Daily Tech Snippet: Friday, March 11th

• TechCrunch Sources: India’s Flipkart in talks to raise up to $1b, likely in a down round: After years of raising hundreds of millions of dollars to tap into the burgeoning e-commerce market in India, one of the country’s biggest tech companies is facing a markdown in its valuation as it aims to pick up yet more investment. TechCrunch has learned from sources that Flipkart is looking to raise up to $1 billion in funding to grow its business and shore up against competition from local rival Snapdeal and global giant Amazon. “The funding is now delayed and should take another 3-4 months. A downround is certain,” said a source. According to our sources, one potential investor is Chinese e-commerce giant Alibaba. The company — already a backer of rival Snapdeal — reportedly met with Flipkart management in Hong Kong to discuss investing at less than $10 billion. Other sources say a round would not be this low, and more likely in the range of $11 billion to $14 billion. Alibaba’s alleged interest in Flipkart has been reported previously. Another investor that has been eyeing up a stake in Flipkart is the Fosun Group, sometimes referred to as the Berkshire Hathaway of China. It’s not clear what valuation Fosun has discussed with Flipkart.

• Box Shares Soar as Sales Rise 36 Percent on Shrinking Losses: Shares of cloud storage and collaboration company Box rose by 11 percent in after-hours trading as the company posted fourth quarter results that were better than what analysts expected. Box shares rose $1.38 to $13.90 after posting a per-share loss of 26 cents on revenue of $87 million. Analysts had forecast a loss of 29 cents a share and sales of $81.8 million. The company also finished its fiscal year with revenue of $303 million, up 40 percent year-on-year, and an operating loss of $201 million which ballooned from a $166.6 million operating loss in 2015. The company said Q1 will come in between $88 million and $89 million with a loss of between 23 and 24 cents, both of which were in line with analysts’ estimates. For the year it expects revenue in the range of $390 million to $394 million, with a loss ranging from 83 to 85 cents. It also said it expects a positive free cash flow from operations — a key milestone toward profitability — in the fourth quarter.

• Pre-Roll Ads For Virtual Reality Are Here: Virtual reality is in its “early days” — ask anyone involved in the field and that’s usually their chosen term. And as with the genesis of social media, there’s a coming mad dash of people eager for ways to cash in. On Facebook, gaming companies figured out they could spend fistfuls advertising mobile games and get paying users in return. A handful of ad veterans who rode that social media wave are now trying to replicate the success on VR. A new startup called Immserv is launching a “first-of-a-kind platform” that lets developers creating VR content promote that content with ads. Their product is essentially a YouTube pre-roll ad, just inside VR devices. Immserv is starting with Google’s Cardboard and Samsung’s Gear VR. Say you’re playing a game in your virtual headpiece (maybe this Firefly Rescue one, designed by Immserv partner Archiact Interactive). A video ad pops up at the onset or in the middle of the game, promoting another game; users are invited to download that app by using the head tracking feature in the VR device. The ads are sold on a cost-per-view basis ranging from three to five cents, said Shah. The company has been testing the ads since December and is going live with at least a dozen apps, launching in advance of the Game Developers Conference next week. Ads in VR are tricky, partly because of formatting challenges, but more critically because they risk upsetting users coming to the incipient form. “You can absolutely turn off customers if you’re not careful,” said Eric Hine, an executive producer for Archiact Interactive. But he stressed that Immserv ads in his games won’t, because they play like thrilling trailers and only run if consumers opt in. The launch also comes at the onset of a pivotal year for VR, as big tech companies hope that consumer enthusiasm for the field approaches the fervor for it inside the big tech companies. Neither Google nor Facebook, massive digital ad sellers, have announced plans to bring ads to their VR efforts. Google is testing in-app purchases and pushing the media industry to build VR content for YouTube. These may be indicators of a coming ad model, although the search giant is also pondering a subscription model across several of its products.

• Salesforce Expands Machine-Learning Service to Microsoft Outlook: Salesforce.com Inc. is taking another step forward in its partnership with Microsoft Corp., expanding integration with the Outlook e-mail program to help sales representatives streamline tasks such as scheduling meetings and responding to messages. With the new SalesforceIQ Inbox for Outlook application, Salesforce is folding its predictive technology into an e-mail service that has more than 400 million users. The app will let executives work directly from within Outlook on their desktop computers, boosting productivity by automating key steps while interacting with their customers. E-mail continues to be a crucial tool used by sales representatives when they’re trying to land a deal, said Steve Loughlin, chief executive officer of the SalesforceIQ unit. “There are all these data sources that sales reps are trying to access -- they’re drowning in the information," Loughlin said. "This is a way to pull it all together into a single place and deliver it where they are working." Salesforce is extending the reach of machine-learning technology after acquiring RelateIQ for $390 million in 2014. With Inbox, predictive tools are folded into Outlook to erase manual steps. For example, the program can juggle potential meeting times inside e-mails -- automatically adjusting open calendar spots as they fill up before e-mails are returned. The cooperation between San Francisco-based Salesforce and Microsoft broadens the companies’ growing partnership. About two years ago, the two agreed to make some of their business-software products work better together, signaling a thaw in relations between the longtime rivals. “A large number of Salesforce’s large customers are on Outlook,” Loughlin said. "This is going to be a huge opportunity."

