Daily Tech Snippet: Monday, February 1st 2016

• Microsoft Plumbs Ocean’s Depths to Test Underwater Data Center: Microsoft has tested a prototype of a self-contained data center that can operate hundreds of feet below the surface of the ocean, eliminating one of the technology industry’s most expensive problems: the air-conditioning bill. Today’s data centers, which power everything from streaming video to social networking and email, contain thousands of computer servers generating lots of heat. When there is too much heat, the servers crash. Putting the gear under cold ocean water could fix the problem. It may also answer the exponentially growing energy demands of the computing world because Microsoft is considering pairing the system either with a turbine or a tidal energy system to generate electricity. The effort, code-named Project Natick, might lead to strands of giant steel tubes linked by fiber optic cables placed on the seafloor. Another possibility would suspend containers shaped like jelly beans beneath the surface to capture the ocean current with turbines that generate electricity. Such a radical idea could run into stumbling blocks, including environmental concerns and unforeseen technical issues. But the Microsoft researchers believe that by mass producing the capsules, they could shorten the deployment time of new data centers from the two years it now takes on land to just 90 days, offering a huge cost advantage. The underwater server containers could also help make web services work faster. Much of the world’s population now lives in urban centers close to oceans but far away from data centers usually built in out-of-the-way places with lots of room. The ability to place computing power near users lowers the delay, or latency, people experience, which is a big issue for web users. The company recently completed a 105-day trial of a steel capsule — eight feet in diameter — that was placed 30 feet underwater in the Pacific Ocean off the Central California coast near San Luis Obispo. Controlled from offices here on the Microsoft campus, the trial proved more successful than expected. The researchers had worried about hardware failures and leaks. The underwater system was outfitted with 100 different sensors to measure pressure, humidity, motion and other conditions to better understand what it is like to operate in an environment where it is impossible to send a repairman in the middle of the night. The system held up. That led the engineers to extend the time of the experiment and to even run commercial data-processing projects from Microsoft’s Azure cloud computing service.

• Tech Valuations In 2016: The End Of The Line For Sloppy Growth: What’s going on in technology investing right now? Is this another 2001, when tech imploded? Another 2008, when the wider world crashed but tech powered through? Or is it like Facebook in 2012, a valuation blip and a chance to buy? High-growth companies have attracted  high valuations, which allowed them to raise capital, which was then spent to generate still more growth and raise the valuation again. The result has been a self-perpetuating cycle of high burn, higher growth, still higher valuations and a strong positive feedback loop. The slop has been showing up in the numbers. The valuations of public companies already reflect this - valuations of public tech companies crashed 18 months ago. In March 2014, these high-growth companies were being valued at 12x run-rate revenues, but by mid-2014, this had declined to around 6x revenues, which is where it has remained since. The long-expected crash has, in fact, already happened — almost 18 months ago.  Unlike the private markets, the public markets get to rethink investment decisions every day. Over time, public investors either explicitly or implicitly realized that customer economics and the quality of growth have declined and, consequently, reduced the premium paid for excess growth. Capitalism works. The private markets, where decisions only get made once a year, have been slower to react; hence, the dearth of IPOs and the price adjustments seen as high-priced private companies come to the public markets. In 2016, any private tech company where the last percentage points of growth have only been generated at the expense of profit will no longer be able to attract capital at a high valuation. Smart companies will respond by cutting marginal investment, thus raising sales efficiency — even at the expense of having a lower growth rate. We will then see the same feedback loop kick in, but in reverse. Lower valuations will result in less capital being raised, which will result in lower growth and still-lower valuations. In contrast to the rise, the decline will happen much more quickly. Bubbles build up slowly, crashes happen fast. Eventually it will bottom out as growth rates become sustainable at acceptable levels of customer economics. Sloppy growth will be out. Sustainable, smart growth will be back — at least until the next time.

• Theranos is running out of time: When Elizabeth Holmes, chief executive officer of Theranos Inc., sat down for an interview last month, she sought to address reports that sparked serious doubts about her company's innovative blood-testing technology. “What we need to do now is focus on the technology and focus on the science and the data and put that out there,” Holmes said in an interview for a Bloomberg Businessweek cover story. “Because that speaks for itself.”: Since then, investors, critics, and members of the medical community have been waiting. And waiting. And the news just keeps getting worse. The most recent blow comes from an inspection report by the Centers for Medicare and Medicaid Services, which found that Theranos's lab facility in Newark, Calif., is in violation of regulations on five counts. As Bloomberg News reported, the company's testing center inside a Walgreen's pharmacy in Palo Alto, Calif., has been temporarily shuttered and turned into a ghost town with a sign taped out front saying it's closed "until further notice." The company's response to this new crisis is the same as it has been all along: It says it is on top of it. How much longer it can keep saying this without losing its credibility is unclear, but it's safe to say that time is running out.Holmes and her story of upending the blood testing market were so powerful that Theranos was granted a $9 billion valuation through recent investment rounds and attracted a VIP roster of politically connected board members from outside the medical field, such as Henry Kissinger and William Perry. Theranos did much of its fundraising from 2003 to 2015, in the midst of an inflating Silicon Valley bubble, when billions of dollars in investor money was sloshing around. The environment has become much more difficult over the past six months, and the company may be running out of time.

Daily Tech Snippet: Friday, January 29

• Amazon shares plunge as record profit still misses estimates: Amazon.com Inc posted its most profitable quarter ever on Thursday but the world's No. 1 online retailer still managed to disappoint Wall Street by badly missing estimates, sending its shares down more than 13 percent in after-hours trading. The results, as well as the company's determination to invest more in new areas and its extremely low profit margins, brought back perennial questions for investors about the company's ability to consistently earn money. Amazon's net profit for the fourth quarter, which includes the holiday shopping season, rose to $482 million, or $1.00 per share, in the quarter ended Dec. 31, up from $214 million, or 45 cents per share, a year earlier. Net sales rose 21.8 percent to $35.75 billion, but missed analysts' expectations of $35.93 billion. Net sales from its cloud services business, Amazon Web Services, rose 69.4 percent to $2.41 billion, compared with a growth of more than 78 percent in the third quarter. AWS continues to be the fastest growing division within Amazon. The company's total operating expenses rose more than 20 percent to $34.64 billion in the fourth quarter.

• Microsoft beats Wall Street view on high demand for cloud products: Microsoft Corp reported quarterly revenue and profit that beat analysts' expectations, driven by aggressive cost cutting and growing demand for its cloud products and services.Total revenue, however, fell 10.1 percent to $23.80 billion, squeezed by a strong dollar as well as a weak personal computer market that has reduced demand for Microsoft's Windows operating system. On an adjusted basis, revenue fell to $25.69 billion but beat analysts' estimates. Microsoft generates more than half of its revenue from outside the United States. Microsoft's net income fell to $5 billion, or 62 cents per share, in its second-quarter ended Dec. 31 from $5.86 billion, or 71 cents per share, a year earlier. Revenue from the "intelligent cloud" business, which includes products such as its Azure cloud infrastructure and services business along with other non-cloud products such as traditional servers, rose 5 percent to $6.3 billion. Perhaps a better indicator of its cloud strength is what the company calls its combined cloud business, on track for $9.4 billion in annual revenue, the company said. That measure, which includes Azure plus other businesses like Office 365, is up 15 percent from the $8.2 billion revenue it estimated last quarter. "They nailed the cloud," said Matt Howard, a venture capitalist at Norwest Ventures who monitors Microsoft closely.

• Alibaba Falls as Sales Volume Slows, Adding to China Concern: Alibaba Group Holding Ltd. shares fell after the Chinese online retailer reported flagging growth in sales on its marketplaces, adding to concerns about the country’s economic slowdown. The shares dropped 3.8 percent to $66.92 in New York, bringing their loss for the year to 18 percent. While gross merchandise volume on Alibaba’s Chinese retail marketplaces rose 22 percent to 964 billion yuan ($147 billion) in the three months ended December 31, that’s less than the 28 percent increase in the prior quarter.  Revenue and earnings per share beat analysts’ estimates in the fourth quarter because Alibaba was able to sell more ads to its merchants and better capitalize on its Tmall and Taobao platforms, he said. What’s troubling is the decelerated growth in GMV, most worryingly at Tmall, where it was 37 percent this quarter, compared with 56 percent growth the previous period, Cordwell said. Plus, the boost in sales from advertising came from Alibaba catching up on monetizing its mobile platforms, a phenomenon that will end, he said. Sales of 34.5 billion yuan ($5.2 billion) rose 32%, and outpaced expectations for a 27-percent rise. The proportion of revenue Alibaba gets from outside China fell to 6 percent 

• Facebook to Shut Down Parse, Its Platform for Mobile Developers: Facebook acquired Parse, a toolkit and support system for mobile developers, in 2013. At the time, the social network’s ambitions were high: Parse would be Facebook’s way into one day harnessing developers to become a true cloud business, competing alongside the likes of Amazon, Google and Microsoft. Those ambitions, it seems, have fallen back to earth. On Thursday, Facebook said it plans to shut down Parse, the services platform for which it paid upwards of a reported $85 million. At one point, Facebook was willing to take those risks. When Facebook bought Parse in 2013, Facebook’s stock was below its initial public offering price of $38. The company had not grown a robust mobile advertising yet, and Facebook was eager to seek out other lines of business in hopes of future profits, according to two people with knowledge of the company’s plans at the time who requested anonymity because they were not authorized to speak for the company. Parse seemed like a good opportunity for expansion. At the time, Internet businesses were in the midst of a major industry change, as users were shifting away from desktop computing and increasingly relying on mobile devices. Parse, the thinking went, could provide Facebook the opportunity to be the foundation of a whole new generation of developers building mobile apps in the age of the smartphone. Things have changed. Facebook is generating record profits and its mobile advertising business is booming; 80 percent of the company’s advertising revenue now comes from mobile devices. As Facebook’s fortunes have turned, it has shown less interest in pursuing other lines of business outside of what it does best. Instead, the company appears intent on building things that somehow, someday, will feed Facebook’s core ad-based business — and those bets are going to have to get bigger and weirder Facebook also would have had to invest untold millions of dollars in capital and, more importantly, engineering talent, to get the Parse business fully off the ground to have a better chance at making a dent in competitors like Amazon, Microsoft and Google.

