NIC Undergrad Review
The fight for the future
Volume 1 Number 1
NIC Undergrad Review
Vol. 1 No. 1
Contents 3 4
6 7 8 9 11 12 17
Opening Remarks VIEWS Reinventig the SIM Card Traditional Telecoms: meet the new business model.
The Social Empire A look inside Facebook’s new strategy Solving for X Google lives by survival of the most innovative Who wants to live forever? Google’s Calico is taking on humanity’s most ancient fear Home, Smart Home Nest is making your home appliances smarter Omnipresent, Omniscient, Omnipotent Why are we talking about a fight for the future? Buying the People’s Telecom Get to know why Facebook spent $19 billion on WhatsApp Bringing the web to everyone Facebook and Google are embarking on an adventure to connect the world’s most remote places Can Google cure our Myopia? Glass could be the savior of our screecentered society. Learn about Facebook’s take on Virtual Reality! Machina Sapiens, Sapiens Can a machine “outthink” the smartest human? Google and Facebook think so.
NIC Undergrad Review Vol. 1 No. 1
HELLO WORLD! As editor-in-chief of the NIC Undegrad Review, it is truly an honor to welcome you to our inaugural edition. This project has been a long-standing goal of the club’s undergraduate division. More than being closed upon ourselves, we want to change Nova in a fundamental way. Founding the first student-run business magazine in Portugal, and one of the few student-run publications in the country, was our first way to fulfill this ambition. We hope that this publication will not only serve to inform the student community at Nova, but also to engage it in debating the most current topics regarding business, economics, and, of course, finance. Everything has been set to the highest-standard. The research that each article requires is a high multiple of the time you will spend reading them, and the design was crafted to give this publication a look that fits the efforts and dedication of the team working on it. Before rounding out this first editorial, let me remind you that this work was done by 1st and 2nd year undergraduates in its entirety. We see this as yet another testament to the quality of all undergraduates at Nova, and their unlimited potential.
Hard work, dedication and a commitment to excel can go a long way, and there is no reason to believe that Nova could not become an elite school of the likes of the highly-touted Anglo-Saxon institutions. The raw material is most certainly here. Finally, I would like to take these final line to acknowledge this most wonderful and talented team, that I had the chance to lead as editor-in-chief. Their drive and willingness to sacrifice hours upon hours to craft these articles is simply remarkable, and the results show it quite well. Of course, none of this would be done without the support of Bernardo Lupi, and Rodrigo Lameira, the President and Vice-President of the Nova Investment Club. Their support, and belief in our skills was essential. We would also like to acknowledge the Nova Marketing Office for their prompt support. Thank you to everyone, who believed in this team. Back in September, when Joana Fontoura and I started to work on this Undergraduate Division, achieving this was a mere pipe dream to be left to a future pair of Co-Heads. We were clearly underestimating the people we were going to work with.
José Veiga Rodrigues
The Team Afonso Ramos Borges Diego Tremiterra Duarte Barosa Mariana Fernandes Sebastião Fernandes Tiago Reganha José Veiga Rodrigues Special thanks to Francisco Borges Corporate Partners
NIC Undergrad Review Vol. 1 No. 1
Reinventing the SIM Card by Afonso Borges
The first Subscriber Identity Module card, also known as SIM card, was made in 1991. Twentythree years after, its purpose is undergoing major changes, as the rising importance of data plans make text and calls obsolete. When I got my first Nokia 3310, the absence of credit on my SIM card meant I could not communicate, unless someone (probably one of my parents) called me. Some years later, the democratization of unlimited talk and text plans meant I need not to worry about how many calls I made or texts I sent, as long as I confined my network to people in the same operator. Later on, with the appearance of BBM, I could extend my Merry Christmas wishes to my non-Vodafone friends, as long as they were using a Blackberry, which they probably were. As people surprisingly moved away from these magnificent keyboard-equipped devices, Whatsapp appeared, allowing its u s er s t o t ex t e ac h ot her, regardless of what operator and mobile phone they preferred. At the same time, the way people communicate was changing as teenagers- whose “communication rituals” are often followed by those of other age groups- around the world embraced first Facebook, then Instagram and Snapchat. In order to gain access to these dataconsuming software, users can either use their data plan, often limited to 1GB per month and
spent by the first moment of boredom of the month, or access a free Wi-Fi network. While in the past, the number of texts and minutes of conversation dictated the most popular plans; nowadays the amount of data is the determinant factor. Most people would easily trade the unlimited talk and text for more data, which by itself isn’t a huge problem for carriers. After all, they can make up for the revenue lost in texts and calls, by charging more gigabytes of data usage. Facebook has made it clear that it wants carriers to “zerorate” the data people spend when accessing its mobile app. Such deals have been reached in the developing world, but European and North American carriers seem more skeptic about the premises sustaining FB’s a r g u ment . V i t t or io C ola o, Vodafone’s chief executive stated “it does not make any sense… there is no reason why I should give my network capacity for free”. It remains to be seen whether these deals could be extended to F B ’ s ot her apps , s uch a s Instagram, but the state of affairs already poses too many questions on “Internet Neutrality”. If you have to spend data in order to tweet, while Facebook is available for free, than Facebook might get closer to owning a monopoly. On the short term, Facebook could threaten to develop “zero rate” partnerships with smaller
carriers that would probably see a deal of this kind as an opportunity to compete with stronger competitors, but it’s the long run that brings the most severe challenges to the established business of carriers, as drone-enabled internet could make Internet access available for free to Facebook users, making data-plans obsolete. The recent acquisition of Ascenta, i.e. a British drone maker, gives Facebook some leverage against carriers at the negotiation table, for if and when the day arrives that you can access Internet for free wherever you are, there would be very few arguments for the need of carriers at all. Some revenues should be better than no revenues at all and if only Mr. Zuckerberg had the means to make this clear to Mr. Colao, perhaps the latter would have to reckon that there is indeed a solid argument to “zero rate” FB’s content. Should Mr. Colao accept this demand and Facebook’s usage would skyrocket, both the amount and the ways we use it. If searching on FB was free of charge, people would prefer it to Google. If streaming a video from Facebook is free, why use Youtube? On the day that deal is reached, a time-bomb starts its countdown on Google headquarters, because either Google manages to get the same kind of deal within a couple of weeks, or it’s game over. 4
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The Social Empire Facebook isn’t your good old social media platform anymore by José Veiga Rodrigues
17% of the world’s total population logs on to Facebook each month. That’s just over 50% of total internet users. 1,23 billion people spend, roughly, 1,3 million years per month on Facebook. 945 million log on mostly through their mobile phones. On average, a Facebook user will spend 4,75 days scrolling through the meanders of the world’s most popular social network, each year. The phenomenon from Menlo Park is now truly far away from its original roots as a start-up cofounded by a group of Harvard undergraduates. Like Google saw Microsoft, like Facebook saw Google, now Facebook is being seen by some younger techies, most notably Snapchat’s founder, as an established, corporate name. And in good right. Facebook is beyond the stage of being just a place to meet your friends on the web. With the recent acquisitions of WhatsApp and Instagram, two of the world’s most used mobile services, the social network is truly building a network for the 21st century. Could Facebook become the web-equivalent of the Walt Disney Company? For us in Europe this might seem utterly ridiculous. Disney is almost instantaneously linked to Mickey Mouse, Donald Duck and other lovable cartoons. In the U.S. tough, Disney is one of corporate America’s most
