Daily Tech Snippet: Wednesday, September 30

• Alibaba, Ant Financial invest about $680 million in Paytm, up stake to 40%: Chinese e-commerce giant Alibaba has made a strategic investment in One97 Communications, the parent company of Paytm, along with its affiliate Ant Financial, which had made its first investment in February 2015. With this, Alibaba becomes a new investor in the Indian online payment and e-commerce firm. Two people aware of the details told ET that the Alibaba Group Holding will pick up about 20% stake through a fresh issue of shares by investing about $680 million(around Rs4,450 crore). The deal has been closed. In February, Ant Financial had picked up a 25% stake for $575 million, of which $200 million came in as the first tranche. The fresh investment by Alibaba Group Holdings subsumes the outstanding tranche of $375 million, and will see Ant Financial's stake being lowered to 20%, one of the people aware of the details said.? Alibaba will now hold around 20%. With this, Alibaba will become the biggest shareholder in the company as it will hold 40% through two entities, and Paytm will be its ecommerce play in India. Under the financial contours of the transaction, existing investor Saif Partners' stake comes down to 30% from 37% while Paytm's founder and Chairman & Managing Director Vijay Shekhar Sharma now owns about 21%, down from 27%.

• Google Unveils New Chromecast, Other Devices to Connect Smartphone and TV: Google on Tuesday revealed two new Chromecast streaming devices — one for televisions, another for speakers — along with a new tablet computer and a pair of new devices from the company’s Nexus line of Android mobile phones. Much like Apple, Google is pushing a future where televisions become a vessel for the Internet and channels are replaced with apps. But instead of having separate devices for music and TV, Google has tried to position the mobile phone as the center of everything — a kind of remote control for life.Enter Chromecast, Google’s popular streaming device that beams content from mobile phones to TVs via the Internet. The idea is pretty much the same as Apple TV, but Apple TV costs $149 and is essentially a small computer with lots of storage for apps to run on a television. Chromecast costs $35 and is just a waypoint between TVs and phones. The field of streaming devices has become crowded — Amazon and Roku make similar products. To distinguish itself from those stick-shaped competitors, Google’s new Chromecast is about the size and shape of a silver dollar. Google also announced that it had sold 20 million Chromecast devices and that it was now compatible with thousands of apps, including Netflix and HBO Now. For a company whose spotty hardware record includes Google Glass, the much-maligned Internet glasses, and Nexus Q, a streaming device that was never released, Chromecast is a huge success. So Google is expanding it. On Tuesday, the company also announced Chromecast Audio, a new line of Chromecast devices that plug directly into speakers and receive music sent from a phone. Google simultaneously announced a new partnership with Spotify, the popular music-streaming app that is in a battle with Apple’s new Apple Music offering.

• Hands-On With Google’s New Nexus 6P and Nexus 5X Smartphones: Google announced its newest pair of Android smartphones, the Nexus 6P and Nexus 5X. This is the first time since the Nexus line was launched, in 2010, that Google is releasing two phones at once. Each is targeted at a different segment of the market, but they both share a number of critical features for wooing customers. The 6P is Google’s new flagship, the successor to last year’s Nexus 6. The original Nexus 6 was made by Motorola (owned by Google at the time, though since bought by Lenovo) and was met with mixed reactions from critics and customers. It was big, the camera wasn’t as good as those in competing phones, and it was roughly twice the price of its own predecessor, the Nexus 5. The 6P is the first Nexus phone made by Chinese company Huawei, and it tries to fix what was wrong with the 6 while bringing a few new things to the party. The smaller Nexus 5X, manufactured by LG, is just over five inches long and has an ultrasensitive camera that is designed to work better indoors, where people take most of their pictures. It starts at $379 for an entry-level phone without a contract. The other larger phone, the Nexus 6P, which is made by Huawei, is 5.7 inches and starts at $499. Both phones use a new kind of charging cable, called USB Type-C, that powers up more quickly and has a symmetrical charging port so people won’t have to fumble to figure out which way to plug it in. Nexus runs what Google calls the “purest” form of its Android operating system. The devices come with a few Google apps but are otherwise free of so-called bloatware — software loaded onto a device by a phone maker — that can slow the device. Also, Nexus products receive monthly security updates and come with the latest version of Android, making them a kind of showcase for new Google products.

• The ‘Oh, Shit!’ Moment When Growth Stops: Most high-growth businesses stare down periods when growth unexpectedly slows down or stops altogether. At some point, that stomach-churning moment has visited the leadership of most of the companies I’ve advised. We also faced it at OpenTable, eBay and Reel.com when I was managing them. And it has reputedly happened to a number of today’s mightiest Internet businesses as well, including the likes of Amazon and Facebook. CEOs at high-tech businesses work hard to keep as much growth going for as long as possible. Investors — both public and private — tend to value growth over everything else during most investment cycles, and the recent cycle has been no exception. Growth is where all the action is, and to where all the money flows. The reason for this is that the majority of returns are driven by a handful of companies that “break out.” And a business can’t get big enough to break out if it isn’t growing. Entrepreneurs’ reactions to these moments fall into one of two extremes: There is the preternaturally calm CEO who resolves to watch the metrics closely to see if they change; he or she is concerned that a hint of panic will cause the rest of the team to panic, so they “Zen it out” as best they can. Then there is the CEO who freaks out, setting off alarm bells that reverberate throughout the entire building and continue ringing in every single employee’s ears. Which approach do I advocate? The freak-out, of course! Why? Because the unexpected slowing of growth in a “growth” business presents an existential risk to the company. Growth rates over a company’s history tend to move only one way over time (down); even in hypergrowth companies, growth rates tend to fall to earth … which is why I’ve referred to this effect as “gravity.” Once gravity takes hold, it’s very hard to reaccelerate the growth of the business. Slowing growth portends a strong possibility that the company will never again experience prior levels of growth going forward. There are precious few examples of this happening on a sustained basis: Amazon accomplished it during 2010-2011, contributing to its value today. We accomplished this during my tenure at OpenTable, leading to a fourfold growth in market cap over six quarters. But growth will never resume magically. If CEOs can figure out what exactly happened to cause that slowdown, it presents them with the opportunity to try to correct what went wrong.