• Walgreens Halts Use Of Theranos’ California Lab: More bad news for blood analysis startup Theranos – Walgreens has suspended use of the company’s Newark, California lab, following news the Centers for Medicare & Medicaid Services said that lab posed “immediate jeopardy” to patients. Walgreens partners with Theranos, allowing the startup to collect blood draws out of many of the drug store’s Arizona locations and one in Palo Alto. The blood samples are then sent to Theranos labs. Walgreens sent a statement to explain the action: "In light of the letter dated Jan. 25 from the Centers for Medicare and Medicaid Services (CMS) to Theranos, Inc., Walgreens said today that it has informed Theranos that it must immediately cease sending any clinical laboratory tests provided through Theranos Wellness Centers at Walgreens to the Theranos lab in Newark, Calif., for analysis. In addition, Walgreens is suspending Theranos laboratory services at its Palo Alto, Calif., store, effective immediately."

Daily Tech Snippet: Thursday, January 28

• Facebook shares soar as mobile drives big jump in ad sales: Facebook smashed investors' expectations with a 52-percent jump in quarterly revenue as it sold more ads targeted at a fast-growing number of mobile users, sending its shares sharply higher after hours. Facebook shares rose almost 12 percent in after-hours trading to $105.32. The company said sales in the fourth quarter rose 52 percent from a year ago, to $5.84 billion, while profit increased to $1.56 billion, more than doubling from $701 million a year ago. For the full year, the company reported $3.69 billion in profit on $17.93 billion in revenue, an increase of 44 percent from 2014. The company has also begun monetizing some of its other units, such as photo-sharing app Instagram, which surpassed 400 million users last year and began selling ads in September. Facebook said mobile ads accounted for 80 percent of total ad revenue in the quarter, compared with about 78 percent in the third quarter and 69 percent a year earlier.The results offer a bright spot in a tumultuous climate for many American technology stocks. Shares of Twitter, Facebook’s most visible social networking competitor in the United States, have tumbled more than 55 percent during the last year. Yelp, the local-review service, is down about 60 percent. LinkedIn, the professional social networking service, is off more than 15 percent. Facebook is a much larger company than many of its peers, yet it is able to keep its growth rate high. The company has notched double-digit jumps in ad revenue and in the expansion of its user base. Facebook now has 1.59 billion monthly visitors, up 14 percent from a year ago. About 1.44 billion of those people visit the site on a mobile device; 1.04 billion visit Facebook every day. 

• EBay's disappointing forecast fuels stock decline: EBay forecast weaker-than-expected revenue and profit for the current quarter and full year, as the e-commerce company struggles against a strong dollar while trying to revamp its core marketplace business. Shares of the retailer fell more than 12 percent to $23.51 in extended trading on Wednesday. The online retailer, which faces intense competition from e-commerce giant Amazon.com, has also been hit by brick-and-mortar rivals like Wal-Mart Stores that are aggressively boosting their online presence. The company said its gross merchandise value, or the total value of all goods sold on its site, rose 5 percent after accounting for foreign exchange impact. In its second quarter without PayPal, eBay's revenue was $2.32 billion in the fourth quarter ended Dec. 31, flat with a year earlier during the crucial holiday shopping season and in line with analysts' average expectations. EBay began testing a paid shipping membership program in Germany last year, responding to shoppers' increased demand for faster delivery. Wenig on Wednesday said there were "no plans for now" to expand the program. EBay derives nearly 60 percent of its revenue from overseas and faces headwinds from a strong dollar.

• PayPal's revenue beats Street view on higher transactions, customers: Revenue rose about 17 percent to $2.56 billion.  Payment processor PayPal Holdings Inc on Wednesday reported better-than-expected quarterly revenue, as new customer additions and payment processing volumes surged, and it announced a buyback of $2 billion of its stock. PayPal said it expects 2016 full-year earnings of $1.09 to $1.14 per share, and revenue growth of 16-19 percent on a currency neutral basis. It expects currency fluctuations to impact net revenue by 3 percentage points during the year. The company's share buyback program was a reminder of the strength of its free cash flow. PayPal ended the year with $5.7 billion in cash reserves. PayPal's net income rose to $367 million, or 30 cents per share, from $286 million, or 23 cents per share. Shares of PayPal, which completed its spin-off from eBay Inc in July, rose 6.4 percent to $33.66 in extended trade.

• Samsung Electronics warns of difficult 2016 as smartphone market peaks:  Tech giant Samsung on Thursday warned of possible weaker earnings this year compared with 2015 due to softer sales of gadgets such as smartphones, a trend that is also hurting rival Apple and major chipmakers. The South Korean firm's warning came a day after Apple shares fell more than 6.5 percent, the biggest percentage drop in two years, as the iPhone maker forecast its first quarterly sales drop in 13 years.

• Qualcomm forecasts weak profit as demand slows for mobile chips:  Qualcomm forecast current-quarter profit below analysts' expectations as demand weakens for its chips used in mobile devices in a slowing market. Revenue fell 18.7 percent to $5.78 billion. The company, whose customers include Apple, said it expected its mobile chip shipments to fall by 16-25 percent in the second quarter from a year earlier. Qualcomm also expects 3G and 4G device shipments to decline by 4-14 percent, hurting its licensing revenue. The chipmaker's weak outlook comes a day after Apple forecast its first quarterly revenue drop in 13 years and reported the slowest-ever rise in iPhone shipments as the critical Chinese market shows signs of weakness. Qualcomm shares fell 3 percent in extended trading on Wednesday.

• Google ships five million Cardboard virtual reality devices: Alphabet's Google said it had shipped 5 million units of the Google Cardboard viewer, a wearable device that allows users to experience virtual reality through mobile apps. Oculus, the virtual reality company Facebook Inc (FB.O) bought in 2014, started accepting pre-orders this month for its much-awaited headset, Rift, which will ship in first quarter. Google said in November that its video-sharing site, YouTube, supported virtual reality videos. Viewers can watch virtual reality videos using a mobile device and the Google Cardboard viewer. Google said more than 350,000 hours of YouTube videos had been watched in virtual reality.

• Theranos Lab Poses ‘Immediate Jeopardy to Patient Health,’ Says U.S. Agency:  The Centers for Medicare and Medicaid Services has decided that Theranos’ Newark, Calif., facility poses “immediate jeopardy to patient health and safety.” A letter sent to the company on January 25th says that the lab has been given 10 days to provide “acceptable evidence of correction.” Specifically, the document cites problems with the laboratory director, the technical supervisor, hematology and the lab’s analytic systems. CMS has not released the laboratory inspection report that led to this letter, so the details of these infractions remain unclear. But the level assigned to these determinations — “Condition-level deficiencies” — are among the most serious that CMS can make. They mean that Theranos’ Newark lab was found to be in violation of accepted professional standards. CMS declined to comment on the letter.

Daily Tech Snippet: Wednesday, January 27

• Apple sees first sales dip in more than a decade as super-growth era falters: Revenue increased 1.7 percent to $75.87 billion. Apple forecast its first revenue drop in 13 years and reported the slowest-ever increase in iPhone shipments as the critical Chinese market showed signs of weakening, suggesting the technology company's period of exponential growth may be ending.Apple's guidance for the March quarter implies iPhone sales of 50 million to 52 million units in the March quarter, which would mark the company's first-ever decline in sales of the gadget In the same quarter last year Apple sold 61.2 million iPhones. The company reported revenue of $18.37 billion from Greater China, accounting for 24.2 percent of total revenue. Revenue from the region had nearly doubled in the fourth quarter. Apple forecast second-quarter revenue of $50 billion to $53 billion, below analysts' average forecast of $55.5 billion. In the same quarter last year Apple reported revenue of $58 billion. While revenue in Greater China rose 14 percent in the last quarter, Apple is beginning to see a shift in the economy, particularly in Hong Kong, Apple Chief Financial Officer Luca Maestri told Reuters in an interview. "As we move into the March quarter it's becoming more apparent that there are some signs of economic softness," Maestri said. "We are starting to see something that we have not seen before." The slowdown comes as Wall Street analysts worry the company does not have another blockbuster product to replace the iPhone. Apple does not report Watch sales, but it does not appear to have the makings of being a hit on the same level as the iPhone a year after launch. And while the company is reportedly working on a car, what it plans to do in that area and when are still unclear. The company's shares, which have fallen 5 percent this year, bounced around in after-hours trading and were down more than 2.6 percent.   