important players. Disney holds major positions in both the silver screen and the television set. It owns ABC, one of America’s biggest networks, ESPN, the worldwide leader in sports, and your good old cartoon friends, Disney’s traditional business. It is a conglomerate tailored to the needs of an entire population. Whichever is your desire, there’s a high chance, you’ll find some type of content suiting to it on Disney’s archives. Facebook is becoming pretty much the same thing: The socialmedia conglomerate. And that is the company’s st ated direction. With the creation of Facebook Creative Labs, an in-house app incubator, and the acquisition of Instagram and WhatsApp, Facebook is trying to be there whenever you have a social experience on your electronic device. Facebook’s future will be less a b out Fa c eb o ok i t s el f , a s Zuckerberg has already said. Sounds confusing? It’s not. The social media website that everyone reading this is using, is becoming the flagship service of a much larger operation. Basically, Facebook is trying to expand its portfolio, so that it will appeal to everyone. Yes, when I write everyone, I actually mean everyone. Why is this important? Well, Facebook is in a business that is actually closer to fashion sense, than soft ware. Menlo Park engineers have to find out what
700 billion minutes total time spent on facebook per month
will be next social media fad. And that is probably harder, than figuring out an algorithm for yet another revolutionary app. Flappy Bird is the paramount ex a mpl e o f t h i s a p p a r e nt irrationality. A sloppy game with a very simple concept, it spent one year under the radar, in the depths of the App Store. And out of the blue, it became a literal obsession. Just through old-school word-of-mouth. Risk is high when popularity is one of your main drivers, but Facebook knows the answer. Diversify, Diversify, Diversify. That’s why Mark Zuckerberg is reorienting his teams to focus on developing new products, with standalone brands, and different strategies, as Facebook embraces "mobile first" as its new corporate mantra. But Facebook is trying to become more than a simple content provider. It is trying to be the full web service supplier, and that includes the signal, too. With internet.org, a joint venture launched with tech companies like Ericsson and Nokia, Zuckerberg is trying to bring the internet to the world’s most isolated areas. The promising results from some early experiments might seem a bit too euphoric, when you take into account the poor revenue generating capacity of these “webless” territories. But the point isn’t just revenues, its connecting the world, as the Social Empire takes yet another victory. 6
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Solving for X In the battle for the future, Google is aiming for the moon by José Veiga Rodrigues
When a company dominates an open industry as it is its very own backyard, you know that it is doing something terribly right. It seems that Google can’t do no harm. Its search engine, the cornerstone of its reign, is still the most used tool on the web. Chrome is the most used browser. Gmail is the most used e-mail platform. Maps is the most u sed navigation tool, and Translate is simply smashing its competitors with ease. To top it all off, Android is the most popular system in the mobile landscape. We could go on for a really long time, if we really were to enumerate all of the proofs of Google’s dominance. Still, in spite of all of its might, Google does have one Achilles’ heel: 85% of its revenues come from advertising. Is this the proverbial thorn in such a splendid rose? Is it just the curse of the Internet business? Innovating and investing to become nothing more than an interactive billboard? Well, it is a big problem, but it doesn’t have to keep on being one. Google has invested $33,3 billion in R&D from 2005 to
2013. Still, most of this went into building new software, which Google then gives away and improves over time. But the undisputed success of its software does not equate to its results on other ventures. Google+ is one gigantic failure. Google TV, Nexus Q? Yeah, they’re so good that 99,9% of its target consumers don’t know them. However, the web’s most interesting company is clearly changing its course. It knows all too well that just like it preyed on the TV ad business, something may come up tomorrow, which ends up wiping out the web search ad market. Google is trying to secure its future by doing the most obvious thing: Making the future happen. From advanced robotics to smart homes, Google is trying to cover each and every base, as it tries to secure its dominance. For this titan, innovation is not just a nice word for an annual report or yet another powerpoint presentation. At Google it’s innovate or die trying. Instead of simply buying disruptive tech, Google is actually developing a lot of it. All of this is happening at
G o o g l e X , t he c omp a n y ’ s secretive lab. The seeds of this initiative were planted in 2009, when Larry Page challenged Stanford computer scientist Sebastian Thrun to develop a self-driving car. In January 2010 Google X was officially created. Since then, X has attracted talents from all over the world, in its quest to tackle “moonshot” projects. As of now the two most successful initiatives are Glass and Drive. Project Loon and Google Contact Lens, aimed at helping diabetics controlling their glucose levels, are the other two projects of which we know of. In spite of all the secrecy, the most interesting thing about X is summed up in the words of its director, Astro Teller: “If there’s an enormous problem with the world, and we can convince ourselves that over some long but not unreasonable period of time we can make that problem go away, then we don’t need a business plan. We should be focused on making the world a better place, and once we can do that, the money will come back and find us”
“There are all these opportunities to make people’s lives better. Tech companies are attacking 1 percent of them. That leaves 99 percent virgin territory.” Larry Page to WIRED magazine 7
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Who wants to live forever? Calico is Google’s 21st weapon in the fight against Death By Tiago Reganha
Age-reversal and eternal life were always one of the would still toil in slums, dying because of the most basic most overlooked fields of study, in spite of its intemporal infections. Suddenly, this Holy Grail of Science becomes preponderance in our collective imagination. Every a horrid vision. company or research institution claiming to challenge the And are we even psychologically prepared to live to human lifespan significantly simply wasn’t taken 170? Could the earth’s resources sustain such a drastic seriously, until now. demographic change? Calico was announced last September by Larry Page, Many interesting questions can be posed surrounding Google co-founder and CEO. Its goal? To dramatically this theme, but the answers are simply pure philosophical extend the human life-expectancy by defeating age-related reasoning, based on what would have to be mostly diseases. fictional assumptions. The company, led by Arthur D. Levinson, Apple There is still no clear path on how Calico will put its Chairman and former Genentech CEO, is still in an plans into place. However with such a star-studded team early phase and looking for fields to explore, but it and Google’s resources and credibility, our probabilities already carries the burden of assuming its goal to of living deep into our 100’s have vastly increased. increase human-life expectancy by as much as 100 years. Calico just recently recruited a new talent, Cynthia Kenyon, a researcher at the University of