Archiv des Autors: innovation

Apple Delays Ad Anti-Tracking Features Planned for iOS 14

Source: https://www.macrumors.com/2020/09/03/apple-delay-ad-anti-tracking-ios-14/

Apple told some developers that it will delay the enforcement of an anti-tracking feature that’s being implemented in iOS 14, reports The Information.


In ‌iOS 14‌, Apple is requiring apps to seek customer consent before the IDFA (Identifier for Advertisers) can be used to track user behavior and preference across apps and websites for ad targeting purposes.

Major app developers and ad networks like Facebook have spoken out against the feature, with Facebook warning advertisers on its platform that the new feature could cause a more than 50 percent drop in Audience Network publisher revenue due to the loss of personalization from ads within apps.

Facebook and other advertisers expect that customers will not want to share their IDFA’s for ad targeting purposes and will therefore decline consent for the ad blocking popups that Apple has implemented in ‌iOS 14‌.

Mobile developers that spoke to The Information said that they’ve had little time to prepare for Apple’s change, which was announced in June alongside ‌iOS 14‌. Apple has also not provided a way for them to target ads without using the IDFA.

If Apple does end up delaying the anti-tracking features in ‌iOS 14‌, customers who upgrade to ‌iOS 14‌ will not see the prompts to decline sharing their device IDFA with third-party apps.

According to The Information, if Apple does decide to delay, the anti-tracking features could be held until next year.

Eric Seufert, an ads industry analyst, said it „simply wasn’t possible for developers to adapt their advertising infrastructure“ to Apple’s proposed IDFA change in time for the public release of ‌iOS 14‌, which Apple usually makes available in September. He called delaying enforcement of the new IDFA prompt „the right thing for Apple to do, even if those privacy restrictions are well intentioned and ultimately best for consumers.“

Apple’s App Store team has apparently been asking gaming firms for details on how the change might impact their businesses, as these kinds of targeted ads are important to free-to-play games, and their responses may determine Apple’s plan to implement or delay the feature.

Update 10:02 a.m.: In a statement to TechCrunch, Apple confirms that it is pushing back the change to „early next year.“

We believe technology should protect users’ fundamental right to privacy, and that means giving users tools to understand which apps and websites may be sharing their data with other companies for advertising or advertising measurement purposes, as well as the tools to revoke permission for this tracking. When enabled, a system prompt will give users the ability to allow or reject that tracking on an app-by-app basis. We want to give developers the time they need to make the necessary changes, and as a result, the requirement to use this tracking permission will go into effect early next year.

 

What iOS 14’s Hidden ‘Approximate Location’ Feature Is (and Why It’s Important)

Source: https://www.idropnews.com/news/what-ios-14s-hidden-approximate-location-feature-is-and-why-its-important/141938/

iOS 14 Approximate LocationCredit: JL IMAGES / Shutterstock

As iOS 14 betas continue to roll out and the software’s full release grows near, more people are noticing just how revolutionary some of its privacy and security features appear to be.

There’s some exciting stuff there, but one of the most interesting – and, until recently, overlooked – features is called “Approximate Location.”

It means enormous changes for location-based services on iOS, and could affect many third-party apps in ways that aren’t entirely clear yet. Here are the significant points all iPhone users should know.

Approximate Location Will Hide Your Exact Location

Based on the details that Apple has given, Approximate Location is a new tool that can be enabled in iOS. Instead of switching off location-based data, this feature will make it…fuzzy. Apple reports that it will limit the location data sent to apps to a general 10-mile region.

You could be anywhere in that 10 miles, doing anything, but apps will only be able to tell that your device is in that specific region. This is going to change several important things about apps that want to know your location, but is a big boon for privacy while still enabling various app services.

Limited Data About Movement Will Be Shared

Not all the details are certain yet, but we do know that apps will be able to track when a device moves from one region to another. Apps will probably be able to extrapolate on that data and know that you were somewhere along a particular border between one region and another.

However, companies still won’t be able to tell what exactly you were doing near the border, or how long you stayed near the border before crossing over. If you cross over the same borders a lot, then apps will probably be able to make some basic guesses, like you’re commuting to work, dropping kids off at school, or visiting a preferred shopping center, but that’s basically all they will be able to tell.

Some Apps Won’t Have a Problem with This

For many third-party app services, these new 10-mile Approximate Location Regions won’t pose much of a problem. Apps that are recommending nearby restaurants you might like, parks you can visit, available hotels, and similar suggestions don’t need to know your exact location to be accurate – the 10-mile zone should work fine. The same is true of weather apps, and a variety of other services.

But not all third-party apps are interested in location data just to offer services. They also want to use it for their own ends…and that’s where things get more complicated.

Location-Based Advertising Is up for a Challenge

A whole crowd of third-party apps want to track your exact location, not for services, but to collect important data about their users. Even common apps like Netflix tend to do this! They are tracking behavior and building user profiles that they can use for advertising purposes, or provide to advertisers interested in building these profiles themselves.

Apple has already changed other types of tracking to require permission from app users. But turning on Approximate Location is another hurdle that blocks apps from knowing exactly what users are doing. Not only does this make it more difficult to build behavioral profiles, but it also makes it hard or impossible to attribute a user visit to any specific online campaign.

There are solutions to this, but it will be a change of pace for advertisers. Apps can use Wi-Fi pings, check-in features, and purchase tracking to still get an idea of what people are doing, and where. That’ll require a lot more user involvement than before, which puts privacy in the hands of the customer.

It’s Not Clear How This Will Affect Apps That Depend on Location Tracking

Then there’s the class of apps that needs to know precise locations of users to work properly.

For example, what happens when an app wants to provide precise directions to an address after you have chosen it? Or – perhaps most likely – will alerts pop up when you try to use these services, requiring you to shut off Approximate Location to continue? We’ve already seen how this works with Apple Maps, which asks you to allow one “precise location” to help with navigation, or turn it on for the app entirely.

Then there’s the problem with ridesharing and food delivery apps. They can’t offer some their core services with Approximate Location turned on, so we can expect warnings or lockouts from these apps as well.

But even with this micromanaging, more privacy features are probably worth it.

Apple’s Ushering in a New Era of Mobile Ads (Here’s How It Affects Us)

Source: https://www.idropnews.com/news/apples-ushering-in-a-new-era-of-mobile-ads-heres-how-it-affects-us/138841/10/

Safari Private Browsing Mode On Iphone

While it may have slipped the attention of many consumers, online businesses around the world were rocked by Apple’s June 2020 decision to make the IDFA fully opt-in. What does that mean exactly?

Well, IDFA stands for Identifier for Advertisers, and it’s a protocol that creates an ID tag for every user device so that device activity can be tracked by advertisers for personalized marketing and ad offers.

While IDFA made it easy to track online behavior without actually knowing a user’s private info, the practice has come under some scrutiny as the importance of online privacy continues to increase.

While Apple still provides the IDFA, it’s now entirely based on direct permission granted by users. In other words, if an app wants to track what a device is doing through an IDFA, a big pop-up will show up that says, roughly, “This app wants to track what you’re doing on this device so it can send you ads. Do you want to allow that?” Users are broadly expected to answer no.

So, what does that mean for advertisers and for your personal user experience going forward? Continue reading to learn what it means for you.


You Will Still Get Online Ads

Apple’s change is a big one for mobile advertisers, but it doesn’t mean that ads will disappear from your iPhone. Consumers will still get ads in all the usual places on their phones. That includes in their internet browsers, and in some of the apps that they use.

The big difference is that those ads will be far less likely to be 1) personalized based on what you like doing on your phone and 2) retargeted based on the products and ads you’ve looked at before. So the ads will still appear, but they will tend to be more general in nature.

 


Big Platforms Will Need to Get More Creative with Tracking

Without the
IDFA option, advertising platforms face a need for more innovation. Advertising
lives off data, and Apple’s move encourages smarter data strategies.

What’s that going to look like? We’ll have to wait and see, but one potential solution is “fingerprinting” a device, or making a device profile, a lot like marketers make buyer personas. This involves gathering ancillary data about a device’s IP addresses, location, activity periods, Bluetooth, and other features, then combining it into a profile that shows how the device is being used and what that says about the user.

Another
option is to develop more ways to track “events” instead of devices. An app
event could be anything from logging on for the first time to reaching the
first level of a game, etc. By looking at events across the entire user base,
advertisers can divide users into different groups of behavior and target ads
based on what that behavior says about them.

 


Developers and Advertisers Will Design New Ways to Monitor Apps

Advertisers
still need app data from iOS to make effective decisions about ads. Since
individual device data is now largely out of reach for them, we’re going to
start seeing more innovation on this side, too. Companies are going to start
focusing on broad data that they do have to make plans based on what they do
know – in other words, what users are doing directly on the app itself, instead
of on the entire device.

Apple is helping with this, too: The company has announced a new SKAdNetwork platform that is essentially designed to replace some of what the IDFA program used to do. It doesn’t track individual device activity, but it does track overall interaction with apps, so creators will still know things like how many people are downloading apps, where they are downloading from, and what features are getting the most use, etc. The key will be finding ways to make intelligent ad decisions from that collective data, and looking for synergistic ways to share it with partners – something advertisers traditionally haven’t done much in the past.

 


Retargeting Will Refocus on Contact Information

Retargeting
is the ad tactic of showing a user products and ads they have already viewed in
the past, which makes a purchase more likely. It’s a very important part of the
sales process, but becomes more difficult when device activity can’t be
directly monitored. However, there’s another highly traditional option for retargeting:
Getting a customer’s contact information. Depending on how active someone is on
the Web, something like an email address or phone number can provide plenty of
useful retargeting data. Expect a renewed focus on web forms and collecting
contact information within apps.

 


Online Point of Sale Will Become Even More Important

Buying on eBay with Apple iPad Air

The online shopping cart is already a locus of valuable information: Every time you add a product, look at shipping prices, abandon a shopping cart, pick a payment method, choose an address, and complete an order – all of it provides companies with data they can use for retargeting, customer profiles, personalized ads and discounts, and so on.

Nothing Apple is doing will affect online POS data, so we can expect it to become even more important. However, most POS data currently stays in house, so the big question is if – and how – large ad platforms might use it in the future. Which brings us to another important point: auctioning data.

 


Auctioning Mobile User Data Is Less Viable Than Ever

A big secondary market for mobile advertising is selling device data to other advertisers (it’s also technically a black market when it happens on the dark web with stolen data, but there’s a legitimate version, too). Now bids for iOS data don’t really have anywhere to go – how can you bid on a list of device use information when that data isn’t being collected anymore? And if someone is selling that data, how do you know if it’s not outdated or just fake?

These secondary auction markets and “demand-side platforms” (DSPs) have been facing pressure in recent years over fears they aren’t exactly healthy for the industry. Apple nixing the IDFA won’t end them, but it will refocus the secondary selling on top-level data (the kind we discussed in the points above) and less on more personal user data.

 


This Is Just the Beginning

The era of
device tracking has only begun to change. Apple’s decision about IDFA was expected,
and is only the beginning of the shift away from this tactic. Google is also expected
to make a similar change with its own version of the technology, GAID (Google
Ad Identifier). Meanwhile, major web browsers like Safari and Chrome are
dropping support for third-party cookies as well.

This is great
for customer privacy, which is clearly a new core concern for the big tech
names. It’s also ushering in a new age of marketing where advertisers will have
to grapple with unseen data – and find new ways to move ahead. In some ways, it’s
an analyst’s dream come true.

The iPhone 12 Pro vs iPhone 5.4 inch

 

https://www.tomsguide.com/amp/news/the-54-inch-iphone-12-will-be-a-game-changer-heres-why

As exciting as boundary-pushing, hyper-premium phones are, they’re less important to everyday users than those special devices that check all the right boxes for a price folks can actually afford. It’s the cheaper iPhones that destroy the barriers of entry to new technology, and therefore matter to the widest majority of people. 

The iPhone 12 Pro will captivate the imagination of the public, no question. But rest assured, Apple’s success or failure with this upcoming swath of phones is dependent on whether the company can hit its marks with the 5.4-inch version.

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Why Google gains competitive advantage over all other competitors in the Online Ad Market

Source: https://www.wired.com/story/google-ad-market-regulated-like-stock-market/

Should Google’s Ad Market Be Regulated Like the Stock Market?

A leading antitrust scholar says yes. Congress may be listening.
A cowboy readies a lasso for a giant chrome logo.
In a new paper, Dina Srinivasan argues that “Google dominates advertising markets by engaging in conduct that lawmakers prohibit in other electronic trading markets.” Illustration: WIRED Staff; Getty Images

The days of suit-clad men shouting out orders on the bustling floors of stock exchanges are mostly gone, replaced by windowless rooms full of servers, but the stock market is still a busy place. On the 13 US stock exchanges combined, around 50 million trades happen every day. And yet there’s another digital marketplace out there that processes tens of billions of transactions daily, one whose complexity makes the NASDAQ look like a lemonade stand: online advertising.

It may sound odd to refer to advertising as a market, but that’s what it is. The industry’s own terminology provides a hint: Publishers selling ad space, and advertisers buying it, do business on so-called “ad exchanges”; one of the biggest companies involved is called the Trading Desk. Whenever you load a web page, advertisers compete in an automated process called real-time bidding to show you their ad. Multiply that by billions of internet users around the world, loading many different pages and apps per day, and you can start to appreciate the scope. As antitrust scholar Dina Srinivasan puts it in a forthcoming paper, online advertising “is likely the most sophisticated of all electronic trading markets.” And yet, despite the market’s size and complexity—and unlike other markets—online advertising is almost completely unregulated.

A former digital advertising executive, Srinivasan gained attention last year for her paper “The Antitrust Case Against Facebook,” which laid out a novel theory of why Facebook’s market dominance can be bad for users even as it offers a free product. Now she aims to do something similar for Google—specifically, for the sprawling advertising empire that accounts for the vast majority of the company’s revenue. In her new paper, which will be published in the Stanford Technology Law Review, Srinivasan takes a deep dive into the inner workings of the digital ad market. The details are astoundingly complex, but the broad argument is straightforward. When you see an ad online, the odds are very high that the advertiser used Google to buy it, the website used Google to put the space up for sale, and Google’s exchange matched them together. In other words, Google both runs the largest exchange and competes as the biggest buyer and seller on that exchange. On top of that, it also owns YouTube, one of the biggest suppliers of ad inventory, meaning it competes against publishers on its own platform. And yet there are no laws governing any of it.

That regulatory vacuum, Srinivasan argues, has allowed Google to dominate the industry by doing things that are prohibited in other parts of the economy. “In the market for electronically traded equities, we require exchanges to provide traders with fair access to data and speed, we identify and manage intermediary conflicts of interest, and we require trading disclosures to help police the market,” she writes. Her proposal flows naturally from that observation: Apply those regulatory principles to digital advertising.

The resemblance between securities and ad markets first occurred to Srinivasan back in 2014. That’s when Michael Lewis published Flash Boys, which documented the extensive mischief created by high-frequency trading and other modern tricks of the digital securities market—and which helped spur a wave of investigations, fines, and regulatory action. At the time, Srinivasan saw similar issues arising in her own industry.

“When Flash Boys came out, it was comical. That book was being passed from executive to executive,” she said in an interview. “People would laugh about how there were operatives who were arbitraging between ad exchanges too. People were just laughing at the parallels.”