• China May No Longer Be Apple’s Great Firewall: The iPhone maker is feeling the effects of an economic slowdown in its most important market. China has been one of Apple's most reliable strongholds during its historic stretch of technology dominance. Even when sales began to level out in the U.S., Europe, and Japan, China was a buffer, promising a massive market of newly middle-class customers looking for a high-end, brand-name smartphone. Sales in Greater China grew 84 percent to $58.7 billion in 2015, making it the company's second-biggest market after the U.S. Apple Chief Executive Officer Tim Cook showered the region with praise at the time for its importance to the company's future. Apple's reliance on the country is now being put to the test. On a conference call with analysts after its Tuesday earnings report, Cook said the company is beginning to see "economic softness" in the region, particularly in Hong Kong. China is no longer able to offset sluggishness elsewhere or counter the broader slowdown in the global smartphone market. Even with the Chinese New Year shopping season approaching, Apple is projecting its first quarterly sales decline since 2003.

• Apple’s iPhone Grows Finally Flatlines: 0.4% Yearly With 75 Million Units Sold In Q1: Apple today reported sales of 74.8 million iPhones, 16.1 million iPads, and 5.3 million Macs in its Q1 earnings report today. Apple’s first quarter includes holiday sales, as the three-month period ends December 31, 2015. As such, it was supposed to be one of Cupertino’s best qrters of the year. Plus, the iPhone 6s and iPhone 6s Plus both went live on September 25, meaning that Apple’s next-gen flagship devices were available for the whole of this quarter. Last year at the same time, Apple sold nearly 75 million units of the iPhone, which represented 57 percent revenue growth from the year before. This quarter’s sales of 74.8 million iPhones puts yearly revenue growth at just one percent for the category, and device sale growth at 0.4 percent. In terms of quarterly growth, Apple sold 56 percent more iPhones from last quarter’s 48 million. Apple was expected to sell at least 75 million units of the iPhone this year, a forecast that analysts have had a very close eye on during the course of the quarter. Many fear that the iPhone may finally start declining after nearly eight solid years of growth. On the other side of the spectrum, Apple is having more difficulty cultivating the iPad line of products. The company sold 16.1 million iPads in the first quarter, down 25 percent year-over-year, but up 63 percent from last quarter. Meanwhile, the PC industry as a whole has been steadily slowing, and Apple is no exception. Apple sold 5.3 million units of the Mac, down four percent from last year.

• Apple TV And Apple Watch (Probably) Had A Big Quarter:  Apple’s “other” category makes it difficult to assess how many Apple Watches and TVs were purchased. What we do know is that the $4.35 billion in the “other” category saw a big jump — not just 62 percent annually, but up 43 percent since the last quarter. This means that there was a spike in sales months after the initial Apple Watch release in April. This could be because of increased holiday sales or a popular fourth generation Apple TV. Beats headphones and iPods are also included in  “other.” Without giving specific sales numbers, CEO Tim Cook said on the earnings call that it was the “best quarter by far for Apple TV sales.” There are 3,600 apps available for the TV now, he said.  Cook added that the company “set a new quarterly record for Apple Watch sales…especially strong sales in the month of December.” Apple has never released specific Watch sales numbers. Asymco analyst Horace Dediu updated his Apple Watch projections "My estimate on Watch sales is about 5.5 million units during Q4. 12.4 million to date"

• Software maker VMware to cut 800 jobs, sees weak 2016: VMware Inc forecast 2016 revenue and profit below analysts' expectations, suggesting the software maker's strong growth in new businesses was not enough to compensate for weakness in its traditional server-virtualization software. VMWare, like many technology providers, is struggling to keep pace with its customers' efforts to move key computing infrastructure to the cloud, meaning remote data centers. VMware shares fell 5 percent in extended trading on Tuesday, while EMC shares declined 1.4 percent. The company, whose flagship product helps customers cut costs by running multiple operating systems on a single server, has been hurt by slowing economic growth in markets outside the United States, which account for nearly half of its revenue. In particular, it cited weak bookings for its software in China, Russia, and Brazil. But the company noted some bright spots in newer businesses, such as NSX, which makes networking more efficient. That business is on track to generate $600 million annually, VMWare said, up from $200 million a year ago. The company's net income rose 14.4 percent to $373 million, or 88 cents per share, in the quarter ended Dec. 31, helped by a 12.6 percent jump in its services revenue. Revenue increased 9.7 percent to $1.87 billion, topping the average analyst estimate of $1.85 billion.

Daily Tech Snippet: Monday, January 25

• A Personality Profile of Larry Page: How Larry Page’s Obsessions Became Google’s Business: Three years ago, Charles Chase, an engineer who manages Lockheed Martin’s nuclear fusion program, was sitting on a white leather couch at Google’s Solve for X conference when a man he had never met knelt down to talk to him. They spent 20 minutes discussing how much time, money and technology separated humanity from a sustainable fusion reaction — that is, how to produce clean energy by mimicking the sun’s power — before Mr. Chase thought to ask the man his name. “I’m Larry Page,” the man said. He realized he had been talking to Google’s billionaire co-founder and chief executive. “He didn’t have any sort of pretension like he shouldn’t be talking to me or ‘Don’t you know who you’re talking to?’” Mr. Chase said. “We just talked.” Larry Page is not a typical chief executive, and in many of the most visible ways, he is not a C.E.O. at all. Corporate leaders tend to spend a good deal of time talking at investor conferences or introducing new products on auditorium stages. Mr. Page, who is 42, has not been on an earnings call since 2013, and the best way to find him at Google I/O — an annual gathering where the company unveils new products — is to ignore the main stage and follow the scrum of fans and autograph seekers who mob him in the moments he steps outside closed doors. But just because he has faded from public view does not mean he is a recluse. He is a regular at robotics conferences and intellectual gatherings like TED. Scientists say he is a good bet to attend Google’s various academic gatherings, like Solve for X and Sci Foo Camp, where he can be found having casual conversations about technology or giving advice to entrepreneurs.

• SoftBank's Slide Leaves It Worth Less Than Stake in Alibaba: SoftBank tumbled below the value of its stake in Alibaba Group Holding Ltd. amid growing concerns about the Japanese company’s other assets, including struggling U.S. wireless carrier Sprint. SoftBank’s market capitalization stood at 5.89 trillion yen ($50 billion) Friday after its stock rebounded 8 percent after a four-day losing streak triggered by rising pessimism about Sprint’s ability to pay down debt. That still lags the $56 billion that its stake in Alibaba is worth, according to its own website.  Billionaire Masayoshi Son has struggled to turn around Sprint since buying a controlling stake in 2013 for SoftBank’s biggest acquisition ever. The wireless operator lost its place as the third-largest U.S. carrier to T-Mobile US Inc. and its stock this week fell to the lowest level in more than two years. Its bonds led declines among junk-rated debt Wednesday. “It’s symbolic because it tells you that investors feel SoftBank has been destroying value,” said Amir Anvarzadeh, a manager of Japanese equity sales at BGC Partners Inc. in Singapore. “Son’s pride has been another major issue, which pushed him to where he is now.” SoftBank lists the value of holdings in nine other public companies on its website, including Sprint and Yahoo Japan. The company calculated the total market value of those holdings as more than 8 trillion yen. 

• Big Exec Departures at Twitter: Media Head Stanton and Product Head Weil Leaving: In a major executive upheaval, two of Twitter’s top executives — media head Katie Jacobs Stanton and product head Kevin Weil — are departing the company, according to sources close to the situation. Neither has immediate plans to go to another company, added sources, but are expected to. Right now, the jobs of both Weil and Stanton will be filled with interim replacements. There have been rumblings of the changes for weeks now inside the San Francisco social communications company. Sources said Twitter is planning to announce the shuffle tomorrow, along with the hire of a prominent CMO.

