Daily Tech Snippet: Thursday, August 18

• Pinterest Follows Rivals Into Selling Video Ads: Pinterest is finally taking the plunge that many other tech companies already have: It has started selling video advertising. Video ads from brands like Kate Spade and bareMinerals will start appearing in the virtual scrapbook-like Pinterest feed on Wednesday and into the coming weeks, and Pinterest is hopeful that ads from other brands will soon follow. The new ads will show up in a silent, GIF-like format within Pinterest’s feed, and will play with sound once clicked. Users will be able to click images, or pins, of featured products next to the videos. That could, for instance, bring them to a brand’s website or allow them to buy the product without leaving Pinterest. The move puts the social-bookmarking site in competition with the likes of Facebook, Twitter and Snapchat, as well as large digital publishers, which are all vying for the increasingly large amounts of marketers’ digital ad dollars. Pinterest allows people to save links to images and videos, known as pins, to aesthetically pleasing virtual bulletin boards, and to follow the boards created by others. It has become a popular destination for consumers looking to buy goods, particularly in areas like home improvement and cooking, and for the brands looking to reach them. Pinterest says 75 percent of the content people consume on its site comes from businesses. Pinterest, which says it has more than 100 million visitors a month, has largely been absent from conversations about videos, even as such content has boomed in popularity on its site. The company said it had seen a 60 percent increase in the number of videos saved by users in the last year. Last year, Etsy was the website with the greatest number of links from Pinterest’s Save button. Now, it is YouTube. “Candidly, the company just in general has underinvested until now in video as a platform,” Jon Kaplan, the head of global sales at Pinterest, said in an interview. “We wanted to make sure it was customized and specific to the way people use our platform. What you’re going to see going forward is a very big investment in video.”

• An Expert in Valuation Says Uber Is Only Worth $28 Billion, Not $62.5 Billion: According to Aswath Damodaran, a professor who specializes in equity valuation at NYU's Stern School of Business, Uber is running up against the roadblock that has thwarted many upstart businesses: Profit. While Damodaran thinks Uber and riding sharing will continue to expand, albeit at a slower pace, he's concerned about whether revenues will follow. China especially worries him given Uber's recent sale of its operations in that country to Didi Chuxing, its biggest rival there. The decision to exit "even if it was the right one from the perspective of saving itself from a cash war, will reduce its potential revenues in the future."  In the other places where Uber does continue to operate, there are often large discounts for riders and other special promotions. This is proof that the business model is challenged, according to Damodaran. "I believe that a significant portion of their expenses are associating with maintaining revenues rather than growing them," he says. "In effect, it looks like the business model that has brought these companies as far as they have in such a short time period are flawed, because what allowed these companies to grow incredibly fast is getting in the way of converting revenues to profits, since there are no moats to defend." Damodaran says that young companies all face a point in time that he calls the "Bar Mitzvah Moment," when the focus shifts from growth to evidence that the business model can be profitable. In his mind, that moment is right now for ride sharing. "After an initial life, where investors have been easily sated with reports of more ride sharing usage (number of cities served, rides, drivers etc.), these investors are starting to ask the tough questions about how ride sharing companies propose turning these impressive usage statistics into profits."

• Lenovo's first-quarter profit jumps 64 percent, beating estimates: China's Lenovo Group Ltd, the world's biggest personal computer (PC) maker, said on Thursday its first-quarter net profit rose 64 percent, beating estimates as solid PC sales offset tepid smartphone demand. Beijing-based Lenovo said in a filing that net profit grew to $173 million for the quarter ended June from $105 million in the same period a year earlier. That was more than the $130.1 million average of analysts polled by Thomson Reuters SmartEstimates. First-quarter revenue dropped 6 percent to $10.05 billion from a year earlier, compared with an average of $9.63 billion estimated by analysts. Lenovo consolidated its hold on the slowing PC market during the quarter. PC shipments fell 2 percent year-on-year, compared with a 4 percent decline in the broader industry. Like peer Xiaomi Inc, Lenovo has been focusing on diversifying away from intense competition in low-margin devices in China - still the world's largest handset market but affected by the slowing Chinese economy.According to researcher TrendForce, Lenovo had a 4.5 percent share of the global smartphone market in April-June, leaving it a distant seventh after top player Samsung Electronics Co Ltd's 24 percent and Apple Inc's 15 percent.