Daily Tech Snippet: Wednesday, April 19

• To Stay Ahead of Facebook, Snap Rolls Out 3-D Features for Messaging: To keep a step ahead of Facebook, Snap is introducing on Tuesday a new feature for its Snapchat ephemeral messaging service that will allow users to place 3-D cartoon objects into their videos and pictures. The technology is similar to the augmented reality used with Pokemon Go, a Nintendo game for mobile devices that overlays digital images on the physical world. Snap’s new technology, a 3-D lens, can also change and shift in response to physical objects. Snap said in a blog post that it launched lenses — which are images that people can superimpose on their selfies — a year and a half ago to give users more ways to express themselves. These features added whimsy and color to Snapchat’s messaging service, which has drawn an avid base of users and has helped propel new forms of digital advertising. Partly powered by Snapchat’s fan base and advertising business, Snap went public last month. But the company’s stock has fallen as Facebook and its many brands have copied the features that once made Snapchat unique. Instagram, Facebook Messenger, WhatsApp and Facebook all now have a feature that mimics Snapchat Stories, which lets people string together their images in an ongoing story that disappears after 24 hours. Facebook recently introduced a user interface for its app that also resembles the camera-first interface pioneered by Snapchat. It also lets people send messages that disappear, another innovation popularized by Snapchat. Facebook is holding its annual developer conference this week, starting on Tuesday. Last week, Instagram said that 200 million people were using its Stories feature each day. Snap reported an average of 158 million active daily users at the end of 2016. Snap’s share price has dropped from a high of $27 to a low of about $19, and the Facebook clones are very likely to be a concern for shareholders when Snap reports its first earnings as a public company next month.

• IBM posts first revenue miss in five quarters, shares tumble: International Business Machines Corp (IBM.N) reported a bigger-than-expected decline in revenue for the first time in five quarters due to weak demand in its IT services business, a sign that the company's turnaround could take longer than expected. Shares of IBM, whose revenue has now fallen for 20 quarters in a row, tumbled 4.7 percent to $162 in trading after the bell on Tuesday. At current levels, the stock is set to more than erase its roughly 2.5 percent gain this year. With demand for its legacy hardware and software businesses stagnating, IBM has been shifting towards cloud-based services, security software, data analytics and artificial intelligence such as its supercomputer Watson, which once defeated human contestants in the quiz show Jeopardy.These "strategic imperatives", spread across IBM's various businesses, continued to grow in the first quarter, but failed to offset weakness in the company's core operations, especially at the technology services and cloud platforms business. IBM could not close some large deals in that business, which is its largest, while a couple of large clients took their operations in-house, Chief Financial Officer Martin Schroeter said on a conference call. IBM's revenue of $18.16 billion in the first quarter missed analysts' estimate of $18.39 billion, according to Thomson Reuters I/B/E/S.IBM's net income dropped 13 percent to $1.75 billion.

• PetSmart is acquiring Chewy.com for $3.35 billion in the largest e-commerce acquisition ever: PetSmart has agreed to make the biggest e-commerce acquisition in history, putting a deal in place to snatch up fast-growing pet food and product site Chewy.com for $3.35 billion, according to multiple sources familiar with the deal. The deal is a huge one by any standard — bigger than Walmart’s $3.3 billion deal for Jet.com last year— and especially for a retail company like PetSmart, which was itself valued at only $8.7 billion when private equity investors took it over in 2015. But Chewy.com has been one of the fastest-growing e-commerce sites on the planet, registering nearly $900 million in revenue last year, in what was only its fifth year in operation. The company had been a potential IPO candidate for this year or next, but was taken out by its brick-and-mortar competitor before that. It was not profitable last year. Chewy was founded in 2011 by Ryan Cohen and Michael Day, and built a cult following for its excellent customer service, large selection and fast shipping. It had quietly raised at least $236 million in venture capital from investors including Volition Capital, T. Rowe Price and BlackRock. Its under-the-radar status was probably aided by the fact that it was headquartered in Fort Lauderdale, Florida.