Daily Tech Snippet: Friday, July 31

• Uber to invest $1 billion in India: FT: Online ride hailing service Uber is set to invest $1 billion in India, which will bring its investment on par with that in China, the Financial Times reported. Uber said that this move would help its service reach 1 million daily rides by March 2016, the first time the company has set such target for India, FT said. Amit Jain, president of Uber India, said the company was "extremely bullish" on the Indian market and that it continues to see a 40 percent monthly growth, FT reported. Jain also added that the company will expand service beyond the 18 cities in which it operates, the largest number in any country outside of the United States. On Wednesday, Uber launched its own auto leasing subsidiary in an effort to sign up more drivers, injecting the fast-growing ride services company directly into the financial services sector for the first time.


• LinkedIn Shares Slip on Concerns Lynda Buy Masks a Slowdown: LinkedIn shares fell after the company attributed a bump in its annual revenue forecast to its acquisition of the education website Lynda.com, raising concerns that growth is slowing in its main business. LinkedIn said full-year sales would be about $2.94 billion, beating the $2.91 billion average of analysts’ estimates compiled by Bloomberg. As part of the forecast, the company more than doubled expectations for revenue from the Lynda.com acquisition to $90 million for the year, raising questions about whether the professional-networking website’s core business was expected to slow. The company acquired Lynda.com for $1.5 billion while it also reorganized its sales force and changed advertising methods -- expensive moves that may take time to produce benefits. The Lynda.com purchase and LinkedIn’s efforts to promote news content are intended to make the website valuable to people even when they aren’t looking for jobs. LinkedIn initially rose as much as 15 percent in extended trading after the earnings were released, only to erase those gains and fall as low as 9 percent to $207 during the company’s conference call with investors. Second-quarter sales increased 33 percent to $711.7 million, while analysts’ estimated $679.9 million. LinkedIn’s loss widened to $67.7 million, or 53 cents, from $1.03 million, or 1 cent, a year earlier, the Mountain View, California-based company said. LinkedIn’s Talent Solutions business was its fastest-growing segment in the quarter, gaining 38 percent to $433 million after the sales force shake-up. The jobs site, which reported 380 million users, said those people spent 60 percent more time on LinkedIn than they did a year earlier. The company reduced the amount of e-mails it sends out by 40 percent to reduce complaints and improve the quality of the experience. The company said its China-based site now has more than 10 million members.


• Social Media Stocks and Their Unforgiving Investors: Several social media stocks took a pummeling on Wednesday, with Yelp plunging 25 percent and Twitter dropping 15 percent after both companies issued quarterly earnings that disappointed investors in one way or another. On top of that, Facebook’s shares fell slightly in after-hours trading after it posted financial results that included a surge in spending and a forecast of slowing revenue growth. Few should be surprised by the stock reaction. Investors have demonstrated for many months that they are unforgiving of any stumble by technology companies that became alluring because they had portrayed themselves as high growth. See what happened last quarter with LinkedIn, Yelp and Twitter, which all plummeted more than 20 percent shortly after reporting results that surprised investors (and not in a good way). At the time, Vindu Goel and Mike Isaac wrote that “shareholders increasingly have little tolerance for the slightest misstep” by social-media companies — something that was once again made very clear this week.


• In rural China, shoppers go online - with a little help: Cheng Yonghao left his village in central Henan province almost 20 years ago, not expecting to return. He's now back home, and this week opened a village store to help locals shop online. Cheng is just one of an army of local recruits who are part of Alibaba Group's big bet on rural e-commerce as China's internet giants invest billions in outpost service hubs to tap a market twice the size of the United States. E-commerce growth in the countryside now outpaces that in major cities, though fewer than one tenth of online purchases made on Alibaba platforms were shipped to rural areas in the first quarter of this year. Alibaba estimates the potential market at 460 billion yuan ($74 billion) by next year. Rival JD.com also says that developing rural e-commerce is a key strategy this year. While the rewards are enticing, few are making money yet. "We don't know when our rural e-commerce operations will become profitable, but there's value in what we're doing, there's consumer demand," Gao Hongbing, director of Alibaba's research arm, told reporters earlier this month. Before it can reap the rewards, Alibaba is having to teach a rural population - which tends to be older, poorer and less comfortable with technology - how to browse and buy. Alibaba has been on a recruitment drive to find and train local 'partners', who set up service centers in their home villages, helping locals shop online. Partners - mostly younger, educated, and more familiar with navigating websites like Taobao, Alibaba's online emporium - go through a written exam, computer test and interview. More than 1,000 applied for one batch of 50 jobs, said one applicant from Henan. Training takes place at local government business offices over 2-3 days in groups of around four dozen. Trainees are asked about their aspirations and how they can reach their potential.


• MakeMyTrip sales growth skids in Q1, lowers revenue guidance for the year: MakeMyTrip reported a slow net revenue growth of just 7.5 per cent (14.7 per cent in constant currency) for the first quarter ended June 30, 2015 over the year-ago period. This was due to a mere 2.8 per cent rise in net revenues from hotels and packages segment (10.4 per cent in constant currency). Net revenues from the air ticketing business rose 10.8 per cent (17.6 per cent in constant currency). Overall net revenue as captured by revenue less service cost, a key metrics for OTAs like MakeMyTrip, rose 27.5 per cent (28.4 per cent in constant currency) in Q4 FY15 and 36.3 per cent in Q1 FY15. Net revenues for the last quarter stood at $38.1 million. Overall revenues declined 1.2. per cent (roe 5.2 per cent in constant currency) to $93.6 million in the quarter while gross bookings, which represent the total amount paid by a customer while booking on its platform, rose 8.3 per cent (15.6 per cent in constant currency) to $467.8 million. In terms if operating stats, booking transactions in its hotels and packages segment rose 14.4 per cent to 430,100. This was overshadowed by a robust 45.6 per cent rise in air ticketing transactions that rose to 1.6 million last quarter. The transaction growth in air ticketing business was largely driven by special fares offered by Indian domestic carriers. The firm also saw its net margins from the air ticketing segment shrink from 5.8 per cent in Q1 FY15 to 5.5 per cent last quarter. Net margins in the hotels and packages segment, however, increased from 11.9 per cent in the quarter ended June 30, 2014 to 13.3 per cent. This was also in line with net revenue margin of 13.2 per cent for the fiscal year ended March 31, 2015. Operating loss almost doubled from $3.4 million to $6.1 million while adjusted operating loss (excluding employee share-based compensation costs, merger and acquisitions related expenses and amortisation of acquisition related intangibles) stood at $1.6 million compared with operating profit of $0.3 million in the quarter ended June 30, 2014


• Baidu Plans $1 Billion Buyback to Bolster Slipping Stock Price: Baidu, China’s biggest Internet search engine company, said on Thursday it will buy back shares worth $1 billion after the company’s stock price slid following a weak earnings report earlier this week. The repurchases will take place over the next 12 months and be funded from the company’s existing cash balance, New York-listed Baidu said in a statement. Baidu shares have fallen 14 percent since July 27, when it reported lower-than-expected second-quarter profit. The company’s plan to spend aggressively on connecting online smartphone users to offline services raised investor concerns on margins, triggering the shares’ worst two-day drop since late 2008. Baidu said last month it would invest $3.2 billion in linking mobile internet users to nearby offline services such as buying cinema tickets, booking taxis, getting restaurant deals. But these O2O services are eroding the healthy margins Baidu enjoyed from its core search business.

Daily Tech Snippet: Thursday, July 30

• Archived snippets are here      Fa

• Facebook Revenue Tops Estimates; Shares Drop as Spending Surges: Facebook, buoyed by robust advertising sales, signaled that it will keep up its brisk pace of investments to attract users and advertisers. Spending climbed 82 percent in the second quarter as the social-media company increased hiring, poured money into data centers and boosted marketing. While that was more than double the rate of sales growth, Facebook still managed to top analysts’ revenue estimate, crossing the $4 billion mark for the first time. Net income shrank to $719 million from $791 million a year earlier, while the operating margin, a measure of profitability, narrowed to 31 percent from 48 percent. Revenue rose 39 percent to $4.04 billion. Yet Facebook also signaled that it wouldn’t let investments grow uncontrollably. The company forecast that expenses will rise 55 percent to 60 percent this year, compared with a previous range of 55 percent to 65 percent. Facebook is improving tools for advertisers and expanding the audience for its mobile applications beyond Facebook itself, including Messenger, Instagram and WhatsApp, which have yet to contribute meaningfully to revenue. Monthly active users for Facebook’s main social network jumped 13 percent to 1.49 billion, with 1.31 billion people logging in at least once a month via mobile. Shares of Menlo Park, California-based Facebook fell 3.4 percent in extended trading, after advancing 1.8 percent to $96.99 at the close in New York. The stock is up 24 percent this year. Facebook’s ability to keep adding users and keeping them engaged stands in stark contrast to Twitter, which is struggling to break past 300 million people. The total number of Facebook users who logged in daily rose to 968 million in June, the company said, slightly less than the 970.5 million projection of four analysts surveyed by Bloomberg.


