Daily Tech Snippet: Thursday, August 12

Alibaba Skids as Revenue Growth Slowest in Three Years; $4 Billion Stock Buyback Is Planned as Stock Plunges 5% to New Low: Alibaba Group Holding Ltd's shares fell to a record low after China's biggest e-commerce company posted its slowest revenue growth in over three years as its strategy to shift more services to mobile devices hurt advertising sales. The company's shares declined as much as 8 percent to $71.03 - just shy of their IPO price of $68 - wiping off nearly $16 billion from its market value on Wednesday. The stock has lost declined nearly 30 percent this year, up to Wednesday's close. Alibaba also announced a $4 billion share repurchase program over two years, aimed at offsetting the impact of its share-based compensation programs. The company's results come at a time when China's economy is expected to grow at its slowest pace in a quarter of a century. Adding to investor concerns, China devalued the yuan on Tuesday, guiding the currency to its lowest point in almost three years. mobile was still less profitable than business via personal computers, where profitability also decreased. Revenue for the three months through June rose 28 percent to $3.27 billion, well below forecast. Gross merchandise volume (GMV) -- the total value of goods transacted across Alibaba's platforms -- rose 34 percent to 673 billion yuan ($105 billion), also the slowest growth in more than three years.

Online grocer BigBasket raises $50M from Bessemer, others: Online grocery retailer BigBasket.com, has raised $50 million in a fresh round of funding led by existing investor Bessemer Venture Partners. The Times of India, which first reported the development citing BigBasket CEO Hari Menon, said BigBasket has also mandated Citigroup to raise $150 million (Rs 950 crore) from new investors. The new round of funding, which values BigBasket at $1 billion, will power the company’s plans to enter 50 more Tier-II cities, the report said. BigBasket.com is an online grocery store with operations in Bangalore, Hyderabad, Mumbai, Pune, Chennai, Delhi-NCR and Mysore. It was founded by a team of five in 2011. The team has both offline and online retail experience, as it had earlier set up India’s first e-commerce site FabMart.com in 1999, and then established the Fabmall-Trinethra chain of more than 200 grocery supermarket stores in southern India. Trinethra was sold to Aditya Birla Group in 2006 and currently operates under the brand name ‘More’. The startup has investments from Bessemer Venture Partners, Helion Venture Partners and Zodius Capital. It was valued at Rs 1,400 crore when it last raised funds in January. The company is understood to have closed fiscal 2015 with a top-line of Rs 250 crore and a run-rate of 6,000 orders a day with average billing of Rs 1,500 per customer.

Strong U.S. sales help Cisco beat estimates: Network equipment maker Cisco Systems Inc reported higher-than-expected quarterly revenue and profit as strong demand for its products in the United States more than offset weakness elsewhere. Shares of Cisco, considered a bellwether for the performance of the broader network gear industry, rose nearly 4 percent in extended trading on Wednesday. The company is the market leader in selling network equipment to businesses, controlling about half of the $38 billion global market and overshadowing rivals Hewlett-Packard and China's Huawei, according to market research firm Gartner. For the fourth quarter, the company earned 59 cents per share on an adjusted basis, while revenue rose nearly 4 percent to $12.84 billion. Cisco's latest results also underscore an ongoing recovery in sales of the company's switches and routers, which were hit by a slowdown in spending by telecom carriers, its traditional customers, in the second half of 2014. The company has also been investing in new products and services such as data analytics software, security and cloud-management tools. Cisco said in June it would buy cloud-based security firm OpenDNS for $635 million. The company also said revenue from telecom providers rose 2 percent in the quarter but added that it did not expect an increase in capital spending by its traditional customers.

