficiency, digital ad space is too often traded back and forth among middlemen.

Advertisers and publishers alike complain that those companies charge fees along the way and make it much less clear where the ads will run and how they'll get there. That's particularly true of ad exchanges open to buyers and sellers across the spectrum, including some less-than-ethical players.

So there's a lot of enthusiasm for streamlining things.

"In concept, it makes a ton of sense," said Joe Zawadzki, the CEO of MediaMath. "Instead of buying in the ocean, the idea's of a curation role in programmatic ... with a bunch of always-on deals, preferred deals."

Many advertisers have lost trust in their agencies and want a closer look at the books

Besides the messy nature of programmatic advertising, there's also the issue of declining trust between agencies and their marketing clients.

In 2016, a bombshell report from the Association of National Advertisers decried the lack of transparency in the industry — particularly in programmatic advertising — and alleged rampant kickbacks.

That led many marketers to question whether their ad agencies were ripping them off by arbitraging media using programmatic channels. Now, agencies are using this moment of doubt to tell their clients that things will be different this time around — just trust us.

"Really what you are starting to see is the more complicated, messy, and technical this all gets, clients are saying: 'Enough! Get me in your ad server,'" said Sarah Warner, a managing partner and digital investment lead at GroupM. "They are very focused on compressing the supply chain."

Warner added: "This is really about holding the entire system accountable."

An ad-tech shakeout may be coming — and the winners are likely to be big players like Google and AppNexus

Compressing the supply chain is probably not good news for the hundreds of small and midsize ad-tech companies that don't have standout tech or unique access to big ad budgets.

This now well-known slide from the investment bank Luma Partners illustrates ad tech's complexity:

lumascape

To mitigate such complexity, Magna recently asked dozens of ad exchanges and supply-side platforms to lay out their features and demonstrate their value in a detailed questionnaire.

It's likely to significantly shrink the number of intermediaries Magna works with — and, ideally, allow the agency to forge more direct programmatic deals.

"This will lead to continued massive amounts of consolidation in the coming years," Paolozzi said.

"You're going to probably end up with big, most efficient, scaled partners," said Jeremy Hlavacek, the head of global automated monetization for Watson Advertising, a division of IBM. "They'll muscle everybody else out."

Digital ad buyers are jealous of the negotiating clout TV buyers have

Typically, talk in the ad industry of late has focused on how TV advertising needs to emulate digital media, meaning more tech and more data.

But there's one aspect of the TV business that digital ad agencies would like to steal back: buying power.

One of the reasons that giant media-buying companies exist is to negotiate mega TV ad deals, the promise being better pricing and preferred inventory — that is, ads on the best shows.

That dynamic has been lost in programmatic, where buying is automated and highly democratic.

"One of the side effects of programmatic is that there is no benefit from the fact agencies are spending billions," a former ad agency CEO said. "If you're spending $1 or $1 million, you all get the same shot at buying an ad in a given moment."

That's the trade-off between automation and human negotiation. But with direct publisher partnerships, ad agencies think they can recapture some of that lost power.

Some publishers are bullish on direct integrations, while others want guaranteed money

Like most ad-buying trends, some publishers like the direct concept, and others don't. But given the competitive landscape, it will be hard for many to continue to say no.

"Both agencies and brands are aggressively leaning in [to this concept], and as a top-10 digital publisher, I can tell you the conversations are very real," said Scott Hendrickson, who heads up sales for News IQ, a programmatic unit at News Corp. "In broad terms, they are trying to solve for trust and efficiency."

Hendrickson said that for a while, advertisers and publishers worked together to create "private marketplaces," where a single advertiser could get preferred access to a publisher and maybe bring its data along for targeting purposes.

That has proved largely inefficient, he said.

slow down caution warning sign

Still, even if publishers like the concept, they'll have to be very picky about how many third parties get to plug into their sites.

Besides that of the likes of Google and Amazon, will most publishers want to integrate tech from four or five giant ad agencies? Especially if they're trying to ensure their site loads fast and operates smoothly in a mobile world, a mission that every extra bit of tech on it threatens to thwart?

"It's still early days," said Sara Badler, the head of programmatic revenue and strategy at the IAC-owned web publisher Dotdash. "We want to be as efficient as possible, and we want to manage our revenue. But every publisher is looking at their tech stack.

"This is a place of exploration," Badler said. "We're not there yet."

Another top publishing executive put it plainly.

"No chance — not unless you give me a huge spending guarantee," he said. "Otherwise, why am I doing that?"

Fueling this debate is the reality that agencies are fighting for their purpose

There have been dozens of stories over the past few years about how programmatic, data-driven advertising is leading more marketing giants to explore whether they can hire a few experts, tap into the right software, and bring ad buying in-house.

Having a bunch of direct deals with big publishers for preferred access and prices helps agencies counter that argument.

"This is the kind of thing where leveraging scale, custom tech and tech partners can add value for clients," said Muldoon. "Brands probably couldn't do this on their own."

Steve Katelman, the executive vice president of global digital partnerships at Annalect, a division of Omnicom, said ad-buying agencies had not sold their programmatic expertise enough, and that these kinds of deals can help make their case.

"As agencies, we need to make it clear: This is what we're good at, this is why we're valuable," Katelman said. "We're going hard at this idea."

Some major media companies contend that agencies have little choice, as their very existence is at stake.

"There really is an existential crisis at these agency programmatic trading desks," said a top web publishing executive. "They don't want to become order-takers — they want to offer strategy and planning."

In their favor is that agencies control a lot of advertisers' budgets, this executive said. On the flip side, "if you're an agency, your biggest threat is Google selling direct to Coke."

Join the conversation about this story »

NOW WATCH: Ally Financial CMO says that too much data hurts a brand — and is dangerous for the industry in the long-term

POINT-OF-SALE TERMINALS: How evolving merchant demands are pushing POS terminal providers to up their game in an increasingly competitive environment

Posted: 28 Apr 2018 01:03 PM PDT

pos terminals graphicThis is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here.

The downfall of US brick-and-mortar commerce is overblown — despite sharp gains in e-commerce, which will nearly double between now and 2021, the lion's share of purchasing continues to take place in-store. And that's unlikely to change anytime soon, since the online environment can't yet compensate for the reasons customers like brick-and-mortar shopping.

That means the point-of-sale (POS) terminal, which merchants use to accept payments of all types and to complete transactions, isn't going anywhere. But that doesn't mean it's not changing. As merchants look to cut costs amidst shifts in consumer shopping habits, POS terminals, which were once predominantly hardware offerings used exclusively for payment acceptance, are evolving into full-service, comprehensive solutions. These new POS terminals are providing an array of business management solutions and connected offerings to complement payment services. 

This is where the smart terminal, a new product that's part-tablet, part-register, comes in. Merchants are increasingly seeking out these offerings, which afford them the connectivity, mobility, and interoperability to run their entire business. And that's shaking up the space, since it's not just legacy firms, but also mobile point-of-sale (mPOS) players and newer upstarts, that offer these products. 

As merchants begin demanding a wide variety of payment solutions, terminal providers are scrambling to meet their needs in order to maintain existing customers and attract new ones. This is leading to rapid innovation and increased competition in both the POS terminal hardware and software spaces.

Business Insider Intelligence, Business Insider's premium research service, has put together a detailed report on the shifts in this landscape, how leading players can meet them, and who's doing it most effectively.

Here are some key takeaways from the report:

  • Evolving merchant needs are impacting POS terminal players' strategies. Merchants select terminal providers based on four key areas: payment functionality, user experience (UX), over-the-top (OTT) offerings, and distribution/customer service. Terminal firms need to innovate in these areas, or risk falling behind.
  • Larger players need to double down on existing success. Smaller players can often be more nimble, which gives them the opportunity to innovate more quickly and build in-demand solutions. That's a disadvantage to market leaders; however, they can, and should, leverage their massive distribution networks when upgrading or updating their offerings. Meanwhile, smaller players can win by focusing on niches instead.
  • It's all about the platform. No single feature is likely to make or break a merchant's decision to pursue a specific provider. Above all, they want a robust ecosystem that can evolve over time. 

In full, the report:

  • Explains the current state of in-store retail and why terminal firms need to evolve to meet it.
  • Groups features that matter to merchants and explains why they're important and what terminal providers stand to gain from focusing on them.
  • Determines the leading players in the space.
  • Assesses how the leading players stack up, and which offerings are the most comprehensive.
  • Issues recommendations about how to develop an attractive platform that best serves merchants' needs as the market continues to shift. 

Subscribe to an All-Access pass to Business Insider Intelligence and gain immediate access to:

This report and more than 250 other expertly researched reports
Access to all future reports and daily newsletters
Forecasts of new and emerging technologies in your industry
And more!
Learn More

Purchase & download the full report from our research store

 

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Computers in North Korea run on look-alike Mac software called 'Red Star 3.0' — see what it looks like to log in and use it

Posted: 28 Apr 2018 11:13 AM PDT

North Korea Red Star Computer

When former Google employee Will Scott had the chance to visit the Pyongyang University of Science and Technology, he also purchased a copy of North Korea's "Red Star 3" operating system before returning to America.

Little was publicly known about Red Star 3 at the time.

North Korea used to use Windows, but it has since created Red Star 3, which is designed to look a lot like Apple's macOS operating system. Red Star 4 is reportedly in the works, but for now, most people in North Korea are still on the third version.

From stunning and picturesque wallpapers to removing South Korea from the available time zones, here's what it's like to use a computer in North Korea:

This is the startup screen when you first boot up Red Star 3.



When installing Red Star 3, you're prompted to select a city for your time zone. Interestingly enough, Seoul, South Korea, isn't an option.



This is the log-in screen.



See the rest of the story at Business Insider

THE VR HARDWARE REPORT: How stand-alone VR headsets will usher in mainstream adoption beginning in 2018

Posted: 28 Apr 2018 11:02 AM PDT

Global VR Headset

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here.

The virtual reality (VR) market is expected to rally in 2018 after seeing slow growth from 2016 to 2017. The uptick will be largely catalyzed by the emergence of the newest headset form factor, stand-alone VR headsets, which address some of the biggest pain points that have prohibited mainstream consumers from adopting VR.

This new form factor is more affordable than cost-prohibitive high-end headsets and more capable than its smartphone-powered counterparts. Additionally, it features in-unit processing that frees the VR headset from wires. The first major stand-alone headset, the Vive Focus from HTC, was launched in January of this year, and more from other major companies like Oculus and Google are expected to follow over the next six months. 

In a new report, Business Insider Intelligence lays out where the VR market is and forecasts how it will grow over the next five years. We dissect the various hardware categories and the unique strengths and opportunities of each, and identify how they will gain traction at different points of the market's evolution. Finally, we examine various components impacting consumer adoption.

Here are some of the key takeaways:

  • Business Insider Intelligence forecasts shipments of all VR headsets to grow 69% year-over-year (YoY) to reach 13.5 million in 2018. Powering that growth is the stand-alone VR headset category, which is expected to account for 30% of total headsets shipped in the year ahead. 
  • The VR hardware market is volatile because getting a device right is a balancing act. On one hand, the price point needs to be affordable for most consumers, and on the other, the experience has to be distinctive and immersive enough to convince a consumer to strap a visor to their face on a regular basis. 
  • While only a handful of stand-alone VR headsets will hit the market in 2018, they mark the biggest step toward mainstream adoption of consumer-oriented VR headsets by making the technology more accessible for the average consumer. 
  • Declining price points, coupled with high-quality headsets and the introduction of a game-changing app, are crucial for the VR industry to achieve before VR can really gain traction on a global scale.