• Samsung Electronics cautious on outlook, says mobile business environment tough: Samsung Electronics offered a downbeat outlook for the third quarter after April-June profit dropped on a supply shortage for one of its main smartphone models, underscoring continued headwinds for the tech giant. Samsung remained the world's top smartphone seller in the second quarter, but investors and analysts say the South Korean firm's inability to meet demand for its curved-screen S6 edge smartphones likely cost the firm in April-June. Second-quarter operating profit fell 4 percent to $5.9 billion, matching an estimate issued by the company early this month. But the firm doubled its interim dividend payout to 1,000 won per common share. The firm said on Thursday that the mobile division faces a tough business environment as smartphone market growth slows. On the bright side, the chips division reported an operating profit of 3.40 trillion won, up from 1.86 trillion won a year earlier on the back of healthy demand for memory chips and sales growth for its mobile processors. Overall, annual profit is expected to rebound from a three-year low marked in 2014, thanks to robust semiconductor profits and some stabilization for the mobile business. In addition to the supply shortage for the S6 edge model, some analysts are worried by softer demand from China and Europe. Research firm TrendForce last week cut its forecast for 2015 global smartphone shipment growth to 8.2 percent from 11.6 percent, citing a weaker world economic outlook.


• Alibaba cloud unit sets sights on Amazon in $1 billion global push: Alibaba said on Wednesday it would invest $1 billion into its Aliyun cloud computing arm to challenge Amazon.com's lucrative Web Services division, opening a global front in the battle between the two e-commerce giants. With the global cloud computing market estimated by analysts to be worth about $20 billion, Alibaba said in a statement the investment would go toward setting up new Aliyun data centers in the Middle East, Singapore, Japan and Europe. The firm also plans to strike business partnerships with telecom and enterprise technology providers in those regions. Although Alibaba and Amazon have so far avoided competing directly in their core business of e-commerce outside China, Aliyun's international expansion takes aim squarely at Amazon Web Services (AWS), an increasingly central and profitable division of the Seattle-based company. Amazon shares soared last week after the company reported, among other items, an 81 percent revenue increase for AWS, which hosts Web customers like Netflix and Airbnb. As it expands, Aliyun will face stiff competition from some of the biggest names in technology. Amazon led the global cloud infrastructure market with a 28 percent share in 2014, trailed by Microsoft, IBM and Google Inc at 10, 7 and 5 percent, respectively, according to Synergy Research Group. After Amazon made a limited "beta" entry into China last year, where cloud adoption rates by businesses are far lower than in the rest of the world, Aliyun opened a data center in Silicon Valley in March to serve U.S. customers. "Our goal is to overtake Amazon in four years, whether that's in customers, technology, or worldwide scale".


• Steep Discounts a Boon for Customers, but a Gamble for Start-Upsh: Jet.com, a well-funded new shopping site, opened to the public last week and celebrated the debut by sending reporters a big box of swag. I got a T-shirt with a company logo, fuzzy socks, stickers and $1,400 in oversize, fake $100 bills. Jet is a discount site, so I suspect the funny money was meant to illustrate the cash I’d save by shopping there. But the faux bills immediately evoked a more cautious reminder — of all the money Jet plans to spend to become the next force in online shopping. It isn’t just Jet. On a venture-capital high, tech start-ups are burning through vast cash reserves to offer rock-bottom prices, and to sign up new customers with discounts, giveaways and other deals that may sound too good to be true. Jet, a Costco-like members-only discount company that has raised more than $225 million from investors before opening its doors, is only the largest such example. Forget the fake bills; for Jet, as well as for many of its smaller start-up kin, giving away real money is a key part of business. This sounds fishy. But there’s an upside: While investors’ cash lasts, consumers could be in for a boon. After all, from the perspective of customers, what’s so bad about companies giving away their venture-funneled cash? Jet’s prices may be the most ambitious. In May, I found the company was vastly undercutting Amazon, and The Wall Street Journal recently ordered a basket of goods from the site for which it calculated that Jet lost nearly $243 on a single order. In an interview, Mr. Lore was unfazed by these numbers, because, he said, they were already built into his projections. “We understand really well what these costs are now and how they’ll come down over time, and it’s simply a matter of understanding how much capital it’s going to take,” he said. In fact, he added, losing money on each order isn’t his biggest worry; instead, it’s failing to draw enough orders to get to scale. “The hard part is, can you get to $20 billion in five years?” The only way to get there, Mr. Lore said, is to keep spending. Whether or not he’s right, enjoy it.


• E-commerce firms boost Indian postal department revenues: With e-commerce platforms increasingly turning to the Indian Posts to deliver their orders to customers, the fast flourishing e-retail business has become a revenue generator for the state-run agency, whose traditional operations are dented by the deep penetration of e-mail and mobile phones. Realising the potential, the Postal Department has set up a dedicated e-commerce and parcel processing center in the country’s commercial hub Mumbai. Spread across 12,000 sq ft, the facility at Parel in the city has bagged good business in a short span, handling around 5,000 orders a day. The department officials expect at this pace the traffic would soon increase to 10,000 parcels per day. The facility has a capacity to process 30,000 parcels per day.


• Google Loon To Cover Entire Country Of Sri Lanka With Internet: Google is working on many things, and that includes balloons that fly high in the sky to bring Internet infrastructure to locations that can’t be wired for it easily. Today, Sri Lanka announced that it’s the first country to ever get universal Internet access from Google’s Project Loon. Thanks to a partnership with Google, the country promises “affordable high-speed Internet” for all of its residents. Google Loon was announced in 2013, with only incremental and anecdotal information hitting the presses up until now. This is a landmark moment for Loon, and clearly for Sri Lanka.


• GitHub Raises $250M Series B Round To Take Risks: GitHub, the software development collaboration and version control service based on the popular open source Git tool, today announced that it has raised a $250 million funding round led by Sequoia Capital. Andreessen Horowitz, Thrive Capital and Institutional Venture Partners also participated in this round. The company, which was founded back in 2008, has now taken a total of $350 million in outside funding. While the company isn’t talking about its valuation, the WSJ reports that it’s currently hovering around $2 billion. GitHub’s 2012 Series A round was led by Andreessen Horowitz. At the time, the company’s valuation was said to be around $750 million. As GitHub CEO and co-founder Chris Wanstrath told me shortly after the new round was announced, the company plans to use this new round to accelerate growth and expand its sales and engineering team (as most companies do when they raise). He also stressed, though, that the round isn’t just meant for that. “The round is not just to accelerate, but also to allow us to think bigger and take larger risks,” Wanstrath said. This means GitHub acquisitions are likely on the horizon, but he also noted that the company wants to push its international strategy forward. It recently opened an office in Japan (and hosted its first meetup there) and other locations will likely follow. There can be no doubt that Git has become something of a de facto version control system for many startups and GitHub currently leads the charge among companies that essentially offer Git as a service. Atlassian, Microsoft, GitLab and others offer similar services, both cloud-hosted and on premise, but GitHub has clearly attracted most of the mindshare in recent years. GitHub says it currently has about 10 million users who are in collaboration on over 25 million projects (that’s up from 10 million in January 2014). Given that the company offers free accounts, it’s not clear how many of these users are actually paying for the service, though (pricing starts at $5/month).


• Caller ID App Truecaller Is Raising $100M At A $1B Valuation; India Is Its Biggest Market: Communications apps that strike a chord with users across different markets are hot property these days, and it looks like another one of them may soon enter the so-called unicorn club. TechCrunch has learned that Truecaller — a caller ID app that now has 150 million users — is looking to raise around $100 million at a $1 billion valuation. We’re hearing that Truecaller has hired Morgan Stanley to lead the process, and there are term sheets out. The round is likely to have previous and new investors. To date, True Software, maker of Truecaller, has raised around $80 million. Previous investors include Atomico, Kleiner Perkins Caufield Byers, Sequoia Capital, Access Partners and Open Ocean. The plan will be to use the funds to grow the product. Truecaller, founded in Sweden, has seen a lot of traction in markets like India, its biggest market at 80 million users. Now it wants to expand elsewhere, like the U.S., and will be building out the company’s office in the Bay Area. The company is projected to hit 300 million users this year. Truecaller works by aggregating directory services via deals with white pages companies, and platforms like Yelp to bring in businesses. It complements this with crowdsourced information from the app’s users. That includes accessing your own address book, although you can opt out. Individual users can also opt out from being listed. It then uses big data analytics and machine learning to offer additional services beyond caller ID such as predicting who you might want to call next based on where you are and what time of day it is, or what the top-reported spam number is in your area at the moment. Other features include spam blocking, directory services and “smart” SMS services. The company makes revenues through in-app purchases for premium features, as well as advertising within the app. The company’s country manager for India has also reportedly said that Truecaller may launch a paid version by the end of this year.

