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Washington Post Finds Itself in the Middle of the Jeff Bezos Story

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Jeff Bezos says owning The Washington Post is a “complexifier” for him. The newspaper could say the same about him.

The paper has flourished under Mr. Bezos’ ownership. Since he bought the newspaper in 2013 for $250 million, The Post has added over 200 people to its newsroom, which now numbers 900 journalists, and won plaudits and awards for its coverage of, among other subjects, the Trump administration. The paper has more than 1.5 million digital subscribers, and the business has been profitable for the past three years.

But the newsroom entered tricky editorial terrain last week when it became a factor in an apparent extortion attempt against Mr. Bezos, while also having to independently cover the events around its owner.

The drama featured a litany of classic tabloid elements that would challenge any newsroom — a marriage-busting affair documented by The National Enquirer, Hollywood agents with ties to political figures, secret rendezvous at high-end hotels and sexting — let alone one whose owner sits at the center of the controversy.

It was also a stark reminder that Mr. Bezos is a very public figure of great wealth and influence. He is the world’s richest person by dint of his command of Amazon, a company that is reaching further and further into the lives of everyday people, whether through its e-commerce business, its entertainment properties or its numerous warehouses around the country that employ hundreds of thousands.

His personal project, Blue Origin, describes its mission as “building a road to space so our children can build the future.”

With his blog post detailing his extortion allegations last week, Mr. Bezos has now also become a prominent commentator on the First Amendment. He said he was fighting back against alleged tactics that have no business in journalism, while The Enquirer claims he is merely trying to muzzle a publication because its coverage embarrassed him.

The editorial page of The Post clearly sides with its owner. On Friday, the day after Mr. Bezos published his blog post, the paper published an editorial praising him for exposing an “insidious model of intimidation and corruption masquerading as journalism.”

The overall situation will “test both Marty Baron and Jeff Bezos,” Kyle Pope, the editor and publisher of The Columbia Journalism Review, said in an email, referring to The Post’s executive editor. Mr. Bezos gets “good marks so far,” Mr. Pope said, but “the truth is that the rules of journalism are not baked into his bones; it’s something he’s going to have to learn, at a very stressful and trying time.”

Mr. Bezos did not respond to a request for comment.

The Washington Post declined to make Mr. Baron available for an interview but the paper did provide a statement from him.

“Jeff has never gotten involved in our reporting or our final stories,” he said. “People surmise that it must be difficult to cover Jeff and Amazon. But we’ve gone five and a half years with his ownership, and he hasn’t once intervened in any way.”

The clash between Mr. Bezos and The Enquirer began last month when the tabloid published an exposé of his extramarital affair with the television personality Lauren Sanchez. Mr. Bezos fought back in his remarkably revealing blog post on Medium, the online open platform. He accused David J. Pecker, the chairman of The Enquirer’s parent company, American Media Inc., of threatening through intermediaries to publish graphic photographs of Mr. Bezos if he did not publicly announce that The Enquirer’s reporting on his affair was not politically motivated.

The Post has traditionally focused on the nation’s capital, with not as many resources devoted to business coverage. That has started to change. The Post had previously said it would nearly double the number of journalists devoted to covering Silicon Valley to 25, including a reporter in Seattle who will focus on Amazon.

It also aggressively followed up on the revelation about Mr. Bezos’ private life.

The Post published a lengthy article on Feb. 5 about The Enquirer’s coverage of Mr. Bezos’ affair. It quoted Gavin de Becker, his longtime security chief, as saying the leak of evidence of Mr. Bezos’ infidelity to The Enquirer was “politically motivated,” designed to embarrass Mr. Bezos because he owns The Post. Mr. de Becker added that the effort could also involve figures from President Trump’s campaign.

Emails from American Media that Mr. Bezos included in his blog post referred to the Post article and demanded that he — and the newspaper — refrain from any statements or suggestions that politics played any part in its coverage of his affair with Ms. Sanchez.

Like other newspapers, including The New York Times, The Post ran front-page articles on Mr. Bezos and American Media on Friday and Saturday. Those were not the only articles about his interests. The paper also published a report about Amazon’s potentially pulling out of its agreement to build a headquarters in New York City, as well as one about a lawsuit filed against Amazon by the director Woody Allen, who said its streaming service had improperly backed out of a four-movie deal with him.