California, San Francisco, one of the world’s leading medical science research centers. The Kenyon Lab was very well-known for her work of expanding the lifetime of worms. Kenyon isn’t the lone star of this project though. She’s joining an elite team of world-recognised researchers at Calico, such as David Botstein, from Princeton University, Hal V. Barron formerly at Roche and Genentech), and Robert Cohen, also formerly at Genentech. By entering this field of study, other companies will also be tempted to do so, shifting more resources for this modern-day adaptation of the epic quest for the Fountain of Youth. Solving the unsolvable suddenly doesn’t look so impossible and utopic. Even if Calico is only marginally successful, it would provide a huge advancement for Medicine, because it would probably help to figure out some issues related to old-age diseases, a field where scientistsBusiness-wise this could translate into Calico becoming the pharmaceutical company of the next century. The profits would have to be left to the imagination, since such revolutionary drugs would be very hard, or simply impossible, to price, given the current portfolio of available drugs. There are still have infinitely more questions than answers. However, other ethical and sustainability-related Ultimate conquest or ultimate dystopia? discussions may emerge, as it is unclear how such Could the moral implications of Calico’s adventure stop it in its developments would affect a world where 7 billion people tracks? cohabit and a part still lacks access to basic resources. These drugs could create a second species, a higher class of human beings that would live to 170, as others 8
NIC Undergrad Review Vol. 1 No. 1
Home, Smart Home The Internet of Things is here, brought to you by Google Nest by Sebastião Fernandes
Bringing Tech Home Nest’s smoke alarm detector is a lot more than great technology.
Have you ever sat on your couch, looked around, and thought about the amazing technology that keeps on coming through the door, year after year, at an increasing pace? I have (which may be a sign that I have too much time on my hands, but let’s not dwell on that). There is always something new. It’s paying your bills through your mobile phone, it’s controlling your television with a wave of your hand, and now it’s having a temperature setting system, that can be controlled from afar and that learns your habits and optimi zes the temperature of your home to your very personal preferences. This product is being developed by
Nest, a company founded in 2011 b y two Apple engineers, Tony Fadell and Matt Rogers. On its second largest deal since Motorola Mobility, Google bought Nest for some impressive $3.2 billion on January 14th. Why? Well, first off this is simply Google trying to break into the Internet-connected consumer devices market. It’s the Internet of things, the crossroads of hightech programming, daily human activities and the most basic electric devices. As expected, Google revealed that they expect this acquisition to enhance their product line and available ser vices, allowing Nest to continue to work on simple home
devices, making them more useful and intuitive, as it reaches out to millions of households. Smart houses are the next big thing. And it seems quite logical. We have smart computers, smart cars, smart phones, smart watches. Why not smart houses? The thing for Google is that Samsung thought about this a bit earlier as they already launched their Smart Home ecosystem. Google could not lose out on another ground-breaking product, as it did with the smartphone, where they had to spend billions trying to catch up Apple. And we all know how that worked out.
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Nest is built upon a smart thermostat and a smart smoke detector. It’s hardly a sexy product. But it sells, and it’s trending. Just to give you an idea of how fashionable it is, a group of Portuguese undergraduates is actually writing an article about how a thermostat and a smoke detector are worth roughly 2% of Portugal’s GDP. Nest’s products are not just efficient, they are well designed. It’s not even about just looking nice. It actually complements an avant-garde lifestyle. It’s a home appliance for the modern times of the twenty-first century. This know-how comes from Nest’s co-founders. Fadell and Rogers weren’t just Apple engineers. They played leading roles in the company’s two biggest hits: The iPod and the iPhone. Look at it from another perspective. Google has the technical ability to develop cutting edge products, but here’s the problem: Who wants to have a house fully equipped by the world’s biggest search engine? Exactly. That is why Google already announced the Nest would be kept as a separate brand. As time goes by, Google will probably integrate Nest’s products with its own products and platforms, assuming the successful rise of the Home Automation market. But the talents of Nest’s crew may bring a lot to Google as a whole. And it is easy to see why.
New perspective Nest brings a lot more than its products. The experience of its founders could help Google overcome some key challenges.
Every time Tony Fadell speaks, you notice that the way he expresses his enthusiasm and conviction about the design, functionality and the fr ustrations of consumer technology resembles Steve Jobs’ obsession about simplifying his costumers life. Nest shares some of Apple’s values such as product design, corporate secrecy and attention to detail. Nest’s future and what it produces may be the closest Google ever got to a joint venture with Apple. That force, that passion, that ability to turn an efficient product into a lifestyle symbol is exactly what Google has been missing in a lot of its projects. This deal is just what the doctor ordered. Nest’s products already had a “Googlesque” aspect in its use of machine learning and data streaming to make its thermostat able to learn a person’s behaviors.
On top of that, the smoke and carbon monoxide alarm, called Nest Protect, gives the company access to much more detailed information on what goes on inside your house. Add to that Google’s acquisition of DeepMind Technologies, and we have a recipe for developing a home that knows its residents. At the end of the day, what this means is that your appliances could gather tons of data on what you like, and from that they could adjust your house to whatever your wishes are, given the fact that these devices would have autonomous learning abilities. So, in, say, 15 years time, when you’re controlling your house from your smartphone, remember, you’ve heard it here first.
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Omnipresent, Omniscient, Omnipotent Can you lose out on the future if you’re the one creating it? by José Veiga Rodrigues
Tech is a strange business. It all starts with a new product. Investor s get excit ed, the innovators reach messianic status. Billions are made as analysts start to chart the glory of a profitable future. And all of a sudden something new comes up, and the once game-changing companies become the moguls of days past. If you look back at what has been holding back companies like IBM, Microsoft, HP or Sony, you will come to the conclusion that the problem lies in a difficult to transit from one pace setting dynamic to the other. The classic example would be the Sony’s Walkman, a cult gadget in the 90’s, which ended up being replaced by Apple’s Ipod. Have you seen a popular Sony MP3 player ever since? Exactly. Facebook and Google don’t want to go down the same path, and to avoid it they need to be on the forefront of the newest “fad”. So, when confronted with the challenge of navigating through such uncertain waters both companies followed a simple philosophy: If we are everywhere, we are bound to be right on top of the next breakthrough. Of course, this is much easier said than done, unless you have mountains of cash at your disposal. And that’s not really a problem for both sides. Add to that a number of ambitious exe c ut i ve s , e n g i n e e r s a n d
scientists, and you have yourself a true shopping spree. Nonetheless, this spree is more about future survival than present dominance. Projects like internet.org, or Google X’s moonshots, are not being built for this year’s annual report. They are an investment in the future.
