Daily Tech Snippet: Monday, August 29

• China’s Murky World Where E-Commerce Meets Student Lending: Across college campuses in China, a small army of marketers is recruiting students to borrow money at interest rates many times that charged by the nation’s banks. Those without a credit history or parental approval can borrow money to buy a smartphone, pay for holidays, or get the latest sneakers through a raft of apps such as Fenqile. The market leader, whose name literally means Happy Installment Payments, has 50,000 part-time marketers across more than 3,000 universities and proudly touts the slogan “Wait no more; love what I love.” Welcome to the regulatory gray area where peer-to-peer lending meets e-commerce in China. In the last three years, tens of millions of students have taken out micro-loans with the tap of a button to buy things. Once just the realm of startups, the sector has attracted heavy hitters in China’s online industry, including Alibaba Group Holding Ltd.’s finance affiliate and JD.com Inc., which are pouring hundreds of millions of dollars into the lending model. In a nation with 37 million college students, the market is expected to reach $15 billion, according to the Beijing-based market research firm Analysys. The apps sell everything from cameras to concert tickets sourced from third-parties, charging students annualized interest rates typically above 10 percent. The loans are then packaged and sold to wealthy individuals, who find the expected return of as much as 10 percent much more attractive than the central bank’s benchmark savings rate of 1.75 percent.

• How long before Amazon forces its Indian rivals into a merger or sale? Three years into Amazon’s aggressive push in India, the country’s two home-grown e-commerce competitors are feeling the pressure. Both Flipkart and Snapdeal have raised more than a billion dollars, but have historically recorded big losses as they’ve engaged in discounting battles with each other and with Amazon. Amazon has made it clear it is willing to spend big to become the No. 1 e-commerce player in the country after failing to make a dent in another huge international market, China. Now, it seems like every week there’s a new rumor of the two homegrown players considering a merger or sale. Alibaba, which owns a stake in Snapdeal and another Indian player, Paytm, is often in the conversation. In any potential talks, however, Flipkart and Snapdeal’s frothy valuations could be a problem. Flipkart was valued last year at $15 billion while Snapdeal most recently secured a $6.5 billion valuation.

Daily Tech Snippet: Friday, August 5

• Meet the China ‘whisperers’ who get the big deals done in Silicon Valley: When Uber chief executive Travis Kalanick wanted advice about whom to hire to run his ride-hailing business in China, he asked Carmen Chang, a longtime Silicon Valley lawyer and investor who had helped a previous generation of tech companies navigate that murky territory. When Uber sold its China business to its rival Didi this week, Chang was a trusted confidante.When Lyft, Uber’s smaller rival, needed an entree into China, the company’s president turned to another Silicon Valley insider who shuttles between worlds. The introduction from Connie Chan, a partner at the venture capital firm Andreessen Horowitz, to China’s largest ride-hailing company led to a $100 million investment and partnership. Behind the scenes of an unprecedented flood of capital from China into Silicon Valley over the past two years is an elite network of brokers. These brokers do more than deal-making; they play anthropologist and cultural translator -- from coaching startup founders about the culturally appropriate place to sit at a conference room table in China to breaking down how emojis are used in Chinese apps. Their acumen is growing more valuable, entrepreneurs say, as they navigate a cast of hard-to-parse characters with alluring deep pockets and promises of big business opportunities overseas. “She is the whisperer between China and Silicon Valley,” said Matthew Prince, chief executive of Cloudflare, a web security startup, of Chang. Last year, Chang helped Prince -- whose company had given up on China in 2011 -- clinch a partnership with Baidu, China’s search giant. “There’s very few that really understand both sides.” Chang, who was born in Nanjing, China, came to the States to seek a doctorate in Modern Chinese History. She got pulled into tech industry after graduating from Stanford Law School in the early 1990s, when she got a job as an associate at Wilson Sonsini Goodrich & Rosati, the Silicon Valley firm known for its ties to the clubby venture capitalists on Sand Hill Road. One of her early clients was Masayoshi Son, the billionaire Japanese investor who founded the Japanese telcommunications giant Softbank. At the time, she said, senior management at the firm had never been to Asia, and Son “wasn’t considered important enough” to be represented by a general partner. “So he got an associate,” she says.

• Snapchat Used to Spook Advertisers. Not Anymore. When Snapchat opened itself up to advertisers more than a year ago, many initially griped that the company needed to lower its ad prices. Some were mystified about how to reach the right audience with the ads, since Snapchat did not provide traditional ad-targeting tools. Most of all, brands wondered how Snapchat could be effective when the ads — like Snapchat messages — disappeared. In the last 15 months, Snapchat has moved to respond. It introduced new ad formats. It dangled its attractive user base — the service now claims 150 million daily users, including nearly half the country’s population from ages 18 to 34 — to lure advertisers. Most important, Snapchat has persuaded brands like Tiffany & Company, Kraft Foods and Burger King that its ads let them interact playfully with this young audience.Now Snapchat faces the challenge of keeping up its nascent ad business as its early success raises the competitive hackles of rivals. On Tuesday, Instagram, the photo-sharing app owned by Facebook, introduced a near carbon copy of a Snapchat photo and video service known as Stories. A lot is riding on Snapchat’s building up its ad business. The company, which Mr. Spiegel helped found in 2011 and is now based in the Venice Beach neighborhood of Los Angeles, needs to justify a valuation of about $19 billion that its investors have placed on it. The company also faces sky-high revenue expectations; the investment bank Jefferies recently projected that Snapchat’s revenue would grow to $1 billion next year from more than $350 million this year.Mr. Khan’s biggest job was to explain why Snapchat’s unusual platform was better for advertisers. The task was thorny because Snapchat is a messaging, sharing and broadcast service where most content disappears. Companies had few comparable apps to judge Snapchat against. The potential became clearer after brands started experimenting with Snapchat’s geofilters, a tool that adds custom stickers, a type of colorful icon, to the app when people enter a certain geographic area, and lenses, which are whimsical images that transform someone’s face in the app.

• Facebook's News Feed to show fewer 'clickbait' headlines: Facebook's News Feed will show fewer "clickbait" headlines over the next few weeks, the company announced Thursday, as it seeks to establish itself as the prime web destination for news and social updates. The company receives thousands of complaints a day about clickbait, headlines that intentionally withhold information or mislead users to get people to click on them, Adam Mosseri, vice president of product management for News Feed, said in an interview. In an effort to eliminate clickbait from the site, Facebook created a system that identifies and classifies such headlines. It can then determine which pages or web domains post large amounts of clickbait and rank them lower in News Feed. Facebook routinely updates its algorithm for News Feed, the place most people see postings on the site, to show users what they are most interested in and encourage them to spend even more time on the site. The system looks for commonly used phrases in clickbait headlines, similar to how filters for email spam work, Facebook said in a blog post. It categorized tens of thousands of headlines as clickbait by looking for headlines that intentionally withheld information and those that exaggerated the content of an article. News Feed, a team of about 200 people, uses a similar classification system to determine what it should show each user, Mosseri said.

• Amazon adds several new devices to its Dash Replenishment auto ordering service: At the beginning of the year, Amazon flipped the switch on Dash Replenishment, a service aimed at bringing the instant reordering of its devoted product buttons directly to connected devices. The idea being that you don’t have to, say, order ink for your printer or batteries for your smart lock — the devices will do it for you. The retail giant has already announced a slew of different partners for the program, including Brother Printers, the Gmate SMART blood glucose monitor and a GE washing machine, all of which went live in the first round. Today the company announced a number of new additions. The highest profile of the additions is GE, which will be extending its involvement to driers and dishwashers, which will be updated to order fabric softener and dishwasher detergent, respectively, when supplies start to dwindle. Neato joins the list as well, bringing the Wi-Fi-connected robot to the service to order replacement filters and brushes, while Petcube’s Kickstarter-supported Bites camera will be able to order pet food. Also on the list are the Behmore Connected coffee brewer, Simplehuman trashcan and SmartThings platform. Even The Hershey Company has been added to the stable with an unnamed device. That should be interesting.

• LinkedIn Results Beat Expectations Ahead of Microsoft Deal: LinkedIn Corp. reported earnings and revenue that were higher than analysts expected, after the company negotiated a $26.2 billion sale to Microsoft Corp. LinkedIn said second-quarter revenue was $933 million, up 31 percent from a year earlier. The average analyst estimate was $899 million. Earnings, excluding some items, were $1.13 cents per share in the second quarter, compared with analysts’ projection of 78 cents. This may be LinkedIn’s last earnings report as an independent company, before it joins Microsoft in one of the largest technology industry deals on record. 

