Daily Tech Snippet: Tuesday, February 9

• Facebook Loses a Battle in India Over Its Free Basics Program: For years, Mark Zuckerberg has had a grander vision than just connecting the more than one billion people who already use Facebook: He wants to connect the entire world. That effort hit a major roadblock on Monday, when Indian regulators banned free mobile data programs that favor some Internet services over others. The regulations, issued after months of intense public debate over how to extend the Internet to India’s poorest citizens, effectively block Facebook’s controversial Free Basics program in the country. Free Basics offers people no-fee access to a text-only mobile version of the Facebook social network, as well as to certain news, health, job and other services. Facebook describes the program as a way to introduce the poor and the technologically unskilled to the potential of the Internet. Free Basics came out of Mr. Zuckerberg’s program for universal Internet access, which was started in 2013 under an initiative called Internet.org. The idea was to simplify phone applications to run more efficiently and to offer these apps to users in developing countries. Half a dozen of the world’s tech giants, including Samsung, Nokia, Qualcomm and Ericsson, agreed to work with Facebook as partners on the initiative. Free Basics is now in 38 countries, from Indonesia to Panama. Facebook is investing heavily in other parts of the project, including experiments to deliver cheap Wi-Fi to remote villages and to beam Internet service from high-flying drones. In India, where Facebook already has at least 132 million users, the company began offering Free Basics last year through Reliance Communications, a local mobile phone carrier. A Reliance spokesman could not be reached for comment. The program quickly became the target of critics, who said that it was an attempt to steer unsophisticated new Internet users to Facebook and other services that were working with the company. They argued that Free Basics and other so-called zero rating programs, which are a set of apps or sites that a mobile operator or I.S.P. does not charge customers to use, violated the concept of net neutrality. Facebook embarked on a blitz of paid lobbying and advertising to promote Free Basics, spending millions of dollars in media campaigns to convince locals its offering would be positive for the population. The company ran special banners in the Facebook news feeds of Indian users urging them to petition the government to allow Free Basics. Mr. Zuckerberg personally lobbied against the new rules, including writing an opinion column in The Times of India. Experts said that campaign may have had an adverse effect on Indian thinking. Locals were wary of the company’s unknown long-term plans for advertising or other parts of Facebook’s business.

• Job Site Hired Raises $40 Million and Forecasts Profit by 2017: When Mehul Patel, Hired Inc.'s chief executive officer, began talking to venture capitalists last year for the company's latest fundraising round, they were no longer interested in hearing about market potential or user growth. Investors wanted to know when the job recruitment website would become profitable. Patel tailored his pitch to highlight the ways he'd made his startup run more efficiently while showing that Hired would roughly triple annual revenue in 2016. He forecast a profit by early 2017. "The conversation had really changed from a year ago," he said. Hired faces many larger and more established competitors. CareerBuilder.com, Indeed Inc., LinkedIn Corp., and Monster Worldwide Inc. each control segments of the online jobs market. Monster generated revenue of $770 million in 2014. Although LinkedIn had a rough time last week, the site generated $862 million in just its last quarter. Hired said it has a 2016 revenue "run rate" of $100 million. (The number is generally calculated by using the performance during one period as the basis to project a full year.) Hired is cost-free for job seekers, who create profiles listing their skills and backgrounds. About 4 percent of applicants are accepted. Recruiters from companies such as American Express Co., Comcast Corp., and Facebook Inc., pay to target those high-skill candidates and send them offers via e-mail. Since it began in 2012, Hired has expanded from tech workers in San Francisco to sales, marketing, and other professionals in 15 cities. The company has acquired two small startups in Paris and Melbourne to help it continue expanding internationally. Patel said he's constantly looking for ways to cut costs. The startup has moved three times in as many years because it was unwilling to commit to a long-term lease. The chairs at the company's San Francisco office are mostly from Ikea. Patel said he bought a Herman Miller model for his home office from a startup that shut down during the first dot-com crash. "That's still my office chair," he said. "It reminds me not to let things get too crazy."