Daily Tech Snippet: Friday, January 22

• Facing a Price War, Uber Bets on Volume: The U.S. operation cuts fares while promising imminent profit. It’s becoming a bit of a holiday tradition for Uber: ringing in the new year by lowering fares. Amid a price war with rival Lyft, the ride-hailing leader reduced its rates by 10 percent to 45 percent in 100 cities across North America. In Detroit, Uber drivers’ per-mile rate is less than it takes to cover their gas and the depreciation of their cars, according to IRS figures. “It’s depressing,” says Bill Scroggins, an Uber driver in Indianapolis. “I’m not even sure I want to drive anymore. It feels like I’m doing it for free.” This is the third year in a row Uber has discounted fares in January. It calls the cuts seasonal but says they could last indefinitely. Last year rates never rose again in almost a third of cities; only in two did they return to precut prices. Uber has instituted temporary hourly wage guarantees to limit drivers’ earnings declines. It’s assured Scroggins and other outraged drivers they’ll come out ahead by making more trips an hour thanks to increased demand. That may be what Uber is telling itself, too. A few months ago, Chief Executive Officer Travis Kalanick told employees that North American operations would turn a profit in the second quarter of this year. The goal sounds less realistic in light of the price cuts. “Uber has to sacrifice profits for growth,” says Evan Rawley, a professor at Columbia Business School. Uber is also churning through cash a lot faster than Lyft, having said it will spend billions to push its way into China, India, and Southeast Asia. In the first quarter of 2015, Uber lost $385.1 million on $287.3 million in revenue, according to leaked figures published by the Information, a tech news site. And losses are growing: In the third quarter, Uber lost $697 million on $498 million in revenue, according to a person briefed on the numbers. Over the first three quarters of 2015, Uber lost $1.7 billion on $1.2 billion in revenue. For perspective, during Amazon.com’s worst-ever four quarters, in 2000, it lost $1.4 billion on $2.8 billion in revenue. CEO Jeff Bezos responded by firing more than 15 percent of his workforce.

• Google Paid Apple $1 Billion to Keep Search Bar on IPhone: Google Inc. is paying Apple Inc. a hefty fee to keep its search bar on the iPhone. Apple received $1 billion from its rival in 2014, according to a transcript of court proceedings from Oracle Corp.’s copyright lawsuit against Google. The search engine giant has an agreement with Apple that gives the iPhone maker a percentage of the revenue Google generates through the Apple device, an attorney for Oracle said at a Jan. 14 hearing in federal court. Rumors about how much Google pays Apple to be on the iPhone have circulated for years, but the companies have never publicly disclosed it. Kristin Huguet, a spokeswoman for Apple, and Google spokesman Aaron Stein both declined to comment on the information disclosed in court. The revenue-sharing agreement reveals the lengths Google must go to keep people using its search tool on mobile devices. It also shows how Apple benefits financially from Google’s advertising-based business model that Chief Executive Officer Tim Cook has criticized as an intrusion of privacy. Oracle has been fighting Google since 2010 over claims that the search engine company used its Java software without paying for it to develop Android. The showdown has returned to U.S. District Judge William Alsup in San Francisco after a pit stop at the U.S. Supreme Court, where Google lost a bid to derail the case. The damages Oracle now seeks may exceed $1 billion since it expanded its claims to cover newer Android versions.

• Seeking Twitter's territory, Facebook launches real-time sports platform: Facebook Inc is tackling the sports arena with a new platform called Facebook Sports Stadium, which the social media site said will provide real-time updates on games, popular posts from fans, statistics and commentary from experts. "With 650 million sports fans, Facebook is the world's largest stadium," it wrote in a post on Wednesday announcing the feature. The new service appears to be an effort to encroach on Twitter's territory. The micro-blogging site has long been a popular destination for so-called "live-tweeting" games. MichaelAaron Flicker, president of XenoPsi, a New York City-based marketing firm, said the new product is Facebook's attempt at capturing "in the moment" engagement. "They don't have that piece of the puzzle," Flicker said. "The challenge for Facebook is there are already a lot of communities (like Facebook Sports Stadium). This is not a unique offering."

• Jack Dorsey Juggles Twitter and Square, Both Caught in Downdraft: It is not shaping up as a happy new year for Jack Dorsey and his two companies. Even as the stock market’s volatility has dragged down many businesses, Mr. Dorsey and the public tech companies that he runs as chief executive — Twitter, the social network, and Square, the mobile payments company — have been particularly buffeted.Shares of Twitter hit a record low early Wednesday before going on a wild ride and rising 4.1 percent for the day. The gain did little to erase Twitter’s negative trajectory, with its shares off 25 percent this year. Square, which went public last November, fell below its initial public offering price of $9 for the first time on Wednesday before recovering. In total, the stock is down 28 percent this year. Square faces its own set of difficulties. Naysayers have long questioned the profit margins on the company’s payments processing business. Square takes a small cut of every credit card payment it processes, a cut that is split with banks and other financial intermediaries. The company has expanded into other areas in recent years, such as food delivery and capital extensions to small businesses. Square also is dealing with a relatively small proportion of shares available for trading, since the company sold less than 10 percent of itself in its public offering, in what is known as a “small float” offering. Also, many of Square’s executives and major shareholders are still held by the so-called lockup period after the offering, which prohibits them from selling their shares. Companies with relatively few shares outstanding tend to get whipsawed during volatile market periods because it becomes harder to adequately match the small amount of supply for the stock with the demand, or lack thereof. “Those tiny-float I.P.O.s come back to haunt you,” Mr. Wolff of Manhattan Venture Partners said.

Daily Tech Snippet: Thursday, January 21 2016

• Tech’s ‘Frightful 5’ Will Dominate Digital Life for Foreseeable Future: There’s a little parlor game that people in Silicon Valley like to play. Let’s call it, Who’s Losing? There are currently four undisputed rulers of the consumer technology industry: Amazon, Apple, Facebook and Google, now a unit of a parent company called Alphabet. And there’s one more, Microsoft, whose influence once looked on the wane, but which is now rebounding. So which of these five is losing? A year ago, it was Google that looked to be in a tough spot as its ad business appeared more vulnerable to Facebook’s rise. Now, Google is looking up, and it’s Apple, hit by rising worries about a slowdown in iPhone sales, that may be headed for some pain. Over the next couple of weeks, as these companies issue earnings that show how they finished 2015, the state of play may shift once more. But don’t expect it to shift much. Asking “who’s losing?” misses a larger truth about how thoroughly Amazon, Apple, Facebook, Google and Microsoft now lord over all that happens in tech. Who’s really losing? In the larger picture, none of them — not in comparison with the rest of the tech industry, the rest of the economy and certainly not in the influence each of them holds over our lives.  Indeed, the Frightful Five are so well protected against start-ups that in most situations, the rise of new companies only solidifies their lead. Consider that Netflix hosts its movies on Amazon’s cloud, and Google’s venture capital arm has a huge investment in Uber. Or consider all the in-app payments that Apple and Google get from their app stores, and all the marketing dollars that Google and Facebook reap from start-ups looking to get you to download their stuff. This gets to the core of the Frightful Five’s indomitability. They have each built several enormous technologies that are central to just about everything we do with computers. In tech jargon, they own many of the world’s most valuable “platforms” — the basic building blocks on which every other business, even would-be competitors, depend.

• Alibaba Teams With Nvidia in $1 Billion Bet on Cloud Computing: Alibaba Group Holding Ltd. will work with Nvidia Corp. on cloud computing and artificial intelligence, and plans to enlist about 1,000 developers to work on its big-data platform during the next three years. The arm of China’s biggest e-commerce operator, known as AliCloud, will boost investment in data analysis and machine learning, it said in a statement Wednesday. AliCloud is staking $1 billion on the belief that demand for processing and storage from governments and companies will boost growth during the next decade as its tries to compete with Amazon.com Inc. in computing services. The investment also reflects Alibaba’s own appetite for information processing as China’s online-retail market grows to 10 trillion yuan ($1.5 billion) by 2020, according to Bain & Co. The push into of cloud computing, where software and services are provided to customers via remote data centers the size of American football fields, prompted Alibaba to open its second data center in Silicon Valley in October and prepare its first in Europe. AliCloud is now extending its scope beyond basic cloud-computing services. It co-founded a quantum computing laboratory with the Chinese Academy of Sciences to help secure its data centers and develop machines capable of even faster calculations. The company will team up with Santa Clara, California-based Nvidia to provide customer support in the areas of deep-learning and high-performance computing, AliCloud said in a statement. AliCloud generates revenue mostly by charging clients a fee for using its computing infrastructure. For now, it contributes a mere sliver of total revenue, with computing and Internet infrastructure accounting for 3.1 percent of sales in the June quarter according to data compiled by Bloomberg. By comparison, Amazon Web Services’ revenue rose a better-than-expected 78 percent to $2.1 billion in the third quarter.