In full, the report:

  • Forecasts the growth projections and shipment expectations of the global VR headset market, and breaks it up by the major headset categories.
  • Explores the four major segments in the current VR hardware market, defined by the hardware needed to power the experience — stand-alone, smartphone-powered, PC-powered, and game console-powered VR.
  • Identifies the key players shaping the burgeoning stand-alone VR headset segment.
  • Discusses the biggest challenges to VR development and adoption.

Subscribe to an All-Access pass to Business Insider Intelligence and gain immediate access to:

This report and more than 250 other expertly researched reports
Access to all future reports and daily newsletters
Forecasts of new and emerging technologies in your industry
And more!
Learn More

Purchase & download the full report from our research store

Join the conversation about this story »

Russia has 'stepped on the gas' with its submarine fleet — and NATO is on alert

Posted: 28 Apr 2018 11:00 AM PDT

Russia navy submarine

  • Russian and NATO navies have come into increasingly close contact around Europe in recent years.
  • A particular concern for NATO is Moscow's submarines.
  • Western navies still have an edge under the sea, but Russia's progress has them worried.


A British Astute-class nuclear-powered attack submarine was reportedly closely pursued by Russian warships and subs in the eastern Mediterranean during the first days of April.

That "cat-and-mouse" encounter between one of the UK's most advanced submarines and a Russian force that included Improved Kilo-class subs — nicknamed "the Black Hole" because of their stealth — took place in the run-up to the latest US-led strikes in Syria.

But submarine and antisubmarine warfare in general have become areas of more intense focus for both Russia and NATO, the latter of which is increasingly concerned about what it sees as Russian encroachment in Europe and the seas around it.

'They've really stepped on the gas'

Russia decreased its undersea activity after the Cold War, and its navy went through a considerable decline. But in recent years Moscow has embarked on a modernization effort, putting money into developing newer, quieter subs manned by better-trained crews.

Yasen class Russian submarine

Some aspects of Russia's naval modernization have been delayed, and some of its achievements overstated, but there has been progress. Moscow plans to built three Borei-class and five improved Borei II-class ballistic-missile subs by 2025, though delays are likely — delivery of the first improved Borei II-class sub has already been pushed back. Russia also expects to start getting a new class of nuclear-powered subs in the 2030s.

Upgrades are planned for other Russian missile subs, and Russian media has in recent months boasted about new, sophisticated attack subs and of attack subs loitering near US military bases.

"The Russians are closing the gap," Magnus Nordenman, the director of the Transatlantic Security Initiative at the Atlantic Council, told Business Insider earlier this year. "And they have departed from their traditional sort of approach — with lots of mass and lots of submarines but of sort of varying quality — and they are taking page from our playbook, which is go for quality instead."

Krasnodar kilo class submarine russia navy

This has not gone unnoticed by NATO officials, who have warned several times in recent years that Russian sub activity was becoming more sophisticated and reaching levels not seen since the Cold War.

They've also sounded alarm about Russian activity around undersea cables that support global communications.

Russian navy chief Adm. Vladimir Korolyov seemed to give weight to that concern in March 2017, when he said Russian subs spent more than 3,000 days on patrol in 2016, matching their Soviet-era operational tempo.

"A major component of this resurgent Russia has been in their maritime" activity, US Chief of Naval Operations Adm. John Richardson, a career submariner, told the House Appropriations subcommittee on defense in March.

"They've really never taken their eye off the ... deployment of their undersea forces, but they've really stepped on the gas and stepped that up, both in technology and in ... the amount of of time that they're spending deployed."

'Aggressively defensive'

Russia has used its involvement in Syria as a sort of "test bed for showing off its new submarine capabilities," including the ability to launch cruise missiles from subs, Nordenman said.

Borei Russian submarine

In mid-2017, NATO navies shadowed the Krasnodar, a Improved Kilo-class sub, as it sailed around Europe to take up station with Russia's Black Sea fleet. That journey culminated in the eastern Mediterranean, where the Krasnodar launched cruise missiles at targets in Syria.

In response to the sub's presence and its efforts to avoid detection, the sailors and airmen of the USS George H.W. Bush carrier group began tracking it — an operation with which many of those US sailors and airmen had little real-world experience.

"It is an indication of the changing dynamic in the world that a skill set, maybe we didn't spend a lot of time on in the last 15 years, is coming back," Capt. Jim McCall, commander of the air wing on the USS Bush, told The Wall Street Journal at the time.

US Navy Los Angeles-class attack submarine Springfield Toulon France Europe

Russia has said it plans to add several subs to its Black Sea fleet, which is a point of focus for Moscow — along with the Northern fleet, which has Russia's sea-based nuclear forces and is based close to NATO territory in Norway.

"I think if you look at Russia's four navies — Northern, Baltic, Black Sea, and Pacific — that clearly the main emphasis is the Northern fleet and the Black Sea fleet," Nordenman told Business Insider.

"They're the two that are getting the most in terms of modernization, in terms of new submarines and ships and training and exercises," he added. "The Northern fleet provides you access to the broader North Atlantic, and the Black Sea fleet provides you access to the Mediterranean."

Submarines specifically pose a threat to NATO's ability to operate on the ground in Europe. "They can obviously sink ships," Nordenman said, "but related, you can use cruise missiles to shoot at ports and airfields."

This increasing activity — amid Russian action on the ground in Ukraine and Georgia — is seen by NATO members as reason for concern about Russian aggression, though Moscow sees it differently.

In late 2017, Russian President Vladimir Putin signed off on a new security strategy that identified "the striving of a series of governments, above all the United States of America and its allies, to dominate the oceans" as a direct threat. It also claimed other countries wanted to "limit Russia’s access to resources at sea and its access to vitally important naval transport communications."

"I think the Russian concept is sort of being aggressively defensive," Nordenman told Business Insider. "If you can access the North Atlantic and cut off reinforcements, then from a Russian perspective, that's a defensive move. We wouldn't consider that defensive, but from their perspective, that's a defensive move."

'Russia has closed that gap'

US Navy Virginia-class attack submarine USS California MK-48 torpedo Rota Spain

That perspective notwithstanding, NATO members are still looking for ways to counter the undersea threats they perceive from their eastern neighbor.

"The Norwegians are buying submarines. The Germans are buying new submarines. The Poles are at least looking at the prospect of new submarines," Nordenman said. "Now along with that too you see an increased sort of focus on other types of antisubmarine, submarine-hunter platforms, so frigates and maritime-patrol aircraft and stuff like that."

Richardson, the chief of US naval operations, told the House Appropriations subcommittee in March that Russia's increasing interest in undersea operations was "exactly why our investments [in European operations] are focused on the antisubmarine-warfare problem, both enhancing our undersea sensors and then ... infrastructure for the antisubmarine aircraft, the P-8."

In recent months, the P-8A Poseidon and other intelligence-gathering aircraft have been deployed to the Black Sea area to track the growing number of Russian subs there. The Navy is also renovating hangers and infrastructure in Iceland as part of a project to house P-8s there for patrols over the Greenland-Iceland-UK gap, a choke point for ships moving between the Arctic and North Atlantic oceans — though those plans don't necessarily include reestablishing a permanent presence there.

The US Navy has also been more active around Europe.

US Navy P-8 Poseidon Keflavik Iceland

A US military official said the deployment of Arleigh Burke-class guided-missile destroyers USS Carney and USS Ross in the Black Sea in February was meant to "desensitize Russia" to the US military's presence there.

The Pentagon is also considering keeping the Truman carrier strike group in Europe rather than sending it to the Middle East — which would be a major departure from rotational deployments the US has conducted since the early 1990s.

Things are changing up North too.

NATO subs were a frequent presence around Norway in 2017, with more than 40 trips requiring permission to enter and exit the country's coastal waters, often to exchange crew members or take on new supplies or equipment.

"The majority were in the north, three times more," Navy Capt. Per-Thomas Bøe, with the Norwegian Ministry of Defense, told The Barents Observer of the trips.

Bøe said the increasing presence was linked to increasing Russian submarine activity, which in recent years includes more frequent trips between the Barents, Baltic, and Mediterranean seas. Stopping at a port or in a fjord in northern Norway is more convenient for NATO subs because it's closer to the Norwegian Sea, though which Russian subs pass on the way to the North Atlantic, transiting the GIUK gap.

USS Connecticut submarine Arctic ice surface

This activity extends to the Arctic, where receding ice has generated new interest in transportation routes and resource extraction. The US and British navies have shown off their ability to operate under Arctic ice, and Russia has boasted of its ability to track foes in frigid Arctic waters as well.

The Russia navy remains well short of its Soviet-era numbers, and NATO and US subs are still ahead in terms of sophistication and capability, Nordenman told Business Insider. But Moscow has whittled away at the edge Western navies gained after the Cold War.

"Russia has closed that gap and is not as far behind as they used to be," Nordenman said. That advancement has been aided by Western focus elsewhere.

"This has not been the priority for NATO member navies, in terms of hunting submarines or the North Atlantic or the Baltic," he added. "Beyond just sort of having a hull or having a submarine, you also need to train and exercise and have command and control and so on to to make a real capability, and that's somewhere where NATO has fallen down over the last decade or so."

SEE ALSO: China's growing submarine force is 'armed to the teeth' — and the rest of the Pacific is racing to keep up

Join the conversation about this story »

NOW WATCH: Everything you've ever wanted to know about life on a US Navy submarine

‘Fortnite’ requires 'more skill' than 'PlayerUnknown's Battlegrounds,' according to top-streamer Ninja — here's why

Posted: 28 Apr 2018 11:00 AM PDT

fortnite battle royale

  • Despite being very similar games in concept, "PlayerUnknown's Battlegrounds" ("PUBG") and "Fortnite: Battle Royale" are very different to play.
  • Due to its cartoon art style and less serious tone, many players consider "PUBG" to be the more challenging game.
  • The world's most popular "Fortnite" streamer (and former "PUBG" streamer), Tyler "Ninja" Blevins, said "Fortnite" requires "more skill" in a recent interview.


Like Super Mario and Sonic the Hedgehog before them, "PlayerUnknown's Battlegrounds" ("PUBG") and "Fortnite" are currently battling for title of biggest game in the world. Both games center around the same core concept: 100 people fighting to the death in an ever-shrinking island.

Beyond the two games competing for players, devotees of each are debating which is the better game, and the number one argument is related to skill.

The argument goes something like this: Since "PUBG" is more focused on shooting, and intends to more seriously model real shooting, it's the more difficult game to play. "Fortnite," in this argument, is the watered-down, "for babies" version of "PUBG."

Twitch streaming star Tyler "Ninja" Blevins, the guy who's making at least $500K every month streaming "Fortnite" for thousands of people, disagrees.

"A lot of people are like, 'PUBG' requires so much more skill because there's no building," Blevins said on a recent episode of the H3 Podcast. "Exact opposite."