• As Chinese hacking abates, FireEye plans layoffs, cuts forecasts; shares plunge: Cyber security firm FireEye Inc said on Thursday it planned to lay off 300 to 400 of its 3,400 workers as it announced quarterly sales below its own forecast, due to a slowdown in demand for its services helping businesses respond to hacking attacks. FireEye's shares were down 16.2 percent at $14.02 in extended trading.Chief Executive Kevin Mandia said the company is now responding more frequently to financially driven cyber criminals, who engage in crimes such as ransomware, which are relatively simple to clean up. "The size and scope have changed. The whole remediation was more complex" when the company was responding to large numbers of state-sponsored hacks from China, he said. FireEye cut its full-year revenue forecast to $716 million-$728 million from $780 million-$810 million.Executives blamed much of the trouble on a slowdown in its services business, including its high-profile Mandiant forensics unit that helps organizations respond to cyber attacks. That division's revenue rose just 2 percent in the second quarter, compared to a 40 percent increase in the first quarter. Its total number of engagements rose, but average revenue from each one fell dramatically because work performed was less extensive. Mandia said that was due to a shift away from previous years where there were large numbers of state-sponsored espionage hackers from China attacking customers in the United States. FireEye and other cyber security firms said in June that cyber espionage attacks from China appeared to have dropped this year as the Chinese government made good on a pledge with the United States to stop supporting the digital theft of U.S. trade secrets.

• Zynga plummets 9% in after-hours trading: Social game developer Zynga tumbled 9 percent in after-hours trading following the second quarter 2016 earnings announcement after the bell today. The company reported a net loss of $4.4 million, while still beating analysts’ expectations in terms of revenue.For the second quarter ended June 30, the San Francisco-based maker of FarmVille and Words with Friends posted revenue of $181.7 million and non-GAAP net earnings came in at $0. 

• Grand Theft Auto' publisher Take-Two's revenue jumps 13 percent: Videogame publisher Take-Two Interactive Software Inc reported a 13 percent rise in revenue, helped by strong sales of its "Grand Theft Auto V" and "NBA 2K16" titles. Take-Two, like its rivals, has also benefited from a shift by players downloading digital copies of its videogames – which generate higher margins – rather than buying physical game discs. Take Two's net revenue rose to $311.55 million in the first quarter ended June 30 from $257.30 million a year earlier. Digital downloads accounted for about 55 percent of revenue in the quarter. Net loss narrowed to $38.57 million, or 46 cents per share, from $67.02 million, or 81 cents per share.

• Activision revenue surges on "Overwatch" launch, "Candy Crush" deal: Activision Blizzard Inc reported a 50.4 percent surge in quarterly revenue on Thursday, propelled by the popularity of the newly-launched "Overwatch" game and the boost from the acquisition of "Candy Crush" maker King Digital. Activision's total adjusted revenue, which excludes deferred revenue and related costs, rose to $1.57 billion in the second quarter ended June 30 from $1.04 billion a year earlier.The company's shares were up 1.4 percent at $41.40 in extended trading. Activision, best known for its "Call of Duty" and "World of Warcraft" games, released "Overwatch" on May 24 to rave reviews. The multi-player futuristic game now has more than 15 million players and has generated about $500 million in revenue to date, excluding deferrals, the company said. The company's net income dropped 40 percent to $127 million, or 17 cents per share, mainly due to costs associated with the near $6 billion acquisition of King Digital in February.

Daily Tech Snippet: Wednesday, August 3

• China, Not Silicon Valley, Is Cutting Edge in Mobile Tech: Snapchat and Kik, the messaging services, use bar codes that look like drunken checkerboards to connect people and share information with a snap of their smartphone cameras. Facebook is working on adding the ability to hail rides and make payments within its Messenger app. Facebook and Twitter have begun live-streaming video. All of these developments have something in common: The technology was first popularized in China. WeChat and Alipay, two Chinese apps, have long used the bar-codelike symbols — called QR codes — to let people pay for purchases and transfer money. Both let users hail a taxi or order a pizza without switching to another app. The video-streaming service YY.com has for years made online stars of young Chinese people posing, chatting and singing in front of video cameras at home. Silicon Valley has long been the world’s tech capital: It birthed social networking and iPhones and spread those tech products across the globe. The rap on China has been that it always followed in the Valley’s footsteps as government censorship abetted the rise of local versions of Google, YouTube and Twitter. But China’s tech industry — particularly its mobile businesses — has in some ways pulled ahead of the United States. Some Western tech companies, even the behemoths, are turning to Chinese firms for ideas.China’s largest internet companies are the only ones in the world that rival America’s in scale. The purchase this week of Uber China by Didi Chuxing after a protracted competition shows that at least domestically, Chinese players can take on the most sophisticated and largest start-ups coming out of America.Industry leaders point to a number of areas where China jumped first. Before the online dating app Tinder, people in China used an app called Momo to flirt with nearby singles. Before the Amazon chief executive Jeff Bezos discussed using drones to deliver products, Chinese media reported that a local delivery company, S.F. Express, was experimenting with the idea. WeChat offered speedier in-app news articles long before Facebook, developed a walkie-talkie function before WhatsApp, and made major use of QR codes well before Snapchat. Before Venmo became the app for millennials to transfer money in the United States, both young and old in China were investing, reimbursing each other, paying bills,and buying products from stores with smartphone-based digital wallets.

• Instagram's Snapchat-like feature allows 24-hour-limit posts: Users of Instagram, a photo-sharing app owned by Facebook Inc , can now post picture and video slideshows that last 24 hours, a feature similar to the signature function of social media rival Snapchat. Snapchat, which launched in 2011, got its initial boost from millennials, especially teenagers, who value the privacy that the app offers. Text messages disappear right after they are read, and posts expire after 24 hours. As with Snapchat, the new Instagram Stories feature allows its 500 million members to annotate their posts with emojis, doodles and texts, Instagram said in a blog post on Tuesday. The feature is the latest salvo between Facebook, which bought Instagram for $1 billion in 2012, and Snapchat, which rejected Facebook's $3 billion buyout offer just three years ago, as they try to attract more users. Snapchat is popular with younger people who want to shield their posts from the eyes of their parents, who are more likely to be on Facebook, whose 1.7 billion monthly users tend to be older. Snapchat recently surpassed Twitter Inc in daily users and is valued at around $18 billion.

• Lyft hit a record of 14 million rides last month with run-rate revenue of as much as $500 million: July was a record month for Lyft, which performed 13.9 million rides, according to a letter the company sends its investors on a monthly basis that Recode obtained.That’s 1.5 million more rides, or 12 percent more, than the company performed in June 2016 and amounts to 167 million rides on an annual run-rate basis, according to the document. The company also hit more than $2 billion in what it calls net ride value for the first time in its history, on a run-rate basis. Net ride value — not to be confused with Lyft’s revenue — is the amount passengers pay without accounting for tips and tolls. Lyft takes anywhere from 20 to 25 percent of the fare, which means the company’s run-rate revenue for the year is between $400 million and $500 million. The leaked document comes at a time when the company is under pressure to sell right after Uber sold its China operations to homegrown competitor Didi. The two companies have essentially agreed to operate a monopoly in China after years of battling for customers and riders through price enticements that made it hard to turn profit. Market dominance is more important than ever as ride-hailing startups look to turn a profit. Uber is likely to seek an IPO next year, and Lyft will have to find a buyer to help it better compete.

• Tableau Software’s Q2 earnings fall short of estimates: Data analytics provider Tableau Software reported second quarter earnings after the bell today. The Seattle-based company posted a loss due to higher than expected expenses for the quarter, while still beating analyst’s expectations in terms of revenue. For the three months ended June 30, Tableau posted total revenue of $198.5 million Tableau Software went public in May 2013 at an initial public offering price of $31 per share. At the New York Stock Exchange trading Tuesday, the company’s shares closed down 4 cents, or less than one percent, at $56.40.

Daily Tech Snippet: Thursday, July 07

• India's $4 Smartphone Seems Too Good to Be True: A little-known Indian company called Ringing Bells Pvt is set to start shipping the Freedom 251. The prototype touts a quad-core processor, a 4-inch screen and front and back cameras - at the astonishingly low price of 251 rupees (less than $4). While global brands Samsung Electronics Co. and Lenovo Group Ltd. sell devices for less than $100, the $4 smartphone is the one stirring up the internet-hungry, app-crazy hordes in a country where Apple Inc. has been unable to make a dent. With iPhones costing upwards of $700, Apple commands a mere 2 percent market share in a country where the World Bank puts the per capita income at $5,630. Brands can't make money even on $50 smartphones, so profiting from a $4 device is a ludicrous idea, say experts like Tarun Pathak, a senior analyst at Counterpoint Technology Market Research. While Micromax sells millions of cheap devices every month in smaller cities - it profits by taking advantage of economies of scale. Ringing Bells’ managing director Mohit Goel isn't counting on a profit from device sales, conceding that the company will lose hundreds of rupees on each unit, and is instead planning to recoup money through advertising and marketing deals. Goel has said the company is importing kits from Taiwan and assembling the phones in a factory in Haridwar near Delhi.Even at $4, the smartphone could still be out of reach for most because of scarcity. When Goel first announced Freedom 251 in February, the company said over 70 million jostled to register, crashing its website. Last week he said Ringing Bells will soon start shipping 200,000 smartphones to buyers picked by lottery. Other details were not available and e-mails, phone calls and text messages to Goel and his representatives in the past days went unanswered. Selling such a cheap device has attracted scrutiny along with the publicity. The prototype Freedom 251 presented to the media turned out to be produced by another manufacturer with its logos covered. Thwarted buyers protested outside the company’s headquarters, setting off inquiries by the police and tax officials. Pankaj Mahindroo, president of the Indian Cellular Association, with members including Apple and Samsung, said “We are concerned and keeping a close watch.”

