Daily Tech Snippet: Monday, May 25

• Google adds a Buy Button to YouTube "TrueView" Pre-Roll Ads - Initial Results Very Positive: Google today announced that its YouTube TrueView ad product will now come with an optional "click to shop" button on pre-roll spots. The new button will often appear adjacent to the "Skip" button that YouTube fans know very well. A few brands have been testing the ads, which allow viewers to click through to e-commerce pages and add items to their shopping carts. Per Google, home goods merchant Wayfair has been getting three times the digital revenue compared to previous YouTube campaigns, while the cosmetics retailer Sephora saw more than an 80 percent jump in brand consideration and a 54 percent lift in ad recall. The move for Google is designed to shift YouTube's ad business into a higher gear as the site faces increased digital video competition—chiefly from Facebook, although Snapchat, Kik and other mobile startups also pose a threat. Jonathan Opdyke, CEO of HookLogic, predicted the feature would be a hit with merchant brands. Sridhar Ramaswamy, svp of ads and commerce at Google, revealed the new feature while speaking earlier this afternoon at the ad:tech conference in San Francisco.

• Amazon to Stop Funneling European Sales Through Low-Tax Haven: In a move that could put pressure on its rivals to follow suit, Amazon will start paying taxes in a number of European countries where it has large operations, instead of funneling nearly all its sales through Luxembourg, a low-tax haven that is the home base in the region for Amazon and many other large tech companies. Several European countries, including Germany and France, have criticized the tax strategies of some American tech companies, including Google, which use complicated structures that sharply reduce the amount of tax they pay in individual European countries. The European Commission, the executive arm of the European Union, is also investigating whether Apple and Amazon receive unfair state support through low-tax agreements in Ireland and Luxembourg, respectively, where the companies run their European operations. On May 1, Amazon said that it had started reporting revenue from its operations in Britain, Germany, Italy and Spain. By altering how it reports its revenue, the online retailer may become liable for larger tax charges in certain nations, though it may still be able to reduce its tax burden through other complex accounting practices.Amazon reported a 14 percent rise in European revenue, to 13.6 billion euros, or $15 billion, in 2013 (the latest full-year figures available), according to company filings.The changes to the company’s tax arrangements, however, are likely to put pressure on other tech companies in the United States that funnel the majority of their European revenue through low-tax countries like Ireland and the Netherlands. In Britain, George Osborne, the country’s finance minister, has championed a so-called Google Tax that imposes a 25 percent tax on the local profits of international companies that are perceived to route money unfairly overseas. The new policy came into effect last month. And in response to mounting criticism from other European countries, Ireland announced late last year that it would phase out a tax loophole called the “Double Irish” that would often be used by tech companies. The structure allows corporations with operations in Ireland to make royalty payments for intellectual property to a separate Irish-registered subsidiary. That subsidiary, though incorporated in Ireland, typically has its home in a country that has no corporate income tax. The Double Irish policy has allowed companies like Google to limit how much tax they pay on their international operations. The policy was phased out for new companies at the beginning of 2015, and will be stopped entirely by the end of the decade. Yet, despite the growing clampdown on tax structures used by American tech companies and others, analysts say that European countries are still vying to attract international companies through low-tax policies. Britain, Ireland and the Netherlands have already created new policies that allow companies to apply for a lower tax rate on profits that result from certain patents that are held locally. The European Commission, however, is currently reviewing the legality of these so-called patent boxes.

• Contest for Nokia's maps business heats up; German carmakers, Uber and Baidu, and Tencent are all in the fray: The contest for Nokia's maps business has become a three-way race between German carmakers, a consortium including Uber and Baidu, and a third group including China's Tencent and Navinfo, people familiar with the process said. Finland's Nokia has started an auction of its maps business HERE while it completes its 15.6 billion euros ($17.2 billion) takeover of network equipment maker Alcatel Lucent. German automakers Daimler , BMW and Volkswagen's premium brand Audi have teamed up with private equity firm General Atlantic to form what is being described as the "Industry consortium", two sources familiar with the matter told Reuters on Thursday. Nokia, Daimler, BMW and General Atlantic declined to comment. The automakers have agreed to contribute potentially more than 700 million euros, but below 1 billion euros, said one auto industry source, who declined to be named. The consortium could be widened to include more carmakers, the source added. Another group consists of Chinese media, mobile and Internet services firm Tencent Holdings, Chinese map maker Navinfo, and Swedish buyout firm EQT Partners, three sources who declined to be named said. Navinfo and Tencent were not immediately available for comment. EQT declined to comment. Private equity firm Apax has joined U.S.-based taxi service Uber and China's Baidu in a third consortium, a financial source who declined to be named said. Apax and Uber declined to comment. Baidu was not immediately available for comment. Analysts put the potential value of HERE at 2 billion euros to 4 billion euros.

