Daily Tech Snippet: Wednesday, June 3

• Here is an audio (MP3) version of this snippet, and archived snippets are here. 

• Instagram to Open Its Photo Feed to Ads: Instagram is cranking up its money machine, and that means a lot more ads in your photo feed. Facebook, which bought Instagram in 2012, has kept the mobile photo-sharing service mostly free of advertising, allowing only a handful of big brands to put a few carefully drafted commercial messages on the service. But on Tuesday, the company announced plans to open the Instagram feed to all advertisers, from the local tattoo parlor to global food makers, later this year. Marketers will be able to target ads to the service’s 300 million users by interest, age, gender and other factors, just as they can on Facebook. Instagram will also begin testing a type of ad that allows viewers to click on a link to buy a product or install an app that is advertised. The commercialization of Instagram, while sure to disappoint some users, was probably inevitable. Major social networks like Facebook, Twitter and Pinterest have committed to keep their services free to users, and they have turned to advertising to pay the bills. Instagram offered its first ads in November 2013, but since it has been subsidized by Facebook, it has had time to develop an ad strategy. Many retailers already use third-party workarounds, such as Curalate’s Like2Buy tool, to allow fans to shop their Instagram feeds. Visitors to the Instagram pages of Target, Nordstrom, Forever 21, Williams-Sonoma and other retailers can click on a special link that the store posts in its account description that leads to a mirror image of its Instagram feed — but one where photos are clickable and link to product pages where a shopper can buy the items.

• More On Instagram's Monetization: Instagram Unleashes a Fully Operational Ad Business With shopping links and Facebook-powered targeting: Instagram's ad business is growing up fast thanks to a boost of new technology from Facebook. Today, the popular photo-sharing app with more than 300 million users and counting is opening up to potentially millions of advertisers, with more ad styles and sophisticated targeting tools first honed by its parent company. Instagram is launching ads with "Shop Now" buttons and other messages that link outside the app so users can take marketable action. Also, there's a new API—software platform—that lets marketing partners automate the advertising process. The API comes polished—able to manage, track and measure marketing campaigns—thanks to borrowed technology and lessons learned from Facebook, said James Quarles, Instagram's global head of business and brand development. Advertisers can reach users based on more than just their ages and genders, targeting interests gleaned from Facebook profiles. "We have benefitted greatly from being a part of Facebook," Quarles said. "It would have taken us years to build this tech stack for ourselves. So, we're fortunate to be able to take select pieces of Facebook's tech stack."

• Amazon Debuts Free Shipping on Small Goods, No Minimum Order: Amazon.com is introducing free shipping on thousands of popular, smaller items -- makeup, mobile phone accessories, earplugs -- in its Web store, without requiring a minimum order. The new initiative applies to all customers, including those not enrolled in Amazon Prime, the annual membership program that includes two-day shipping, the company said on Tuesday. Amazon is using the free shipping program to target cost-conscious shoppers, a group that EBay Inc. is courting. Amazon Chief Executive Officer Jeff Bezos has focused on increasing the value of the $99-a-year Prime membership, adding same-day delivery in big cities, video streaming and music. By offering free shipping, the Seattle-based online retailer will be able to target a wider pool of customers and market its services, including Prime membership. The new offer gives online shoppers an opportunity to order inexpensive goods one at a time without worrying that shipping costs are more than the price of the item or feeling compelled to buy additional products to meet a free-shipping threshold. The service covers items that weigh 8 ounces (230 grams) or less, which usually cost no more than $10. Delivery will take four to eight business days from a new shipping hub in Florence, Kentucky, specifically stocked for the program dubbed Fulfillment by Amazon Small and Light.

• Pinterest Brings E-Commerce to Social Scrapbooking With ‘Buy It’ Button: Pinterest, the online social scrapbooking service, has long claimed to help people discover new things in the real world. Soon users will be able to buy those things, too. The San Francisco company announced Tuesday that it would offer the ability to buy products from inside of pinned items, in what is its first foray into e-commerce on its service. The new product, named “buyable pins,” allows sellers large and small to place a “Buy it” button on items that they post to the site. Founded in 2009 by the entrepreneur Ben Silbermann and some of his colleagues, Pinterest quickly caught on as a sort of digital scrapbook where people could save things that drew their interest online. A user may come across an interesting pair of jeans on the web, for example, and “pin” a photo of those jeans to a Pinterest board. The idea was that users could collect items that they may find or buy later. But there was no way to purchase items directly on Pinterest, so for many users, the idea of buying their saved items was largely aspirational. That changes with buyable pins, as Pinterest, which has raised more than $1.3 billion in venture capital, works to justify its valuation of $11 billion. While the company does not disclose its number of users, estimates place its audience in the United States at more than 75 million, according to the online analytics firm comScore. With buyable pins, Pinterest has teamed up with major retailers like Cole Haan, Ethan Allen, Kate Spade and Macy’s. More than two million blue “Buy it” buttons will appear on products posted to Pinterest by these companies. Payments made through the service will be powered by Stripe, an e-commerce start-up that focuses on small and midsize online businesses. Braintree, a payments processing company owned by PayPal, will also handle processing. Other merchants will be able to sell items on Pinterest using Shopify, which does the heavy lifting of online commerce for smaller, independent businesses. The move is a major moneymaking opportunity for Pinterest and perhaps an obvious one for the company, which has been around for close to six years but has only recently pushed heavily into generating revenue. In December, the company introduced its first major advertising effort with its “promoted pins” product; the announcement Tuesday is the company’s first real effort at building an e-commerce site. Pinterest does not plan to make money off e-commerce the traditional way, by taking a cut of retailers’ transactions. Instead, the company said, it would make money selling promoted-pins advertisements to retailers, who can then insert buyable pins into those ads.