It all boils down to D r u c ke r ’s c e l e b r a t e d words: “The best way to predict the future is to invent it”. It is interesting to see how both companies have embraced this challenge. Facebook has focused on becoming the social media equivalent of a traditional media empire. Zuckerberg has tried to buy every single popular social media app, and has focused significantly on mobile platforms. The recent entry into the Virtual Reality business is a different animal. It’s a clear transition from software to hardware. A virtual reality product could be a very profitable business, it would be the last step before pure teletransportion. Just picture this, you could have a robot operating on a child in a remote area of an underdeveloped country, while the doctor is commanding the robot through his virtual reality goggles somewhere in Europe. Or, not necessarily better, but
certainly more profitable, you could enjoy your favorite sports from the player’s point-of-view. This type of sci-fi like products i s w h er e Fa c e b o o k m e et s Google’s strategy. The search engine knows, just as well as Facebook does, that at the end of the day they are glorified billboards. In order to survive, Google decided to go back to its roots at Stanford University, and started to track a new path founded upon some of the most interesting challenges that academics have been faced with. Google Glass, for example, is the modern and commercial version of wearable computing, a field which has been in development for the last 30 years, and will certainly be fundamental for many more to come. Even death is now being under threat, as Google’s Calico is trying to push the boundaries of life even further. It may be a risky business, but at the end of the day, this drive could be fundamental for the world, as companies are now becoming important drivers for ambitious projects, as scientists have to abandon such initiatives due to funding cuts, NASA being the leading example. Could this be a new era of corporations driving groundbreaking research? It seems like it. Whether this is good or bad, that’s something that we will leave for your inner philosopher to feed on. 11
BUYING THE PEOPLE’S TELECOM Facebook’s biggest-ever acquisition turned a lot of heads. Find out why.
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What’s up with WhatsApp? The intricacies of an app that is destroying the SMS market by Mariana Fernandes
WhatsApp is the world’s most popular communication app. Founded in 2009 by Jan Koum and Brian Acton, two former Yahoo! Engineers, the company was recently bought by Facebook for $19 billion. The service allows users to exchange messages using the same Internet data plan that both e - m a i l a n d w e b b r ow s i n g platforms use. On top of that, each message sent is free of charge. The app itself is also free to download, and available on every smartphone platform. You can use it for $0 for one year, after that you will be charged a meager 99 cents for unlimited messaging, including exchanging image, audio and video files. Of course, this is only possible between WhatsApp users, but that’s not really a problem. The company already has a worldwide monthly active user base of 500 million, as to April 22, 2014, and 70% of them log in daily. That amounts to a staggering daily traffic of 53 billion messages. WhatsApp’s message volume growth is accelerating, as its
p op u l a r i t y ex p a nd s t o a n increasing number of markets. Currently, more than 1 million p e ople a r e r e g i st er i ng on WhatsApp daily. To top it all off, its users remain more engaged on WhatsApp than on any other service, to the dismal of the now rivaling telecoms, which might have lost $32,5 billion in SMS revenues in 2013, according to Ovum Ltd.
WhatsApp’s message volume will soon surpass that of global SMS. Facebook estimates that sometime next year WhatsApp will reach 1 billion users. This sort of large scale network could provide significant monetization opportunities, which could help explain the hefty price tag. WhatsApp’s 99 cent annual subscription fee could thus translate into significant revenue for Facebook. Still, what baffles most people is WhatsApp’s marketing
strategy. Actually, it’s the nonexistence of such a plan. All of its growth has come from satisfied users encouraging their friends to try the service. Good old word of mouth. Those of you who think that this is about sparing resources might be terribly wrong. On WhatsApp’s homepage, its cofou nd er s c ompl a i n of t he emphasis put on ads, which makes engineers focus on improving a banner, instead of the actual product. This might provide for an interesting clash with the rest of the Facebook clan. (see next section) In the meanwhile, WhatsApp will keep on making sure that telecom executives will lose their hair at an increasing pace, as their revenues erode faster and faster. And here is one curious fact for that City interview, or the casual pub banter: Brian Acton, applied for a job at Facebook, in 2009, and was rejected. Now they’re paying him $3 billion.
Taking over the world Whatsapp is the dominant instant messaging app in Western Europe and in some crucial Emerging Markets.
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The anatomy of a deal Breaking down Facebook’s biggest-ever acquisition by Afonso Ramos Borges
The Price WhatsApp cost Facebook $19 billion. $16 billion were paid upfront (25% in cash, 75% in stock). By paying upfront 12 of the 19 billion US dollars of the deal in its own stock, Facebook is saying that if or when the valuations per user decline, meaning that the implicit value of WhatsApp is lower, the price it paid is also lower, because its stock, owned by Jan Koum and Brian Acton will also decrease in value. The other $3 billion will be paid in restricted stock to its co-founders, a popular alternative to stock options. It is important to mention that for Oculus Rift’s acquisition, Facebook also paid only 20% of the price tag in cash, in that case, 400 million out of 2 billion.
Acquiring Consumers Not only is Whatsapp’s growth impressive, having reached more users in the first four years than Facebook, Gmail, Twitter and Skype combined, but its popularity is especially strong among the younger users to whom Facebook is not cool anymore. According to Global Social Media Impact Study, published in the end of 2013, Facebook is losing its grip on the younger generations. Here is one conclusion from it: “What we’ve learned from working with 16-18 year olds in the UK is that Facebook is not just on the slide, it is basically dead and buried. Mostly they feel embarrassed even to be associated with it. Where once parents worried about their children joining Facebook, the children now say it is their family that insists they stay there to post about their lives.” The younger generations, particular the 16-18 age bracket, are determinant to the initial success of any social network. Historically, they have been the
earlier adopters, followed by their elders. When young people start leaving - myspace, hi5 and MSN messenger provide great examples - networks don’t usually last much longer. Furthermore, the younger generations are more prone to have their consumption habits influenced by their peers and embrace e-commerce, meaning the very profitable targeted advertising works particularly well among them. At $42,22 per user versus Facebook’s $141,32 and Twitter’s $83,53, Whatsapp might look like an undervalued company. If you add the rapid pace of growth in the first four years after launch: 419 million users compared with Facebook’s 145 million and Twitter’s 54 million, you would be tempted to think this is a bargain. Yet one should not forget that FB was launched in 2004 and Twitter in 2006, whereas Whatsapp didn’t exist before 2009 and it obviously became immensely easier to reach this amount of users after webconnected smartphones use became widespread. Besides, it is significantly simpler to extract money from a software that sells ads and make no confusion, the $0,99 annual fee required by Whatsapp by no means justifies its price tag of $19 billion.