Over the past year, as she researched the paper, Srinivasan realized that the resemblance went even further than she thought, sometimes uncannily so. Lewis describes high-frequency traders seeking an edge by placing their computers as physically close as possible to the stock exchange servers to shave microseconds off trade times. Srinivasan relays a similar anecdote from the world of ad tech: Last year, OpenX, one of the largest non-Google ad tech companies, announced a five-year, $110 million deal to move its exchange to Google Cloud. OpenX was open about the fact that being on Google’s servers would give it a speed edge. “You have to operate at speed, efficiency, closeness to the publisher and the demand side of Google,” one executive said. It’s almost an exact copy of high-speed traders’ tactics. The difference, Srinivasan notes, is that “in financial markets, co-location practices are tightly regulated” to make sure everyone has equal access to speed. In advertising, they aren’t.

Speed is crucial in online advertising because the auctions occur in milliseconds. If an ad buying platform submits its bid too slowly, the exchange might exclude it from the auction entirely. This gives a leg up to a platform that shares infrastructure with the exchange—in other words, to Google. Google advertises this fact. “Since Google Ads and Display & Video 360 run on servers in the same data centers as Ad Exchange, they can respond faster to Ad Exchange bid requests compared to other exchange requests,” says a Google help page. “There are no network latency or timeout issues between either Google Ads or Display & Video 360 and Ad Exchange.” When the buying platform isn’t the same as the exchange, on the other hand, latency issues “can prevent buyers from successfully submitting a bid on up to 25% of bid requests.”

Srinivasan also explores the way Google benefits from unequal access to information. Modern digital advertising is all about being able to target users with the most precision. When someone arrives on a website using Google’s DoubleClick ad server, Google’s exchange “hashes” the ID, passing a different one along to the ad buying platforms. Those buyers then must match their ID with the hashed one to make sure they’re targeting the right person—a process called “cookie syncing.” But cookie syncing, Srinivasan writes, “is inherently inefficient.” Some percent of the time, the platform will fail to match the user. In those situations, she writes, advertisers aren’t willing to pay as much, or anything, because they aren’t guaranteed to reach the right audience.

Google doesn’t have this problem, because it allows its own exchange, and its own ad buying platform, to see the DoubleClick ID. That means it automatically knows who the user is. Google says it shares the DoubleClick ID only with its own platforms to protect user privacy. But another result is to put a thumb on the scale of Google’s own properties: If you want to make sure you’re targeting the right user, you have an extra incentive to buy ads using Google. Google advertises this advantage as well.

While securities law has its share of problems, it does broadly curtail the kind of flagrant information and speed imbalances that Srinivasan describes in the ad market. Indeed, the contrast between the digital advertising regulatory vacuum and the world of financial markets is striking.

“It’s a highly, highly regulated system,” said Kevin Haeberle, a professor at William & Mary Law School who specializes in securities law. Only registered brokers are allowed to execute trades, and those brokers must register with the Securities and Exchange Commission. “You’ve got to take tests, you’ve got to be registered, you have to be supervised in certain ways, you’ve got to pay into various insurance mechanisms to make sure the trades actually do settle.” He added, “There’s this whole regulatory regime, it’s very complex, and it applies to regulating these exchanges that run this important market for our society. In the ad market, we don’t have that.”

Why does that matter? At the broadest level, when one entity is allowed to both run a market and participate in it, and when there are no rules requiring it to let everyone else participate on equal terms, there’s nothing stopping it from enriching itself at the expense of the other buyers and sellers. In digital advertising, that means Google could be inflating prices advertisers pay, or depressing the amount of money publishers receive, or both. Google, of course, denies this characterization. It says its ad tools benefit both advertisers and publishers, no regulation necessary. To Srinivasan, believing that claim would be like trusting J.P.Morgan to run the New York Stock Exchange.

Srinivasan is particularly worried about the publishers who rely on digital advertising for revenue. “From a very big-picture perspective, we are a democracy and we want a healthy and robust economy of news,” Srinivasan said. “We want the news business as a sector in our economy, we want to make sure that it works. And so we should make sure that the market is not rigged for the middleman, so that entrepreneurs are encouraged to enter the business of news.” (In the paper, she discloses that she is “advising and consulting on antitrust matters, including for news publishers whose interests are in conflict with Google’s.”)

Her argument may be catching on. At the tech CEO hearing held by the House antitrust subcommittee in July, Pramila Jayapal, a Democratic congresswoman from Washington state, cited Srinivasan’s paper directly as part of her questioning of Google CEO Sundar Pichai.

“The problem is that Google controls all of these entities,” she said. “So it’s running the marketplace, it’s acting on the buy side, and it’s acting on the sell side at the same time, which is a major conflict of interest. It allows you to set rates very low as a buyer of ad space for newspapers, depriving them of their ad revenue, and then also to sell high to small businesses who are very dependent on advertising on your platform. It sounds a bit like the stock market. Except, unlike the stock market, there’s no regulation on your ad exchange market.”

In an interview after the hearing, Jayapal said she was looking into developing legislation that would address that regulation gap. She suggested that the underlying principles of any regulation would be straightforward. “It seems to me that the simplest thing to do is say, you can’t control the market and engage as a buyer and seller. Those two things have to be separated. And then, if you’re buying and selling, then you’re regulated by insider trading rules.” She added, “I think it’s just an unregulated marketplace that should be relatively easy to do something about.”

Sex, Beer, and Coding: Inside Facebook’s Wild Early Days

Adam Fisher @ Wired Magazine Source

Image may contain Mark Zuckerberg Clothing Apparel Human Person Face Jacket and Coat

Mark Zuckerberg and his cofounders moved from Harvard to Palo Alto, California, in March 2004. The whole enterprise began as something of a lark.Scott Beale

 

Sex, Beer, and Coding: Inside Facebook’s Wild Early Days

When the young Mark Zuckerberg moved to Palo Alto in 2004, he and his buddies built a corporate proto-culture that continues to influence the company today.
Image may contain Mark Zuckerberg Clothing Apparel Human Person Face Jacket and Coat
Mark Zuckerberg and his cofounders moved from Harvard to Palo Alto, California, in March 2004. The whole enterprise began as something of a lark.Scott Beale

This story is excerpted from Valley of Genius, by Adam Fisher.

Everyone who has seen The Social Network knows the story of Facebook’s founding. It was at Harvard in the spring semester of 2004. What people tend to forget, however, is that Facebook was only based in Cambridge for a few short months. Back then it was called TheFacebook.com, and it was a college-specific carbon copy of Friendster, a pioneering social network based in Silicon Valley.

Mark Zuckerberg’s knockoff site was a hit on campus, and so he and a few school chums decided to move to Silicon Valley after finals and spend the summer there rolling Facebook out to other colleges, nationwide. The Valley was where the internet action was. Or so they thought.

In Silicon Valley during the mid-aughts the conventional wisdom was that the internet gold rush was largely over. The land had been grabbed. The frontier had been settled. The web had been won. Hell, the boom had gone bust three years earlier. Yet nobody ever bothered to send the memo to Mark Zuckerberg—because at the time, Zuck was a nobody: an ambitious teenaged college student obsessed with the computer underground. He knew his way around computers, but other than that, he was pretty clueless—when he was still at Harvard someone had to explain to him that internet sites like Napster were actually businesses, built by corporations.

Image may contain Text
Excerpted from Valley of Genius by Adam Fisher. Copyright © 2018. Available on Amazon and from Twelve Books, an imprint of Hachette Book Group, Inc.

But Zuckerberg could hack, and that fateful summer he ended up meeting a few key Silicon Valley players who would end up radically changing the direction of what was, at the time, a company in name only. For this oral history of those critical months back in 2004 and 2005, I interviewed all the key players and talked to a few other figures who had insight into the founding era. What emerged, as you’ll see, is a portrait of a corporate proto-culture that continues to exert an influence on Facebook today. The whole enterprise began as something of a lark, it was an un-corporation, an excuse for a summer of beer pong and code sprints. Indeed, Zuckerberg’s first business cards read, “I’m CEO … bitch.” The brogrammer ’tude was a joke … or was it?

Image may contain Human Person Mark Zuckerberg Footwear Shoe Clothing Apparel Sitting Flooring and Floor
Zuckerberg, photographed in March 2006 at the headquarters of Facebook in Palo Alto. His first business card read “I’m CEO … bitch.”

Elena Dorfman/Redux


Sean Parker (cofounder of Napster and first president of Facebook): The dotcom era sort of ended with Napster, then there’s the dotcom bust, which leads to the social media era.

Steven Johnson (noted author and cultural commentator): At the time, the web was fundamentally a literary metaphor: “pages”—and then these hypertext links between pages. There was no concept of the user; that was not part of the metaphor at all.

Mark Pincus (co-owner of the fundamental social media patent): I mark Napster as the beginning of the social web—people, not pages. For me that was the breakthrough moment, because I saw that the internet could be this completely distributed peer-to-peer network. We could disintermediate those big media companies and all be connected to each other.

Steven Johnson: To me it really started with blogging in the early 2000s. You started to have these sites that were oriented around a single person’s point of view. It suddenly became possible to imagine, Oh, maybe there’s another element here that the web could also be organized around? Like I trust these five people, I’d like to see what they are suggesting. And that’s kind of what early blogging was like.

Ev Williams (founder of Blogger, Twitter, and Medium): Blogs then were link heavy and mostly about the internet. “We’re on the internet writing about the internet, and then linking to more of the internet, and isn’t that fun?”

Steven Johnson: You would pull together a bunch of different voices that would basically recommend links to you, and so there was a personal filter.

Mark Pincus: In 2002 Reid Hoffman and I started brainstorming: What if the web could be like a great cocktail party? Where you can walk away with these amazing leads, right? And what’s a good lead? A good lead is a job, an interview, a date, an apartment, a house, a couch.

And so Reid and I started saying, “Wow, this people web could actually generate something more valuable than Google, because you’re in this very, very highly vetted community that has some affinity to each other, and everyone is there for a reason, so you have trust.” The signal-to-noise ratio could be be very high. We called it Web 2.0, but nobody wanted to hear about it, because this was in the nuclear winter of the consumer internet.

Sean Parker: So during the period between 2000 and 2004, kind of leading up to Facebook, there is this feeling that everything that there was to be done with the internet has already been done. The absolute bottom is probably around 2002. PayPal goes public in 2002, and it’s the only consumer internet IPO. So there’s this weird interim period where there’s a total of only six companies funded or something like that. Plaxo was one of them. Plaxo was a proto–social network. It’s this in-between thing: some kind of weird fish with legs.

Aaron Sittig (graphic designer who invented the Facebook „like“): Plaxo is the missing link. Plaxo was the first viral growth company to really succeed intentionally. This is when we really started to understand viral growth.

Sean Parker: The most important thing I ever worked on was developing algorithms for optimizing virality at Plaxo.

Aaron Sittig: Viral growth is when people using the product spreads the product to other people—that’s it. It’s not people deciding to spread the product because they like it. It’s just people in the natural course of using the software to do what they want to do, naturally spreading it to other people.

Sean Parker: There was an evolution that took place from the sort of earliest proto–social network, which is probably Napster, to Plaxo, which only sort of resembled a social network but had many of the characteristics of one, then to LinkedIn, MySpace, and Friendster, then to this modern network which is Facebook.

Ezra Callahan (one of Facebook’s very first employees): In the early 2000s, Friendster gets all the early adopters, has a really dense network, has a lot of activity, and then just hits this breaking point.

Aaron Sittig: There was this big race going on and Friendster had really taken off, and it really seemed like Friendster had invented this new thing called “social networking,” and they were the winner, the clear winner. And it’s not entirely clear what happened, but the site just started getting slower and slower and at some point it just stopped working.

Ezra Callahan: And that opens the door for MySpace.

Ev Williams: MySpace was a big deal at the time.

Sean Parker: It was a complicated time. MySpace had very quickly taken over the world from Friendster. They’d seized the mantle. So Friendster was declining, MySpace was ascending.

Scott Marlette (programmer who put photo tagging on Facebook): MySpace was really popular, but then MySpace had scaling trouble, too.

Aaron Sittig: Then pretty much unheralded and not talked about much, Facebook launched in February of 2004.

Dustin Moskovitz (Zuckerberg’s original right-hand man): Back then there was a really common problem that now seems trivial. It was basically impossible to think of a person by name and go and look up their picture. All of the dorms at Harvard had individual directories called face books—some were printed, some were online, and most were only available to the students of that particular dorm. So we decided to create a unified version online and we dubbed it “The Facebook” to differentiate it from the individual ones.

Image may contain Mark Zuckerberg Furniture Human Person Electronics Lcd Screen Monitor Screen Display and Footwear
Zuckerberg, left, cofounded, Facebook with his Harvard roommate, Dustin Moskovitz, center. Sean Parker, right, joined the company as president in 2004. The trio was photographed in the company’s Palo Alto office in May 2005.

Jim Wilson/New York Times/Redux

Mark Zuckerberg (Facebook’s founder and current CEO): And within a couple weeks, a few thousand people had signed up. And we started getting emails from people at other colleges asking for us to launch it at their schools.

Ezra Callahan: Facebook launched at the Ivy Leagues originally, and it wasn’t because they were snooty, stuck-up kids who only wanted to give things to the Ivy Leagues. It was because they had this intuition that people who go to the Ivy Leagues are more likely to be friends with kids at other Ivy League schools.

Aaron Sittig: When Facebook launched at Berkeley, the rules of socializing just totally transformed. When I started at Berkeley, the way you found out about parties was you spent all week talking to people figuring out what was interesting, and then you’d have to constantly be in contact. With Facebook there, knowing what was going on on the weekend was trivial. It was just all laid out for you.

Facebook came to the Stanford campus—in the heart of Silicon Valley— quite early: March 2004.


Sean Parker: My roommates in Portola Valley were all going to Stanford.

Ezra Callahan: So I was a year out of Stanford, I graduated Stanford in 2003, and me and four of my college friends rented a house for that year just near the campus, and we had an extra bedroom available, and so we advertised around on a few Stanford email lists to find a roommate to move into that house with us. We got a reply from this guy named Sean Parker. He ended up moving in with us pretty randomly, and we discovered that while Napster had been a cultural phenomenon, it didn’t make him any money.

Sean Parker: And so the girlfriend of one of my roommates was using a product, and I was like, “You know, that looks a lot like Friendster or MySpace.” She’s like, “Oh yes, well, nobody in college uses MySpace.” There was something a little rough about MySpace.

Mark Zuckerberg: So MySpace had almost a third of their staff monitoring the pictures that got uploaded for pornography. We hardly ever have any pornography uploaded. The reason is that people use their real names on Facebook.

Adam D’Angelo (Zuckerberg’s high school hacking buddy): Real names are really important.

Aaron Sittig: We got this clear early on because of something that was established as a community principle at the Well: You own your own words. And we took it farther than the Well. We always had everything be traceable back to a specific real person.

Stewart Brand (founder of the Well, the first important social networking site): The Well could have gone that route, but we did not. That was one of the mistakes we made.

Mark Zuckerberg: And I think that that’s a really simple social solution to a possibly complex technical issue.

Ezra Callahan: In this early period, it’s a fairly hacked-together, simple website: just basic web forms, because that’s what Facebook profiles are.

Ruchi Sanghvi (coder who created Facebook’s Newsfeed): There was a little profile pic, and it said things like, “This is my profile” and “See my friends,” and there were three or four links and one or two other boxes below that.

