Notion gets thrown for a Loop

Years after Teams crushed Slack, Microsoft clones another popular productivity app. Should regulators intervene?

Microsoft Loop (Microsoft)

Today let’s talk about one of my favorite productivity companies and the challenge it now faces from a tech giant. It’s a story that speaks to the challenges of competing with software bundles in a world with only minimal antitrust enforcement — even when the challenger’s product is significantly better. 

Seven years ago this month, Slack was riding high. One of the fastest-growing enterprise software companies of all time, it hit a $100 million run rate and was valued at $3.8 billion. The company arrived in an era when newly smartphone-savvy workers were choosing their own tools to bring to work, and for a moment it looked as if it might be a generation-defining company.

Then Microsoft entered the picture. Teams, a straightforward clone of Slack’s workplace communication app, didn’t arrive with a bold new design or fresh set of features. But while it looked to fans of Slack like a pale imitation, Teams boasted two crucial advantages. One, it’s part of the Microsoft 365 bundle. That meant any workplace that already paid for Word, Excel, and PowerPoint could now get Slack for no extra charge. And two, Teams is backed by Microsoft’s formidable sales force, which helps the company sell into the large enterprises that are traditionally most profitable for software services.

In a move that the company came to regret more or less instantly, Slack “welcomed” Teams to the world with a smarmy full-page newspaper ad. In retrospect, it was the moment that the company peaked. Over the next four years, its user base would triple to about 12 million people. Over that same time period, Microsoft took Teams from zero to 115 million users. Slack went public in 2019, but did not turn a profit this year, and after its stock floundered the company sold to Salesforce for the (admittedly incredible) price of $27.7 billion.

Since then, despite a recent redesign, Slack has more or less been treading water. The division just named its third CEO in a year. A fun party game you can play in San Francisco is to try to find a Salesforce employee who thinks that buying Slack was a good strategic move for their company. (I’ve never succeeded.)

Slack made more than its share of mistakes along the way, including on the product side. Even if it had executed perfectly, though, there’s a good chance the outcome here would have looked more or less the same.

I thought about all this today when reading about Loop. Like Teams, it’s a new app from Microsoft, and also like Teams, it’s a clone of a successful product from a challenger. Loop is a clone of Notion, a 7-year-old workplace collaboration app that boasts more than 20 million users. 

As of today, Loop is now included in the Microsoft 365 bundle. Here’s Jay Peters at The Verge:

Loop lets you use flexible, collaborative workspaces and pages to make it easier to cooperate on work. If you’re familiar with Notion’s interface at all, Loop looks and feels remarkably similar — right down to the ability to easily access a bunch of tools and formatting options by typing the forward slash key (which pulls up what Microsoft calls the “insert menu”).

But because Loop is built by Microsoft, that means it has some useful integrations with other Microsoft software. For example, you can take parts of Loop pages and share them across other Microsoft apps like Teams chat and Outlook, which seems like a handy way to be able to work on things together without being forced to context switch between apps. Microsoft’s AI-powered Copilot assistant is also available within Loop, which can help with things like drafting text and summarizing pages in the app.

Like Teams before it, there is little in Loop today to entice any Notion user to switch. But as with Teams, Loop isn’t really aimed at Notion users. It’s aimed at people who might have used Notion eventually, if their workplaces had ever bought it for them. 

And Microsoft has the same advantages here that it had against Slack. Anyone with a 365 account can now use Loop at no extra charge. And Microsoft’s sales force can now tell thousands of clients that the value of its bundle just increased significantly, as workplaces may no longer have any need to buy Notion. (Notion plans start at $8 per user per month; Microsoft’s basic 365 plan for businesses is actually $2 cheaper.) 

Of course, some businesses — particularly those that prefer to run on Macs — will never purchase Microsoft 365. And I imagine small- and medium-sized businesses may continue to prefer the lovingly crafted, pixel-polished Notion, particularly in the more design-forward enclaves of Silicon Valley.