Playerunknown's Battlegrounds

Blevins knows a little something about this — he's a longtime professional gamer who spent loads of time playing "PUBG" before switching over to "Fortnite." He breaks down the situation as such:

"If someone in 'PUBG' sees you from a mile away with a 15x scope, they can hide in a building and kill you. It's not difficult to shoot a gun and hit somebody. Gun skill is never the main reason why someone is talented at a game. It's literally their decision making."

Both "Fortnite" and "PUBG" follow the same formula of pitting 100 players against each other on an island that's shrinking in size. The main difference with "Fortnite" is that there's a construction aspect — you can build structures (or destroy structures) on the fly.

As such, a crucial aspect of defense is building structures to protect your character from enemy fire.

fortnite battle royale

Rather than making the game easier, Blevins argued, it makes the game far more demanding. "The shooting is not the difficult part — it's building," he said. "You'll find that there aren't that many talented players in every game, so if you just build simple structures you can win."

Not that he dislikes "PUBG," of course, nor is he saying it's a simple game. "The game does obviously require talent, but less in my opinion," he said.

Check out the full interview on The H3 Podcast right here:

SEE ALSO: This 26-year-old makes $500,000 every month playing 'Fortnite' in his bedroom — here's how he does it

DON'T MISS: 7 reasons you should play PlayerUnknown's Battlegrounds, or PUBG, instead of Fortnite

Join the conversation about this story »

NOW WATCH: Face-swapping videos could lead to more 'fake news'

The 400-horsepower Audi TT RS is the most polarizing sports coupe on the market — and that's what makes it great

Posted: 28 Apr 2018 10:52 AM PDT

Audi TT RS

The Audi TT is probably the most polarizing sports coupe on the market.

It's the compact, two-door, four-seater hatchback of the Audi lineup, and it's among the smallest cars the luxury automaker produces.

In its base form, the TT's 220-horsepower, four-cylinder engine doesn't necessarily inspire thoughts of track days and breakneck zero-to-60 times. It is a design-focused car. On the outside, you get tastefully sculpted fenders, shapely haunches, a stern front fascia with a piercing LED headlight array.

The 2018 TT maintains the rounded wedge aesthetic that made the tiny coupe famous when it first hit the streets in 1998.

I first drove the current generation TT back in 2016 and loved it. I was a little bit head-over-heels with it, actually. I even called it a "mini-R8," and got my inbox flooded with fan mail from people who disagreed. (Some of them made good points, to be fair).

Since then, I have driven quite a few cars — from the actualR8, in V10 Plus guise, to the Tesla Model S P100D, the Cadillac CTS-V, Lexus GS F, and many others that are far more unhinged than a base TT.

But then there's the Audi TT RS. It's still a TT, yes, but that's in name only. Everything else about it is on an entirely different stratum. It's a 400-horsepower, all-wheel-drive misfit that grunts and snarls to life when you hit the start button and barks and growls at everything on the road.

But you want to know the quickest way to become jaded about fast cars? Drive a lot of fast cars.

When Audi let me borrow a TT RS for a few days this month, I obliged, but I wasn't expecting to be impressed. It took only a few drives to change my mind.

Keep reading to find out why ...

SEE ALSO: Tesla's largest US Supercharger station has a plush, private customer lounge in the middle of a folksy California town — take a look inside

Here's how the Audi TT RS looked when it first arrived at BI's LA office.



The TT RS is a product of Audi Sport, the automaker's high-performance division.

Audi Sport pumps a select few models with extra everything, transforming them into muscular land rockets.



It's powered by a 400-horsepower, 2.5-liter, 5-cylinder, turbocharged engine.



See the rest of the story at Business Insider

MORGAN STANLEY: Here are the 10 tech companies most likely to get acquired in the next 12 months

Posted: 28 Apr 2018 09:41 AM PDT

twilio ipo

Corporate mergers and acquisitions in the US are rebounding this year. 

Thanks to tax cuts, companies have access to more cash they can spend on deals.  According to Morgan Stanley, M&A offer intensity, the number of offers relative to the number of stocks, increased to 3.2% in the first quarter from 2.5% in the fourth.

Among S&P 500 sectors, tech saw the second-largest increase.

Morgan Stanley identified 10 tech companies that are the most likely to receive tender offers over the next year. On average, 7% of all the companies published in prior lists received offers in the following 12 months. 

"Our model, ALERT (Acquisition Likelihood Estimate Ranking Tool), combines stock characteristics, cohort membership, and data regarding offers to forecast probabilities that stocks receive tender offers in the coming 12 months," said Brian Hayes, the global head of quantitative research, in a note on Tuesday.

"On the one hand, stock-specific information, such as yield, leverage and valuation, impacts stocks' offer likelihoods; on the other hand, recent activity levels in the cohorts to which a stock belongs (e.g., sector and size) tend to continue for some time, and this affects subsequent offer intensities for remaining stocks in those cohorts."

Betting on possible takeover targets has been a successful strategy for investors this year. A Goldman Sachs-curated index of stocks with at least a 15% chance of being acquired in the next 12 months has beaten the benchmark S&P 500 by 4 percentage points since the start of the year.

Here's Morgan Stanley's list of the top takeover targets in tech:

SEE ALSO: Morgan Stanley identified 12 trades to protect you from a stock market meltdown

Arris International

Ticker: ARRS

Year-to-date Trading: $9.21 billion

US Market Cap: $4.9 billion

Closing price as of 4/20: $27.54



Nuance Communications

Ticker: NUAN

Year-to-date Trading: $11.61 billion

US Market Cap: $4.62 billion

Closing price as of 4/20: $15.01



Hubspot

Ticker: HUBS

Year-to-date Trading: $9.63 billion

US Market Cap: $4.06 billion

Closing price as of 4/20: $113.6



See the rest of the story at Business Insider

MORGAN STANLEY: Here are the 10 tech companies most likely to get acquired in the next 12 months

Posted: 28 Apr 2018 09:33 AM PDT

twilio ipo

Corporate mergers and acquisitions in the US are rebounding this year. 

Thanks to tax cuts, companies have access to more cash they can spend on deals.  According to Morgan Stanley, M&A offer intensity, the number of offers relative to the number of stocks, increased to 3.2% in the first quarter from 2.5% in the fourth.

Among S&P 500 sectors, tech saw the second-largest increase.

Morgan Stanley identified 10 tech companies that are the most likely to receive tender offers over the next year. On average, 7% of all the companies published in prior lists received offers in the following 12 months. 

"Our model, ALERT (Acquisition Likelihood Estimate Ranking Tool), combines stock characteristics, cohort membership, and data regarding offers to forecast probabilities that stocks receive tender offers in the coming 12 months," said Brian Hayes, the global head of quantitative research, in a note on Tuesday.

"On the one hand, stock-specific information, such as yield, leverage and valuation, impacts stocks' offer likelihoods; on the other hand, recent activity levels in the cohorts to which a stock belongs (e.g., sector and size) tend to continue for some time, and this affects subsequent offer intensities for remaining stocks in those cohorts."

Betting on possible takeover targets has been a successful strategy for investors this year. A Goldman Sachs-curated index of stocks with at least a 15% chance of being acquired in the next 12 months has beaten the benchmark S&P 500 by 4 percentage points since the start of the year.

Here's Morgan Stanley's list of the top takeover targets in tech:

SEE ALSO: Morgan Stanley identified 12 trades to protect you from a stock market meltdown

Arris International

Ticker: ARRS

Year-to-date Trading: $9.21 billion

US Market Cap: $4.9 billion

Closing price as of 4/20: $27.54



Nuance Communications

Ticker: NUAN

Year-to-date Trading: $11.61 billion

US Market Cap: $4.62 billion

Closing price as of 4/20: $15.01



Hubspot

Ticker: HUBS

Year-to-date Trading: $9.63 billion

US Market Cap: $4.06 billion

Closing price as of 4/20: $113.6



See the rest of the story at Business Insider

The rise and fall of Elizabeth Holmes, who started Theranos when she was 19 and became the world's youngest female billionaire before it all came crashing down

Posted: 28 Apr 2018 09:14 AM PDT

Elizabeth Holmes

These days, blood-testing startup Theranos is on its last legs. 

But in 2014, the billion-dollar company and its CEO, Elizabeth Holmes, were on top of the world. Back then, Theranos was a revolutionary idea thought up by a woman hailed as a genius who styled herself as a female Steve Jobs. Holmes was the world's youngest female self-made billionaire, and Theranos was one Silicon Valley's unicorn startups. 

Then it all came crashing down.

The shortcomings and inaccuracies of Theranos's technology were exposed, along with the role Holmes played in covering it all up. Theranos and Holmes were charged with massive fraud, and the company was forced to close its labs and testing centers. 

This is how Holmes went from precocious child to ambitious Stanford dropout to embattled startup CEO. 

SEE ALSO: Leaked video shows Theranos employees playing the video game they created where you shoot at the reporter who exposed the startup's problems

Elizabeth Holmes was born on February 3, 1984 in Washington, D.C. Her mom, Noel, was a Congressional committee staffer, and her dad, Christian Holmes, worked for Enron before moving to government agencies like USAID.

Source: Elizabeth Holmes/TwitterCNN, Vanity Fair



Holmes' family moved when she was young, from Washington, D.C. to Houston.

Source: Fortune



At the age of 9, Holmes wrote a letter to her father: "What I really want out of life is to discover something new, something that mankind didn't know was possible to do."

Source: CBS News



See the rest of the story at Business Insider

Some developers are furious ahead of Facebook's annual conference: 'They're declaring war on their partners' (FB)

Posted: 28 Apr 2018 09:10 AM PDT

facebook ceo mark zuckerberg

  • Facebook's annual F8 conference is supposed to be a celebration, but the company could be in for a rough reception this year from some angry developers. 
  • In response to the Cambridge Analytica scandal, Facebook locked down its platform and paused all new app and chatbot approvals.
  • "There could be a lot of unhappy developers next week throwing tomatoes at Mr. Zuckerberg," one developer remarked.
  • Others are more optimistic, and want to see how they can work with the new tech Facebook is likely to unveil.


On Tuesday, Facebook is kicking off its keynote event of the year: F8, an extravagant two-day conference dedicated to showcasing new products, interacting with developers and generally celebrating all things Facebook.

But following months of bad press and executive apologies, this year's F8 is expected to be a more serious affair than usual. Following sweeping changes made to how apps can interact with its platform, the mood among developers is varied — from optimistic about potential announcements to verging on apocalyptic.

"I think new data privacy restrictions and how it impacts them is a key concern for developers," Laura Martin, managing director of investment bank Needham & Company said in an email.

 Or as one disgruntled developer put it more bluntly: "They're declaring war on their partners."

Cambridge Analytica's isn't just causing problems for Facebook

The Cambridge Analytica scandal, which began with reports of the political research firm misappropriating 87 million users' data but soon morphed into a fullblown panic over data privacy that sent CEO Mark Zuckerberg to Congress, is arguably the worst crisis in Facebook's 13-year history.

Zuckerberg and other executives have gone on an apology tour, promising to take a "broader view of our responsibilities," and making a number of changes to the platform. These including new privacy controls for users, limiting how developers can access and use users' data, and — perhaps most significantly for developers — imposing a moratorium on approving any new apps for the social network or any Messenger bots for the messaging platform.