Daily Tech Snippet: Thursday, December 3

• Startup Founders Sound Just as Pessimistic About a Bubble as Tech Journalists: There has been a lot of kvetching of late about whether or not we’re in the middle of another tech bubble, and most of the pontificating has come from venture capitalists and tech media. But what do people who launch startups actually think? According to First Round Capital’s new State of Startups Report — a survey of more than 500 founders of VC-backed companies — founders are also largely convinced we’re in a tech bubble of some sort. First Round’s findings indicate that startup leaders are having a harder time raising money and that they think it’s only going to get tougher. The report also says they believe bitcoin is one really overhyped technology, whereas self-driving cars don’t get enough attention. We’ve embedded the report in a slideshow below, but here are some key facts and figures from First Round: 80 percent of founders say they were able to raise what they wanted to in their last rounds, but virtually all of them say that it will be harder to do so in the next year. 73 percent of startup founders believe we are in a bubble, but enterprise startup leaders are twice as likely to say we aren’t (twice as many enterprise tech founders also say they’ll be profitable in the next year). No one has a clue about what the IPO market will look like in 2016: One third says there will be more IPOs, one third says it’ll be about the same and one third says there will be fewer. 90 percent of founders expect to see more tech mergers and acquisitions over the next year, which is also what’s generally expected by industry analysts and experts.

• Crazy Like a Box: Going Public Can Give Start-Ups Outsize Power: In early 2014, when the cloud storage company Box filed for an initial public offering, many on Wall Street looked at its numbers and laughed. Box’s revenues were soaring, but its losses were growing nearly as quickly. It was pouring vast sums into sales and marketing, it had less than a year of cash remaining, and executives did not anticipate making a profit for years. When Box eventually went public this January — after raising another round of private funds to delay its I.P.O. — its stock price briefly surged but has since lost about 40 percent of its value. The company reported on Wednesday that in the third fiscal quarter, it again increased sales, and it projected slightly higher sales in 2016 than it had previously expected. Now, with a stock market valuation of about $1.7 billion, Box is technically in league with the “unicorn” private companies valued at more than a billion dollars — but compared with some of those highflying start-ups, it could easily be mistaken for a pony. Dropbox, a cloud storage competitor that remains private, was valued at about $10 billion in its last fund-raising round. To many in Silicon Valley, Box’s inauspicious debut on the stock market, like several other recent tech offerings, serves as a cautionary tale. While floating an I.P.O. was once seen as a rite of passage in Silicon Valley, in the last few years it has become a much bemoaned annoyance to many tech founders. Companies are waiting longer to go public, and thanks to a surge of money from hedge funds and mutual funds looking to get in on the start-up scene, young companies have been given resources to stay private for years on end. Go out to the public markets before you’re bulletproof, the thinking goes, and you’ll get crushed. No one wants to be the next Etsy, Hortonworks or Box, all of which now trade below their I.P.O. price. But what if Box gets the last laugh? Despite the company’s languishing stock price, it’s possible that a few years from now, many in the Valley may come to look back on Box’s I.P.O. as a masterly timed bit of corporate strategy — an initially painful move that ultimately rewarded investors, improved employees’ financial stability, provided executives with independence from unpredictable private investors and pushed the company to adopt a more structured path toward profitability. To understand why, it helps to look at the market for private tech funding, and how it is affected by public valuations. Several unicorns have recently discovered that taking money from mutual funds and other large investors brings surprising public scrutiny. The mutual fund company Fidelity and others must regularly report assessments of their private-company holdings, and lately they’ve calculated that start-ups like Snapchat and Dropbox are worth less than what the funds paid for them. Dropbox’s valuation, in fact, may now be tied directly to Box’s, since large investors look at comparable public companies to help determine the value of their private investments. The same logic applies to employees. If you’re an engineer looking to work at a cloud storage company, you could go to Dropbox, where you’ll receive stock options at a lofty $10 billion valuation that you’ll have a hard time turning into actual money. Or you can go to Box, in which you’ll get shares at a relatively reasonable valuation that can also be traded on the public market.

• Ballmer Chides Microsoft Over Cloud Revenue Disclosures:  One major Microsoft Corp. investor wasn’t happy with the level of disclosure Wednesday at the company’s annual shareholder meeting: Steve Ballmer. The company should disclose profit margins and sales for its cloud and hardware businesses, Microsoft’s former chief executive officer said. “It’s sort of a key metric -- if they talk about it as key to the company, they should report it,” Ballmer, who is the company’s biggest individual shareholder, told Bloomberg at the software maker’s annual meeting in Bellevue, Washington. Microsoft reports an annualized revenue run rate -- or sales at a certain point in time carried out to a yearly rate -- for its commercial cloud business and has said it is aiming to reach $20 billion on that basis by 2018. Ballmer, who handed the reins to Satya Nadella in 2014, derided the use of run rate as “bulls---.” “They should report the revenue, not the run rate,” he said. Margin -- a measure of profitability -- is important because while gross margins for software are very high, they are far lower for things like hardware and cloud services, Ballmer said. Microsoft also said in April it would end its fiscal year with a commercial cloud gross margin of 44 percent. Though it reports revenue and margin for some of its cloud businesses, it doesn’t provide a total sales number for cloud. Ballmer said he has discussed the issue with the company and that after almost two years out of the CEO job, he can’t even guess what these numbers are. “We enjoy a regular dialogue with Steve, and welcome his input and feedback, as we do from our other investors.” said Chris Suh, Microsoft’s general manager for investor relations. Ballmer also criticized Nadella’s answer to an audience member questioning the lack of key apps, like one for Starbucks, on the company’s Windows Phone. Nadella responded by citing the company’s plan to appeal to Windows developers by allowing them to write universal applications that work on computers, phones and tablets, targeting a larger array of devices than just Microsoft’s handsets that have just a single-digit share of the mobile market. “That won’t work,” Ballmer commented as Nadella spoke. Instead, the company needs to enable Windows Phones “to run Android apps,” he said.

• Uber launches taxi-hailing button for third-party apps:  Online taxi-hailing service Uber [UBER.UL] said it would allow third-party app developers to add a 'Ride Request' button within their apps for free. Developers would need to register their apps on Uber's website to get access to the code to add the button, which users can tap to request a ride. To entice developers to use the feature, Uber said it would pay $5 for every new U.S.-based customer that uses the button from the developer's app. Earlier this year, Uber had partnered with Zomato, an India-based restaurant finder, to add a "Ride there with Uber" button on the restaurant page. Last year, Google Maps also integrated Uber within its app to allow users to book a ride.