Lenovo quarterly revenue misses expectations, announces 10% cuts: Lenovo missed quarterly revenue expectations on Thursday and said it plans to lay off about 10 percent of its global non-manufacturing workforce, after posting a steep sales decline in its mobile division. The world's No. 1 PC maker said it plans to cut about 3,200 non-manufacturing positions to save $650 million in the second half of 2015 and about $1.35 billion on an annual basis, reflecting intense competition among global smartphone makers. Chief executive Yuanqing Yang said Lenovo would also restructure its lagging smartphone business at a one-time cost of $600 million, and was facing its "toughest market environment in recent years". Lenovo, which last year spent $2.91 billion to buy handset brand Motorola from Google in a bid to solidify its position in smartphones, pointed to "intensifying competition and long product development lifecycles" in the business.

Tinder Invokes North Korea in Strange Response to Vanity Fair Article, then Backtracks: Like a person scorned after a bad date, the tech company Tinder went a little bit crazy on social media on Tuesday after Vanity Fair published an article blaming technology for the death of dating. The article, “Tinder and the Dawn of the ‘Dating Apocalypse,’ ” was not just about Tinder — there is a wider Internet at work, the writer Nancy Jo Sales suggested. But the app, which lets users quickly swipe left to signal rejection or right to signal interest, was used to illustrate the problems young daters face when technology fuses short attention spans with too many options. On its official Twitter account, Tinder took issue with the report’s suggestion that its dating app was fueling a culture of casual sex. Tinder’s defense continued for more than 30 posts. The outrage was not lost on Twitter users, who relished the opportunity to point out that Tinder was being awfully thin-skinned. One post came under particular scorn. Tinder said it helped people find friends and make connections in places where Internet use is restricted. The claim that Tinder had “many users” in North Korea prompted a few creative memes featuring that country’s leader, Kim Jong-un, and many derisive questions about the extent of Tinder’s user base in China and North Korea. Both countries maintain strict controls on the Internet, and information in general. On Wednesday, Tinder issued a statement acknowledging its outburst. “Our intention was to highlight the many statistics and amazing stories that are sometimes left unpublished, and, in doing so, we overreacted,” the company said

WeChat’s Growth Shows Why Messaging Apps Attract Big Valuations: For an idea of why messaging applications are attracting valuations in the tens of billions of dollars, look no further than WeChat, a 600 million-user messaging application that’s part of Tencent. WeChat, a smartphone instant-messenger, digital wallet and car-booking service rolled up into one, is probably worth $83.6 billion1, or about half of TenCent's value, according to HSBC. As people spend more and more time sending short messages to each other—instead of, say, browsing websites or shopping online—such services have become some of the hottest technology businesses around. WeChat's user count jumped by 37 percent in the latest quarter, according to Tencent's results—and it isn't even the Internet company’s biggest messaging product. That honor goes to QQ, which has 843 million users. Facebook’s own Messenger has 700 million users. Skype, the Internet calling service operated by Microsoft Corp., also lets people exchange messages and boasts 300 million users. By comparison, Twitter Inc., which is projected to generate $2.24 billion in revenue this year, only has 316 million users. When it comes to innovation, however, WeChat may be far ahead of the pack in terms of money-making opportunities. It already includes shopping and in-app games, features that other services are rushing to replicate, according to Adley Bowden, senior director of analysis at Pitchbook Inc. "WeChat's success is a little bit of a game-changer in the take on messaging as a platform," Bowden said. Line, a messaging app popular in Japan, may soon offer a better picture of how investors are valuing messaging apps. The company, controlled by South Korean search portal Naver Corp., is preparing for a dual listing in Tokyo and New York next month, people with knowledge of the matter said in May. Line, which makes money by selling teddy bear icons and games to its 211 million users, had $223.9 million in revenue in the latest quarter. Competition for users remains fierce. Viber, a popular messaging app, has 249 million users. Kik, a Canadian messaging service, has more than 200 million, while South Korea’s KakaoTalk has 48 million people exchanging messages and photos. Eventually, within three to five years, there will be a few winners that survive, said Gartner's Blau. That will probably involve more acquisitions by the biggest messaging service providers, with the main question being how much further valuations can go.