• Another Tesla crash is under investigation to see if Autopilot is at fault: U.S. transportation regulators are opening a new probe of a Tesla car crash, one week afterannouncing an investigation into a fatal crash of a Tesla operating in the company’s semi-autonomous driving mode. The new investigation involves a non-fatal crash on July 1 in Pennsylvania. The National Highway Traffic Safety Administration will try to determine if the Tesla’s Autopilot functions were active at the time. The additional investigation will likely intensify scrutiny around the safety and design of Tesla’s Autopilot product, which provides some self-driving features as a software update. 

• Zomato's Results: For the year ending March 2016, Zomato posted revenues of Rs 87.5 crore for the India region, up from Rs 46 crore revenues in 2015. India accounted for 47.3% of Zomato's overall revenues that stood at 184.97 crore for FY16. The net loss for the India region however shot up to Rs 247 crore for the fiscal, up more than three times from Rs 62.3 crore loss in 2015. This is nearly half of Zomato's overall net loss of Rs 574.5 crore in FY16.In the US market that accounts for nearly 50% of its listings, the Gurugram-based company posted a net loss of Rs 327.5 crore on revenues of Rs 6.73 crore for the fiscal. This is a massive increase from Rs 33 crore on revenues of Rs 5.1 crore in 2015. Zomato had forayed into United States last year with the $52 million UrbanSpoon acquisition that was eventually folded into the company.In terms of segments, Online advertising still dominates Zomato's revenues, accounting for 91.4% of the company's overall revenues. The segment's revenues grew by 76.1% to Rs 169.1 crore for FY16, from Rs 96 crore in FY15. Revenues from online ordering was at Rs 7.5 crore for the fiscal, accounting for nearly 4% of the company's revenues. Goyal had recently said that 20% of its India revenues came from the ordering business in April this year. Subscription revenues grew to Rs 8.4 crore from Rs 0.64 crore in 2015. This includes revenues from its business app from restaurants and its Whitelabel platform among others.

• Apple Drops to Fifth in China’s Mobile Market as Locals Rise: Apple Inc. dropped to fifth place in Chinese smartphone shipments, losing ground in its biggest overseas market in a fresh blow for the technology giant. IPhones made up 10.8 percent of devices sold in May, down from 12 percent a year earlier, according to Counterpoint Research. By comparison, Chinese vendor Huawei Technologies Co. increased its lead with 17.3 percent. Chief Executive Officer Tim Cook has publicly touted the importance of China, where the company is combating a slowing domestic economy and local vendors with increasingly popular devices. The launch of the cheaper iPhone SE was meant to boost Apple’s popularity in developing markets and Cook met with China’s vice premier Liu Yandong in May. Instead, it has suffered commercial, legal and regulatory setbacks in recent months leading to lawsuits and key products getting shut down. Local brands Huawei, Vivo, Oppo and Xiaomi are now the top four smartphone makers in China with a combined market share of 53 percent, according to Counterpoint research director Neil Shah. Oppo almost doubled its market share to 11 percent. Apple’s sales in Greater China, which also includes Taiwan and Hong Kong, fell 26 percent during the March quarter compared to a year earlier, amid a slowing market.

Daily Tech Snippet: Monday, June 27

• Brexit Pounds Some Technology Companies: Online marketplace operator EBay sank as much as 8.2 percent on Friday, outpacing declines by the wider U.S. equity market as analysts singled it out for its large exposure to the U.K. and Germany. Chipmaker ARM, based in Cambridge, U.K., gained as much as 6.8 percent on calculations that a weaker British pound will make its repatriated earnings more valuable. The pound sank more than 8 percent against the U.S. currency Friday, to its lowest level in 30 years. The U.S. dollar rose 2 percent against a basket of foreign currencies tracked by Bloomberg. A strong dollar hurts mainly when proceeds from goods and services sold in foreign currencies are exchanged into dollars. That can also make it more expensive to buy U.S. tech products. EBay has the most significant exposure among U.S. internet companies to the U.K. and Europe, according a report by Needham & Co. The disruption caused by Britain’s exit from the EU and currency fluctuations could slow cross-border transactions on online marketplaces. "EBay gets 31 percent of revenue from U.K. and Germany, more than Google or Amazon," said Needham analyst Kerry Rice. "This really impacts cross-border trade more than anything. It could shift spending behavior if currency fluctuations make a purchase cost-prohibitive." ARM investors were quick to turn to its own calculations on the impact of currency moves and bet on an increase in profit. The company, which licenses chip technology and designs, gets more than a third of its sales from the U.S., 19 percent from China and another 25 percent from Taiwan and South Korea. Singapore and Switzerland supply it with more revenue than its home market at around 3 percent each, according to data compiled by Bloomberg. According to a company presentation from April, more than 95 percent of ARM’s sales are in dollars. A 10 percent move in the value of the pound against the dollar moves earnings per share by 15 percent, it said. That suggests the recent drop in the British currency could boost profit by about 10 percent for the rest of this year.

• China Tightens Internet Rules for Baidu and Other Search Engines: Chinese authorities will require Baidu Inc. and other search engines to report banned content and verify advertisers’ qualifications in its latest attempt at Internet regulation. Under rules to take effect Aug. 1, search engines operating in the country will be prohibited from providing banned information in various formats including links, summaries, cached pages, associative words, related searches and relevant recommendations, the Cyberspace Administration of China said in a statement. They will also be required to report websites and applications that contain prohibited content when spotted, the regulator said. Baidu, China’s biggest search engine, has been criticized recently for misleading users with search results. The Cyberspace Administration launched aninvestigation earlier this year after the death of Wei Zexi, a 21-year-old computer science major, who sought out a controversial treatment advertised among search results. Baidu said it would restrict the number of sponsored posts to 30 percent of a results page and establish a 1 billion yuan ($151 million) fund to fight fraud after the death of the student.

• Line, the biggest tech IPO of the year, struggles to show its growth plan can work: In delaying its IPO by two years, Japanese messaging app company Line Corp bought time to correct weak financial reporting controls, work on its business plan, bolster staffing - and left billions of dollars on the table as its valuation shriveled. Line's initial public offering in the next three weeks is set to raise about $1 billion, which given a global drought of such deals could make it the biggest tech listing this year, but skeptical fund managers point to tepid growth in Line's home market and doubts about its prospects for regional expansion. They also question whether its advertising revenue strategy will work. Fund managers who have watched Line's growth slow in a crowded global messaging app market assess the plan with caution. "I'm not interested," said Yasuo Sakuma, portfolio manager at Bayview Asset Management, which manages 270 billion yen ($2.64 billion). "Its growth outlook is very poor." "Among the four countries that it's focusing on, only Indonesia has big room for growth in use," he added. "Even there, the business outlook is not that easy." Growth in Line's monthly active users has tailed off after tripling across the world over the past three years. Last year, user numbers rose just 13 million to 218 million at the end of March, the IPO filing showed. The company isn't providing much visibility about the future either - it says in its filing that limited operating history makes it "difficult" to forecast future results. "I went to the company's meeting with investors... but nothing moved me," said a fund manager at a major Japanese asset management firm who declined to be named because of company rules against discussing individual shares. "It's not clear how it can make money out of its advertisement business." Line's likely valuation is far less than the $10 billion-$20 billion that was expected by investors when South Korean parent Naver Corp previously talked of a Line listing in 2013-2014, although Line may not have had much choice but to wait.

Daily Tech Snippet: Tuesday, June 21

• VR is the future of porn, and it’s a creepy future indeed: This got real weird, real fast. And not just because I was demoing the technology in the middle of the E3 floor, surrounded by fellow show-goers. It’s just — well, even after all the explainers in the world, it’s hard to sufficiently brace your mind for all that virtual reality porn entails. It occupied a small space, tucked in the rear of the LA Convention Center, but Naughty America may just have had the one booth capable of rivaling Nintendo’s for sheer show buzz. We must have walked by the thing a dozen times during our three days on the floor, and there was always a small army of show-goers lined up to take it for a spin. Much like, say, your standard first-person shooter, the technology is built around a POV (point-of-view) shot, putting the viewer in the place of the camera. The effect is already a bit jolting (and, at times nausea-inducing) in standard VR, but all of that really goes next level when you look down and you’ve swapped your bits and bobs with someone else’s. The company’s demo cycles through a few short clips, in which the scenery, scenarios and co-stars change, but, well, the view pretty much stays the same. It’s hard to say how much of the initial shock is due to the newness of the technology and how much is firmly entrenched in the uncanny valley, though the company told me that many attendees enjoyed the demo, strange setting and all.Once you get past the somewhat off-putting nature of swapping nether regions with a professional, VR porn does offer an interesting way forward for an industry that, like many others, has been hard hit by the prevalence of free online content.