Daily Tech Snippet: Monday, April 20

• As Advertising on Facebook gets Expensive, Some US Advertisers Switch back to TV: In the pre-Facebook era, with no budget for TV, newspaper or radio advertising, this would have meant we had no feasible way to gain quality exposure at a large scale for years. The Facebook advertising platform changed the course of that fate: We could now bootstrap our marketing — and that was revolutionary. Facebook offered a genuinely disruptive solution with three core strengths. First, it was one of the only platforms that allowed you to accurately measure your results in real-time, letting startups do what they do best — be agile. Second, it provided a superior level of targeting. Want to advertise only to women aged 20-23, who live in Minneapolis, have an annual income of $40K, drive a Mini Cooper and listen to Kendrick Lamar? You got it. To put this in context, to this day, Twitter doesn’t even know the gender of its followers. Third, and most importantly, combining real-time measurable results and superior targeting meant we could scale up quickly. Our marketing dollars on Facebook went a long way, and accurate targeting strategies on our end allowed our tiny budget to catapult the business to $1 million revenues in 2012. Facebook users are clicking more, and advertisers are paying for more clicks. But what are users really clicking on? Facebook calculates its CPCs as cost per every single click the user makes, whether it’s a Like, a share, or a visit to the brand’s website. But in the world of direct-response advertising, where “engagement” is an obscure term (whose impact on either sales or brand awareness no one knows how to measure), Likes and shares are worth absolutely nothing. This is how the real surge of Facebook prices is disguised: For us, Facebook CPCs — cost per any Facebook click — went up 50 percent from January 2014 to January 2015. But our real CPC value — cost per Facebook click to our website — went up by a whopping 127 percent in the same time period. That means that our real Facebook prices have more than doubled YoY, and a sizable chunk of that price increase is due to a service of Likes and shares valued at zero. Large corporate brands are unaware that a hefty share of their Facebook spend is attributed to Likes and shares; newcomers and the biggest spenders on Facebook don’t fully realize what they’re paying for. Same goes for Facebook’s targeting. Yes, Facebook offers superior targeting, but unless you’re running a narrow-niche business, the benefits of targeting have their limits. If I had a business selling on-demand $10K caviar jars that deliver only to Manhattan’s Upper East Side, I would be very excited by Facebook’s granular targeting. But the biggest spenders on Facebook are mass-market brands looking for mass-market exposure, and while they may have the option to target by specific neighborhoods, elementary schools or favorite books, they have no business reason to do so. Facebook may be developing more granular targeting capabilities, but its biggest spenders don’t really need it. Big spenders on Facebook are paying a premium for a service they don’t use or need. Today, with its 2014 $6 billion advertising revenues in the U.S. alone, Facebook is exhibiting all the alarming symptoms of a bubble: a service traded in high volumes at inflated and economically irrational prices. we took the plunge and launched a national TV campaign on MTV, Bravo, Lifetime and other networks. When the results were in, we had to rub our eyes to believe it: The CPAs on TV weren’t that far off from Facebook. If I needed any further proof of the Facebook bubble and its irrationally inflated prices, there it was: Acquiring new customers on Facebook with an expert online team, optimized spend and single-image creative was almost as expensive as a full-fledged TV campaign, with third-party agency fees, not-yet-optimized spending, and three different pricey video creatives. In 2015, we have scaled back on our Facebook spend by almost two-thirds and plan to divert that budget into TV advertising. And we’re not alone. Other startups such as Birchbox, Dollar Shave Club and BaubleBar are going into TV, as well, and at least in our case, this is entirely at the expense of Facebook.

• Three Months After IPO, Box, Provider of Cloud-Computing Services, Faces Make-or-Break Moment: Box conducted an initial public offering in January, but had already raised more than $500 million privately. It employs 1,200 people and is considered on the cutting edge of a new generation of companies that provide services to big business customers over cloud-computing systems. Now comes the hard part — survival. Box today is worth $2.1 billion, but losses are continuing to add up while revenue is not growing enough to suit Wall Street’s tastes. The company’s shares are down 25 percent since it went public. And rival services from tech heavyweights like Amazon and Microsoft threaten Box’s business. In its last fiscal year, Box lost $167 million on revenue of $216 million. That was a 74 percent revenue gain from the year before, with a 5 percent bigger net loss. This year, revenue is expected to grow by about 30 percent, a marked slowdown that Mr. Levie hopes the new developer strategy may also turn around. As of its latest earnings report, in March, Box had $330 million in cash. Mr. Levie and his company are nearing a make-or-break point others in this generation of young companies are also likely to soon face: Find a way to cut those losses and stay ahead of deep-pocketed competition or disappear. For Box to compete, it has to get other people to build great things on what it has built in the same way Apple and Google got app makers to create tools that made their mobile software indispensable. At a company conference this week, Box, which has so far focused on Internet data storage and collaboration technology, will explain how it plans to help other businesses build their own cloud services. The goal is to create a so-called ecosystem that ensures continued growth just as Microsoft did with PCs and Apple did with the iPhone. If the plan does not work, it is doubtful that Box will survive as an independent company, and Mr. Levie, for all those high hopes, will become a footnote, someone with a great idea who could not quite turn it into a lasting business.

• AMD Q2 earnings: Stock Drops 10%, Most Since July After Outlook Misses Estimates: Advanced Micro Devices Inc. fell the most since July after the chipmaker’s revenue forecast fell short of analysts’ estimates. Second-quarter revenue will be between $968.2 million to $1.03 billion, the Sunnyvale, California-based company forecast Thursday in a statement after markets closed. Analysts had predicted $1.14 billion, according to 23 estimates compiled by Bloomberg. AMD shares slid 10 percent to close at $2.58 on Friday as the Nasdaq Composite Index fell 1.5 percent amid a broad decline for stocks. AMD is trying to break away from more than 40 years as a cheaper alternative to Intel Corp., the world’s largest chipmaker. Sales from custom chips that AMD sells for video-game consoles such as Sony Corp.’s PlayStation and Microsoft Corp.’s Xbox haven’t made up for falling demand for personal-computer processors.

