Author: Ingrid Lunden

Russia’s Telegram ban that knocked out 15M Google, Amazon IP addresses had a precedent in Zello

Russia blocking access to Telegram after the messaging app refused to give it access to encrypted messages has picked up an unintended casualty: we’re now up to over 15 million IP addresses from Amazon and Google getting shut down by the regulators in the process, taking various other (non-Telegram) services down with it.

Telegram’s CEO Pavel Durov earlier today said that its reach in the country has yet to see an impact from the ban 24 hours on, with VPNs, proxies and third-party cloud services stepping in to pick up the slack for its roughly 14 million users in the country, and third parties refusing to buckle under requests from Roskomnadzor, the regulator, to remove the app from its stores and servers.

“Thank you for your support and loyalty, Russian users of Telegram. Thank you, Apple, Google, Amazon, Microsoft — for not taking part in political censorship,” Durov noted.

But Telegram’s Russia crisis is not the first time that an app banned by the Russian government has had to rely on third-party support to navigate its position with users. A recent precedent involving a much smaller communications app sheds some light on how all of this works. And ironically, its own run-in may have been the reason for why the government moved so quickly to block so many IP addresses around Telegram’s, affecting more than just the app itself.

A little over a year ago, the walkie-talkie app Zello received a notice from the Russian regulator Roskomnadzor. Zello was informed that it would be banned unless it started to host records of the conversations that were taking place on the app on Russian servers — in compliance with a hosting requirement that Russia put in place for ISPs back in 2014 as part of its efforts to tighten its control of digital information in the name of national security.

You might remember the name Zello from its bump of attention when a wave of people hit by Hurricane Harvey in Texas used it to communicate with each other when voice services went down or became too clumsy to use, but mobile internet connections stayed up. “Voice is how we most naturally communicate, and push-to-talk and radio-style communication is instant, no dialling or waiting,” said Zello CEO Bill Moore. “It can be with one person or large groups and build relationships and to solve problems.”

The startup itself is based out of Austin, Texas and has around 120 million registered users, with around four million monthly active users.

Moore — who had in the past also founded and run another Texas startup, TuneIn — said in an interview this week that Zello’s run-in with Russia started about a year ago, when the regulator started to block the application in Spring 2017, after Zello refused to cooperate with the hosting requirement, both on grounds of cost and principle.

(Cost: because it’s a small startup. And principle: because Zello is built in a way where messages are stored locally, both for direct messages and those sent in more widely-distributed channels, the feature that Moore believes might have been “why Zello annoyed Russia,” because protestors used these channels to coordinate activities.”)

Instead of buckling and leaving Russia, Zello decided to use to some software it had written years before, when the app had been issued with a block in Venezuela after it ran afoul of the government there — software “that let us change IP addresses for our service,” as Moore describes it. The change in IP addresses essentially meant that as Zello was shut down in one place, it was able to hop to another, using services from either AWS or Google Cloud.

Moore said that Zello — which originally hosted its service on IBM’s cloud before the ban — used its IP hopping tactic for nearly a year, moving first across IP addresses on Amazon and then hopping to Google Cloud when Amazon got too hot. By the time Zello started using Google Cloud, the government was well on to Zello’s ways, and it took only about 10 days before Google asked Zello to stop, Zello’s CTO and founder Alexey Gavrilov added.

“About a month ago, the press in Russia began to report that Roskomnadzor was threatening to block millions of addresses if that’s what it took to get Zello [to retreat]. That was when Amazon said, ‘you need to stop changing IP addresses,'” Gavrilov said. “We tried to get Amazon to reconsider, making the case that by asking us to stop, it is are really acting the same way that ISPs do that are controlled by Russia. Zello is not damaging, but Russia is by blocking. It’s not wise to go along with that threat.”

His argument echoes what Durov has been saying in defense of Telegram, although it didn’t appear to wash for the smaller app. “We lost that debate,” Gavrilov said.