• Apple May Soon Open Retail Stores in India: After months of delays, Apple is likely to open its first retail stores in India, a fast-growing market for smartphones where the American technology giant has little presence. New rules issued by the Indian government on Monday exempt foreign-owned companies that want to open stores selling a single brand of products from requirements that 30 percent of the content of those products come from India. The exemption, which lasts three years, can be extended to eight years in the case of companies selling “cutting edge” items, such as Apple’s iPhones and Macs. Apple, which makes virtually all of its devices in China, lobbied for months for the loosening, and Timothy D. Cook, the company’s chief executive, discussed it with government officials during his first visit to India last month.An Apple spokesman declined to comment on the issue on Monday. The company has not yet received any formal response from the Indian government on its application to open stores. By themselves, new stores will have little impact on Apple’s small market share in India, beyond serving as a marketing tool. Although Indians will buy an estimated 139 million smartphones this year, Android models that cost less than $120 dominate the market, according to the Gartner research firm.Apple says its sales in India grew 56 percent during its last fiscal quarter, but its cheapest phones typically run $400 or more. Its total annual sales in India were around two million units last year, according to Gartner.

• Chinese Curb Cyberattacks on U.S. Interests, Report Finds: Nine months after President Obama and President Xi Jinping of China agreed to a broad crackdown on cyberespionage aimed at curbing the theft of intellectual property, the first detailed study of Chinese hacking has found a sharp drop-off in almost daily raids on Silicon Valley firms, military contractors and other commercial targets. But the study, conducted by the iSight intelligence unit of FireEye, a company that manages large network breaches, also concluded that the drop-off began a year before Mr. Obama and Mr. Xi announced their accord in the White House Rose Garden. In a conclusion that is largely echoed by American intelligence officials, the study said the change is part of Mr. Xi’s broad effort to bring the Chinese military, which is considered one of the main sponsors of the attacks, further under his control. As a result, the same political forces that may be alleviating the theft of data from American companies are also responsible for Mr. Xi’s stunningly swift crackdown on the Chinese media, bloggers and others who could challenge the Communist Party.

• Wal-Mart to Buy 5% Stake in JD.com as Part of Chinese Deal: Wal-Mart Stores will acquire a 5 percent stake in Asian e-commerce giant JD.com Inc. in a deal that will reshape the U.S. retail chain’s operations in China. As part of the agreement, JD.com will take ownership of Wal-Mart’s Yihaodian online marketplace, the companies said in a statement Monday. The Chinese branch of Sam’s Club also will open a store on JD.com, and the two companies will link up their supply chains. The partnership gives Wal-Mart a fresh start in China after it struggled to adapt to a slowing local economy and a rise in online shopping. Wal-Mart Chief Executive Officer Doug McMillon has said that the company needs to succeed in China, where it estimates that 25 percent of global retail growth will come from in the next five years.A 5 percent stake in JD.com would be worth about $1.5 billion at its current stock price. Wal-Mart will receive about 145 million newly issued Class A shares of JD.com in the transaction. That deal will increase the retailer’s earnings per share by 16 to 19 cents in the second quarter, according to the statement.

• Apple to lose weighting in Russell index, shares could fall: After dropping more than $200 billion in market capitalization in one year, Apple shares could fall further as they are set to lose their weighting and be reclassified in the annual reconstitution of the widely followed Russell indexes. When all is said and done, about $1.3 billion more will be sold in Apple Inc shares at the market close on Friday, when the reconstitution of the Russell indexes takes effect, according to an analysis by Credit Suisse. Because Apple has been aggressively buying back and retiring its stock, outstanding shares have dropped to less than 5.5 billion from 5.8 billion in late June 2015, when the Russell indexes were last recalibrated, according to Reuters data. Apple's weighting in the Russell 1000 will roughly fall to 2.52 percent from 2.77 percent, Credit Suisse said. The decline is due to the combination of fewer shares outstanding and Apple's smaller part of the index's capitalization. The performance of a market-weighted index is more influenced by larger companies, like Apple. Adding to the selling pressure, Apple will be classified as both a value and a growth company at Russell. After the close on Friday, 92 percent of Apple will be considered "growth" and 8 percent "value" according to index provider FTSE Russell, splitting it between two Russell subindexes. The move matters because value managers that peg their investments to the Russell indexes will be buying Apple while growth managers will be selling. Because there are more assets benchmarked to growth than to value, there will be net selling of Apple, said Meera Krishnan, U.S. index strategist at Credit Suisse in New York. She estimated there will be over $850 million of selling in Apple out of the growth component of the Russell 1000 and about $400 million of buying from the value side.

Daily Tech Snippet: Monday, June 20

• Phone Tracking, Nude Selfie IOUs See Chinese Bare All for Credit: Talkative people pay back loans. The very talkative default. Too taciturn is no good either. Also, don’t take out a loan at 4 a.m. Those are lessons from online lenders in China that are tracking people’s behavior -- via apps on their mobile phones -- and taking it into account when deciding what their credit ratings should be. Chinese consumers don’t mind handing over personal details that would spark outrage in the West, in exchange for lower interest rates. WeLab Ltd., a Hong Kong-based online lender that makes loans in China, looks at what apps people have downloaded, where they go using the phone’s GPS tracker, their social networks and their school records. It offers discounted interest rates for each extra piece of personal information that helps profile customers for credit ratings. In Hong Kong, for example, giving WeLab access to a Facebook account gets a 5 percent discount on the cost of a loan, and access to LinkedIn gets you 10 percent off, on loans with interest rates that otherwise reach as high as 20 percent. "Chinese people have no issue handing over their personal data, giving you their credit card number, giving you their bank account," said GGV Capital’s Shanghai-based managing partner Jenny Lee, whose Silicon Valley venture capital firm has invested in data-hungry tech giants such as Alibaba Group Holding Ltd. "Look at the whole internet finance sector, people are giving you their bank statement so you can do profiling." Some are perhaps over-sharing. University students desperate for cash have been sending nude photos of themselves as collateral to several online lending platforms, according to the official People’s Daily. Typically they get loans of 15,000 yuan ($2,280) -- more if they’re doctoral students or enrolled at a famous university, the report said, and at least one loan had a weekly interest rate of 30 percent. Delinquent borrowers face the threat of their naked selfies being sent to family if they don’t pay.

• Apple says iPhones still available for sale in China: Apple  said its iPhone 6 and 6 Plus were still available for sale in China after Beijing's intellectual property regulators barred their sales saying the designs had infringed a patent held by a Chinese company. "We appealed an administrative order from a regional patent tribunal in Beijing last month and as a result the order has been stayed pending review by the Beijing IP Court," Apple said in a statement on Friday. The notice, dated May 19, banning sales of certain iPhone models in Beijing was posted on a Chinese government website. The Chinese market is vital to Apple, driving more of its sales than any other region outside the United States. But the tech giant has faced greater scrutiny there in recent months, with its online book and film services blocked by Chinese regulators earlier this year. Apple historically had enjoyed favorable treatment in China, but Beijing’s crackdown on the iPhone 6 and 6 Plus is a reminder that the tech giant is not immune to the scrutiny that other U.S. tech firms have long faced in the country, said analyst Colin Gillis of BGC Partners.

Daily Tech Snippet: Friday, 17 July

• Uber Rival’s $28 Billion Valuation Shows Size of China’s Ride-Sharing Market: The Chinese car-hailing app Didi Chuxing said on Thursday that it had brought in $7.3 billion in its latest round of fund-raising, which included Apple, Alibaba, and SoftBank as investors. The new funds give the company a total of $10.5 billion in disposable funds, and put its valuation at $28 billion, according to a person familiar with the fund-raising. That Didi’s valuation is now almost half that of the $62.5 billion valuation of its main rival in China, Uber, shows how much potential investors see in China. Yet the size of the cash infusions also underscores the market’s difficulties. In part because of China’s widespread blocking of foreign websites, the competition between Uber and Didi marks the first time in recent history a major foreign tech company has vied so intensely with a local Chinese business. In other markets the contest over ride-sharing has focused on regulation and technology, but in China it has been much more about cash, with the two companies spending billions. The most recent round has also pulled in Apple, pitting America’s biggest tech company against America’s best-known start-up, Uber, in a tricky Chinese market. Both see China as critical to growth. The fund-raising comes as executives from Didi and Uber have signaled that they are focusing on profitability in China. Since then both companies have been locked in a spending war. Though it has primarily taken the form of subsidies, both companies have also tried to develop technology specific to China, and have actively wooed both local and national government officials. Didi has focused on technology that better predicts car arrival times, given China’s unruly traffic, while Uber has developed a commute function that links drivers with riders based on where they live and work.