For startups that rely on Facebook as an integral part of their business, this can be a major setback — and highlights just how vulnerable some businesses are to the company's actions.

Andrew Magliozzi, CEO of AdmitHub, a startup that builds chatbots for universities and colleges to provide information for their students, called the moratorium "terribly unfortunate."

Facebook thumbs down protest menlo parkThe company has a number of schools in the pipeline, each requiring a new version of the bot tailored to the institution. But until Facebook's pause on approvals is lifted, there is nothing Magliozzi can do for these potential customers or to otherwise grow his user base.

"I have no idea what to expect," the exec said of F8. "Quite honestly it's kind of a black box at this point ... [it] could be everything from  a wholesale restructuring and abolishing of the bot ecosystem ... [to] a return to the status quo."

Another executive at a company in the Facebook Messenger partner ecosystem, expressed frustration that the entire developer community was being punished for the actions of Cambridge Analytica. "They're declaring war on developers and we've done nothing wrong," he said.

The developer, who asked to remain anonymous, compared Facebook's actions that of God changing the "Ten Commandments" retroactively.

He added: "There could be a lot of unhappy developers next week throwing tomatoes at Mr. Zuckerberg."

It's not all doom and gloom

Mark Zuckerberg happyOther developers are more optimistic — particularly those less directly impacted by the changes — and are focusing more on the tech Facebook is expected to announce.

Auston Bunsen, who is a lead for Facebook's "Developer Circle" in Miami, Florida, said due to the changes "it’s definitely been a bit of a pain to use FB APIs, particularly [Instagram] APIs since the CA scandal. I understand it, but me and other friends who have been using it to find customers automatically are now cut off."

But he wasn't predicting any tomato-throwing at F8, and was confident Facebook would be able to push through the crisis: "The mood will probably be good, they always have great breakouts & cool technology launching. I’m sure they’ll put extra effort in to combat the negative press they’ve received lately."

Alexandru Ilescu, CEO of language-learning app Mondly, said his startup had not been significantly affected by the changes — and that he was excited to learn more about Facebook's augmented reality efforts and how Mondly could work with them.  (Facebook put Business Insider in touch with Ilescu.)

In a blog post published April 8, marketing platform Later cofounder Matt Smith, said the changes will only have a "minimal" impact on his company's offering, and that his company supports the changes, viewing them as a "good move" for keeping users safe and secure.

'These changes can be disruptive'

Facebook's vice president of product partnerships, Ime Archibong, acknowledged the "disruption" but praised developers in adapting to these changes.

"We'll always make the important platform changes, trying to strike the right balance between creating compelling social experiences, protecting people's data, and supporting an innovative developer ecosystem. These changes can be disruptive," he told Business Insider in an emailed statement provided by the company.

"But Facebook developers are incredible partners and help us ensure the platform enables experiences that are both social and safe. This F8, it’s important to bring our global community together to navigate these changes and explore new ways we can build community."

Facebook recently got some much-needed good news in the form of Q1 financial results that surpassed analysts' expectations, and F8 will provide another opportunity for the company to reset the narrative.

But the experiences of developers in recent weeks demonstrates that that Facebook doesn't just have to show its ordinary users it is owning up to its mistakes and moving forward: It needs to convince the developer community too.

SEE ALSO: Facebook may be underestimating the challenge it faces in Europe

Join the conversation about this story »

NOW WATCH: Why Apple makes it so hard to get a new iPhone battery

Engineers from Apple and Google are loving this viral Twitter challenge about describing their job in 5 words

Posted: 28 Apr 2018 08:00 AM PDT

Silicon Valley

There's nothing a programmer likes more than a problem to solve.

Perhaps that's why when Abstractions, a Pittsburgh-based conference about software development, issued a challenge on Twitter to find the best solution to a simple problem, it went viral. 

The challenge: Describe programming in five words. 

Programmers couldn't help themselves. They had to take a crack. 

It's a challenge because programming is a craft that people spend their entire lives honing. But summarizing it in only a few words is exactly the kind of problem that engineers love to tackle.

The answers were wide-ranging, hilarious, and revealing — and even engineers from Apple, Google and other big tech companies shared them and tried to write their own. 

Check out some of the best below: 

Many of the best responses addressed the inherent absurdity of computers:

 



 



 



See the rest of the story at Business Insider

The 5 most anticipated TV shows returning in May

Posted: 28 Apr 2018 07:45 AM PDT

kimmy schmidtThe spring TV season is well underway, and some fan-favorite shows are returning with new seasons next month.

To find out which returning shows audiences are anticipating the most, the TV tracking app TV Time analyzed data from its 2.1 million global users to see which upcoming TV shows viewers had followed the most frequently on its platform.

The list includes the upcoming seasons of Netflix's sitcom "Unbreakable Kimmy Schmidt" and the USA Network's science-fiction drama, "Colony."

Here are the 5 returning TV shows that viewers are anticipating the most in May, according to TV Time:

SEE ALSO: The 5 most anticipated new TV shows premiering in May

5. "SIX" (Season 2) — Premieres May 28 on The History Channel

Summary: "The ten-episode second season of 'SIX' follows Navy SEAL Team Six in a mission to destroy the terrorist network responsible for the shooting of their former team leader Richard “Rip” Taggart (Walton Goggins)." 



4. "Animal Kingdom" (Season 3) — Premieres May 29 on TNT

Summary: "The series following a Southern California crime family stars Ellen Barkin as the matriarch of the Cody clan, Scott Speedman as her second in command and Shawn Hatosy as her volatile, mentally unstable eldest son."



3. "Colony" (Season 3) — Premieres May 3

Summary: "Set in the near future, 'Colony' centers on a family who must make difficult decisions as they balance staying together with trying to survive."



See the rest of the story at Business Insider

Jeff Bezos reveals what it’s like to build an empire and become the richest man in the world — and why he's willing to spend $1 billion a year to fund the most important mission of his life

Posted: 28 Apr 2018 07:39 AM PDT

Mathias Döpfner, the CEO of Business Insider's parent company, Axel Springer, recently sat down with Amazon CEO Jeff Bezos to talk about the early days of creating Amazon, what he's learned since then, how he funds his rocket company Blue Origin, and what it's like when the president of the United States is your biggest critic.

The sit-down interview happened in Berlin, Germany, where Bezos received the Axel Springer Award 2018. You can read the complete transcript of their talk below.

Mathias Döpfner: Jeff, welcome to Berlin.

Jeff Bezos: Thanks, it's great to be here.

Döpfner: When we were sitting in the first row just a couple of minutes ago, waiting for the award ceremony, you looked at me: "Mathias are you nervous?" And I said, "Yes, I’m always nervous on occasions like that." And you said, "So am I." And I said, "Really?" The richest person in the world is nervous … Jeff, you used to work in New York as an investment banker. So, an investment banker is actually the exact opposite of an entrepreneur. He’s not taking risks himself he is taking advantage of risks, that other people take. How did you dare to think that you should become an entrepreneur and really launch a company?

Bezos: I think I always wanted to do it. Even since I was a kid. I had the idea. I was one of those people who every time I looked at something, it looks like it could be improved - there’s something wrong with it, so I’d go through, like, how could this restaurant be better. So I’ve always had that kind of idea. By the way, before we really get into this. How about this amazing production that you and your team have put together. This is truly incredible for its originality. These boxes that you were filming live – that’s just crazy cool. So thank you. [applause]

I think the great thing about humans in general is we’re always improving things. And so if entrepreneurs and inventors follow their curiosity and they follow their passions, and they figure something out and they figure out how to make it. And they’re never satisfied. You need to harness that. In my view, you need to harness that energy primarily on your customers instead of on your competitors. I sometimes see companies – even young, small start-up companies or entrepreneurs who arrived – is that they start to pay more attention to their competition than they do to their customers. And I think that in big mature industries, that can or might be a winning approach that some cases they kind of close follow. They let other people be the pioneers and, you know, go down the blind alleys. There’s many things that a new, inventive company tries that won’t work. And those mistakes and errors and failures do cost real money. And so maybe in a mature industry where growth rates are slow and change is very slow, but, as you see in the world more and more, there aren’t that many mature industries. Change is happening everywhere. You know, we see it in the automobile industry with self-driving cars, but you can go right down the line of every industry and see it.

Döpfner: But, do you have any idea of where your ambition really comes from, what was driving you?

Bezos: I really don’t know. I have been passionate about certain things forever, and I fell in love with computers in fourth grade. I got very lucky: My elementary school had a teletype that was connected to a mainframe computer that some business in downtown Houston donated a little bit of computer time to. You can picture these teletypes, they had the punch tape and they had a 300-baud modem. You would dial up the phone and put it in the cradle, and so we had some time-sharing on that mainframe computer, and none of the teachers knew how to use it, so me and two other kids stayed after school and sort of figured out how to do it. And kind of taught ourselves programming from books. I think that one thing that is, I got very lucky early in my childhood. Look, we all get gifts, we get certain things in our life that we’re very lucky about. And one of the most powerful ones is who your early role models are, you know it could be…

Döpfner: ...your grandfather.

Bezos: It was, in a big sense. My mom and my dad and my grandfather, too. My mom had me when she was 17 years old, and she was still in high school, in Albuquerque, New Mexico, and this is in 1964. I can assure you that being a pregnant teenager in high school was not cool in Albuquerque, New Mexico, at that time. And so it was very difficult for her. My grandfather went to bat for her, and then they tried to kick her out of school, and they’re incredible, so the gift I had was I that had this incredible family.

Döpfner: Could you describe a little bit the role of your grandfather? It seems he was particularly important to you.

Bezos: He was super important for me, and I spent an unusual amount of time with my grandparents, and especially with my grandfather on the ranch. He had a ranch in South Texas, and I would spend my summers there from age 4 to 16. When I was 4, they were taking me for the summer to kind of give my parents a break. I was so young, and it was useful. I was a handful, I’m sure. Anyway, he created the illusion for me when I was 4 years old that I was helping him on the ranch. Which, of course, cannot have been true. But I believed it. And by the time I was 16, of course, I was actually helping on the ranch. I could fix prolapsed cattle, we did all our own veterinary work. Some of the cattle even survived. [laughter] And we fixed windmills, and laid water pipelines, and built fences, and barns, and fixed the bulldozer that you guys talked about. And so one of the things that’s so interesting about that lifestyle and about my grandfather is he did everything himself. You know, he didn’t call a vet, if one of the animals was sick, he figured out what to do himself.

Döpfner: So, the lesson was, if it really matters, there is no delegation?