“I think they’ve finally woken up to the fact that their owner is a huge story,” said Mr. Pope, who has criticized the paper’s past coverage of Amazon as anemic. With the fight between Mr. Bezos and American Media, he said, “they’ve moved into an appropriately higher gear.”

Mr. Baron said the paper had not changed its approach to its coverage of Mr. Bezos or his business interests. Mr. Baron has said that he, along with other executives, talks with Mr. Bezos about “strategy” every two weeks or so, but that the discussions do not touch on the paper’s coverage. Mr. Bezos owns The Post separately from Amazon.

“Because I know full well that he won’t interfere, it’s not really difficult to cover him and Amazon at all,” Mr. Baron said in his statement. “In all the years of his ownership, there hasn’t been one report of his exerting influence, explicitly or implicitly, on our coverage.”

Frederick J. Ryan Jr., the publisher and chief executive of The Post, echoed those sentiments in a statement, and said Mr. Bezos had played no part in the editorial that praised his blog post.

“Jeff has always made it clear that he expects The Washington Post will act with complete independence, both in our news coverage and editorials, and treat him and his companies just as we would anyone else,” Mr. Ryan wrote. “We have never wavered from that position.”

Donald Graham, whose family had owned The Post for almost 80 years before he sold it to Mr. Bezos, said he was “delighted” by the editorial. “I agree with every word of it,” he said in an email.

He added, “Had they not editorialized, perhaps The Times would be doing a piece about the absence of such an editorial and what did that mean?”

Bill Grueskin, a Columbia University journalism professor and a former editor at The Wall Street Journal, said it should have been made clearer to readers that Mr. Bezos had nothing to do with the editorial.

“Readers deserve to know whether Bezos knew about the editorial in advance, or in any way contributed to discussions that led to it,” he said.

To show that the newspaper remains independent of its owner, The Post pointed to another editorial, from early last year. That editorial warned that cities should “proceed with caution, with their eyes at least as wide open as their wallets,” when bidding to be a location for Amazon’s second headquarters.

That has now become a major hometown story. Amazon recently announced that it would build a headquarters in nearby Arlington, Va., meaning it will be one of the largest employers in the region.



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Facebook’s Open Compute Project hits over $2.5 billion in revenues

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The Open Compute Project began its life at Facebook as a revolutionary idea to do for data center hardware what Linux and open source software did for the software market. In other words, the OCP comes up with cutting-edge, super-efficient designs that any company can use to build their own hardware.

And the OCP has succeeded, by most reasonable metrics. The project has created a fanatical following among data center engineers, and has led to the creation of products in 10 categories, including networking, servers, and storage.

And in terms of dollars and cents: On Thursday, the preliminary results of a new market assessment report commissioned by OCP was released. That report finds that companies spent more than $2.5 billion on OCP-designed products in, up from $1.16 billion year the before.

Read: AT&T signed an ‘8-digit’ deal that isn’t good news for VMware, Cisco, or Huawei — but could be great for Google Cloud

And this report doesn’t actually reveal the true amount being spent on OCP gear.

It deliberately hides what the project’s board member companies are spending on their OCP equipment, which includes Facebook, Goldman Sachs, Intel, Microsoft and Rackspace. Those companies run enormous data centers and buy a lot of data center equipment, meaning the real figure is likely higher.

The reason the board members are excluded is to try and show that the project is having an impact beyond the handful of companies in leadership roles — although it’s a bit coy of the organization to keep mum on how much money those companies pour into the ecosystem.

Even so, the commissioned report makes a fair case that OCP is creating a multi-billion market.

Excluding the purchases of board members, OCP products account for nearly 1% of the total data center market, which it pegs at $127 billion, the report says.

Interestingly, the report also finds that the overall data center equipment market is shrinking, from $137 billion in 2017 to $127 billion in 2018. Companies across the board are reducing their use of private data centers, as their use of the cloud increases. And OCP includes many of the big cloud providers that are taking those workloads, including Microsoft, Google and Rackspace.

Simply put, that means that OCP has been eating the data center market in a measurable way.

Engineers love it

OCP’s goal is to take the power out of the hands of traditional server and networking vendors like Hewlett Packard Enterprise, Dell, or Cisco, and put it into the hands of the companies who buy and use that hardware.

While all three of those companies have joined the project, OCP members design their own servers, storage, and networking gear, making them cost less and perform faster than traditional commercial alternatives. Then, they share their designs for free. Anyone can modify those designs for their own use, or share them with the group.