• Tech boom lures Indian engineers back home: Kunal Bahl's American dream was coming together in late 2007. He had Ivy League degrees in business and engineering, a debut job at Microsoft Corp. and a roadmap to the career he’d always wanted in Silicon Valley. Then his application for a U.S. visa was rejected and he was kicked out the country. Lucky for him. Back in India, he got over the shock and founded a company in New Delhi with a childhood friend. Today Snapdeal.com is one of the most highly valued startups in the world’s third-largest economy, valued at about $5 billion. The 31-year-old is one of the thousands of a generation of engineers and entrepreneurs who quit America for home — some by choice, some because of U.S. immigration barriers — to find a technology industry with more green-field opportunities than Silicon Valley. Many Indians aren’t leaving at all, or are going to the U.S. for degrees from Harvard and Stanford with no plans to stay after graduation. India's booming startup culture probably wouldn’t feel any affects if the H-1B floodgates suddenly opened. The super-growth potential these days is east, not west. While only about 19 percent of Indians are connected to the Internet, their numbers are mushrooming. Economic output is expanding at an annual rate of more than 7 percent, and by some projections the country's population will reach 1.6 billion to surpass China’s by 2050. India is hard to resist. Google engineering executives Peeyush Ranjan and Punit Soni recently left the company and California for home, moving to Bangalore to join Flipkart, India's largest e-commerce company and Snapdeal’s main domestic rival. Namita Gupta departed Facebook for Zomato, a restaurant-search service based in New Delhi. The trend is a dramatic shift from the 1980s and 1990s, when a graduate education and employment in the U.S. were the brass rings for engineers like Satya Nadella, Microsoft's chief executive officer. Now for anyone interested in programming or e-commerce or mobile-device apps, India "is like the late 1990s in the U.S.," says Bahl. Venture capitalists and hedge funds are swooping in with aims to profit on startups like Snapdeal. Venture financing in Indian tech companies hit $1.9 billion in the fourth quarter, almost six times the $325 million in the year-earlier period, according to CB Insights. Hedge funds, investment firms and asset managers have pumped $3.8 billion into 26 Indian tech startups since the beginning of last year, according to data compiled by Bengaluru-based Tracxn. "Investors are writing big checks even by Valley standards."

• Russia's Internet Research Agency deploys an army of well-paid “trolls” that seek to wreak havoc all around the Internet - The New York Times investigates. A New York Times report investigates a shadowy organization in St. Petersburg, Russia, that spreads false information on the Internet. It has gone by a few names, but I will refer to it by its best known: the Internet Research Agency. The agency had become known for employing hundreds of Russians to post pro-Kremlin propaganda online under fake identities, including on Twitter, in order to create the illusion of a massive army of supporters; it has often been called a “troll farm.” The word “troll” was popularized in the early 1990s to denounce the people who derailed conversation on Usenet discussion lists with interminable flame wars, or spammed chat rooms with streams of disgusting photos, choking users with a cloud of filth. As the Internet has grown, the problem posed by trolls has grown more salient even as their tactics have remained remarkably constant. Today an ISIS supporter might adopt a pseudonym to harass a critical journalist on Twitter, or a right-wing agitator in the United States might smear demonstrations against police brutality by posing as a thieving, violent protester. Any major conflict is accompanied by a raging online battle between trolls on both sides. As former employees describe it, the Internet Research Agency had industrialized the art of trolling. Management was obsessed with statistics — page views, number of posts, a blog’s place on LiveJournal’s traffic charts — and team leaders compelled hard work through a system of bonuses and fines. “It was a very strong corporate feeling,” Savchuk says. Her schedule gave her two 12-hour days in a row, followed by two days off. Over those two shifts she had to meet a quota of five political posts, 10 nonpolitical posts and 150 to 200 comments on other workers’ posts. The grueling schedule wore her down. She began to feel queasy, she said, posting vitriol about opposition leaders of whom she had no actual opinion, or writing nasty words about Ukrainians when some of her closest acquaintances, including her own ex-husband, were Ukrainian. Russia’s information war might be thought of as the biggest trolling operation in history, and its target is nothing less than the utility of the Internet as a democratic space.