Bezos: Being resourceful. If there’s a problem, there’s a solution. And of course as you get into the business world and anything you do on a team, you very quickly realize that it’s not just about your own resourcefulness and that it’s about team resourcefulness. And how does that work? But that attitude of my grandfather’s – he was full of wisdom. And as John mentioned the story about the words my grandfather gave me at one point that it’s harder to be kind than clever. That story – the slightly longer version of that story because this is really powerful wisdom – is that I made my grandmother burst into tears. The way I did it was we were driving on a long road trip, and she was a chain smoker. And this was – I was probably 10 years old – so this was around 1974, and we was in a period of time where there were heavy anti-smoking radio advertisements trying to convince people to stop smoking. One of the advertisements had this figure in it that said something like, “Every puff of a cigarette takes so many minutes off your life.” I think it was two minutes, but can’t remember. So, I sat in the back of the car on this long car ride and calculated how many years she had taken off of her life. In my 10-year-old mind, I had been extremely clever to do this, and so when I was finished with my arithmetic, I proudly announced to her how many years she had taken off of her life. And I got a reaction I did not expect, with her bursting into tears. So my grandfather stopped the car and he took me out of the car. And I had no idea what was about to happen, because he had never said a cross word to me. I thought, he might actually be angry with me. But he wasn’t. He took me out so that we had some privacy from her and he said these incredible words. He said “You’re going to figure out one day that it’s harder to be kind than clever.”

Döpfner: Wonderful. And how about your brother? Is it true that he’s still a firefighter?

Bezos: He is. He’s a volunteer firefighter in Scarsdale, New York. He’s also the funniest person I know. When I’m with him, I’m just laughing continuously. First of all, I’m a good audience, I mean I laugh easily. But he is really very funny, and my sister too. We’re all very close. And I have my mother to thank for that, because she worked hard to make sure as we grew up so  that we stayed close together. She takes all the grandkids for one week every summer so that so that me and my sister and our spouses can go on a trip together. So we end up spending a lot of time together.

jeff bezos mark bezos summit 2017

Döpfner: For me, the most moving image that we saw tonight was the one that John Elkann showed, where you and MacKenzie are constructing that famous office table. It is very moving because it shows how you really started from the very scratch, like two classmates. It illustrates symbolically that the launch of Amazon was really something that you did together. Could you describe a little bit what MacKenzie’s role was?

Bezos: Well, first of all, MacKenzie, you know, she had married this stable guy working on Wall Street, and a year after we got married, I went to her and said I wanted to quit my job, move across the country and start this Internet bookstore. And MacKenzie of course, like everybody that I explained this to, her first question was: “What’s the Internet?” Because nobody knew. This was 1994. But, even before she could say “What’s the Internet?” she said, “Great, let’s go!”. Because she wanted to support it and she knew that I had always had this passion for invention and starting a company. And so again I think, you know, MacKenzie is an example of this, what I was talking about with my mom and my dad who’s a Cuban immigrant and he came to the US when he was 16 in a refugee camp in the Everglades. They are so loving and supportive. When you have loving and supportive people in your life, like MacKenzie, my parents, my grandfather, my grandmother, you end up being able to take risks. Because I think it’s one of those things, you know, you kind of know that somebody’s got your back. And so if you’re thinking about it logically it’s an emotional thing.

Döpfner: So you think that unconditional love, if you feel and experience unconditional love it helps you to take risks in life.

Bezos: I think it helps you take… By the way I think that’s probably true for all kinds of risks in life, not just for starting a business. Life is full of different risks. And I think that, when you think about the things that you will regret when you’re 80, they’re almost always the things that you did not do. They’re acts of omission. Very rarely are you going to regret something that you did that failed and didn’t work or whatever. But the acts of omission. And again, I’m not just talking about business things, it’s like “I love that person and I never told them” and you know 50 years later you’re like “Why didn’t I tell her? Why didn’t I go after it?” So that’s the kind of life regret that is very hard to be happy about when you’re telling yourself in a private moment that story of your life. I have been, I’ve won that lottery of having so many people in my life who have given me that unconditional love, and I do think that MacKenzie’s definitely one of those. So, we moved, and then MacKenzie, who basically has no skill in this area at all – I mean, really, you’re the least suited person for this. But she did our accounting for the first year. Was it the first year?

MacKenzie Bezos: Yeah.

Bezos: Something like that. And she did it well. That’s really, that’s what’s amazing. My wife is a novelist. She’s won the American Book Award. Toni Morrison, the Nobel-prize-winning author, who was MacKenzie’s teacher at Princeton, said on the Charlie Rose Show that MacKenzie was her best student ever. So MacKenzie is a very talented novelist, but she is not an accountant. But she pulled it off. And again, just to, we all got done what we needed to get done.

Jeff Bezos wife Mackenzie

Döpfner: Did she, being an author, suggest that you focus on the book business at the beginning?

Bezos:  No. I picked books. It is true that she’s a big reader and I’m a big reader. But that’s not why I picked books. I picked books because there were more items in the book category than in any other category. And so you could build universal selection. There were three million in 1994 when I was pulling this idea together, three million different books active in print at any given time. The largest physical bookstores only had about 150 000 different titles. And so I could see how you could make a bookstore online with universal selection. Every book ever printed, even the out-of-print ones was the original vision for the company. So that’s why books.

Döpfner: And when did you know that Amazon was going to be successful?

Bezos: Well I knew that the books, strangely, I was very prepared for this to take a really long time. I knew that the books business was going to be successful in the first 30 days. I was shocked at how many books we sold. We were ill-prepared. We had like only ten people in the company at that time. And most of them were software engineers. So, everybody, including me and the software engineers were all packing boxes. We didn’t even have packing tables. We were down on our hands and knees on a concrete floor, packing the boxes. At about one or two in the morning, I said to one of my software engineering colleagues, I said, “You know, Paul, this is killing my knees, we need to get knee pads.” And Paul looked at me and he was like, “Jeff, we need to get packing tables.” [laughter] And I was like, “Oh my God, that is such a good idea”. The next day I bought a packing tables and it doubled our productivity, and probably saved our backs and our knees too.

Döpfner: But Amazon had also serious crises. You went almost bankrupt. What went wrong?

Bezos: We had so many, there have been so many, I haven’t had any existential crises – knock on wood – I don’t want to jinx anything. But we’ve had a lot of dramatic events. I remember, early on, we only had 125 employees, when Barnes & Noble, the big United States bookseller, opened their online website to compete against us, barnesandnoble.com. We’d had about a two-year window. We opened in 1995, they opened in 1997. And at that time all of the headlines - and the funniest were about how we were about to be destroyed by this much larger company. We had 125 employees and 60 million dollars a year in annual sales. $60 million with an ‘m’. And Barnes & Noble at that time had 30 000 employees and about three billion dollars in sales. So they were giant, we were tiny and we had limited resources and the headlines were very negative about Amazon. The one that was most memorable was just “amazon.toast”. [laughter] And so, I called an all-hands meeting, which was not hard to do with just 125 people. We got in a room and because it was so scary for all of us, this idea that now we finally had a big competitor. That literally everybody’s parents were calling and saying, “Are you okay?” It’s usually the moms calling and asking their children are you going to be okay? So, and I said, “Look, you know, it’s okay to be afraid, but don’t be afraid of our competitors, because they’re never going to send us any money. Be afraid of our customers. And if we just stay focused on them, instead of obsessing over this big competitor that we just got, we’ll be fine.” And I really do believe that. I think that if you stay focused and the more drama there is and everything else, no matter what the drama is. Whatever the actionable distraction is, your response to it should be to double down on the customer. Satisfy them. And not just satisfy them – delight them.

Jeff Bezos Amazon

Döpfner: Amazon is employing 566 000 people. You’re probably the biggest job creator of recent times. At the same time, you are aggressively criticized by unions, and by the media for paying low wages, for inappropriate working conditions. How do you deal with these accusations?

Bezos: Well, first of all, with any criticism – my approach to criticism and what I teach and preach inside Amazon – is when you’re criticized, first look in a mirror and decide, are your critics right? If they’re right, change. Don’t resist.

Döpfner: Are they right?

Bezos: No. Not in this case. But we’ve had critics be right before, and we changed. We have made mistakes. And you know, I can go through a long list. One of the early most painful ones is so stupid, it’s hard to believe how we ever did it, but early on with the Kindle, either the first year of the Kindle or the second year of the Kindle, we had accidentally illegally sold (or given away I guess) copies of the famous novel “1984”. Because it had a complicated copyright history, it was in copyright in the US and not in the UK or something strange like this so it was in the public domain, but only in certain geographies. And we had screwed that up. And somehow – and this is the kind of mistake that only a corporation can make – an individual can’t make this mistake because somehow it happens at the intersections of the different teams, so you’ve got the legal department saying, “Oh crap, we’ve made this mistake” and you’ve got the books team… And anyway, the answer the company came up with was to (and we did this without warning) just electronically go into everybody’s Kindle who had downloaded that book and just disappear it. [laughter] So, it’d be as if we’d walked into your bedroom in the middle of the night, found your bookshelf and just took that book away. And so we were rightly criticized for that and we responded to that. On the issue of working conditions, I’m very proud of our working conditions and very proud of the wages we pay. You know, in Germany we employ 16 000 people and we pay at the high end of the range for any comparable work.

Döpfner: So, is it a union fight, because the union want to make sure you are unionized, or what is the real substance of the conflict?

Bezos: It’s a good question. And this is in my longer version of how to deal with critics. There are two kinds of critics. There are well-meaning critics who are worried it’s not going to work, but they do want it to work. So it could be, I can give you an example, customer reviews would be one of those. When we first did customer reviews 20 years ago some book publishers were not happy about it because some of them were negative so it was a very controversial practice at that time, but we thought it was right and so we stuck to our guns and had a deep keel on that and didn’t change. But, there’s a second kind of critic, which is the self-interested critic, and they come in all shapes and sizes. So they can be any kind of institution, competitors, of course. And so when you are doing something in a new way, and if customers embrace the new way, what’s going to happen is incumbents who are practicing the older way are not going to like you. And they’re going to be self-interested critics.

And so you do need as you’re looking at yourself in the mirror to try and tease those two things apart. In our view, we have workers’ councils, of course, and we have very good communications with our employees. So we don’t believe that we need a union to be an intermediary between us and our employees but, of course, at the end of the day, it’s always the employees’ choice. And that’s how it should be. But for sure we would be very naïve to believe that we’re not going to be criticized. That’s just part of the terrain. You have to accept that. One thing that I tell people is if you’re going be, if you’re going to do anything new or innovative, you have to be willing to be misunderstood. If you cannot afford to be misunderstood then for goodness’ sake, don’t do anything new or innovative.

Döpfner: Maggie Thatcher said “Leadership is not to be pleased by the moment”.

Bezos: Perfect.

Döpfner: But, your most prominent critic at the moment is the President of the United States. People are even saying that he may be willing to prepare initiatives to break up Amazon, because it’s too big, it’s too successful, it’s too dominant in too many sectors, or for varied other reasons, including the fact that he doesn’t like the „Post“. Is this break up scenario something that you take seriously, or do you think it’s just a fantasy?