Daily Tech Snippet: Wednesday, July 29

• Archived snippets are here, and MP3 versions are here

• Twitter Shares Surge on Earnings Beat, then Slump on Slowing User Growth: After reporting quarterly sales that topped estimates, interim Chief Executive Officer Jack Dorsey and Chief Financial Officer Anthony Noto struck a critical tone, saying user growth won’t improve until the social-media company reaches a mass market -- something that will take a mixture of product improvements and marketing. The company’s efforts so far have had minimal success, they said. Shares dropped 11 percent in extended trading, after climbing as much as 12 percent following the earnings release. n the second quarter, revenue rose 61 percent to $502.4 million, the social-media company said Tuesday in a statement. That exceeded analysts’ average projection for $481.9 million, according to data compiled by Bloomberg. Twitter’s net loss narrowed to $136.7 million, or 21 cents a share. Profit excluding certain items was 7 cents, compared with the 4 cents analysts estimated. On a conference call, executives quashed any initial optimism generated by the report by confronting Twitter’s underlying problem: It’s much smaller than the competition. The company today reported 316 million monthly users, while Facebook has 1.4 billion. Twitter recently started counting feature-phone users in emerging markets as part of its tally. Without that extra boost, Twitter’s user count was 304 million. Noto said Twitter changed its tone on the call because growth slowed so meaningfully, the company wanted to explain how it’s working to address the deceleration. “In the past we may not have had the growth that investors wanted us to have, but it was still quite strong. And this quarter we barely had any growth.”


• Yelp Plunges After Reducing Sales Forecast, Ending Brand Ads: Yelp, the customer-review website, plunged as much as 18 percent when it reduced its revenue forecasts and said it will stop selling national brand advertising. Yelp lowered its third-quarter sales forecast to a range of $139 million to $142 million, below analysts’ average estimate of $152.7 million, according to data compiled by Bloomberg. Annual revenue was projected at $544 million to $550 million from an April forecast of $574 million to $579 million. The website attracts more than 160 million visitors looking for customer reviews about local businesses. National brand advertising revenue decreased 8 percent to $8.3 million in the second quarter and Yelp will phase out those sales by the end of the year to focus on its core local advertising. Yelp shares fell in April after the company reported declining advertising sales. The shares rebounded in May following reports that Yelp was exploring a possible sale. Yelp reported a net loss of $1.3 million, or 2 cents a share in the quarter, from a profit of $2.7 million, or 4 cents a share, a year earlier. “I certainly think they can survive, as to whether or not they can flourish time will tell,”


• Akamai forecasts revenue, profit below estimates; shares sink: Online content distributor Akamai Technologies forecast third-quarter revenue and profit below estimates, citing a stronger dollar. Shares of Akamai, which claims to deliver between 15 and 30 percent of all Web traffic, fell as much as 13 percent in after-hours trading on Tuesday. The company's second-quarter profit fell nearly 8 percent after 11 quarters of growth, as costs rose. Akamai, whose customers include MTV Networks and online home rental marketplace Airbnb, forecast an adjusted profit of 56-58 cents per share and revenue of $543 million-$555 million for the current quarter. Akamai and rivals Limelight Networks and Level 3 Communications face increasing competition as companies such as Amazon, Netflix and Comcast enter the content delivery market. Akamai has been trying to differentiate itself by investing in cloud security services, as well as investing to expand its content delivery platform to better handle rising video traffic. Revenue rose 13.6 percent to $540.7 million, beating the average estimate of $540.4 million. Overall net income fell to $67.2 million, or 37 cents per share, from $72.9 million, or 40 cents per share, a year earlier. Up to Tuesday's close of $73.65, Akamai's shares had risen about 17 percent this year.


• Stripe, Digital Payments Start-Up, Raises New Funding and Partners With Visa: Stripe is gaining more financial allies to help it take on the digital payments industry. The start-up, based in San Francisco, said on Tuesday that it had raised new funding from investors like Visa, American Express and Sequoia Capital, among others, valuing the young company at $5 billion. That is a significant jump for Stripe, coming roughly six months after it garnered $70 million at a $3.5 billion valuation. Stripe declined to disclose the amount of new funding, except to say it was “less than $100 million.” Founded five years ago, Stripe has quickly gained traction by offering simple software and services for online small and medium-size businesses. Similar to Square and PayPal, Stripe accepts credit and debit cards for merchants who have not taken them previously. Stripe charges a small fee per transaction. On Tuesday Stripe also announced a partnership with Visa, one of the world’s largest credit card companies, in which the two will work on ways to improve digital transactions. The companies said they expected to collaborate on initiatives like payments security, as well as software like website “buy buttons.” Stripe said it would rely on Visa’s global footprint to expand its international availability. Stripe is currently available to businesses in more than 25 countries, and hopes to expand further with help from Visa. That Visa is partnering with Stripe instead of a larger payments processor is something of a coup for the start-up. Visa has become increasingly wary of other payments companies, such as PayPal, which processed more than $220 billion in online transactions last year and this month was spun off from its onetime parent, eBay. While PayPal has handled online credit transactions since the early days of e-commerce, Visa said it became concerned by PayPal’s ability to siphon customer relationships away from card companies and steer customers to debit transactions, in which PayPal sees healthier profit margins.


• LinkedIn, Notorious for Sending Too Many Emails, Cuts Back: On Monday, LinkedIn decided that less is more. In a blog post, the site acknowledged its history of overzealous email habits and said it was taking steps to reduce the amount that users would receive. Among the examples, users who receive too many requests to connect will now get just one weekly digest, and users who subscribe to several of the site’s groups will get updates in a streamlined format. “For every 10 emails we used to send, we’ve removed 4 of them,” Aatif Awan wrote in the post. “Already, member’s complaints have been cut in half.”


• Price Is Only One Weapon Amazon Is Using to Win the Cloud War: Remember how a few months ago there was talk of a “price war”in the world of cloud computing services? It’s over and all the signs point to Amazon having won. As we reported last week, Amazon posted a stunning 81 percent rise in revenue at its Amazon Web Services cloud computing unit, along with a five-fold surge in the unit’s operating income, giving it an operating margin of 21 percent. During the quarter Amazon said it cut prices on many of its cloud services for the 49th time since the service launched in 2006. Meanwhile, at least one of Amazon’s rivals — Microsoft’s cloud computing service Azure — raised some of its prices in Europe and Australia. Portions of emails to Azure customers published by the Dublin-based blogger Aidan Finn earlier this month detailed price increases of 11 percent in Europe and up to 26 percent in Australia. The last time Amazon gave a ballpark estimate for how many customers it had on AWS was late last year when it said it had more than one million active customers. It hasn’t updated that figure since then. Whatever the number, it suggests that the average revenue per customer is on the rise. If Amazon’s margins are increasing it implies that its operational costs are coming down at the same time that its customer count is going up. Logically speaking, that implies that quality of service might suffer. There’s a few reasons that it doesn’t, and it has to do with how Amazon’s costs come down as it scales up. As Amazon’s cloud footprint grows, its fixed costs per customer on things like commodity memory chips and electricity decrease. The more chips and power it buys, the more negotiating leverage it has to squeeze a good deal from suppliers. Meanwhile, business and administrative costs associated with keeping the system running — billing and personnel, for example — shrink as more customers sign on and processes become more efficient. Finally, there’s more that those customers can do with AWS all the time. Amazon has added 350 individual new features to AWS in the first half of the year. Two new services include one called AWS Device Farm which allows mobile app developers to run their software on simulated Android mobile phones. At its current pace it will by sometime this fall have added about 700. And the pace at which those features are being added is increasing too. Last year it added 516 new features. The year before that, it was 280, and the year before that 159.

