Daily Tech Snippet: Tuesday, July 19

• Netflix Disappoints Wall Street as Subscriber Growth Slows: Netflix isn’t looking so invincible anymore. On Monday, the company disappointed Wall Street with the news that subscriber growth for its streaming video service had slowed significantly during the second quarter. Also disconcerting was that Netflix added far fewer subscribers over all during the period than expected, which the company blamed on news media coverage of its plans for price increases. Netflix added just 1.7 million new streaming members in the three months that ended June 30, about half the 3.3 million net additions from the same period the previous year. That anemic growth — for both United States and international subscribers — came in well below its forecast of 2.5 million new members. The development sent Netflix shares down as much as 16 percent in after-hours trading on Monday, representing the second earnings report in a row that has sparked a double-digit plunge in the company’s stock price. Mr. Hastings finds himself in a starkly different position from just six months ago, when he stood onstage at the big consumer electronics show in Las Vegas and declared that Netflix would conquer the global market for streaming television, adding more than 130 countries to its world service map. At the time, the company’s share had been soaring, surging 135 percent in 2015 as the top performer on the Standard & Poor’s 500-stock index. So far this year, Netflix’s share price has declined about 14 percent. Still, some analysts pointed to the company’s financials as proof that it would continue to deliver on its plans in the long term. Net income for the quarter was $41 million, up 58 percent from $26 million during the same period last year. Total revenue was $2.1 billion, up 27 percent from $1.6 billion in the same period last year.

• Yahoo Revenue Falls 15 Percent and Profit Drops 64 Percent: As Yahoo accepted the final bids for its core business on Monday, the internet company revealed just how badly that business was deteriorating. Yahoo said that its revenue in the second quarter fell 15 percent, after excluding accounting adjustments, and its operating profit fell 64 percent. Yahoo also acknowledged that Tumblr — its biggest acquisition under its current chief executive, Marissa Mayer — was now worth only one-third of the $1.1 billion that Yahoo paid for it in 2013. But investors were not focused on the quarterly numbers or Yahoo’s vast overpayment for Tumblr. They were far more interested in whether Yahoo’s web, email, news and other businesses will finally be sold — and at what price.Yahoo has been conducting a prolonged auction for those assets since February, and final bids were due on Monday. Yahoo’s board is expected to evaluate the offers over the next week or two and decide whether to proceed with a transaction that would end Yahoo’s 20-year run as an independent, publicly traded company.Analysts expect the final bids to come in at $3.5 billion to $6 billion, including Yahoo’s land and patents.The write-off of most of the value of the Tumblr blogging network is emblematic of the failure of Ms. Mayer’s strategy to expand Yahoo by luring the mobile young users who drive the business of its chief rivals, Google and Facebook.In the second quarter, Yahoo’s revenue was $1.31 billion, up from $1.24 billion in the same quarter a year ago. But the most recent quarter’s revenue rose only because of a change in how Yahoo accounts for revenue from its search partnership with Microsoft. Excluding those changes, revenue fell 15 percent, and both search ads and display ads posted significant drops. The company reported a net loss of $440 million, or 46 cents a share, for the quarter, compared with a loss $22 million, or 2 cents a share, in the same quarter a year ago. Excluding the Tumblr write-off and other adjustments, the company’s operating profit fell 64 percent. Shares of Yahoo were down slightly in after-hours trading Monday evening.

• IBM Rises After Sales Beat Estimates on Software Unit Gains: IBM second-quarter revenue beat analysts’ estimates, boosted by the unit that includes its Watson artificial intelligence platform, in an early indication that the company’s transition to cloud-based software and services is beginning to pay off. Sales were $20.2 billion, compared with the average analyst estimate of $20.1 billion, according to data compiled by Bloomberg. Revenue in cognitive solutions, which includes Watson, increased 3.5 percent to $4.7 billion. This is the first time since IBM reorganized its segments that the cognitive solutions portion has registered growth, after declining the previous five quarters in a row. Adjusted earnings, excluding some items, was $2.95 a share, beating the $2.89 average estimate of 19 analysts. The shares rose 3.2 percent in late trading to $165. They are up 16 percent this year through the end of Monday, compared with a 6 percent gain on the Standard & Poor’s 500 Index.

