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Facebook Blames ‘Faulty Configuration Change’ for Nearly Six-Hour Outage

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By Reuters | Updated: 5 October 2021

Facebook blamed a “faulty configuration change” for a nearly six-hour outage on Monday that prevented the company’s 3.5 billion users from accessing its social media and messaging services such as WhatsApp, Instagram, and Messenger.

The company in a late Monday blog post did not specify who executed the configuration change and whether it was planned.

Several Facebook employees who declined to be named had told Reuters earlier that they believed that the outage was caused by an internal mistake in how Internet traffic is routed to its systems.

The failures of internal communication tools and other resources that depend on that same network in order to work compounded the error, the employees said. Security experts have said an inadvertent mistake or sabotage by an insider were both plausible.
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“We want to make clear at this time we believe the root cause of this outage was a faulty configuration change,” Facebook said in the blog.

The Facebook outage is the largest ever tracked by Web monitoring group Downdetector.

The outage was the second blow to the social media giant in as many days after a whistleblower on Sunday accused the company of repeatedly prioritizing profit over clamping down on hate speech and misinformation.

As the world flocked to competing apps such as Twitter and TikTok, shares of Facebook fell 4.9 percent, their biggest daily drop since last November, amid a broader selloff in technology stocks on Monday. Shares rose about half a percent in after-hours trade following resumption of service.

“To every small and large business, family, and individual who depends on us, I’m sorry,” Facebook Chief Technology Officer Mike Schroepfer tweeted, adding that it “may take some time to get to 100 percent.”

“Facebook basically locked its keys in its car,” tweeted Jonathan Zittrain, director of Harvard’s Berkman Klein Center for Internet & Society.

Twitter on Monday reported higher-than-normal usage, which led to some issues in people accessing posts and direct messages.

In one of the day’s most popular tweets, video streaming company Netflix shared a meme from its new hit show Suid Game captioned “When Instagram & Facebook are down,” that showed a person labeled “Twitter” holding up a character on the verge of falling labeled “everyone.”

Inside a Facebook group for advertisement buyers, one member wisecracked after service returned that “lots of people searched today ‘how to run google ads for clients.'”

Facebook, which is the world’s largest seller of online advertisements after Google, was losing about $545,000 ( roughly Rs. 4 crores) in US advertisement revenue per hour during the outage, according to estimates from ad measurement firm Standard Media Index.

Past downtime at Internet companies has had little long-term affect on their revenue growth, however.

Facebook’s services, including consumer apps such as Instagram, workplace tools it sells to businesses and internal programmes, went dark noon Eastern time (9:30pm IST). Access started to return around 5:45pm ET (3:15am IST).

Soon after the outage started, Facebook acknowledged users were having trouble accessing its apps but did not provide any specifics about the nature of the problem or say how many users were affected.

The error message on Facebook’s webpage suggested an error in the Domain Name System (DNS), which allows Web addresses to take users to their destinations. A similar outage at cloud company Akamai Technologies took down multiple websites in July.

On Sunday, Frances Haugen, who worked as a product manager on the civic misinformation team at Facebook, revealed that she was the whistleblower who provided documents underpinning a recent Wall Street Journal investigation and a US Senate hearing last week on Instagram’s harm to teen girls.

Haugen was due to urge the same Senate subcommittee on Tuesday to regulate the company, which she plans to liken to tobacco companies that for decades denied that smoking damaged health, according to prepared testimony seen by Reuters.

© Thomson Reuters 2021

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Apple vs Epic: Fortnite Maker Opposes Apple’s Effort to Pause Antitrust Trial Orders

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By Reuters | Updated: 23 October 2021

Fortnite creator Epic Games on Friday opposed Apple’s efforts to put on hold orders handed down in an antitrust trial as a potentially lengthy appeals process plays out.

US district Judge Yvonne Gonzalez Rogers in September struck down some of the iPhone maker’s App Store rules, including a prohibition on developers directing their users to other payment options beside Apple’s in-app payment system, in a partial win for Epic and other app makers.

Apple has until December 9 to comply with the injunction, but earlier this month the company said it will appeal the ruling and asked Gonzalez Rogers to put her order on hold as the appeals process, which could take more than a year, unfolds.