Aaron Sittig: But I was really impressed by how focused and clear their product was. Small details—like when you went to your profile, it really clearly said, “This is you,” because social networking at the time was really, really hard to understand. So there was a maturity in the product that you don’t typically see until a product has been out there for a couple of years and been refined.

Sean Parker: So I see this thing, and I emailed some email address at Facebook, and I basically said, “I’ve been working with Friendster for a while, and I’d just like to meet you guys and see if maybe there’s anything to talk about.” And so we set up this meeting in New York—I have no idea why it was in New York—and Mark and I just started talking about product design and what I thought the product needed.

Aaron Sittig: I got a call from Sean Parker and he said, “Hey, I’m in New York. I just met with this kid Mark Zuckerberg, who is very smart, and he’s the guy building Facebook, and they say they have a ‘secret feature’ that’s going to launch that’s going to change everything! But he won’t tell me what it is. It’s driving me crazy. I can’t figure out what it is. Do you know anything about this? Can you figure it out? What do you think it could be?” And so we spent a little time talking about it, and we couldn’t really figure out what their “secret feature” that was going to change everything was. We got kind of obsessed about it.

Two months after meeting Sean Parker, Mark Zuckerberg moved to Silicon Valley with the idea of turning his dorm‐room project into a real business. Accompanying him were his cofounder and consigliere, Dustin Moskovitz, and a couple of interns.

Mark Zuckerberg: Palo Alto was kind of like this mythical place where all the tech used to come from. So I was like, I want to check that out.

Ruchi Sanghvi: I was pretty surprised when I heard Facebook moved to the Bay Area, I thought they were still at Harvard working out of the dorms.

Image may contain Human Person Sitting Chris Hughes Electronics Pc Computer Clothing Apparel Furniture and Laptop
Zuckerberg recruited fellow Harvard student Chris Hughes in the early days of Facebook to help make suggestions about the fledgling service. The two were photographed at Eliot House in May 2004.

Rick Friedman/Getty Images


Ezra Callahan: Summer of 2004 is when that fateful series of events took place: that legendary story of Sean running into the Facebook cofounders on the street, having met them a couple months earlier on the East Coast. That meeting happened a week after we all moved out of the house we had been living in together. Sean was crashing with his girlfriend’s parents.

Sean Parker: I was walking outside the house, and there was this group of kids walking toward me—they were all wearing hoodies and they looked like they were probably pot-smoking high-school kids just out making trouble, and I hear my name. I’m like, Oh, it’s coincidence, and I hear my name again and I turn around and it’s like, “Sean, what are you doing here?”

It took me about 30 seconds to figure out what was going on, and I finally realize that it’s Mark and Dustin and a couple of other people, too. So I’m like, “What are you guys doing here?” And they’re like, “We live right there.” And I’m like, “That’s really weird, I live right here!” This is just super weird.

Aaron Sittig: I get a call from Sean and he’s telling me, “Hey, you won’t believe what’s just happened.” And Sean said, “You’ve got to come over and meet these guys. Just leave right now. Just come over and meet them!”

Sean Parker: And so I don’t even know what happened from there, other than that it just became very convenient for me to go swing by the house. It wasn’t even a particularly formal relationship.

Aaron Sittig: So I went over and met them, and I was really impressed by how focused they were as a group. They’d occasionally relax and go do their thing, but for the most part they spent all their time sitting at a kitchen table with their laptops open. I would go visit their place a couple times a week, and that was always where I’d find them, just sitting around the kitchen table working, constantly, to keep their product growing.

All Mark wanted to do was either make the product better, or take a break and relax so that you could get enough energy to go work on the product more. That’s it. They never left that house except to go watch a movie.

Ezra Callahan: The early company culture was very, very loose. It felt like a project that’s gotten out of control and has this amazing business potential. Imagine your freshman dorm running a business, that’s really what it felt like.

Mark Zuckerberg: Most businesses aren’t like a bunch of kids living in a house, doing whatever they want, not waking up at a normal time, not going into an office, hiring people by, like, bringing them into your house and letting them chill with you for a while and party with you and smoke with you.

Ezra Callahan: The living room was the office with all these monitors and workstations set up everywhere and just whiteboards as far as the eye can see.

At the time Mark Zuckerberg was obsessed with file sharing, and the grand plan for his Silicon Valley summer was to resurrect Napster. It would rise again, but this time as a feature inside of Facebook. The name of Zuckerberg’s pet project? Wirehog.

Aaron Sittig: Wirehog was the secret feature that Mark had promised was going to change everything. Mark had gotten convinced that what would make Facebook really popular and just sort of cement its position at schools was a way to send files around to other people—mostly just to trade music.

Mark Pincus: They built in this little thing that looked like Napster—you could see what music files someone had on their computer.

Ezra Callahan: This is at a time when we have just watched Napster get completely terminated by the courts and the entertainment industry is starting to sue random individuals for sharing files. The days of the Wild West were clearly ending.

Aaron Sittig: It’s important to remember that Wirehog was happening at a time where you couldn’t even share photos on your Facebook page. Wirehog was going to be the solution for sharing photos with other people. You could have a box on your profile and people could go there to get access to all your photos that you were sharing—or whatever files you were sharing. It might be audio files, it might be video files, it might be photos of their vacation.

Ezra Callahan: But at the end of the day it’s just a file-sharing service. When I joined Facebook, most people had already kind of come around to the idea that unless some new use comes up for Wirehog that we haven’t thought of, it’s just a liability. “We’re going to get sued someday, so what’s the point?” That was the mentality.

Mark Pincus: I was kind of wondering why Sean wanted to go anywhere near music again.

Aaron Sittig: My understanding was that some of Facebook’s lawyers advised that it would be a bad idea. And that work on Wirehog was kind of abandoned just as Facebook user growth started to grow really quickly.

Ezra Callahan: They had this insane demand to join. It’s still only at a hundred schools, but everyone in college has already heard of this, at all schools across the country. The usage numbers were already insane. Everything on the whiteboards was just all stuff related to what schools were going to launch next. The problem was very singular. It was simply, “How do we scale?”


Aaron Sittig: Facebook would launch at a school, and within one day they would have 70 percent of undergrads signed up. At the time, nothing had ever grown as fast as Facebook.

Ezra Callahan: It did not seem inevitable that we were going to succeed, but the scope of what success looked like was becoming clear. Dustin was already talking about being a billion-dollar company. They had that ambition from the very beginning. They were very confident: two 19-year-old cocky kids.

Mark Zuckerberg: We just all kind of sat around one day and were like, “We’re not going back to school, are we?” Nahhhh.

Ezra Callahan: The hubris seemed pretty remarkable.

David Choe (noted graffiti artist): And Sean is a skinny, nerdy kid and he’s like, “I’m going to go raise money for Facebook. I’m going to bend these fuckers’ minds.” And I’m like, “How are you going to do that?” And he transformed himself into an alpha male. He got like a fucking super-sharp haircut. He started working out every day, got a tan, got a nice suit. And he goes in these meetings and he got the money!

Mark Pincus: So it’s probably like September or October of 2004, and I’m at Tribe’s offices in this dusty converted brick building in Potrero Hill—the idea of Tribe.net was like Friendster meets Craigslist—and we’re in our conference room, and Sean says he’s bringing the Facebook guy in. And he brings Zuck in, and Zuck is in a pair of sweatpants, and these Adidas flip-flops that he wore, and he’s so young looking and he’s sitting there with his feet up on the table, and Sean is talking really fast about all the things Facebook is going to do and grow and everything else, and I was mesmerized.

Because I’m doing Tribe, and we are not succeeding, we’ve plateaued and we’re hitting our head against the wall trying to figure out how to grow, and here’s this kid, who has this simple idea, and he’s just taking off! I was kind of in awe already of what they had accomplished, and maybe a little annoyed by it. Because they did something simpler and quicker and with less, and then I remember Sean got on the computer in my office, and he pulled up The Facebook, and he starts showing it to me, and I had never been able to be on it, because it’s college kids only, and it was amazing.

People are putting up their phone numbers and home addresses and everything about themselves and I was like, I can’t believe it! But it was because they had all this trust. And then Sean put together an investment round quickly, and he had advised Zuck to, I think, take $500,000 from Peter Thiel, and then $38,000 each from me and Reid Hoffman. Because we were basically the only other people doing anything in social networking. It was a very, very small little club at the time.

Ezra Callahan: By December it’s—I wouldn’t say it’s like a more professional atmosphere, but all the kids that Mark and Dustin were hanging out with are either back at school back East or back at Stanford, and work has gotten a little more serious for them. They are working more than they were that first summer. We don’t move into an office until February of 2005. And right as we were signing the lease, Sean just randomly starts saying, “Dude! I know this street artist guy. We’re going to come in and have him totally do it up.”

David Choe: I was like, “If you want me to paint the entire building it’s going to be $60,000.” Sean’s like, “Do you want cash or do you want stock?”

Ezra Callahan: He pays David Choe in Facebook shares.

David Choe: I didn’t give a shit about Facebook or even know what it was. You had to have a college email to get on there. But I like to gamble, you know? I believed in Sean. I’m like, This kid knows something and I am going to bet my money on him.

Ezra Callahan: So then we move in, and when you first saw this graffiti it was like, “Holy shit, what did this guy do to the office?” The office was on the second floor, so as you walk in you immediately have to walk up some stairs, and on the big 10-foot-high wall facing you is just this huge buxom woman with enormous breasts wearing this Mad Max–style costume riding a bulldog.

It’s the most intimidating, totally inappropriate thing. “God damn it, Sean! What did you do?” It’s not so much that we set out to paint that, because that was the culture. It was more that Sean just did it, and that set a tone for us. A huge-breasted warrior woman riding a bulldog is the first thing you see as you come in the office, so like, get ready for that!

Ruchi Sanghvi: Yes, the graffiti was a little racy, but it was different, it was vibrant, it was alive. The energy was just so tangible.

Katie Geminder (project manager for early Facebook): I liked it, but it was really intense. There was certain imagery in there that was very sexually charged, which I didn’t really care about but that could be considered a little bit hostile, and I think we took care of some of the more provocative ones.

Ezra Callahan: I don’t think it was David Choe, I think it was Sean’s girlfriend who painted this explicit, intimate lesbian scene in the woman’s restroom of two completely naked women intertwined and cuddling with each other—not graphic, but certainly far more suggestive than what one would normally see in a women’s bathroom in an office. That one only actually lasted a few weeks.

Max Kelly (Facebook’s first cyber-security officer): There was a four-inch by four-inch drawing of someone getting fucked. One of the customer service people complained that it was “sexual in nature,” which, given what they were seeing every day, I’m not sure why they would complain about this. But I ended up going to a local store and buying a gold paint pen and defacing the graffiti—just a random design— so it didn’t show someone getting fucked.

Jeff Rothschild (investor turned Facebook employee): It was wild, but I thought that it was pretty cool. It looked a lot more like a college dorm or fraternity than it did a company.

Katie Geminder: There were blankets shoved in the corner and video games everywhere, and Nerf toys and Legos, and it was kind of a mess.

Jeff Rothschild: There’s a PlayStation. There’s a couple of old couches. It was clear people were sleeping there.

Karel Baloun (one of the earliest Facebook programmers): I’d probably stay there two or three nights a week. I won an award for “most likely to be found under your desk” at one of the employee gatherings.

Jeff Rothschild: They had a bar, a whole shelf with liquor, and after a long day people might have a drink.

Ezra Callahan: There’s a lot of drinking in the office. There would be mornings when I would walk in and hear beer cans move as I opened the door, and the office smells of stale beer and is just trashed.

Ruchi Sanghvi: They had a keg. There was some camera technology built on top of the keg. It basically detected presence and posted about who was present at the keg—so it would take your picture when you were at the keg, and post some sort of thing saying “so-and-so is at the keg.” The keg is patented.

Ezra Callahan: When we first moved in, the office door had this lock we couldn’t figure out, but the door would automatically unlock at 9 am every morning. I was the guy that had to get to the office by 9 to make sure nobody walked in and just stole everything, because no one else was going to get there before noon. All the Facebook guys are basically nocturnal.

Katie Geminder: These kids would come in—and I mean kids, literally they were kids—they’d come into work at 11 or 12.

Ruchi Sanghvi: Sometimes I would walk to work in my pajamas and that would be totally fine. It felt like an extension of college; all of us were going through the same life experiences at the same time. Work was fantastic. It was so interesting. It didn’t feel like work. It felt like we were having fun all the time.

Ezra Callahan: You’re hanging out. You’re drinking with your coworkers. People start dating within the office …


Ruchi Sanghvi: We found our significant others while we were at Facebook. All of us eventually got married. Now we’re in this phase where we’re having children.

Katie Geminder: If you look at the adults that worked at Facebook during those first few years—like, anyone over the age of 30 that was married—and you do a survey, I tell you that probably 75 percent of them are divorced.

Max Kelly: So, lunch would happen. The caterer we had was mentally unbalanced and you never knew what the fuck was going to show up in the food. There were worms in the fish one time. It was all terrible. Usually, I would work until about 3 in the afternoon and then I’d do a circuit through the office to try and figure out what the fuck was going to happen that night. Who was going to launch what? Who was ready? What rumors were going on? What was happening?

Steve Perlman (Silicon Valley veteran who started in the Atari era): We shared a break room with Facebook. We were building hardware: a facial capture technology. The Facebook guys were doing some HTML thing. They would come in late in the morning. They’d have a catered lunch. Then they leave usually by mid-afternoon. I’m like, man, that is the life! I need a startup like that. You know? And the only thing any of us could think about Facebook was: Really nice people but never going to go anywhere.

Max Kelly: Around 4 I’d have a meeting with my team, saying “here’s how we’re going to get fucked tonight.” And then we’d go to the bar. Between like 5 and 8-ish people would break off and go to different bars up and down University Avenue, have dinner, whatever.

Ruchi Sanghvi: And we would all sit together and have these intellectual conversations: “Hypothetically, if this network was a graph, how would you weight the relationship between two people? How would you weight the relationship between a person and a photo? What does that look like? What would this network eventually look like? What could we do with this network if we actually had it?”

Sean Parker: The “social graph” is a math concept from graph theory, but it was a way of trying to explain to people who were kind of academic and mathematically inclined that what we were building was not a product so much as it was a network composed of nodes with a lot of information flowing between those nodes. That’s graph theory. Therefore we’re building a social graph. It was never meant to be talked about publicly. It was a way of articulating to somebody with a math background what we were building.

Ruchi Sanghvi: In retrospect, I can’t believe we had those conversations back then. It seems like such a mature thing to be doing. We would sit around and have these conversations and they weren’t restricted to certain members of the team; they weren’t tied to any definite outcome. It was purely intellectual and was open to everyone.

Max Kelly: People were still drinking the whole time, like all night, but starting around 9, it really starts solidifying: “What are we going to release tonight? Who’s ready to go? Who’s not ready to go?” By about 11-ish we’d know what we were going to do that night.

Katie Geminder: There was an absence of process that was mind-blowing. There would be engineers working stealthily on something that they were passionate about. And then they’d ship it in the middle of the night. No testing—they would just ship it.

Ezra Callahan: Most websites have these very robust testing platforms so that they can test changes. That’s not how we did it.

Ruchi Sanghvi: With the push of a button you could push out code to the live site, because we truly believed in this philosophy of “move fast and break things.” So you shouldn’t have to wait to do it once a week, and you shouldn’t have to wait to do it once a day. If your code was ready you should be able to push it out live to users. And that was obviously a nightmare.