• News Corp denies rumors of Twitter bid: Rupert Murdoch's News Corp said rumors about the company's interest in buying microblogging site Twitter Inc or building a stake in it were untrue. Twitter's shares, which rose as much as 14 percent on Wednesday, pared some gains and closed up 4.1 percent at $17.38. The stock rose from a record low after unconfirmed chatter about News Corp's interest in Twitter circulated on Wednesday. The rumors intensified after a CNBC segment, tech website Re/code said. The social media site was evaluated as a takeover target because of the company's shrinking stock price

• How Amazon Is Slowly Building a World in Which It Takes Very Little Effort to Shop  'Replenishment' service nabs GE, other brands: If you use all of Amazon's technologies in the near future, you almost won't have to leave your home. And you won't even have to push buttons to get your household needs fulfilled. The Seattle-based retailer today revealed that General Electric, printer brand Brother and glucose-monitor player Gmate Smart are the latest brands to partner with Amazon Dash Replenishment. The 3-month-old program lets appliances and gadgets order products without any help at all. For instance, GE's washers that utilize what's called "smart dispense technology" can be programmed to automatically order detergent when the owner is running low on his or her go-to brand. You don't even need to push one of those Amazon Dash buttons the e-commerce giant unveiled in April. Essentially, the Replenishment system will send the order through your Amazon Prime account via its namesake mobile app—think items you always need like dog food, coffee beans or grounds, ink cartridges (when it comes to Brother), blood-sugar testing strips (for Gmate Smart), water filters for purifying pitchers, dish-washing soap, etc.  No effort required, and if Amazon CEO Jeff Bezos gets his way with drones, very little human energy will be spent on delivering such items to your home. A new commercial world is emerging, indeed. Other brands that were already a part of Dash Replenishment include Whirlpool (for its high-tech dishwashers) and hand sanitizer Purell. The initiative builds on Amazon Echo, the 11-month-old speaker system with voice-control technology that lets folks order goods just by talking into the device. 

Daily Tech Snippet: Wednesday, January 20

• Why an Ex-Google Coder Makes Twice as Much Freelancing: With a talent war raging, companies from Airbnb to Pfizer are paying top dollar for the services of independent programmers. James Knight recently made an unorthodox career move for a 27-year-old coder: quitting a well-paid gig writing software for Google to go freelance. No more catered lunches, gold-plated benefits or million-dollar views from the search giant’s Manhattan office. Knight is willing to sacrifice those perks because as an independent he’s pulling down about twice as much as he did at Google. Plus, he has more freedom. In March, Knight and his wife plan to travel to Spain and hopscotch across Europe—all the while writing code for a dating app and a self-portrait app, among others. "I’d rather control my own destiny and take on the risk and forgo the benefits of nap pods and food," Knight says. Amid an accelerating war for tech talent, big companies and startups alike are paying top dollar—as much as $1,000 a hour, according to a person who gets coders gigs—for freelancers with the right combination of skills. While companies still recruit many of the best minds, they're turning to independent software developers to get a stalled project moving or to gain a competitive edge. In some cases, the right person can be the difference between a failed and successful product. Last spring, Aaron Rubin hired a freelance coder through recruiter Toptal for about four weeks to help get ShipHero, his cloud-based logistics startup, off the ground.  "To find someone that talented in New York in three days was never going to happen," Rubin says. "Every talented engineer I know has a job.

• Netflix global push grabs more customers than expected; shares jump 7%. Netflix said revenue rose 22.8 percent to $1.82 billion in the December quarter.Netflix's aggressive push into international markets won more customers than the video streaming service and its investors expected last quarter, sending its shares surging 7 percent. The dominant online video company said on Tuesday it had 74.8 million subscribers at the end of December and forecast 6.1 million more through March, fueled by its expansion this month into virtually every country except China, where it is exploring ways to launch its service. Shares of Netflix rose 7 percent to $115.42 in after-hours trading.New customers overseas are countering slowing growth for Netflix in the United States, the company's biggest market. It added 1.56 million U.S. subscribers in the fourth quarter, below the 1.65 million it forecast, and less than 1.9 million a year earlier. 

• IBM forecasts weak earnings for 2016; shares slide:  Revenue fell 8.5% to $22.06 billion. International Business Machines Corp forecast weak earnings for this year after reporting an 8.5 percent fall in fourth-quarter revenue as a strong dollar and tepid IT spending weigh on Big Blue's results. Shares of the company, which receives more than half its revenue from markets outside the United States, fell 3 percent in extended trading on Tuesday. IBM has been shifting away from hardware by selling low-margin businesses such as low-end servers and semiconductors to focus on high-growth areas such as security software and data analytics, besides cloud-based services. Yet the new businesses have so far failed to make up for revenue lost to divestitures. IBM's fourth-quarter revenue fell to $22.06 billion in the quarter ended Dec. Revenue from "strategic imperatives", which include cloud and mobile computing, data analytics, social and security software, rose about 10 percent in the fourth quarter. Net income fell to $4.46 billion, or $4.59 per share, from $5.48 billion, or $5.51 per share, a year earlier. Up to Tuesday's close, IBM's shares had fallen 18.5 percent in the past 12 months.

• AMD revenue forecast misses market estimates:  Revenue fell 22.7 percent to $958 million. Advanced Micro Devices forecast first-quarter revenue below analysts' estimates, due to lower demand for its graphic chips used in consoles and an economic slowdown in China. Shares of the company, which is in the process of selling some of its assets to cut costs, fell 7.7 percent to $1.80 in extended trading. AMD has been shifting to gaming consoles and low-power servers, but progress has lagged Wall Street expectations due to intense competition from Intel Corp and Nvidia Corp. China accounted for 42.2 percent of AMD's revenue in 2014. Revenue fell 22.7 percent to $958 million but still came above analysts' expectation of $954.7 million. Up to Tuesday's close, AMD's shares had fallen 13 percent in the past 12 months. The company's net loss narrowed to $102 million, or 13 cents per share, in the fourth quarter ended Dec. 26, from $364 million, or 47 cents per share, a year earlier.

• Twitter Stock Hits New Low Amid Struggles to Keep Website Up: Twitter Inc. shares slumped to a new all-time low after the company’s website suffered disruptions, shutting out millions of users and underscoring concerns about the company’s efforts to boost its audience and sales. Services including search and the news stream were unavailable for more than five hours after the company’s software engineers made changes to the service that lets people post and share 140-character status updates. The stock fell 7 percent to $16.69 at the close on Tuesday, well below the price of $26 at its November 2013 initial public offering. Users of Twitter’s mobile applications and website experienced a string of outages since Friday, as the company tweaks its features and services to improve the user experience and address a slowdown in growth. The glitches come at an inconvenient time for the company, which has to prove its value to any new users and keep existing ones from leaving in frustration. “The issue was related to an internal code change,” Twitter said on its website. “We reverted the change, which fixed the issue.” Services including search and the news stream were disrupted, according to the company’s performance status website. The top trending hashtag for about the past two hours was #twitterdown. Prior to the latest round of issues, Twitter’s last outage was about two months ago. Twitter’s stock has tumbled more than 28 percent in January, following a 35 percent decline in 2015.

Daily Tech Snippet: Tuesday, January 19, 2016

• Social media ‘buy buttons’ are n't off to a great start, but they might still be big: In the past year, there’s been a flurry of experimentation with “buy buttons,” a way for social-media sites to allow users to purchase cocktail dresses, throw blankets, candle-making kits and sundry other items from retailers without leaving the social network. Pinterest launched “buyable pins” in June, the same month Instagram released its similar “shop now” feature. Those offerings joined ongoing tests by Facebook and Twitter for similar ­functionality. The rush by tech giants and retailers to join the buy-button arms race would suggest that these businesses see money-making potential. And given how much time people spend on social media — an estimated 1 of every 5 minutes spent on a mobile phone in the United States is on Facebook or Instagram, for example — it would be logical to assume that these buy buttons are bringing retailers a blast of online sales. But this holiday season, social channels accounted for 1.8 percent of overall online sales, according to data from Custora, whose software platform is used by many retailers. That’s just a tiny sliver of purchases, and it’s not even growing: In 2014, Custora found that social media led to 1.9 percent of sales during the same time period. But even if buy buttons have not had an explosive launch, experts say they could prove to be a crucial solution to some of retailers’ biggest online shopping problems. Right now, stores are seeing a massive “conversion gap” on mobile devices, meaning that there has been a surge in the number of people browsing sites from mobile devices, but only a small share of them are actually making purchases. In studies, shoppers frequently say they don’t buy on their smartphones because it is a hassle to enter payment information and go through a checkout process on the small screen. Buy buttons could also help retailers re-create the idea of the impulse buy for the online era. On the web, a shoppers’ journey so often begins with a search in Amazon or Google for a specific item. That has made it hard for retailers to do what they’ve long done in stores with elaborate window displays and sweet treats near the checkout counter: Persuade you to buy something eye-catching on a whim.

• Son's SoftBank Vision at Risk as Sprint Goes From Bad to Worse: The acquisition of Sprint Corp. was supposed to help Masayoshi Son realize his vision of transforming SoftBank Group Corp. into the world’s most-valuable company. Instead, the 2013 deal has become his biggest setback so far, dragging down SoftBank shares and cutting into the billionaire’s wealth. SoftBank tumbled yesterday to its lowest level since the Sprint deal closed 2 1/2 years ago. Son’s fortune has shrunk by $3.2 billion over the past 12 months, according to the Bloomberg Billionaires Index, as the Japanese company’s stock plunged. SoftBank paid $22 billion for a controlling stake in the No. 3 U.S. wireless operator at the time. That investment has lost $7.3 billion in value, according to SoftBank, and Sprint is now the No. 4 carrier.  At the same time, a slowdown in China brought down shares of Alibaba Group Holding Ltd., SoftBank’s biggest holding, by 22 percent last year. “There will always be fans of SoftBank, it’s just at this moment in time, no one cares --it’s out of fashion,” said Andrew Clarke, director of trading at Mirabaud Asia Ltd. in Hong Kong. “They have too many concerns about Sprint and Alibaba because those shares are being crushed.”

