Daily Tech Snippet: Monday, March 30

• To Grow in the Data Center Market, Intel Is Said to Be in Talks to Acquire Chipmaker Altera: Intel Corp. is in talks to acquire Altera Corp., people with knowledge of the matter said, as the world’s largest chipmaker searches for growth beyond a moribund personal-computer market. The people asked not to be identified discussing private information. The Wall Street Journal reported earlier on the discussions. Altera shares jumped 28 percent to $44.39 at the close in New York, giving the company a valuation of about $13.4 billion. Intel rose 6.4 percent to $32. Chuck Mulloy, a spokesman for Santa Clara, California-based Intel, and Sue Martenson, a spokeswoman for San Jose, California-based Altera, declined to comment. Intel is on the hunt for growth as it faces a slowdown in the market for PCs that forced a $1 billion cut in its first-quarter sales forecast earlier this month. Sales in the worldwide PC market will shrink 4.9 percent this year, IDC said, as consumers around the world spend more on mobile devices typically based on processors using designs from Intel rivals such as Qualcomm Inc. That decline comes on top of heavy losses in Intel’s mobile division. The group reported an operating loss of $4.21 billion for 2014. A bright spot for Intel is the data-center group, where profits soared to $7.28 billion on sales of $14.4 billion in 2014. The company benefited from a boom in the amount of data being generated and held in computing centers around the world. Altera makes a broad range of low-power programmable semiconductors, which are used in small embedded devices and computer servers for big data centers. In buying Altera, Intel could expand into markets for automotive, industrial and communication applications, while cementing its lead in data centers, said Betsy Van Hees, an analyst at Wedbush Securities Inc. Hees has a neutral rating on the stock. “This would be a significant move for Intel, it would be a significant change in strategy,” she said. “They need diversification beyond the PC market. Data center has been a tremendous source of strength. Mobile has been a tremendous financial drain. Intel and Altera announced a manufacturing partnership in February 2013, agreeing that Altera chips would be made in Intel’s cutting-edge plants. That deal was extended in March last year when the companies agreed to do more detailed work together on chip packaging and design. An acquisition of Altera would help Intel make further inroads into corporate data centers and reduce its dependence on a PC market pressured by the rise of mobile computing, according to Stacy Rasgon, an analyst at Sanford C. Bernstein & Co. who has the equivalent of a sell rating on Intel’s stock. “It makes sense that they would potentially be looking for other opportunities to grow the other part of the business,” Rasgon said. “There are synergies, say, in Intel’s data-center business.” Intel could use Altera’s technology to create new processors that pair its traditional products with low-power communications chips, wrote Jefferies Group LLC in a note circulated after the market close on Friday. That would let the company “offer cloud-service providers like Google, Amazon and Facebook the ability to pull communication processing from expensive networking equipment into much lower-cost server blades, effectively enabling Intel to take share in the data-center networking-equipment market,” Jefferies wrote. Altera reported operating income of $543.4 million on sales of $1.93 billion in 2014, compared with Intel’s full-year revenue of $55.9 billion.

• GitHub has been battling a DoS attack for days - alleged source of attack: China: U.S. coding site GitHub said on Sunday that it was deflecting most of the traffic from a days-long cyber attack that had caused intermittent outages for the social coding site, with the Wall Street Journal citing China as the source of the attack. "Eighty-seven hours in, our mitigation is deflecting most attack traffic. We're aware of intermittent issues and continue to adapt our response," a tweet from the GitHub Status account said. The attack took the form of a flood of traffic, known as a distributed denial of service, or DDoS, attack. Those kinds of attacks are among the most common on the Internet. The Wall Street Journal reported that the flood of Internet traffic to GitHub came from Chinese search engine Baidu Inc, targeting two GitHub pages that linked to copies of sites that are banned in China. On its blog, GitHub said that the attack began early on Thursday "and involves a wide combination of attack vectors." "These include every vector we've seen in previous attacks as well as some sophisticated new techniques that use the web browsers of unsuspecting, uninvolved people to flood github.com with high levels of traffic," the blog post continued. "Based on reports we've received, we believe the intent of this attack is to convince us to remove a specific class of content." GitHub supplies social coding tools for developers and calls itself the world's largest code host. A Beijing-based Baidu spokesman said the company had conducted a thorough investigation and found that it was neither a security problem on Baidu's side nor a hacking attack. "We have notified other security organizations and are working to get to the bottom of this," the spokesman said.

• India's capital markets regulator Sebi on listing norms for start-ups: SEBI is likely to put out a discussion paper on the listing norms for start-ups next week. Securities and Exchange Board of India (Sebi) Chairman U K Sinha today met an eight-member team from start-up think-tank iSpirt Foundation here to discuss the way forward for start-ups to raise funds from the primary markets. “Sebi would put out a discussion paper next week suggesting a series of improvements. The first draft guidelines are expected by the end of June,” iSpirt Foundation co-founder and governing council member Sharad Sharma told PTI. The think-tank has been in touch with Sebi since mid-December to facilitate the rapidly burgeoning start-up space to go public and raise funds. “This will stop the exodus of start-ups that choose to list on international markets currently,” Sharma said. He, however, declined to comment on the contents of the discussion paper. At the last meeting with Sebi on December 19 last year, the industry had sought regulatory intervention in easing the existing regulations and guidelines which make it difficult for companies to get right investors and advisors. Another suggestion was to make the listing process faster and easier so that investors could exit. Minutes of the past meeting with Sebi posted on the thinktank’s website say the Sebi chairman had indicated that the regulator was exploring putting in place a framework for crowd-funding which will provide a much-needed new mode of financing for start-ups and SME sector and increase flow of credit to SMEs and other users in the real economy. In this mode, small and medium enterprises (SMEs) and start-ups will be able to raise funds at a lower cost of capital without going through rigorous procedures.