But assuming Loop scoops up tens of millions of users in the same way Teams did, that leaves Notion with far fewer businesses to sell into — and a much more challenging path to realize the $10 billion valuation investors gave it this year.

None of this will come as any surprise to executives at Notion. Loop was announced in 2021, and since then Notion has continued to roll out new features at an admirable pace. (One that far exceeded Slack’s innovations in the year after Teams was announced, for what it’s worth). Over the past year, the company has invested heavily in features that make use of artificial intelligence: for an extra monthly fee, Notion will write documents for you, summarize them, extract key information from links stored in databases, and much more.

This week, Notion launched a feature I had asked for back in August: a tool that uses generative AI to let you query your entire Notion instance. Many companies use Notion to create internal wikis, and Q&A offers a nice way to find onboarding documents, human resources information, and other important but typically hard-to-find internal information. (David Pierce has a good write-up of Notion Q&A in The Verge.) 

For the past few weeks, I’ve been using Q&A to essentially chat with the database of links that I store in Notion to power the links section of the newsletter. The first couple weeks, when Notion was using a less capable model, were relatively rough. Answers were inconsistent and sometimes wrong. Over the past few days, it’s gotten much better, though it’s still very much in beta and more of a curiosity than a core part of my workflow.

AI seems like absolutely the right focus for Notion as it works to differentiate itself from competitors. But how differentiated can a company be in AI when its competition is Microsoft? At its Ignite conference this week, Microsoft announced its own AI chatbot strategy, and its AI Copilot comes standard in Loop.

On one hand, Loop’s existence is a testament to the power of competition. Notion’s highly flexible workspaces helped to reinvent the idea of what a digital document could be, and in the process jolted Microsoft and other rivals out of their slumber.

The question, now that the giants have awakened, is whether Notion can continue to compete in any meaningful sense of the word. The company has wisely kept any opinions about Loop to itself, avoiding Slack’s mistake of focusing attention on a rival. But the fundamental dynamics that doomed Slack still seem to apply.

After it went public, and as its business faltered, Slack filed a complaint with the European Commission accusing Microsoft of unfairly stifling competition in the marketplace by bundling Teams. This July — three years after Slack sounded the alarm — the commission opened a formal probe into the matter.

“The Commission is concerned that Microsoft may be abusing and defending its market position in productivity software by restricting competition in the European Economic Area … for communication and collaboration products,” the commission said in announcing the probe. “These practices may constitute anti-competitive tying or bundling and prevent suppliers of other communication and collaboration tools from competing, to the detriment of customers.”

If the commission makes a formal finding that those statements are true — and Lord knows how long that might take — it seems to me that what applies to Slack might apply to Notion as well. 

In the meantime, Notion’s advantage may be that it cares about the product in a way that is existential for the company. But now that a cheaper, bundled alternative is available, history suggests the company will struggle to get others to care nearly that much.  

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On the podcast this week: I tell Kevin about my field trip to Humane’s office. Then, we debate YouTube’s new deepfake policies. And finally, SciFi Foods CEO Joshua Mark swings by to serve us a lab-grown Thanksgiving.

Apple | Spotify | Stitcher | Amazon | Google | YouTube

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Governing

• Elon Musk agreed with a post on X that claims Jewish communities push “hatred on whites” and that referenced “hordes of minorities” flooding Western countries. (David Goldman / CNN Business)

• Epic v. Google: Google CEO Sundar Pichai testified in this trial soon after he testified in the DOJ antitrust trial, confirming the huge percentage of Safari search revenue that Google shares with Apple. (Nico Grant / The New York Times)

• Meta will allow political ads that question the legitimacy of the 2020 elections on Facebook and Instagram, ahead of the 2024 elections. A terrible step backwards for the company. (Salvador Rodriguez / The Wall Street Journal)

• Meta says app stores should be responsible for age-gating. The company is calling for legislation to require parental approval when underage users download apps. (Cristiano Lima and Naomi Nix / Washington Post)

• Cartel-backed smugglers are exploiting Snapchat, TikTok and other apps to find drivers to transport migrants across the US-Mexico border. (Julia Love / Bloomberg)