Daily Tech Snippet: Tuesday, July 28

• Archived snippets are here, and MP3 versions are here

• Google Loosens Ties to Google Plus: On Monday, Google said it would move features once integrated into Google Plus out of the social network and into other Google services. Photo features have already been moved to the newly introduced Google Photos. Location-sharing will go to Google Hangouts, the company’s chat app. Users will also no longer need a Google Plus account to comment on YouTube, long a point of contention among customers who felt as if they were being roped into using a social network they did not ask for. Altogether, the moves, announced in a blog post on Monday, are a moment of reckoning for Google Plus and those who created it. “While we got certain things right, we made a few choices that, in hindsight, we’ve needed to rethink,” Bradley Horowitz, who oversees Google Plus, wrote about the moves. He was even more contrite on his personal Google Plus page: “We want to formally retire the notion that a Google+ membership is required for anything at Google.” Driving home that point, Google said it would make it easier for users to delete Google Plus accounts, if they choose to. Started in 2011 and promoted as Google’s answer to Facebook, Google Plus initially appeared popular on paper. The social network reached 300 million monthly active users in just two years, according to the company. But much of that growth, analysts say, came because users needed to create Google Plus accounts to use some of the company’s other services, like YouTube, annoying many longtime users of those services. But Google’s decision to dismantle Google Plus may have less to do with appeasing users’ anger than with meeting the demand of mobile phone owners, who expect apps for each individual service. Rather than make an app or website that is a one-stop shop, tech companies instead are introducing stables of services. Twitter has Vine, a video-sharing app, and Periscope, a live-streaming app, separate from the main Twitter platform. Facebook not only broke out photos and messaging into separate apps, but also decided to acquire Instagram and WhatsApp, direct competitors to those services, and maintain them both as yet another set of options for smartphone owners.


• In its next move, Amazon could turn to physical grocery stores: Amazon wants to set up drive-through grocery stores where consumers can pick up goods they've ordered online, according to the Silicon Valley Business Journal. Where this could have the biggest impact is on perishables, which obviously require timely delivery. Although shoppers can already buy some perishables through Amazon Fresh and get them delivered the same day, the $300 annual membership isn't for everyone. And the logistics of delivering fresh groceries right to people's homes is still a big challenge. Amazon has reportedly explored retail locations before, but doing it just for groceries would be a different thing entirely.


• EBay Ends Same-Day Delivery in U.S. in Face of Amazon Effort: EBay Inc. is killing its U.S. same-day delivery service EBay Now, an acknowledgment it won’t try to match the speedy delivery of e-commerce giant Amazon.com. The online marketplace hinted the service wasn’t performing last year when it canceled the EBay Now mobile application and encouraged its use on desktops. The program had been available in the San Francisco area, New York, Dallas and Chicago. Amazon has invested heavily in same-day delivery, offering the service for free to Amazon Prime subscribers in New York, Seattle, San Francisco and other large cities.


• Baidu Sales Outlook Misses Estimates on Weaker Chinese Economy; Shares Tumble: Baidu shares fell as much as 9.5 percent after U.S. markets closed, after already being down 6.3 percent at during the Asian trading day; forecast quarterly sales missed estimates as China’s biggest search-engine provider expands into delivery services and movie ticketing amid a weakening domestic economy. The company’s second-quarter net income climbed 3.3 percent to 3.66 billion yuan, missing the 3.9 billion-yuan average of analyst estimates. Second-quarter revenue rose 38 percent to 16.6 billion yuan, compared with the company’s April forecast of 16.365 billion yuan to 16.75 billion yuan. Mobile accounted for 50 percent of sales, in line with the prior quarter, Baidu said. Active users of its mobile wallet climbed by 9 million to reach 35 million in June, Li, the chief executive officer, said in a conference call Tuesday. Revenue for its IQiyi service climbed to 1 billion yuan during the second quarter, he said. Baidu is also said to be in talks to buy a new stake in the local unit of car-booking provider Uber Technologies Inc., adding to its investment in the company’s global operations. Baidu last month sold $1.25 billion of debt to fund Chinese operations and said it will invest 20 billion yuan over three years into Nuomi.


• Alibaba Appoints Tsai to Lead Board at New Local Services Unit Koubei: Alibaba Vice Chairman Joseph Tsai will head up the board at Koubei, underscoring the strategic importance of a new business unit that will spearhead the e-commerce company’s drive into the local services market. Tsai’s new responsibilities as Koubei’s chairman come on top of his current role as the number two executive at Alibaba, the company said in an email confirming his appointment on Monday. Alibaba executives have stressed the importance of establishing a foothold beyond e-commerce in what they call an “online to offline” market, which refers to the increasing use of mobile devices to buy physical goods and services. Tsai joined Alibaba in 1999 and he helped transform Alibaba into a global powerhouse, leading negotiations on dozens of acquisitions and early financing rounds, including with SoftBank Corp. Koubei, a joint venture set up by Alibaba and its financial services affiliate, is competing with Baidu and Tencent in a market for local services that’s expected to reach 7.28 trillion yuan ($1.17 trillion) by 2017. Local services is a key area of contention for Chinese Internet companies as people turn to the web to order take-out, beauty treatments and domestic helpers. Chinese users of location-based services could rise 29 percent to 400 million people in 2017 compared with this year, according to a research report by Shanghai-based Internet consultant IResearch. Baidu said in June it would invest 20 billion yuan in three years to expand its own location-based services platform, called Nuomi. And group discount website Meituan.com, which is also competing in the same field, raised $700 million in January this year to fund expansion.


• Pepperfry raises $100M from Goldman Sachs, Zodius, others: Mumbai-based Pepperfry.com, an e-commerce marketplace for furniture, home decor and appliances, has secured $100 million in funding from Goldman Sachs Group Inc and Zodius Technology Fund. The company’s existing investors Norwest Venture Partners and Bertelsmann India Investments have also participated in this round of funding, according to its founder and CEO Ambareesh Murthy. TrendSutra Platform Services Pvt Ltd, the company behind Pepperfry.com, will use the money to expand its logistics footprint in over 300 towns and for ‘quadrupling’ the size of its technology team, Murthy told Techcircle.in. The company will also use the funds to add new ‘experience centres’ and for upping digital marketing spend. Avendus Capital was the exclusive financial advisor to Pepperfry for this round of funding. Started in January 2012 with categories like home, lifestyle, fashion and more, Pepperfry now specialises in furniture and home products on its managed marketplace platform. The company not only markets furniture and home decor products through its site, but also employs carpenters and operates a fleet of over 350 delivery vehicles. Prior to the latest transaction, Pepperfry had bagged close to $30 million in funding. Pepperfry is expected to have crossed Rs 500 crore in GMV this year.

Daily Tech Snippet: Monday, July 27

• Archived snippets are here, and MP3 versions are here

• Yelp Cries Foul at Google’s Mobile App Ad Declaration: Those ads that splash on your phone, nudging you to install an app? You know the ones. Earlier this week, Google released an internal study showing that these app download “interstitials” were not merely obnoxious but ineffective, hindering the intended goal of encouraging app installation. Google said it was retiring them and asked the mobile Internet to do the same. Some were pleased. Some were not. Firmly in the latter camp is Jeremy Stoppelman, Yelp CEO and frequent Google sparring partner. On Friday, he pointed to the study and cried hypocrite. Here’s the background: Google’s test paired the full-page ads against subtler banner promotions on mobile websites. Nine percent of mobile users tapped through to the app from the first ads, while 69 percent ran away from the site. With the second version, Google reported an uptick of 17 percent in traffic to the app. Innocuous enough. But Stoppelman is not just accusing Google of a double standard (running its own app ads while nixing others). Behind his beef is the suspicion, percolating in the mobile industry now, that Google is trying to replicate its Web search position with apps. In the past year, Google has pushed aggressively to index the entirety of the app world, while positioning itself, through deep-linking features like the upcoming Now on Tap, as the facilitator. And with Google as facilitator, that leaves less room for other app go-betweens, a la Yelp. It doesn’t help Google’s case here that the interstitial study relied on its own Google+ social app, a Google application that, to be kind, is not terribly in demand.


• Using Algorithms to Determine Character: A company in Palo Alto, Calif., called Upstart has over the last 15 months lent $135 million to people with mostly negligible credit ratings. Typically, they are recent graduates without mortgages, car payments or credit card settlements. Those are among the things that normally earn a good or bad credit score, but these people haven’t been in the working world that long. So Upstart looks at their SAT scores, what colleges they attended, their majors and their grade-point averages. As much as job prospects, the company is assessing personality. “If you take two people with the same job and circumstances, like whether they have kids, five years later the one who had the higher G.P.A. is more likely to pay a debt,” said Paul Gu, Upstart’s co-founder and head of product. “It’s not whether you can pay. It’s a question of how important you see your obligation.” The idea, validated by data, is that people who did things like double-checking the homework or studying extra in case there was a pop quiz are thorough and likely to honor their debts. Analytics, meet judgment of people. “I guess you could call it character, though we haven’t used that label,” said Mr. Gu, who is 24. The same personality dynamic holds for people go to great schools or have top grades. Douglas Merrill, the founder and chief executive of ZestFinance, is a former Google executive whose company writes loans to subprime borrowers through nonstandard data signals. One signal is whether someone has ever given up a prepaid wireless phone number. Where housing is often uncertain, those numbers are a more reliable way to find you than addresses; giving one up may indicate you are willing (or have been forced) to disappear from family or potential employers. That is a bad sign. Zest recently branched into “near prime” borrowers, who have either fallen from the prime category or risen from subprime. The question is why these people have changed categories, and Zest tries to figure out if a potentially reliable borrower has had some temporary bad luck, like a one-time medical expense. “‘Character’ is a loaded term, but there is an important difference between ability to pay and willingness to pay,” said Mr. Merrill. “If all you look at is financial transactions, it’s hard to say much about willingness.”