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One possible explanation for why Facebook decided to pay more than 10% of its market-cap on Whatsapp is that it wants to bring its users to Facebook, where their value is much higher. The problem with this approach is that the biggest part of Whatsapp 450 million users are already on Facebook.
Advertising WhatsApp CEO Jan Koum put it in simple terms: No ads, no gimmicks, no games. Zuckerberg went as far as saying that having ads popping up on a private messaging interface may not be the best of options. And Koum’s views on protecting consumer privacy, leaving ads on billboards are actually deep personal convictions. Still, once connected to Facebook, Whatsapp will inevitably play an important role in enhancing FB’s capacity to target advertising. The fact that the messaging volume of WhatsApp is close to the SMS volume of the entire global telecom companies combined shows just how much data Facebook will get its hands on. Of course this strategy is risky as it takes for granted that privacy concerns will not be raised by data protection regulators, which is unlikely at best. According to Jacob Kohnstamm, who leads a group of EU privacy officials known as the Article 29 Data Protection Working Party, “the main concern for privacy regulators is the collection of data from its users’ address books on their phones when they download the application” Nonetheless, new messaging apps focusing on privacy could appear quite quickly as public concern regarding corporate “spying” is on the rise.
A new business model On the 24th of February, Reuters reported that later this year WhatsApp will add free voice-call services to its application. The implication of this announcement is that a data plan will suffice in enabling users to call and text, eradicating the purpose of text and calls plans. Facebook’s recent move could, then, threaten the traditional telecom
businesses of companies such as Vodafone. In a recent interview, Jan Koum, WhatsApp’s cofounder said “We are here to make communication easy and affordable, be it messaging or voice. We became the leader in messaging because we focused on quality, and we are going to put the same focus on voice.” The most obvious move telecoms all over the world could make to restrain the pain inflicted by WhatsApp’s growth would be to charge more for data plans, which would prove difficult in such a competitive industry. Alternatively, telecoms could agree on reducing the price users pay for texts, perhaps giving up, even if temporarily, the revenues from this service. Nonetheless, this could on yield a marginal effect, since fees for international texting would be very difficult to cancel out.
FB Messenger There is still one important question: Why buy WhatsApp when your own instant messaging app? The answer is relatively simple. Facebook Messenger is a doomed business, because it can only be used by people, who already have Facebook accounts. On top of that, Facebook Messenger has had its fair share of technical problems, as sent messages get lost along their virtual paths and some users receive the same notifications twice on different platforms. WhatsApp though might be the polar opposite. It is a very personal interface, that only links you to users who already downloaded the app. It is as quick as a standard SMS, and each an every bug, which have been rare, has been fixed promptly. A testament to the company’s commitment to quality. On top of that, it does not spam users with a ton of requests to spread the good word, and ask them to join the app. Curiously, that is what you end up doing anyway. An interesting lesson for all “marketeers”.
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Actio - Reactio How Wall Street and Tech experts reacted to the deal by Afonso Ramos Borges
Wall Street didn’t take long to react to WhatsApp’s acquisition by Facebook. The deal was announced after the closing bell on February 19. At one point during the after-hours market, FB was trading at 5% under the previous close. On the following day, during the regular hours market, FB was up 2,3%, from the previous regular market closing price, erasing the losses from the after-hours market. This apparently contradicting reaction makes more sense if you look at the players in both the after-hours and the regular hours markets. Whereas extended hours trading, which include pre-market trading and after-hours trading, are mostly used by high net-worth investors and institutional investors, like mutual funds that are easily scared when a company in their portfolio spends $19 billion on acquiring another company, which hasn’t had more than $20 million in revenue last year, regular hours clients include the vast majority of small individual investors, that saw the potential benefits of the deal. Within a couple of days a lot of articles and opinions were written on this acquisition. One of the most interesting and critical texts was written by Aswath Damodaran, a NYU professor and valuation expert. We highly recommend this reading, which clearly distinguishes how this deal ought to be seen from the trader’s and the investor’s perspective. Larry Page, Google CEO, allegedly offered to outbid Facebook, but was turned down, as WhatsApp’s owners felt he was mostly interested in keeping it from Facebook.
extremely valuable. It's software; it can morph into a broad set of things – once you're set up communicating with somebody, you're not just going to do text. You're going to do photos, you're going to share documents, you're going to play games together.” Harry McCracken at TIME wrote “WhatsApp is already a phenomenon unto itself, the most important of several services that threaten to render text messaging obsolete in its old-fashioned, supplied-by-a-wireless-carrier form. And if Oculus takes off, Facebook may take a lead role in defining the future of human-machine interaction.” Some analysts worried about a bubble-effect, while others saw the acquisition as an important step in a world -social media- where you clearly have a flavour of the month. In the opinion of Greg Sterling at Opus Research, the deal comes from FB’s frustration from not being able to acquire Snapchat. To Roger Kay at Endpoint Technologies, “When you have a stock like that (Facebook) which has run up quickly and created a lot of paper value, it's good to trade that for other value.”