Moore and Gavrilov say they believe Telegram may be using a similar kind of approach to move around Amazon- and Google-based IP addresses (I’ve tried to contact Durov to ask about this but have not had a reply; Google and Amazon also have not replied to my emails). However, now, with the Russian authorities well aware of the tactic, it simply decided to block large swathes of IPs to act more quickly, rather than negotiate with cloud companies to pick out which IP addresses were actually being used.

Partly because of the size of the service in question, and partly because of the blanket blocking, the difference between the IP addresses being blocked varied from just over 2,000 for Zello to more than 15 million by the time Telegram attempted its own IP hops.

Zello still believes that it was not in the wrong in its own encounters with the Russian government, although its appeals to Amazon and Google, and eventually Apple and others who host the app on their stores, ultimately didn’t wash.

“We believe that Zello doesn’t violate Russian law because originally the hosting requirement was written for ISPs, and Zello is not an ISP,” Moore said. “We cooperate with law enforcement on a consistent basis and do what we can under the law.” But like Telegram, Zello takes the view that the medium should not be attacked because of how it is used. “Terrorists drink water, but I don’t think we should outlaw water, either,” is how Moore describes his stance.

Since about two weeks ago, the only way that people in Russia can use Zello is by way of VPN proxies. Zello has a fairly even distribution of its several millon monthly active users across several countries, including the U.S., Mexico, Brazil, and Hong Kong. Russia had been one of its top markets until this happened, but the cost to Zello has been about half of its active users in the country, which now stand at 200,000.

“We don’t like to think about how we’ve lost half our users there,” Gavrilov said. “We like to think about how many we’ve managed to keep.”

Zello has always been ad-free and free to use by regular consumers. Moore said that the company is profitable, making its revenues through a premium tier for businesses to have their own private channels. So far, Zello is completely bootstrapped, although Moore said that it is likely it will want to raise money eventually to grow its consumer business.

Neither CTO nor CEO think that Russian bans impact the company’s wider business.

“In my opinion, incidents like these only help companies like Telegram and Zello on the global market,” Gavrilov (a native of Russia) said. “Realistically, Russia is a small share of the Telegram user base, and standing up to the demands in Russia just communicates to everyone else that you can trust these people. That only makes it more valuable.”

Facebook makes its privacy, data downloading and deletion settings easier to find

With Facebook facing a wave of public backlash over how it has handled user data over the years — a backlash that was kicked off two weeks ago with the revelation that data analytics firm Cambridge Analytica had worked on targeted election campaigns using personal and private Facebook data — the company today announced a new set of changes to help users find and change their privacy settings, as well as download and delete whatever data has been collected through Facebook’s network of social media services.

To be clear, many of these settings and features already existed in Facebook, but now Facebook is making them significantly clearer for the average user to find and use. It’s possible that Facebook would have had to do a lot of this work anyway in light of the new GDPR requirements that are coming into place in Europe.

What today’s changes do not do is provide any indications that Facebook plans to do anything different in terms of what information it’s gathering and using to run its service, and its bigger, profitable business. (Indeed, even upcoming changes to its terms of service, which will include more clarity on Facebook’s data policy, will contain no changes in it, the company says: “These updates are about transparency – not about gaining new rights to collect, use, or share data,” writes Erin Egan, Facebook’s chief privacy officer.)

We’ve seen a lot of people already downloading their Facebook data in the last week or so (without today’s update), and the impression you get is that they are generally coming away shocked by the amount of information that had been amassed through Facebook’s various apps across web and mobile. That in itself — combined with more scrutiny from regulators over how data is collected, used, and shared, and bigger changes that Facebook is making in terms of how it works with third-party apps that link into the Facebook platform (which CEO Mark Zuckberg announced last week) — will hopefully lead to more meaningful changes on that front.