• Facebook and Other Tech Giants Expand Internet Access in Africa: Africa has become a hotbed of experimentation by big American technology companies as well as local start-ups. In addition to Facebook’s efforts, which included developing a Swahili language version of Facebook, Google, Microsoft and IBM have all been promoting tech projects on the continent. Google, for example, has built a high-speed, fiber-optic Internet network in Kampala, Uganda. But unlike the similar Google Fiber project in major American cities, Google doesn’t offer the service, called Project Link, directly to Ugandans but instead sells access cheap on a wholesale basis to local Internet providers. The result was a sharp drop in the price of Internet access in Kampala as new entrants competed with the traditional carriers to offer services. Microsoft has been supporting various projects to transmit Internet signals via “white spaces,” which are basically unused portions of the television broadcast spectrum. On Friday, the company announced that it was working with the United States government’s Overseas Private Investment Corporation to provide financing to Mawingu Networks to build solar-powered Internet access stations across rural Kenya using white spaces technology. And IBM said on Saturday that it would begin a formal program to assist entrepreneurs in Nairobi’s iHub innovation and collaboration space. And Africa seems to have brought a bit of kumbaya to the traditional tech rivals. “It’s the one place where I have seen Microsoft and Google and Facebook as allies,”


• Facebook partnership a boon for video technology firm Bidalgo: Facebook marketing partner Bidalgo targets a tripling in sales in 2015 as its new technology to automate the process of making personalized online video advertising benefits from Facebook's growing share of the video market. Facebook is becoming a leader in the video market as users prefer to watch video ads over static images, said Peleg Israeli, general manager of Bidalgo's Israeli operations. Videos are expensive to make and an advertiser usually makes only one or two versions. The Bidalgo executive said his company's technology, called ADaptation, can automatically turn one video into as many versions as needed, so that targeted audiences will see images they respond to most. For example, a German audience might see a German flag in one video while users in France will see their flag. Automated videos will give Facebook an advantage over Google's YouTube, as Facebook's core technology can identify users "in the most accurate way". U.S.-Israeli Bidalgo's technology targets mobile app and game developers, who have been quick to adopt mobile advertising. Clients include online gaming firm 888 Holdings and Zynga. Bidalgo, which has 40 employees, has been profitable for about a year, with a target of $100 million in sales this year, Israeli said. It competes with San Francisco-based Ampush and Boston-based Nanigans. Companies wishing to advertise on Facebook must bid for users that they wish to see their advertising. Bidalgo's algorithms test an ad against multiple audiences to understand which segments are relevant and what is the right price the advertiser should offer.

Daily Tech Snippet: Friday, July 24

• Archived snippets are here, and MP3 versions are here

• Amazon Reports Unexpected Profit, and Stock Soars; Market Value Exceeds Wal-Mart's: The e-commerce company beloved by Wall Street for its fast-growing ways did something completely out of character in the second quarter: It made a profit. It was only $92 million, practically a rounding error for Google or Apple. But it confirmed all the hopes and expectations of analysts and investors, who immediately pushed Amazon shares up 17 percent in after-hours trading Thursday to $566. Amazon’s second-quarter profit amounted to 19 cents a share. A year ago, the company lost 27 cents a share. Analysts had been predicting another loss of 13 cents. Revenue was better than expected, too, up 20 percent to $23.2 billion. That was about $800 million more than forecast. One big contribution to the improved profit and revenue was Amazon Web Services, the cloud computing division whose numbers were broken out for the first time in the first quarter. A.W.S. is the undisputed leader in the sector, outdistancing both Microsoft and Google, but analysts had been wondering if price cuts would hamper growth. Apparently not. A.W.S. revenue rose 81 percent to $1.82 billion from a year ago, even better than it did last quarter. In the first quarter, A.W.S. revenue was up 49 percent. Operating income for the cloud division rose to $391 million from $77 million. No wonder analysts on a conference call with Amazon financial executives offered their congratulations. Amazon hired another 50,000 employees over the last year, increasing its head count by 38 percent. Many of those workers are in its network of more than 100 fulfillment centers. Amazon held a Prime Day sale last week that was a demonstration of Prime’s power — and also a few of its problems. Enough shoppers found fault with the selection to create a popular Twitter hashtag, #PrimeDayFail. Michael Pachter, managing director of equity research for Wedbush Securities, estimated Amazon took in $1.5 billion in revenue on Prime Day, versus $250 million for a typical day during the quarter. “That means that they can deliver $1.25 billion of upside by scheduling a flash sale,” he said. “There’s no reason that they can’t do this once per quarter,” although he noted that no such announcement had been made.

• Amazon’s Cloud Business Rose 81 Percent in Q2, Its Fastest Growing and Most Profitable Business: Amazon Web Services, the cloud computing unit of the Web retail giant, grew its revenue by 81 percent year on year in the second quarter. It grew faster and with higher profit margins than any other aspect of Amazon’s business. AWS, which offers leased computing services to businesses, posted revenue of $1.82 billion, up from $1 billion a year ago, as part of its second-quarter results. By comparison, retail sales in North America grew only 26 percent to $13.8 billion from $11 billion a year ago. The cloud computing business also posted operating income of $391 million — up an astonishing 407 percent from $77 million at this time last year — for an operating margin of 21 percent, making it Amazon’s most profitable business unit by far. The North American retail unit turned in an operating margin of only 5.1 percent. The AWS profit margin has also risen despite price competition from the likes of Google, Microsoft and IBM. Last quarter, the operating margin at AWS was closer to 17 percent. If it were broken out as a separate business — something that some investors may want but which Amazon has no intention of doing — AWS would be on track to reach about $7 billion and change in revenue this year.

• Apple's India test: how to gain volume and meet aspiration: For years, India has been a low priority for Apple as spending power is weaker than in China, where the company's iPhones swiftly became must-have devices after their 2007 launch. But Apple is now looking to build on a 93 percent increase in its iPhone sales in India in April-June, which for the first time outpaced growth in China, of 87 percent - albeit from a low base. Apple has just a 2 percent share of India's smartphone market, while South Korean rival Samsung Electronics accounts for around one third of volume sales with its range of Android phones. "Apple is consciously expanding its distribution in India and pushing its products aggressively. The marketing spend too is a part of that," said Jaideep Mehta, managing director for India and South Asia at tech research firm IDC. Executives at several electronics retail chains and Apple distributors said the Cupertino-based firm was chasing shelf space to make its gadgets more visible, and has more than doubled the number of distributors to five. Apple has also brought in a new senior executive to take charge solely of the Indian market, industry sources said, and has placed advertisements for a policy adviser to help it work with New Delhi's bureaucracy. "Apple's single-minded focus for India is on volume," said a senior executive at an electronics chain store, who declined to be named. "They have increased distributors and want to reach out to smaller cities." Taking to Indian TV screens for the first time, Apple plays up the aspirational appeal of its phones, showing a glamorous Indian bride using Facetime, Apple's video calling feature, to send coy flashes to her groom of a henna-ed hand or skirt hem before their wedding. In addition, Apple offers financing schemes where buyers of its latest iPhone 6 can pay in monthly instalments, and has launched Apple Music, a cloud-based music streaming service, for just 120 rupees ($1.88) a month in India - a fifth of the price in the United States. "The premium smartphone market will be close to 8 million units in 2015," said Neil Shah, analyst at Counterpoint. "Apple has a lot of room to grow and capture a significant share of that," he added, noting Apple sold just over a million iPhones in India in the year to April.

• Pandora Sales, Forecast Beat Estimates Amid Apple Pressure: The largest Internet radio service reported a 30 percent increase in revenue to $285.6 million, according to a statement Thursday. Pandora is trying to grab advertisers from terrestrial radio while it faces pressure from rivals Spotify Ltd. and Apple. Pandora said listener hours rose 5 percent in the period ended June 30, the day of Apple Music’s debut. This quarter, sales will be $310 million to $315 million, the company said, above analysts’ estimates of $309.1 million. Both Spotify and Apple market streaming-music services that allow users to tailor their choice of songs and create music libraries. Each also offers Web-based radio that competes with Pandora. They use the free products to attract consumers to their paid services. Pandora raised its forecast for full-year revenue to a range of $1.175 billion to $1.185 billion.