• What is ARM and why is SoftBank spending $32 billion on it? SoftBank’s $32 billion deal to buy chip designer ARM had many people scratching their heads Monday. It’s not that ARM isn’t important in tech. Indeed, its processor designs are used by nearly every chipmaker and, by extension, find a place inside nearly every piece of tech from cellphones to hard drives to networking gear. Rather, it is the fact that the chipmaker is so far removed from SoftBank’s other businesses. The Japanese conglomerate has a wide range of tech holdings, including a controlling interest in Sprint, its own mobile carrier business in Japan and investments in Alibaba, OlaCabs and Snapdeal. “SoftBank would have been one of the least likely I thought to buy ARM,” said longtime chip analyst Kevin Krewell of Tirias Research. “They are not in the semiconductor business in any significant way.” Krewell says he suspects that SoftBank looked hard at buying other companies in the chip business and decided that ARM was the strongest play, especially for the very long term.It’s worth taking a second to understand how ARM’s business works and what it does. ARM doesn’t make any products. Not only does it not manufacture chips, it doesn’t even design the ones that are eventually sold. Rather, it designs the core engines that get built into others’ chips — chips from companies like Qualcomm and Nvidia as well as processors like Apple’s A9 and Samsung’s Exynos. For its efforts, ARM gets a small license fee from every chip that uses its design. Because it is in so many products, that small license fee adds up to a pretty healthy business. Its 2015 revenue was nearly one billion British pounds. And its sphere of influence is growing, both in terms of the number of chips using its design as well as the kinds of products. Last year nearly 15 billion chips using its designs were sold, up from about six billion in 2010. Cars, servers and internet-of-things devices are all seen as big expansion areas for ARM chips.

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.

Daily Tech Snippet: Wednesday, January 20

• Why an Ex-Google Coder Makes Twice as Much Freelancing: With a talent war raging, companies from Airbnb to Pfizer are paying top dollar for the services of independent programmers. James Knight recently made an unorthodox career move for a 27-year-old coder: quitting a well-paid gig writing software for Google to go freelance. No more catered lunches, gold-plated benefits or million-dollar views from the search giant’s Manhattan office. Knight is willing to sacrifice those perks because as an independent he’s pulling down about twice as much as he did at Google. Plus, he has more freedom. In March, Knight and his wife plan to travel to Spain and hopscotch across Europe—all the while writing code for a dating app and a self-portrait app, among others. "I’d rather control my own destiny and take on the risk and forgo the benefits of nap pods and food," Knight says. Amid an accelerating war for tech talent, big companies and startups alike are paying top dollar—as much as $1,000 a hour, according to a person who gets coders gigs—for freelancers with the right combination of skills. While companies still recruit many of the best minds, they're turning to independent software developers to get a stalled project moving or to gain a competitive edge. In some cases, the right person can be the difference between a failed and successful product. Last spring, Aaron Rubin hired a freelance coder through recruiter Toptal for about four weeks to help get ShipHero, his cloud-based logistics startup, off the ground.  "To find someone that talented in New York in three days was never going to happen," Rubin says. "Every talented engineer I know has a job.

• Netflix global push grabs more customers than expected; shares jump 7%. Netflix said revenue rose 22.8 percent to $1.82 billion in the December quarter.Netflix's aggressive push into international markets won more customers than the video streaming service and its investors expected last quarter, sending its shares surging 7 percent. The dominant online video company said on Tuesday it had 74.8 million subscribers at the end of December and forecast 6.1 million more through March, fueled by its expansion this month into virtually every country except China, where it is exploring ways to launch its service. Shares of Netflix rose 7 percent to $115.42 in after-hours trading.New customers overseas are countering slowing growth for Netflix in the United States, the company's biggest market. It added 1.56 million U.S. subscribers in the fourth quarter, below the 1.65 million it forecast, and less than 1.9 million a year earlier. 

• IBM forecasts weak earnings for 2016; shares slide:  Revenue fell 8.5% to $22.06 billion. International Business Machines Corp forecast weak earnings for this year after reporting an 8.5 percent fall in fourth-quarter revenue as a strong dollar and tepid IT spending weigh on Big Blue's results. Shares of the company, which receives more than half its revenue from markets outside the United States, fell 3 percent in extended trading on Tuesday. IBM has been shifting away from hardware by selling low-margin businesses such as low-end servers and semiconductors to focus on high-growth areas such as security software and data analytics, besides cloud-based services. Yet the new businesses have so far failed to make up for revenue lost to divestitures. IBM's fourth-quarter revenue fell to $22.06 billion in the quarter ended Dec. Revenue from "strategic imperatives", which include cloud and mobile computing, data analytics, social and security software, rose about 10 percent in the fourth quarter. Net income fell to $4.46 billion, or $4.59 per share, from $5.48 billion, or $5.51 per share, a year earlier. Up to Tuesday's close, IBM's shares had fallen 18.5 percent in the past 12 months.

• AMD revenue forecast misses market estimates:  Revenue fell 22.7 percent to $958 million. Advanced Micro Devices forecast first-quarter revenue below analysts' estimates, due to lower demand for its graphic chips used in consoles and an economic slowdown in China. Shares of the company, which is in the process of selling some of its assets to cut costs, fell 7.7 percent to $1.80 in extended trading. AMD has been shifting to gaming consoles and low-power servers, but progress has lagged Wall Street expectations due to intense competition from Intel Corp and Nvidia Corp. China accounted for 42.2 percent of AMD's revenue in 2014. Revenue fell 22.7 percent to $958 million but still came above analysts' expectation of $954.7 million. Up to Tuesday's close, AMD's shares had fallen 13 percent in the past 12 months. The company's net loss narrowed to $102 million, or 13 cents per share, in the fourth quarter ended Dec. 26, from $364 million, or 47 cents per share, a year earlier.