For the time being, however, the main idea here is that if you choose to stay and use Facebook, caveat emptor, and proceed armed with more control. Facebook highlights several areas where changes are being put in place:

  1. User controls. Facebook said that it has redesigned its settings menu for mobile, consolidating all of the primary controls on one screen. This is already a major change, given that previously they were spread across 20: a gating factor that would have meant it was hard to find what you were trying to change, or perhaps leading many to give up altogether. It’s also making it clear what can and cannot be shared with apps, specifically: “We’ve also cleaned up outdated settings so it’s clear what information can and can’t be shared with apps,” writes Egan. The fact that it seems there were some out of date elements in the menus highlights that this might not have been Facebook’s biggest priority up to now.
  2. Privacy shortcuts. For those who don’t want to dive into their settings, Facebook said it is also going to put in a new item into its menu, directly linking users to privacy settings. Privacy Shortcuts, Facebook said, will come by way of a few taps and will let people add in two-factor authentication; composite access to what you’ve shared via Facebook with the option of deleting if you choose; controls for your ad settings, which will also include an explanation of how ads work on Facebook for those who might want to know more; and a link to help you control what and how you share on the site — that is, the setting of “public, friends only, and friends of friends.” Again, that control has been in place for years already at Facebook, but many don’t know how to access it, or what it means. Putting it a little more front and center might change that.
  3. Downloading and deleting Facebook data. The aim here is to make it easier for people to do both if they want. Access Your Information will be a secure link that people can use to collect this, and it will make it easier for people to do both. Will the ease and openness make it less likely that users will decide to leave Facebook altogether? That remains to be seen.

The news comes in the wake of CEO Mark Zuckerberg last week posting an acknowledgement of Facebook’s role in the scandal, and a pledge to improve the company’s practices with regards to third-party apps and how Facebook works with them, and what data it will provide in the future, which he also followed up with a full-page apology printed in several newspapers. It has not been enough for some, and #deletefacebook has become a trending concept, with the company’s stock taking a nosedive in the last two weeks.

FTC reportedly eyes probe of Facebook over data violations as UK and US pols summon Zuck to testify

The fallout from the story concerning Facebook, Cambridge Analytica, the misuse of personal data and how much Facebook knew about all this, has quickly made its way into the halls of government.

Bloomberg is reporting that the Federal Trade Commission is opening a probe into Facebook and the misuse of personal data, related to a consent decree that was issued in 2011 over the social network’s personal data handling policies.

Also today, Damian Collins, a member of parliament who is the chair of the Department of Culture, Media and Sport select committee in the UK, has issued a request to Facebook CEO Mark Zuckerberg to provide oral evidence to the committee. Meanwhile, Mark Warner, the U.S. Senator who is vice chair of the Intelligence Committee, has also requested that Zuckerberg, along with other tech CEOs, testify in order to answer questions about Facebook’s role in “social manipulation” in the 2016 election.

The FTC has not yet responded to our requests for comment, and it has not publicly confirmed if it is probing Facebook. The original decree was made as a settlement to an inquiry at the time into how Facebook — then just a startup but growing wildly fast — “deceived consumers by telling them they could keep their information on Facebook private, and then repeatedly allowing it to be shared and made public,” and it arose specifically in relation to how third-party apps were able to use and access this data. This is key because the original survey that users filled out was, in fact, an app of sorts, linking into Facebook by way of its API.

The idea behind the FTC settlement in 2011 was to ensure that Facebook made its privacy and data handling policies clear to consumers going forward, and to get their “express consent” before information is shared beyond the privacy settings those users established.

Specific details of the 2011 decree included barring Facebook from making misrepresentations about privacy and security of personal information; getting user consent before making change that override privacy preferences; preventing material to be shared after an account was deleted or deactivated; and maintaining a privacy program assessing risks and getting this audited every two years.

The decree also notes that it will terminate 20 years from the date of being issued, but that it will renew for another 20 years each time that the FTC files a complaint over any violations — meaning, if the FTC does file a complaint and is successful in determining the violation, it will prolong Facebook’s own need to report and make clear privacy policies to its users.

Committees call on Zuck to speak for the company.

Warner’s public call for Zuckerberg to speak, delivered earlier this morning by way of a Tweet, was not the first time that the Intel Committee has requested Zuckerberg to testify: it had also invited him to the original hearing in November of last year, where lawyers were sent instead.