• Flipboard has confirmed that it has raised $50 million. Flipboard didn’t provide valuation for the round, though JP Morgan is participating, and the funding will be used to build out the product and team, the company said. According to the regulatory documents, the valuation of the most-recent round could range from $800 million to $1.32 billion. The raise comes at a time when rumors cropped up that Twitter might buy Flipboard — though, to be sure, it’s not exactly clear how far those talks progressed — and had held discussions with a few other companies like Google and Yahoo. The company said its user base had jumped 75% in the past six months or so to 72 million monthly active users, with the vast majority of that coming from mobile devices. The company said it sees anywhere from 150,000 to 200,000 activations every day around the world. Still, the company will face stiff competition from new entries like Apple News — and will have to grapple whether the company can continue to grow in the face of that competition.

Daily Tech Snippet: Thursday, July 23

• Archived snippets are here, and MP3 versions are here

• Qualcomm Reports Lower Earnings and Says It Will Cut Jobs: Qualcomm had one of the best playbooks in tech, but it looks like the game is changing. The semiconductor designer and maker helped develop much of the technology used in mobile communications, particularly in smartphones. Qualcomm was a pioneer in the radio technology that makes it possible to send enormous amounts of data over wireless networks without clogging them. Virtually every maker of phones and wireless infrastructure needs to draw off Qualcomm’s intellectual property, which the company leases. The knowledge and profits Qualcomm earned from that business gave it both capital and a head start in building chips for phones, first in advanced third-generation, or 3G, digital networks, then in the succeeding 4G systems.With a market capitalization of $100 billion, over the last 15 years it became the world’s third-largest chip company in terms of revenue. Little of that was on display Wednesday, when Qualcomm reported lower earnings, and, under pressure from Wall Street, announced it would cut about 15 percent of its staff, or somewhere between 4,500 and 5,000 people. Spending will be reduced by $1.4 billion, the company said, including $300 million in shares that Qualcomm has been giving to its top executives and employees. Three new board members, approved by Jana Partners, a Wall Street investment firm that had been pressing for changes, will be put on Qualcomm’s 15-member board. Qualcomm said its third fiscal quarter’s net income was $1.2 billion, down 47 percent from a year earlier. Net income was 73 cents a share, down from $1.31 a share. Revenue fell 14 percent, to $5.8 billion, from $6.8 billion last year. The numbers were slightly higher than analysts had expected. The price of Qualcomm shares was down about 1.8 percent in after-hours trading.


• Amazon is expanding its on-demand home services business -- "Amazon Home Services" -- to 15 new cities: Amazon announced Wednesday that it's expanding its on-demand home services business -- transparently named "Amazon Home Services" -- to 15 new cities. The program was already operating in New York, San Francisco, Seattle and Los Angeles, offering users an easy way to book plumbers, electricians, cleaners and other people who can handle the things you may need around the house. The company announced that it is also expanding the service to let people request help with custom jobs, rather than just the pre-packaged services previously offered. The competition in the on-demand space for home tasks is heating up. Companies such as TaskRabbit jumped in early to the "gig" economy -- in fact, it integrates with Home Services -- and now a host other of cleaning, laundry and other service companies such as Handy, Thumbtack and others have found success providing on-demand workers to take care of your home needs. Amazon says its Home Services "pros," as the service calls them, are vetted and required to keep all appropriate licenses to continue working with the service. Some use Amazon to expand their own businesses. Google is also thought to be jumping into the space. The company recently hired the technical team from Homejoy, a home-cleaning startup that shut down in part because it faced a lawsuit for classifying its workers as contractors rather than employees, Recode reported. The report suggested that Google may try and bake some sort of services link into its search results -- a sort of instant referral from the search page.


• Intel Issues $7 Billion in Bonds to Help Fund Takeover of Altera: Intel tapped the bond market for $7 billion to finance part of its $16.7 billion takeover of Altera Corp. at lower rates than initially offered to investors. The world’s biggest chipmaker sold the longest portion of the four-part deal, $2 billion of 30-year, 4.9 percent securities, to yield 1.85 percentage points more than similar-maturity Treasuries, according to data compiled by Bloomberg. The spread tightened as the day went on, according to a person with knowledge of the matter. Similar-maturity debt was traded at a 1.8 percentage point spread in the secondary market on Tuesday, Bloomberg data show. Intel may have offered generous terms to appease investors dealing with a turbulent market, CreditSights analysts led by Erin Lyons wrote in a research note Wednesday, as a disappointing earnings forecast from Apple sent technology stocks tumbling. Speculation that Intel peer Qualcomm would split may have also “soured investors’ opinions of highly rated tech companies,” they wrote.


• Amazon’s Latest Prime Perk: A Five Percent Cash-Back Credit Card: Amazon continues to make a concerted effort to add new perks to Amazon Prime as it tries to funnel new shoppers into the membership program that turns casual shoppers into Amazon addicts. Here’s another Prime benefit that many people might not know about: Access to an Amazon credit card that pays back 5 percent on every Amazon.com order. Amazon quietly introduced the card, the Amazon Prime Store Card, in March and has been slowly rolling out marketing for it on Amazon.com since then. But the company hasn’t done any PR around it, which is why I first learned of the Prime card by seeing a message on the site last week. The card has no annual fee and allows Prime members to get 5 percent back in the form of a statement credit on all Amazon.com orders — not just Prime purchases — that they place with the card. The card also comes with some promotional financing options, but you should read the fine print yourself because credit card application fine print ain’t nothing to mess with. The card is obviously great for Amazon if it attracts new shoppers to the Prime program, which costs $99 a year and comes with two-day shipping and media streaming, or helps retain current ones. But it’s also important because Amazon will likely be paying lower transaction fees on purchases made with Prime cards compared to purchases made with mainstream credit cards. That’s because store-branded cards typically carry low processing fees when they aren’t associated with Visa, MasterCard or American Express’ networks. As a result, expect Amazon to try its best to get cardholders to make the Prime Store Card the default payment option.


• Tata Communications plans to sell data centre business: Tata Communications plans to sell a 74% stake in its subsidiary Tata Communications Data Centre Pvt Ltd, reports indicate. Talks with some private equity and strategic investors have begun, and the deal size would likely be around $300 million and help Tata Communications reduce debt on its books. According to Tata Communications’ 2014 annual report, the data centre subsidiary is profitable, and returned a net profit of Rs. 23 crore for 2013-14 on a revenue of Rs. 375 crore. The company is yet to announce its numbers for 2014-15. “In the long run, unless the company is able to raise equity funding, its ability to raise additional debt funding may be restricted. This, in turn, could adversely affect the capital expenditure programme in the long run,” the annual report said. Tata Communications Data Centre has facilities in Delhi, Mumbai, Bengaluru, Chennai, Kolkata and Pune and some tier-II, and tier-III towns. The company also provides data centre services in the US, the UK and Singapore. It owns over 1 million sq. ft of data centre and co-location space across 44 global locations and also has eight partner sites in Australia, Malaysia, Germany and the Netherlands, according to the company’s website. In 2013-14, the Tata Communications had a 28% market share of the Indian data market and a 25% market share of the Indian data centre market, according to the company’s annual report. Several global and Indian firms are in the process of setting up data centres in India.

Daily Tech Snippet: Wednesday, July 22

• Archived snippets are here, and MP3 versions are here

• Apple Profit Up 38%, but iPhone Sales Disappoint Wall Street: Apple reported double-digit increases in sales and profit for its fiscal third quarter, a rate of growth that is highly unusual for a company of its size. Yet the results still fell short of estimates by Wall Street analysts, who are accustomed to Apple blowing past projections and had been predicting sky-high sales of iPhones and the company’s brand-new Apple Watch. In total, Apple reported a 38 percent increase in profit, to $10.7 billion, from a year ago, with revenue surging 33 percent to $49.6 billion. Sales of the company’s biggest revenue and profit generator, the iPhone, soared 35 percent to 47.5 million units. IPhone sales faced some tough sequential comparisons. The 47.5 million units sold in the quarter was below the roughly 50 million that analysts had calculated Apple would sell, and was also down from the 40 percent growth in the previous quarter and the 46 percent growth two quarters earlier. Still, the rate of growth exceeded the 13 percent increase in the same period a year ago. And while Apple did not share numbers on sales of the Apple Watch, which began selling in April, analysts on Tuesday calculated that the company had sold between 1.5 million and three million watches, far less than the three million to five million watches they had predicted ahead of Apple’s earnings report. Apple’s sales in the quarter were fueled by overseas buyers, with international regions accounting for 64 percent of the quarter’s overall revenue. Sales in the greater China region, one of Apple’s prime growth areas, more than doubled to $13.2 billion. The company also reported healthy growth for its Macintosh computer business. Apple sold 4.8 million Macs, up 9 percent from a year ago. Shares were down 7% in after-hours trading.