• Amazon is removing seven brands of eye drops from its site after the FDA sent a letter to CEO Andy Jassy saying the products were not recognized as safe and effective. (Amanda Holpuch / The New York Times)

• TikTok is challenging its categorization as a “gatekeeper” under the European Digital Markets Act and Meta is appealing the decision to designate Facebook Messenger and Marketplace as “core” services. (Javier Espinoza / Financial Times)

  • Meta also challenged its “gatekeeper” status. (Supantha Mukherjee / Reuters)

• The UK’s minister for AI and intellectual property, Viscount Jonathan Camrose, said there will be no regulation on AI in the short term, citing concerns about curbing industry growth. This viscount loves capitalism! (Daria Mosolova / Financial Times)

• Amazon is reportedly funding advocacy groups lobbying against Microsoft’s efforts to become a major cloud computing contractor for governments. (Emily Birnbaum / Bloomberg)

• YouTube’s updated guidelines will allow monetization on videos that display nudity while breastfeeding and “non-sexually graphic dancing”. (Aisha Malik / TechCrunch)

• Facebook and YouTube are the most popular sites for news in the US, a new report by the Pew Research Center found. (Sarah Scire / Nieman Lab)

• An email server flaw was used to steal data from governments in Greece, Moldova, Tunisia, Vietnam, and Pakistan, Google’s Threat Analysis Group found. (Katie Malone / Engadget)

• AI companies are inadvertently using underage labor in their global data supply chain, often exposing young teens to traumatic content. (Niamh Rowe / WIRED)

• An analysis of AI tools by Common Sense Media warns parents that Snapchat’s My AI chatbot is willing to chat with young users about sex and alcohol, and that it misrepresented Snap’s targeted advertising. (Khari Johnson / WIRED)

• Social media users, armed with AI image recognition tools, are helping morgues and authorities who are overwhelmed and lack resources to identify otherwise unidentified bodies. (Deidre Olsen / WIRED)

• Facial recognition software is often used by police in executing search warrants and arrests, despite its limitations and biases. In one case, it’s led police astray, wrongfully arresting someone despite contradicting evidence. (Eyal Press / The New Yorker)

• Ireland’s data protection commissioner and the EU’s top privacy watchdog, Helen Dixon, is stepping down. (Stephanie Bodoni / Bloomberg)

• Argentina’s presidential election is becoming a testing ground for AI, with both candidates using AI to create images and videos to promote themselves and attack each other. (Jack Nicas and Lucía Cholakian Herrera / The New York Times)

• Japan’s new tax code proposal will make app store operators like Apple and Google pay consumption taxes on content sold by foreign developers. (Ko Fujioka / Nikkei Asia)

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Industry

• TikTok said it was removing videos promoting Osama bin Laden’s “Letter to America”, which sought to justify the 9/11 attacks. A huge discussion broke out online about how viral the videos were; it seems like most of the attention the TikToks got was on X. (Ted Johnson / Deadline)

• Tiktok executives were recently confronted by a number of Jewish celebrities and creators, urging them to address the increase in antisemitism and harassment on the platform. (Sapna Maheshwari / The New York Times)

• ByteDance is reportedly testing a feature that lets some creators add paywalls on parts of their videos on TikTok’s sister app in China, Douyin. (Josh Ye / Reuters)

• OpenAI temporarily paused new subscriptions to ChatGPT Plus, with CEO Sam Altman saying usage exceeded the company’s capacity following its recent DevDay conference. (Kristi Hines / Search Engine Journal)

• Ed Newton-Rex resigned from his role as vice president of Audio at Stability AI, saying he disagrees with the company’s stance that training generative AI models on copyrighted works constitutes “fair use.” (Ed Newton-Rex / Music Business Worldwide)

• Microsoft announced several new AI products at Ignite, including new cybersecurity solutions, strengthening infrastructure, and expanded Copilot capabilities for sales and services. (Matt Marshall / VentureBeat)