Attendees at the OCP Summit conference
OCP

Engineers love it. They get to freely collaborate with other top engineers trying to solve the same problems without worrying about protecting intellectual property or trade secrets.

Contract manufactures are available to build the gear, too, to make it easier for even smaller companies to take advantage of OCP gear.

OCP has also become such a big thing that a growing list of vendors, including HPE and Dell, also make commercial products that match OCP specifications. So OCP-designed products can be bought off-the-shelf. They don’t have to be custom-ordered, lowering the bar to entry.

Next up: the telecom industry

With a loyal following of data center engineers, OCP and Facebook have moved on to a related industry: telecom equipment.

Through OCP, telecom providers like AT&T and Deutsche Telekom are working on open source designs for routers and the other equipment that run their networks. This is gear that would challenge networking giants including Cisco and Juniper.

A few years ago, Facebook also launched a telecom-specific organization called the Telecom Infra Project. It is working on projects like open source telecom radio transmitters. This is gear that would take on the likes of Ericsson, Nokia and Huawei at this especially critical time, when telcos are upgrading their networks to 5G.

Meanwhile, the telecom industry has also decided that it wanted to lead its own open-source hardware project, away from Facebook.

A project called the O-RAN Alliance has gained steam, and includes a who’s who of the major telecom companies worldwide. This includes AT&T, T-Mobile, Verizon, Sprint, SoftBank, SK Telecom, Telefónica, and others.

The industry scuttlebutt is that the two groups, TIP and O-RAN, are going to announce some sort of collaboration next week at Mobile World Congress so they don’t duplicate efforts as they work to to upend the global telecom equipment industry.

Read: Bill Gates warns of the dangers of cow farts — and the world should take his words seriously

Amy Wheelus, AT&T VP of Network Cloud & Infrastructure heads Airship
YouTube/TelecomTV

OCP’s market research report doesn’t shed much light on how much money the telecos might shift to these new open source creations.

But it does show that telecom companies are one of the major users of OCP gear — including servers, storage and OCP’s optical networking equipment.

Meanwhile AT&T has taken open source even further. It’s leading a project called Airship to share software that it’s building to run and manage its 5G network. This software can be used for lots of other data center needs at all sorts of other companies.

The radical idea that launched OCP is turning into a full-fledged hardware industry coup.



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Roku CFO Steve Louden says it’s in a good position in ad-based video

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Roku isn’t worried about Amazon or anyone else horning in on its cash cow.

The electronics maker has transformed itself in recent years into an advertising business, thanks in no small part to the Roku Channel, an advertising-supported free streaming video service that’s available on Roku devices and through the web. Last month, though, Amazon launched a rival service called Freedive from its IMDb unit that threatens to steal viewers and ad dollars from Roku’s offering.

But that’s not how Steve Louden, Roku’s chief financial officer, sees it. Amazon’s entry — along with similar services from YouTube, Vudu, and others — just serve as “validation” for the Roku Channel and the ad-supported streaming business in general.

“We’re strong supporters of ad-supported content,” Louden told Business Insider in an interview on Thursday, just after the company reported its fourth-quarter results.

Read this:Amazon’s got its eyes set on yet another market — and one high-flying upstart should be worried

Roku topped analyst expectations as revenue from its platform business — which includes its advertising sales — jumped 77% from the holiday period of 2017.

Roku is in “a strong position”

The streaming video company is in a better position than many of its rivals to capitalize on ad-supported video market, Louden said. Its control of not just a streaming channel, but a streaming media platform — through its Roku streaming boxes and smart televisions that run its operating system — gives it important data on users’ viewing habits that competitors don’t have, he said. Through its platform, Roku also has the ability to steer viewers to the Roku Channel and other places that run its video ads.

“That puts us in a strong position,” he said.

Amazon too has its own platform in the form of its Amazon Fire TV devices, and it has plenty of data on viewing habits through that, its Amazon Fire tablets, and its Prime Video service. But Louden seemed unconcerned, suggesting that Amazon and many of Roku’s other competitors can’t fully match up with it. Roku can offer advertisers both the data they need to target their ads and a large viewership for them.

“That’s where a lot of folks have gaps,” he said.

