Daily Tech Snippet: Tuesday, March 24

• Uber Sells $24M Stake to India’s Times Group in Marketing Deal: Uber Technologies Inc. said the publisher of India’s most-read English newspaper has taken a small stake in the ride-hailing application company as part of a strategic partnership to support its expansion. The investment made by Times Internet is worth about 1.5 billion rupees ($24 million), the Indian company said in an e-mailed reply to a question. The Economic Times newspaper, also published by Bennett, Coleman, had first reported the value of the deal citing people familiar with the transaction. The deal with Times Internet Ltd. will help increase the marketing and distribution of Uber’s services to more than 200 million consumers in India, the San Francisco-based company said in a statement on its blog, without giving details of the investment. Times Internet is a fully owned unit of Bennett, Coleman & Co., the flagship company of the Times of India Group and publisher of The Times of India newspaper. Uber counts India as its biggest market outside the U.S. and the fastest growing globally. Baidu Inc., China’s largest Internet search engine, in December agreed to invest in Uber and said the company will connect its map and mobile-search features with the ride-hailing service. Uber’s service is available in 11 Indian cities and offers three types of cars, including hatchbacks for as little as 7 rupees (11 cents) a kilometer.

• Chinese city Hangzhou cracks down on Taobao seller-on-seller dirty tricks: China’s online ecommerce market is massive, but it’s also kind of a jungle. Especially in the C2C wilderness that is Taobao, shop owners use all kinds of shady tactics like brushing to make sure they get the sale, whether or not the consumer is actually getting what they want. Now Hangzhou, they city that plays host to Alibaba HQ, has passed a new set of regulations on ecommerce transactions that makes behavior like that illegal and punishable by local authorities. The new regulations will require Hangzhou sellers to register as businesses with the ecommerce platform they use, and levy fines of RMB 10,000 to RMB 30,000 (US$1,600-4,800) on platforms that don’t collect the proper information. Sellers can also be fined between RMB 10,000 to RMB 30,000 for doing any of the following: (1) Using the name or trademark of a famous company, product, brand, person, social organization, or government organization without permission (2) Leave negative reviews for, slander, or falsely report rival sellers and shops (3) Buying products in bulk and then returning all of them or refusing to accept delivery to harm rival shopkeepers’ profits (4) Falsifying internet transactions [like “brushing”] to get good reviews (5) Using technological measures to interfere with search rankings (6) Releasing fake products or false service information Harming national interests, public interests, or the lawful rights of others (6) Additionally, sellers can be fined between RMB 2,000 and RMB 20,000 (US$320-3,200) if they engage in any kind of customer harassment like calling customers who left negative reviews and berating or threatening them until they change their review score. Because these laws were passed by the city of Hangzhou and not China’s national government, they don’t apply to all online sellers yet. But they certainly provide a window into the kinds of dirty tricks that some Chinese C2C shopkeeps go in for, and the dangers consumers still face when shopping on C2C marketplaces like Taobao.

• Apple Pay’s pitch: Simpler is better. But some security experts disagree. When Apple introduced its pay-by-smartphone feature last fall, the company touted the simplicity of the setup. All shoppers needed to do was wave their iPhones in front of a special scanner at the cash register — no need to fumble through pockets and purses for plastic cards or identification. But a sharp rise in reports of fraudulent Apple Pay transactions is raising questions about the security of the first mobile payment system to find a measure of popular success. One payments analyst, Cherian Abraham, estimated that as many as 6 percent of Apple Pay purchases are completed with stolen credit cards, or 60 times the rate of the old-fashioned plastic swipe. The problem is that Apple Pay may be too simple to set up, security analysts said. Fraudsters have been loading stolen cards onto iPhones to buy things at stores. As it turns out, it might have been better if Apple Pay required users to do more to prove their identities when they sign up for the service, these experts said. The balance between security and ease of use has long bedeviled technologists, especially those pushing for a new payment system to replace the plastic cards that are highly vulnerable to thieves. That need has grown more urgent as credit card hacks — such as those that have afflicted Target and Home Depot in recent years — have risen in scope and frequency. Mobile payments offer a potential solution. They are considered much harder to hack than traditional payment systems. And they avoid the swipe — a critical advancement since a lot of credit card numbers are stolen by fake card readers. But consumers, banks and retailers have been slow to embrace the technology, partly because of its complexity. Launched in October, Apple Pay was billed as simple to use, and the universe of stores and banks accepting the service has been growing steadily over the past few months. Apple boasts that Apple Pay is now accepted at hundreds of thousands of store locations. Bank of America said customers added 1.1 million of its credit and debit cards to Apple devices in the first two months of Apple Pay. JPMorgan Chase cited a similar figure. But reports of fraud are now giving retailers and banks some pause. “The issuers were probably so eager to be involved that they kind of forgot best practices and sidestepped some procedures they normally would’ve had [in order] to accept Apple Pay,” said Michelle Evans, senior analyst for consumer finance at market research firm Euromonitor.