Epic on Friday argued in a court filing that Apple has not met the legal standard for that pause, which requires Apple show that it will be irreparably harmed by even temporarily complying with the order if the injunction is later reversed on appeal.

Epic said that Apple’s positive comments about the ruling shortly after it landed, and its delay in asking for a pause, showed that it would not be harmed by enacting the orders.

“The public interest favours denying (Apple’s request); an injunction is the only path to effective relief,” Epic wrote. “History shows … that in the absence of an injunction, Apple will not make any changes.”

Apple did not immediately respond to a request for comment.

A hearing on Apple’s request is set for November 9.

© Thomson Reuters 2021

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Apple Updates App Store Payment Rules to Allow Developers Contact Customers Directly

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By Agence France-Presse | Updated: 23 October 2021

Apple has updated its App Store rules to allow developers to contact users directly about payments, a concession in a legal settlement with companies challenging its tightly controlled marketplace.

According to the App Store rules updated Friday, developers can now contact consumers directly about alternative payment methods, bypassing Apple’s commission of 15 or 30 percent.

They will be able to ask users for basic information, such as names and e-mail addresses, “as long as this request remains optional”, said the iPhone maker.

Apple proposed the changes in August in a legal settlement with small app developers.

But the concession is unlikely to satisfy firms like Fortnite developer Epic Games, with which the tech giant has been grappling in a drawn-out dispute over its payments policy.

Epic launched a case aiming to break Apple’s grip on the App Store, accusing the iPhone maker of operating a monopoly in its shop for digital goods or services.

In September, a judge ordered Apple to loosen control of its App Store payment options, but said Epic had failed to prove that antitrust violations had taken place.

For Epic and others, the ability to redirect users to an out-of-app payment method is not enough: it wants players to be able to pay directly without leaving the game.

Both sides have appealed.

Apple is also facing investigations from US and European authorities that accuse it of abusing its dominant position.

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Tencent Says ‘Loophole’ Allowed WeChat Searches on Google, Bing

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By Reuters | Updated: 22 October 2021

Tencent’s WeChat has fixed a glitch that allowed some of its content to be searchable by external search engines, the owner of China’s most popular messaging app said on Friday, raising questions over regulators’ latest attempt to crackdown on the internet sector.

Some of WeChat’s content, including articles on its public accounts page, was briefly searchable in the last few days on Alphabet-owned Google and Microsoft’s Bing, but not on China’s dominant search engine Baidu, Reuters checks showed.

The change had prompted speculation that Tencent was heeding a call by Chinese authorities for its tech giants to tear down “walled gardens” in the country’s cyberspace which has come amid a wide ranging crackdown on the sector.

“Due to recent technological upgrades, the official accounts’ robots protocol had loopholes, which caused the external crawlers to scrape part of the official accounts’ content,” Tencent said in a statement in Chinese.

“The loopholes have since been fixed.”

Google, Microsoft, and Baidu did not immediately respond to a request for comment. Google is not available in China.

The ability to find WeChat content on Google and Bing was initially raised by users on developer forums. China’s internet sector has been long dominated by a handful of technology giants who have historically blocked rivals’ links as well as their search crawlers, a practice is often referred to as ‘walled gardens’.

In recent months, this practice has been targeted by Chinese authorities as part of a sweeping regulatory crackdown.

Last month, China’s Ministry of Industry and Information Technology (MIIT) ordered companies to stop blocking links, which they said has affected users’ experience and damaged consumer rights.

The MIIT has also been studying plans and conducting research to make WeChat content available on external search engines, according to a person with direct knowledge.

MIIT did not immediately respond to requests for comment.

Some users on China’s Twitter-like Weibo platform expressed dismay over Tencent’s comments.

“This should be an important attempt of creating an open internet space, how can you call it a bug,” said one user.

© Thomson Reuters 2021

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Snap Shares Plunge 25 percent as Apple Privacy Changes Hit Advertising Business

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By Reuters | Updated: 22 October 2021

Shares of Snap plummeted 25 percent on Thursday after the owner of photo messaging app Snapchat said privacy changes implemented by Apple Inc on iOS devices hurt the company’s ability to target and measure its digital advertising.