• Bing is now using GPT-4 to generate captions for some of its search results to make them “more relevant and informative”. The captions will be labeled as AI-generated. (Barry Schwartz / Search Engine Land)

• Lots of Google product updates today, starting with: Google Photos is rolling out three new features, including auto-grouping Photo Stacks and better categorization of pictures and documents. (Abner Li / 9to5Google)

  • Google’s new Titan security key models lets users store passkeys and works with third-party services. (Abner Li / 9to5Google)

  • Bard will soon be available to teens with a number of safety features, including a double-check response feature and an AI Literacy Guide. (Abner Li / 9to5Google)

  • Search Generative Experience, Google’s AI-powered search, is allowing shoppers to generate gift ideas and items to help with online shopping. (Jess Weatherbed / The Verge)

  • Google News is removing support for paid magazines, both for new subscriptions and existing ones. (Ben Schoon / 9to5Google)

  • Maps is getting improved transit directions, emoji reactions, and collaborative lists. (Andrew J. Hawkins / The Verge)

  • Users can choose to annotate search results using Google’s new “Notes” experiment. Sure to be a vibrant new battleground for content moderators. (Jay Peters / The Verge)

• YouTube is expanding its 1090p HD option for premium users to more devices, on Android, Web, and smart TVs. (Aisha Malik / TechCrunch)

• YouTube Shorts creators are getting a new generative AI tool called Dream Track, which can generate songs in the style of nine different artists, including Charlie Puth, Demi Lovato, Sia, and T-Pain. (Will Knight / WIRED)

• WhatsApp Channels is adding a new feature, stickers, as it crosses the 500 million monthly active user mark. (Tech Desk / The Indian Express)

• Instagram is adding new filters, improving editing functions on Reels, and testing the ability to let users create custom stickers from videos and images in their camera roll. (Chris Welch / The Verge)

• Threads is now testing the ability for people to use hashtags to tag topics, but without displaying the “#” symbol. (Sarah Perez / TechCrunch)

• Meta is partnering with MediaTek to develop custom silicon to improve its AR smart glasses capabilities. (Andrew Romero / 9to5Google)

• Apple is extending the free usage period for Emergency SOS satellite features for iPhone 14 users by another two years. (Benjamin Mayo / 9to5Mac)

• iPhone will reportedly have support for Android’s messaging standard, RCS messaging, which means users can soon stop fighting about the green and blue bubbles. (Emma Roth / The Verge)

• Proton Mail’s new Key Transparency feature uses blockchain technology to allow users to verify email addresses, and CEO Andy Yen wants to be clear: it’s not “some sketchy cryptocurrency”. (Leo Schwartz / Fortune)

• Signal president Meredith Whittaker says running the platform will soon cost $50 million as she calls out competitors with ad-based business models. (Andy Greenberg / WIRED)

• People are more likely to think pictures of white faces generated by AI are human than photographs of actual people, a team of researchers found. The results do not hold up for images of people of color. (Nicola Davis / The Guardian)

• Artist and musician Holly Herndon, along with others in the creative field, use AI to help create art. But that comes with challenges around copyright, consent and compensation for other artists. (Anna Wiener / The New Yorker)

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Those good posts

In light of the ongoing, disgusting antisemitism on the platform, we will no longer be including funny X posts in this section or on Casey’s Instagram. There are still lots of funny people on X, but it’s time for them — and us — to move on. (Casey and the Platformer account, which for the past year have used X only to post newsletter and podcast links, will no longer be doing that, either.)

We know this part of the newsletter is a favorite for many of you. It’s one of our favorite parts of putting it together. And while any day over the past year would have been a good day to stop using X, today was our day.

Going forward, we’ll experiment with putting other stuff here. Threads continues to be a great place to discuss news, but it’s not a very funny one. We hope Weird Twitter will migrate there over time. Bluesky is funnier, but we spend less time there. Mastodon is a convention of Linux developers. The landscape is bleak.

We’re committed to finding funny social posts to put here, and we highly encourage you to send stuff our way. So please do. And now, some skeeys we found in today’s Today in Tabs.

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Talk to us

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