Daily Tech Snippet: Tuesday, March 17

• Alibaba founder demos facial recognition payments: Alibaba is working on a new technology called “Smile To Pay” that will allow users to make mobile payments by simply scanning their face. It would basically work the same way as Apple Pay does with fingerprints, where users can approve mobile payments with a single tap on the home button — only, Alibaba wants to replace fingerprints with the user’s face. At Cebit in Hanover, Alibaba founder Jack Ma, after noting how online payments can sometimes be troublesome, the founder took out his smartphone and paid for a set of stamps on Alibaba using face-recognition technology. Alibaba has been open about its plans to release face recognition-enabled payments for Alipay, its third-party payment service, at least since October of last year.

• TripAdvisor reviews affect tourism of entire countries, hotel revenues: TripAdvisor is the biggest travel reviews website in the world. Today, TripAdvisor lists over 890,000 hotels, holds one of the largest collections of travel photos on the internet, and features accommodation in more than 45 countries. It makes nearly $1 billion in revenue a year and boasts more than 60 million members. Customers of hotels, restaurants, and other attractions add 115 comments to the site every minute, writes Tom Vanderbilt on Outside Online. The site is now so big that its reviews can shift the tourist economies of entire countries, Vanderbilt says. Social media and TripAdvisor have together forced hotel owners to do more than rely on nice photos and clever branding to entice customers, Vanderbilt writes. And that is changing the hotel economies of entire countries. Ireland:  The standout discovery is that as Irish hotel managers took action to garner good reviews on TripAdvisor, their hotels actually got better. And as they did, responses also improved — and visitors arrived more frequently. UK: User-generated content was “directly related to £1.7 billion of tourism spending in the UK,” Big Hospitality reports. In 2012, that figure made up around 2.2% of all tourist spending.  Studies found that reviews even Affect hotels’ “RevPAR,” or revenue per available room. Every positive percentage point a place rises up the tables in TripAdvisor, RevPAR at locations increases by 1.4%. Vanderbilt explains that as a result, hotels can raise prices by 11% to reflect their reputation on the site.

• Youtube retools annotations for mobile : Youtube is finally retooling a troublesome feature, making it more useful for content producers and hopefully a bit less frustrating for users. Annotations, YouTube's clickable pop-ups (which, to be clear, are still available for the moment) are being joined in the company's toolbox by a new feature called "cards," which, to every advertiser's delight (and most users' chagrin) will now work on mobile. The good news is that cards will take up a relatively minimal amount of video real estate when they first appear, showing teaser text that, if clicked, will pop up more information. At later points in the clip, a small "i" will indicate the presence of cards. 

• Lyft plans to be profitable by 2016, targests $2.7 B topline and reduced driver acquisition spends : Last week on-demand transportation service Lyft announced that it had raised $530 million in new funding as it seeks to steal market share away from arch-rival Uber and launch services in new markets in the U.S. and internationally. While it is clearly second to Uber in both markets it serves and financing it’s raised, Lyft’s financial projections at least show a path to profitability in the next 24 months. This year Lyft is targeting nearly $1.2 billion in gross revenues, of which its take will be around $300 million net. That assumes between 20 and 25 percent commission for the rides it books. In 2016, Lyft expects its revenues to more than double(targeting $2.7 billion). That revenue growth is driven by an increase in the number of rides and passengers that Lyft serves. The company is targeting nearly 90 million rides in total for 2015, which it expects to more than double to 205 million in the year following. While Lyft is generating a lot of cash, it also has a number of costs associated with running the business, including credit card processing fees, insurance, and taxes. After those costs, Lyft forecasts a $170 million gross profit in 2015, which it expects to grow to about $400 million in 2016. That said, its gross profit number doesn’t take into account Lyft’s customer and driver acquisition costs, which the company is using to prime the pump and grow both supply and demand. In 2015, Lyft expects to spend $150 million to acquire new users, while spending an additional $50 million on getting drivers on board to shuttle them around. Taking those numbers into account, there’s a delta of around $30 million between its gross profit and acquisition costs this year. In 2016, the financial picture gets a little better: While gross profit is expected to grow to around $400 million, its spend on driver and passenger acquisition is forecast to increase only slightly, to around $250 million.

• Snapdeal in talks to buy Jabong’s spun out logistics unit GoJavas for $32M:  Online marketplace major Snapdeal is in talks to acquire logistics firm GoJavas in a deal estimated to be about Rs 150-200 crore, as it looks to further strengthen its delivery operations in the country. GoJavas, which works with eCommerce firms like HealthKart, Jabong, Yepme and Lenskart, covers over 2,500 pincodes in the country. Currently, Snapdeal does not have a captive delivery arm and relies on third-party logistics.

• Another CFO retires (after Google, Apple, Amazon) : Uber CFO steps down: Brent Callinicos, the chief financial officer of Uber, plans to leave the ride-sharing company, in what will be one of the highest-level departures yet for the six-year-old start-up. Mr. Callinicos’s departure comes just two years after he joined Uber, according to an internal memo to employees obtained by The New York Times, where he helped the company expand from a young start-up to span more than 53 countries. The move comes on the heels of a spree of fund-raising activity for Uber. It also comes amid a spate of chief financial officer retirements at some of the largest companies in Silicon Valley over the past year. But perhaps most important, Mr. Callinicos’s departure comes shortly after Uber arranged a private sale of convertible debt, managed by Goldman Sachs. The terms of this offering, as described by people briefed on the matter, give Uber an incentive to go public within the next few years. The securities being offered to Goldman’s clients can be converted into stock — at a discount of roughly 20 to 30 percent of Uber’s valuation in an initial stock offering. 

• Non-compete agreements drive away talent, Silicon Valley thrives in their absence:  In Silicon Valley,  Not only are formal alliances commonplace among the local firms, it is also, arguably, one of the most dynamic labour markets in the world. Here, the culture is one of loyalty to the profession rather than to a firm. Equally, there is nowhere else on the globe that can compete with the number of start-ups which successfully launch and, more importantly, stay in business and go on to be global leaders in the industry.  But what drives this collaborative environment? Silicon Valley’s vibrancy can’t all be pinned down to one factor. However, one critical characteristic of Californian is that firms simply cannot enforce non-compete agreements on their employees – as the state doesn’t recognise them legally. There  is clear evidence that talented workers feel a pull towards states where they can change employers freely and take their creativity with them.  In today’s collaborative business environment, this raises some questions about whether non-competes really are the best tool for protecting intellectual property and recouping technological investments even from the perspective of the companies involved.  It is important to recognise that these are a double-edged sword.  Preventing employees from going to work for a competitor could not only hurt your competitor, but it could be hurting your own business too if one looks at the bigger picture.  Because finding the right match between an employee and employer is a little like the dating game — some are matches are made in heaven, some are not — and it is beneficial to be able to break the relationship as easily as possible, should the need arise. If, however, your own employees and your competitor’s employees are unable to find the right match for fear of breaking a contract, the only outcome is a zero-sum game.  In this situation, the degree of experimentation between employees and firms becomes that much harder, leading to an inefficient labour market. As well as being detrimental at firm level, the consequences are felt across the industry and region.