The Santa Monica, California-based company, which earns the vast majority of its revenue from selling digital advertising on the app, said the issue was compounded by global supply chain disruptions and labor shortages and caused brands to pull back on their advertising spending.

The results for Snap, which is the first of the major social media companies to report earnings, cast a shadow over Facebook and Twitter, which release third quarter results next week..

Snap’s results also knocked Facebook shares down 6 percent, Twitter down 7 percent and Alphabet fell 3 percent on Thursday.

The Apple privacy updates were rolled out broadly in June and prevent digital advertisers from tracking iPhone users without their consent.

A new ad measurement tool provided by Apple hampered the ability for companies to measure the performance of their ads, upending many of the ways advertisers have been accustomed to doing business for decades, said Snap Chief Executive Evan Spiegel during a conference call with analysts.

“This has definitely been a frustrating setback for us,” he said.

Snap added it expects the Apple privacy changes and global supply chain disruptions to linger through the fourth quarter, which is typically the highest-earning period for social media companies when brands ramp up marketing for the holiday season.

Many of the advertisers who place ads on Snapchat are in the beauty, fashion and consumer goods industries.

Snap said the supply chain disruptions affected a wide variety of advertisers across industries and regions.

Revenue for the third quarter ended September 30 was $1.07 billion, missing consensus estimates of $1.1 billion (roughly Rs. 8,000 crore), according to IBES data from Refinitiv.

Daily active users, a metric watched closely by advertisers and investors, rose 23 percent year-over-year to 306 million, beating analyst estimates of 301.9 million.

Snapchat has worked to attract and retain users by building new features like the ability to discover restaurants and stores through a map feature, or play virtual games with friends.

The net loss during the quarter was $72 million (roughly Rs. 540 crore), or 5 cents (roughly Rs. 4) per share, narrowing from $199.9 million (roughly Rs. 1,495 crore), or 14 cents (roughly Rs. 10) per share, in the year-ago quarter.

Snap forecast fourth quarter revenue between $1.16 billion (roughly Rs. 8,670 crore) to $1.2 billion (roughly Rs. 8,970 crore), and daily active users between 316 million to 318 million.

© Thomson Reuters 2021

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PayPal Said to Be in $45-Billion Bid for Pinterest

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By Reuters | Updated: 22 October 2021

PayPal has offered to buy Pinterest for $45 billion (roughly Rs. 3,36,770 crore), people familiar with the matter said, a combination that could herald more financial technology and social media tie-ups in e-ecommerce.

It would be the biggest acquisition of a social media company, surpassing Microsoft’s $26.2 billion (roughly Rs. 1,95,990 crore) purchase of LinkedIn in 2016.

The deal talks come as internet shoppers increasingly buy items they see on social media, often following “influencers” on platforms such as Instagram and TikTok. Acquiring Pinterest would allow PayPal to capture more of that e-commerce growth and diversify its income though advertising revenue.

PayPal has offered $70 (roughly Rs. 5,200) per share, mostly in stock, for Pinterest, one of the sources said. The online payments provider hopes to successfully negotiate and announce a deal by the time it reports quarterly earnings on November 8, the source added.

The sources cautioned that no deal was certain and terms could change. They asked not to be identified because the matter is confidential.

PayPal and Pinterest did not respond to requests for comment. Bloomberg News first reported on the companies’ talks on Wednesday.

PayPal shares fell 4.9 percent to close at $258.36 (roughly Rs. 19,330), while Pinterest shares jumped 12.8 percent to $62.68 (roughly Rs. 4,690).

“(The) combination would be a significant positive for PayPal’s ongoing monetisation initiatives on both sides of its merchant and consumer platforms, especially if Pinterest’s social commerce platform gets integrated with Honey’s AI into PayPal’s destination app,” Wedbush analysts wrote in a note.

The payments behemoth was among the big winners of the COVID-19 pandemic, as more people used its services to shop online and pay bills to avoid stepping out. Its shares have risen about 36 percent in the last 12 months, giving it a market capitalisation of nearly $320 billion (roughly Rs. 23,94,100 crore).