• Jet.com Will Launch With Amazon Prices Front and Center: Jet, the new shopping site that launches on Tuesday, promises shoppers “the lowest prices on everything.” To hammer home the point, the online mall will compare its price with Amazon’s price on every one of its product pages. As a way to prove its marketing promise, Jet tested its service with some customers who were given early access by showing its prices against those found on multiple competing websites. But after some people were confused by the appearance of the various competitors, Jet has decided to show its prices against just one competitor, Amazon, which typically has very low prices. “So it’ll be very easy for customers to understand that savings means savings compared to Amazon,” Jet CEO Marc Lore said of the changes in an interview on Monday. “They’re clearly the dominant player, so they’re a great reference point.” Lore said about 90 percent of Jet’s product listings at launch will show Jet’s discounted price compared with Amazon’s lowest price for the same item. The remaining 10 percent of Jet product pages will be updated with Amazon price comparisons over the next two months. There are some caveats. While Amazon often has the lowest prices, it doesn’t always. When that’s the case, Jet will discount the product below the lowest price found elsewhere on the Web, but will still show Amazon’s price for consistency’s sake, the company said. The Amazon prices also won’t factor in the fact that some of the products wouldn’t carry shipping fees for Amazon customers who pay $99 a year for Amazon Prime. Jet, meanwhile, charges $5.99 for orders under $35, while Amazon also charges delivery for orders of this size for non-Prime members. “If you have Prime, you’re not our target customer,” Lore said, explaining the rationale. “You’re getting video, you’re getting faster shipping. It’s a completely different animal.”


• More on the launch of Jet - Jet is here. Let the price wars begin.: After months of testing and tweaking, the e-commerce start-up Jet.com opened its digital storefront on Tuesday, marking the official kickoff of the company's ambitious effort to battle Amazon and Wal-Mart for budget-conscious customers. Jet is taking a new approach to pricing. Its algorithm doesn't simply look at the price of each individual item in your online shopping cart. It looks at all the items you want to buy, as well as your Zip code, to determine which retailer or warehouse can ship that unique combination of items to you the cheapest. Shoppers can only buy things on Jet if they've signed up for a $49-per-year membership. Ad Week reports that in this online store, viewing ads could lead to discounts as Jet.com is lowering bills wherever it can. It's a risky business model. Lore has to get Jet.com to $20 billion in revenue by 2020 to make the site profitable. That kind of revenue means it would have to become one of the most successful e-commerce players in the world. The only money Jet.com would make comes from the $50 membership fee users pay to access the savings, which average about 15 percent on everything from detergent to sofas. The site offers deeper discounts depending on variables such as whether a customer pays with a credit or debit card, whether the order can be filled with an efficient shipping route, and whether the consumer waves the right to return items. All these little options help whittle down the price of a basket of goods.


• A $7 Billion Charge at Microsoft Leads to Its Largest Loss Ever: An accounting charge wiped out Microsoft’s profit for the quarter, leading to its largest loss ever, the company said on Tuesday, making clear the cost of its missteps in the mobile business. The $7.5 billion accounting charge, stemming from Microsoft’s troubled acquisition of Nokia’s cellphone business, was disclosed by the company earlier this month, along with plans to eliminate 7,800 jobs, mostly in the company’s phone operations. While the accounting charge was on paper and will not diminish the company’s huge cash hoard, it was a psychic blow to Microsoft, one of the biggest money makers in tech. Investors, however, seemed to mostly look beyond Microsoft’s struggles in the phone market. They appeared to focus on two of the company’s most important businesses, Windows and Office, which showed some signs of weakness. Those were somewhat offset by strong growth in its cloud services business, Xbox games and Surface tablets. For its fiscal fourth quarter, which ended June 30, Microsoft said its net loss was $3.2 billion, or 40 cents a share, compared with net income of $4.61 billion, or 55 cents a share, during the same period last year. While the company’s stumbles in smartphones have shown the bruising downsides of the hardware business for Microsoft, it had success with other devices, including its Surface tablet, the revenue from which grew 117 percent, to $888 million. Revenue from its Xbox game business rose 27 percent. In total, Microsoft said it had nearly $2 billion in computing and gaming hardware revenue in the quarter. Revenue from Microsoft’s overall commercial cloud business grew 88 percent during the quarter, one of the brightest spots in its results. Microsoft’s shares fell about 4 percent in after-hours trading


• Yahoo Posts Loss, Despite Rise in Its Display Ad Business: Yahoo’s revenue in the second quarter rose 15 percent, the company said on Tuesday. But it spent heavily to achieve the gains, wiping out all of its profits and then some. For the quarter, Yahoo reported revenue of $1.24 billion, up 15 percent from the $1.08 billion it reported in the same quarter last year. But after deducting the share paid to partners, revenue was flat. The company posted a net loss of $22 million, or 2 cents a share, compared with the profit of $270 million, or 26 cents a share, it reported a year ago. Executives also warned that expenses would continue to be high through the rest of the year. “We are investing heavily to grow market share through traffic acquisition,” Marissa Mayer, Yahoo’s chief executive, said in a conference call with investors to discuss the results. Yahoo shareholders were unimpressed, sending the company’s stock down more than 1 percent in after-hours trading. Not that Yahoo’s core business — selling advertising — matters much to investors right now. Wall Street is far more interested in the fate of the company’s 15 percent stake in Alibaba, China’s biggest e-commerce company. Yahoo plans to spin off the holdings, worth more than $30 billion, into a separate company called Aabaco Holdings in the fourth quarter. The deal is designed to avoid incurring a capital-gains tax bill, but Wall Street analysts are concerned that the Internal Revenue Service will reject Yahoo’s argument that the spinoff should be tax-free.


• Targeted ads to drive mobile video business, Verizon CFO says: Verizon Communications Inc 's upcoming mobile video service will drive revenue with a combination of highly targeted ads, exclusive content and pay-per-view live concerts and sporting events, Chief Financial Officer Fran Shammo said in an interview on Tuesday. Most Americans own a mobile phone and Verizon is looking at offering video content to increase data consumption on mobile devices and grow revenue. The digital video service, which it expects to release this summer, is aimed at families and younger viewers who increasingly view content on mobile devices. The video service will be offered through a mobile app, and will include some free sponsored content, Shammo said.

Daily Tech Snippet: Tuesday, July 21

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• Ahead of Earnings, Amazon Surges on Confidence Over Cloud, Spending Discipline: Amazon.com’s shares reached another record, three days before the company’s earnings report, as investors expected upbeat results from the fast-growing cloud-computing business, a boost in sales from last week’s Prime Day promotion and signs that the company is controlling spending. The stock set records three days last week and is up 12 percent this month. The Seattle-based online retailer reports earnings Thursday. Analysts on average project earnings of $364 million on sales of $22.4 billion, according to data compiled by Bloomberg. The shares’ advance shows renewed faith that Amazon can boost profit margins despite Chief Executive Officer Jeff Bezos’s history of sacrificing short-term earnings to invest in growth. A year ago, the company’s shares tumbled almost 10 percent the day after reporting a $126 million quarterly loss, hurt by a surge in spending on such items as its new Fire smartphone. This year, the company has invested in online entertainment and same-day delivery in big cities, increasing the allure of a $99 annual membership in Amazon Prime. Investors see such investments -- rather than on hardware -- as a sign of greater discipline. Amazon this year also began reporting results for its Amazon Web Services cloud-computing division, revealing a fast-growing and profitable enterprise to complement the core retailing business. The inaugural Prime Day promotion helped boost memberships, which will increase revenue through the year, said Michael Pachter, an analyst at Wedbush Securities. Amazon Prime members spend significantly more than nonsubscribers. He estimated that Prime Day added about $500 million in new third-quarter sales. Pachter issued a report on Sunday encouraging investors to buy Amazon shares in advance of earnings, in part citing the company’s cloud-computing operation. “Amazon Web Services has a much higher profit than anyone thought, and we know it’s growing at a ridiculously fast rate,” he wrote.


• IBM Drops After Revenue Declines for 13th Straight Quarter: IBM fell after reporting second-quarter sales declines across all of its major business units, missing analysts’ estimates and marking the 13th straight period of falling revenue. “Investors are losing patience given the revenue miss,” said Bill Kreher, an analyst at Edward Jones “It’s a show-me stock.” IBM, based in Armonk, New York, fell as much as 5.3 percent to $164.01 in late trading. The stock has lost about 10 percent in the past year. Total revenue fell 13 percent from a year earlier to $20.8 billion, or a 1 percent decline adjusting for currency impact. Analysts estimated $20.9 billion on average. The company said it cut total expenses by 7.9 percent from the year-earlier period. Last quarter, IBM said full-year earnings would greatly hinge on its software business, which saw a sales decline of 10 percent in the second quarter, or a 3 percent decrease when excluding currency impact. The hardware business’ sales fell 32 percent as reported.