“I think [Zuckerberg’s] aggressivness is wise” Bill Gates In an interview to Rolling Stone, Bill Gates said that Microsoft was also interested in WhatsApp, but not for $19 billion. Commenting on the deal, Gates said “I think his aggressiveness is wise – although the price is higher than I would have expected. It shows that user bases are 16
You will have internet access in this place. Wanna know why? 17 Â
NIC Undergrad Review
Vol. 1 No. 1
Breaking the Internet’s Final Frontier Facebook and Google are on a mission to bring the world wide web to the globe’s remote corners by Afonso Ramos Borges and Mariana Fernandes
Roughly 76% of the world’s population is still offline. A grand total of 5 billion potential consumers still untapped by the innovations of the Internet. This might not be the case for long, as Google and Facebook fight out another chapter of the Web Wars, as they set their eyes to the stratosphere. The more time we spend on joking around Facebook pages such as “Animals stuck in odd pl ac e s but don ' t s e em t o mind”(go on and check that out, but make sure you come back to read the rest of the report), the more we forget about the Internet’s pivotal role as a vehicle for disseminating essential information. For the billions of people that don’t have internet access, it is impossible to “google” something or host a video-conference or to read a newspaper for free. G oogle and Facebook identified this huge opportunity. A hybrid of humanitarian aid and business strategy. It’s great PR and it might be great business. Project Loon started on June 2013 in New Zealand, when Google launched a pilot-test with 30 balloons capable of providing Internet to a small group of people. This project’s mission is to connect rural and remote areas p o orl y s er ve d b y ex i s t i ng provisions, and helping to improve communication in regions affected by natural disasters. It consists of a wireless
network of high-altitude balloons placed in the stratosphere, at approximately 30km above the Earth’s surface, enough to avoid aircrafts, meteorological phenomena and high-flying birds. In order to connect to this network the users attach a purposely designed antenna to their homes or working places. The signal will then travel from one balloon to the other, and will finally reach a ground-based station connected to an Internet service provider. Welcome to the world wide web. As the balloons must stay in the stratosphere for several years, the best alternative is to rely on renewable energy for both logistic and cost-efficient purposes. T herefore the project is energetically self-sufficient. It uses different wind layers for propulsion, whilst the electronic components are fed through solar panels. Each of these balloons can provide connectivity to a radius of 40km with up to 3Glike speeds. Simultaneously, Mark Zuckerberg, founder and CEO of Facebook, launched Internet.org, a global partnership with leading companies in the technological sector such as Samsung and Nokia, non-profit organisations, local communities and specialists. Internet.org expects to make data more affordable and apps more efficient as well as developing new means of provisioning Internet to remote populations. In order to make the Internet 100 times more affordable, they
expect a 90% reduction in the data prices and to enable apps to consume 90% less data. Developers from all around the world will have a chance to achieve this ambitious goal through the Internet.org Innovation Lab at Facebook’s HQ in Menlo Park, California. For Zuckerberg this is a lot more than an investment. It’s a life-saving mission. Just read his words: “Internet access is a human right and no one should have to choose between Internet or food and medicine.” Internet.org got a further push with the announcement of the Connectivity Lab at Facebook on March 27. It is expected to develop and solar-powered drones and satellites built by Ascenta, a UK-based company working on drone technology, to beam the good tech to the remote parts of the world.
NIC Undergrad Review Vol. 1 No. 1
Big Ambitions, Big Projects Analyzing Facebook and Google’s eﬀorts to bring the web to the masses by Afonso Ramos Borges, Mariana Fernandes and José Veiga Rodrigues
Could Drones be the answer? Facebook and Google are using next-gen drones for their projects.
The race is on, but who will get there first, or will get the best service? Both sides have very good arguments, let us walk you through the strengths of these projects. Internet.org, Facebook’s effort to bring the web to the world’s most remote regions, is founded upon a joint venture that brings together firms with experience on all possible issues. The partnerships draw from businesses and research institutions. Among the companies joining Facebook we can find Ericsson, Nokia, Media Tek, Opera, Qualcomm and Samsung. The NASA Jet Propulsion Lab and the National Optical Astronomy Observatory (U.S.A.) count as the associate
labs. T hese joint ventures are extremely important, because the sheer width of topics, which these firms can cover guarantees, that a great major it y of potential problems can be addressed by one of the partners. On top of that, Facebook has recently acquired Ascenta, a British company working on drones, which gives shape to Zuckerberg’s conviction of using drones to bring Internet to the masses. The two labs that it founded will also be of an immense help. The Innovation Lab and the Connectivity Lab are attracting some very bright minds from all over the world. After all, this is a great opportunity to do interesting research on a very complex issue,
which also has a very humanitarian appeal. (see last article) Finnal y, Facebook ha s WhatsApp on its side. Why is this important? Well, given the lower speed and qualit y of the connection, instante messaging apps like WhatsApp will be the first to have a large following in a remote area, especially given the necessity for efficient communication in a lot of these areas. Google comes with a different perspective. Instead of JV’s, the web titan decided to go solo. With Project Loon Google has used its own research crews extensively, looking into every aspect of this challenge. Looking at them closely, we found three strong aspects. 19
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Firstly, Google owns Android, which is the most used mobile device platform in the developing world. This could of course provide an advantage in creating not just new apps, but an entire software dedicated to running on low data, which is crucial to the success of this endeavour. Secondly, the recent acquisition of Titan Aerospace gave Facebook two blows with one move. On the one hand it weakens Facebook’s position, since the Menlo Park based firm was actually looking to add the drone manufacturer to its portfólio. On the other hand, this could mean that Google would be able to replace its baloons with drones. But not just any drones. Titan’s machines can fly for up to 5 years without any assistance. Technologically, Google now has the planes that Facebook is trying to build. The third argument is quite obvious. Maybe a bit too obvious, since most people end up forgetting it: How do people from the poorest regions on the globe acess the Internet? Exactly. At the current price of a smartphone they simply do not. This is where we believe that Google can get a significant advantage. Why?
Through its acquisition of Motorola, Google gained a lot of exposure to the hardware side of the mobile business. This acquired know-how was then used to bring the Motorola Ara project to life. You probably may have heard of this, but, if you do, you might know it as Phonebloks. The concept is really simple. There is a basic module, which can be bought for $40. This module is the hardware equivalente of a canvas, since you can attach small blocks to this piece. Each of these blocks incorporates a diferent function, from a battery to a camera, or more computing power. So, it’s essentialy a Lego-like smartphone. Although the costs might still be relatively high for third-world standards, the potential for lower production costs is high, especially since Google is planning on letting other developers create new blocks or enhance existing ones. This means, that some developers might tap into this opportunity, and develop low-cost smartphones with first class computing capabilities. Long-Shot? Not really. Just ask your parents how much a PC cost 20 years ago.
Getting to the heart of the matter Are these eﬀorts philanthropic or is there a hidden corporate strategy? by Afonso Ramos Borges and Mariana Fernandes
If you were to believe Mr. Zuckerberg’s words, you would be convinced that he genuinely thinks he can make the world a better place by connecting the unconnected 5 billion people. Yet Mr. Bill Gates, one of the world’s leading philanthropists, recently pointed out that finding a vaccine for malaria is far more important than giving the planet an internet connection, clearly criticising internet.org’s premise. “When you’re dying of malaria, I suppose you’ll look up and see that ballon, and I’m not sure how it’ll help you” were his words to Businessweek.