• China fines Alibaba $129,000 for pricing violations: China's e-commerce giant, Alibaba Group, has been fined 800,000 yuan ($129,000) by the price bureau in eastern Zhejiang province for violations by third-party sellers during promotions on its e-commerce platforms. Since Alibaba turned "Singles' Day", a November 11 Chinese response to Valentine's Day, into an online shopping festival in 2009, the event has grown to similar proportions as Cyber Monday and Black Friday in the United States. Sales of more than $9 billion were achieved at last year's event, and the company has copyrighted the phrase "Double 11", a reference to the date (11/11), which in turn, refers to the status of single people. "The company has been fined 500,000 yuan ($81,000) for matters related to Singles' Day pricing by third-party sellers on our Tmall marketplace in 2013 and 2014 and 300,000 yuan($48,000) for pricing in other promotions in 2013 and 2015," Alibaba Group said in a statement on Friday. While pricing is handled by third parties, not directly by Alibaba, the group said, it would nevertheless reinforce pricing rules and regulations with sellers to protect consumers. The 27,000 vendors featured on Alibaba's Singles' Day shopping sites hope to boost sales and gain customers, but some have complained that discounts and cut-throat corporate rivalry undercut the benefits. Alibaba has had occasional difficulties regulating its sprawling e-commerce empire, which now includes online markets such as Taobao; Tmall, a platform for larger retailers linked to Taobao; group-buying site Juhuasuan and the original flagship platform Alibaba.com, which links exporters with foreign buyers. Alibaba shares have lost more than a fifth this year, with analysts citing concern about counterfeits along with lackluster third-quarter earnings and waning investor excitement after last September's record-setting $25-billion IPO.

• Offline to Online: Indonesian conglomerate Lippo prepares for a drive into e-Commerce: Indonesian conglomerate Lippo Group has appointed Credit Suisse and Bank of America Merrill Lynch to lead its first round of funding, worth $200 million, for its e-commerce push. Lippo, controlled by the Riady family, has also chosen Rothschild as its financial adviser for the transaction. The funding will be used to "dominate e-commerce in Indonesia," it said in a statement on Monday. Lippo plans to launch payment, chat and other online services early next year as it expands in the nascent e-commerce industry of the world's fourth most populous country, director John Riady told Reuters last month. Lippo has already earmarked $500 million for a new online department store, and investment in services planned for the first quarter of 2016 will be on top of that, Riady said.

• Rakuten Ventures invests in push notification platform startup: Rakuten Ventures, the investment arm of the Japan-based ecommerce titan, announced today that it has made an undisclosed seed investment in a US startup that’s made a push notification platform aimed at mobile app and game developers. That startup is OneSignal, which today rebrands from GameThrive. “If the opportunity arises, Rakuten Ventures would love to see the [OneSignal] team partner up with Rakuten Group to utilize the company’s capabilities,” he adds. Viber, which Rakuten acquired in February 2014, has 236 million monthly active users at the last count, surpassing the much-hyped Line app. While most people are coming to hate spammy push notifications as much as banner ads, they’re still considered by many mobile app developers as a great tool for engagement – to give people a little nudge and some kind of enticement to get back into their app or game. The simple fact is that monetization is a lot harder if people don’t open your app all that often. “Push notifications are a key part of every single mobile application since they are easy to use, have low barriers for user opt-in, and have significantly higher visibility than email messages,” explains George Deglin, the CEO of OneSignal. “Most of our clients use our service to send occasional messages to their users to re-engage users by encouraging them to complete an action or to tell them about new features. We also have many clients using our service for transactional notifications, such as telling users when it’s their turn in a multiplayer game.” The team has recently been working on HTML5 push notification support in Google Chrome and Firefox. “With this, our developer audience will soon expand outside of mobile to include anyone with a website,” adds Deglin.

• Facebook Seeks to Edge Out YouTube - Pushes Publishers for Exclusive, Optimized Content: Hosting exclusive programming appears to be Facebook's latest move toward becoming a dominant player in streaming video. BuzzFeed and ABC's Jimmy Kimmel Live also recently struck a deal with Facebook, while a number of other publishers say they have projects in the works. There is a strong push to provide exclusive content to Facebook, which the social network is "aggressively" asking for, say several publishers contacted by Adweek. One publisher who requested anonymity noted that while posting a YouTube link to his video on Facebook produced weak results, the same content posted directly to Facebook led to millions of views. Facebook, he said, had "no desire" to see YouTube's preroll ads on its platform as it affected the user experience. "Most companies know that a best practice on Facebook is that an image of a video performs better than a direct link [to a third-party player]," noted Paul Kontonis, executive director of the Global Online Video Association. "But Facebook native video performs better than everything." While Facebook has done a limited number of video ad deals, publishers have been told traditional ads are on the way. In the meantime, sources said the social network will announce the expansion of branded-content program Facebook Anthology at a meeting with publishers, brands and agencies in New York on April 22. Anthology connects advertisers with publishers to create Facebook-native content—Budweiser's 2013 Made in America partnership with Vice, for example. Other Anthology participants include Vox, The Onion and Funny or Die. The finely tuned targeting capabilities around Facebook video are grabbing the attention of marketers. And no wonder. Facebook targeting by age, gender and location boasts up to 94 percent accuracy while its video player can derive deeper insights and metrics than other competitors, including YouTube, per Universal McCann. Still, said Kevin Cronin, partner, search and social at UM, YouTube remains the leading platform for driving views overall. He cautions that if Facebook is asking publishers for exclusive content, marketers creating branded content might balk at having to limit that content to a single platform. James Crolley, media director at Starcom MediaVest, noted that while Facebook has an autoplay feature, videos can easily be passed over in a feed. The challenge, he said, is "it does require creative to be far more impactful."