• Chinese Car-Hailing App, Backed by Both Alibaba and Tencent, Gives Away Free Rides to Fend Off Uber: Chinese car-hailing app operator Didi Kuaidi will give away 1 billion yuan ($161 million) worth of rides to commuters starting next week to promote its new chauffeur service. The company, backed by Alibaba Group Holding Ltd. and Tencent Holdings Ltd., is expanding into the market for ride-sharing and carpooling after winning an estimated 99 percent of the taxi-hailing market share. The giveaway is expected to hit Uber Technologies Inc. and Yidao Yongche, two other companies competing for the estimated $1 trillion-a-year market for transportation services in the world’s most populous country. China’s car-hailing industry is currently dominated by Didi and Kuaidi, which together account for a combined 78 percent of ride bookings, with Uber a distant third at 11 percent, according to Analysys International, an industry researcher. “Three years from now, our goal is to allow everyone to hail a taxi or get a ride within three minutes and to serve 30 million people per day,” Cheng Wei, chief executive officer of Didi Kuaidi, said in a statement. The company hopes to meet the demand by supplying more cars in a more flexible way, he said in the statement. Starting May 25, commuters in 12 Chinese cities will enjoy free rides for Didi Kuaidi’s chauffeur service every Monday for a month, according to the company. Didi Kuaidi aims to create the largest “one-stop transportation platform” in the world, the company said. The goal is to cover commuting needs from hailing taxis through mobile apps, to carpooling and booking premium cars with chauffeurs, it said. Formed out of an alliance of two competing apps, the two former rivals had engaged in intense competition, giving out subsidies to drivers and riders, before agreeing to work together in February. Alibaba and Tencent own 10 percent and 13 percent, respectively, in the merged company. Didi Kuaidi won a breakthrough this month after Shanghai said it will include the company in a new taxi-booking platform, the first official recognition of mobile-booking apps. The company is in talks with more local governments about cooperating on car-hailing services, Cheng said, declining to name the cities. By contrast, local media reported Uber’s offices in Guangzhou in southern China were raided by local authorities.

• EBay Plots European Growth With Click-and-Collect Expansion; Surplus Space at Supermarkets Adds to Opportunity: EBay Inc. plans to expand its click-and-collect service in the U.K. and across Europe, after buyers on its site collected 1.5 million parcels from British store chain Argos in the first 18 months of the service. Click and collect is becoming “the dominant way that consumers want their online purchases to be fulfilled” in the U.K., EBay’s senior vice president for Europe Paul Todd said in an interview at Bloomberg’s London headquarters. EBay, based in San Jose, California, is looking at all kinds of partnerships to boost its presence, Todd said. The Argos service, covering about 750 stores across Britain, is used by about 160,000 EBay merchants. Click-and-collect services are booming in Europe as more shoppers choose to fetch their purchase from a store rather than risk missing a home delivery. More than half of online orders placed with John Lewis department stores in the U.K. last Christmas were picked up from a store. France’s Darty Plc said Thursday that 20 percent of all Web sales in the fourth quarter were collected, up from about 10 percent a year ago. Surplus space in U.K. supermarkets may be one avenue that the company explores to boost its collection capabilities. J Sainsbury Plc said this month that about a quarter of its stores will have some under-utilized space in the next five years. The need for grocers to fill that space presents a “huge opportunity” for EBay, Todd said.

• Tinder Gets Into Music by Offering Zedd's New Album for $3.99: Tinder users who spot Zedd's fake profile and "swipe right"—which indicates interest in someone—receive a link to download his new True Colors album for $3.99 (compared to $7.99 on iTunes or Google Play). The profile is also tied to a contest to win an autographed CD. It may be the initial foray for Tinder in terms of selling music, but it's not the first time the red-hot dating app has linked up with music. Earlier this year, pop singer Jason Derulo created a profile to drive views of his YouTube music video. A Tinder rep confirmed to Adweek that the Zedd promo is not an actual ad—it's a partnership that the dating app has been testing with a number of marketers, such as Twentieth Century Fox, E!, and New York's Urban Mudder event on July 25. Bud Light was the first and only brand to run Tinder ads last month as part of its "Whatever, USA" campaign.

• Consolidation in China's online travel sector: Expedia gives up on China partner, sells off $671M majority stake in eLong: Ctrip, China’s top travel site, this afternoon announced it has taken a US$400 million stake in long-time arch-rival eLong. The deal, which closed today, was done by acquiring eLong shares from Expedia. Ctrip now has a 37.6 percent stake in its erstwhile rival. Expedia has sold off its entire 62.4 percent stake in eLong, worth US$671 million, by selling the remaining shares to three other buyers (Keystone Lodging Holdings, Plateno Group, and Luxuriant Holdings), the US-based company said today. As a result of this deal, Ctrip says that it and Expedia have agreed to cooperate with each other on “certain travel product offerings for specified geographic markets.” Expedia’s brief statement did not make clear why it’s exiting eLong. The huge Expedia sell-off marks a major sea-change in China’s highly competitive travel ecommerce sector. It seems to be a huge win for Ctrip, which has now tamed its closest competitor. That leaves Ctrip freer to focus on newer and fast-growing rivals such as Baidu-owned Qunar, Tuniu, and LY. Ctrip has US backing of its own in the form of Priceline, which owns about eight percent of the company.