Well, one could argue that a connection to the internet could help many people make more efficient economic decisions and that with the gains from these decisions, they could easily purchase vaccines for themselves. The counterarguments to this reasoning would be that for one thing, the development of a cure t o m a l a r i a d em a n d s g r e at investment that far exceeds what most people are willing and capable of spending; while for another, the people suffering from polio in countries like Nigeria and Afghanistan couldn’t possibly benefit from an internet
connection as they don’t own devices such as smartphones or personal computers. The real issue though is this: The fact that the Bill & Melinda Gates Foundation gives away $4B yearly to charity is simply a matter of their judgment. It is a simple personal choice. Facebook and Google are businesses and its “contributions” to change the world ought to be approved by the companies’ shareholders.
Can Google Glass cure our myopia?
NIC Undergrad Review Vol. 1 No. 1
Put on some GLASSes Discovering the newest wearable computer. By Diego de Bragança Tremiterra
Google Glass, developed by Google X, Larry Page and Sergey Brin’s secretive development lab, is a wearable computer that operates in the Augmented Reality world, a digital overlay onto the real world. With its Optical Head-Mounted Display (OHMD), it promises to make the smartphone experience much more real, fast and socially acceptable, in simpler terms without the need of isolating ourselves by staring at touchscreens. “ We wanted to create something that frees your hands, eyes and ears”, Brin said. It provides Google searches, instant messaging, a music player, access to maps and other apps, and of course an incorporated camera. Everything at the reach of the new version of “Open Sesame”: “Ok Glass”. The project started, subliminally, 15 years ago. When Google was founded, Brin and Page had a vision where information came to us as we needed it. Google Glass is the first disruptive technology created by Google that can accomplish that vision. In the summer of 2011 Google made a prototype that weighted 3600g. Then, in April 2012 the product began being tested, Sergey Brin actually brought his Google Glass to the Fighting Blindness Foundation event on April 5. 2012. Exactly one year later, in April 2013, the Explorer Edition, worth $1500, was made available in the United States to testers and Google I/O developers. At this point, Google has not announced when Google Glass will be available for consumers, but on April 15, 2014 the purchase of Google Glass was made available to the general public, but just for that day.
Nevertheless, the retail price was still $1500. Google Glass therefore quite expensive for the average consumer, meaning that for now it cannot be massively sold. Experts have valued the total production cost of a pair of Google Glass at $200, meaning the gross margin is about $1300, this shows though that Google has a big enough margin to reduce its prices. Its design has also been widely criticised, creating another limitation for this project. Google responded by entering in a partnership with the eyewear brand Luxottica, owner of both Ray-Ban and Oakley, two iconic, fashionable brands, in order to offer a portfolio of appealing frame designs. In spite of its price, Glass is still quite limited: Glass runs on Android. Compatibility with the IPhone has improved due to the launch of the iOS MyGlass App, but they are still suffering some technical problems, like messages that aren´t forwarded to Glass. Regarding the Windows Phone 8, there are no compatible features available yet. Glassware, Google Glass’ database for apps specifically developed for the wearable prototype, only lists 42 apps, which shows that Glass is still at an early stage. Big social networking apps like Facebook, Twitter, Tumblr and Path are already engineering a display for the Glass.
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Currently, the maximum number of contacts Google Glass supports by users saying their names is ten, which is not really that impressive. Right now, we can still consider Google Glass a prototype, even after it having been tested by thousands of Explorers. How Google Glass will turn out to be depends on several factors. The price is the probably the main one. The faster Google lowers the price, the faster the sales growth, as it reaches a user-friendly edition, appealing to the mainstream consumer. It has been estimated that it will decrease to around $600 from $1500 in around two years. Also, there is the App catalyst. Google has been encouraging developers to create apps for the Glass even before the release of an Explorer version. The creation of innovative apps might boost up interest in the product. Last but not least, there are many cultural challenges that will define the Glass path. Privacy is the main one. Imagine entering a bathroom with the Glass… Several different bars in San Francisco prohibited Google Glass from their facilities, because people didn’t feel confortable not knowing if they were being recorded or not. There is also the social look barrier: are we ready to embrace a Star Wars look in our daily life? Most people would associate Glass to Facebook’s newest acquisition, Oculus Rift. It is therefore really important to stress the difference between Augmented Reality (AR), associated to Google Glass, and Virtual Reality (VR), associated to Oculus Rift, a virtual reality head-mounted display.
WATCH OUT FOR WORLD LENS! CONSIDERED “ONE
OF THE MOST IMPRESSIVE APPS BY A THIRDPARTY DEVELOPER ” BY F ORBES , IT SCANS ANS VISUALLY
ENGLISH TO AND FROM PORTUGUES, ITALIAN, GERMAN, FRENCH AND SPANISH. WITH AN ALREADY EXISTING APP FOR ANDROID AND IOS, WITH THE GLASS IT PROVIDES A MUCH MORE INVOLVING “TRANSLATING” EXPERIENCE. TRANSLATES WORDS IN
The main goal of AR is to allow you to experience technology without the need of isolating yourself from the real world, by overlaying technologies displays onto our field of vision. VR, on the other side, seeks to improve reality by eliminating it and, therefore, isolates users from the real world. Quoting Forbes, “Oculus wants us to do things we can’t by pretending that they’re real, but Google wants us to do things we can’t by expanding our capabilities”. Concluding, if you are more of a Indiana Jones kind of person, you don’t need VR, because real life is quite adventurous enough, you just need AR to record it, take photos and improve it even more. On the other side, if you are more of a Matrix groupie, VR isn’t a bad idea, at all.
Sharing your perspective After years of reclusion highly touted computer science labs, wearable computers are now on the verge of full-scale massification. 23
Hello, this is your brain.
Could a machine outsmart it? Google and Facebook think so.
NIC Undergrad Review Vol. 1 No. 1
A.I.: Unraveling the myth What kind of artificial intelligence are both companies truly investing on by Duarte Barosa
Artificial Intelligence has been discussed since ancient times, most notably in Greek mythology, as in the tales of Talos of Crete. The question “What if we create machines that can think like us?” has already been in everybody’s mind, and it is no wonder that it gave place to extreme theories like the one behind the classic movie ‘’The Terminator’’ (1984) where AI machines attempts to destroy the humankind, or, most recently, ‘’Her” (2013) where a man falls in love with its virtual, siri-like assistant, Samantha. After millennia of imagination, we might have come to the point in which a lot of this world of fiction could come to life in the near future. Facebook and Google have made some moves recently, which show that they have a special interest in this intriguing field. So, does this mean Facebook and Google will start to communicate with us, just like humans? Of course not, artificial intelligence is not that advanced, or at least for now. What they are really looking forward to achieve is the keystone of these humanoid machines, a process known as Deep Learning. And what is this? Well, when the first researchers started to get their heads around artificial intelligence, it was always assumed that it would be created with millions, billions or maybe trillions of lines of complex codes. This is exactly where the Deep Learning system comes in. Instead of trying to predict all possible scenarios with pre-written rules, programmers will insert data to a computer program. The computer then needs to draw logical associations from the data it was given.