Here’s what Roku reported and how it compared with Wall Street’s expectations:

  • Fourth-quarter (Q4) revenue: $275.7 million. Analysts had forecast $262.4 million.
  • Q4 earnings per share (EPS): 5 cents. Wall Street was expecting 3 cents a share.
  • First-quarter (Q1) revenue (company guidance): $185 million to $190 million. Analysts had projected $188.8 million.
  • Q1 EPS (guidance): Roku forecast that it will lose $28 million to $32 million, which works out to a per-share loss of 23 to 26 cents, assuming its share count stays stable. Wall Street was forecasting a loss of 12 cents a share.
  • 2019 full-year revenue (guidance): $1 billion to $1.025 billion. Analysts had forecast for $985.4 million.
  • 2019 EPS (guidance): The company projected a loss of between $80 million and $90 million, which is about 65 cents to 73 cents a share, assuming its share count remains the same. Analysts had predicted a full-year loss of 23 cents a share.

Roku’s stock jumped $2.72, or 5%, to $54.20 in after-hours trading. Its shares closed regular trading off $2.16, or 4%, to $51.48.



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The Trade Desk’s Q4 2018 earnings beat expectations

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The Trade Desk continues to be an outlier among ad-tech companies that struggling to grow ad revenue as more of those dollars go to Facebook and Google.

The company reported $160.6 million in fourth-quarter 2018 revenue on Thursday, primarily boosted by growth in programmatic ad dollars flowing to connected TV devices and audio.

The programmatic advertising firm reported a total of $477 million in revenue during 2018, up 55% from $308.2 million in 2017. The Trade Desk’s technology plugs into agency trading desks to power programmatic advertising.

In 2019, The Trade Desk said that it expects to grow faster than the rest of the programmatic industry, making at least $637 million with gross spending on its platform hitting at least $3.2 billion, said Jeff Green, The Trade Desk’s CEO, during the earnings call.

Programmatic firms are making connected TV gains

The Trade Desk saw the biggest growth from connected TV, where spending grew 525% year-over-year. Mobile spend jumped 69%. while programmatic audio spending grew 230%.

During the fourth-quarter, more than 160 advertisers spent more than $100,000 each on connected TV advertising, Green said. In 2018, the company’s inventory for streaming TV ads grew sixfold, with the bulk of new inventory coming from networks like NBCUniversal, A+E Networks and CBS that are building their own streaming services.

Read more: Ad-tech companies and networks are pinning hopes on streaming TV, but OTT is full of headaches for marketers

He added that inventory is also coming from digital players like Hulu, which works with The Trade Desk to power programmatic advertising.

But streaming TV ads are significantly more expensive with higher cost-per-impressions (or CPM) prices than display ads. Over time, prices will come down as more premium content becomes available, Green said.

“I don’t think it will have any big, long-term effect on our fee structure because we add so much more value by bringing data to the table,” he said. “Time will tell there but I think we’re in a really strong position.”

This week, big brands like McDonald’s and AT&T pulled their YouTube ads after it was revealed that ads ran alongside videos with inappropriate comments. Asked about what the pushback against YouTube means for The Trade Desk, Green said that he expects to see a short-term increase in spending from big advertisers over the coming weeks.

“There’s a bunch of dollars that need to find a new home,” he said. “I do think it represents an opportunity for us, but I think it’s hard for all those advertisers to move away from YouTube.”

China holds a lot of potential

The Trade Desk’s move into China was another big topic on the earnings call. The Trade Desk has long eyed Asia as a source for growth and analysts repeatedly asked Green for details on the company’s plans, particularly in China. According to Green, 86% of the firm’s revenue comes from the US, with the goal to get two-thirds of revenue from international markets.

“The fastest-growing and largest middle class in the history of the world is emerging here in Asia, and global brands want to reach these new consumers,” Green said.

Specifically, Green mentioned Alibaba, Baidu and Tencent as critical media partners in Asia. However, the Chinese market is notoriously difficult for marketers to crack. Green emphasized that the country is a “long-term investment.”

Because the Chinese companies have been slower to ramp up advertising, Green said that they have a benefit from learning from Facebook, Google and Amazon’s measurement mistakes and walled gardens.

“There’s actually clearer lines with Baidu, Alibaba and Tencent than there is with Google, Amazon and Facebook, which makes it much easier to have conversations about activating data,” he said. “I don’t think we’re going to have the same debates and evolution that we had in the rest of the world.”



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