Daily Tech Snippet: Friday January 23

• Amazon buys an Israeli chip startup for $350-370M; Annapurna Labs makes chips optimized for the cloud business: (More coverage here and here) Amazon agreed to acquire Israeli semiconductor company Annapurna Labs, seeking to improve performance within its Amazon Web Services cloud unit. A deal has been reached but hasn’t yet closed, said Mary Camarata, a spokeswoman at Amazon Web Services. She declined to comment on the terms. Acquisition talks were reported earlier by Israeli newspaper Calcalist, which said the purchase price could be as much as $370 million. Annapurna Labs develops microprocessors that allow fast data traffic for power-efficient computing and storage servers, according to the newspaper. Seattle-based Amazon, the world’s largest online retailer, is constantly seeking to improve the cost and performance of the equipment in its data centers and has been hiring more semiconductor engineers to add to its capabilities, James Hamilton, a vice president of Amazon Web Services, said in a November interview. The unit rents out computing power on its servers to businesses for access through the Web.

• Google is gearing up to sell wireless service directly to customers as a mobile virtual network operator (MVNO), by acquiring excess network capacity from Sprint and T-Mobile and reselling it to customers under its own brand. This is the same approach used by Cricket Wireless, MetroPCS, Pure Talk, Republic Wireless and many others in the U.S., but Google’s arrangement apparently required special consideration, according to The Wall Street Journal, given the potential threat network providers perceived in giving the search giant and Android maker too much control. Sprint built a volume clause into their agreement with Google, per WSJ, which triggers if the Google wireless service acquires a large number of users and lets Sprint renegotiate the terms of the deal. There’s no word on how T-Mobile’s arrangement works, but given comments about the U.S. carrier by its parent company Deutsche Telekom, the provider is probably looking for ways to shore up the sustainability of its prolonged “Uncarrier” campaign. More analysis here: What is Google planning? The company hasn't confirmed anything, but reports suggest that Google wants to offer its own brand of cellular service by partnering with Sprint and T-Mobile, the nation's third- and fourth-largest carriers, respectively. This means you'd buy minutes and data from Google, but it would all ride over the other two companies' pipes. Is this like Google Fiber for cellphones? Not quite. With Google Fiber, Google is connecting homes to high-speed fiber-optic infrastructure that, in many places, the search giant laid down itself. But in this case, it doesn't appear that Google is building its own cell towers; it would simply resell Sprint and T-Mobile under the Google banner. Would this shake up the wireless industry? Google probably hopes so, but unlike the wired broadband industry that Google Fiber has been so successful at disrupting, the wireless industry is actually fairly competitive already. You have four major national carriers that are engaged in a major battle over pricing and customers right now. You also have dozens if not hundreds of smaller carriers who operate on the same basis as Google's rumored plan — paying the national carriers a wholesale rate and then repackaging the service into a different product. These piggyback carriers are called MVNOs, short for mobile virtual network operators. Why would Google want to become a wireless provider? If there's one thing driving Google, it's a thirst for your commercial data. Think about all the data generated by your Google searches that gets scooped up and used for advertising. Now think about all the data you generate when you place a phone call: whom you're calling, for how long, what time of day and so on. This information is incredibly personal and can be used to help build a profile of you — which, if you'll recall, is partly why everyone was so outraged when they found out about the National Security Agency's snooping into phone records. Then there's the business information Google can collect about which data plans people find most attractive and how they use those plans. And naturally, all of Google's handsets would likely run on Android, so there's that software integration.

• Box prices IPO - implied valuation of $1.6B, 33% discount to last funding as Box struggles to rise from storage play to platform play: (More here) Box Inc. is set to price its initial public offering at a discount to its latest financing round, as stiff competition overshadows the cloud-storage company’s plans to expand into new areas. The IPO comes almost a year after Box, which lets businesses manage, store and have access to data over the Web instead of through onsite computers, first filed to go public. The company’s financials in its March prospectus underwhelmed some investors just as deep-pocketed competitors including Microsoft Corp. (MSFT) were entering the fray, and the IPO was delayed. Ten months later, Box’s losses have narrowed as revenue surged 70 percent in the most recent quarter, and the company is offering new services that could help it retain and increase its customer base. The company, led by 29-year-old Aaron Levie, is still valuing itself below the level it fetched in a July private-financing round, betting the combination of its turnaround plan and cheaper price will lure buyers. “Investors are either going to have to buy into that story that they can diversify their business, or that this is coming cheap and that there will be consolidation,” said James Gellert, the president and chief executive officer of Rapid Ratings International Inc., which uses quantitative models to grade securities. Box, based in Los Altos, California, is seeking as much as $163 million from the IPO, scheduled to price Jan. 22. It is offering 12.5 million shares for $11 to $13 apiece, according to a Jan. 9 filing with the U.S. Securities and Exchange Commission. Those terms indicate a valuation as high as $1.6 billion, reflecting a 33 percent discount to the $2.4 billion Box was valued at during a private round by investors including TPG Capital and Coatue Management LLC. The market for file sharing and synchronization software is forecast to grow 23 percent a year on average to $2.3 billion in 2018, market researcher IDC said in a report looking at 2013. The enterprise side of the market, where Box fits, is growing slightly faster at 27 percent a year. Box had 14 percent share in the overall market, behind Dropbox Inc. with 27 percent and Microsoft with 17 percent. The challenge for Box, said IDC’s Maureen Fleming, is that Microsoft has been dropping prices for its OneDrive and including it free for customers who are signing up to use its Office apps online. That means many corporate customers decide to at least try OneDrive, curbing Box’s growth rates. Fleming regards Box as superior to OneDrive for companies looking for cloud-based systems but said product quality doesn’t always matter to chief information officers in the market for software. In response to those price wars, Box has created ancillary services on top of storage to differentiate its offerings. They include programs to help companies to build custom applications as well as security features that can be customized. The company also has a consulting arm, which helps customers navigate its services. Said Eli Lilly CIO Mike Meadows: “They are doing the right things and saying the right things,But we haven’t come across the use case that would drive us using them in more of platform mode rather than just a storage mode.”

