Swipe to unlock. Technology and Business Strategy Guide: Awesome summary by ebookhike

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Authors: Neil Mehta, Part Detroya, Aditya Agashe 

Swipe to Unlock: A Primer on Technology and Business Strategy Parth Detroja, Aditya Agashe, Neel Mehta 2017

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Swipe to Unlock: After meeting at Microsoft, the book’s authors quickly realized that the Silicon Valley community was not bringing the tech world closer to “non-experts.” Combining their experience in technology startups and large companies, they wrote a book about technology and the business strategies behind it.

The authors believe that everyone can and should understand the basics of technology. For example, it is not necessary to know how to program to understand how the applications that we use everyday work. The book talks about all the major technologies that we use in life: from operating systems to mobile applications, from big data to cloud storage, from already familiar to emerging ones. 

The book will help:

  • ordinary people – to understand how the main modern technologies work and earn money, why and how they are created, and how they can help or harm society; 
  • job seekers and people working in IT to the features and concepts of technology, prepare for an interview or the next step in a career;
  • for programmers and developers – the business component of IT and learn how to explain their projects in simple language;
  • specialists of any field – to remain at the forefront of their career path;
  • any reader – to become a conscious consumer of technological products.

software development

Every program, whether it’s the Pac-Man game or the latest version of Snapchat, a popular app among teens, is made up of code—instructions that the computer follows. Any application or site works with the help of three components:

1) Algorithm – a procedure that a computer uses to solve a problem; 

2) API, an application programming interface that allows applications to receive algorithms and data from other applications;

Three main types of API:

The API solves the problem: calculate the best route, send a message, or translate a phrase into another language. Paypal’s Braintree API allows you to add a card payment option in minutes.

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An API communicates information: for example, the New York City Subway has developed an API that allows you to track trains and predict when the next one will arrive. 

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The API accesses the device. Snapchat messenger uses the phone’s camera, while Google Maps uses built-in GPS apps.

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3) A/B tests, which are used to improve applications by comparing performance during testing. 

Google search algorithm 

In order to return the 10 most relevant web pages out of 30 trillion in existence in response to a search query, Google must have a database of all web pages. For this, the so-called search spiders are used – programs that “move” along links, indexing pages and replenishing the Google database.

The founders of Google, Sergey Brin, and Larry Page came up with an algorithm for assessing the importance of a page based on the number of links to a resource – PageRank. In the Google database, each web page has a ranking position, which is also determined by characteristics such as the date of the last update and geolocation.

For businesses, getting to the first page for a search query is very important, so a whole industry of SEO has appeared – search engine optimization of sites. But Google is constantly changing its algorithm, and optimizer techniques quickly become obsolete.

Recommendation Algorithm: How Spotify Recommends Music

To recommend relevant music to its 75 million audiences, the Spotify app analyzes two types of data: your listening history and the listening history of all users.

The recommendation algorithm can suggest you a song in your favorite genre. To make a recommendation based on the listening history of all users, the algorithm uses a collaborative filtering technique: for example, if another user creates a list of eight songs, seven of which you like, the system will automatically suggest the missing one.

Recommendation systems based on the analysis of data from all users are becoming more and more popular: they are used by the Amazon online store, the Netflix movie and TV series viewing service, Youtube, and Facebook social networks.

Facebook feed news algorithm

The Facebook algorithm uses hundreds of thousands of factors to determine the sequence of posts in the feed. Four main ones: creator profile, post-reaction, post type, and post novelty. The algorithm is not fully disclosed, but users noticed, for example, that on the mobile version, less video content is displayed in the feed.

With the help of the algorithm, Facebook tries to improve the engagement rate, that is, to get you to like or comment on the news. The more you like the news, the more time you will spend on the social network and the more ads you can see, on which Facebook’s profit depends.

But if Facebook’s primary metric is engagement, then the content of posts doesn’t really matter, and neither does their credibility. This has led to epidemics of false news more than once. Therefore, Facebook is trying to combine computer algorithms with manual work, gathering focus groups to get feedback from the audience.