Bezos: For me again, this is one of those things where I focus on and ask our teams to focus on what we can control, and I expect – whether it’s the current US administration or any other government agency around the world – Amazon is now a large corporation and I expect us to be scrutinized. We should be scrutinized. I think all large institutions should be scrutinized and examined. It’s reasonable. And one thing to note about is that we have gotten big in absolute terms only very recently. So we’ve always been growing very fast in percentage terms, but in 2010 just 8 years ago, we had 30,000 employees. So in the last 8 years we’ve gone from 30,000 employees to 560,000 employees. You know in my mind I’m still delivering the packages to the post office myself. You see what I’m saying? I still have all the memories of hoping that one day we could afford a forklift. So obviously my intellectual brain knows that’s just not the case anymore. We have 560,000 employees all over the world,. And I know we should be scrutinized and I think it’s true that big government institutions should be scrutinized, big non-profit institutions should be scrutinized, big universities should be scrutinized. It just makes sense. And that’s, by the way, why the work at the “Washington Post” and all other great newspapers around the world do is so important. They are often the ones doing that initial scrutiny, even before the government agencies do.

jeff bezos

Döpfner: The general sentiment concerning the big innovative tech companies has changed. Facebook, Google, Amazon, Apple – they used to be seen as the nice guys in T-shirts that are saving the world. Now they are sometimes portrayed as the evil of the world. And the debate about the Big 4 or the Big 5 is heating up: Professors like Scott Galloway and “The Economist” are suggesting a split-up, other powerful people like George Soros are giving very critical speeches at Davos, and the EU Commission is taking pretty tough positions here. Do you think that there is a change in the mindset of society, and how should the big tech companies, how should Amazon deal with that?

Bezos: I think it’s a natural instinct, I think we humans, especially in the western world, and especially inside democracies are wired to be skeptical and mindful of large institutions of any kind. We’re skeptical always of our government in the United States, state governments and local governments. I assume, it’s similar in Germany. It’s healthy, because they’re big, powerful institutions – the police, the military, or whatever it is. It doesn’t mean you don’t trust them, or that they’re bad or evil or anything like that. It’s just that they have a lot of power and control, and so you want to inspect them. Maybe that’s a better word. You kind of want to always be inspecting them. And if you look at the big tech companies, they have gotten large enough that they need and are going to be inspected. And by the way, it’s not personal. I think you can go astray on this if you’re the founder of a company – one of these big tech companies, or any other big institution. If you go astray on this, you might start to take it personally. Like “Why are you someone inspecting me?” And I wish that people would just say, “Yes, it’s fine”.

Döpfner: The whole attitude towards data protection and privacy has always been different between Europe and the United States but it is also at the moment – in the context of events like Cambridge Analytica – changing in the United States. Is this criticism hysterical or is it appropriate? And what are the consequences for a company like Amazon?

Bezos: I think this is one of the great questions of our age. I think of the Internet like this big, new, powerful technology. It’s horizontal. It affects every industry. And if you think of it even more broadly, it’s tech and machine learning, big data and all these kinds of things. These are big, horizontal, powerful technologies. And in my view – the Internet is quite old at this point, we’ve been around a long time – but that scale has only been around 10 or 15 years. You know, go back in time 20 years and it was tiny. And so that scale has only been around 10 or 15 years. And so we haven’t learned as a civilization and a human species how to operate that yet. We as a civilization are still figuring all of that out. It gives us fantastic capabilities. The fact that I can look up almost anything on Wikipedia in 5 seconds is an unbelievable capability that just simply didn’t exist 20 years ago. And so on and so on. But we’re also finding out that these powerful tools enable some very bad things, too, like letting authoritarian governments interfere in free democratic elections in the world. This is an incredibly scary thing.

Döpfner: So, you are advocating a balance of, say, entrepreneurs who are really moving their businesses forward, politicians and regulators who are defining a certain framework, society and journalists who are asking unpleasant questions?

Bezos: My view on Amazon’s role in this, which is what you asked me. I think, first of all, we have a duty on behalf of society to try and help educate any regulators - to give them our point of view sincerely, without any cynicism or skepticism, this is what we believe. But it’s not ultimately our decision, so we will work with any set of regulations that we’re given. Ultimately, society decides that. We will follow those rules regardless of the impact they have on our business. And we will find a new way – if need be – to delight customers. What you have to worry about and the problem I would not want to see happen is that you don’t want to block innovation and invention. One of the unintended consequences often of regulation is that it really favors the incumbents. Now, Amazon at this point is an incumbent, so maybe I should be happy about that. But I wouldn’t be because I think for society, you really want to see continued progress. To the degree that we have regulation, we want to be sure that it is incenting innovation and not blocking it, while at the same time. Regarding data security, privacy, encryption – how do you safeguard people’s physical safety against terrorists and bad actors all over the world, and how do you balance that against privacy? These are very challenging questions. And we’re not going to answer them, even in a few years. I think it’s going to be an ongoing thing for quite a while.

Döpfner: Data security and privacy are going to be competitive advantages for companies or a disadvantage for those who are not dealing respectfully and responsibly with data.

Bezos: I 100% agree with this. I think with customers one of the reasons we have been able to extend into new business areas and pursue new product categories – going way back we just sold books and then we started selling music and DVDs and electronics and toys and so on, and then we extended into electronic reading with Kindle – the reason customers have been receptive in large part to our new initiatives is because we have worked hard to earn their trust with them. Earning trust with customers is a valuable business asset. And if you mistreat their data, they will know, they will figure it out. Customers are very smart. You should never underestimate customers.

Döpfner: You’re preparing a second headquarter. It’s going to be in the US. Why didn’t you consider doing it in Europe?

Bezos: I wanted it in a time zone either in Canada, the US and Mexico…

Döpfner: So it’s not an anti-Europe decision?

Bezos: No, absolutely not.

Döpfner: When you bought the "Post," there were people saying, "Well that’s just a personal toy, he wants to have some political influence in Washington." Other people thought it was a new long term element of your strategy. So, what was it?

Bezos: You can explain things to people but you can’t understand things to people. All I can do is say really what my thought process was. I was not looking to buy a newspaper. It had never even crossed my mind. So when the opportunity came only up, because I had known Don Graham at that point for 15 years. And any of you who are lucky enough to know Don, know that he is the most honorable gentleman that you’ll ever meet. You know him very well. He’s a remarkable guy. He so loved the “Post” that he believed, even if this was a huge personal sacrifice for him, because it had been in his family for so long, that he needed to find a new home for it. I think there were certain purchasers he was hoping would not end up buying the “Post”, because he wanted it to remain independent. So when he approached me with this I said, “You know, I’m the wrong guy, because I don’t know anything about the newspaper business.” And he said, “That’s okay, because we have a lot of people at the ‘Post’ who know a lot about the newspaper business. What we really need is somebody who knows something more about the Internet. The “Post” was in a very difficult financial position at that time. So for me I had to decide – was it hopeless? I didn’t believe it was hopeless. I was optimistic that the “Post” could turn around. And then second I had to decide, did I want to put my own time and energy into this? That for me I just had to ask the simple question: Is it an important institution? The answer to that question is yes. It was very obvious to me as soon as I thought about it that way, it was like ok, I think I actually can help in two ways. I can provide financial resources while this turn around occurs. And I can also help with my Internet knowledge. And then is it an institution worth saving? You bet! It’s the most important newspaper in the most important capital city in the western world. I’d be crazy not to save that newspaper. I’m going to be very happy when I’m 80 that I made that decision.

Döpfner: Have you seen Steven Spielberg’s film “The Post” and how did you like it?

Bezos: I have, yeah. I’ve seen it a couple of times.

Döpfner: What’s the lesson that you learned from that and could you imagine also to buy other newspapers?

Bezos: No, I get that request monthly. I really do. I tell them, no. The “Post” is it for me. I’m not interested in buying other newspapers. I watched that movie and it’s helpful. I loved that movie and also reading Katherine Graham’s memoir, which won a Pulitzer Prize and is an amazing book. Because, it gets me ready. You know, as the owner of the “Post”, I know that at times the “Post” is going to write stories that are going to make very powerful people very unhappy.

Döpfner: Are you upset if the Post journalists are writing critical stories about Amazon?

Bezos: No, I’m not upset at all.

Döpfner: Did or would you ever interfere?

Bezos: Never. I would be humiliated to interfere. I would be so embarrassed. I would turn bright red. It has nothing to do with… I don’t even get so far… I just don’t want to. It would feel icky, it would feel gross. It would be one of those things when I’m 80 years old I would be so unhappy with myself if I had interfered. Why would I? I want that paper to be independent. We have a fantastic editor in Marty Baron. We have a fantastic publisher in Fred Ryan. The head of our technology team, a guy named Shailesh is fantastic. They don’t need my help in the newsroom for sure. First of all that’s also an expert’s job. It would be like me getting on the airplane and going up to the front of the plane and saying to the pilot, “You should move aside, let me do this!”

Döpfner: Well, you are not flying airplanes, but you are sending rockets to the orbit. Could you share with us the vision of Blue Origin and the idea of space tourism with reusable rockets?

Jeff Bezos Amazon Blue Origin

Bezos: Yes. This is super important to me, and I believe on the longest timeframe – and really here I’m thinking of a timeframe of a couple of hundred years, so over millions of decades – I believe and I get increasing conviction with every passing year, that Blue Origin, the space company, is the most important work that I’m doing. And so there is a whole plan for Blue Origin.

Döpfner: Really, so you’d say retail, e-commerce, clouds, publishing – that’s all less relevant than the space project.

Bezos: Yes, and I’ll tell you why. First of all, of course, I’m interested in space, because I’m passionate about it. I’ve been studying it and thinking about it since I was a five-year-old boy. But that is not why I’m pursuing this work. I’m pursuing this work, because I believe, if we don’t, we will eventually end up with a civilization of stasis, which I find very demoralizing. I don’t want my great-grandchildren’s great-grandchildren to live in a civilization of stasis. We all enjoy a dynamic civilization of growth and change. Let’s think about what powers that. We are not really energy-constrained. Let me give you just a couple of numbers. If you take your body – your metabolic rate as a human it’s just an animal, you eat food, that’s your metabolism – you burn about a 100 Watts. Your power, your body is the same as a 100-Watt lightbulb. We’re incredibly efficient. Your brain is about 60 Watts of that. Amazing. But if you extrapolate in developed countries where we use a lot of energy, on average in developed countries our civilizational metabolic rate is 11 000 Watts. So, in a natural state, where we’re animals, we’re only using a 100 Watts. In our actual developed-world state, we’re using 11 000 Watts. And it’s growing. For a century or more, it’s been compounding at a few percent a year – our energy usage as a civilization.

Now if you take baseline energy usage globally across the whole world and compound it at just a few percent a year for just a few hundred years, you have to cover the entire surface of the Earth in solar cells. That’s the real energy crisis. And it’s happening soon. And by soon, I mean within just a few 100 years. We don’t actually have that much time. So what can you do? Well, you can have a life of stasis, where you cap how much energy we get to use. You have to work only on efficiency. By the way, we’ve always been working on energy efficiency, and still we grow our energy usage. It’s not like we have been squandering energy. We have been getting better at using it with every passing decade. So, stasis would be very bad I think.

Now take the scenario, where you move out into the Solar System. The Solar System can easily support a trillion humans. And if we had a trillion humans, we would have a thousand Einsteins and a thousand Mozarts and unlimited (for all practical purposes) resources and solar power unlimited for all practical purposes. That’s the world that I want my great-grandchildren’s great-grandchildren to live in.

By the way, I believe that in that timeframe we will move all heavy industry off of Earth and Earth will be zoned residential and light industry. It will basically be a very beautiful planet. We have sent robotic probes to every planet in this solar system now and believe me this is the best one.

Döpfner: Jeff when can I buy the first ticket to do a little space tour.