• Reddit's Pick for New Ad Leader Shows the Site Is Getting Serious About Mobile Hires Zubair Jandali away from Google. The company hired Zubair Jandali from Google, who started this month as Reddit's first vp of sales. Jandali had been with Google since 2009 when the company bought ad network AdMob, where he also worked. His hiring is yet another sign Reddit is serious about developing a mobile advertising presence. Reddit recently bought Alien Blue, the app that lets readers access Reddit on mobile, to hone a more sophisticated approach to smartphones and tablets. Alien Blue is Reddit's first in-house app. Now, it has a vp of sales with experience in mobile advertising to go along with the product. "Mobile is definitely one big area of investment for the company, so my background certainly plays into that," Jandali said in a phone interview this week. Reddit offers brands two ways to advertise on its site, which reaches 150 million people a month: banners and sponsored headlines. Headlines are the items that users and brands post to Reddit, and users can vote up or down on whether they like them. The user-submitted headlines that accumulate the most positive votes rise to a higher position on the page, but brands pay for top placement. There are over 8,000 "active" user-generated groups on the site called subreddits dedicated to different categories; they can attract fans of brands, movies, science fiction or just about any interest you can imagine. Advertisers can target a subreddit or buy ads on the front page of the site, which gets 50 million views a day, Jandali said. For instance, on Wednesday TBS promoted a headline on reddit.com at the top of the page for the show King of the Nerds. Jandali said visitors who click on sponsored headlines can spend up to five minutes in the posts. Jandali reports to CEO Ellen Pao, who took the role after a shake-up late last year that saw the exit of the former CEO and the return of co-founder Alexis Ohanian to board chairman. The ad sales teams are based in New York, Los Angeles and San Francisco.

• Twitter pleads with power users not to use Instagram: Twitter appears to be sending out a message to a group of very high-profile users suggesting that these users post photos directly to Twitter instead of sharing through Instagram. Mashable secured a screenshot of the prompt, which shows the aesthetic differences between sharing an Instagram link and posting a photo directly through Twitter. In 2012, Instagram shut off Twitter Cards integration, meaning that the images would no longer appear in-line on the Twitter feed. Instead, Instagram photos shared out to Twitter would simply show as an Instagram.com link and push the user to the website for viewing. At the time, many people were upset that Instagram would interfere with the user experience for Twitter. It’s also worth noting that parent company Facebook has always displayed and still proudly shows Instagram images right in the feed. The original backlash over Instagram shutting down Twitter integration has long been forgotten, and in many ways, Instagram has won. In December, Instagram announced that it had surpassed 300 million active users, surging past Twitter’s 284 million active users. Twitter, which is older than Instagram, has struggled to keep up with the young gun in the media department. Twitter has released countless updates to the web product and the mobile apps to try to bring more attention to images and videos. It added a tab under user profiles to view media only, and put more focus on images that are used on profiles, like the addition of the Facebook-style header image and the now-larger profile photos. The company also added photo filters and editing tools long ago to deal with Instagram’s exodus from the feed in 2012. This latest message from Twitter to its mega-users, asking them to post photos from the app itself, only shows the severity of that struggle as consumers hungrily consume more and more multimedia content.

• Button, a mobile start-up, looks to deep link apps with commerce: It took years for the web to become what it is today: a sprawling, interconnected network of sites endlessly linking back and forth to one another. It will likely take years for the same thing to happen to smartphone applications, which are mostly stuck in silos, disconnected from one another. One New York-based start-up believes it can help speed that process. “The mobile app world is so very fragmented that for users, it makes interactions between apps much more difficult than they should be,” said Michael Jaconi, chief executive of Button, which announced a $12 million round of venture financing on Thursday morning. “Our thesis is, can we connect the mobile economy in a smarter way?” Button’s value proposition is largely technical: The company wants to create the plumbing behind what’s known as deep-linking between apps that make sense to be connected. So for example, if a customer books a table at a restaurant using Resy, a restaurant reservation app, Button could suggest you book a ride to the restaurant using Uber, the ride-hailing service, and link the customer directly to the Uber app to request a ride. That connection may come with a commerce-based incentive — say, a $30 credit toward an Uber ride. Button makes its money based solely on the amount of traffic it drives to its app partners. The idea, Mr. Jaconi said, is similar to what Google did for search more than a decade ago. When a user wants to find something specific, they type in a search query and Google serves up a list of suggestions, along with a series of advertisements. Google has made billions capitalizing on what technologists call the moment of intent — that is, the exact time when a person wants to see a paid advertisement. Button believes it can pinpoint that moment of intent inside apps, a problem that Google has yet to crack. “The future, we think, is one where we’re no longer living in a world of typing, but rather in a world of taps,” Mr. Jaconi said. “Using your phone, we’ll be able to infer what you want to do next based on your location, the time of day, the context of the other apps you’re using.” “It’s increasingly difficult for app developers to rise above the noise and acquire users, and then re-engage these users over time,” said Chris Moore, a partner at Redpoint Ventures, a venture capital firm that led Button’s recent funding round. “Button enables a new channel for user acquisition and engagement.” Button is not the only company taking on deep app links. Facebook wants its deep-linking solution, announced last year, to become the standard for developers. And start-ups like Branch Metrics, URX and Quixey offer different approaches to the same problem as well.