Uber, Yelp, and Pokemon Go tech

Taxi and driver apps for Uber, Yelp review apps, and Pokemon Go need very accurate maps that would take years to develop. But thanks to an API that lets them borrow functionality or data from another app, they can use Google Maps without having to reinvent the wheel.

Due to the convenience and mutual benefit of the ecosystem, almost no application is now complete without an API, which has led to the dependence of applications on each other. For example, if the PayPal API stops working, then Uber will not be able to process payments. However, APIs are usually more reliable than individual application developments.

Why Tinder registration via Facebook

Through the SSO (single sign-on) API developed by Facebook, Tinder (an online dating application) receives user data such as a list of friends, interests, and age. So Tinder gets rid of empty registrations, stops bots that register automatically, and receives information to issue potential candidates. Also, Tinder can study its customers in more detail in order to improve the design and advertising strategy of the application itself. For users, signing up with Facebook is a simpler step without the need to remember a password and generates auto-populated dating profiles.

Facebook provides an API to get information about what applications the audience is using. For those who log into Tinder, the social network may offer targeted ads about other dating apps. Developing and providing a free API is a great way to get data and attract new users.

Why Uber delivers groceries

The UberRUSH API allows you to deliver goods over short distances by “renting” a driver. For example, a flower seller, in order not to create his own delivery department, can use Uber to deliver bouquets. 

For Uber, this is not only an additional source of profit but also an opportunity to conquer a new market for delivery of goods on demand, where the company can already compete with logistics giants like FedEx or UPS. Also, with the help of the new service, Uber can attract new drivers, strengthen its competitive advantage, and with the growth of the number of trips, collect more data to improve the core service.

How the weather app works

Knowing the algorithms and API, anyone can create their own meteorological application. Almost any such app uses Google Maps and its APIs to collect data on temperature and weather changes; Index API to define a city; The geolocation API on your phone and the National Weather Service API, which provides the data for free. The meteorological service, in turn, uses an algorithm that reproduces the physical characteristics of the atmosphere to predict the weather. 

Why The Washington Post Has Two Headlines In Every Article

The Washington Post uses A/B testing to maximize the number of clicks on an article: the system places an article with two versions of the headline for different audiences and chooses the one that the audience most often responds to.

Many companies do A/B testing: Tinder uses it to determine which of a user’s photos to show as the main one, Snapchat allows advertisers to test content right in the app, and one startup is testing different background music on the sales floor to maximize sales.

In statistical analysis, you need to make sure that the results are a pattern and not an accident. For verification, a p-value is considered, which indicates the probability that the result is an accident. Usually, if the p-value is less than 0.05, the results of the study are considered “statistically significant.”

Operating Systems

Operating systems enable devices and applications to “understand” each other. Just as automotive engineers adapt cars to drive on the left or right, so software developers are forced to create slightly different versions of applications for each operating system. App appearance may also differ, such as Facebook Messenger for iOS and Android. 

Why Android is Free for Phone Manufacturers

Google’s strategy is to get as many users and data about them as possible to increase ad revenue. More and more paid applications appear on Google Play, and the company receives a commission from the sale of each of them. By making Android available for free, Google is able to install its own default apps, such as Google Chrome or Google Maps, on devices.

Android is an open-source system, that is, any developers can independently modify it and create their own systems based on it. Thus, phone manufacturers can create unique products, attracting more and more users to the Google ecosystem.

Why Android phones are sold with a bunch of useless apps preinstalled

Pre-installed apps are a lucrative business. Phone manufacturers and telecom operators operate in a highly competitive market. They take every opportunity to get to the user: device manufacturers simply install their own applications in the hope of making money on them, and application developers pay for pre-installation. 

As a result, users suffer: useless applications take up space, drain the battery, and can even slow down the device.

Windows PCs may also come pre-installed with apps: eBay, the free version of McAfee antivirus, etc., but Windows 10 gives users the option to disable app installation. 

Apple has a different business model: the company makes money by selling devices and strives to make the user experience as convenient as possible. Thanks to this strategy, she was able to gain a loyal base of customers who buy these particular devices. Now Apple can afford to ban telecom operators from installing useless apps.

