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Why Facebook is shutting down its facial recognition system...
November 03, 2021 View Online | Sign Up

Morning Brew

Manscaped

Good morning and happy National Sandwich Day.

There's lots of debate around whether a hot dog is a sandwich, with solid points made on both sides. But you know what'd be better? If we just let the hot dog make up its own mind.

Max Knoblauch, Jamie Wilde, Neal Freyman

MARKETS

Nasdaq

15,649.60

S&P

4,630.65

Dow

36,052.63

10-Year

1.553%

Bitcoin

$62,972.23

UA

$25.60

*Stock data as of market close, cryptocurrency data as of 6:00pm ET. Here's what these numbers mean.

  • Markets: The Dow closed above 36,000 for the first time, and the other two major indexes notched records as investors prep for a big announcement from the Fed today. Any sweat Under Armour had over the past few years is fully wicked; it hiked its outlook and investors are feeling good about the apparel brand's turnaround.
  • Elections: Former private equity CEO Glenn Youngkin, a Republican, defeated Democrat Terry McAuliffe in Virginia's closely watched gubernatorial race, while New Jersey's remains too close to call. Here's a list of all the important results from Election Day.

BIG TECH

Forget You Ever Tagged Me

A tablet surrounded by loose wires shows a glitching facial scan on the screen.

Francis Scialabba

Facebook is shutting down its decade-old facial recognition software, the company announced yesterday. As part of the change, the newly minted Meta will delete the facial scan data of more than 1 billion users from its social network.

The technology, introduced in December 2010, automatically recognizes the identity of people in photos and videos and suggests that users tag them. Before that, if you recall, we had to tag people in images ourselves or (if you can believe) leave a photo untagged altogether and suffer the consequences of fewer likes.

What's changing:

  • Users' faces will no longer be recognized in photos, videos, or Memories on Facebook. Tagging is still possible, but it will have to be done manually.
  • Users who have opted in to the technology will have their templates deleted.

In a blog post, Meta's VP of Artificial Intelligence Jerome Pesenti cited a lack of clear regulation by the government and "concerns about the place of facial recognition technology in society" as the main reasons behind the company's decision.

What concerns?

How much time do you have? What initially seemed like an innocuous feature to save you precious seconds while you dropped apple picking albums on the timeline has become a highly controversial technology seen by critics as a privacy nightmare. The ACLU calls facial recognition tech an unprecedented threat that "gives governments, companies, and individuals the power to spy on us wherever we go."

There's also the issue of algorithmic bias. An MIT study of facial analysis software showed an error rate of 0.8% in the identification of light-skinned men, but that jumps to 34.7% for dark-skinned women.

Zoom out: Despite heavy investments by tech giants, facial recognition has suffered some major setbacks. Last year, Amazon, Microsoft, and IBM announced they would stop selling facial recognition software to police departments, who have come under scrutiny for using the technology to identify protesters. And Baltimore, Portland, and New York City have begun regulating private and public sector use of biometric data like face scans.—MK

        

REAL ESTATE

Zillow Leaves Home-Flipping to the Property Brothers

Zillow's home-flipping business is a flop. The online real estate company said yesterday it's shutting down the unit and reducing its overall workforce by 25%.

Why? "We've determined the unpredictability in forecasting home prices far exceeds what we anticipated," CEO Rich Barton said. In other words, what happened in the Excel spreadsheet didn't translate to real life…

Zillow Offers, the company's algorithmic home-buying business, lost $381 million last quarter.

And its demise wasn't exactly a shock:

  • Over two weeks ago, Zillow said it would stop buying homes for the remainder of 2021 because it didn't have the bandwidth to work its way out of a backlog.
  • Earlier this week, an analyst pointed out that 66% of the homes Zillow bought were listed below their purchase price.

Looking ahead...Zillow also said yesterday that it has 9,800 homes it still needs to sell, and an additional 8,200 beyond those it's already in contract to purchase (and would then need to flip). It expects to lose 5%–7% on those sales.—JW

        

AUTO

Rental Car Madness

A sign is posted in front of an Avis rental car office

Justin Sullivan/Getty Images

Seriously—what in the $31 per day liability charge is going on in the rental car industry? It's bananas.

Let's start with Avis. Shares in the car rental company blasted 108% higher yesterday. The heavily shorted stock had to be halted at least 11 times for investors to catch their breath, and the volume of shares traded was 15x more than last month's levels.

We've been down this road enough times before to know a meme stock when we see one. Sure enough, the surge appears to be driven by individual traders, who posted about Avis on r/WallStreetBets with the same frequency as GameStop and Tesla. They were apparently jazzed about a comment by Avis's CEO earlier in the day, when he said the company would play a "big role" in the adoption of electric cars.

Speaking of Tesla…

Remember its deal with Hertz for 100,000 EVs? The one that propelled Tesla's market cap past $1 trillion? That's become a lemon. Elon Musk tweeted on Monday night that "no contract has been signed yet" with Hertz for those vehicles, which sent its stock down 3% yesterday. But a Hertz spokesperson said Tesla deliveries had already started.