Daily Tech Snippet: Monday January 12

• JD.com and Tencent back the same horse - to invest $1.55 billion in Chinese auto e-commerce site Bitauto: Chinese auto information website operator Bitauto Holdings Ltd said JD.com Inc and Tencent Holdings Ltd would invest about $1.3 billion in the company, sending its shares sharply higher in early trading on Friday. E-commerce company JD.com and Tencent, best known for its communications app WeChat, will also invest a total of $250 million in Bitauto unit YiXin Capital Ltd. JD.com, China's No. 2 e-commerce company after Alibaba Group Holding Ltd, will invest $400 million in cash and about $750 million in resources to Bitauto, whose sites offer sales data and other information on new and used vehicles as well as customer reviews. Tencent will pay $150 million for its shares.

• Infosys weighs smart uses of its ~INR 35,000 Crore cash pile; stock up 7% on strong earnings (Q3 Rev INR 13,796 Crore, +6%, NI INR 3250 Crore, +13% Y/Y): Under new CEO Vishal Sikka Infosys, once a trendsetter for India's more than $100 billion IT outsourcing industry, has made a push for new age technologies such as machine learning and artificial intelligence, which the CEO has said will help Infosys hit annual revenue growth rates of 15-18 percent over time. On Friday, Infosys said it was also using its workforce more efficiently, with a utilisation rate of 82.7 percent excluding trainees, its highest in 11 years. Attrition, or the number of people leaving or retiring, fell in absolute terms to 8,900 employees in the third quarter from 10,100 in the quarter before. India’s second largest software company reported a 13 percent on year increase in net profit to Rs 3,250 crore and 6 percent rise in revenue to Rs 13,796 crore for the quarter ended December, sending its shares soaring about 6 percent yesterday. The company’s cash and cash equivalents stood at Rs 34,873 crore as on 31 December. With a change in the top leadership, there are expectations that the company will start using this cash more productively. "We are interested in acquisition of small innovative companies. We are not interested in acquiring technologies from yesterday, but in acquiring technologies of tomorrow," Sikka had told analysts in a recent interaction. 

• Amazon takes 1.3 days on average to return cash, the quickest among online stores, and customers respond, according to new research from StellaService Inc., which tracks e-commerce data. While most Web stores will only pay once a return parcel is on its way, Amazon offers instant refunds for some purchases, issuing immediate credit and 30 days to return a product. Instead of tying up cash and preventing customers from buying other things, Amazon’s aim is to get people spending again. That’s especially critical during and after the annual holiday shopping season, when gift returns spike and consumers are predisposed to buy merchandise. Fast refunds are also important in Internet commerce because shoppers buy things they haven’t touched or tried, making return rates higher than in retail outlets. “Amazon is killing it on refunds and others should follow suit,” said Eduardo Vilar, chief executive officer of Returnly Technologies Inc., a San Francisco company that researches retail returns. “Customers who are given the right experience on a return are more loyal shoppers.” Amazon’s instant refund, which was rolled out quietly last year, gave the Web retailer the fastest refund-processing time out of 40 companies measured by StellaService. Amazon’s closest competitors in refund-processing speed include online furniture and home goods retailer Wayfair Inc. (W) and personal computer and printer-maker Hewlett-Packard Co., which both took about three days to issue refunds, according to StellaService. The average refund-processing time of the 40 companies tracked by the researcher was more than nine days.

• Offline retailers bet on smart in-store tech: Neiman Marcus is reinventing the mirror: The retailer announced Thursday that it has installed a MemoryMirror from MemoMi in its Walnut Creek, Calif. store. It plans to install two in its San Francisco store later this month and then two in Dallas. The mirror* allows for shoppers to compare in real time how different outfits look on them. After trying on clothes in the fitting room, a customer can head to the sales floor where the special “mirror” is located. A customer controls the mirror with an iPad, instructing it when to start recording or take photos. Then he or she can try on additional outfits, and compare video footage. Two outfits can be looked at side-by-side, and the mirror stores as many clips as the customer wants. So a customer could try on a dozen looks, take videos of each, and quickly compare how each look. There’s also the option to e-mail videos or photos to friends for their input, or share on social media. The MemoryMirror isn’t technically a mirror, but a 70-inch screen with a camera on top that films the consumer. MemoMi founder Salvador Nissi Vilcovsky says the secret sauce is its perspective distortion correction, which automatically sizes the mirror to fit the customer. So no matter if you’re standing four feet in front of it or 10 feet away, it proportions the mirror so the customer fills the shot. “The world is going in the direction of in-store devices and personalization. We want to make these devices as cheap as possible and give these services not only for luxury brands,” said Vilcovsky. Nordstrom and Rebecca Minkoff have also dabbled in the smart fitting room space, using eBay technology. MemoMi is working on adding features to its MemoryMirror that allow a customer to see how they look in different colors or patterns of the clothes they’re trying on. Vilcovsky also envisions one day technology such as this being available on consumers’ televisions.

• Box is finally close to $162M IPO, valulation likely lower than last round of funding: After months of delay, Box is finally close to making its stock market debut. Box, the online data storage provider, disclosed on Friday that it was seeking to raise up to $162.5 million in its initial public offering, as the company embarked on a road show for potential investors. (If demand proved high, the company could sell additional shares and raise up to $186.9 million.) In an amended prospectus, Box said that it planned to price its shares at $11 to $13 a share. At the midpoint of that range, the company would be valued at about $1.4 billion — less than the valuation the company fetched in a private $150 million fund-raising round last summer. Founded in 2005, Box became one of the most prominent independent providers of online storage and file sharing services, particularly for corporations. But the company has been somewhat overshadowed by the much bigger Dropbox, a member of the 11-digit club of start-ups with a $10 billion or more valuation, and rival file-sharing offerings from technology juggernauts like Google. According to its prospectus, Box still hasn’t turned a profit. It lost $121.5 million in the nine months ended Oct. 31, a slight narrowing from the same time in the previous year. Sales, however, jumped 80 percent during that same period, to $153.8 million. And Box has asserted that it has won clients like General Electric, DirecTV and AstraZeneca. The company first filed to go public last spring, but put off its I.P.O. plans as a sudden investor distaste for risky technology companies rippled through the markets. Since then, the start-up has waited for a more propitious time to make its stock market debut. Bankers and companies are betting that time is now. Last month, a number of technology start-ups, ranging from the peer-to-peer lending juggernaut Lending Club to the data analysis provider New Relic, enjoyed strong trading debuts. The company is expected to begin trading on the New York Stock Exchange under the ticker symbol “BOX.”