Why the BlackBerry smartphone failed

In 2000, the company released the world’s first smartphone, and in 2009 occupied 20% of the US market. But in 2016, BlackBerry’s market share dropped to a critical 0.05%.

Apple released the iPhone in 2007, and BlackBerry didn’t take the competitor seriously: Apple sold its phones directly to customers, while BlackBerry sold to corporations for employees. As a result, people used two phones for a while – personal and corporate, but, getting used to the convenience of the iPhone, they chose it.

BlackBerry missed one of the most important trends – the beginning of the app economy. Realizing the mistake, the company tried to attract app developers and users at the same time, and fell into a vicious circle known as the “chicken and egg problem.” As a result, customers stopped buying devices for which there were too few applications. 

Are Macs Vulnerable to Viruses?

For years, Apple’s competitive advantage has been “no viruses.” Indeed, hackers created viruses under Windows, the more common operating system. But now, with the growing popularity of Apple, hackers create viruses for Macs too. Therefore, antiviruses must also be installed on Apple devices.

Macs have built-in virus protection programs: by default, computers won’t run suspicious programs without a user password. But no operating system is able to protect against such methods of “social engineering”, such as phishing, with which hackers steal access to personal data.

Application Economy

The mobile app industry was valued at $50 billion in 2016. 

Why almost any application can be downloaded for free

Apps use different monetization strategies. Freemium is the most common model: the application can be downloaded for free, but you have to pay for additional features or a subscription. 

In-app purchases. Users of free gaming apps such as PokemonGo and CandyCrush can purchase additional virtual instruments. Often, free apps show ads that you can get rid of by paying to upgrade to a paid version.

Paid subscriptions, which are paid like a phone bill once a month, are offered by apps like Tinder or Linkedin. Economists apply the 80/20 Pareto principle: 20% of customers bring 80% of the profits. By making the application available to everyone, the creators find the so-called “whales” who are willing to pay for it. Most subscriptions and in-app purchases are designed specifically for active users.

How Facebook makes money

Facebook makes money by showing targeted ads to the audience. There is a saying in Silicon Valley: if you don’t pay for a product, you are the product.

Apps and websites use one of the following advertiser pricing schemes:

CPM, cost per impression – for example, $ 5 per impression for 1000 users.

CPC, cost per click – for example, Google and Facebook take a fee for clicking on a link. In doing so, they use an auction system where advertisers bid. 

Since page clicks bring more profit to social networks, they introduced a system of targeted advertising that shows the consumer the most relevant ads based on a huge amount of data about him. Privacy advocates are concerned about targeted advertising practices and their consequences. Google and Facebook don’t sell data to advertisers: together they have captured almost half of the mobile ad market.

Why there is so much sponsored content on news sites

Many sites and apps have ditched annoying banner ads and switched to native ads or sponsored content that masquerades as a social media feed or news feed. Such ads can be difficult to distinguish from real content, so they are more profitable. Native advertising is used by the New York Times, Wall Street Journal, and CNN. For example, as an advertisement for the Netflix series Orange Is the New Black, the NY Times published an article about the problems of female prisoners, raising the rating of the series.

How Airbnb Makes Money

Platform apps connect suppliers with buyers and charge a commission for this, most often on each purchase. Airbnb earns revenue every time an apartment is booked: the host pays 3%, and the guest pays between 6-12%. Uber commission from each trip is 20-25%.


The Internet belongs to no one, and there is no single organization that would control it.

Every building has an address, and every Internet site has its own address – a   URL, a Uniform Resource Locator. Google.com is a short version of the real address https://www.google.com. When the browser sees the full URL of a site, it decodes it to understand the course of action:

HTTP:// is a data transfer protocol that shows how to get information. HTTPS:// is a more secure, encrypted version of the protocol, which, for example, encrypts login/password data for accessing online banking so that hackers cannot use the funds in the account.

www is an optional part, like a city or country code. If you exchange phones in the same city, it is not needed.

google.com is the domain name.