Meanwhile, Collins’ invitation also comes in the wake of other requests for top Facebook executives, for hearings that the DCMS has held both in London and, just weeks ago, in Washington in an attempt to attract more senior executives to participate.

“The Committtee has repeatedly asked Facebook about how companies acquire and hold on to user data from their site, and in particular about whether data had been taken without their consent,” Collins writes in his letter. “Your officials’ answers have consistently understated this risk, and have been misleading to the Committee. It is now time to hear from a senior Facebook executive with the sufficient authority to give an accurate account of this catastrophic failure of process.”

Indeed, the thinking now seems to be that the increased attention, and the revelations in the media, will now force Facebook’s hand a bit more than before.

The summons to give evidence before the parliamentary committee or Congress are not legally binding, but they are significant for other reasons.

For one, they provide a moment to hear Zuckerberg give live responses to questions as they are presented to him: up to now, a lot of what we’ve heard from the CEO on the subject of Facebook and its position in the wider issue of elections, fake news and the use of social media help achieve certain outcomes, has largely come in the form of long Facebook posts by him, with little in the way of dialogue (which is in itself a little ironic when you consider the whole point of Facebook is supposed to be about engagement).

While there are no direct legal ramifications for testifying, what it does do is provide more evidence for lawmakers. At a time when we have relatively light regulation for social media and how it handles data in the US, this could become a critical moment where we may start to see more calls and efforts to start to regulate this area of digital media more carefully.

A third reason why testifying is notable is because of the optics: for a lot of people who do not understand and care much about the intricacies of how social networks handle their data, this could bring new light to the topic, on both sides of the table. Perhaps especially important for Zuckerberg if he’s truly considering a run for public office sometime in the future, as some have reported.

Meltwater has acquired DataSift to double down on social media analytics

In a week when all eyes are on Facebook and the subject of how data about us on social media platforms gets used without us knowing, there’s been some consolidation afoot in the world of media-based big data services. DataSift, the London-based company that pulls data from conversations across social, news and blog platforms, anonymises it, and then parses it for insights for third party organizations, is being acquired by Meltwater, the company originally out of Norway but now based in San Francisco that provides business intelligence services such as media monitoring and AI analytics on internal business communications.

Financial terms are not being disclosed for the deal but it includes technology, employees and DataSift’s customer base. DataSift had raised about $72 million in funding from investors that include Insight Venture Partners, Scale Ventures and Upfront Ventures and the company had never disclosed its valuation. Meltwater is bootstrapped and has never raised outside funding, but it has also been described as a “unicorn” with a billion-dollar valuation — a description that the company would not confirm but also does not contest.

DataSift’s CEO Tim Barker, who is taking on a role at Meltwater leading his team there, said that it’s business as usual for DataSift’s existing customers, while the two will also work on integrating their platforms together. Combined, the customer base includes media companies, brands and educational and other organizations that make use of the data. Disclosed customer names include Viacom, Ogilvy, Air France, Vans, Harvard Business School and Columbia Business School.

The news comes at an interesting time in the world of social media, and more specifically the data that swirls around it. Over the weekend, we saw a huge story break about how the analytics firm Cambridge Analytica was involved in what has amounted to a data scandal: an affiliate working with the firm had used an innocuous-looking research survey to in turn tap into the social graphs and the related data of respondents, by way of Facebook’s API, netting tens of millions of profiles in the process. The fallout is likely to be felt for a long time to come, and may well bring about a new kind of regulation and scrutiny over how personal data is harnessed and used in social networks.

While this is raising a lot of questions already about personal data and social media, DataSift and Meltwater, to be clear, sit at a different section of the data and media continuum. While Meltwater focuses on what’s produced either internally at a business, or by publications and other media companies, DataSift’s currency is the movement of information that’s already being put out onto social networks in public posts, rather than personal details or attributes of users. As Barker describes it, the company has taken an approach that it calls “privacy by design,” in which it works only with anonymised data to reach its insights, and that work is not focused on how to use that data to rebuild profiles or “types” that can be used to match people back up with ads or other marketing.