Katie Geminder: Can our servers stand up to something? Or security: How about testing a feature for security holes? It really was just shove it out there and see what happens.

Jeff Rothschild: That’s the hacker mentality: You just get it done. And it worked great when you had 10 people. By the time we got to 20, or 30, or 40, I was spending a lot of time trying to keep the site up. And so we had to develop some level of discipline.

Ruchi Sanghvi: So then we would only push out code in the middle of the night, and that’s because if we broke things it wouldn’t impact that many people. But it was terrible because we were up until like 3 or 4 am every night, because the act of pushing just took everybody who had committed any code to be present in case anything broke.

Max Kelly: Around 1 am, we’d know either we’re fucked or we’re good. If we were good, everyone would be like “whoopee” and might be able to sleep for a little while. If we were fucked then we were like, “OK, now we’ve got to try and claw this thing back or fix it.”

Katie Geminder: 2 am: That was when shit happened.

Ruchi Sanghvi: Then another push, and this would just go on and on and on and on and on until like 3 or 4 or 5 am in the night.

Max Kelly: If 4 am rolled around and we couldn’t fix it, I’d be like, “We’re going to try and revert it.” Which meant basically my team would be up till 6 am So, go to bed somewhere between 4 and 6, and then repeat every day for like nine months. It was crazy.

Jeff Rothschild: It was seven days a week. I was on all the time. I would drink a large glass of water before I went to sleep to assure that I’d wake up in two hours so I could go check everything and make sure that we hadn’t broken it in the meantime. It was all day, all night.

Katie Geminder: That was very challenging for someone who was trying to actually live an adult life with, like, a husband. There was definitely a feeling that because you were older and married and had a life outside of work that you weren’t committed.

Mark Zuckerberg: Why are most chess masters under 30? Young people just have simpler lives. We may not own a car. We may not have family … I only own a mattress.

Kate Geminder: Imagine being over 30 and hearing your boss say that!

Mark Zuckerberg: Young people are just smarter.

Ruchi Sanghvi: We were so young back then. We definitely had tons of energy and we could do it, but we weren’t necessarily the most efficient team by any means whatsoever. It was definitely frustrating for senior leadership, because a lot of the conversations happened at night when they weren’t around, and then the next morning they would come in to all of these changes that happened at night. But it was fun when we did it.


Ezra Callahan: For the first few hundred employees, almost all of them were already friends with someone working at the company, both within the engineering circle and also the user support people. It’s a lot of recent grads. When we move into the office was when the dorm room culture starts to really stick out and also starts to break a little bit. It has a dorm room feeling, but it’s not completely dominated by college kids. The adults are coming in.

Jeff Rothschild: I joined in May 2005. On the sidewalk outside the office was the menu board from a pizza parlor. It was a caricature of a chef with a blackboard below it, and the blackboard had a list of jobs. This was the recruiting effort.

Sean Parker: At the time there was a giant sucking sound in the universe, and it was called Google. All the great engineers were going to Google.

Kate Losse (early customer service rep): I don’t think I could have stood working at Google. To me Facebook seemed much cooler than Google, not because Facebook was necessarily like the coolest. It’s just that Google at that point already seemed nerdy in an uninteresting way, whereas like Facebook had a lot of people who didn’t actually want to come off as nerds. Facebook was a social network, so it has to have some social components that are like really normal American social activities—like beer pong.

Kate Geminder: There was a house down the street from the office where five or six of the engineers lived that was one ongoing beer pong party. It was like a boys’ club—although it wasn’t just boys.

Terry Winograd (noted Stanford computer-science professor): The way I would put it is that Facebook is more of an undergraduate culture and Google is more of a graduate student culture.

Jeff Rothschild: Before I walked in the door at Facebook, I thought these guys had created a dating site. It took me probably a week or two before I really understood what it was about. Mark, he used to tell us that we are not a social network. He would insist: “This is not a social network. We’re a social utility for people you actually know.”

MySpace was about building an online community among people who had similar interests. We might look the same because at some level it has the same shape, but what it accomplishes for the individual is solving a different problem. We were trying to improve the efficiency of communication among friends.

Max Kelly: Mark sat down with me and described to me what he saw Facebook being. He said, “It’s about connecting people and building a system where everyone who makes a connection to your life that has any value is preserved for as long as you want it to be preserved. And it doesn’t matter where you are, or who you’re with, or how your life changes: because you’re always in connection with the people that matter the most to you, and you’re always able to share with them.”

I heard that, and I thought, I want to be a part of this. I want to make this happen. Back in the ’90s all of us were utopian about the internet. This was almost a harkening back to the beautiful internet where everyone would be connected and everyone could share and there was no friction to doing that. Facebook sounded to me like the same thing. Mark was too young to know that time, but I think he intrinsically understood what the internet was supposed to be in the ’80s and in the ’90s. And here I was hearing the same story again and conceivably having the ability to help pull it off. That was very attractive.

Aaron Sittig: So in the summer of 2005 Mark sat us all down and he said, “We’re going to do five things this summer.” He said, “We’re redesigning the site. We’re doing a thing called News Feed, which is going to tell you everything your friends are doing on the site. We’re going to launch Photos, we’re going to redo Parties and turn it into Events, and we’re going to do a local-businesses product.” And we got one of those things done, we redesigned the site. Photos was my next project.

Ezra Callahan: The product at Facebook at the time is dead simple: profiles. There is no News Feed, there was a very weak messaging system. They had a very rudimentary events product you could use to organize parties. And almost no other functions to speak of. There’s no photos on the website, other than your profile photo. There’s nothing that tells you when anything on the site has changed. You find out somebody changed their profile picture by obsessively going to their profile and noticing, Oh, the picture changed.

Aaron Sittig: We had some people that were changing their profile picture once an hour, just as a way of sharing photos of themselves.

Scott Marlette: At the time photos was the number-one most requested feature. So, Aaron and I go into a room and whiteboard up some wireframes for some pages and decide on what data needs to get stored. In a month we had a nearly fully functioning prototype internally to play with. It was very simple. It was: You post a photo, it goes in an album, you have a set of albums, and then you can tag people in the photos.

Jeff Rothschild: Aaron had the insight to do tagging, which was a tremendously valuable insight. It was really a game changer.

Aaron Sittig: We thought the key feature is going to be saying who is in the photo. We weren’t sure if this was really going to be that successful; we just felt good about it.

Facebook Photos went live in October 2005. There were about 5 million users, virtually all of them college students.

Scott Marlette: We launched it at Harvard and Stanford first, because that’s where our friends were.

Image may contain Randi Zuckerberg Mark Zuckerberg Pants Clothing Apparel Human Person Jeans Denim and Footwear
Zuckerberg started coding while growing up in Dobbs Ferry, New York, where he was raised by his parents, Edward and Karen along with his sisters Randi, left, and Arielle, right.

SHERRY TESLER/New York Times/Redux

Aaron Sittig: We had built this program that would fill up a TV screen and show us everything that was being uploaded to the service, and then we flicked it on and waited for photos to start coming in. And the first photos that came in were Windows wallpapers: Someone had just uploaded all their wallpaper files from their Windows directory, which was a big disappointment, like, Oh no, maybe people don’t get it? Maybe this is not going to work?

But the next photos were of a guy hanging out with his friends, and then the next photos after that were a bunch of girls in different arrangements: three girls together, these four girls together, two of them together, just photos of them hanging out at parties, and then it just didn’t stop.

Max Kelly: You were at every wedding, you were at every bar mitzvah, you were seeing all this awesome stuff, and then there’s a dick. So, it was kind of awesome and shitty at the same time.

Aaron Sittig: Within the first day someone had uploaded and tagged themselves in 700 photos, and it just sort of took off from there.

Jeff Rothschild: Inside of three months, we were delivering more photos than any other website on the internet. Now you have to ask yourself: Why? And the answer was tagging. There isn’t anyone who could get an email message that said, “Someone has uploaded a photo of you to the internet”—and not go take a look. It’s just human nature.

Ezra Callahan: The single greatest growth mechanism ever was photo tagging. It shaped all of the rest of the product decisions that got made. It was the first time that there was a real fundamental change to how people used Facebook, the pivotal moment when the mindset of Facebook changes and the idea for News Feed starts to germinate and there is now a reason to see how this expands beyond college.


Jeff Rothschild: The News Feed project was started in the fall of 2005 and delivered in the fall of 2006.

Dustin Moskovitz: News Feed is the concept of viral distribution, incarnate.

Ezra Callahan: News Feed is what Facebook fundamentally is today.

Sean Parker: Originally it was called “What’s New,” and it was just a feed of all of the things that were happening in the network—really just a collection of status updates and profile changes that were occurring.

Katie Geminder: It was an aggregation, a collection of all those stories, with some logic built into it because we couldn’t show you everything that was going on. There were sort of two streams: things you were doing and things the rest of your network was doing.

Ezra Callahan: So News Feed is the first time where now your homepage, rather than being static and boring and useless, is now going to be this constantly updating “newspaper,” so to speak, of stuff happening on Facebook around you that we think you’ll care about.

Ruchi Sanghvi: And it was a fascinating idea, because normally when you think of newspapers, they have this editorialized content where they decide what they want to say, what they want to print, and they do it the previous night, and then they send these papers out to thousands if not hundreds of thousands of people. But in the case of Facebook, we were building 10 million different newspapers, because each person had a personalized version of it.

Ezra Callahan: It really was the first monumental product-engineering feat. The amount of data it had to deal with: all these changes and how to propagate that on an individual level.

Ruchi Sanghvi: We were working on it off and on for a year and a half.

Ezra Callahan: … and then the intelligence side of all this stuff: How do we surface the things that you’ll care about most? These are very hard problems engineering-wise.

Ruchi Sanghvi: Without realizing it, we ended up building one of the largest distributed systems in software at that point in time. It was pretty cutting-edge.

Ezra Callahan: We have it in-house and we play with it for weeks and weeks—which is really unusual.

Katie Geminder: So I remember being like, “OK, you guys, we have to do some level of user research,” and I finally convinced Zuck that we should bring users into a lab and sit behind the glass and watch our users using the product. And it took so much effort for me to get Dustin and Zuck and other people to go and actually watch this. They thought this was a waste of time. They were like, “No, our users are stupid.” Literally those words came out of somebody’s mouth.

Ezra Callahan: It’s the very first time we actually bring in outside people to test something for us, and their reaction, their initial reaction is clear. People are just like, “Holy shit, like, I shouldn’t be seeing this, like this doesn’t feel right,” because immediately you see this person changed their profile picture, this person did this, this person did that, and your first instinct is Oh my God! Everybody can see this about me! Everyone knows everything I’m doing on Facebook.

Max Kelly: But News Feed made perfect sense to all of us, internally. We all loved it.

Ezra Callahan: So in-house we have this idea that this isn’t going to go right: This is too jarring a change, it needs to be rolled out slowly, we need to warm people up to this—and Mark is just firmly committed. “We’re just going to do this. We’re just going to launch. It’s like ripping off a Band-Aid.”

Ruchi Sanghvi: We pushed the product in the dead of the night, we were really excited, we were celebrating, and then the next morning we woke up to all this pushback. I had written this blog post, “Facebook Gets a Facelift.”

Katie Geminder: We wrote a little letter, and at the bottom of it we put a button. And the button said, “Awesome!” Not like, “OK.” It was, “Awesome!” That’s just rude. I wish I had a screenshot of that. Oh man! And that was it. You landed on Facebook and you got the feature. We gave you no choice and not a great explanation and it scared people.

Jeff Rothschild: People were rattled because it just seemed like it was exposing information that hadn’t been visible before. In fact, that wasn’t the case. Everything shown in News Feed was something people put on the site that would have been visible to everyone if they had gone and visited that profile.

Ruchi Sanghvi: Users were revolting. They were threatening to boycott the product. They felt that they had been violated, and that their privacy had been violated. There were students organizing petitions. People had lined up outside the office. We hired a security guard.

Katie Geminder: There were camera crews outside. There were protests: “Bring back the old Facebook!” Everyone hated it.

Jeff Rothschild: There was such a violent reaction to it. We had people marching on the office. A Facebook group was organized protesting News Feed and inside of two days, a million people joined.

Ruchi Sanghvi: There was another group that was about how “Ruchi is the devil,” because I had written that blog post.

Max Kelly: The user base fought it every step of the way and would pound us, pound Customer Service, and say, “This is fucked up! This is terrible!”

Ezra Callahan: We’re getting emails from relatives and friends. They’re like, “What did you do? This is terrible! Change it back.”

Katie Geminder: We were sitting in the office and the protests were going on outside and it was, “Do we roll it back? Do we roll it back!?”

Ruchi Sanghvi: Now under usual circumstances if about 10 percent of your user base starts to boycott the product, you would shut it down. But we saw a very unusual pattern emerge.

Max Kelly: Even the same people who were telling us that this is terrible, we’d look at their user stream and be like: You’re fucking using it constantly! What are you talking about?

Ruchi Sanghvi: Despite the fact that there were these revolts and these petitions and people were lined up outside the office, they were digging the product. They were actually using it, and they were using it twice as much as before News Feed.

Ezra Callahan: It was just an emotionally devastating few days for everyone at the company. Especially for the set of people who had been waving their arms saying, “Don’t do this! Don’t do this!” because they feel like, “This is exactly what we told you was going to happen!”

Ruchi Sanghvi: Mark was on his very first press tour on the East Coast, and the rest of us were in the Palo Alto office dealing with this and looking at these logs and seeing the engagement and trying to communicate that “It’s actually working!,” and to just try a few things before we chose to shut it down.

Katie Geminder: We had to push some privacy features right away to quell the storm.

Ruchi Sanghvi: We asked everyone to give us 24 hours.

Katie Geminder: We built this janky privacy “audio mixer” with these little slider bars where you could turn things on and off. It was beautifully designed—it looked gorgeous—but it was irrelevant.

Jeff Rothschild: I don’t think anyone ever used it.

Ezra Callahan: But it gets added and eventually the immediate reaction subsides and people realize that the News Feed is exactly what they wanted, this feature is exactly right, this just made Facebook a thousand times more useful.

Katie Geminder: Like Photos, News Feed was just—boom!—a major change in the product and one of those sea changes that just leveled it up.

Jeff Rothschild: Our usage just skyrocketed on the launch of News Feed. About the same time we also opened the site up to people who didn’t have a .edu address.

Ezra Callahan: Once it opens to the public, it’s becoming clear that Facebook is on its way to becoming the directory of all the people in the world.

Jeff Rothschild: Those two things together—that was the inflection point where Facebook became a massively used product. Prior to that we were a niche product for high-school and college students.

Mark Zuckerberg: Domination!

Ruchi Sanghvi: “Domination” was a big mantra of Facebook back in the day.

Max Kelly: I remember company meetings where we were chanting “dominate.”

Ezra Callahan: We had company parties all the time, and for a period in 2005, all Mark’s toasts at the company parties would end with “Domination!”

Mark Zuckerberg: Domination!!


Max Kelly: I especially remember the meeting where we tore up the Yahoo offer.

Mark Pincus: In 2006 Yahoo offered Facebook $1.2 billion ,I think it was, and it seemed like a breathtaking offer at the time, and it was difficult to imagine them not taking it. Everyone had seen Napster flame out, Friendster flame out, MySpace flame out, so to be a company with no revenues, and a credible company offers a billion-two, and to say no to that? You have to have a lot of respect to founders that say no to these offers.

Dustin Moskovitz: I was sure the product would suffer in a big way if Yahoo bought us. And Sean was telling me that 90 percent of all mergers end in failure.