Every site has at least one IP address. To convert a domain name to an IP address, the browser uses DNS, a domain name system that can be compared to a huge phone book. Next, the Google server receives information that you would like to visit the home page, a picture of the day, known as Google Doodle, is selected for you, and the servers send code that the browser decodes, displaying elements on the screen.

The TCP and IP protocols transmit data in parts over short distances, indicating 0 or 1 on each part. The trajectory of movement can be similar to the trajectory of mail letters that are transmitted through intermediary offices. Data travels over wires, so data transmission is geographically limited.

In 2018, Wall Street trader Daniel Spivey installed a fiber optic cable between the Chicago and New York Stock Exchanges. The project cost him $ 300 million, but traders easily recouped investments with the help of the so-called high-frequency trading, when the struggle goes on in a split second and the one whose Internet is faster wins. The straightest possible trajectory ensures faster data transfer.

Cloud computing

Cloud storage – storing data on the servers of another company. The cloud is servers that are located in huge data centers with a complex cooling system. They need to run smoothly 24/7. You can store files on your computer or on servers such as Dropbox.

Google offered Google Docs and Google Drive so that users could “rent” server space and store data there and access it over the internet. Users got the opportunity to work on files together and simultaneously, from different devices, and also protected data in case of a device breakdown. 

Cloud applications are certainly convenient for users, but the question of security and protection of personal data arises. However, given how secure Google servers are compared to a personal computer, storing information in the cloud is still safer. Another disadvantage of cloud storage is dependence on the Internet, but now some applications provide limited functionality without access to the Internet.

Software as a Service (SaaS) 

In 2013, Adobe closed sales of Adobe Photoshop software and now only offers a cloud service subscription, which is an example of software-as-a-service (SaaS). For a relatively small cost compared to buying Adobe Photoshop, the buyer “rents” the program, which at the same time works on the client’s computer. 

The company’s profit grew by 70% during the year, and the product became available to a much wider range of users due to its low price.

Microsoft has not yet decided on such a radical step for its Office products and so far offers two options: the classic purchase of the program and the use of an Office 365 subscription, which is also an example of SaaS, a program-as-a-service.

Infrastructure-as-a-Service (IaaS)

Due to the growth of data, companies need more and more computing power, not to mention specialists and security. Therefore, businesses use computing services such as Amazon Web Services (AWS), which allow companies to rent Amazon servers on which applications can run. 

This gives the business the flexibility to add capacity as the business grows or at peak times. Economies of scale also work. The security of such servers is also higher: for example, Amazon can ensure uninterrupted operation even in the event of a disaster in one of the regions. 

AWS controls about 34% of this market, but Microsoft has already released an analog – Azure, and Google – Google Cloud Platforms. All of them provide infrastructure-as-a-service (IaaS).

Platform-as-a-service (PaaS)

Heroku provides a platform-as-a-service to store data and get analytics on it, making it easier for developers to code in the cloud.

SaaS is like a restaurant, you ask for a dish – they bring it to you, IaaS is a kitchen rental where you can cook yourself, and PaaS is something in between: you give the recipe and ingredients, but the dish is cooked for you.

With services like this, companies like Netflix can handle high traffic when new episodes are released. However, the transition to cloud storage is not an easy process: for Netflix, for example, it took almost seven years.

This coin also has a downside: on February 28, due to a mistake by an Amazon employee, a server error occurred, which led to multimillion-dollar losses for the largest S&P 500 companies. Since any application can fail from time to time, companies try to combine “internal” data storage and cloud storage to reduce risks. 

big data

The analysis of large amounts of data makes it possible to make relatively accurate predictions of buying behavior. In 2012, the father of a teenager in the United States received coupons in the mail from a Target maternity supermarket in the name of his daughter, which led to a scandal because the girl was pregnant, but did not tell her parents about it.

One method of obtaining data is through loyalty cards or discount cards, which track all purchases made by individuals and families. Also, companies collect all the information together: when contacting a call center, paying with a credit card, redeeming a coupon, visiting an online store, etc.

Companies use predictive analytics. For example, the Target analytical system has learned to predict pregnancy with an accuracy of 87%.