• Why back-up cameras haven’t stopped drivers from backing into stuff: With or without eyes in the back of their heads, drivers keep hitting things. Despite the growing prevalence of back-up cameras, federal data shows that this technology hasn't significantly cut down on cars backing into people and causing them harm. That research on so-called "back-over incidents" comes as the National Highway Traffic Safety Administration moves to make back-up cameras standard and presses automakers to add a bevy of new technologies -- from automatic braking to lane collision warnings -- to even entry-level cars to reduce accidents on the road.As car companies and even regulators increasingly lean on technology to make roads safer, the tepid success of the back-up camera is a red flag. Sure, drivers can see more of what's behind them -- the cameras reduce blind zones while in reverse by 90 percent, according to a study by the Insurance Institute for Highway Safety -- but they keep hitting things.Even with back-up cameras, drivers still don’t look around their vehicles enough when in reverse and sometimes get distracted by any number of things as their cars roll backward. Back-up cameras also often beam images to display screens in the front of the car, and drivers can become too reliant on them. Instead of looking backward and through their rearview window or checking mirrors, their eyes are glued to a screen.

• LG Electronics sells mosquito-repelling TV in India: The Indian arm of South Korea's LG Electronics Inc has begun selling a TV with a feature that it says repels mosquitoes, which can spread diseases such as malaria, Zika and dengue. The TV's "Mosquito Away Technology" uses ultrasonic waves that are inaudible to humans but cause mosquitoes to fly away, according to the company. It was released in the country on Thursday, LG said. The same technology, which was certified as effective by an independent laboratory near Chennai, India, has been used by LG in air conditioners and washing machines, the company said. The technology, which also functions when the TV is switched off, is available in two models, priced at 26,500 rupees and 47,500 rupees ($394 and $706). The TV is targeted at lower-income consumers living in conditions that would make them vulnerable to mosquitoes. It will go on sale next month in the Philippines and Sri Lanka. Kim Sang-yeol, an LG Electronics official, said there are no plans for now to market it elsewhere.

• Oracle's cloud strength boosts quarterly revenue: Business software maker Oracle Corp reported a higher-than-expected quarterly revenue as sales in its cloud business surged due to more customers. Shares of the Redwood City, California-based company rose as much as 3.8 percent to $40.10 in extended trading on Thursday. Like its rivals such as SAP SE, IBM Corp and Microsoft Corp, Oracle has focused on moving its business toward the cloud-computing model, essentially providing services remotely via data centers rather than selling installed software. Total revenue from the company's cloud-computing software and platform service rose 49.1 percent to $859 million in the fourth quarter ended May 31. It contributed 8 percent of Oracle's total revenue during thequarter. The company's total revenue fell 1 percent to $10.59 billion, beating analysts' average estimate of $10.47 billion. Oracle's net income rose to $2.81 billion, or 66 cents per share, in the quarter ended May 31, from $2.76 billion, or 62 cents per share, a year earlier. Excluding items, it earned 81 cents per share, meeting average analysts' estimate. Up to Thursday's close, Oracle's stock had risen 5.8 percent this year.

• Salesforce also made a bid for LinkedIn, CEO Benioff confirms: Salesforce was also a serious bidder for LinkedIn, the business networking site that sold to Microsoft for $26 billion this week, said CEO Marc Benioff. While he would not give details of the effort, sources said Salesforce was primarily interested in LinkedIn's recruiting business, which makes up the bulk of its revenue. Sources said LinkedIn was already deep into negotiations with Microsoft when Salesforce made its approach, which would have required both debt and stock financing. Microsoft was able to buy LinkedIn in cash and also promised to let it operate independently. Interestingly, sources confirmed numerous reports that Microsoft had tried to buy Salesforce earlier this year, and both price and the way it would be operated within the company were among the issues that resulted in it not happening. Indeed. Salesforce recently bought Demandware for $2.8 billion.

• InMobi Technologies to discontinue use of mascot function on Miip platform:  InMobi on Thursday said it has shuttered the animated-discovery commerce part of Miip for now, a product it launched amid much fanfare in July last year. Instead, the firm will look to help e-commerce companies reach inactive customers using more traditional ad formats, using the underlying technology it built for the platform. In July, InMobi launched a beta version of Miip, which took the form of an animated monkey, that tracked users’ browsing habits across various mobile apps and showed ads in the forms of bubbles and animations instead of traditional display ads. It allowed consumers to interact with the mascot and tell it what they liked, and how they felt about the products and ads they saw. The promise of such a technology was that first, it enabled personalised discovery of products, and second, the completion of purchases within the ad itself as InMobi had tied up with payments providers like Stripe, AliPay and Paytm. This hasn’t worked out. “The larger vision behind Miip is to enable consumers to buy products and complete transactions through ads. The mascot was conceptualized simply as a ‘face’ to the Miip platform. Over the course of testing, users responded better to an advertiser’s brand as against the Miip branding on an ad unit,” said Arun Pattabhiraman, vice president and global head of marketing, InMobi

Daily Tech Snippet: Monday, May 30

• China to open e-commerce, other sectors to foreign investment: newspaper: China will lift restrictions to investments by foreign firms in a range of service industry sectors, including e-commerce, logistics, accounting and auditing, the China Securities News quoted commerce minister Gao Hucheng as saying. Gao said China would also promote the orderly opening of other service fields including finance, education, culture and health care, the report published on Saturday said without elaborating or giving a time-frame. China's trade in services would exceed $1 trillion by 2020, the minister predicted. The Ministry of Commerce has previously said the value of China's services trade was expected to exceed $750 billion this year.

• Thiel-Gawker Fight Raises Concerns About Press Freedom: The story of Gawker versus Hulk Hogan — or, perhaps more accurately, Peter Thiel — has some asking whether press freedom in the United States is in peril if a scorned billionaire can help deliver a crippling blow to a media company. But since Mr. Thiel spoke to The New York Times on Wednesday about his reasons for funding the lawsuit against Gawker, the debate surrounding the dispute has expanded to encompass ideological battles in media, technology and politics. A variety of observers, including other billionaires and figures involved in GamerGate, have entered into the fray to address themes like Mr. Thiel’s political motivations, and the wider issue of Silicon Valley power players and their involvement with the news media. Several journalists felt that Mr. Thiel’s political views and connection withDonald J. Trump, the Republican presidential front-runner, could be worrisome based on Mr. Trump’s previous comments about changing libel laws to make it easier to sue media outlets.

• Twitter's retreat from 'Buy' buttons puts its payments partner Stripe in an awkward spot: In September, payments startup Stripe trumpeted a new product that would allow retailers to sell goods directly in social networking and content apps. The biggest partner app Stripe launched with was Twitter, whose 'Buy' buttons allowed users to buy items directly from a tweet. But just a month later, Twitter disbanded the team working on 'Buy' buttons, as Recode reported on Thursday, and shifted its focus on commerce to other initiatives. The 'Buy' button technology still exists, and retailers can still use Stripe's new product, Relay, to sell products on Twitter. But the perception that Stripe's biggest partner no longer considers it a priority doesn't look good. You could imagine the challenge convincing potential retail partners that they should invest in a program whose biggest platform partner no longer appears to be interested. The idea behind Relay is that people will increasingly want to purchase items online wherever they discover them, even if it's not on a shopping site or app. And as people spend more of their online time on Twitter and other social apps, they should have the option to complete transactions quickly without leaving those apps, the thinking goes, rather than getting redirected to another site that may be difficult to navigate on a mobile phone. In addition to Twitter, Pinterest and Facebook have also bought into this thinking to some degree. Each has introduced 'Buy' buttons, with varying levels of investment. But neither one of them currently works with Stripe on the Relay product. The open question for Stripe is whether retailers and users will show real interest in Twitter's Buy buttons without the company promoting them — and, if not, whether Stripe can find another big-name app to replace Twitter as the anchor partner.

• Amazon built a tool that puts Alexa in your browser: Amazon's Alexa personal assistant is super useful in the Echo and lot of fun to use. But if you don't have an Echo or can't buy one because you're outside of the US, it can be hard to appreciate Alexa's skill set. In light of this, Amazon has created a web app that lets you play with Alexa right in your browser. You can access the web app at echosim.io and it lets you ask Alexa all kinds of questions. What it doesn't let you experience is the always listening nature of the Echo device and its far field microphone array — you have to click and hold a button on the site before you speak to it. (That makes it closer to the experience you get with the Amazon Tap than the Echo itself.) The real purpose of this simulator is to let international devs see what Alexa is capable of, since Amazon doesn't yet the Echo or other Alexa devices outside of the US. Amazon says it was inspired by a project from a hackathon last year. Still, it's open to anyone with an Amazon account, so fire it up and start pelting Alexa with questions.