Mark Pincus: Luckily, for Zuck, and history, Yahoo’s stock went down, and they wouldn’t change the offer. They said that the offer is a fixed number of shares, and so the offer dropped to like $800 million, and I think probably emotionally Zuck didn’t want to do it and it gave him a clear out. If Yahoo had said, “No problem, we’ll back that up with cash or stock to make it $1.2 billion,” it might have been a lot harder for Zuck to say no, and maybe Facebook would be a little division of Yahoo today.

Max Kelly: We literally tore the Yahoo offer up and stomped on it as a company! We were like, “Fuck those guys, we are going to own them!” That was some malice-ass bullshit.

Mark Zuckerberg: Domination!!!

Kate Losse: He had kind of an ironic way of saying it. It wasn’t a totally flat, scary “domination.” It was funny. It’s only when you think about a much bigger scale of things that you’re like, Hmmmm: Are people aware that their interactions are being architected by a group of people who have a certain set of ideas about how the world works and what’s good?

Ezra Callahan: “How much was the direction of the internet influenced by the perspective of 19-, 20-, 21-year-old well-off white boys?” That’s a real question that sociologists will be studying forever.

Kate Losse: I don’t think most people really think about the impact that the values of a few people now have on everyone.

Steven Johnson: I think there’s legitimate debate about this. Facebook has certainly contributed to some echo chamber problems and political polarization problems, but I spent a lot of time arguing that the internet is less responsible for that than people think.

Mark Pincus: Maybe I’m too close to it all, but I think that when you pull the camera back, none of us really matter that much. I think the internet is following a path to where the internet wants to go. We’re all trying to figure out what consumers want, and if what people want is this massive echo chamber and this vain world of likes, someone is going to give it to them, and they’re going to be the one who wins, and the ones who don’t, won’t.

Steve Jobs: I don’t see anybody other than Facebook out there—they’re dominating.

Mark Pincus: So I don’t exactly think that a bunch of college boys shaped the internet. I just think they got there first.

Mark Zuckerberg: Domination!!!!

Ezra Callahan: So, it’s not until we have a full-time general council onboard who finally says, “Mark, for the love of God: You cannot use the word domination anymore,” that he stops.

Sean Parker: Once you are dominant, then suddenly it becomes an anticompetitive term.

Steven Johnson: It took the internet 30 years to get to 1 billion users. It took Facebook 10 years. The crucial thing about Facebook is that it’s not a service or an app—it’s a fundamental platform, on the same scale as the internet itself.

Steve Jobs: I admire Mark Zuckerberg. I only know him a little bit, but I admire him for not selling out—for wanting to make a company. I admire that a lot.


Author’s Note:

The written language is very different from the spoken word. And so, I’ve taken the liberty of correcting slips of the tongue, dividing streams of consciousness into sentences, ordering sentences into paragraphs, and eliminating redundancies. The point is not to polish and make what was originally spoken read as if it were written, but rather to make the verbatim transcripts of what was actually said readable in the first place.

That said, I’ve been careful to retain the rhythms of speech and quirks of language of everyone interviewed for this article intact, so that what you hear in your mind’s ear as you read is true in every sense of the word: true to life, true to the transcript, and true to the speakers‘ intended meaning.

The vast majority of the words found in this article originated in interviews that were given to me especially for this article. Where that wasn’t possible I tried, with some success, to unearth previously unpublished interviews and quote from them. And in a few cases I’ve resorted to quoting from interviews that have been published before.

Mark Zuckerberg’s quotes were uttered at a guest lecture he gave to Harvard’s Introduction to Computer Science class in 2005 and in an interview he gave to the Harvard Crimson in February that same year. Dustin Moskovitz’s quotes were taken from a keynote address at the Alliance of Youth Movements Summit in December of 2008 and from David Kirkpatrick’s authoritative history, The Facebook Effect. David Choe’s comments were made on The Howard Stern Show in March 2016. Steve Jobs made his remarks to his biographer, Walter Isaacson. The interview was aired on 60 Minutes soon after Jobs died in 2011.


This story is excerpted from Valley of Genius, by Adam Fisher.

one of the key things that set SIGNAL MESSENGER apart—that it collects almost no information about its users, appears to be changing.

https://www.vice.com/en_us/article/pkyzek/signal-new-pin-feature-worries-cybersecurity-experts

Signal’s New PIN Feature Worries Cybersecurity Experts

The popular encrypted app is now going to store your contacts in the cloud. Experts are worried this compromises users’ privacy.

by Lorenzo Franceschi-Bicchierai
July 10, 2020, 2:33pm

Ever since NSA leaker Edward Snowden said “use Signal, use Tor,” the end-to-end encrypted chat app has been a favorite of people—including Motherboard—who care about privacy and need a chat and calling app that is hard to spy on.

One of the reasons security experts recommended Signal is because the app’s developers collected—and thus retained—almost no information about its users. This means that, if subpoenaed by law enforcement, Signal would have essentially nothing to turn over. Signal demonstrated this in 2016, when it was subpoenaed by a court in Virginia. „We’ve designed the Signal service to minimize the data we retain about Signal users, so the only information we can produce in response to a request like this is the date and time a user registered with Signal and the last date of a user’s connectivity to the Signal service,“ Signal wrote at the time.

But a newly added feature that allows users to recover certain data, such as contacts, profile information, settings, and blocked users, has led some high-profile security experts to criticize the app’s developers and threaten to stop using it. Signal will store that data on servers the company owns, protected by a PIN that the app has initially been asking users to add, and then forced them to.

The purpose of using a PIN is, in the near future, to allow Signal users to be identified by a username, as opposed to their phone number, as Signal founder Moxie Marlinspike explained on Twitter (as we’ve written before, this is a laudable goal; tying Signal to a phone number has its own privacy and security implications).

”Make the networks dumb and the clients smart.”
But this also means that unlike in the past, Signal now retains certain user data, something that many cybersecurity and cryptography experts see as too dangerous.

Matthew Green, a cryptographer and computer science professor at Johns Hopkins University, said that this was “the wrong decision,” and that forcing users to create a PIN and use this feature would force him to stop using the app.

“The problem with that is that most people pick weak PIN codes. To harden this and make the system more secure, Signal has a system that uses Intel SGX enclaves on their server,”Green said in an email to Motherboard, referring to a technology made by Intel to encrypt and isolate certain data on a cloud server. “SGX seems like a good choice, but it really can’t stand up against a serious attacker. This means anyone with the right resources (at least as good as, say, Daniel Genkin’s group and U. Mich) could potentially compromise those servers and get most of this information.”

“I don’t care that much about my contact lists, honestly. But I also don’t like the idea that I’m going to be forced into uploading them to a server, when the whole reason I use Signal is because it’s designed not to do things like this. Also, I’m scared that in the future, Moxie will design a feature to upload message content, and that won’t be ‚opt in‘ either,“ Green said.

Have you ever tried to hack Signal or look for vulnerabilities in the app? We’d love to hear from you. Using a non-work phone or computer, you can contact Lorenzo Franceschi-Bicchierai securely on Signal at +1 917 257 1382, OTR chat at lorenzofb@jabber.ccc.de, or email lorenzofb@vice.com
The Grugq, a well-known cybersecurity expert, agreed that this approach isn’t secure, because SGX enclaves are “a sort of wet paper bag for clustering sensitive info.”

Technical issues aside, it’s the philosophy behind it that bothers people like Green and The Grugq. Before this new feature, Signal claimed—and had proved—to provide a communication app that was designed not to store almost any information about its users.

„Notably, things we don’t have stored include anything about a user’s contacts (such as the contacts themselves, a hash of the contacts, any other derivative contact information), anything about a user’s groups (such as how many groups a user is in, which groups a user is in, the membership lists of a user’s groups), or any records of who a user has been communicating with,“ Signal wrote in 2016.

That, according to critics, has now changed.

“They should have a dumb network that knows nothing because it can’t be compromised then,” The Grugq told Motherboard. “[Having contacts] is a lot. It isn’t messages, sure. But I don’t like it. I don’t want them to have anything. Make the networks dumb and the clients smart.”

Marlinspike defended the decision to enable PINs and give users a way to migrate to a new device and keep certain data, and will increase the security of users’ metadata, “new features Signal users have been asking for.”

“The purpose of PINs is to enable upcoming features like communicating without sharing your phone number. When that is released, your Signal contacts won’t be able to live in the address book on your phone anymore, since they may not have phone numbers associated with them,” Marlinspike told Motherboard. “For most users, this also increases the security of their metadata. Most people’s address book is syncing with Google or Apple, so this change will prevent Google and Apple from having access to your Signal contacts.”

Following Green’s and others critiques, Marlinspike said on Twitter, and then confirmed with us, that Signal will add the ability to disable PINs “for some advanced users.’ Marlinspike warned that doing that “would mean that every time you re-install Signal you will lose all your Signal contacts.”

In recent weeks, Signal has introduced more features that make it more user friendly to people who may not have extremely paranoid threat models. For example, it’s now possible to migrate all Signal data, including message history, from one phone to another, using a feature that does not rely on cloud servers and is also encrypted, according to Signal. This is a different feature than the one that relies on PINs, but both of these are likely aimed at people who may be reluctant to use Signal, and prefer other apps such as WhatsApp.

The changes Signal has made show how there can be a tension between messenger usability and feature set and security. It’s too early to say whether you should stop using the messenger. For most users‘ threat models, it’s still one of the best options. But one of the key things that set Signal apart—that it collects almost no information about its users, appears to be changing.

Jeff Bezos’s vision comes true, here’s how you’ll shop in 2020: The vast bulk of store-bought goods – food staples, paper products, cleaning supplies, and the like – you will order electronically. Some physical storefronts will survive, but they’ll have to offer at least one of two things: entertainment value or immediate convenience.

If Jeff Bezos’s vision comes true, here’s how you’ll shop in 2020:

The vast bulk of store-bought goods – food staples, paper products, cleaning supplies, and the like – you will order electronically. Some physical storefronts will survive, but they’ll have to offer at least one of two things: entertainment value or immediate convenience.

 

Source: https://www.wired.com/1999/03/bezos-3/

 

The Inner Bezos

Amazon.com’s founder figured out how to sell books on the Web, and now he wants to sell you everything else. Simple, right? So why is he so far ahead of the pack?

The counter clerks at Amelia Island’s Flash Foods convenience store never saw it coming. Around Christmas 1997, a rented white Chevrolet Suburban pulled into the parking lot and disgorged three members of a commando squad on a mission. The team was disguised in the tourist garb common to the Florida resort island, and the only hint that it might be a military operation was the way the squad members whispered code words like „Whiskey, Bravo, Tango“ into their Motorola walkie-talkies. While the driver sat in the car and timed the exercise, a second soldier stood guard at the door. Another quickly grabbed a spot in line for the cashier. The fourth rushed toward the dairy case in quest of the squad’s ultimate goal: a quart of milk.

Within two minutes, the purchase was completed and the car was roaring back onto the streets.

One of these odd customers bore the code name Ffej Sozeb. If the clerks had heard this nom de guerre, they still might not have figured out that they’d been hit by a pioneering Internet entrepreneur who one year later would be worth north of $9 billion. The slightly built, 5′ 8″, brown-eyed faux Navy SEAL with thinning hair was, in reality, Jeff Bezos, founder, chair, and CEO of Amazon.com. His comrades on this mission of breakfast necessity were members of his immediate family: father Mike, brother Mark. Behind the wheel: his mother Jackie.

That Jeff Bezos is almost innately programmed to turn something as mundane as a milk run into a fantasy game should serve him well during the next few years, as he attempts to drive Amazon.com beyond its phenomenal, if so far unprofitable, early success as a book, music, and video seller. The 35-year-old Bezos must make Amazon.com, to this point little more than a convenient place to shop for a limited range of goods, the kind of environment that lures men, women, and children in from vast distances, then seduces them into acts of acquisition. As Internet commerce matures from the exotic to the everyday, as it becomes less about exploiting a position on the frontiers of technology and more about mastering the art of sales and merchandising, the challenges Bezos faces have become exactly those that confronted the great retailers who invented the mass market for consumer goods in the United States a century ago.

To reach historical heights – to become as important to 21st-century culture as Richard W. Sears, Macy’s Isidor Straus, and John Wanamaker were to the culture of the late 19th and early 20th centuries, when they fundamentally changed not only the experience of shopping but also the essential nature of American life – Bezos will need to deliver on the second promise in the oft-repeated goal he sets for his staff: „to build a valuable and lasting company.“

„It’s a question,“ says Stanley Marcus, chair emeritus of Neiman Marcus, with the simplicity of an expert in long distance seduction, „of how you get the merchandise you’re infatuated with into the hands of the people you like.“

The goal is within reach. Bezos’s vision has always been about taking advantage of a new platform and new tools to change shopping itself. Long before he launched the company, he had dreams of making Amazon.com „broader than books and music“ – a point reinforced this past Christmas season by his move into gift sales and by his December move to offer Amazon.com customers goods from other retailers. Analysts who had projected $190 million in revenue for the company during the fourth-quarter holiday period were flabbergasted when Amazon.com registered sales of approximately $250 million, news that helped send the company’s stock as high as $350 per share by early January (shortly before a three-for-one stock split) – just shy of the $400 per share CIBC Oppenheimer foresees by 2002.

If Jeff Bezos’s vision comes true, here’s how you’ll shop in 2020:

The vast bulk of store-bought goods – food staples, paper products, cleaning supplies, and the like – you will order electronically. Some physical storefronts will survive, but they’ll have to offer at least one of two things: entertainment value or immediate convenience.

Successful „shoptainers“ will be like the Gap, with its environment of music and youth culture, or Nordstrom, with its tinkling pianist and distinctive face-to-face service. They may be even more amplified, with personal service and showmanship turning every shopping trip into a Super Bowl-style destination event. „That experience is what you get when you go to movie theaters, and why you don’t always rent movies, right?“ Bezos notes.

As Internet commerce matures, Bezos faces the same challenges that confronted the great retailers who invented the mass market for consumer goods a century ago.

Convenience specialists will also have contemporary antecedents – the 7-Eleven chain, say, or Walgreen’s, where you can get a quart of milk or NyQuil geltabs at 10 p.m. – but these, too, will evolve: open 24/7, for example, so that you can take care of the last mile of delivery yourself at any time. The consultants at the Global Business Network even sketch out a scenario where, within a generation or two, vans carrying inventories of more popular necessities, such as toilet paper or diapers, may be constantly circling neighborhoods, ready to drop off an order within moments of receiving it.

The United States – whose culture has been defined by consumption since at least the 1840s, when the British consul in Boston was appalled to see servant girls „strongly infected with the national bad taste for being overdressed“ – will be utterly transformed, Bezos believes, by this bifurcation of shopping and consumer desire into shoptainment and just-in-time components. The urban downtowns, which just a few years ago planners and politicians gave up for dead, will continue to renew and thrive, thanks to the inherent entertainment value in the great retail districts like Times Square or Pine Street in Seattle. Yet within a generation’s time the kitschy and cluttered landscape of today’s suburbia will disappear, because the new retail environment won’t support „the sort of bad stores that people go to because they don’t have any alternative.“

„Strip malls,“ Bezos predicts, „are history.“

Bezos reserves an evangelical passion for the changes he expects in the most manipulative aspects of today’s consumer culture.