• JD.com launches online store to sell U.S. brands in China: JD.com Inc, the no. 2 Chinese e-commerce company, said it would start selling U.S. products to customers in China through a new store on its website, as it looks to battle competition from bigger rival Alibaba. Both companies have recently started exclusive stores that offer products from countries including Japan, France, South Korea and Australia. JD.com also said on Monday that it would be the first authorized seller of Taylor Swift merchandise in China, which will include a line of clothes designed by the singer exclusively for JD.com customers. JD.com said the "U.S. Mall" would feature American brands such as Converse, Samsonite, and major apparel labels that are part of the Global Brands Group, including Nautica Kids and Jeep apparel. JD.com's U.S.-listed shares were little changed at $35.39 on the Nasdaq. Up to Friday's close, the stock had gained about 53 percent this year.


• EBay Reports Sale of Enterprise Unit as Earnings Beat Estimates: EBay is sailing into the split of its two businesses — PayPal payments and its online marketplace — with a reassuring show of strength as its second-quarter financial performance surpassed Wall Street forecasts. With its PayPal business to be spun off at the end of this week, eBay also did some last-minute corporate cleanup Thursday morning. The company announced that it was selling its eBay Enterprise unit, which handles warehousing and logistics for third-party sellers, for $925 million to an investors consortium led by two private equity firms, Permira and Sterling Partners. Both eBay’s profits and revenue were better than expected, after taking into account the sale of its warehouse and logistics arm. Shares in eBay, which reported its results before the stock market opened, were up about 3 percent in midday trading. The company’s revenue increased 7 percent from the year-earlier quarter to $4.38 billion. The reported revenue fell short of analysts’ average estimate of $4.49 billion. In the quarter, eBay pulled out the revenue from eBay Enterprise. If included, total revenue would have been $4.65 billion, above Wall Street forecasts. The split-up strategy is the byproduct of a drawn-out proxy fight with Carl C. Icahn, an activist investor, who advocated a PayPal spinoff. His pressure and logic prevailed, and the company declared in September that it planned to break itself up.

Daily Tech Snippet: Monday, July 20

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• Apple Waits as App Developers Study Who’s Buying Its Watch: In the months surrounding the much-ballyhooed release of the Apple Watch, Apple managers courted Facebook in the hopes that the social networking giant would make a software application for the new gadget. Facebook was not persuaded. Three months after the watch’s release, there is no Facebook app tailored for it. Adam Mosseri, who oversees Facebook’s news feed, said the social network had been studying the Apple Watch but had not figured out how to deliver a good Facebook experience — including the news feed’s stream of posts, photos and videos — on such a small screen. The lack of support from Facebook — and from other popular app makers like Snapchat and Google, which also do not have apps for Apple Watch — underscores the skepticism that remains in the technology community about the wearable device. That puts the watch, Apple’s first new product since the iPad in 2010, in something of a Catch-22: The companies whose apps would most likely prompt more people to buy the device are waiting to see who is buying it and how they use it. Another challenge with the Apple Watch software system is that apps have to process all the data on the iPhone and then beam it to the watch, limiting what the Apple Watch apps can do. The next version of the software, which will be released in the fall, will remedy this by letting developers write apps that run directly on the watch, relying on the iPhone mostly for the Internet connection. That doesn’t mean the Apple Watch lacks apps. Apple released the device in April with more than 3,000 apps — far more than the 500 that were available for the iPhone when the App Store opened in 2008. Yet only five of the 20 most popular free iPhone apps in the United States have versions for the Apple Watch, according to data from App Annie, an analytics firm. And the number of apps for the watch, which now stands at about 7,400, is growing at a slower rate than the explosive uptick of apps that were produced for iPhones and iPads in their early days. While the number of apps for the watch jumped 142 percent in the first three months, that compared to 437 percent for the iPhone and 200 percent for the iPad, according to data provided by App Annie.


• Tesla Offers New ‘Ludicrous Mode’: Zero to 60 in 2.8 Seconds: Tesla Chief Executive Officer Elon Musk introduced a new “Ludicrous Mode” for the dual-motor version of the Model S during a call on Friday, allowing the all-electric sedan to go from zero to 60 miles per hour in 2.8 seconds. The upgrade costs an additional $10,000 for new buyers and results in a 10 percent acceleration improvement. The hold music before the conference call began was a loop of the rap song Beast Mode by Ludacris. Tesla will also offer Ludicrous Mode for its coming Model X SUV, which will probably clock in at zero to 60 mph in 3.3 seconds, according to Musk. “We haven’t tested it yet, so that’s just a guess,” he said. “That’s mad for an SUV, obviously.” Here’s how Tesla squeezed out the extra juice to go from insane to ludicrous. The limiting factor for acceleration during the first 30 mph is traction—basically getting the wheels to stay connected to earth. Tesla had already solved that engineering roadblock. The limiting factor when accelerating from 30 mph to 60 mph, on the other hand, is pulling enough current from the battery pack.


• Google Adds a Record $60 Billion to Its Stock in One Day: The search-engine giant added $65 billion to its market capitalization today, more than the size of Hewlett-Packard Co. The surge, following earnings that topped analyst estimates, is the biggest one-day gain in value ever for a U.S. company, according to data compiled by Standard and Poor's Dow Jones Indices. Apple held the previous record, with a $46.4 billion surge in April 2012. Google’s rally pushed the Mountain View, California-based company further ahead of Microsoft Corp. in rankings of the world’s biggest companies, sending its value to about $468 billion compared with the software giant’s $377 billion. The shares are up 26 percent in five days, the biggest one-week advance since it went public in 2004. Thursday’s report marked the first time since 2013 that Google has announced quarterly adjusted earnings per share higher than expectations. Chief Financial Officer Ruth Porat, who joined the company in May, also signaled plans to bring more restraint to spending at the Internet search giant.


• Etsy Surges Most Since IPO on Mention in Google Revenue Call: Etsy surged the most since it went public, after Google said the online artisan marketplace is seeing a boost in traffic from mobile-search results. Etsy gained 31 percent to $21.98 at the close in New York, the biggest climb since its IPO on April 16. The shares had increased 5.2 percent from the stock’s debut through Thursday’s close. Brooklyn-based Etsy, a platform where sellers offer homemade and vintage items ranging from jewelry to wall art, has been trying to boost sales after its first-quarter net loss widened. Google’s “deep links,” which redirect users to mobile applications when they click results from a Web search, could help Etsy lure more shoppers to its marketplace.“Developers like Etsy are already seeing a boost in traffic as a result of deep linking,” Omid Kordestani, Google’s chief business officer, said on an earnings phone call Thursday. Etsy’s sudden spike may be creating what’s called a short squeeze -- meaning traders who were betting against the company have to cover their positions at the higher price, leading to swings in the stock.


• China central bank issues guidelines on internet finance development: The central bank called on the government to support internet firms in setting up platforms for expenditures and loans, crowdfunding, the sale of financial products and other financing platforms. It called for broadening channels of financing and supporting private investment funds to back the internet finance industry. The bank also recommended tax breaks for qualifying small enterprises including start-ups, saying that provincial level governments should increase their support for those companies.


• Indian PC market dips as smartphone, tablet sales rise: PC market in the country has declined for the first time to 10.6 million units, falling over 10 per cent, on account of growing consumer preference for smartphones and tablets, industry body MAIT today said. According to MAIT-IMRB report, desktop and notebook market cumulatively stood at 11.8 million units in 2013-14. Smartphone market in 2014-15 grew 33 per cent to 69.6 million units, while phablets and tablets grew 527 per cent (50.8 million) and four per cent (3.4 million units) respectively. In revenue terms, the PC market declined to Rs 21,058 crore in 2014-15 from Rs 25,117 crore in the previous fiscal. For smartphones and tablets, the revenue was up 88 per cent to over Rs 65,815 crore in 2014-15 from Rs 34,900 crore a year ago. “The growth is expected to continue in 2015-16 with smartphones expected to grow 27 per cent, phablets 65 per cent and tablets 16 per cent,” he said. During the year 2014-15, server sales registered a growth of 30 per cent over the last financial year at 1,82,727 units. The overall size of Indian ICT hardware market, which comprises printers, servers and computers among others, stood at USD 15.87 billion, showing a growth of 23.98 per cent over the previous year.