Daily Tech Snippet: Wednesday, May 18

• China Quietly Targets U.S. Tech Companies in Security Reviews: Chinese authorities are quietly scrutinizing technology products sold in China by Apple and other big foreign companies, focusing on whether they pose potential security threats to the country and its consumers and opening up a new front in an already tense relationship with Washington over digital security. Apple and other companies in recent months have been subjected to reviews that target encryption and the data storage of tech products, said people briefed on the reviews who spoke on the condition of anonymity. In the reviews, Chinese officials require executives or employees of the foreign tech companies to answer questions about the products in person, according to these people. The reviews are run by a committee associated with the Cyberspace Administration of China, the country’s Internet control bureau, they said. The bureau includes experts and engineers with ties to the country’s military and security agencies. While other countries, including the United States and Britain, conduct reviews of some tech products, they usually focus on products that will be used by the military or other parts of the government that are concerned with security, and not on products sold to the general public. The Chinese reviews stand out because they are being applied more broadly, including to American consumer software and gadgets popular in China, the people briefed on the reviews said. And because Chinese officials have not disclosed the nature of the checks, both the United States government and American tech companies fear that the reviews could be used to extract tech knowledge as well as ensure that the United States was not using the products to spy. Ultimately, the reviews could be used to block products without explanation or to extract trade secrets in exchange for market access. Those secrets could be leaked to Chinese competitors or expose vulnerabilities, which, in turn, Chinese hackers could exploit. Further, tech companies are concerned that the reviews could set a precedent and that other countries will follow suit, each demanding different checks that would not only be costly but also put the companies at risk of having to hand over further secrets in exchange for market access.

• Google's launch of a carpooling service Monday marks the beginning of its seemingly inevitable entry into the ridesharing wars. The pilot program, which is being offered via Google's Waze navigation app, aims to connect commuters who need a ride with drivers who can supply one. In exchange, riders will help cover the drivers' fuel costs. Consolidating rides means fewer cars on the road — which is better for traffic congestion and the environment, according to Waze. Google's launch of a carpooling service Monday marks the beginning of its seemingly inevitable entry into the ridesharing wars. The pilot program, which is being offered via Google's Waze navigation app, aims to connect commuters who need a ride with drivers who can supply one. In exchange, riders will help cover the drivers' fuel costs. Consolidating rides means fewer cars on the road — which is better for traffic congestion and the environment, according to Waze.

• Apple CEO Makes First India Trip With Billion Phone Sales at Stake: Smartphone shipments may be sputtering in the U.S., Europe and other mature markets, but in India, there’s the prospect of a billion new device sales. It’s probably no surprise then that Apple Inc. Chief Executive Officer Tim Cook is making his first trip to the country. Cook, who begins his multiday visit on Wednesday, will unveil a development center for digital maps in Hyderabad and introduce an accelerator program for iOS developers in Bangalore, a person with knowledge of the trip said. Apple is pushing to open its first retail stores in the country, though it’s not clear whether any discussions will be part of the CEO’s agenda on this trip. The prize is more than 1 billion in smartphone sales in the next five years, according to researcher Counterpoint. As China’s market becomes more saturated and people across the globe upgrade their smartphones less frequently, Apple, Samsung Electronics Co. and other vendors are keen to sell to India’s middle class, which is projected to quadruple to 200 million by 2020. Signs of this explosive rise in consumption already emerged in the first three months of this year, when Apple reported that shipments in India grew 56 percent, even as iPhone sales declined globally for the first time ever.

• Can virtual reality translate into real profits? A growing number of U.S. companies are counting on virtual reality for real profits. With growth hard to come by amid the lethargic economy, companies ranging from snowmobile manufacturers to furniture sellers are incorporating virtual reality that so far has mostly been found in video games. Their bet: that the trendy headset-based technology can help them build sales and cut costs. Theme park operator Six Flags Entertainment Corp (SIX.N) is outfitting riders on some of its aging roller coasters with Samsung VR headsets, allowing the company to brand the rides as brand-new without having to build costly new attractions. nowmobile manufacturer Arctic Cat Inc (ACAT.O) has developed virtual reality rides that customers can use to try out new models at dealerships, while eBay Inc's (EBAY.O) StubHub is testing technology that allows fans to check out the view from different seats before buying tickets. In the most recent round of corporate earnings reports, some 38 companies - including the New York Times, GoPro, and furniture-seller Wayfair - highlighted virtual reality as a part of their business plans. That was a 375 percent jump from the 8 that did so at this time last year, according to a Reuters analysis of earnings calls transcripts. Nearly all were either consumer or technology companies, suggesting that virtual reality technology has a ways to go before becoming mainstream. Yet for all of the enthusiasm, there is little evidence that virtual reality can deliver substantial growth. here are few pure plays for investors who want to buy into virtual reality. Facebook Inc (FB.O), which paid $2 billion for its Oculus virtual reality division in 2014 and began shipping its first $599 Oculus Rift headsets in March, has the best-known virtual reality head gear, though other well-known companies including Google's parent Alphabet and Apple are rumored to be working on high-powered headsets of their own. Neither company returned requests to comment. Virtual reality is such a small part of Facebook's business that most analysts do not break out Oculus in their revenue or earnings estimates. Nor did Facebook give any numbers on how many Oculus headsets it expects to sell on its most recent earnings call. "This is very early and we don't expect VR to take off as a mainstream success right away ... but eventually we believe that VR is going to be the next big computing platform and we're making the investments necessary to lead the way there," Chief Executive Mark Zuckerberg said.

• For online lenders, it’s suddenly touch-and-go:  A year ago, privately held online lenders like Prosper, SoFiand Avant looked all but certain to go public at the same unicorn valuations their venture investors had assigned them — if not higher. They were seemingly reshaping the student, consumer and small business lending business. The market they’re chasing is enormous: The U.S. consumer lending market is a $3.5 trillion business, and 22 of  the largest online marketplace platforms originated just more than $5 billion of unsecured consumer credit in 2014 and more than $10 billion in 2015. They also talked a big game. When SoFi raised a whopping $1 billion from Softbank last year, CEO Michael Cagney told Bloomberg: “I’m looking at over $1 trillion of market cap from the banks, and I think it’s all vulnerable.” Fast forward to today, and it’s online lenders that suddenly look like sitting ducks. In an SEC filing yesterday, Lending Club, which announced the surprise departure of its founder and CEO last Monday, revealed that investors who “contributed a significant amount of funding” for loans are now examining that performance “or are otherwise reluctant to invest.” For many casual observers in Silicon Valley, the first signs of trouble in the online lending category emerged in late April, when the WSJ reported that Avant made $514 million worth of new loans in the U.S. in the first quarter, a 27 percent drop from the fourth quarter of 2015. Then, two weeks ago, Prosper confirmed that it planned to cut roughly 28 percent of its staff in response to falling loan volume. And Prosper’s news came just a day after OnDeck Capital said its own first-quarter losses had more than doubled as demand for its loans began to nosedive. Of course, the kicker came last week, when Lending Club CEO Renaud LaPlanche resigned following an internal audit that turned up $22 million in loans that were sold to Jefferies yet didn’t meet the investment bank’s criteria. Smartly, some players are already looking to reimagine themselves as broader financial outfits. For example, SoFi, which began as a way for students from top universities to refinance their debt, has since branched into personal loans, wealth management and mortgages. It also said last month that it’s hoping to drum up more investor demand for the debt it originates by starting a hedge fund that will buy its own loans. Baker expects that to survive and thrive, more online lenders may need to remodel themselves into the institutions they vowed to replace, either by becoming banks, buying or selling to banks or else striking up partnerships with banks. OnDeck and JPMorgan made one such pact. Last month, JPMorgan quietly began offering online loans to its existing small-business customers using OnDeck’s technology. Indeed, there is a silver lining, and it’s that huge market opportunity. The trick for online lenders will be finding new ways to pursue it while remaining viable businesses.

Daily Tech Snippet: Friday, May 13th

• Facebook, Facing Bias Claims, Shows How Editors and Algorithms Guide News:  Facebook, the largest social media network, published internal editorial guidelines on Thursday, the company’s latest attempt to rebut accusations that it is politically biased in the news content it shows on the pages of its 1.6 billion users. The 28-page document details how both editors and computer algorithms play roles in the process of picking what should appear in the “Trending Topics” section of users’ Facebook pages. Facebook describes a list of processes it uses to display some of the most popular content across the network, including relying on algorithms to detect up-and-coming news trends as well as a team of editors who, much like a newsroom, direct how those topics are presented and decide what should be displayed to people who regularly use the service. As the guidelines make clear, at practically every point in the process, a human editor is given the leeway to exercise his or her editorial influence. The document was released just days after a report on the tech news siteGizmodo said Facebook editors had intentionally “suppressed” news topics from conservative publications trending across the network. The report also said editors were able to artificially inflate the importance of other topics by “injecting” them into the Trending section of users’ Facebook pages. Since those claims surfaced, Facebook has been questioned by news sites across the political spectrum and by legislators in Washington. On Thursday, critics urged the company to consider the biases of its editors. “As long as Facebook is hiring editors who lean left politically, those stories are going to get preferential treatment,” Erick Erickson, former editor in chief of the conservative website RedState and founder of another conservative site called The Resurgent, said in an email. “I’d hope that Facebook would take care to consider all views and all news.” The company has continued to deny accusations of political bias and pointed to editorial rules that discourage Trending Topics staff members from taking one viewpoint or another.