To analyze a huge amount of data, you need huge computing power, which is simply not available now. Therefore, analysts use software such as Hadoop, which uses the MapReduce technique to partition data and distribute computational tasks across different devices. As a result, the specialty of big data analytics and a separate scientific field – data science, which is engaged in the search for patterns in a large amount of data, have appeared.

Amazon makes extensive use of big data analytics. Its analytical system analyzes buying behavior, competitors’ prices, margins, and stock availability and chooses the best price for each product. Therefore, the price in the online store can change every few minutes. Based on buying behavior, Amazon also makes recommendations. Using the patented Anticipatory Shipping Model technology, the company distributes goods to nearby warehouses before they are ordered to guarantee the minimum delivery time. 

With such technologies, companies have become much more efficient: for example, UPS saved $50 million by monitoring data from sensors on trucks. Customers also benefit from improved service, such as faster shipping and helpful advertising.

However, when so much personal data is in the hands of companies, it poses a threat to society due to the risk of leakage. Companies are already using anonymization techniques, but even anonymized data is no guarantee against hackers.

Hackers and security

In May 2017, hackers infected computers in 150 countries with the WannaCry virus, causing an estimated $4 billion in damage. Ransomware, like WannaCry, infects computers by encrypting all files and extorting a ransom to restore access to them. Often a virus can be picked up by opening an email or downloading a file on the Internet. Ransom hackers accept bitcoin in cryptocurrency, which can be bought and sent on a crypto exchange for ordinary money.

Since hackers have complete control of the computer and an anonymous network is used to receive payments, hackers may not give access to files after payment, but then people would stop paying the ransom. Therefore, even the support line for victims of the virus works great for scammers.

Timely updating of operating systems, and regular backup of data in the cloud or on an external hard drive help against attacks.

In 2013, the US government shut down Silk Road, an online store for buying illegal goods, drugs, weapons, and stolen credit card details. The site worked in the so-called darknet – an area of ​​the Internet where sites that are not indexed by Google are located. The darknet is part of the deep web, a deep network that can only be accessed with the help of special programs that encrypt all communication and IP address. But programming errors happen there too, so the FBI managed to catch the creators of the resource. 

You can enter the dark web using the Tor browser, which uses “onion” routing, hiding information in layers, like an onion hides the core: it seems to wrap communication in several layers of encryption and transmit information to many computers in the network, each of the nodes of which “knows” only previous and next step. This makes tracking on the dark web nearly impossible. Tor is a modified version of Mozilla Firefox, so it can be used as a regular browser.

There are also absolutely legal ways to use the darknet, for example, visiting regular sites anonymously, which eliminates targeted advertising. Many organizations that fight for Internet freedom and equal access to data note the usefulness of this technology: for example, people in China can use Facebook despite a government ban. 

Some users choose to use the technology to share highly personal information. Such technologies are neither good nor bad – they just help protect anonymity.

Whatsapp can’t read user messages

In 2014, the Whatsapp application launched end-to-end encryption, end-to-end encryption, in which only the recipient’s and sender’s devices can decrypt the conversation data. 

Such technologies are a victory for all those who defend themselves against censorship, but they also help criminal organizations.

In 2016, the FBI required Apple to unlock a suspect’s device, but the company made it so that even employees of the company could not unlock the phone. 

Free Wi-Fi can give access to hackers 

When connecting the device to an unverified network, which can be disguised, for example, as a free Starbucks coffee shop network, hackers can access data, and read the username and password of a bank card. Having obtained passwords from social networks and other resources, hackers can completely take over the data of the victim. Browsers may warn of such a substitution or an SSLStrip attack. To stay safe when connecting to public networks, you need to use a VPN, a virtual secure network that encrypts data between the device and the resources that the user visits.

Computer hardware and robots

Each device consists of the following three components. 

The “brain” of every device is the CPU, the central processing unit is a small chip that performs all the calculations that allow the device to work. The CPU is made up of sections called the “core” or core. The more cores a processor has, the more tasks it can perform simultaneously: an Intel i7 chip will be faster than an i5 or i3 chip. However, the more powerful the processor, the more it costs and the more battery it consumes.