• Google Fiber Plans Experiment With Targeted Ads for Television: In a note to customers who subscribe to Google’s Google Fiber Internet and television service in Kansas City, Kan. and Kansas City, Mo., the search giant said it would soon begin a trial of local TV ads that will be aimed at a viewer’s locality and viewing habits. A spokeswoman who confirmed the service said Google expected it to roll out in the coming weeks. The move, if it were widely adopted by rival cable companies, could represent a sea change in how television ads are viewed and sold. For starters, it would mean that people in the same city might see different ads while watching the same show. It could also change how ads are sold by giving advertisers more leeway over when ads are shown, to whom and how often — the same kinds of control they have when advertising online. Google’s trial — which for now is aimed only at customers in the Kansas City area, who can opt out of having their viewing history used for advertising purposes — will use ads that are targeted by geography and what kinds of shows they view most often. “Fiber TV ads will be digitally delivered in real time and can be matched based on geography, the type of program being shown (like sports or news), or viewing history,” Google said in a online forum for Google Fiber. “If you’re a local business in Kansas City, just as with digital ads, you’ll only pay for ads that have been shown, and can limit the number of times an ad is shown to a given TV.” Analysts had been expecting Google to start experimenting with targeted television ads from the moment it announced its Google Fiber Internet service, which is about 100 times faster than the standard broadband connection. The company makes about $60 billion in annual revenue based largely on its ability to mine its user information to deliver highly targeted ads. Invidi Technologies, based in Princeton, N.J., makes software inside around 30 million United States cable boxes that can be used to target television ads based on age, gender, income, whether the viewer owns a dog or if their car lease is about to expire. Verizon, Dish, DirecTV and Comcast are all customers. “It is like direct mail for television,” said Michael Kubin, an executive vice president at Invidi.

• China's tax environment is tightening - regulator to reap Alibaba windfall as tightens up on tax: China could make billions of dollars from taxing gains made by employees of e-commerce giant Alibaba Group (BABA.N) who are free to sell their shares for the first time since its IPO, as the country tightens up its leaky mechanisms for tax collection. On Wednesday, a six-month lock-up period for the recently New York-listed stock expired, allowing insiders who bought 437 million shares prior to the IPO to sell their stock, though 100 million of them are subject to trading restrictions that apply to employees until the company reports results in May. The total lock-up represents roughly 18 percent of Alibaba's shares, which if sold would fetch just over $37 billion at Friday's closing price. Although Alibaba did not disclose the identity of the shareholders subject to the lock-up, many will be taxable in China, where most of its 22,000 people are employed, and its share scheme is subject to a number of controls that will help ensure China gets its tax. Current and former employees hold around 26.7 percent of the company, having built up holdings through stock options and other incentives since 1999, according to a Reuters report from June using IPO securities filings. Those subject to the expiring lock-up will have obtained their shares at different times and costs, so the gains figure is unknown, but the tax is expected to reach billions of dollars for China's State Administration of Taxation (SAT). While tax on employee compensation is withheld by employers, tax on share sales must be declared by employees, meaning it's typically harder for the authorities to track. It is not uncommon for employees participating in Chinese company stock incentive schemes to transfer their shares to offshore trusts in the Cayman or British Virgin Islands to avoid tax, according to a person who helps create such structures. But Alibaba's newly minted millionaires won't escape the gaze of the tax inspector, said a Beijing-based accountant. "Because it was such a large IPO, the tax bureau will for sure be monitoring that." While the potential tax windfall is tiny relative to China's total fiscal revenue of 14 trillion yuan ($2.26 trillion) last year, it reflects the government's more rigorous stance on tax.

• Facebook May Host News Sites’ Content: Nothing attracts news organizations like Facebook. And nothing makes them more nervous. With 1.4 billion users, the social media site has become a vital source of traffic for publishers looking to reach an increasingly fragmented audience glued to smartphones. In recent months, Facebook has been quietly holding talks with at least half a dozen media companies about hosting their content inside Facebook rather than making users tap a link to go to an external site. Such a plan would represent a leap of faith for news organizations accustomed to keeping their readers within their own ecosystems, as well as accumulating valuable data on them. Facebook has been trying to allay their fears, according to several of the people briefed on the talks, who spoke on condition of anonymity because they were bound by nondisclosure agreements. Facebook intends to begin testing the new format in the next several months, according to two people with knowledge of the discussions. The initial partners are expected to be The New York Times, BuzzFeed and National Geographic, although others may be added since discussions are continuing. The Times and Facebook are moving closer to a firm deal, one person said. To make the proposal more appealing to publishers, Facebook has discussed ways for publishers to make money from advertising that would run alongside the content. Facebook has said publicly that it wants to make the experience of consuming content online more seamless. News articles on Facebook are currently linked to the publisher’s own website, and open in a web browser, typically taking about eight seconds to load. Facebook thinks that this is too much time, especially on a mobile device, and that when it comes to catching the roving eyeballs of readers, milliseconds matter. In addition to hosting content directly on Facebook, the company is talking with publishers about other technical ways to hasten delivery of their articles. Even marginal increases in the speed of a site, said Edward Kim, chief executive of the analytics and distribution company SimpleReach, generally mean big increases in user satisfaction and traffic. So it is likely, he said, that Facebook’s plan focuses on those small improvements, rather than on getting money from deals with media companies. “But there are a lot of implications for publishers,” he added. “It really comes down to how Facebook structures this, and how they can ensure this is a win on both sides.” The issue is also pressing, he said, because some media companies have seen a drop in traffic from Facebook that could be attributed to the company’s prioritizing of video — a much more lucrative medium for ad sales.