„What consumerism really is, at its worst,“ he adds, „is getting people to buy things that don’t actually improve their lives. The one thing that offends me the most is when I walk by a bank and see ads trying to convince people to take out second mortgages on their home so they can go on vacation. That’s approaching evil.“

When Bezos describes his primary goals for the Amazon.com interface, he becomes a whistle-stop campaigner for a new politics of consumerism. „We want to turn visitors into customers, and we want to make the experience as welcoming as possible,“ he says. He insists that the lures and aids Amazon.com provides for its online shoppers – the one-click ordering system that stores credit card and shipping information; the variety of helpful suggestions and information that seem configured to exploit a customer’s most impulsive tendencies – are far removed from the world’s entrenched consumerist come-ons.

The new merchant, he suggests, volubly and unstoppably, is a community builder, a facilitator, a networker. He cites Amazon.com’s willingness to post negative book reviews as an example of harnessing the antimanipulative truths the Internet allows consumers to root out. The Net’s famously decentralized, open flow of information, he goes on, inevitably deflates the most extravagant hype of traditional retailing. And that shifts the balance of power – which since the origins of department stores and mass merchandising has favored the merchant – back into the hands of consumers. Amazon.com’s scheme is, in effect, to form a strategic alliance with all that newly unleashed power.

„This doesn’t mean that you can’t build a valuable, lasting enterprise in the online environment,“ Bezos says, „but it does mean you better recognize the environment you’re in, and not try to build an airplane to fly underwater. Ah-ha-ha-ha-ha-ha!“ The laugh, which frequently interrupts conversation, comes out as a long, extended bray, startling the uninitiated. The laugh has become famous, too, yet it only underscores Bezos’s ardor. Almost since the beginning of Amazon.com’s remarkable rise, Bezos has been characterized as yet another fuzzy-cheeked geek who lucked into an IPO, an uninspired financial technician with a good but not very original idea about distributing goods over the Internet, who would soon be, in the ill-fated phrase of Forrester Research president George Colony, „Amazon.toast.“ It’s a characterization Bezos’s competitors have found costly. They may also have missed that, in focusing on the consumer in a way few Web entrepreneurs can match, he is actually trying to transform the world.

„Jeff always wanted to make a lot of money,“ says his high school girlfriend, Ursula „Uschi“ Werner. She herself was an overachiever – valedictorian of the Miami Palmetto Senior High School class a year ahead of Bezos, winner of a full scholarship to Duke University, and a Rhodes Scholar – but she remains awed by Bezos’s commitment. „It wasn’t about money itself. It was about what he was going to do with the money, about changing the future.“

Family is important. The Bezos family is extremely close; they actually enjoy spending the holidays together. Reflecting on the source of Jeff Bezos’s drive, his closest friends turn inevitably to the legion of family stories, all of which seem to revolve around the theme of hard work and equally hard play.

But within the well-known Bezos family story lies a remarkable story of collective strength.

Mike Bezos is not Jeff’s biological father. „I’ve never met him,“ Jeff says of the man who is. „But the reality, as far as I’m concerned, is that my Dad is my natural father. The only time I ever think about it, genuinely, is when a doctor asks me to fill out a form.“ While it’s easy enough to theorize that the circumstance of Bezos’s birth has had profound psychological repercussions, he responds to questions about it with complete equanimity – if some surprise; his family rarely discusses the matter and even close friends don’t know the truth. „It’s a fine truth to have out there,“ he says. „I’m not embarrassed by it.“

He recalls that his parents sat him down and told him when he was 10. Whatever their concerns about the possible consequences, they needn’t have worried. Jeff describes the moment as not nearly as important or memorable as learning, at around the same time, that he would need to wear glasses. „That made me cry,“ he says.

Mike Bezos (pronounced BAY-zoes) had arrived in the United States, alone, in 1962, at the age of 15. He came under the auspices of Operation Pedro Pan, an education/rescue program crafted by a south Florida Catholic priest that spirited thousands of teenagers out of Castro’s régime during the early ’60s. After learning English and graduating from high school in Delaware, where he lived in a Catholic mission with 15 other refugees, Mike Bezos moved to New Mexico to attend what was then the University of Albuquerque.

There, he met Jackie Gise, in a local bank where the two worked. In his freshman year of college – he was 18, she was 17 – they married.

Jeff was born soon after, in January 1964, and Mike Bezos legally adopted him.

With a young family – Jeff’s sister Christina and brother Mark are five and six years younger than him, respectively – Mike Bezos still managed to finish his education, then joined Exxon as a petroleum engineer. The family moved several times during Jeff’s childhood, from Albuquerque to Houston, then briefly to Pensacola, Florida.

Bezos remembers he always had the youngest parents around. But his friend Joshua Weinstein says that even during their high school years, when she was in her early 30s, Jackie Bezos commanded as much if not more authority and respect than any other mother. She says her values came from her own father, who offered another strong role model for Jeff.

Jeff spent summers working at his maternal grandfather’s ranch in Cotulla, Texas, fixing windmills, castrating cattle, laying pipes, and repairing pumps. Lawrence Preston „Pop“ Gise had held jobs that a young boy couldn’t help but find cool. Gise worked on space technology and missile defense systems at Darpa in the late 1950s; in 1964, Congress appointed him manager of the Atomic Energy Commission’s Albuquerque operations office, where he supervised 26,000 employees in the AEC’s western region, including the Sandia, Los Alamos, and Lawrence Livermore laboratories. He retired to his southwest Texas spread in 1968, and he doted on Jeff from the time his grandson was an infant. „Mr. Gise was a towering figure in Jeff’s life,“ says Weinstein.

His grandfather sparked and indulged Jeff’s fascination with educational games and toys, assisting him with the Heathkits and the other paraphernalia he constantly hauled home to the family garage. (Picture the scattered components of a robot; an open umbrella spine clad in aluminum foil for a solar cooking experiment; an ancient Hoover vacuum cleaner being transformed into a primitive hovercraft.)

Jackie Bezos’s challenge as a parent was to stay a step ahead of, or at least next to, her prodigy. „I think single-handedly we kept many Radio Shacks in business,“ she jokes. During his late grade school years, Jeff became fixated on a device called an Infinity Cube, which uses a set of motorized mirrors to allow one to stare into „infinity.“ But at $20 it was too expensive to buy, she told him. Jeff figured out that the pieces of the cube could be bought cheaply, so he did – and built it himself. „The way the world is, you know, someone could tell you to press the Button,“ he said at the time. „You have to be able to think … for yourself.“

The story of Bezos and the Infinity Cube is documented in Turning on Bright Minds: A Parent Looks at Gifted Education in Texas. Written by Julie Ray and published locally in the Houston area in 1977 – and, incidentally, not available via Amazon.com – the book follows 12-year-old Jeff (renamed Tim) through a typical day in the Vanguard program at Houston’s River Oaks Elementary School, a magnet school that was part of a voluntary integration effort in the city’s public school system. Jeff endured a 40-mile round-trip commute each day to attend. The author describes him as „friendly but serious,“ even „courtly,“ and possessed of „general intellectual excellence,“ though, according to teachers, „not particularly gifted in leadership.“

He used his brain to compensate. Jackie and Mike, concerned that Jeff wasn’t always comfortable with kids his own age, enrolled him in the high-pressure world of Texas youth football. „He barely made the weight limit, and I thought he was going to get creamed out there,“ Jackie recalls, laughing. Within two weeks, however, the coach had named him defensive captain, because Jeff was one of the few kids on the team who could remember all the plays – not only where he was supposed to be but also the assignments for the other 10 players on his squad.

He completed his personal immersion in the shared world of every American geek growing up in the ’70s and early ’80s by diving into the deep end of the sci-fi and fantasy pool. When the River Oaks school gained access to a mainframe computer in downtown Houston via a timeshare system, he and his friends spent hours on it playing a primitive Star Trek game, searching for cloaked Klingon ships in a three-by-three matrix.

By the time he reached high school in Dade County, Jeff had focused on space travel as his future. It wasn’t just that he wanted to be an astronaut, like thousands of other kids; as he told friends and acquaintances, he intended to be a space entrepreneur. „Oh, he had ideas about space promotion!“ says Bill McCreary, a Miami Palmetto science teacher. Some were drawn from real-life experiences in a high school space initiative he attended at NASA’s Huntsville, Alabama, center. But behind the young Bezos’s space-station plans was serious intent. „He said the future of mankind is not on this planet, because we might be struck by something, and we better have a spaceship out there,“ recalls Rudolf Werner, the father of Jeff’s high school girlfriend. Uschi Werner still jokes that Bezos’s real goal for Amazon.com is to amass enough of a personal fortune to build his own space station. Reminded of those concerns today, Bezos laughs but quickly turns serious. „I wouldn’t mind helping in some way,“ he says. „I do think we have all our eggs in one basket.“

Achieving his astronaut goals meant succeeding at school, and Bezos would show as a teenager that behind the easygoing façade and booming laugh was a relentless, even intimidating, work ethic, one that has become his hallmark at Amazon.com. „He was always a formidable presence,“ says Joshua Weinstein. When Bezos made clear his intention to become class valedictorian, for example, Weinstein says everyone else understood they were working for second place. Besides securing the valedictorian’s title, Bezos was also one of three members of his graduating class awarded a Silver Knight Award, a prestigious academic honor in south Florida high schools, sponsored by Knight Ridder’s Miami Herald. (Pilgrimage note: One of the few remaining talismans of Jeff Bezos’s presence at Miami Palmetto is an oak board, in a glass display case cluttered with sports memorabilia just inside the school’s front door, that holds the names of Silver Knight winners.)

Bezos got his first taste for retail during this time, spending one summer as a fry cook at McDonald’s, studying the company’s automation improvements even while he responded to the Pavlovian cues of the many and often simultaneously sounding buzzers that told him when to scramble his eggs, flip his burgers, and pull his fries out of the boiling vat. „Now, actually, the french fries raise themselves up out of the oil,“ he says, „which let me tell you is a major technological innovation! Ah-ha-ha-ha-ha-ha!“

In an attempt to avoid a second summer in the grease pit, Bezos, with Uschi Werner, embarked on his first serious entrepreneurial effort: a summer-education camp for fourth-, fifth-, and sixth-graders that the two labeled the DREAM Institute. (DREAM stood for Directed REAsoning Methods.) Six students signed up for the $600 camp; two of them were Jeff’s own brother and sister.

The program, prophetically, emphasized a mix of science and literature, the future and the past. Required reading included The Once and Future King, Stranger in a Strange Land, The Lord of the Rings, Dune, Watership Down, Black Beauty, Gulliver’s Travels, Treasure Island, and David Copperfield, along with the plays Our Town and The Matchmaker. The science curriculum ranged from fossil fuels and fission to space colonies and interstellar travel – with a dollop of television and advertising study thrown in for good measure. „Our program,“ the budding entrepreneurs wrote in a „Dear parent“ flyer generated on Jeff’s Apple II and a dot-matrix printer, „emphasizes the use of new ways of thinking in old areas.“

„When I’m 80,“ he asked himself, „am I going to regret leaving Wall Street? No. Will I regret missing the beginning of the Internet? Yes.“

Jeff and Uschi’s long distance relationship didn’t survive his matriculation at Princeton, but their entrepreneurial exploits nonetheless helped Bezos overcome his first serious intellectual disappointment. Intent on becoming a theoretical physicist and following the likes of Einstein and Hawking, he discovered that although he was one of the top 25 students in his honors physics program, he wasn’t smart enough to compete with the handful of real geniuses around him. „I looked around the room,“ Bezos recalls, „and it was clear to me that there were three people in the class who were much, much better at it than I was, and it was much, much easier for them. It was really sort of a startling insight, that there were these people whose brains were wired differently.“ The pragmatic Bezos switched his major to computer science and committed himself to starting and running his own business.

In his senior year, Bezos turned down job offers from Intel, Bell Labs, and Andersen Consulting to join a start-up called Fitel, which had run a full-page ad in The Daily Princetonian soliciting the school’s „best computer science graduates.“ The company, launched by two Columbia professors in the days when VANs and EDI were hot topics, was attempting to build an ambitious worldwide telecommunications network for trading firms that would help them clear and settle cross-border equity transactions – piggybacking atop General Electric Information Service’s network alongside GEnie, GE’s early consumer online service.

Bezos was employee number 11. His success at debugging spaghetti code earned him rapid promotion to head of development and director of customer service, which entailed a weekly commute between New York and London, where his divisions were located, aboard discount airline People’s Express. „This is not,“ he says, „the right way to organize a start-up company, just for the record. Ah-ha-ha-ha-ha-ha!“

After nearly two years of failed attempts to grow Fitel, Bezos bailed out for a more stable job as a product manager at Bankers Trust. There, he sold software tools to the company’s pension-fund clients, but he also explored outside projects. At one point, he collaborated briefly with a Merrill Lynch consultant named Halsey Minor (who would later become well known as the founder of CNET) on an abortive plan to start a company that would use then-fledgling software agents to create a personalized news fax for financial professionals. By 1990, however, after only two years at Bankers Trust, Bezos was circulating his résumé to headhunters with the express goal of escaping financial services for a technology company, where he could pursue what he had decided was his „real passion,“ using computers and so-called second-wave automation to revolutionize business.

Then a headhunter called, telling Bezos, „I know you said you would kill me if I even proposed the finance thing, but there’s this special opportunity that’s actually a very unusual financial company.“ It was the two-and-a-half-year-old hedge fund firm D. E. Shaw.

David Shaw, like Bezos, was a computer scientist. His specialty was devising new trading strategies for particular financial instruments. The two clicked immediately, with Bezos finding Shaw „one of those people who has a completely developed left brain and a completely developed right brain. He’s artistic, articulate, and analytical. It’s just a pleasure to talk to someone like that.“ Shaw, in turn, thought his 26-year-old hire „fantastic,“ a „pleasurable person to talk to“ who was „also very entrepreneurial.“

Four years later, Bezos had worked his way up to senior vice president, one of four at the firm. He’d also devised a plan for his personal life.

„At a certain point I was sort of a professional dater,“ he explains about his years in New York. His systematic approach to the quest for a permanent relationship was to develop what he labeled „women flow,“ a play on the „deal flow“ Wall Streeters try to generate to locate worthwhile investments. In managing their deal flow, bankers will set limits like „I won’t look at anything under a $10 million equity investment.“ The limitation Bezos set for friends producing candidates for his „women flow“ was more esoteric. „The number-one criterion was that I wanted a woman who could get me out of a Third World prison,“ he says.

„What I really wanted was someone resourceful. But nobody knows what you mean when you say, ‚I’m looking for a resourceful woman.‘ If I tell somebody I’m looking for a woman who can get me out of a Third World prison, they start thinking Ross Perot – Ah-ha-ha-ha-ha-ha! – they have something they can hang their hat on! Life’s too short to hang out with people who aren’t resourceful.“

His self-deprecatory explanation for asking friends to set him up on blind dates is that „I’m not the kind of person where women say, ‚Oh, look how great he is,‘ a half hour after meeting me. I’m kind of goofy, and I’m not – Ah-ha-ha-ha-ha-ha! – it’s not the kind of thing where people are going to say about me, ‚Oh my God, this is what I’ve been looking for!'“

As it happened, women flow did not produce the desired result. Instead, he fell in love with a member of his own staff. The future MacKenzie Bezos was a research associate who had been an assistant to novelist Toni Morrison while studying at Princeton. MacKenzie – whose first novel will be published by Random House later this year – and Jeff were married in 1993. A year later, Shaw put Bezos in charge of exploring new business opportunities in the burgeoning world of the Internet.