For long-term storage, a magnetically-recorded hard disk drive (HDD), a more reliable SDD that stores information in separate cells or flash memory can be used. HDDs are less reliable, make more noise, are heavier, and use more battery, but SDD cards are more expensive. Phones, tablets, and cameras use flash memory because they don’t have room to fit an HDD or SDD.

Short-term memory is used until the device is rebooted and helps the computer perform calculations quickly, using only the resources it needs. Your computer may run slower if you keep hundreds of bookmarks open in your browser and run all programs at once. More short-term memory makes a computer faster. However, it makes no sense to buy a computer with very powerful short-term memory if you only use the Internet and watch movies.

Fingerprint unlock

In 2014, Samsung first released a phone that could be unlocked with a finger. Fingerprint identification technology has been taken up by other companies, and Apple has added facial recognition to the latest version of the iPhone. 

The first systems used optical scanning, but the system could be fooled by attaching a picture with a fingerprint. Further, capacitive fingerprint scanning systems with sensors began to be used, which can only be deceived by advanced scammers who are able to make a high-resolution fingerprint overlay. Even the most powerful biometric systems, such as iris recognition systems or facial recognition, are not completely secure against hacking.

Apple Pay

Since 2014, it has become possible to pay for purchases by attaching an iPhone to the reader. Apps like Apple Pay and Android Pay use NFC technology, near-field communication: devices communicate using radio waves, like Bluetooth, using very little power, and “passive” chips, like the subway card, don’t even use power at all. The NFC chip is built into payment terminals. To make the payment system secure, Apple agreed with credit card companies to create a 16-digit token that comes to the phone. And even if a hacker gets hold of the token, they won’t be able to get the card details, which makes Apple Pay and Android Pay more secure than credit cards.

AR augmented reality

The PokemonGo game uses the device’s camera to obtain information about the landscape. Next, the application “places” the Pokémon, for example, on the grass. It uses an acceleration sensor, a compass, and GPS data from a phone to mimic the movements of the Pokémon so that players can “catch” it.

Delivery in less than an hour

Amazon uses software, robots, and employees. First, the company collects data about customers and uses predictive analytics to predict their buying behavior to ensure that goods are available in the nearest warehouse. Secondly, Amazon warehouses are served simultaneously by robots and people: robots quickly determine the location of goods on the shelves and serve them to the packer. Such a system allows you to get any product in a few minutes, and, finally, the courier already uses all possible delivery routes in order to deliver the goods within an hour. 

Delivery by drones 

Amazon plans to deliver goods using drones in half an hour. This initiative is clashing with local regulations, and drones have yet to be “trained” to detect weather conditions and “see” other drones while flying. However, the first successful drone delivery took place in England in December 2016.

Business motives

Technology dominates the business environment. The largest companies by capitalization are all tech companies: Apple, Amazon, Alphabet (Google’s parent company), Microsoft, and Facebook. Salesforce co-founder Parker Harris said, “All business leaders must become technology experts…and every business must become an application company.”

Everyone is already used to free Wi-Fi at Starbucks, but since 2012 retailer Nordstrom has also started offering free Wi-Fi, and other retailers like Home Depot or Family Dollar have quickly followed suit. Thus, the retailer calculates the exact location of the devices, which allows, by combining information with data from CCTV cameras, to track all movements within the store. This allows merchandisers to optimally arrange products, and find out which products customers pay more attention to, and which demographic group the buyers belong to. Also, stores can offer targeted advertising with coupons if the buyer lingered near some product and then moved away. 

Why Amazon Prime is losing money on free shipping

The Prime program offers free shipping, free movies, music, and books for just $99 per year. For a company, turnover is much more important than profit. In retail, margins are always relatively small, and the company is betting on growth in the long term.

The company’s analysts estimate that customers who subscribe to Amazon Prime spend 4.6 times more on purchases in the online store: fast delivery gives almost instant pleasure, which leads to an increase in impulsive purchases. Customers have already paid for the subscription, and this motivates them to transfer a significant part of the consumer basket to the platform in order to “return on investment”. 

