Daily Tech Snippet: Tuesday, December 1, 2015

• Holiday Shopping Is Chilly for ‘Buy’ Buttons at Twitter, Facebook and Pinterest: More than a year after Twitter and Facebook began placing Buy buttons on their social networks, their e-commerce initiatives still appear to be relegated to experimental side projects. And at Pinterest, the tech platform that many believe is most conducive to e-commerce, one of its mainstream launch partners is seeing fewer than 10 purchases a day via so-called Buyable Pins. The lack of aggressiveness on the part of Facebook and Twitter, and tepid early results at Pinterest, highlight the myriad challenges all three platforms face in transforming their immense user bases into shoppers. The sluggishness of the combined efforts also serves as a warning to other industry players betting big on the idea of social commerce that it’s still unclear if consumers will make purchases in big numbers on platforms that aren’t mainly retail destinations. Spokespeople for the three companies declined to disclose sales numbers for these initiatives. While each platform had its own reasons for pursuing e-commerce initiatives, the central idea was that they thought there was an opportunity to make it easier for their users to buy a product when they discover it on the platform. In theory, the usefulnesses of such a feature would be the biggest on mobile phones, where clicking through to make a purchase on another site can make purchases less likely because of uneven mobile webpage experiences. Facebook was the first to take a crack. Sixteen months after Facebook first began testing Buy buttons on ads and regular posts to let people purchase products they discover on Facebook without leaving Facebook, the initiative is still being dubbed a beta test, restricted solely to online merchants who work with e-commerce software provider Shopify. The company has also recently added purchase capabilities to some Facebook business pages and to a dedicated shopping section of Facebook, but these features, too, are being characterized as “tests” that aren’t available to all Facebook users in the U.S. At Twitter, it’s still unclear how big of a priority e-commerce will be going forward under the leadership of new CEO Jack Dorsey. The company began placing Buy buttons in tweets in September of 2014, and struck partnerships in October of this year with software partners such as Bigcommerce and Stripe to get more merchants on board. Best Buy, for example, will soon join the program — just not in time for the just-passed Black Friday weekend. But regular Twitter users can still go weeks without seeing any tweets enabled with e-commerce; most Re/code colleagues I polled, who are absolute Twitter power users, said they never come across them at all. Then there’s Pinterest, the massive tech platform that retailers were most excited about for its e-commerce potential. The company began inserting Buyable Pins into its iPhone app in late June, and just added the feature to its Android app in early November. The company says more than 10,000 merchants have joined the program, including big retailers and brands like Macy’s, Nordstrom, Neiman Marcus, Cole Haan and Tory Burch, but at least one of these big partners is seeing fewer than 10 purchases a day on Pinterest, according to a person with direct knowledge of the sales figures. This source and another also said that Pinterest insiders have privately admitted to being disappointed with early sales numbers.

• AppDynamics Raises $158M; Now Valued At $1.9 Billion: Last month, based on an SEC filing, we told you that seven-year-old, San Francisco-based AppDynamics had raised a fresh $83.4 million in funding as part of a round that was targeting up to $150 million. Turns out the company met that target and then some. CEO David Wadhwani — who joined the firm in September after spending more than a decade as an executive at Adobe, including as its digital chief — says the company has just closed on $158 million in a round led by General Catalyst and Altimeter Capital. Other participants in the round include Adage Capital, Industry Ventures, Goldman Sachs, and Cross Creek Advisors, as well as earlier backers Institutional Venture Partners, Greylock Partners and Lightspeed Venture Partners. AppDynamics makes software to monitor the performance of business applications, competing with some traditional firms like IBM, as well as younger outfits like New Relic, which went public last December and has seen relatively steady stock performance since. (New Relic, which raised $214 million in venture funding, has a current market cap of $1.8 billion.) AppDynamics had previously raised roughly $206 million in debt and equity, including a $120 million round — $70 million equity and $50 million of debt — that closed in July of last year. At the time of the funding announcement, the company told VentureBeat that the money represented “pre-IPO growth financing.” Asked today what this new round means, Wadhwani said he “won’t speculate on the exact timing” of an IPO but added, “I was brought in to take this company public, and that’s what I intend to do.” The new funding, he said, “represents freedom. We can [execute on our plans for the company] on this money and effectively choose when we want to go public.” Wadhwani declined to discuss the company’s post-money valuation, but a source close to the company pegs it at $1.9 billion.