• Upstarts Are Leading the Fintech Movement, and Banks Take Heed: Ryan Craine hates carrying cash and finds writing checks to be a headache. He doesn’t do much of either anymore — he mostly uses his smartphone to pay for things. Mr. Craine, a 28-year-old tech support worker in Washington, D.C., uses Apple Pay at the stores and restaurants that accept it. About 20 times a month, he turns to Venmo, a digital wallet for transferring money from one person to another, to pay his share of rent, meals, groceries and utility bills. To refinance his student loans last year, he went to an online lending start-up, Earnest. Mr. Craine’s money choices point to the millennial-led shift toward new digital financial services, a change in behavior that threatens to upend the consumer banking industry. The popularity of the services has left the major banks rushing to adapt, even as they have regained their footing after the financial crisis. Americans in their 20s and early 30s, analysts say, offer a glimpse of tomorrow’s banking market. “Their relationship with the financial system is very different — it’s an electronic one, on their smartphones,” said Mark Zandi, chief economist at Moody’s Analytics. “That can and will be very disruptive to the banking system.” Money is pouring into so-called fintech start-ups. And major technology companies — Apple, Google, Amazon, Facebook and Samsung — are all entering consumer banking, typically starting with digital payment apps. Investment worldwide in start-ups focused on retail banking markets rose to nearly $6.8 billion in 2015, according to CB Insights, a research firm. That is more than triple the $2.2 billion in 2014. In 2010, 40 percent of Americans with bank accounts visited a physical branch once a week, while only 9 percent made a mobile transaction weekly, according to survey research by Javelin Strategy and Research. By 2014, the percentage reporting weekly visits to bank branches fell to 28 percent, while the weekly mobile banking share tripled, to 27 percent.

• WhatsApp drops $1 subscription, studies making businesses pay: The world's most popular messaging service, WhatsApp, is dropping its token $1 fee still levied on some users as it experiments with making businesses pay to reach their customers, Chief Executive Jan Koum said on Monday. In addition, the Facebook-owned communications service expects in the coming months to offer complete encryption of messages, in a move to ensure the privacy of user conversations that is likely to draw further criticism from some governments. The authorities in the United States, Britain and elsewhere say the growing prevalence of encryption on services such as WhatsApp and Apple's iMessage, hamstring their ability to monitor criminal suspects or thwart militant plots and have threatened to pass new laws to block these changes. WhatsApp, the service that offers free text, picture and video messages, has been slowly working to develop end-to-end encrypted communications services for more than a year. It has already introduced full encryption for users on Android phones. "We are a couple of months away from calling it done," Koum said, noting that once completed, WhatsApp will represent the world's largest service offering completely private messaging. "Soon we will be able to talk more about this," he said. Once fully introduced, WhatsApp will be the largest encrypted communications service in the world, he noted.

Daily Tech Snippet: Monday, January 18

• Modi Offers $1.5 Billion Fund, Tax Breaks for India Startups: India said it will set up a 100-billion-rupee ($1.5 billion) fund to encourage startup businesses and pledged to ease regulations for entrepreneurs, as Prime Minister Narendra Modi strives to create the jobs needed in a developing nation of 1.3 billion people. Startups will get tax breaks such as income-tax exemptions for the first three years, quicker patent applications, a credit guarantee program and easier routes to wind up if they fail, Modi said at a government conference for entrepreneurs in New Delhi. The fund will be established over four years. "The government should not interfere in startups," Modi said on Saturday to an audience that included billionaire Masayoshi Son, the founder of Japan’s SoftBank Group Corp., and Uber Technologies Inc. Chief Executive Officer Travis Kalanick. "India’s youth should be a job creator, not a seeker."

• Jawbone Raises $165 Million at Half Its Last Valuation: Jawbone, the once-hot wearable technology start-up, said on Friday that it had raised $165 million in funding at a valuation of $1.5 billion, or roughly half the amount that the company was valued at as recently as 2014, continuing a burgeoning trend of start-ups raising money at lower values than before. When private companies raise money at a lower value than they had previously, the event is known as a “down round.” On Thursday, Foursquare announced it had raised a $45 million round of venture capital — which people familiar with the terms have said was also a down round, with Foursquare valued at $250 million, less than half of the $650 million it was valued at during its last round in 2013. Down rounds are increasing as Silicon Valley sobers up somewhat after a frothy period. In the last quarter of 2015, there was a major investment slowdown; funding to private companies dropped 30 percent from the previous quarter, to $27.3 billion, the research firm CB Insights said. Mutual fund investors have also recently marked down the valuations of other high-profile private companies like Zenefits, Dropbox and Snapchat. Down rounds, like the ones that Jawbone and Foursquare have raised, tend to destroy value for all of the pre-existing shareholders, including employees who own the company’s private stock. It has been a tumultuous year for Jawbone, which is based in San Francisco. The company’s Up fitness band line faces stiff competition in a crowded market for wearable technology that is dominated by Fitbit and Apple, according to the research firm IDC. Last year, Jawbone laid off employees as part of a restructuring. The company raised nearly $300 million in debt from the money management firm BlackRock last April.

• As Delivery Startups Cool, Food-Delivery Startup DoorDash Eats Its Words in Fundraising Talks: The company lowered its ambitions by cutting as much as $400 million off its proposed valuation to investors. In meetings late last year, DoorDash pitched venture capitalists on an investment that would value the food-delivery company at $1 billion, people with knowledge of the matter said. The company is back on the fundraising trail for that same round, except this time it’s slashed its lofty goal to as low as $600 million, according to the people, who requested not to be named because the discussions were private. If DoorDash closes the financing at the terms proposed to some investors recently, the valuation would be around the same as the one from the last round in March 2015, which was $600 million, the people said this week. The talks are ongoing, and the terms could change again, they said. A spokesman for DoorDash declined to comment. The comedown for DoorDash shows delivery startups may be losing some of their allure. Such businesses are costly to operate and often take on huge losses in pursuit of growth. Instacart, the grocery-delivery company that was valued at $2 billion by investors, raised prices in December, a move it attributed partly to “changing market conditions.” It also cut staff, according to Re/code. Good Eggs, which works with farmers to deliver fresh produce, closed all of its operations outside San Francisco in August.

• Alphabet (formerly known as Google) Shakes Up Its Robotics Division:  Google’s robotics division has been plagued by low morale and a lack of leadership since the unit’s founder left abruptly in 2014. Now Alphabet is cleaning it up. Over the last two months, Alphabet, the new holding company that separated Google from its collection of speculative projects, has reframed the robots effort, moving it from a stand-alone division inside Google to a piece of the X research division. The company has also hired Hans Peter Brondmo, a technology industry veteran who last worked at Nokia, to help with management. A reorganization of the robots group is one of several recent moves inside the X division, which used to be called Google X but was rebranded with the Alphabet reorganization and recently unveiled a new logo. A range of companies, including tech competitors like Amazon and car manufacturers, are signaling their interest in robotics. X has several projects in varying degrees of completion, but has lately been “graduating” them as stand-alone companies or preparing them for such a move. The life sciences group, for example, is now called Verily. X also recently hired an auto industry veteran to lead its self-driving car effort — called Chauffeur internally — and noted that the project was a good candidate to be spun out. Robotics has gone in the opposite direction for reasons that are personal and practical. The division was created in 2013 by Andy Rubin, who led the development of the widely used Android operating system software, and it has been without a leader since Mr. Rubin left in 2014 to start a technology incubator that helps young start-ups turn their ideas into businesses. After starting the robotics division, Mr. Rubin quickly went on a buying spree, purchasing a number of promising companies, including Boston Dynamics, the maker of experimental military robots, and Schaft, an elite group of Japanese roboticists from the University of Tokyo. But while the companies were promising, Mr. Rubin invested in several technologies that had industry observers scratching their heads about his overall direction. Mr. Rubin originally said that the robotics division would be a 10-year moonshot, and when he was in negotiations to acquire companies he talked about the possibility of the driverless Google car rolling up to your house and the Google robot jumping off the back bumper. Google’s robotics effort stalled after his departure, going through a variety of leaders, including James Kuffner, a Carnegie Mellon roboticist who has since joined Toyota’s research and development laboratory in Palo Alto, and Jonathan Rosenberg, who is a troubleshooter for Larry Page, the Google co-founder who is Alphabet’s chief executive. Many in the industry say it is likely to be awhile before companies, Alphabet included, can get through the many technological and regulatory hurdles that stand in the way of robots becoming a huge business.