It was while brainstorming ideas in the then-unfamiliar area of electronic commerce that Bezos came to his deceptively simple conclusion: The most logical thing to sell over the Internet was books, largely because two of the country’s largest book distributors already had exhaustive electronic lists.

As Amazon.com has long since established, no single bookstore, even a superstore, can carry a comprehensive inventory of the books in print. The distributors, carrying thousands of titles, in effect act as the warehouse for most stores, particularly smaller independent booksellers. When customers ask a store for a book it doesn’t have, the first place many of them will turn to fill the customer’s order is Ingram or Baker & Taylor, the two largest distributors. These companies‘ inventory lists, once regularly circulated to bookstores on packs of microfiche, went digital in the late 1980s along with others in the book trade – an unheralded benchmark that would enable Bezos to offer books online through the virtual retailer he envisioned creating.

But David Shaw and others at the firm weren’t ready to make books a priority. After consulting initially with another partner, Bezos approached Shaw to tell him he had been bitten by the entrepreneurial bug and wanted to leave. Bezos says he kept staring at the Net’s 2,300 percent annual growth figure and placing his thoughts within what he calls a „regret-minimization framework.“ „When I’m 80,“ he asked himself, „am I going to regret leaving Wall Street? No. Will I regret missing a chance to be there at the beginning of the Internet? Yes.“

„Let’s take a walk,“ he recalls Shaw saying, and the two of them set off for Central Park. Shaw, while acknowledging that he himself had left an established business to pursue entrepreneurial dreams, tried to impress on Bezos what he would be giving up by leaving; not just financial security but a pivotal role at D. E. Shaw. „I did tell him that we might be competing with him, too,“ Shaw says. Bezos was willing to accept that risk.

When MacKenzie and Jeff Bezos made their now semifamous cross-country road trip to the Seattle area, Jeff tapping out a business plan on his computer along the way, he had already spent months laying the groundwork for Amazon.com, beginning with his Internet investigations at D. E. Shaw. Bezos had also made at least one recruiting trip to California to meet with three programmers he’d learned about through a D. E. Shaw partner. Over blueberry pancakes at the Sash Mill Cafe in Santa Cruz, Bezos managed to convince one of them, Shel Kaphan, to become employee number one.

Kaphan has a reputation among the engineering staff at Amazon.com as the prototypical pessimist, a geek convinced that the company’s systems are always on the verge of implosion. He came by his doomsaying honestly – he had worked for at least a dozen companies before Amazon.com, including failed start-ups and bureaucratically inept monsters. Shortly before he and Bezos met he had left Kaleida Labs, an ill-fated Apple spin-off, which makes it all the more remarkable that he almost immediately found Bezos trustworthy – so trustworthy, in fact, that Kaphan agreed in short order to relocate to Seattle.

Bezos returned in principle to the setting of his childhood experiments, building the prototype for Amazon.com with Kaphan and a contractor named Paul Barton-Davis in the cramped, poorly insulated converted garage of a rented home in the Seattle suburb of Bellevue. A potbellied stove commanded the middle of the room, and extension cords ran everywhere because there weren’t enough electrical outlets to power the trio’s Sun SPARCstations. Eventually the stove was ejected in a space-saving flurry and replaced by a set of ceramic space heaters, which further taxed the overburdened power supply.

Bezos has profited directly from his Amazon.com stock only once, selling 180,000 shares last November for $23 million.

In their quest to revolutionize retailing, the threesome made ample use of the unsuspecting competition’s physical resources. One can never tire of the delicious irony that Kaphan and Bezos would frequently repair to the Barnes & Noble store in downtown Bellevue to drink coffee and toss around ideas in the relative calm of the in-house Starbucks café. The superstore also served as a venue for business meetings with outsiders. MacKenzie Bezos even negotiated the company’s first freight contracts there.

The first million dollars of seed capital came from a group of 15 angel investors Bezos had persuaded to help him, including Wall Street chums, friends of his parents, buddies from Princeton, and a small group of local investors. Tom Alberg, onetime president of Lin Broadcasting, a subsidiary of McCaw Cellular, was part of the group and became Amazon.com’s first board member.

At one point, a single venture capital firm in the Seattle area wanted to take the whole million-dollar round but demanded a 50 percent discount on the valuation Bezos had offered. He refused and the VCs passed, in part because they believed Barnes & Noble would crush Amazon.com as soon as it turned its attention in Bezos’s direction. Watching that decision, Alberg says, taught him that „you need to do due diligence in this world, but at some point you need to make a judgment about the people.“

Bezos and Kaphan rigged the SPARCstations to sound a bell’s ring every time the servers recorded a sale. Amazon.com launched in July 1995, and the bell started ringing – so often that within a few weeks the noise had become unbearable and they disabled it. „Every week, the revenues went up,“ says Alberg. „By the second or third week, there was $6,000 or $10,000, and by the end of early September there was $20,000 a week. It was clear there was a trend here.“ It also helped that even in the earliest days sales were coming from around the country. „He could say, ‚I had a sale in New Hampshire,‘ and we were all impressed,“ Alberg recalls.

It wasn’t that Bezos was first out of the box with an idea for shopping, or that he had discovered some magic elixir unknown to other merchants. But he had made a series of small, smart choices that added up.

It starts with the realization that in fact not everything should be virtual – that Amazon.com should own its own warehouses, so that it can maintain quality control over the packaging and shipping of orders, which Bezos sees as an essential opportunity to enhance the Amazon.com customer experience. This allows the company to combine orders for books from multiple publishers – or orders that include a book, a CD, and a video – into single packages. It also gives Amazon.com employees who pack orders a chance to check for defective goods. In its music department, for example, the company will replace cracked or broken CD jewel cases. Locating in Seattle, therefore, wasn’t about being near a technology hub as much as it was about being near one of Ingram’s distribution facilities, which allowed for quicker turnaround on deliveries from that key supplier. And Washington had a relatively small population, which limited the pool of potential customers from whom Amazon.com would be forced to collect sales tax. (It’s no accident that the company’s second warehouse is in Delaware, which not only has no sales tax but is also an ideal base for serving East Coast customers; its third and latest warehouse is near Reno, Nevada – which lets Amazon.com originate deliveries close to the huge California population, but just outside that state’s tax-collection borders.)

Bezos combined those pragmatic choices with a relentless focus on the customer experience: tweaking the interface to make it ever easier to understand, streamlining the ordering process at every turn, responding immediately to every customer query. „We want people to feel like they’re visiting a place,“ he says, „rather than a software application.“

He also turned hiring staff into a Socratic test. „Jeff was very, very picky,“ says Nicholas Lovejoy, who joined Amazon.com as its fifth employee in June 1995. In endless hiring meetings, Bezos, after interviewing the candidate himself, would grill every other interviewer, occasionally constructing elaborate charts on a whiteboard detailing the job seeker’s qualifications. If he ferreted out the slightest doubt, rejection usually followed. „One of his mottos was that every time we hired someone, he or she should raise the bar for the next hire, so that the overall talent pool was always improving,“ Lovejoy says.

With its potential $250 million in revenues in the fourth quarter of 1998, Amazon.com is on track for at least $1 billion in annual sales this year. The company has moved its headquarters three times since starting in the Bellevue garage, and its staff is spread out in four buildings in downtown Seattle, in addition to its Northwest warehouse location, in an industrial area near the port facilities that stretch along the harbor south of downtown. This summer, the company will consolidate all but the warehouse operation in the old Pacific Medical Center building, which sits on a bluff near the intersection of I-5 and I-90 southeast of central Seattle.

But nothing about the company’s physical or revenue growth can compare to the astonishing rise in its stock price in recent months – on January 19 Amazon.com’s $22.1 billion market value exceeded that of Kmart and JCPenney combined – and the concurrent growth in Bezos’s personal net worth, over $9 billion by mid-January 1999. (A few other billionaires, including his parents, and dozens of multimillionaires have been created during the two short years of Amazon.com’s public existence.)

Bezos is thus far facing down stratospheric wealth with a modesty that outsiders to tech culture often find odd (and maybe even unnatural) but which is surprisingly common in the industry, where twentysomethings worth millions routinely rent along the freeway. When Joshua Weinstein teased Bezos about being listed on the Forbes 400 roster of the richest Americans, for example, „Jeff said the only real difference was that he doesn’t have to look at the prices on a menu anymore.“

„One thing to keep in mind,“ Bezos says, about not only his own gains but those of any Amazon.com employee who holds unvested options or hasn’t sold their stock, „is for many of these people the wealth that they have is paper wealth, and it will exist at that level only for as long as we continue to serve our customers well.“ Securities and Exchange Commission records show that Bezos himself has profited directly from his Amazon.com stock only once, when, last November, he sold 180,000 shares (of the more than 19 million he held at the time) for approximately $23 million.

Like a lot of other newly minted tech barons, Bezos’s splurges tend to involve having a good time with friends. In August, to celebrate Shel Kaphan’s fourth anniversary at Amazon.com, Bezos organized „the Shelebration,“ a four-day surprise weekend excursion to Maui. He chartered a jet to carry himself and MacKenzie, Kaphan, and members of the Amazon.com engineering staff and their spouses from Seattle to Hawaii. When the group arrived at the house Bezos had rented, Kaphan discovered a second surprise: An even larger group of Shel’s old friends from the San Francisco Bay Area had arrived there first, aboard a second plane Bezos had chartered for them from San Jose.

MacKenzie and Jeff, who’ve lived till now in a one-bedroom rental in downtown Seattle, also recently went shopping for a house, spending a reported $10 million for a rustic mansion alongside Lake Washington in a neighborhood littered with Microsoft millionaires.

It’s often forgotten how recently the mass American consumer market has evolved, how profoundly it has changed the way people shop, and how dramatically it has altered the very structure of society. Little more than 100 years ago, most Americans bought their goods – including clothes, food, furniture, even at times books – directly from the people who created them. But as the Industrial Revolution penetrated industry after industry, a gap began to open between producers and consumers until the one had little or no direct contact with the other. A new breed of middlemen arose to act as brokers between them (creating legendary opportunities for what sociologist Thorstein Veblen, in his Theory of the Leisure Class, derided as „conspicuous consumption“). In turn, routine, public display of manufactured, store-bought wares enabled the development of virtual societies (or „consumption communities,“ as historian Daniel Boorstin labeled them) in which membership and status were based not on an inborn class hierarchy but on the ownership of specific types of goods.

The most successful of the new retailing middlemen were the salesmen and magnates who understood that Americans, particularly in the rapidly urbanizing society of the late 19th and early 20th centuries, wanted their status anxieties satisfied by the shopping experience, and who built the modern department store for this express purpose. Among the most flamboyant was John Wanamaker, who sounds like a latter-day Internet entrepreneur with his boast 89 years ago that he had „revolutionized the retail business in America.“ Among the innovations Wanamaker could claim credit for developing or popularizing were escalators, the glass display cabinet, the street-level store entrance, the revolving door, free delivery anywhere in the world, and charge accounts. Wanamaker’s landmark Philadelphia store still operates at the corner of Broad and Market streets, and his New York store at Broadway and Astor Place was that city’s premier shopping destination from the 1890s until the 1920s, when it was finally surpassed by Macy’s, „The World’s Largest Store.“

But perhaps the most significant innovation by Wanamaker and his peers – who included Marshall Field, Boston’s Filene family, and Isidor Straus, who ran Macy’s – was their decision to display their mass-produced goods artfully behind plate glass, which new technologies had made easier to produce in ever larger sheets.

Before 1885, most merchants, if they chose to display anything, simply piled goods haphazardly in their front windows. It took an impresario named L. Frank Baum – who later indulged another kind of American fairy tale when he wrote The Wizard of Oz – to change that. In 1897 Baum began publishing a trade journal called The Show Window and a year later founded the National Association of Window Trimmers.

„You know, the potential exists in a broadband world for every author to have a five-minute video snippet explaining the intended audience.“

The goal of any good store-display designer, according to Baum, was to „arouse in the observer the cupidity and longing to possess the goods.“ Under his example, department store merchants began to use glass, light, and color to create street-corner crowds and stimulate their audiences in ways previously unknown. „What a stinging, quivering zest they display,“ novelist Theodore Dreiser said in 1902 about the newfangled „show windows“ he had encountered, „stirring up in onlookers a desire to secure but a part of what they see, the taste of a vibrating presence, and the pictures that it makes.“

A century later, the „show window“ is alive and well, now transferred to the modern video display, whether it’s connected to the Internet or receiving a television signal. Bezos and crew have focused as intently on trimming their video windows as Baum and Wanamaker concentrated on theirs.

Certainly, his backers insist, Amazon.com’s founder has the necessary talents. Board member Patty Stonesifer, a former Microsoft executive, points to last year’s annual meeting of Amazon.com shareholders, at the Seattle Art Museum, where Bezos held the audience spellbound in a way that reminded her of the best Hollywood executives she has met. „I don’t think he’s a showman,“ says Stonesifer, „but people are drawn to him because he seems unbelievably like a winner. And they want to help him win.“

Translating that ability from the annual meeting to the screen is, of course, another matter. Up to this point, the focus has been on minimizing flash in favor of speed, and on accepting the limitations of what it’s possible to do within the 640 x 480 pixels available inside a browser window on a computer screen. „Every business has to deal with some scarcity, and in our case it’s screen real estate,“ Bezos observes.

But even amid the tiny graphics and fast-loading pages, the entertainment value built intentionally into Amazon.com shows through. Rankings, for example – updated in real time for the company’s best-sellers – tell shoppers exactly how well each book is selling. (It’s not unheard-of for authors to purchase copies of their own books just so they can see the ticker bump up.) And dedicated collectors of rarities – the most notoriously exacting crowd around, with significant cultural trickle-down – can readily appreciate Amazon.com’s attention to detail. Using the music keyword-search function, for example, you can pull up a listing of the six CDs offered by Amazon.com that feature the oud, the traditional Middle Eastern stringed instrument. (Oud by George Mgrdichian was number 14 on Amazon.com’s Middle East music chart in early January.)

As bandwidth and speed increase, making it ever easier for consumers to browse through goods online, Bezos expects e-catalogs to finally drive their paper counterparts into extinction. The bulletin-board discussions and review areas on Amazon.com will also grow more sophisticated, he promises. „You know, the potential exists in a broadband world for every author to have a five-minute video snippet explaining who the intended audience is, why they should buy that book, or that music CD, or that video, and you’ll be able to show the trailers from the videos.“ (Asked, however, to name the one missing technology that, if it existed, would dramatically improve Amazon.com’s business prospects, he says simply, „Windows instant on“ – meaning a personal computer that boots up as quickly as a TV or a PalmPilot. „At home it’s a real pain,“ he says, „because in the 90 seconds or two minutes that it takes, I’ve forgotten what I was going to do!“)

Bezos spends hours at a time thinking about the future: trawling for ideas, exploring his own site, sometimes just surfing the Web, particularly on Mondays and Thursdays, which he tries to keep unscheduled. „I catch up on email, I wander around and talk to people, or I set up my own meetings – ones that are not part of the regular calendar.“ His surfing isn’t always confined to retail: Let the record note that on a Thursday in January he spent five hours on the Web using MacKenzie’s MSN account, plumbing the depths of his space fascination and learning more about „roton“ rockets.