Thus, shopping on Amazon becomes a habit, and it is difficult for competitors to compete in the speed of free delivery. Bloomberg called Amazon Prime “the most original and effective e-commerce loyalty program, if not for retailers in general.”

Why Uber is promoting self-driving cars

Uber takes a 20% commission on every trip and gives the rest to the driver. If the driver does not have to pay, even taking into account all the costs, the company’s revenues will increase significantly. For consumers, self-driving cars will be cheaper and more attractive. This creates competition among companies for the title of the first player in the market: Google’s Waymo launched a partnership with Lyft to test the system, and Tesla built the infrastructure for self-driving trips into cars.

Why Microsoft bought Linkedin for $26.2 billion 

Microsoft’s main sources of profit – Windows and sales of devices – have been falling for a long time, so Microsoft has bet on business software: Azure cloud computing platform and Office 365. Buying Linkedin, a social network for business, was critical: Facebook and Instagram took over a social life, and Microsoft plans to take over the business so that the company’s products are used at every stage, even when looking for a new job. 

Together with Linkedin, the company acquired a base of 433 million users, obtaining a huge amount of audience data. The company can now provide new services, such as offering to link Outlook Calendar entries with LinkedIn profiles of meeting attendees so that customers can better prepare for negotiations. 

Importantly, Linkedin is generating revenue that continues to grow. 

Why did Facebook buy Instagram for $1 billion when the app wasn’t making a profit yet

Facebook started out as a desktop app and didn’t have time to shift to the mobile market, while Instagram was born as a mobile app. Smartphone users preferred to post photos on Instagram rather than on Facebook, and in order not to lose customers, Facebook had to carve out a place in the photo-sharing market. 

Technology regulation

Companies providing broadband access for watching TV or using the Internet are most often monopolists since the cost of entering the market is very high. Therefore, large providers can raise prices, reduce quality, and set their own rules, for example, delaying the connection at their discretion.

Logistics and postal companies such as FedEx or UPS cannot discriminate against users on any grounds. They are required to provide the same rate for all packages at the same speed, as they are public companies, like public transport or a utility provider, to which everyone is entitled to equal access by law. Companies that provide Internet access are similar in nature to postal companies: you pay the company to deliver the data. The Net Neutrality Act assumes that providers will be recognized as public companies and they will be required to provide everyone with the same speed and quality. 

Now, this is not the case: providers can block individual resources, such as BitTorrent. Other companies are exploiting traffic slowdowns: Verizon and Comcast have slowed down traffic from Netflix. Also, monopolists can prioritize traffic from companies that have paid more than their competitors. For buyers, net neutrality is a win, but regulators are in no hurry to introduce it.

Right to be forgotten 

In 2014, a British doctor submitted a request to Google to remove bad reviews about his medical practice. Under EU law, which gives consumers the right to be forgotten, Google was forced to remove links to bad reviews on local Google sites when asked for their names. 

Most takedown requests come from innocent victims who are hindered by the publicity, but the law can be used by criminals or politicians who are seen behind false promises or scandals. 

Many believe that the right to be forgotten restricts freedom of speech and can be used by government organizations for mass censorship. Supporters of the law point out that the right to be forgotten is an inalienable human right. 

Open Information Policy

In 1983, the US National Weather Service released observations to third parties, creating a $5 billion private weather service industry and improving the service quality. Private companies do not have the resources to maintain satellite and radar infrastructure, but they have provided businesses and the public with customized weather forecasting data. The benefits of the “open information” policy became apparent when a railroad company was able to stop trains heading for a tornado thanks to a private analytics program based on government open data. 

In 1983, the US government also opened up GPS data, creating over 3 million jobs that depend entirely on geolocation data. The McKinsey consulting firm has estimated that the discovery of government data could generate more than $3 trillion in economic activity per year. 

Trends continue

The world of technology is constantly evolving, and in order to stay “on the wave”, you have to constantly follow the trends. Here are the main technologies that promise to become a reality in the near future. 

Self-driving cars

Google began testing self-driving car prototypes in California in 2015. 