• Xiaomi Misses Smartphone Sales Target by 10% on China Slowdown: Xiaomi Corp. sold more than 70 million smartphones last year, falling well short of its target and prompting founder Lei Jun to tell employees he was refocusing research efforts into “cool stuff” like robotics and virtual reality. The Chinese startup had a stated goal of selling 80 million devices. Xiaomi originally predicted selling 100 million units, but then changed that after China set its lowest growth target in 15 years and copycat vendors started taking away market share. The miss was a blow to company morale, Lei said in an e-mail to employees. “We set a target of 80 million and, before we knew it, it became an obligation,” Lei said. “We changed under this pressure, and everyone’s faces gradually lost all traces of humor.” The smartphone maker was one of China’s most exciting startup stories of past years, with a valuation of $45 billion that trailed only that of Uber Technologies Inc. Xiaomi thrived through online sales of budget-priced devices with advanced components, overtaking domestic competitors and challenging Apple Inc. and Samsung Electronics Co. for supremacy in the world’s biggest market. Xiaomi’s market share has been pinched by competitors including Huawei and Meizu, said Jeff Pu, an analyst at Yuanta Securities Co. They are among the Chinese vendors that have flooded the Internet with ultra-thin phones offering similar features and prices to Xiaomi’s Mi 4i and Redmi Note 2. Huawei said it shipped more than 100 million smartphones last year as it expanded in the U.S. and Europe, defying an industry slowdown. Pu expects Xiaomi’s sales growth to slow to 10 percent this year. “With sales growth slowing, Xiaomi’s valuation will be hurt,” Pu said. “It could even face a down round, as investors are less willing to pay.”

Daily Tech Snippet: Friday, January 15

• Intel’s Earnings Fall; Despite Exceeding Investor Expectations, slowing data center revenue growth sends shares down 5%: Intel Corp's (INTC.O) strong quarterly profit beat was overshadowed by concerns about slowing revenue growth in its highly profitable data center business, sending its shares down about 5.6 percent in after-market trading. In quarterly earnings reported by Intel on Thursday, the company’s revenue was up slightly from the same period last year, but money from data center chips was up markedly. Intel reported that its net income in the fourth quarter of 2015 fell 1 percent to $3.6 billion, or 74 cents a share, from the year-earlier quarter. The company said revenue climbed 1 percent, to $14.9 billion. The net income was above the expectations of Wall Street analysts. They had anticipated 63 cents a share on revenue of $14.8 billion, according to a survey of analysts by Thomson Reuters. For all of 2015, Intel revenue was $55.4 billion, down 1 percent from 2014. Net income was $11.4 billion, down 2 percent. Intel’s share price was down about 4 percent in after-hours trading Thursday evening. Intel still gets 59 percent of its revenue from chip sales to PC makers like HP Inc. and Dell, just as Microsoft and other makers of PC software count on the demand for new PCs to sell their products. Now PCs are a tough business: On Tuesday, the market research firm IDC said 276 million PCs were shipped worldwide in 2015, a drop of 10.4 percent from 2014. On Thursday, Intel said data center chip sales, not just to clouds but to older kinds of computing, rose 4 percent in the fourth quarter of 2015. Along with Intel’s much smaller businesses in memory and sensor chips for devices, data center chips accounted for than 60 percent of the company’s operating profit margin. Keeping up with Moore’s Law is increasingly expensive. In 2001 research and development, along with marketing and sales, cost Intel about $8 billion. In 2015, Intel said Thursday, it cost $20.1 billion. Last year, Intel scared many technologists when it announced that a critical next step in delivering on Moore’s Law would happen about a year later than expected. The company has since released numerous charts showing this was a temporary blip. If it was more than a blip, developers of those self-driving cars, connected drones and other new devices will also struggle to make improvements. Relax, said Stacy Smith, the chief financial officer of Intel. “Moore’s Law is the heartbeat of our company,” he said. “It is the core of our competitive advantage.”

• Amazon Can Now Ship Packages From China to the U.S. by Sea - Enters the Ocean Freight Business: Amazon's China subsidiary has registered in the U.S. to operate as an ocean freight forwarder, an entity that organizes the shipment of goods from a supplier or factory in one region — say, China — to a company or customer somewhere far away, like the U.S. The registration was unearthed by Flexport, a San Francisco-based logistics startup that published a blog post on the news today. “Amazon China now has the appropriate paperwork to provide ocean freight services for other companies,” the blog post read. “This is Amazon’s first step toward entering the $350 billion ocean freight market.” The move comes as Amazon continues to make inroads in controlling more of what happens after a customer clicks “Buy” to ultimately cut down on shipping costs and improve speed and reliability of deliveries. In the blog post, Flexport CEO Ryan Petersen suggests that Amazon’s competitive advantage over old-school freight forwarders will be the automation of some steps of the shipment process through software, thus cutting labor costs along the way.

• You Already Knew Parents Post on Facebook More Than Others. Now Find Out How Much:  Its an old joke that moms and dads love to post photos of their kids on Facebook. But thanks to the social network's research with Ipsos Media—they surveyed 8,000 people in eight countries—and Facebook's internal data analysis, we now know just how true that idea is. Some of the more interesting findings came from its U.S.-based study. For instance, new American moms post 2.5 times more status updates, 3.5 times more photos and 4.2 times more videos than nonparents, per Facebook's internal stats. And hey, the updates work: New parents' posts (those from moms or dads) about their babies get 37 percent more interactions from family members and 47 percent more interactions from friends than their general posts. And more than most people, new moms and dads worldwide seem to be uploading posts from their smartphones. The global end of the research—which included 1,000 people from the U.S., U.K., Canada, Mexico, Spain, Brazil, Germany and Australia, respectively—found that new parents use Facebook mobile 1.3 times more often than nonparents, Facebook found.

Daily Tech Snippet: Thursday, January 14

• Parallels Between Netflix and Amazon: Netflix has grown substantially over the last few years, now claiming more than 70 million subscribers who pay about $8 to $10 a month for access to a large library of movies and TV shows. Last year the streaming service’s stock was the best performing of the Standard & Poor’s 500-stock index, rising 140 percent. And its prospects keep looking brighter: Last week, Reed Hastings, Netflix’s goateed chief executive, announced he would make his movies and TV shows instantly available to almost every country in the world (the big exception, for now, is China). The move nearly doubled Netflix’s potential market — the service is now accessible to more than 540 million households worldwide with broadband Internet access. On paper, Mr. Hastings’s plan to take on the traditional TV industry has long sounded slightly nutty, as delusional as Jeff Bezos’s strategy at Amazon to overrun retailing once seemed. Netflix’s plan is certainly high risk — it is spending billions to create and license content, it is fighting determined media incumbents across the globe, and it owns none of the pipes leading into people’s homes. (Among Netflix’s many competitors is Amazon itself, which has its own growing and well-regarded original-content division) A capacity for surprise is the first and most obvious similarity between Netflix and Amazon. There are lots of others.  Like Amazon, Netflix is amassing a cache of intelligence on what customers want, and it’s using that data to create content that appeals to a wide range of demographics globally. And finally, Netflix, like Amazon, is a flywheel that keeps spinning faster: As it gets more subscribers, it gets more data and more money to fund more content, which in turn helps it bring in more customers, and on and on, ever faster. Netflix barely ekes out a profit now, but the bulls say that as the flywheel spins, it will eventually begin earning enormous sums.

• GoPro Issues Weak Q4 Revenue Estimates, Plans to Cut 7 Percent of Workforce - Stock down 20%: GoPro had a hard time selling cameras in the fourth quarter last year, and there are major layoffs planned at the camera maker and action sports media company. Wall Street did not take the news well. After a brief suspension in trading, the company’s stock is down more than 20 percent in after-hours trading. A release from the company says it anticipated $435 million in Q4 revenue and $1.6 billion in revenue for the 2015 calendar year, coming in way below what was expected. As a result, the company plans to cut 7 percent of its workforce. Additionally, the company’s top media exec, Zander Lurie, is leaving his job and moving onto the GoPro board. In email obtained by Re/code that CEO Nick Woodman sent to GoPro employees, Woodman places the blame for the layoffs on the “launch and pricing” of GoPro’s $399 Hero 4 Session camera last year: "Today’s announcement reflects the issues we faced in 2015, largely related to our launch and pricing of HERO4 Session. While we clearly made a mistake pricing Session at $399 (more specifically I made the mistake, it was my decision), I’m proud of how we responded. We recognized the problem, price adjusted to $299 … recognized that wasn’t enough and price adjusted again to $199 which positioned Session as the best entry-level product we’ve ever made." GoPro’s stock has dropped precipitously over the last year as it has struggled to sell more cameras and develop its media business.

• The big fund manager mistake of 2015? Being de-FANGed:  Missing out on the hot technology stocks known as the "FANG" group last year came back to bite some well-known mutual funds. Funds that avoided Facebook, Amazon.com, Netflix and Google - now Alphabet – dramatically underperformed peers that loaded up with the fast-rising tech stocks, according to a review by Thomson Reuters’ Lipper unit. In fact, despite a volatile year in which active managers faced shifting trends in many sectors, it seems that simply choosing to overweight the FANG group was the path to beating the market. Without them, the S&P 500 Index would have declined 2.7 percent last year; instead it fell 0.7 percent, according to Goldman Sachs Global Investment Research. For the year, among 228 funds reviewed by Lipper, those that had less than 5 percent exposure to the FANG group fell 1.3 percent on average; funds with more than 10 percent exposure rose 6.4 percent. Shares in Amazon and Netflix more than doubled last year as both added more content and subscribers to their competing video-on-demand-services. Facebook rose 34 percent as the social media giant continued to increase mobile ad revenue, while Alphabet also increased revenue and showed more cost discipline, boosting its shares 47 percent. Of the four, all but Amazon have outperformed the S&P 500 so far in 2016 through Tuesday, although it is far too soon to say if the group will repeat its performance for investors in 2016.