Correct interpretation is then rewarded, usually through a point system. The machine will then perfect its methods as it is graded over time. In short, it is a machine learning method that, by looking at a huge body of data tries to develop a high-level of abstraction by looking for recurring patterns. It may sound a little unrealistic, but it is working. Just a few months ago Google used a sample of Youtube videos to test a computing infrastructure working on basic Depp Learning processes. And, without any previous knowledge, it started recognizing cats. (Ok, so maybe we are not exactly at that stage in which the computer will solve your homework – but it’s a start.) What’s deep learning? It is a machine learning method that looks for recurring patterns in data, and without any previous knowledge, starts diﬀerentiating it. 25
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Deep learning brains: Gotta catch’em all Deep Learning scientists are being sought out by companies like sports superstars. by Duarte Barosa
Deep learning is a really hot topic at the moment. Especially since January 2014, when Google bought British company DeepMind for an estimated $400 million. Facebook has reportedly failed to acquire the same company back in December 2012. The startup had one of the biggest concentrations of researchers working on Deep Learning, so it was more like an acquisition of talent rather than looking for a specific products. One of the biggest talents is Demis Hassabis, the co-founder of the startup, who originally was a British prodigy chess player who built amazing video games before getting any computer degree. Actually, an AI researcher at University of Montreal predicts that there are only around 50 specialists in deep learning around the world, and that DeepMind had about a dozen of them. It is clearly a sign of the effort Google is making to monopolize the biggest brains of this highly complex field. But this wasn’t the first move both companies did to increase their firepower in this particular area. In September, Facebook announced they were opening a
new artificial intelligence lab, and in D ec emb er the compa n y revealed who was set to run it: NYU’s professor Yann LeCun, one of the world’s leading Deep Learning and machine learning scientists. It was seen as a particularly bold move, as it seemed like a direct shot at Google, which had a deep learning startup run by Geoffrey Hinton, a University of Toronto professor, also a well-known name in the field, just the year before. Professor Hinton, mostly recognized for his work in neural networks, even joined Google’s board as a distinguished researcher. However, Google has shown to be much more interested in artificial intelligence, simply because it invested more money in such programs. In addition to DeepMind, It has bought almost every machine learning and robotics company it can find. It bought Boston Dynamics, the firm that produces life-like military robots. Last December, it spent $3,2 billion on smart thermostat Nest Labs (see Home, Smart Home). And these were just the big
deals. It also acquired Bot & Delly, Meka Robotics, Holomni, Redwood Robotics, Schaff and another AI startup, DNNresearch. So, Google is not only buying deep learning startups. It is also making its way through several robotics firms. So it comes to no surprise that many ask themselves if Google is building a robotic army. The question will stay unanswered for now, since they didn’t disclose their purposes, but for the sake of our sanity let us assume, that this is just a conspiracy theory. Looking at it from a simple business perspective, the obvious reason is that Google is trying to gain a dominant position in markets, which can, and will, shape the future in fundamental ways. There is another bright star at Google. In 2012 Google hired Ray Kurzeil, known as the grandfather of ‘’strong AI’’, a man who forecasts that intelligent machines may exist by midcentury. A DeepMind investor reportedly said that if artificial intelligence was really possible, and if anybody could do it, ‘’this would be the team’’. The optimism is there. Google acquired one more startup I n J a n u a r y, D e e p M i n d announced on their website that they were joining Google.
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New technology, deep changes How could these new findings change the business for our well-known web companies by Duarte Barosa
In some aspects, we are getting close to Deep Learning. Facebook already has some functions that work with similar mechanisms. The face recognition system that is currently operating is basically a program that understood what a face looked like, by analyzing the distance bet ween some key anatomical points. It is still a very primitive intelligence, though. There’s more though: Facebook’s facial recognition research project, DeepFace, is almost as accurate as the human brain. It can look at two photos, from multiple angles, and tell whether the images contain the same face. It’s accuracy? 97,25%. For the sake of comparison, Humans can do this same process with an accuracy of 97.53%. It is just a research project, but it is predicted that it will be used in the near future to improve Facebook’s facial recognition. And what’s the true power of face recognition? Can you imagine what it is to track your face across the entire web? It is indeed a way to produce some very lucrative behavioral tracking data! (Not to mention what the government would pay to own such a program.) However, the main goal here is to use Deep Learning techniques that can work out the emotions or events described on a text, even if
they are not explicitly referenced, or to recognize objects in photos, and, ultimately, to make sophisticated predictions about likely future behavior. The value of such a program for a business that runs on advertising revenues is, simply put, unimaginable. One day you say you want a ticket to a music festival on some comment, and on the next minute your Newsfeed is filled with ads about campaigns that offer free tickets. Just like that!
Computers can now recognize faces just as well as humans. So simple that it is quite scary. On the other side of the battle, Google has a number of operations that can also benefit from deep learning. It search engine would get an incredible boost, since it would be able to handle much more complex requests with ease. On top of that, Google would also be much more precise in delivering the results you actually need, instead of simple approximations. YouTube could help a lot of companies addressing copyright issues, for example. Systems equipped with Deep Learning could recognize people and products and avoid most of these
violations by automatically blocking infringing contents. Google Translate could actually translate a sentence according to its actual sense, instead of simply translating word for word. Google Maps could be even more accurate, and handle even more data to accurately predict your travel time, optimizing your itineraries in the process Google’s online advertising business could use deep learning to t arget users even more precisely with ads. The power of a highly-intelligent search engine would be unmatched for any marketing firm. In fact, it could be somewhat of a marketing utopia. The potential is basically limitless. Using the cliché “The sky is the limit” would be too short of a limitation for a technology, which might actually know no boundaries. One day our refrigerators, toasters, windows and all the other basic home devices and furniture will communicate with each other, and enhance your living standards dramatically, as they cater to your every need. Oh wait. That day is here. Don’t believe us? Check out our article on Google Nest.