Self-driving cars use a combination of sensors attached to the car, an onboard computer, and company servers to access cloud data. First of all, the company determines the location of the car using the built-in GPS. To determine the exact location while driving, the computer uses sensors similar to the speedometer and compass: they show in which direction the car is moving and how fast. Ultra-precise maps are used to analyze road signs and other traffic features. In order for the system to follow other traffic objects, turns, and markings, the car is equipped with a huge number of sensors, including a constantly rotating Lidar laser on the roof (which gives a 360-degree view) and a radar sensor (which determines the exact distance to objects). 

Also, an unmanned vehicle must predict the possible trajectories and speeds of movement of objects around, for which machine learning is used: for example, unmanned vehicles can begin to notice that cyclists who stretch their hand to the left turn left 90% of the time. Finally, the car chooses a movement strategy by comparing the series of possible actions, and having chosen the best path, the car “presses on the gas”. 

According to some experts, self-driving cars can reduce the number of car accidents by 90%. Of course, they are still far from widespread use, but now many drivers use their individual functions, such as self-parking or skid warning on the road.

Complicate the adaptation of unmanned vehicles regulation in individual countries, security issues, and vulnerability to hackers. There are also ethical questions, such as how should a car make a decision in an emergency: hurt a pedestrian or a driver? So far, there is no transparent algorithm for making such decisions.


Economists divide technologies into two groups: providing jobs and replacing human labor. Oxford scientists have suggested that by 2033, half of US jobs will be at risk due to automation. 

However, even technologies that replace human labor replace only manual labor, creating jobs for engineers, mathematicians, marketers, and other specialists. It can be assumed that the dominance of robots will affect the most vulnerable sections of society with a low level of education. To solve this problem, proponents of progress propose to raise the general level of education in society. 

Entrepreneur Elon Musk proposes another solution, a universal basic income that would be provided by a state tax on the use of robots. 

Proponents of robotization also point out that it could lead to higher wages in sectors where humans are indispensable, such as childcare.

Artificial intelligence

The widely known Siri app is a form of artificial intelligence. When a user asks an application a question, the request is sent to Apple’s servers, where natural language processing, NLP, takes place. 

Neural networks are now widely used, which are designed so that the program gradually improves the quality of solving the problem. For example, the technology is used for auto-correction of text on the phone or for sorting spam emails.

A generative adversarial network GAN can create its own content since it consists of a creator and a critic, from whose dispute new things are born. In 2017, the Canadian company Lyrebird published audio where Donald Trump, Barack Obama, and Hillary Clinton allegedly read Twitter posts, after which many stopped believing what they see and hear on the Internet. 

Top 10 Thoughts

1. Everyone can and should know the basics of technology. For example, it is not necessary to know how to program to understand how the applications that we use everyday work.

2. Computer algorithms work most effectively in combination with “manual work”. So, Facebook regularly gathers focus groups to get feedback from the audience.

3. Mutually beneficial and convenient ecosystems – API, cloud computing, SaaS – lead to the emergence of new risks due to the dependence of applications on each other.

4. There are no invulnerable systems. No operating system can protect against social engineering methods, and even the most powerful biometric systems do not guarantee complete security against hacking.

5. Technology is neither good nor bad, it just performs its function. For example, Tor helps protect anonymity, but sellers of illegal goods can also take advantage of this.

6. Users’ personal and banking data may be vulnerable when connected to free unverified Wi-Fi. For security, you can use a VPN that encrypts your data.

7. When choosing a computer or other device, expediency and balance are most important. For example, it makes no sense to buy a computer with very powerful short-term memory if you only use the Internet and watch movies.

8. Technology dominates the business environment, all the largest companies by capitalization are technology companies: Apple, Amazon, Alphabet (Google’s parent company), Microsoft, and Facebook.

9. Internet companies can be regarded as public companies, like postal services, which are obliged to provide equal access to services for everyone: if a law on net neutrality is passed, then Internet providers will not be able to discriminate against customers on any grounds.

10. Robots are replacing human labor, but also creating jobs for engineers, mathematicians, marketers, and other professionals, however, the growth of robotization will affect the most vulnerable segments of the population with a low level of education.

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