• Sacked! Twitter and Facebook Experience a Super Bowl Down Round: Sunday’s Super Bowl was, to put it bluntly, pretty boring. That was reflected on the Internet as well: Despite it being the 50th Super Bowl and most likely the last game for future Hall of Fame quarterback Peyton Manning, both Facebook and Twitter saw significantly less Super Bowl chatter than they did last year. Facebook reported that 60 million people created some 200 million posts, comments and “likes” throughout the game. Those numbers are down from last year, when 65 million people generated 265 million posts, comments and likes. That’s about 25 percent less activity for those keeping score. Twitter had it even worse. Much worse, in fact. Roughly 3.8 million people created 16.9 million tweets during the game, according to Nielsen. That’s down from 25.1 million tweets sent during last year’s game, a drop of roughly 33 percent*. In fact, Twitter didn’t even share its total tweet metrics this year like it did in 2015. The company also didn’t immediately reply to our request for comment on Nielsen’s numbers. Yes, a lousy game doesn’t help. But a dip like this is not a great sign for either platform, both of which offered new features this year intended to increase engagement for a game just like this. On Twitter, that feature is Moments, a curated stream of tweets around a particular event. On Facebook, it’s Sports Stadium, a new area of the app dedicated to following live sporting events and talking with your friends about them. (The new feature had some technical difficulties Sunday afternoon.) Twitter CEO Jack Dorsey will be hit hardest from a poor showing like this. User conversations around live events are where Twitter is supposed to dominate. This kind of regression is exactly why the company stock is at an all-time low; investors are concerned about slowing user growth and the resulting engagement. Those same investors are bracing for the company’s earnings this week, and it could have used a nice Super Bowl boost to highlight on the earnings call. Apparently it’ll need to find something else. 

• Zenefits CEO Parker Conrad Out Amid Compliance Concerns:  There’s a big shuffle happening at Zenefits today — with Zenefits CEO Parker Conrad exiting the company and COO David Sacks taking over. Conrad is also stepping down as a director of the company. In an email to employees, Sacks noted that compliance issues that have plagued the company contributed to Conrad’s exit. Zenefits has hit significant turbulence, including missing revenue targets according to a Wall Street Journal report, and also running into issues with regulators. Regulatory issues have plagued the company, as has been reported by BuzzFeed. Zenefits allowed unlicensed brokers to sell health insurance, leading to at least one commissioner to investigate the company in Washington State, according to a BuzzFeed report. Most recently, BuzzFeed reported 80 percent of the company’s deals in Washington State were done by unlicensed brokers.

• Verizon enlists AOL CEO to explore Yahoo deal: Bloomberg: Verizon Communications has given Tim Armstrong, chief executive officer of its AOL unit, a leading role in exploring a possible bid for Yahoo's assets, Bloomberg reported, citing a person with knowledge of the situation. Verizon, the largest U.S. wireless carrier, hasn't hired bankers to conduct an offer and there have been no formal talks, according to the report. Yahoo said last week that it would consider "strategic alternatives" for its core Internet business, even as it continues with its plan to revamp the business and spin it off. Yahoo's core business, which includes popular services like Yahoo Mail and its news and sports sites, could attract private equity firms, media and telecom companies or firms like Softbank, analysts had said. Verizon's Chief Financial Officer Fran Shammo said in December that the U.S. wireless carrier could look at buying Yahoo's core business if it was a good fit. Earlier this year, Verizon bought AOL Inc in a $4.4 billion deal to push into targeted advertising and mobile video. Verizon's shares were down 1.1 percent, while Yahoo's shares were down 4 percent in afternoon trading on Monday.

• Yelp posts smaller-than-expected loss; CFO to step down; Shares plunge: Consumer review website operator Yelp Inc reported a smaller-than-expected loss on Monday, but its shares slumped 11 percent, swept up in a broader selloff in the technology sector coupled with a weak adjusted EBITDA forecast. The company said results were released about 3 hours ahead of schedule during trading hours on Monday, due to an error by PR Newswire, leading to a spike in volatility in its shares. Yelp also said Chief Financial Officer Rob Krolik would step down later this year but did not elaborate. Krolik, who joined in 2011, will continue in his role until Dec. 15, 2016, or until a replacement is hired, the company said in a statement. Yelp's revenue rose about 40 percent in the fourth quarter, topping analysts' estimates, helped by the strength in its advertising business and a rise in mobile usage. Local advertising accounts in the quarter rose 32 percent to about 111,000, in line with estimates from market research firm FactSet StreetAccount. Revenue rose to $153.7 million from $109.9 million. Yelp reported a net loss of $22.2 million, or 29 cents per share, for the quarter ended Dec. 31, compared with a profit of $32.7 million, or 42 cents per share, a year earlier.