• BlackBerry Reports $28 Million Profit in 4th Quarter - business no longer on brink of collapse, but future still unclear: John S. Chen, executive chairman of the ailing smartphone maker BlackBerry, was again asking for patience on Friday after the company produced a surprise, but slim, profit while also posting an unexpected drop in revenue. The $28 million profit in BlackBerry’s fourth quarter was mainly thanks to a patent sale and tax recovery. The company lost $106 million on an operating basis. For the entire year, the company lost $304 million on revenue of $3.3 billion. Despite the introduction of two new phones and a push by the company to sell software that allows businesses and governments to manage all of their employees’ mobile phones regardless of their brand, fourth-quarter revenue was $660 million, down from $793 million in the previous quarter. Analysts had expected revenue of about $792 million. The revenue drop suggests that the company has yet to revive its phone business, said Brian Colello, an analyst at the firm Morningstar. During the period, BlackBerry offered two new phones: the Classic, which restored features found on older BlackBerrys, and the Passport, which has an unusual square screen. They were aimed at BlackBerry’s traditional customers, like people in the financial industry. Neither has sold well. There was one bright spot. ITG Investment Research reported that retail data it collected in BlackBerry’s home market in Canada showed that BlackBerry sales at Rogers Communications, the country’s largest wireless carrier, rose by 27 percent in the final quarter of last year compared with the third quarter. Sales at Bell Canada were up 12 percent, but BlackBerry sales fell by 13 percent at Telus, the other large carrier in Canada. ITG added that “the solid quarterly trends seen at Canadian carriers may not be representative of global sales trends.” BlackBerry’s software business rose by 24 percent over the previous quarter and 20 percent over the same period a year earlier. But Mr. Chen told analysts that an older version of the company’s mobile device management software, which is more oriented toward BlackBerrys, was outselling the new version, which the company is promoting heavily. Although BlackBerry no longer appears to be on the brink of collapse, Mr. Colello said it was still unclear if Mr. Chen could now make his company grow while maintaining profitability. “The entire business is very uncertain at this point,” he said.

• Founder of mobile buying app Fetch: "Mobile Messaging Conjures A Commerce Platform" This week brought two announcements that reflect a seismic shift in the future of mobile messaging: 600 million users of Facebook Messenger will soon be able to order food, buy products and text directly with businesses; and meanwhile, Magic is raising an astonishing $12 million from Sequoia to allow you to order any on-demand service simply by sending a text message. America is finally discovering what Asia has known for years: mobile messaging is a commerce platform. These developments herald what Chris Messina recently described as a new trend towards “conversational commerce,” in which users will be able to shed the need for countless apps from different companies in favor a simple mobile messaging interface. “Conversational Commerce is about delivering convenience, personalization, and decision support while people are on the go, with only partial attention to spare,” Messina says. Put more simply: we all text more than ever, so why not expand texting’s potential to sending payments, buying products, ordering on-demand services, paying bills, and more? Facebook and Sequoia are not alone in making a big bet that Conversational Commerce marks the next stage of texting’s evolution. We’re in the midst of a veritable messaging gold rush. Earlier this month, Alibaba poured $200 million into SnapChat, which now lets you send money to a friend or buy a product using their newly-launched SnapCash. This follows Alibaba’s $215 million investment in Tango last year. Rakuten recently snapped up Viber for $900 million with an eye towards integrating mobile commerce into the messaging app. Other start-ups in the “conversational commerce” space include Scratch and BRANDiD, which provide curated shopping recommendations; and Native, whose personal travel assistant service allows you to book flights and hotels by sending a text. Path Talk was the first messaging app to allow users to message directly with businesses, making restaurant reservations as easy as sending an SMS. The inevitable evolution of messaging apps like Facebook Messenger and SnapChat into commerce platforms will change the way we think about mobile commerce. It won’t be long until you’ll be texting your food order to DoorDash, paying bills by SMS, or firing off a quick Facebook Message to send flowers to your loved one. Magic may not be able to be deliver on their promise of bringing a tiger to your front door, but it’s clear that mobile messaging is about to get a whole lot more powerful.

• For Hardware Makers, Sharing Their Secrets Is Now Part of the Business Plan: Facebook showed plans last week for drone aircraft that beam lasers conveying high-speed data to remote parts of the world. As powerful as that sounds, Facebook already has something that could be even more potent: a huge sharing of its once-proprietary information, the kind of thing that would bring a traditional Silicon Valley patent lawyer to tears. Facebook is not alone. Technology for big computers, electric cars and high-technology microcontrollers to operate things like power tools and engines is now given away. These ideas used to be valued at hundreds of millions of dollars. To the new generation of technologists, however, moving projects and data fast overrides the value of making everything in secret. “You now don’t need a lot of people or a lot of capital to manufacture a prototype,” said Jay Parikh, vice president for connectivity at Facebook. “The entire world is going to accelerate its technology development.” Facebook has already shared designs for data storage, computer servers and rack designs, among other hardware, Mr. Parikh said, and has seen rapid improvements as a result. Rather than just building and testing a handful of designs, Facebook gets to see dozens of variations that individuals and companies manufacture inexpensively. They often contract with prototype makers over marketplaces like the Chinese e-commerce site Alibaba, or they may even use three-dimensional printers. When companies do make hardware free, Mr. Dougherty said, it is not usually altruistic. “It can create competition for your enemy without spending money on a new product,” he said. He noted that IBM went into open-source software in the 1990s, and Microsoft suffered. Sometimes companies want to kick-start business. Facebook’s open designs have enabled commercial relationships that lower its supply costs as well as speed innovation.