• Alibaba Bears Retreat as Sales Growth Endures China Slump: Chart: Bearish bets against Alibaba Group Holding Ltd. have dropped to the lowest level since January after the Chinese e-commerce leader’s quarterly revenue beat analysts’ forecasts even as the nation’s economy grows at the slowest pace in 25 years. Short interest fell to 7.1 percent this week after peaking at a two-year high of 8.5 percent two months ago, according to data compiled by Bloomberg and Markit Ltd. The U.S.-traded stock has risen 4.4 percent since the company reported its quarterly results, while its main competitor JD.com Inc. tumbled 12 percent after reporting a slowdown in sales volume.

• Intel Sells $2.75 Billion of Bonds to Refinance 2016 Debt: Intel Corp. sold $2.75 billion of bonds on Thursday to refinance debt due this year and a portion of notes maturing in 2017. The world’s biggest chipmaker issued debt three parts, according to data compiled by Bloomberg. The longest portion was $1.25 billion of 30-year notes yielding 1.55 percentage points above comparable government debt. That’s down from an initial offer of 1.7 percentage points, according to a person familiar with the matter who asked not to be identified because the information isn’t public. Bank of America Corp. and JPMorgan Chase & Co. managed the sale.S&P Global Ratings gave the bonds an A+ grade, according to a statement on Thursday. Intel is the latest U.S. blue-chip company to offer notes in what’s poised to be second-busiest week for issuance this year. In its last multibillion-dollar deal, Intel sold $7 billion of bonds in July to finance part of its $16.7 billion takeover of Altera Corp. The company plans to repay its $1.5 billion of 1.95 percent notes due in October and a portion of the $3 billion of 1.35 percent bonds due next year. Investment-grade companies have sold more than $49 billion worth of bonds so far this week as they take advantage of low borrowing costs after posting earnings for the quarter ended March 31. Companies are also front-loading issuance before the summer slowdown, according to Ben Emons, a money manager at Leader Capital Corp. in Los Angeles.

• Apple invests $1 billion in Chinese Uber rival ride-hailing service Didi Chuxing: Apple said on Thursday it has invested $1 billion in Chinese ride-hailing service Didi Chuxing, a move that Apple Chief Executive Tim Cook said would help the company better understand the critical Chinese market. The investment comes as Apple is trying to reinvigorate sales in China, its second-largest market. Apple recently has come under pressure from Chinese regulators, with its online book and film services shut down last month, and Cook is traveling to the country this month. The investment gives Apple, which has hired dozens of automotive experts over the past year, a sizeable stake in Uber Technologies Inc's chief rival in China. Cook said in an interview that he sees opportunities for Apple and Didi Chuxing to collaborate in the future.

• Strong demand for graphics chips to boost Nvidia's revenue: Nvidia Corp forecast better-than-expected revenue for the current quarter as it sees robust demand for its chips that power complex computer graphics. Shares of the company, which also reported profit and revenue above analysts' estimates, were up 7.5 percent in extended trading. The chipmaker last week unveiled its GeForce GTX 1080 and 1070 graphics processors based on its Pascal technology.Revenue from its gaming business, which designs graphics cards such as GeForce for PCs, rose 17 percent to $687 million. The company has weathered a shrinking personal computer industry by focusing on game enthusiasts, who are willing to pay hundreds of dollars for processors used in playing graphically demanding games.Revenue from its data center business, which includes its Tesla processors, rose 62.5 percent to $143 million.Nvidia's net income rose to $196 million, or 33 cents per share, in the first quarter ended May 1 from $134 million, or 24 cents per share, a year earlier. Excluding items, the company earned 46 cents per share, handily beating analysts' expectations of 32 cents. Revenue rose 13.4 percent to $1.31 billion, while analysts were expecting $1.26 billion. The company also said it intends to return about $1 billion to shareholders in fiscal 2017 through quarterly dividends and share buybacks. 

Daily Tech Snippet: Monday, April 25

• A Marriage Gone Bad: Walgreens Struggles to Shake Off Theranos: The sprawling drugstore chain, now a part of Walgreens Boots Alliance, was Theranos’s first — and thus far only — direct-to-consumer retail partner, promising to eventually make Theranos’s “wellness centers” an integral part of its more than 8,000 stores nationwide. When it announced the deal in 2013, Walgreens hoped to drive traffic to its stores and bask in the reflected glow from one of Silicon Valley’s hottest unicorns and its youthful founder and glamorous chief executive, Elizabeth Holmes. For unproved Theranos, the Walgreens endorsement was akin to the Good Housekeeping seal of approval. Theranos’s valuation vaulted to $9 billion and put Ms. Holmes on the Forbes list of billionaires. Nearly three years later, with Theranos under siege on multiple regulatory fronts and its reputation in tatters, it’s clear that the relationship has been a disaster for Walgreens. The company has been trying to distance itself, halting expansion of Theranos testing in its stores and, in January, threatening to end the partnership if Theranos did not meet regulatory standards within 30 days. But that deadline has come and gone. With this week’s news that Theranos is under criminal investigation for, among other things, possibly defrauding Walgreens and other investors, the question is: What will it take for Walgreens to end its troubled relationship? Theranos’s lawyers have taken a hard line, insisting that Walgreens is contractually bound by their agreement. So far, the approach has worked. Walgreens appears to have taken a cautious approach toward terminating the relationship, perhaps preferring to wait until federal regulators impose penalties or the criminal investigation yields formal charges, either of which would strengthen Walgreens’s hand. But that could take years. Theranos can appeal any penalties, and a grand jury investigation could be a protracted process. And Theranos is likely to sue Walgreens in any event if it terminates their agreement. In the meantime, Walgreens risks being dragged into nearly every negative story about Theranos.

• Inside One of the World’s Most Secretive iPhone Factories: A few minutes past 9 a.m. at Pegatron Corp.’s vast factory on Shanghai’s outskirts, thousands of workers dressed in pink jackets are getting ready to make iPhones. The men and women stare into face scanners and swipe badges at security turnstiles to clock in. The strict ID checks are there to make sure they don’t work excessive overtime. The process takes less than two seconds. This is the realm in which the world’s most profitable smartphones are made, part of Apple Inc.’s closely guarded supply chain. After years of accusations that employees in China were forced to work long, grueling hours, Pegatron and Apple adopted new procedures to keep iPhone assemblers from amassing excessive overtime. They’re eager to show how the system works, and for the first time are granting a western journalist access into the inner sanctum.The factory at the corner of Xiu Yan and Shen Jiang roads is one of the most secretive facilities at the heart of iPhone production and covers an area equal to almost 90 football fields. In the center is a plaza with a firehouse, police station and post office. There are shuttle buses, mega-cafeterias, landscaped lawns and koi ponds. The grey and brown-hued concrete buildings are meant to evoke traditional Chinese architecture. The brand-new Shanghai Disneyland, which opens its doors in June, is a 20-minute drive away.Inside, the factory still hides a secret, according to China Labor Watch. Base pay remains so low that workers need overtime simply to make ends meet, the advocacy group said. It said 1,261 pay stubs from Pegatron’s Shanghai facility from September and October 2015 show evidence of excessive overtime. Pegatron, an Asustek spinoff, is the world’s biggest contract electronics manufacturer after Foxconn, according to Bloomberg Intelligence.Pegatron countered by saying the group miscounted because that period straddled state holidays, when pay was three times’ normal. Apple and Pegatron say they were never contacted by China Labor Watch, which said it approached Apple but didn’t get a response. Since March, the group said it’s collected an additional 441 pay stubs that point to continued excessive overtime. Back in the cafeteria, a group of women rush to finish lunch before their 50-minute break is over. They hail from across China, from Sichuan in the west to Shandong in the northeast. None has been there for more than a few months. “This is relaxed compared to other factories,” said Xu Na, 30, who followed her younger brother to work at the factory. “We never work more than 60 hours.”