• In a Global Market for Hacking Talent, Argentines Stand Out: Want to learn how to break into the computerized heart of a medical device or an electronic voting machine? Maybe a smartphone or even a car? Thanks to the legacy of military rule and a culture of breaking rules of all sorts, Argentina has become one of the best places on earth to find people who could show you how. As Silicon Valley’s talent war has gone global, particularly for those skilled at breaking into things, this Latin American nation has become a rich recruiting ground for corporations and foreign governments. Companies need hackers to help defend against online criminals and state-sponsored spies. And as the world’s critical infrastructure moves online and the threat of war moves into cyberspace, governments are desperate to acquire hackers’ tools. Within Latin America, Brazil has become known in recent years as the world leader in Internet banking fraud. But Argentina’s hackers have a reputation for creativity. In particular, they are known for their ability to find so-called zero-day flaws, which are unpatched holes in widely used technology that can be used to spy on or even destroy adversaries’ computer networks. Technology companies like Apple, Facebook and Google have encrypted their products and services so that in many cases the only way to monitor a target’s communications is to hack directly into its device. As a result, there is a new urgency among governments in acquiring zero-day exploits. A mix of executives from around the world, government officials, contractors and — or so it was rumored — spies gathered here in October in an industrial building converted into a cultural center to watch hacking done the Argentine way at the 11th annual EkoParty, the largest hacking conference in Latin America. Long before foreign companies came calling, hacking things was a life skill in Argentina, a way to get by through decades of repressive military rule and a volatile economy. Argentines have a saying, “atado con alambre,” which translates roughly as “held together with wire,” to describe the inventive nature of so many here who learned to do much with little. The country still has one foot in the tech industry’s past because of stringent import rules. Amazon will not ship to your door here. BlackBerry has more market share here than Apple. A new iPhone costs $2,000 or more on MercadoLibre, an online auction site, but many iPhone owners said they had been able to persuade a friend traveling from abroad to sneak one through customs. To get their hands on the latest, greatest devices, Argentines often have to think like a hacker — or even become one. “You make do without resources, without high-end technology, with poor Wi-Fi connections,” said Sergio Berensztein, an Argentine political analyst. “We improvise creative solutions, for lack of other options, and many have applied these same procedures to the technical industry.”

• FAA Permit for Drone Flight School May Help Amazon, Google Speed Up Delivery Plans: The Federal Aviation Administration is plotting how to regulate drones. Tech companies with plans for drones — Amazon, Google, DJI, GoPro and a bevy of others looking to tap a potential multi-billion dollar market — are itching for the FAA to get on with it already. Last week, the agency made a small legal maneuver that advocates hope indicates more leniency to come on the commercial applications of drones. The FAA authorized the Kansas State University Polytechnic campus to train students and outside companies on flying unmanned aircraft. This type of authorization, called a Section 333 exemption, is common; construction sites, news outlets and disaster relief groups have received them. Amazon scored one in April. The notable difference here is in how close the FAA lets drones get to people. Even with flight authorization, drones must stay 500 feet from people, unless the craft meet some stringent safety and logistics requirements. The only exception had been on closed film and TV sets, which deploy drones for movie magic. But the FAA lifted the 500-foot restriction for the Kansas school, even though it didn’t ask for the specific closed-set exemption.

• Target and PayPal Sites Report Problems on Cyber Monday: Cyber Monday, the online version of Black Friday, is not immune to traffic jams of shoppers rushing to take advantage of post-Thanksgiving sales. Some of the most popular websites experienced an overload on Monday, similar to a crowd pushing its way into an already packed brick-and-mortar store. Shoppers were for a period of time unable to gain access to the site of Target, the discount chain,and PayPal, the online payments processing service. Both are now back online after an onslaught that reflects the shifting trends in the way consumers are looking for shopping bargains. Foot Locker, Groupon and Victoria’s Secret also experienced brief outages or slowdowns Monday afternoon, according to Catchpoint Systems, a web monitoring firm. In a statement on Monday, Target said it was experiencing its biggest online volumes ever in response to a 15 percent online discount that it had announced previously. Visitors to the site early Monday got a message saying: “Please hold tight. So sorry, but high traffic’s causing delays. If you wouldn’t mind holding, we’ll refresh automatically & get things going ASAP.” According to a statement from Target, the company said it placed online shoppers in a queue in order to manage the volume of users, but it then allowed them to keep trying to gain access by refreshing their browser. A heat map on downdetector.com showed most of the problems with PayPal were reported in North America and Europe. Problems started around 8:30 a.m. Eastern time. PayPal said in an emailed statement that the “brief, intermittent interruption” in service was resolved. It did not provide a reason. The holiday buying frenzy has evolved over the years as more stores offer sales before and sometimes on Thanksgiving Day. It has also shifted away from physical stores as Americans have increasingly turned to online shopping. For many people, Monday was their first day back at work after the long Thanksgiving weekend, so some shopping was presumably being done surreptitiously while at work.