Bezos: We are going to be… So the first tourism vehicle – we won’t be selling tickets yet – but we may put humans in it at the end of this year or at the beginning of next year. We are very close. We are building a very large orbital vehicle. We have been working on that for more than five years. It will fly for the first time in 2020. The key is reusability. This civilization I’m talking about of getting comfortable living and working in space and having millions of people and then billions of people and then finally a trillion people in space – you can’t do that with space vehicles that you use once and then throw away. It’s a ridiculous, costly way to get into space.

Döpfner: The most recent thing you are planning seems to be home robots. I assume it is more than Alexa walking. What is the vision behind it?

Bezos: I saw that rumor in the press and I can’t comment on that.

Döpfner: So, I see it seems to be very serious. Jeff, you are one of the most long-term thinking entrepreneurs, when it comes to companies, products and services. If it is about philanthropy you recently said that you are a very short-term thinker. You really want to deal with the now and here. I think that is also very innovative. Can you explain that approach?

Bezos: I am going to end up doing a mixture of things. We started doing in Seattle, there is a homeless shelter called Mary’s Place, run by a woman named Marty. And that has really impacted my thinking on this issue because what I’m seeing is (I’m in favor of all – long-term oriented philanthropy is also very good idea. I’m not against that.) I’m finding I am very motivated by the here and now there. Seeing a lot of the homelessness that Mary’s Place works on is transient homelessness. When you go study homelessness, there are a bunch of causes of homelessness. Mental incapacity issues are a very hard-to-cure problem. Serious drug addictions are very hard-to-cure problems. But there is another bucket of homelessness is this transient homelessness. Which is, you know, a woman with kids, the father runs away and he was the only person providing any income. They have no support system – they have no family. That’s transient homelessness. You can really help that person, and by the way, you only have to help them for six to nine months. You get them trained. You get them a job. They are perfectly productive members of society.

Döpfner: Last week we had Bill Gates for dinner here and he said in a self-ironic manner, that he has a ridiculous amount of money and it is so hard to find appropriate ways to spend that money reasonably and to do good with the money. So, what does money mean for you, being the first person in history that has a net worth of a three-digit amount of billions.

Bezos: The only way that I can see to deploy this much financial resource is by converting my Amazon winnings into space travel. That is basically it. Blue Origin is expensive enough to be able to use that fortune. I am currently liquidating about 1 billion dollars a year of Amazon stock to fund Blue Origin. And I plan to continue to do that for a long time. Because you’re right, you’re not going to spend it on a second dinner out. That’s not what we are talking about. I am very lucky that I feel like I have a mission-driven purpose with Blue Origin that is, I think, incredibly important for civilization long-term. And I am going to use my financial lottery winnings from Amazon to fund that.

Döpfner: With regard to your personal lifestyle there are no guilty pleasures, unreasonable things that you do with money or…

Bezos: I don’t think they’re that guilty. I mean, I have lots of pleasures and we just came back from an amazing trip with the kids, MacKenzie and I did. She planned the whole thing. It was her birthday trip, but she planned it all. And we went to Norway for three days and we stayed in an ice hotel. We went dog sledding. We went to a wolf preserve and actually got to interact with timber wolves. It really was an incredible vacation, a pretty incredible holiday. We got it all done in three and a half days. It was amazing.

Döpfner: You are a family man. Your kids are extremely important for you, you seem to be the ideal father. If we were to talk to your kids, what would they criticize about their dad.

Bezos: They would make fun of my singing.

Döpfner: Oh, ok. Can we…

Bezos: No, oh God no. They would make fun of my inability to remember exact words. I am always quoting Churchill or something, and am getting it wrong. And they’re like, “that’s not even close to what Churchill said”. They would probably – depending on the moment – they might criticize my laugh. They’re kids! I am lucky. I have very good relationship with them. This work-life harmony thing is what I try to teach young employees and actually senior executives at Amazon, too. But especially the people coming in. I get asked about work-life balance all the time. And my view is, that’s a debilitating phrase because it implies there’s a strict trade-off. And the reality is, if I am happy at home, I come into the office with tremendous energy. And if I am happy at work, I come home with tremendous energy. It actually is a circle. It’s not a balance. And I think that is worth everybody paying attention to it. You never want to be that guy – and we all have a coworker who’s that person – who as soon as they come into a meeting they drain all the energy out of the room. You can just feel the energy go whoosh. You don’t want to be that guy. You want to come into the office and give everyone a kick in their step.  

Döpfner: Jeff, thank you very much.

Disclosure: Business Insider is owned by Axel Springer.

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You can get a great 4K and HDR TV for incredibly cheap these days – but there are 10 hidden costs you haven't thought of when you go to 4K

Posted: 28 Apr 2018 07:00 AM PDT

tcl 6 series tv roku 4k hdr

These new 4K TVs sure do look tempting, especially the new 6-series TVs from TCL that cost $650 for a 55-inch set.

That's a seriously budget-conscious price tag for a large TV that comes with 4K resolution and supports HDR – a feature that gives movies and TV shows a boost in color and contrast quality (at least for content that supports HDR). 

I've tried TCL's earlier 5-series 4K HDR TVs, and they are absolutely fantastic. They also run on the same operating system as Roku's media streamers, which is great. It's like having a Roku media streamer built into the TV.

But upgrading to 4K from a standard 1080p resolution TV – which I'll call "HD" from now on – comes with a few extra costs that aren't immediately obvious when you're handing over your credit card information to pay for a new 4K TV. If you want to make the most of a new 4K TV, you'll need to upgrade a few things. 

I've listed below 10 things that you'll likely need to upgrade to make the most of a new 4K TV.  To be clear, you don't need to upgrade anything I've listed. However, you may be left wondering why you bought a 4K TV if you don't.

Check out what you'll need to upgrade if you buy a new 4K TV:

SEE ALSO: This $650 TV should cost more than it does – and I'd recommend it to absolutely everyone

1. You'll need to upgrade Netflix if you have it.

For $11 per month, you get the HD resolution Netflix plan. But if you want to stream your TV shows and movies from Netflix in 4K, you'll have to upgrade to the $14 per month plan.

It's not a massive jump, but it does mean an extra $36 per year for 4K Netflix streaming.

Other streaming services like Amazon Prime Video, Hulu, and YouTube have 4K streaming built-in already. 



2. You may need to upgrade your internet speeds.

Streaming video in 4K needs much faster internet speeds than streaming in HD resolution. Netflix, for example, recommends you have 25 megabits-per-second (Mbps) internet download speeds. For 4K streaming in Amazon Prime Video, Amazon recommends you have at least 15 Mbps download speeds. 

To compare, HD streaming on Netflix uses only 5 Mbps. 

The average internet download speed in the US in 2017 was 64.17 Mbps, according to the internet speed testing site, speedtest.net. That's more than enough for 4K streaming. 

However, you should also consider buffering your internet speeds (pun not intended) in your internet plan. Two 4K Netflix streams could use up to 50 Mbps, for example. So if you think multiple people at home will be streaming 4K video, either from Netflix, Amazon Prime Video, or even YouTube, you should think about getting an internet speed plan that can handle heavy internet usage. 



3. You may need to upgrade your video games console.

If you bought an original Xbox One of PlayStation 4 around the time they were released and you're thinking about getting a 4K TV, you may want to sell your console or give it away and replace it with a newer Xbox One S, Xbox One X, or PlayStation 4 Pro. 

That's because Microsoft's and Sony's latest console models support 4K gaming and video streaming, and they'll help make the most of a new 4K TV. 

A quick note about the Xbox One S specifically: This particular console only plays video at true 4K resolution. It does not play games at true 4K resolution. However, it does "upscale" HD games to 4K resolution, and it does a good job of it. So, if you don't feel like paying $500 for the Xbox One X, you'll be fine with the Xbox One S, which you can buy for under $250.

 



See the rest of the story at Business Insider

Facebook's biggest product event of the year kicks off Tuesday — here's everything we're expecting to see (FB)

Posted: 28 Apr 2018 06:30 AM PDT

Facebook Founder and CEO Mark Zuckerberg waves as he arrives on stage during the annual Facebook F8 developers conference in San Jose, California, U.S., April 18, 2017. REUTERS/Stephen Lam

Get ready for feedfull of updates and announcements from Facebook.

The social network' annual developers' conference, F8, kicks off on Tuesday in San Jose, Calif. There's likely to be lots of talk about VR, AR, video games, and of course, data security--an issue that Facebook is still tangled up in after trying to regain users' trust in the wake of the Cambridge Analytica scandal.

Here's what to expect at this year's big event:

SEE ALSO: Mark Zuckerberg revealed one of his 'great regrets' — and the timing doesn't seem like an accident

The conference is largely geared toward software developers, many whose work relies on data collected by Facebook, so the real elephant in the room will be inevitably be how the company plans to move forward in the wake of the Cambridge Analytica scandal.

It's only been a few weeks since Mark Zuckerberg spent two days answering questions about data security on Capitol Hill, and the social network still has a lot to answer for. 

Zuckerberg's keynote will be closely watched, though he may repeat many of the talking points we've already heard.

Chief Security Officer Alex Stamos will be giving a presentation titled "Security at Facebook Scale," on the first day of the conference.

 

 



Facebook is likely to release the Oculus Go, a standalone VR headset.

The headset will retail for around $200 — a steep drop from Facebook's existing $400 Oculus Rift. But it will be designed for stationary or seated use, unlike the Rift, which supports room-scale location tracking.

The Oculus Go headset is expected to be similar to the Gear VR by Samsung, according to Variety. The device was first announced for "early 2018" back in October.

 



But there may be a lot of other big VR and AR tech announcements as well.

There are at least nine VR or AR-related events scheduled to take place over the two-day event, including "Lessons from the Frontier of Social VR," and "Creating Flagship AR Experiences."

Back in February,  Facebook’s VP of AR/VR, Andrew “Boz” Bosworth even suggested on Twitter that this could be Facebook's biggest year for VR yet:

We can also expect a full update and roadmap from the team behind Facebook Spaces, the company's first official VR app, which was announced at last year's F8, and is expected to be supported by the Oculus Go.

 

 

 

 



See the rest of the story at Business Insider

Seven people have died on the job in Amazon's warehouses since 2013 — here's what happened (AMZN)

Posted: 28 Apr 2018 06:27 AM PDT

Amazon warehouse, New Jersey

  • A new report claims that seven Amazon workers have died on or near the job since 2013.
  • The report was compiled by National Council for Occupational Safety and Health, a private nonprofit worker advocacy group, which named it as one of their "dirty dozen" companies.
  • "We are proud of safety record and thousands of Amazonians work hard every day innovating ways to make it even better," an Amazon spokesperson said in a statement.

Amazon has been singled out in a new report for workplace safety.

The company was one of the "dirty dozen'" on a list composed by the National Council for Occupational Safety and Health, a private nonprofit worker advocacy group.

"This year, we’ll identify several companies who received specific warnings about safety hazards and failed to correct them. Workers paid the ultimate price for these failures," Marcy Goldstein-Gelb, co-executive director of National COSH, said in a statement.

The report was compiled by worker safety activists and took information from publicly available sources.