The idea will be to bring that together with Meltwater’s existing business to enhance it.

“By combining advances in machine learning and the vast amount of publicly available information on the internet, you can today understand and track Porter’s Five Forces,” — a framework for analysing a business’ competitors —  “in real time to understand strategic opportunities and threats for your business. Executives that take advantage of this new opportunity create an unfair information advantage over those who don’t,” said Jorn Lyseggen, CEO and founder of Meltwater in a statement.

DataSift has built a scalable platform that lets developers build data science-driven insights from social firehoses while protecting the privacy of an individual’s data. When combined with the data Meltwater captures and our AI capabilities, developers can disrupt the Business Intelligence space by either building new applications or complementing existing ones with unique signal that can be only derived from external data.”

All the same, it will be interesting to see what the affects are on businesses like these. For one, DataSift currently is built on the cooperation (and by the grace) of social networks — by way of APIs and access to firehoses of data that DataSift and companies like it use to feed their analytics engines. Whether the social media companies decide they would like to try their hands at some of that business themselves, or perhaps get told by regulators that they simply can no longer share information in this way, this leaves companies that are built on that access in a precarious position.

And that’s before you consider the effects of existing legislation like GDPR, which Meltwater says is something the company is built to handle.

DataSift’s advanced analytics platform is a great compliment to what we have in house, at a time of growing privacy concerns and regulation such as GDPR,” said Aditya Jami, Senior Director of Engineering and Head of AI at Meltwater. “DataSift’s technology will be instrumental… to deliver next generation insights.”

DataSift in its past had a very notable instance of getting cut off from one of those feeds, and feeling the strong after effects: after years of working closely together and being the main users of Twitter’s firehose of Tweets — access that was brokered when DataSift handed over to Twitter the first third-party website “retweet” button to Twitter, created when DataSift was called TweetMeme — Twitter cut off DataSift from its firehose in the wake of a move to beef up its own big-data analytics business.

DataSift eventually regrouped and now works with around 15 partners, including Facebook, LinkedIn and WordPress, but given that its original premise was based around the kind of real-time data that Twitter uniquely provides, it was a big shift for the startup.

Meltwater has had its own scuffles in the past with the third-party services it relies on to make the wheels of its business model turn. Both have moved on from those more spiky years, it seems.

Fast forward to today, the combination of Meltwater and DataSift makes some sense when you think about the evolution of media. The rise of social networking has created another playing field for businesses: they now have a new set of platforms where they can pick up chatter about themselves, and it’s become the hot new place to communicate with customers.

Whether Facebook wants to admit it or not, social networking has become the modern-day descendent of the old-school media industry, and this is one aspect of that. While DataSift was built on trying to better harness and parse chatter from the former, Meltwater was built on the back of media monitoring to essentially provide the same services on the latter.

 

Hootsuite nabs $50M in growth capital for its social media management platform, passes 16M customers

Over the last several years, social media has become a critical and central way for businesses to communicate, and market to, their customers. Now, one of the startups that helped spearhead this trend has raised a round of growth funding to expand its horizons. Hootsuite, the Vacouver-based social media management company that counts some 16 million businesses as customers, said today that it has raised $50 million in growth capital — specifically through a credit financing agreement — from CIBC Innovation Banking.

We asked Ryan Holmes, the co-founder and CEO, for details about its valuation and funding, and said that it will be used for more acquisitions in the near future, and with it the valuation is unchanged.

“We opted for to go with non-dilutive credit at this point and found a great partner and terms in CIBC,” he wrote in an email. “The company is cash flow positive and the facility will primarily be reserved for M&A purposes. There is no associated valuation, however our latest 409a is up from last year and growth is very strong.”

Notably, the last time Hootsuite raised money — way back in 2014 — the company was already valued at $1 billion. For some context, at the time it had 10 million businesses as customers, and today it has 16 million including what it says is 80 percent of the Fortune 1000, so it’s likely that its valuation has grown as well.