Pinterest was valued at about $13 billion (roughly Rs. 97,275 crore) when it went public in 2019. It also saw a huge spike in users looking for crafts and DIY project ideas, as lockdown curbs kept people at home.

As lockdowns eased, Pinterest has warned about slowing user growth, especially in the United States, its largest market. It has said it expects revenue growth mainly through deeper engagement with existing users rather than signing up new ones.

The market has valued Pinterest shares more cheaply than those of some younger social media platforms such as Snap but higher than more mature companies such as Twitter, according to Refinitiv Eikon valuation metrics.

PayPal’s offer represents a 26 percent premium to Pinterest’s closing price of $55.58 (roughly Rs. 4,160) on Tuesday and it is equivalent to 62 times the social media company’s earnings before interest, taxes, depreciation and amortisation over the last 12 months, according to Eikon.

By that metric, Microsoft paid 79 times LinkedIn’s earnings when it acquired it in all-cash deal. Pinterest, however, would be giving its shareholders some of PayPal’s stock, in a bet that this currency would appreciate over time over time as the combined company reaps revenue and cost synergies.

Pinterest is at a crossroads after co-founder Evan Sharp announced last week he would step down as chief creative officer to join LoveFrom, a firm led by Jony Ive, the designer of many Apple products.

Sharp founded the online scrapbook and photo-sharing platform in 2010 with Ben Silbermann, who is the San Francisco, California-based company’s chief executive officer, and Paul Sciarra, who left in 2012.

PayPal had been looking to boost its e-commerce offerings in recent years through acquisitions. It bought online coupon finder Honey Science in 2019 for $4 billion (roughly Rs. 29,920 crore) and Japanese buy-now-pay-later (BNPL) firm Paidy for $2.7 billion (20,195 crore) earlier this year. It acquired return-service provider Happy Returns in May.

Social media-driven commerce

Social media platforms that have not pursued mergers with fintech firms have been working on ways to allow consumers to buy directly from their platforms.

TikTok, for example, is testing a way for users to buy products directly on its short video app. It has partnered with ecommerce giant Shopify and in August began allowing retail brands to link their product catalogs to the app.

Analysts said the PayPal-Pinterest deal talks highlight the potential for other social media and fintech companies to join forces to capture swaths of the e-commerce market.

“Social/interactive commerce is growing in the United States and no one has won it yet. So rather than going against Amazon, PayPal is making a bet on a different kind of shopping model,” said Marketplace Pulse e-commerce analyst Joe Kaziukėnas.

© Thomson Reuters 2021

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WeChat Makes Content Searchable on Google and Bing

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By Reuters | Updated: 22 October 2021

Tencent’s WeChat has made its content searchable on some foreign search engines such as Alphabet-owned Google and Microsoft’s Bing, Reuters checks showed, in the latest tearing down of “walled gardens” in China’s internet sector.

Content from China’s most popular messaging app WeChat, including articles and videos on its popular public accounts page, a function similar to a news portal, has opened to external search engines, other than Tencent’s own Sogou search engine, in recent days.

Tencent, Google, and Microsoft did not immediately respond to a request for comment. Google is not available in China.

China’s Internet sector has been long dominated by a handful of technology giants who have historically blocked each others rivals’ links as well as their search crawlers. The practice is often referred to as ‘walled gardens’.

In recent months, this practice has been targeted by Chinese authorities as part of a sweeping regulatory crackdown.

Last month, China’s Ministry of Industry and Information Technology (MIIT) ordered companies to stop blocking links, which they said has affected users’ experience and damaged consumer rights.

The MIIT has been studying plans and conducting research to make WeChat content available on external search engines, according to a person with direct knowledge.

MIIT and Tencent did not immediately respond to requests for comment.

WeChat content however, is not yet searchable on Baidu, China’s dominant search engine, according to Reuters checks. Baidu didn’t immediately respond to a request for comment.

Citi analysts said in a Tuesday note that the potential “opening up of the social ecosystem to search engine” was a positive development for Baidu, as its “leading search gateway position has been weakened and diluted by the growth and dominance of super apps.”

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