We'll leave it to the SEC to sort this one out.—NF

        

TOGETHER WITH MANSCAPED

The Ultimate Package for Your, Ahem, Package

Manscaped

You need the right tools to get a job done correctly. And while the words 'lawn mower' and 'weed whacker' may be on any gardening enthusiast's holiday wishlist, the gardening we're referring to is the personal kind that occurs below the belt.

With gift-giving season around the corner, consider The Performance Package 4.0 by MANSCAPED—it's their newest all-in-one grooming kit designed with precision and hygiene in mind. Must-haves include:

  • The All-New SkinSafe Lawn Mower 4.0
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  • Crop Preserver anti-chafing deodorant

And right now, MANSCAPED is giving Morning Brew readers an exclusive trim on pricing with 20% off The Performance Package, plus anti-chafing boxers and a travel bag for free. From head to jingle bells, personal grooming has never been easier.

Use code BELLS20 for 20% off and free shipping for a limited time.

GRAB BAG

Key Performance Indicators

Stat: Pfizer expects its Covid-19 vaccine, which it developed in partnership with BioNTech, to bring in at least $65 billion in revenue in 2021 and 2022. With $36 billion in revenue projected this year alone, Pfizer's Covid vaccine would set the record for the single-best year for a medical product...ever.

Quote: "Facebook brought a lot of joy to my face."

Metta World Peace, the retired NBA player formerly known as Ron Artest, told MarketWatch he was ecstatic to hear that Facebook changed its name to Meta Platforms. What is World Peace even up to these days? It's actually pretty cool—he started a company whose app allows basketball players in underserved communities to book time at high-quality indoor courts.

Read: Google's map of our lives. (The Guardian)

        

TECH

Come On In. The Metaverse Is Fine.

An avatar in a Teams meeting

Microsoft

Companies are jumping into the metaverse like they're being chased by a swarm of bees. Last week, Facebook reemerged as Meta in order to emphasize its metaverse ambitions, and yesterday...

  • Microsoft said that it's adding virtual reality avatars and workplaces to Teams, its web meeting service. The new capability mimics a Facebook virtual reality product called Horizon Workrooms.
  • Nike filed seven trademark applications for virtual sneakers and apparel. It has dipped a toe into the space before by selling Nike-branded items in Fortnite and on the Roblox gaming platform.

Big picture: Companies, in the tech sector or otherwise, are starting to see real $$$ in metaverse products, or at the very least they want to cover their assets for the possibility that the metaverse is, as Mark Zuckerberg put it, "the next chapter for the internet."

Looking ahead...Jensen Huang, the CEO of Nvidia, which makes graphics cards that can support virtual experiences, said, "The top companies in the next few years are going to be based on connected worlds."—JW

        

WHAT ELSE IS BREWING

  • The Atlanta Braves defeated the Houston Astros in the World Series. Now bring on the robot umps.
  • The CDC gave its official thumbs-up to Pfizer's vaccine for children ages 5–11. Shots can be administered as early as today.
  • COP26 updates: The US and EU announced a plan, signed by 100+ countries, to cut methane emissions 30% by 2030. And at least 105 countries pledged to reverse deforestation.
  • John Deere workers who are striking will...continue striking after voting down a tentative agreement.

BREW'S BETS

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Strategic sustainability. Some companies successfully adopt sustainability programs that produce value, while others don't quite get there. The difference? It's all about corporate culture and strategic priorities. Read more in McKinsey's insight-packed Global Survey here.* 

Get hype: Need to give someone (or yourself) a pep talk? Try this generator.

New Twitch category: Animals, aquariums, and zoos. Much cuteness.

New acronym alert: CX, or customer experience. Learn all about what that means and how retailers should approach their relationship with customers at Retail Brew's virtual event next week. Register here.

*This is sponsored advertising content

FROM THE CREW

It's Hoodie Season

A GIF saying "hoodie season" promo-ing Brew merch

It's our favorite time of year—hoodie season. And this hoodie season is the best one yet because you can now rock these cozy WFH wardrobe staples while repping your favorite newsletter.

Shop the Hoodies

GAMES

The Puzzle Section

Word Search: Take a trip to the international box office to identify foreign movie posters. Play the Word Search here.

Sandwich Trivia

Had to do it on National Sandwich Day. Here's the question: Which of the following sandwiches traditionally contain pickles?

Your options: McDonald's Big Mac, lobster roll, the Cuban sandwich, Philly cheesesteak, Burger King Whopper, Chick-fil-A's Chicken Sandwich, Greek gyro

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ANSWER

The Big Mac, the Cuban, the Whopper, and Chick-fil-A's Chicken Sandwich

HOW WAS TODAY'S NEWSLETTER?

GREAT GOOD BAD
         

Written by Neal Freyman, Max Knoblauch, and Jamie Wilde

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