“This financing is a testament to the strong fundamentals behind Hootsuite and our ongoing commitment to innovation and growth as the clear leader in social media management,” said Greg Twinney, CFO of Hootsuite, in a statement. “The additional capital will help us scale even faster to bring the most innovative products and partnerships to market globally and help our customers strategically build their brands, businesses and customer relationships with social.”

The funding, according to the release, will also be used to expand its business in Asia Pacific, Europe and Latin America. It also plans to add in more tools to serve the needs of specific verticals like financial services, government and healthcare.

You may not know the name Hootsuite but you might recognise its mascot — an owl — and more specifically its corresponding shortened link — it starts with ‘ow.ly’ — that is used a lot on Twitter, the social network that gave Hootsuite its first customers and ubiquity.

Things have moved along quite a bit since those early days, when Hootsuite first started as a side project for Holmes, who himself was running a marketing and advertising agency when he started it.

Social media is now the fastest-growing category for marketing spend — partly because of the popularity of social networking services like Facebook, Snapchat and Twitter; and partly because “eyeballs” can be better tracked and quantified on these networks over more legacy channels like print and outdoor ads. At the same time, presenting yourself as a business on a social network is getting harder and harder. Sites like Facebook are focused on trying to improve engagement, and that is leading it to rethink how it shares and emphasizes posts that are not organically created by normal people. On the other side, we’re seeing a new wave of privacy and data protection regulation come in that will change how data can be used across and within these sites.

All of this means that Hootsuite, and others that it competes with, need to get a lot smarter about what it offers to its customers, and how it offers it.

Starting as a modest tool that plugged into Twitter, Hootsuite itself now integrates with just about all of the major social platforms, most recently finally adding Instagram earlier this month. Its customers use a dashboard to both monitor a variety of social media platforms to track how their companies are being discussed, and also to send out messages to the world. And they now use that dashboard and Hootsuite for a growing array of other purposes, from placing ads to content marketing to analytics across an increasing number of platforms — a range of services that Hootsuite has developed both in-house and by way of acquisition.

One challenge that Hootsuite has had over the years has been the company’s focus on the freemium model, and how to convert its initially non-paying users into paying tiers with more premium offerings. Some of that expansion into new services appears to have helped tip the balance.

“In the past year, Hootsuite has seen tremendous growth from acquisitions like AdEspresso, to strategic partnerships with market leaders such as Adobe, to recognitions such as being named a leader in the Forrester Wave and G2 Crowd,” said Holmes in a statement. “This financing allows Hootsuite in continuing to create strong value for customers looking to unlock the power of social.”

Another challenge has been the fundamental fact that Hootsuite relies on third parties to essentially “complete” its offering: Hootsuite offers analytics and tools for marketing, but still needs to connect into social networks and their data pools in order to do that.

This makes the company somewhat dependent on the whims of those third parties. So, for example, if Twitter decides to either increase the fees it charges to Hootsuite, or tries to offer its own analytics and thereby cuts off some of Hootsuite’s access, this impacts the company.

One solution to this is to continue to integrate as many other platforms as possible, to create a position where its stronger because of the sum of its parts. Unsurprisingly, Hootsuite also says that some of the funding will be used to increase its partnerships and integrations.

More generally, we are seeing a trend of consolidation in the area of social media management, as several smaller, and more focused solutions are brought together under one umbrella to improve economies of scale, and also to build out that “hub” strategy, becoming more indispensable, by virtue of providing so much utility in one place.

As part of that trend, we’ve seen two of Hootsuite’s rivals, Sprinklr and Falcon.io (not an owl but another bird of prey), also grow by way of a spate of acquisitions.

Snap Interactive, quietly settling with Snap over trademark infringement, changes name to PeerStream

Back in 2016 after Snapchat rebranded the company name to Snap Inc to reflect its status as a camera company and more than just Snapchat, an existing publicly-traded business by the name of Snap Interactive filed a trademark infringement lawsuit to bar the change. Snap Interactive’s concern: it was already distributing social network apps and using the […]