Daily Tech Snippet: Wednesday, January 13

• Uber Invites Developers to Build Apps for Customized Passenger Distractions: Uber, the huge ride-hailing service, delivers millions of rides to passengers. Now the company wants to give people something to do while they’re in the car. On Tuesday, Uber introduced a way for smartphone app developers to create “trip experiences” for riders. The idea, the company says, is to give riders tailored information and entertainment during their time in an Uber vehicle. Uber gave a few examples of how it might look. Upon entering the vehicle, riders could receive a quick news briefing or perhaps be served with a music playlist built to last the length of their ride. “What if developers could also offer users of their apps new ways to enjoy themselves — or get stuff done — while they’re on the road?” Chris Saad, head of product on Uber’s developer platform, wrote in a company blog post. “These integrations help make life simpler and easier for people to get around.” Uber has long been selective about how it works with partner apps and companies. It has struck deals with Facebook, Foursquare and OpenTable to allow users to hail rides from inside the companies’ apps. Uber is also working with a handful of retailers in some cities for its delivery service, UberRush. For Uber, the goal is to make the user experience more pleasant than a usual ride, which may in turn drum up repeat business and affinity for the company’s brand. The company has struck similar partnerships in the past, such as one with Spotify, in which users can select the songs being played during their Uber rides. This approach invites developers to work directly with Uber to submit and test their ideas, but Uber will have final say over whether a developer’s trip experience will be allowed. It is a different, more cautious approach than that taken by companies like Facebook and Twitter, both of which have had strained relationships with third-party developers in the past. The announcement coincided with Uber’s first hackathon in Bangalore, India, where the company is soliciting developers for new integration ideas.

• Tech Funding Slowdown Hits Venture Capital Firms: Venture capital firms raised less money and closed fewer U.S. funds last year, according to data from the National Venture Capital Association, a trade association. With less capital to invest, the decline from 2014 could signal an even tighter funding environment for technology startups this year. Venture capital decreased to $28.2 billion last year, from $31.1 billion in 2014, according to the report from the NVCA and Thomson Reuters. The 235 venture capital funds that closed in 2015 represent a 13 percent decline from 2014. While venture capitalists invested more money into private tech companies in 2015, the number of investments declined, according to research firm according to research firm CB Insights. This suggests that venture investors are chasing fewer but larger deals. Tiger Global closed a $2.5 billion venture fund in November. If the firm's recent investments in Flipkart, Ola, and Airbnb are any indication, Tiger's new fund will continue to make large bets in late-stage private companies. Some startups, facing a tougher fundraising environment, have decided to reduce spending, cut staff, and focus on turning a profit.

• PC shipments fall a record 10.6 percent in fourth quarter: IDC: Global personal computer shipments fell 10.6 percent in the quarter ended in December compared to a year earlier, research firm IDC said on Tuesday, the largest decline since IDC started tracking PC shipments. Longer lifecycles for PCs, along with competition from mobile phones and tablets, have continued to hobble demand, IDC said.

• Rocket Internet faces new setback with loss of senior managers: Germany's Rocket Internet is losing two senior managers, sources told Reuters, in the latest setback for a company that a year ago was considered one of Europe's best hopes for competing with global tech giants. Europe's largest internet firm, which has helped create a buzzing tech scene in Berlin, seeks to be a launch pad for stock market listings of start-ups ranging from online fashion to food delivery, but has seen its stock slide as plans to float its bigger investments have stalled. Rocket's strategy of rapidly expanding into scores of emerging markets raised the possibility that it could outflank the likes of Amazon and Alibaba as well as powerful venture capital firms. But planned flotations of Rocket start-ups have been put on ice in the past year due to a cooling market for tech initial public offerings (IPO) with investors increasingly unwilling to meet high valuations. Now it faces further upheaval with Franziska Leonhardt, head of its legal department, and Uwe Gleitz, senior vice president of corporate finance, both departing soon, according to sources close to the company, both for personal reasons. Leonhardt and Gleitz were members of the team that steered Rocket through its own IPO in October 2014, since which its share price has fallen by almost half from the 42.50 offer price. Since it started out in 2007, Rocket has set up dozens of e-commerce firms around the world, but all of its current crop are still loss-making - meaning it needs to keep eating into its cash reserves to keep them afloat, and making corporate finance a crucial department.

Daily Tech Snippet: Tuesday, January 12

• Flipkart, Amazon’s India Rival, Changes CEOs: In a move that has been rumored for some time, Flipkart co-founder Sachin Bansal has stepped down as CEO of the Indian e-commerce company, the company announced today. He will be replaced by his co-founder, Binny Bansal (no relation). Sachin Bansal will become executive chairman and “mentor the senior leadership of the company and look for new investment opportunities,” the company said in the announcement. Binny Bansal, formerly chief operating officer, will now run the business day to day. The move comes as competition for market share in India’s burgeoning online shopping industry has ramped up between Amazon, Flipkart and fellow Indian upstart Snapdeal. Amazon has promised to invest billions into its India business, which is run by Amit Agarwal, who spent two years earlier in his career working as Jeff Bezos’s right-hand man.

• Uber China Raises Financing at $7 Billion Valuation: Uber said its China division has raised financing that values that part of the ride-hailing company's operation at $7 billion. Travis Kalanick, Uber's chief executive officer, discussed the new funds at a press conference in Beijing on Monday. Uber is bumping up against local competitors around the world. Nowhere is the competition more fierce than in China, where Uber faces Didi Kuaidi. The company is backed by Alibaba and Tencent, the country’s two most valuable technology companies. Uber and Didi Kuaidi are each spending aggressively to expand, partly by subsidizing the costs of rides. In a letter to investors in 2015, Kalanick committed to spending $1 billion that year in China. It may have surpassed that figure. Didi Kuaidi said on Monday that it completed 1.43 billion trips in 2015. Uber said it increased its share of the private car market in China to 30 percent or 35 percent as of the end of 2015, from 1 percent in January 2015. (The Information reported a similar figure earlier on Monday.) Didi Kuaidi said it holds 87.2 percent of China's private car-hailing market, attributing the figure to a Chinese research firm. A recent round of financing gave Didi Kuaidi a valuation of $16.5 billion, a person familiar with the matter said in September. Uber, which owns a controlling stake in Uber China, was last valued at $62.5 billion, people familiar with the matter said in December. Uber China’s $7 billion valuation does not include the new cash. 

• Digital Display Ads to Overtake Search, Bringing a Reckoning for Google: As advertising keeps flooding over from television to digital screens, this year will mark a first: More online ad dollars will go to ads that aren’t for search results than to those that are. That’s per eMarketer, which measures this sort of stuff. A Monday report claims that spending on display ads — banners, videos, sponsored content and in-stream mobile promotions — will outpace search ads in 2016. The research firm estimates that U.S. spending on display will hit $32.2 billion this year (a 47 percent annual growth), overtaking spending on search (estimated at $29.2 billion, a 10 percent growth). That trend does not bode well for Google, which reaps the lion’s share of search ad revenue. Of course, the search giant also reaps other ad money — from its massive banner business and YouTube, primarily. But in this category of digital ads, Facebook is a far greater foe. Figures from eMarketer show that Facebook claimed just under 30 percent of U.S. display ads in 2015, more than twice Google’s share. Plus, many in the industry see Facebook’s nascent automated ad platforms as a potential threat to Google. Google knows this — that the tremendous profitability of its search business will peter out eventually. Hence the importance of Alphabet: It is scouring for some business after search.

• Israel brings tech expertise to protecting connected cars: Most cars today are equipped with some level of connectivity and self-driving vehicles are being developed. Given this level of sophistication, protecting cars from contamination with malicious software has become big business. Building on its expertise in technology, Israel is emerging as a leader in the race to keep cars secure and prevent the nightmare scenario of a hacker commandeering your vehicle. The threat appears real enough. Fiat Chrysler recalled 1.4 million vehicles to install new software last year after cybersecurity researchers showed they could turn off a Jeep Cherokee's engine as it drove. Software manipulation, albeit intentional, was also behind Volkswagen's emissions scandal. From its headquarters in Tel Aviv, Check Point, one of the world's largest cyber security firms, pioneered the computer firewall two decades ago. It hopes to repeat that success with a security capsule for vehicles. Connected cars need a two-pronged defense. First, they must make sure nothing bad gets in, like a virus sneaking through a navigation system. Then they have to keep internal communications secure to allow functions like side-view mirrors which angle down when vehicles are put into reverse.