"Criteria for inclusion included severity of injuries to workers; exposure to unnecessary and preventable risk; repeat citations by relevant state and federal authorities; and activity by workers to improve their health and
safety conditions," the report reads.

Amazon landed on the list for "a disturbing pattern of preventable deaths," the report says, including seven deaths since 2013. Eleven other companies landed on the list, including Tesla.

"Amazon workers suffer injuries – and sometimes lose their lives – in a work environment with a relentless demand to fill orders and close monitoring of employee actions," the report reads.

The seven workers at Amazon who lost their lives were involved in several different kinds of accidents and crashes. According to the report, two were crushed by forklifts in the warehouses, one was run over by a truck, one was killed by an SUV driver, one suffered a fatal heart-related event during an overnight shift, one was dragged and crushed by a conveyor belt, and one was killed and crushed by a pallet loader.

Amazon, in a statement to Business Insider, defended its workplace safety record, noting the training all employees have to go through, and its commitment to improving safety throughout its warehouse network in conjunction with its high standards.

Amazon also said that it takes "any serious incident" seriously, and is working to improve.

"While any serious incident is one too many, we learn and improve our programs working to prevent future incidents," the statement reads. "We are proud of safety record and thousands of Amazonians work hard every day innovating ways to make it even better."

Read Amazon's full statement below.

Amazon has created over 130,000 jobs in the last year alone and now employees over 560,000 people around the world. Ensuring the safety of these associates is our number one priority.  Operational meetings, new hire orientation, process training and new process development begin with safety and have safety metrics and audits integrated within each program.  We expect our leadership to continually improve the safety results of their operations by reducing physical risk through the design of processes, equipment and work areas, applying high standards of safety performance each day, improving capabilities through training and coaching using rigorous management reporting systems to track and audit their progress.

We have also launched the Safety Leadership Index across our US operations where every associate is surveyed through our Connections Program answering a series of questions each month to measure the perception of safety in their facility. Each of these safety programs and measures apply to everyone working in our facilities — full time, part time, seasonal, and temporary. While any serious incident is one too many, we learn and improve our programs working to prevent future incidents.  We are proud of safety record and thousands of Amazonians work hard every day innovating ways to make it even better. We encourage anyone to come see for themselves by taking a tour at one of our fulfillment center

SEE ALSO: Amazon can now deliver packages directly to your car — here's how it works

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Netflix CEO Reed Hastings told us about his favorite recent Netflix series

Posted: 28 Apr 2018 06:20 AM PDT

reed hastings

  • In an interview with Business Insider, Netflix CEO Reed Hastings called the dark comedy "The End of the F---ing World" his favorite recent Netflix original series.
  • "'The End of the F---ing World.' Just because it's different. It's like something that I've never seen before," Hastings said, when asked to name his "favorite show from the last few months."
  • Hastings previously praised the show in advance of its January release, writing in a Facebook post that the series was Netflix's "most engaging addictive original wild show in a long time."

Netflix CEO Reed Hastings sat down with Business Insider Poland's Adam Turek in Rome this week to discuss a few recent developments for the company, including its new partnership with the European cable network Sky and its decision to pull out of the Cannes Film Festival.

In the interview, Hastings also talked about what he called his favorite recent Netflix original series, "The End of the F---ing World," a critically acclaimed dark comedy about two runaway teens in England. 

"'The End of the F---ing World.' Just because it's different. It's like something that I've never seen before," Hastings said, when asked to name his "favorite show from the last few months."

"You really don't like the characters at the beginning - at least I didn't like them," he continued. "They were weird. And then you really start to grow into liking them - and at the same time, they grow into liking each other."

The debut season of "The End of the F---ing World" earned laudatory reviews and a 98% "Fresh" rating on Rotten Tomatoes. The Atlantic called it "a surprising tour de force."

Hastings also praised the series in advance of its release in January, writing in a Facebook post that "The End of the F---ing World" was Netflix's "most engaging addictive original wild show in a long time."

Hastings previously listed the Netflix animated comedy "BoJack Horseman" as his favorite original series in 2015. 

Read the full Reed Hastings interview here.

SEE ALSO: MoviePass subscribers are no longer allowed to watch the same movie more than once

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SpaceX cargo launches may soon cost 50% more — but it's still an offer NASA can't refuse

Posted: 28 Apr 2018 06:14 AM PDT

spacex dragon cargo spaceship international space station iss space earth capture robotic arm nasa

  • Government auditors published a new report about NASA's commercial spaceflight program that focuses in part on SpaceX, the rocket company founded by Elon Musk.
  • The report says sending cargo to and from the International Space Station may soon cost NASA about 14% more per kilogram.
  • It also said that SpaceX will increase its price about 50%, due to new NASA requirements that forced the company to redesign its Dragon cargo spaceship.
  • But SpaceX missions will still be cheaper than its competitors' and do things other companies can't.
  • The report pins most of the blame on NASA for the cost increase.

A new NASA report has revealed that SpaceX, the rocket company founded by Elon Musk, is raising the price it charges the agency to launch cargo into space by roughly 50%.

Auditors at NASA's Office of Inspector General have posted a 55-page report about a program that pays private companies like SpaceX to ship supplies to the International Space Station. As Ars Technica reported, the analysis focuses on the costs and risks of a second round of contracted missions for NASA's Commercial Resupply Services program, known as CRS.

Its conclusion is blunt: NASA may pay 14% more per pound to launch food, water, and experiments on commercial spaceships for this second round of missions (from 2020 through 2024) than it did for the first round of CRS missions that occurred between 2012 and 2019. It ascribes most of that increase to SpaceX's price hike.

crs 14 spacex falcon 9 dragon launch space station cargo april 2 2018 26326005987_c04418a784_kBut Musk isn't reneging on his promise to lower the crushing cost of access to space. Instead, the auditors pinned much of the blame on NASA for the increase. They also emphasized that the program still seems like a good deal for lowering launch costs.

NASA's rising costs

Auditors cited NASA for missing opportunities to cut redundancies and bargain on pricing, and noted that the agency forced SpaceX to (expensively) redesign its Dragon spaceship from the bottom up.

The report did hint, however, that SpaceX has done some reckoning as the startup has matured.

"[SpaceX] also indicated that their CRS-2 pricing reflected a better understanding of the costs involved after several years of experience with cargo resupply missions," the auditors wrote. (A SpaceX representative declined to comment on the report.)

Despite the cost increases, the report ultimately called the CRS contracts with private companies "positive steps" for NASA — especially since the agency could find discounts by launching cargo on used SpaceX Falcon 9 rocket boosters.

"NASA's continued commitment to the commercial space industry also helps spur innovations in the commercial launch vehicle market," the auditors said.

Why NASA pays companies billions for cargo and taxi services

space shuttle atlantis sts135 july 2011 copyright dave mosher

When the government decided to retire NASA's space shuttles, the agency had to figure out a way to continue sending astronauts to the space station.

So NASA's administrators started funding independent aerospace research and development. Getting private companies to design, build, and launch new rockets and spaceships, the thinking went, would be faster and cheaper than any bureaucratic government program.

NASA set up its first competitions for contracts in 2006 — years before the shuttle program's retirement in 2011. The agency wanted companies to essentially build space taxis and trucks. Industry titans like Boeing and Lockheed Martin balked over the relatively small pool of money ($500 million over 5 years), giving SpaceX an opening to develop its Falcon 1 and Falcon 9 rockets, as well as its Dragon and Crew Dragon spaceships.

The millions of dollars in contract awards helped fuel the rise of Musk's company, which now increasingly out-competes familiar aerospace industry players on price, capacity, frequency, and capability.

SpaceX has rocketed 14 cargo missions since 2012. And in a related program, SpaceX and Boeing plan to launch astronauts within a year — potentially ending NASA's increasingly costly reliance on Russia for space taxi service.

So far, the average costs of launching cargo remain on par with the space shuttle at about $30,000 per lb. (The space shuttle cost about $1.5 billion per mission, including development, and could carry up to 50,000 lbs of cargo.)

The issues NASA auditors found

Dream Chaser spacecraft

NASA awarded CRS2 contracts to three companies in 2016: SpaceX, Orbital ATK, and Sierra Nevada Corp. Each had a minimum of six launches.

Together, the awards are worth up to $14 billion through 2024, depending on how many milestones each company hits and the missions they successfully launch. 

To see if NASA was on the right track, auditors dug into the mistakes of CRS1 and the potential problems with CRS2.

The report found that CRS2 will cost $400 million more than CRS1, even though it'll deliver 13,200 lbs less cargo to space. Part of the reason for the price increase, auditors said, was NASA's decision to pick three contractors. Although the move protects NASA if any one system fails, the policy increases the overall cost of the program. (Fewer companies doing more missions would make launches more efficient and lower-cost.)

How the three NASA contractors stack up

The auditors noted that one company, Sierra Nevada, only has one of its Dream Chaser spaceplanes so far, and that it's not even a flight-proven spacecraft yet.

Orbital ATK, it said, has essentially cut its per-pound launch costs with Cygnus by about 15%, though primarily in response to launch-price competition from SpaceX.

The audit had the most to say about SpaceX.

orbital atk cygnus cargo spacecraft crs resupply international space station nasa

The company's per-pound launch costs may rise by 50%, it said, primarily because NASA wanted more cargo space and capability from SpaceX's Dragon spacecraft.

Though more pricey, SpaceX's new-and-improved Dragon 2 cargo spaceship has 30% more volume for cargo, can pull off much longer missions in space, and will help scientists get their experiments back to Earth and into a lab for analysis more quickly.

SpaceX is currently the only company able to bring things back from space — Orbital ATK's Cygnus spacecraft burns up on reentry to Earth, and the Dream Chaser has yet to prove it can safely fly to and from space. But the auditors didn't consider that added value in their analysis.

They did, however, recommend that NASA look into booking launches with SpaceX's reusable Falcon 9 boosters, which could earn the government a discount of millions of dollars.

The next NASA-funded mission to resupply the space station is a SpaceX launch that's currently scheduled for June 28. It's the company's 17th Dragon launch and its 15th resupply mission, and is expected to deliver 7,310 lbs of cargo to astronauts.

SEE ALSO: Elon Musk says he will colonize Mars — but a 25-year-old experiment in the Arizona desert reveals disturbing challenges that lie ahead

DON'T MISS: I watched SpaceX's Falcon Heavy rocket thunder into space for the first time — here's what it was like on the ground

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I really want to like Snapchat's new camera glasses — but the new model doesn't solve the biggest problems I had with the first version (SNAP)

Posted: 28 Apr 2018 06:00 AM PDT

snapchat spectacles glasses

On Thursday, Snapchat's parent company Snap Inc. introduced the second-generation version of its camera glasses, called Spectacles.

I actually tried the first-generation Snapchat Spectacles in November 2016, and I have to say, as much as I loved the concept behind the camera glasses, I wasn't impressed with the overall design or execution of this particular vision.

Unfortunately, the new second-generation Spectacles don't solve the biggest problems I had with the first model. Let's dive in:

First, the pros: Snap did make some improvements in Spectacles 2.0.



The new Spectacles are slimmer, and so is the charging case it comes with.



Snap also removed those ugly yellow circles around each camera from the 1.0 model, which you can see below.



See the rest of the story at Business Insider