• Twitter Stock Hits New Low Amid Struggles to Keep Website Up: Twitter Inc. shares slumped to a new all-time low after the company’s website suffered disruptions, shutting out millions of users and underscoring concerns about the company’s efforts to boost its audience and sales. Services including search and the news stream were unavailable for more than five hours after the company’s software engineers made changes to the service that lets people post and share 140-character status updates. The stock fell 7 percent to $16.69 at the close on Tuesday, well below the price of $26 at its November 2013 initial public offering. Users of Twitter’s mobile applications and website experienced a string of outages since Friday, as the company tweaks its features and services to improve the user experience and address a slowdown in growth. The glitches come at an inconvenient time for the company, which has to prove its value to any new users and keep existing ones from leaving in frustration. “The issue was related to an internal code change,” Twitter said on its website. “We reverted the change, which fixed the issue.” Services including search and the news stream were disrupted, according to the company’s performance status website. The top trending hashtag for about the past two hours was #twitterdown. Prior to the latest round of issues, Twitter’s last outage was about two months ago. Twitter’s stock has tumbled more than 28 percent in January, following a 35 percent decline in 2015.

Daily Tech Snippet: Wednesday, October 28

• Apple Profit Is Up 31%, Revenue Up 22% as iPhones Sell Briskly, but Its Forecast Is Muted: Apple on Tuesday turned in another quarter of enviable revenue and profit growth, fueled by sales of the iPhone. But the results raised a perennial question for the world’s most valuable company: How can it keep its growth streak alive? The issue was stoked by Apple’s muted forecast for its all-important holiday quarter, as well as the unwillingness of Timothy D. Cook, the company’s chief executive, to go into detail in an earnings conference call about how Apple plans to rev up sales next year. Over all, Apple posted a profit of $11.1 billion for its fiscal fourth quarter, up 31 percent from a year ago. Revenue was $51.5 billion, up 22 percent from last year. The results exceeded Wall Street estimates. Yet while the performance was bolstered by sales of the iPhone — Apple said that it sold 48 million iPhones in the quarter, up from 39 million in the same period last year — the company was more cautious about sales for the key holiday sales period. Apple projected revenue of $75.5 billion to $77.5 billion for the end-of-year quarter. While the sheer numbers are huge, the low end of the forecast fell below Wall Street estimates and would amount to anemic growth of less than 4 percent from a year ago. The last time Apple’s quarterly sales fell below 4 percent was in mid-2013. New Products: Apple is going into 2016 with a full slate of refreshed products. In late September, the company introduced its newest iPhone models, the 6s and 6s Plus. It also announced a larger iPad, the iPad Pro, and will begin shipping a new Apple TV this week. IPad Struggles: While the iPhone continues to grow, the iPad has been facing declines. For the fiscal fourth quarter, Apple said iPad sales dropped 20 percent from a year ago, making it the seventh consecutive quarter that sales of the tablet have slipped. The company is increasingly positioning the iPad as a business device. Apple Watch: The company did not break out sales of the Apple Watch, which debuted in April. But the category called “other products” — which includes the watch — posted $3 billion in revenue in the quarter, up from $2.6 billion in the previous quarter, which was the first quarter that included sales of the device. Ben Bajarin, an analyst at Creative Strategies, said that the numbers for the “other” category were in line with his expectations, and implied somewhere between 3.5 million and four million watches were sold over the quarter. China: One of Apple’s fastest-growing markets — China — continued to grow. Sales in the region that Apple calls Greater China jumped 99 percent in the quarter to $12.5 billion. The region remained the company’s second-largest market after the Americas, accounting for 24 percent of sales in the quarter, compared with 13.7 percent a year ago. Investors have been scrutinizing the China business given that the country has been cutting interest rates to shore up a slowing economy. Apple Pay: Apple said it has partnered with American Express to bring its Apple Pay mobile payments service to global markets. Chief Executive Tim Cook said the credit card company will bring the service to customers in Australia and Canada, then expand to Spain, Hong Kong and Singapore in 2016.

