Daily Tech Snippet: Thursday, July 2

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• As More Tech Start-Ups Stay Private, So Does the Money: Something strange has happened in the last couple of years: The initial public offering of stock has become déclassé. For start-up entrepreneurs and their employees across Silicon Valley, an initial public offering is no longer a main goal. Instead, many founders talk about going public as a necessary evil to be postponed as long as possible because it comes with more problems than benefits. Silicon Valley’s sudden distaste for the IPO. — rooted in part in Wall Street’s skepticism of new tech stocks — may be the single most important psychological shift underlying the current tech boom. Staying private affords start-up executives the luxury of not worrying what outsiders think and helps them avoid the quarterly earnings treadmill. It also means Wall Street is doing what it failed to do in the last tech boom: using traditional metrics like growth and profitability to price companies. Investors have been tough on Twitter, for example, because its user growth has slowed. They have been tough on Box, the cloud-storage company that went public last year, because it remains unprofitable. And the e-commerce company Zulily, which went public last year, was likewise punished when it cut its guidance for future sales. During a recent presentation for Andreessen Horowitz’s limited partners — the institutions that give money to the venture firm — Marc Andreessen, the firm’s co-founder, told the journalist Dan Primack that he had never seen a sharper divergence in how investors treat public- and private-company chief executives. “They tell the public C.E.O., ‘Give us the money back this quarter,’ and they tell the private C.E.O., ‘No problem, go for 10 years,’ ” Mr. Andreessen said.

• PayPal to Acquire Xoom for $890 Million Ahead of EBay Split: PayPal agreed to purchase Xoom Corp, a service for sending international money transfers, in a deal valued at $890 million. PayPal will acquire Xoom for $25 per share in cash, a 21 percent premium to Wednesday’s closing price. The purchase is expected to slightly reduce PayPal’s earnings per share for fiscal 2016, the company said. The acquisition puts PayPal in the international money transfer market with Western Union, the dominant player in what PayPal President Dan Schulman estimated is a $600 billion market. “It’s an industry that’s ripe for disruption,” Schulman, who will become chief executive officer of the stand-alone PayPal, said in an interview. Xoom, based in San Francisco, enables U.S. customers to send as much as $3,000 in a single transaction to friends and family around the world using their mobile phones, tablets or computers. Its 1.3 million users transferred $7 billion to 37 countries, including Mexico, China and India, in the 12 months ended March 31, the company said. Xoom’s first-quarter revenue gained 24 percent to $44.4 million.

• India Now Uber’s Second Largest Market - By City Coverage - Following Expansion To 7 New Cities: Uber is continuing its focus on Asia after announcing that it will expand into seven new cities in India, taking it to a total of 18 locations in the country. With 18 cities served, India becomes the company’s biggest market based on city coverage, behind only the U.S..The U.S. firm recently claimed one million rides per day in China following rapid growth, and it is also sweet on India. It has hired a president to run its business in India and has seemingly invested significant sums to grow its visibility and presence in India, now it’s time to crank its plans up a gear. Uber said that this expansion — which will see it drive into Bhubaneswar, Coimbatore, Indore, Mysore, Nagpur, Surat and Visakhapatnam — is the “largest number of new international cities [it] has ever launched together.” A leaked letter to investors recently suggested that China will overtake the U.S. as Uber’s largest market based on rides handle per day. While the company isn’t spilling raw figures for its business in India, it did say that it is seeing “unprecedented” 40 percent month-on-month growth across the country.

• Facebook Will Start Sharing Ad Revenue With Video Creators: Facebook is offering video creators like the NBA, Fox Sports and Funny or Die a revenue split from ads sold alongside their videos beginning this fall. It’s the first time Facebook has done any kind of revenue share around video, and the pitch to content creators is pretty transparent: Share your content with us and we’ll share some of the money we make back with you. The move is a full-on attack against YouTube, which has dominated the digital video market for the better half of a decade. Facebook has been able to attract content creators because of its massive reach, but now it’s offering them the one thing YouTube has offered for years: Money. YouTube also uses a revenue split to entice content creators — the same revenue split, actually — with 55 percent going to the video creator and the remaining 45 percent staying with the platform. But Facebook’s argument is that it can get more eyeballs for your video. People don’t have to hunt to find your video — Facebook will show it to them. And those people don’t need to be following your Facebook Page, either. The revenue share on Facebook doesn’t apply to all videos in News Feed. Instead, the company is rolling out a new feature called Suggested Videos, a News Feed of sorts that’s exclusively video content. For example, if you click on a video in your News Feed about snowboarding, you’ll be taken to the Suggested Videos feed where you can watch that video, then scroll down to see others that are similar. There will be ads in this stream — standalone, autoplay ads like you might find in News Feed — and this is where the revenue share comes into play.

• Google Tests Price Comparison Within Product Listing Ads To Compete with Amazon, Jet: Google is testing a new Product Listing Ad format that informs shoppers of their percentage savings within a PLA. In the examples that our digital marketing experts uncovered, Google states about the product, “Price is X% lower than average online prices.” At first glance, it looks like this could be an extension of the “Value Alert” feature covered earlier this year in Search Engine Land. Where Google pulls the data to find the average online price has not yet been disclosed. However, based on some quick calculations for a “KitchenAid Mixer” (showing as 14% off in the image below), for the 47 listed on Google Shopping the price was 13.9% off inclusive of shipping but exclusive of tax. This makes sense because tax would vary based upon your location. This suggests that Google is using all of the models that are listed on Google Shopping, as opposed to just the subset featured in the Product Listing Ad. Channel Advisor, which first reported this, theorizes the experiment could have come about because larger marketplaces like Amazon, and potentially newcomer Jet.com, have the potential to continue to eat away at Google’s business. That is, instead of turning to Google’s search engine to locate products, consumers just go directly to Amazon’s website to find low-priced items.