Daily Tech Snippet: Tuesday, August 4

As Employees Flee Twitter and Shares Continue to Slump; Drop to Lowest Since IPO May Lure Takeover Offers: Shares slumped 5.6 percent on Monday to $29.27, the lowest price since the company’s November 2013 initial public offering. The move pushed Twitter below $20 billion in market value, making it more attractive to potential acquirers like Google, investors said. Last week, Jack Dorsey, Twitter’s interim chief executive officer and co-founder, and Chief Financial Officer Anthony Noto warned that it will be a while before the social media company stems a slowdown in user growth. They also noted that demand from advertisers missed their expectations. Meanwhile, Twitter is conducting a search to replace former CEO Dick Costolo. “Their comments could be suppressing the stock price for a reason, because their strategy is to be acquired,” said Jeff Sica, president of Sica Wealth Management, who has clients who hold Twitter. “I’m advising anyone that owns Twitter to hold, because I do think at this point there’s going to be an acquisition.” Even at these levels, Twitter with a small premium would probably be the largest acquisition ever for Google or Facebook Inc. Facebook last year acquired WhatsApp Inc., a messaging application, for $22 billion. Twitter has been increasing its ties with Google, making a deal earlier this year to display tweets in search results and partnering with Google’s Doubleclick ad product. Twitter’s price would have to drop to $11.16 a share, according to data compiled by Bloomberg. For Facebook’s earnings to benefit, Twitter shares would only need to drop to $20.78. Competitors are looking at some of Twitter’s assets: its employees. Two product executives announced their departures on July 28, the same day the company reported earnings. Todd Jackson, who helped Twitter debut its Highlights product, left for Dropbox Inc., while Christian Oestlien, who helped drive growth, is going to Google’s YouTube. Trevor O’Brien, also in product leadership, announced his departure a few days later. Without a clear path to a leader who can help Twitter accelerate user growth, “the only strategy that will work for them is if they’re acquired”.

Alibaba Declines as Chinese ADRs Retreat on Economic Slowdown; Down 35% from Post-IPO High: Alibaba, China’s biggest online retailer, slid for an eighth day as fresh data highlighting China’s weakening economy stoked concern that the company’s sales growth is slowing. The American depositary receipts retreated 0.4 percent to $77.99 in New York on Monday, capping the longest slump since the company’s September debut. The drop pushed Alibaba’s decline from its high in November to 35 percent. Alibaba sold ADRs for $68 apiece in a record $25 billion initial public offering on Sept. 18. They had climbed as much as 75 percent in the following two months to a record high of $119.15 in November. The company will probably report a 34 percent increase in sales for the June quarter, down from 46 percent in the same period last year, according to the average estimate of 26 analysts surveyed by Bloomberg. LightInTheBox, a web-based retailer of China-made goods to overseas markets, tumbled 9.3 percent to $3.63, the lowest since its U.S. listing in June 2013. Jumei International, which sells beauty products online, sank 6.7 percent to $17.46, dropping the most in four weeks.

Apple Falls Below Its 200-Day Moving Average for First Time Since 2013: The bull market’s base just lost another brick. Amid a collapse in breadth and the threat of falling earnings, add a correction in Apple shares to the concerns facing investors. The iPhone maker slipped 2.4 percent to $118.44 today, extending its decline since February to 11 percent and dropping below another chart threshold, its 200-day moving average, for the first time since 2013. The iPhone maker’s shares had spent 471 sessions above the 200-day threshold, last falling below it in September 2013. It entered a correction territory today after coming within 40 cents of one on July 9 before rallying.

For Mobile Messaging, GIFs Prove to Be Worth at Least a Thousand Words: Just as smartphones drove the rise of emoji, mobile devices are propelling GIFs into a more widespread form of instant visual-messaging. Tumblr, the blogging site, said it had 23 million GIFs posted to its site every day. In March, Facebook began supporting GIFs, with more than five million of the animations sent daily through its messaging app. Slack, the workplace collaboration start-up, says it counts more than two million GIF integrations each month. In total, online searches for GIFs have risen by a factor of nine since mid-2012, according to Experian Marketing Services, an industry research firm. While the brief animations are not new — GIFs were created in 1987 by Steve Wilhite, a programmer at CompuServe, and have been omnipresent on desktops — major improvements in mobile technology and a surge of messaging applications are pushing GIFs to break out beyond the web forums of old. They have become a mainstream form of digital expression, a way to relay complex feelings and thoughts in ways beyond words and even photographs, making them hugely popular with young audiences who never leave home without their smartphones. The animated snippets are being spread on mobile devices by a new generation of GIF start-ups, which are backed by venture capital. Riffsy, which makes the GIF keyboard for smartphones, just raised $10 million. Giphy, which provides a search engine for a vast library of GIFs, has raised more than $23 million. And there are numerous other companies, like Imgur, PopKey and Kanvas, all eager to snip and remix video clips into short, ready-to-share packages. For now, few of these companies are profiting from GIFs as they focus on propagating the use of the clips. But the start-ups see potential for profit, especially as brands increasingly integrate the animations into advertising and other marketing. GIFs are marked by certain characteristics. They are typically a few seconds long, soundless and play in a loop. They are often culled from movie and TV clips and can include text on top of the animated image. Their use has seeped into professional venues, frequently replacing text. Google recently sent a reporter a GIF of a toddler throwing her hands up in response to a question. Digital publications like BuzzFeed regularly use GIFs as a storytelling method. And office workers like Jerrod Howlett, an employee at Google, regularly respond to email with GIFs. “I’m not that great with words,” Mr. Howlett said. “But if I find the perfect GIF, it nails it.”

German Carmakers Buy Nokia’s Here Mapping Unit for $3 Billion: Nokia said that it had sold its Here digital mapping unit to a consortium of German automakers for 2.8 billion euros, or about $3 billion. The announcement signals the latest chapter in Nokia’s transformation, as the company tries to rebound from the demise of its once world-leading mobile phone unit, which was sold to Microsoft last year for about $7.6 billion. As part of the changes, the Finnish company has pared its operations to focus almost entirely on its telecom network infrastructure business, which provides communications equipment to some of the world’s largest carriers. The members of the German consortium said that they would use Nokia’s digital mapping unit for their own autonomous driving plans, but that they would be willing to license the technology to other companies. The sale of Nokia’s mapping unit comes as the Finnish company is close to completing its $16.6 billion acquisition of the French-American telecom equipment maker Alcatel-Lucent. Nokia has received regulatory approval from United States and European antitrust authorities for that deal, but it is still waiting for the go-ahead from Chinese officials. By agreeing to a sale price of roughly $3 billion, the Finnish company is essentially writing off years of research and development, and a series of multibillion acquisitions that had turned Here into a global mapping champion. Those deals include the $8.1 billion purchase in 2007 of Navteq, the maker of digital mapping and navigational software based in Chicago, as Nokia tried to keep pace with other handset makers and mobile operating systems. As digital maps are becoming a crucial focal point of many emerging industries, a number of bidders had expressed interest in Here, including the ride-booking service Uber, which submitted a $3 billion bid for the business before dropping out last month. Other tech giants, including Amazon, the Chinese search engine Baidu and Facebook, also rely on Nokia’s geospatial data for their mapping services. These companies had turned to Here to reduce their reliance on Google — a company that they increasingly compete with for users, engineers and advertising revenue. It will now be up to the German automakers to convince these tech companies that they can continue to offer the same level of digital mapping services that had made Nokia’s unit the main global rival to Google Maps.