• Americans teens switching to Snapchat, but adults are still loyal to Facebook; Instagram, Pinterest gaining, Twitter and LinkedIn losing: Pew study of user engagement: American Teenagers may be spending more time on messaging services like Snapchat, but American adults are still increasing their use of social networks, according to a new survey released Friday by the Pew Research Center. The Pew survey, conducted in September, found that 52 percent of Internet users regularly logged on to at least two social networks, up from 42 percent in Pew’s August 2013 survey. The percentage of adults using Facebook, the most general social network, stayed about the same, at 71 percent of the online population. But Pew found significant increases in the number of people using Instagram, a photo service owned by Facebook; Pinterest, a visually oriented service for “pinning” favorite items; LinkedIn, a business networking service; and Twitter, a microblogging service oriented toward real-time news and information. Facebook users were the most dedicated, with 70 percent logging in at least once a day. Nearly half of Instagram users visit the site daily. Twitter, which has reported slow user growth in recent quarters, saw fewer visits from its American users, according to the Pew study. Only 36 percent of them visit the site daily, the researchers found, compared with 46 percent in the 2013 survey. In a statement after the survey data was released, Twitter disputed the findings, saying, “Pew’s data is so wrong as to be laughable. As we said at our Analyst Day in November, 48 percent of our monthly active users in our top 20 markets use the service daily, and the U.S. is our top market,” said Rachel Millner, a Twitter spokeswoman. LinkedIn users also said they visited the site less frequently, although a dedicated core of 13 percent said they went at least once a day. What the numbers don’t reveal was the time people spent on each service. Because most social networks generate revenue from advertising, more time on the service means a greater opportunity for visitors to see ads. But the researchers did learn that for the median Facebook user, two-thirds of his or her friends weren’t “actual” friends at all. And less than half of adult Facebook users have friended their parents or children on the service.

• Cash collection can make the difference between life and death for a Saas business: how does one achieve rapid growth in a SaaS business while maintaining capital efficiency? By focusing on the timing of cash collection, not just cash spend. The timing of cash collection can drastically influence the cash consumption of a high-growth, recurring-revenue business significantly beyond what one would intuitively assume. This ultimately has implications on the attractiveness of a business or, at a minimum, the level of shareholder dilution it experiences over time and will become an increasing area of focus as the period of cheap growth capital slowly comes to an end. Let’s take two hypothetical early-to-mid stage, high-growth, recurring-revenue SaaS businesses and model them over a five-year period. We assume each company admirably grows annual GAAP revenue from $2M-$6M-$13M-$28M-$53M and enjoys a 100 percent annual renewal rate. Both companies have identical aggregate cost structures that are well over 100 percent of revenue, which is benchmarked on dozens of recent high-growth SaaS businesses we’ve evaluated or invested in, or that have gone public. As illustrated below, the two companies thus have identical GAAP bookings, revenues and operating income. The only difference is that the first company, Company M (“monthly”), is like most SaaS companies in that it gets paid cash monthly and ratably over the one year contract period. The second company, Company A (“advance”), collects the full annual contracted value in advance. The difference in cash consumption between the two companies is staggering. Company A would have burned $36 million less cash over the five-year period due to growing deferred revenue balances, to achieve the exact same revenue and bookings trajectory as Company M. This gap in cash consumption can be the difference between success and bankruptcy or moderate versus significant dilution for the founders and early investors. Company M burned more than three times the amount of capital as compared to Company A despite identical bookings, revenue growth and operating expenses. Who can afford to ignore this?

• Twitter Product Update #1: Twitter Will Launch Autoplay Video, but Here's How It Will Differ From Facebook Marketers have 6 seconds to entice users to click. Twitter is about to give marketers new ways to share videos with a feature the ad world has been asking for: autoplay. Twitter has been working on its built-in video system for months, which would finally give users and marketers a way to shoot footage within the app. However, the video capabilities will be different for users and brands. We spoke with industry insiders who saw Twitter's video pitch at CES, and here's what it will look like: Six-seconds to wow The autoplay feature allows marketers to create a six-second video preview, a quick opportunity to entice users to click. Choose wisely The six-second preview, however, does not have to be the first six of the video. Brands can take the best six seconds, the most captivating, and use that as the autoplay preview. Everyone knows that getting clicks on video is all about an exciting hook from the start. No sound to start The autoplay video will not have sound until a user clicks to watch the promoted tweet. Advertisers don't pay until they get that click. There's a lot of time to play with Brands will be offered up to 10 minutes of video time, which is an eternity in social media. Everyday users will only get 30 seconds.

• Twitter Product Update #2: Twitter Plans To Increase Revenue With Ads On Publisher’s Apps: Twitter reportedly has a new advertising strategy – sell ads within third-party apps. According to the Wall Street Journal, the social media network revealed the new plan to expand advertising revenue during a presentation at CES. The social media company is planning to sell ads within streams of tweets on other publishers’ apps and websites.” It isn’t clear which publishers have signed up so far. The WSJ says there were references to ESPN’s Sports Center app and Flipboard during the meeting. Twitter and ESPN have reportedly been chatting about the idea