He also gathers new ideas from other wanderers in the company. Amazon.com’s purchase last August of Junglee, then a Silicon Valley-based company that produces product comparison software for Web shoppers, came about when Amazon.com treasurer Randy Tinsley approached Bezos sometime in late April 1998 and lobbied for the acquisition. After a half-hour debate during which Tinsley allowed that Junglee might resist a sale, Bezos’s final word was, „We have a million other things to do – drop it.“ Two hours later, Tinsley called Bezos back to say he had called Junglee anyway and the management there was actually interested. „It shows you how much people listen to me!“ Bezos jokes.

Like an investor checking his portfolio, every three months Bezos sits down with his assistant Kim Christenson to examine and analyze his calendar for the quarter just past. He wants to know, among other things, how much time he has devoted to each of the dozen or so categories to which Christenson has assigned every meeting, phone call, or trip. (The categories include standards like recruiting, as well as onetime items like the launch plans for Amazon.com’s UK and German sites.)

Although he won’t disclose all the projects currently occupying those 12 categories, one that surely colors all of them is the need to fend off the renewed challenge by Barnes & Noble to Amazon.com’s book business – in particular, the potential threat to his supply chain in Barnes & Noble’s recent purchase of Ingram, the book distributor that has been an essential source of Amazon.com inventory. Asked whether B&N’s bid for Ingram took him by surprise, Bezos implies that he knew Ingram was for sale and passed on it, adding, „We don’t talk about what we might have looked at and not done.“ Given that getting items into customers‘ hands as quickly as possible is a key part of the Amazon.com experience, he admits that distributors are also key, at least currently. But he insists they aren’t a necessity long term. „There are so many ways to solve that problem,“ he says, one of which appears to lie in Amazon.com initiatives to build direct relationships with publishers. As for Barnes & Noble, „I bet you a year from now they will not consider us direct competitors,“ Bezos predicts. „Clearly they do today, but we’re on different paths … we’re trying to invent the future of ecommerce, and they’re just defending their turf.“

Jeff Bezos is shopping in meatspace. „I want to get a pair of cargo pants,“ he says, „although my wife says she hates them.“

We’re striding up Pine Street toward the new Nordstrom store in Seattle’s downtown shopping district, next door to the Pacific Place mall and only a couple of blocks from Amazon.com headquarters. Bezos wants cargo pants, he says, because he has too much stuff to carry in his pockets. Today he’s packing a gizmo he calls his World Trade Center Escape Kit, a combination flashlight, penknife, and key chain that he began to carry after the New York landmark was bombed. (For Christmas, he bought every member of his family their own survival kit, an off-the-shelf postmodern version of the Swiss Army knife, from Brookstone, called the Tool Logic Tool Lite Deluxe. Bezos, who has given the matter a good deal of thought, insists that the people trapped for hours in the smoky darkness of the World Trade Center’s fire escapes would have reached safety faster if they had had these simple tools.) Toy shopping, online and off, captivates him. Jeff and MacKenzie’s Christmas gift to everyone a year ago was laser-tag guns and vests, which, combined with the walkie-talkies his parents offered up, served as weapons in a nighttime game of laser-enhanced Capture the Flag on Amelia Island. The entire Bezos clan raced around in the dark zapping each other. „I never realized my mom was such a good shot!“ he says. But Jeff, as his mother recounts with a hint of disapproval, used a secret weapon to stack the deck in his favor: a pair of night-vision goggles MacKenzie had given him. „It’s not clear,“ Bezos counters, „that you’re supposed to have a level playing field when you’re marching into battle. Ah-ha-ha-ha-ha-ha!“

In Nordstrom we pick up lattes and stand in the middle of the main floor. Bezos comments idly on the down escalator: „Look, you turn immediately and go down, instead of walking from one end to the other and circulating through the merchandise.“ He pauses to consider whether the utility in facilitating quick passage from the main floor to the basement would outweigh the retail imperative.

For the kind of shopper Bezos represents, utility is, of course, a mantra. His wardrobe consists of white or blue dress shirts and a pair of khaki pants. Back in the late ’80s in New York, when he had to wear a suit every day to the office, he gained a preference for shirts with hidden snaps under the collar points for easy tie removal. He has trouble locating this style in the Pacific Northwest, so now he buys a pack of standard snapless shirts and has the snaps sewn on. When he discovers a pair of shoes he likes, he’ll buy four pairs at once and wear them in regular rotation for years.

Bezos has a full-steam-ahead, leaning-into-the-wind style of walking when he’s in a hurry, and in the Pacific Place mall he is continually veering off on some new quest for knowledge. He marches into an upscale pen shop and asks the first salesperson we encounter to show us the most expensive model in stock, which turns out to be a $975 Mont Blanc fountain pen. „That was a very good salesman,“ he announces when we leave, pleased with the young man’s knowledge of nib and ink arcana. As we pass Victoria’s Secret he says slyly, „You know, they charge you for the catalog in the stores,“ and whisks me through racks of bras and panties to a cash register in the back, where he asks the clerk to show him the goods. It turns out two catalogs are for sale, one for $5 and another for $3. „It’s the rare store that gets to charge for the catalog,“ he notes admiringly.

We bomb out of the mall and across the street to Old Navy. („You know, they treat jaywalking as seriously here as they do in Los Angeles,“ Bezos says before leaping bravely into mid-block traffic.) Once inside, he tries on a pair of light khaki cargos, size 33R. He deliberates. He decides to buy the pants. „I’m only going to buy one pair,“ he says, „because my wife hasn’t seen them yet.“

Back out in the street, the shopping throng envelopes us. Bezos waves an arm across the scene. „You see, none of this is going away,“ he says. „The Net can’t replace this experience.“

Not that it matters. Back in his office, he’s once again enumerating Amazon.com’s unlimited upside and its not insignificant advantages over the places we’ve just been – small, centralized inventory, low-cost warehouse space, one-to-one knowledge of consumer preferences. „There’s no comparison between the two models,“ he says gleefully, leaning forward and clasping his hands. „Online is so much cheaper.“

It remains to be seen what the long-term costs for Amazon.com will be. In business, of course, the conventional wisdom is that being an innovator costs a lot more than being an imitator, a fact Bezos acknowledges. But the pioneering quality of his business model is as much an aspect of his personality as the personality of Amazon.com. „You cannot,“ he says, „make a business case that you should be who you’re not.

„One of the things that I hope will distinguish Amazon.com is that we continue to be a company that defies easy analogy,“ he goes on. „This requires a lot of innovation, and innovation requires a lot of random walk“ – that is, spontaneous, open-ended search.

„There’s a strong case to be made for being a copier. It’s just not as satisfying, or as fun!“ Rule number one on how to succeed in business, from the new master of the game.

PLUS

Count the Change: All $22.1 Billion of It*

Mall of America 2010

How Apple and Google Are Enabling Covid-19 Contact-Tracing

Source: https://www.wired.com/story/apple-google-bluetooth-contact-tracing-covid-19/

The tech giants have teamed up to use a Bluetooth-based framework to keep track of the spread of infections without compromising location privacy.
a man walking in the street in boston
The companies chose to skirt privacy pitfalls and implement a system that collects no location data.Photograph: Craig F. Walker/Boston Globe/Getty Images

Since Covid-19 began its spread across the world, technologists have proposed using so-called contact-tracing apps to track infections via smartphones. Now, Google and Apple are teaming up to give contact-tracers the ingredients to make that system possible—while in theory still preserving the privacy of those who use it.

On Friday, the two companies announced a rare joint project to create the groundwork for Bluetooth-based contact-tracing apps that can work across both iOS and Android phones. In mid-May, they plan to release an application programming interface that apps from public health organizations can tap into. The API will let those apps use a phone’s Bluetooth radios—which have a range of about 30 feet—to keep track of whether a smartphone’s owner has come into contact with someone who later turns out to have been infected with Covid-19. Once alerted, that user can then self-isolate or get tested themselves.

Crucially, Google and Apple say the system won’t involve tracking user locations or even collecting any identifying data that would be stored on a server. „This is a very unprecedented situation for the world,“ said one of the joint project’s spokespeople in a phone call with WIRED. „As platform companies we’ve both been thinking hard about what we can do to help get people back to normal life and back to work effectively. We think in bringing the two platforms together we can solve digital contact tracing at scale in partnership with public health authorities and do it in a privacy-preserving way.“

Unlike Apple, which has complete control over its software and hardware and can push system-wide changes with relative ease, Google faces a fragmented Android ecosystem. The company will still make the framework available to all devices running Android 6.0 or higher by delivering the update through Google Play Services, which does not require hardware partners to sign off.

Several projects, including ones led by developers at MIT, Stanford, and the governments of Singapore and Germany, have already proposed, and in some cases implemented, similar Bluetooth-based contact-tracing systems. Google and Apple declined to say which specific groups or government agencies they’ve been working with. But they argue that by building operating-level functions those applications can tap into, the apps will be far more effective and energy efficient. Most importantly, they’ll be interoperable between the two dominant smartphone platforms.

In the version of the system set to roll out next month, the operating-system-level Bluetooth tracing would allow users to opt in to a Bluetooth-based proximity-detection scheme when they download a contact-tracing app. Their phone would then constantly ping out Bluetooth signals to others nearby while also listening for communications from nearby phones.

If two phones spend more than a few minutes within range of one another, they would each record contact with the other phone, exchanging unique, rotating identifier “beacon” numbers that are based on keys stored on each device. Public heath app developers would be able to „tune“ both the proximity and the amount of time necessary to qualify as a contact based on current information about how Covid-19 spreads.

If a user is later diagnosed with Covid-19, they would alert their app with a tap. The app would then upload their last two weeks of keys to a server, which would then generate their recent “beacon” numbers and send them out to other phones in the system. If someone else’s phone finds that one of these beacon numbers matches one stored on their phone, they would be notified that they’ve been in contact with a potentially infected person and given information about how to help prevent further spread.

graph with illustrations of phones and humans
Courtesy of Google
graph with illustrations of phones and humans
Courtesy of Google

The advantage of that system, in terms of privacy, is that it doesn’t depend on collecting location data. „People’s identities aren’t tied to any contact events,“ said Cristina White, a Stanford computer scientist who described a very similar Bluetooth-based contact tracing project known as Covid-Watch to WIRED last week. „What the app uploads instead of any identifying information is just this random number that the two phones would be able to track down later but that nobody else would, because it’s stored locally on their phones.“

Until now, however, Bluetooth-based schemes like the one White described suffered from how Apple limits access to Bluetooth when apps run in the background of iOS, a privacy and power-saving safeguard. It will lift that restriction specifically for contact-tracing apps. And Apple and Google say that the protocol they’re releasing will be designed to use minimal power to save phones‘ battery lives. „This thing has to run 24-7, so it has to really only sip the battery life,“ said one of the project’s spokespeople.

In a second iteration of the system rolling out in June, Apple and Google say they’ll allow users to enable Bluetooth-based contact-tracing even without an app installed, building the system into the operating systems themselves. This would be opt-in as well. But while the phones would exchange „beacon“ numbers via Bluetooth, users would still need to download a contact-tracing app to either declare themselves as Covid-19 positive or to learn if someone they’ve come into contact with was diagnosed.

Google and Apple’s Bluetooth-based system has some significant privacy advantages over GPS-based location-tracking systems that have been proposed by other researchers including at MIT, the University of Toronto, McGill, and Harvard. Since those systems collect location data, they would require complex cryptographic systems to avoid collecting information about users‘ movements that could potentially expose highly personal information, from political dissent to extramarital affairs.

With Google and Apple’s announcement, it’s clear that the companies chose to skirt those privacy pitfalls and implement a system that collects no location data. „It looks like we won,“ says Stanford’s White, whose Covid-Watch project, part of a consortium of projects using a Bluetooth-based system, had advocated for the Bluetooth-only approach. „It’s clear from the API that it was influenced by our work. It’s following the exact suggestions from our engineers about how implement it.“

Sticking to Bluetooth alone doesn’t guarantee the system won’t violate users’ privacy, White notes. Although Google and Apple say they’ll only upload anonymous identifiers from users’ phones, a server could nonetheless identify Covid-19 users in other ways, such as based on their IP address. The organization running a given app still needs to act responsibly. “Exactly what they’re proposing for the backend still isn’t clear, and that’s really important,” White says. “We need to keep advocating to make sure this is done properly and the server isn’t collecting information it shouldn’t.”

Even with Bluetooth tracing, the app still faces some practical challenges. First, it would need significant adoption and broad willingness to share Covid-19 infection information to work. And it will also require a safeguard that only allows users to declare themselves Covid-19 positive after a healthcare provider has officially diagnosed them, so that the system isn’t overrun with false positives. Covid-Watch, for instance, would require the user to get a confirmation code from a health care provider.

Bluetooth-based systems, in contrast with location-based systems, also have some problems of their own. If someone leaves behind traces of the novel coronavirus on a surface, for instance, someone can be infected by it without their phones ever being in proximity.

A spokesperson for the Google and Apple project didn’t deny that possibility, but argued that those cases of „environmental transmission“ are relatively rare compared to direct transmission from people in proximity of each other. „This won’t cut every chain of every transmission,“ the spokesperson said. „But if you cut enough of them, you modulate the transmission enough to flatten the curve.“

 

Astronaut Mike Massimino on How to Make the Most of the COVIT19 / Corona Isolation

We’re all feeling a little cooped up right now. So why not shelter in place like you’re in a space shuttle, orbiting above the Earth?

Mike Massimino has experienced the greatest isolation a human being could ever know: the solitude of space, hundreds of miles above humanity. A NASA astronaut for 18 years, Massimino spent about a month total sheltering in place—or, more accurately, sheltering in space—aboard two separate missions on the space shuttle, donning a suit and stepping out into the ether to repair the Hubble telescope, and taking in the greatest view a human could ever know.

But it was isolation, nonetheless. “Like many of you, I’m sheltering in place right now,” says Massimino, who is currently back on Earth. “I’m inside my home, and it’s kind of like being inside of a spaceship again.” We Earthlings may have the luxury of gravity and grocery stores and fresh air, but you might be feeling more like an astronaut right now than you know. So take it from Massimino: You’re more in control of your isolation than you know.

First of all, he advises, reach out to “mission control,” and be a mission control for someone else. In other words, let others know if you need help, and be available to help them as well. On one spacewalk to fix the Hubble Space Telescope, Massimino recalls, he ended up stripping a bolt on a science instrument while trying to remove a handle. “I thought it was game over,” he says. “I felt like we’re never going to solve this. I’ve created this horrible problem and we’re never going to find out if there’s life anywhere else in the universe and everyone will blame me.” But Massimino took his problem to mission control down on Earth, and they suggested a … blunt solution: Just give the handle a good yank. And indeed, it snapped off. Problem solved.

Read all of our coronavirus coverage here.

“Reach out, be the person that people can call for help,” Massimino says. “Be their mission control. And don’t forget that your mission control is there to help you as well.” If astronauts can email their loved ones from space (fun fact: Massimino was the first to tweet from space), you can certainly call Grandma.

Also, like astronauts, you need exercise right now—badly. Up in space, microgravity doesn’t give the astronauts opportunities to work their muscles, so they use special treadmills and weight machines. If you’re stuck in your house, you need exercise to keep your body and mind in order. And while you’re out there, take in the scenery. (Six feet away from any other human, of course.) It can’t compare to the view from orbit, but it’ll shake you out of the mundanity of looking at the same walls and furniture all day.

For more tips from Massimino about how to make the most of isolation, including the importance of pursuing meaningful distractions (emphasis on meaningful), check out our video above.