• Flipkart is in the middle of a crisis of its own making—stalled growth compounded by management churn and the imminent possibility that it will cede the top slot to Amazon. But it’s not too late to change its strategy. Flipkart is in the middle of a storm of its own making: It is faced with a significant management churn at the top. For a company that pioneered e-commerce in the country, growth has virtually stalled since the middle of last year and the leadership team hasn’t figured out a way to kick-start sales. Its innovation engine isn’t firing. In e-commerce lingo, the gross merchandise volume (GMV) sold over a given period of time has not grown substantially. In the offline world, it is the equivalent of saying, the sales or revenue numbers aren’t growing. And this, for the e-commerce pioneer that until now grew its GMV by over 200% per annum for the past three years. The very culture that made Flipkart a runaway success in the first phase of its existence is now hindering its progress. The battle won’t be easy. Amazon will unleash Amazon Prime, Amazon Fresh and may even partner with offline retailers to consolidate its position as the default destination for online shopping. Amazon has rapidly scaled up its seller ecosystem and outstrips Flipkart today in several product categories. It has a chance to win India—and that is being handed over on a platter thanks to the internal confusion at Flipkart. Amazon is here to play a 20 year game—and any fumbles will cost competitors heavily. Now imagine the Flipkart investors’ dilemma. They’ve poured in over $3 billion and own over 80% of the company. They are neck deep in a business that is burning $50-70 million a month and has to get ready for the next phase of battle in the market. If the cost-cutting moves misfire and market share starts to shrink, the founders could very well put a request for another $500 million for the fight against Amazon. What will the investors do? A new investor is unlikely to step in. Even though the Chinese e-commerce players like Alibaba are waiting in the wings to swoop down on prized assets in India, there's a chance that they could choose to wait out this stage of the company’s evolution—why buy and restructure, when you can wait and buy a cleaned-up asset? Hence, one of the current investors will have to lead the round and it will put serious pressure on the team to show results. Flipkart has a last chance to redeem itself and take control of its destiny, else it will become another victim of early success. It is too big to fail and the market opportunity is too large to ignore. India will have more than one large e-commerce player—just the sheer potential of the market will keep it from consolidating for many years—and so, Flipkart’s existence is not in question. But the next few months will determine the destiny of the company. The A-team cannot afford to flounder so early in their journey. 

Daily Tech Snippet: Tuesday, April 19

• Netflix’s Forecast for Growth Disappoints Wall Street: On Monday, Netflix announced that it expected to add just two million members outside the United States in the second quarter this year — less than the 3.5 million analysts had expected. The figure also represents a decrease from the 2.4 million members the streaming service added internationally in the same period the previous year. That cloudy forecast sent shares down more than 10 percent in after-hours trading, as Netflix has tied its future to its bold global push. The company has been pouring resources into its expanding its international footprint, telling investors that it would run at break-even profitability until the end of 2016 as it continued to roll out the service abroad and increased its investment in content. That uncertainty over the competitive landscape, as well as fears about growth prospects both inside and outside the United States, overshadowed the generally positive first-quarter financial results that Netflix announced on Monday. The company beat expectations for profit and revenue growth during the first quarter. Profits totaled $28 million, up 16 percent from the same period last year, and total revenues increased 24 percent to nearly $2 billion. Netflix added a record 6.7 million total streaming members during the first quarter, bringing its total to 81.5 million, with about 42 percent outside the United States. Netflix had forecast that it would reach nearly 80.9 million total paid members in the quarter. In the United States, Netflix surpassed its forecasts for subscriber growth during a period in which price increases went into effect for some customers. The company added 2.23 million subscribers in America during the quarter, bringing its paid membership in the country to 45.7 million. Outside the United States, Netflix also beat its expectations for growth, adding 4.5 million international streaming subscribers. The company said it was planning to spend more than $6 billion on programming in 2017, up from $5 billion this year.

• IBM reports worst revenue in 14 years, shares slide: IBM on Monday reported a 21 percent decline in net profit from continuing operations, to $2.3 billion in the first quarter that ended March 31. Its operating earnings per share fell 19 percent, to $2.35 a share, though that was above the average estimate of Wall Street analysts of $2.09 a share, as complied by Thomson Reuters. The company’s first-quarter revenue declined 5 percent, to $18.7 billion. But that was ahead of analysts’ consensus forecast of $18.29 billion. After adjusting for the impact of currency translation, revenue was down 2 percent. IBM shares fell about 5 percent in after-hours trading, a retreat from a recent uptrend for the stock. In the first three months of this year, IBM’s stock price had increased 17 percent. IBM delivered a quarterly performance that shows the steady headway it is making in new businesses led by cloud computing and data-analysis software, like its Watson artificial intelligence technology. But the company’s transformation remains very much a work in progress. The erosion of some of its hardware and software products continues to be a drag on growth and profits, overshadowing the gains in the new fields.

• LinkedIn built a new app for college kids - from which Lynda is missing: In an effort to lure more young people to its professional network, LinkedIn built a standalone app specifically for college students. The app helps students quickly create a profile (if they don’t already have one), find career paths and job postings that relate to their major, and connect with alumni who studied the same topic. The app is appropriately named “LinkedIn Students.” LinkedIn’s challenge is that its product is most useful once you already have a job. Or at least know a bunch of other people who do. Oftentimes, college students have neither, which makes the idea of creating a profile seem overwhelming, said Ada Yu, a product manager at LinkedIn. So LinkedIn is trying to appeal to young people with an app that’s less cumbersome than its flagship app. LinkedIn users can already do most of what the college app offers in LinkedIn’s main app; it’s just more simplified now. Two things worth noting: Lynda.com, the online library of classes LinkedIn bought for $1.5 billion last year, is noticeably missing from the app. It seems likely that LinkedIn will add online classes to the app at some point. LinkedIn can make money from this app. Once students scroll past the daily job and alumni recommendations, they get to an “extra credit” section which will include some branded content. LinkedIn will launch with branded content from J.P. Morgan. What LinkedIn will not do, however, is recommend career paths or job openings in exchange for cash. All suggested jobs will be based on LinkedIn’s algorithm, Yu said.

• China's Crowded Smartphone Market Heads for an Epic Shakeout: Smartphone sales in China exploded earlier this decade as incomes rose, prices for chips and displays plummeted, and carriers offered arrays of discounts. Shelves were flooded with hundreds of brands—from national heavyweights Huawei, Lenovo and Xiaomi to the smaller Dakele, Tecno Mobile and Gionee. Shipments more than doubled in each of the three years ending 2012, according to researcher Canalys. Xiaomi's valuation rocketed to $45 billion, and the phone maker started selling devices in India, the world’s fastest-growing major economy. Lenovo Group Ltd. spent $2.91 billion to acquire Motorola Mobility to help make it "a global player." In 2011, only four of the top 10 vendors in China were domestic. Last year, there were eight.  Now that wave has crested. Smartphones no longer are novelties in China, and most domestic brands target the mid- and low-price ranges, where buyers don't upgrade as frequently as those for high-end Apple and Samsung phones. China's herd of 300 phone makers may be halved in 12 months by competition, a sales plateau and economic growth that's the slowest in a quarter-century, according to executives and analysts. "The mobile-phone industry changed more quickly and brutally than expected," Dakele Chief Executive Officer Ding Xiuhong said on his Weibo messaging account. "As a startup, we couldn’t find more strategies and methods to break through."

• Don’t want your startup to fail? Arianna Huffington tells founders to go to bed: Sleep deprivation is the undoing of startup founders, according to Arianna Huffington. “There is this kind of founder myth that if you are a founder you can’t afford to get enough sleep,” she told me over the phone while catching a plane back to New York. “The truth is three-quarters of startups fail and if founders got more sleep they’d have a better chance of succeeding.” Wanting to get more sleep isn’t the problem for most of us. It’s fitting in the recommended seven to 9 hours of sleep with work, eating, exercise, relationships and a social life – and on top of that founders need to spend a lot of time growing their fledgling company. The advice is obvious – no caffeine after 2 pm and keep your bedroom dark and quiet – but like exercise and eating right, a lot of us probably don’t do it anyway. And sacrifices will be made – no tech in the bedroom and you might not get through all of those critically acclaimed Netflix dramas – Arianna tells me she’s only seen one episode of House of Cards because sleep is the priority. But then, maybe you’ll think clearly and your startup won’t fail.

• Media Websites Battle Faltering Ad Revenue and Traffic:  This month, Mashable, a site that had just raised $15 million, laid off 30 people. Salon, a web publishing pioneer, announced a new round of budget cuts and layoffs. And BuzzFeed, which has been held up as a success story, was forced to bat back questions about its revenue — but not before founders at other start-up media companies received calls from anxious investors. “It is a very dangerous time,” said Om Malik, an investor at True Ventures whose tech news site, Gigaom, collapsed suddenly in 2015, portending the flurry of contractions. The trouble, the publishers say, is twofold. The web advertising business, always unpredictable, became more treacherous. And website traffic plateaued at many large sites, in some cases falling — a new and troubling experience after a decade of exuberant growth. Online publishers have faced numerous financial challenges in recent years, including automated advertising and ad-blocking tools. But now, there is a realization that something more profound has happened: The transition from an Internet of websites to an Internet of mobile apps and social platforms, and Facebook in particular, is no longer coming — it is here. It is a systemic change that is leaving many publishers unsure of how they will make money. “With each turn of the screw, people began to realize, viscerally, that this is what it feels like to not be in control of your destiny,” said Scott Rosenberg, a co-founder of Salon who left the company in 2007. Audiences drove the change, preferring to refresh their social feeds and apps instead of visiting website home pages. As social networks grew, visits to websites in some ways became unnecessary detours, leading to the weakened traffic numbers for news sites. Sales staffs at media companies struggled to explain to clients why they should buy ads for a fragmented audience rather than go to robust social networks instead.