• Dismal Twitter Forecast and Flat User Growth Send Its Stock Lower: On Tuesday, Twitter gave a dismal forecast for its fourth-quarter revenue and profits. Shares in Twitter, a social media company, plunged as much as 13 percent in after-hours trading as Mr. Dorsey and his lieutenants offered little explanation for the gloom in a conference call with investors. In a similar call three months ago, Mr. Dorsey’s pointed critique of Twitter’s product failings sent the stock down 11 percent. Twitter also reported revenue of $569 million for the quarter, up 58 percent from $361 million a year ago. Its net loss was $132 million, or 20 cents a share, compared to a loss of $175 million, or 29 cents a share, in the same quarter last year. For the fourth quarter, usually the strongest thanks to holiday advertising, Twitter warned that revenue would be $695 million to $710 million, well below the $740 million that Wall Street had been expecting. The new projections, delivered as the company exceeded analysts’ expectations for its third-quarter results, provided fresh evidence that Twitter is failing to win over advertisers, the source of most of its revenue, as it confronts stiffening competition from Facebook, Instagram and Google. “The company is finding real challenges gaining traction with advertisers,” said Mark Mahaney, an Internet analyst with RBC Capital Markets, citing the new forecasts and an advertiser survey his firm conducts twice a year. Mr. Mahaney, who has a neutral rating on Twitter’s stock, said he was struck by the contrast between the upbeat tone of Twitter’s executives on the call and the company’s deteriorating outlook. “Everything sounds so good, yet you reduced your forecast pretty materially. Why?” Mr. Dorsey didn’t answer that question, although Adam Bain, the company’s former ad chief and new chief operating officer, offered a clue: Ad prices plunged 39 percent in the third quarter, which he said was partly because of improved efficiency of video ads.

• Alibaba Revenue Up 32%, Sends Shares up 4%; Cloud Computing Revenue Doubles Y/Y; Overseas Sales at 8%; GMV growth sinks to lowest in 3 years: China's Alibaba is squeezing more money from online shopping than expected, beating analyst forecasts for revenue growth, as mobile shopping grows. The company wrung out higher-than-expected revenue growth of 32 percent year-on-year, even as gross merchandise volume (GMV), the total value of goods transacted across its platforms, sank to its slowest annual growth rate in more than three years. Alibaba's U.S.-listed shares closed about 4 percent higher on Tuesday, after rising as much as 8.4 percent during market hours. Alibaba is trying to replace decelerating volume growth in online shopping with new kinds of online buying, mirrored in its latest investments. For instance, Alibaba invested $4.6 billion in Suning during the quarter. It also offered $3.5 billion to become sole owner of Youku Tudou, known as China's YouTube. Online video users in the country are beginning to cough up money for high-quality online streaming services. But the majority of Alibaba's revenue still comes from China's online shoppers buying from domestic businesses, a business driven by growth in GMV. For the latest quarter, growth came mostly from Tmall, an Amazon-like website allowing businesses to sell to customers, where GMV rose 56 percent. Gains at Taobao, more akin to eBay and by far the company's biggest contributor to GMV, showed signs of slowing at just 15 percent. Alibaba's revenue rose to $3.49 billion in the three months ended Sept. 30. Net income attributable to shareholders reached $3.58 billion, or $1.40 per share. International Expansion: The proportion of revenue Alibaba gets from abroad reached 8 percent, compared with 9 percent in the previous quarter. Co-founder Jack Ma has said he wants half of the company’s sales to originate outside China. The company named Michael Evans, a former Goldman Sachs  partner, as president in August to spearhead a global expansion into regions such as Russia and Brazil. The company is also looking to make forays into Italy, France, Australia and New Zealand, Evans said in October. Cloud Business: Revenue from cloud computing more than doubled from a year earlier. The e-commerce giant is betting on Internet-based computing and big data to boost growth for the next decade thanks to demand for processing and storage from governments, finance and online gaming companies. AliCloud could account for more than $1 billion of Alibaba’s revenue by 2018

• IBM says SEC investigating company's books, shares fall: The U.S. Securities and Exchange Commission is investigating how the International Business Machines Corp (IBM.N) recognized revenue for certain deals in the United States, Britain and Ireland, IBM said on Tuesday, news that sent its shares down 4 percent. Shares of IBM fell as much as 4.4 percent to a five-year low of $137.33 and closed down 4 percent. News of the SEC probe came a week after the company posted lackluster quarterly results and cut its 2015 profit forecast. "It couldn't come at a worse possible time because now the stock is at another 52-week low as a result of this," said Belpointe analyst David Nelson. He said, however, that the probe "doesn't look like a massive smoking gun." "The investigation could be into warranty reserves, they could have recognized an item at the wrong time," Nelson said.

• PayPal says makes $1 billion in small-business loans in first two years: PayPal Holdings, the online payment processor, said on Tuesday its small-business lending program has processed $1 billion in loans in the first two years of its launch and more than doubled loan growth in that span. PayPal Working Capital is extending short-term loans totaling more than $100 million per month, or $3 million per day, to a mix of sellers on eBay and standalone small- to medium-sized merchants, the company said at a payments conference in Las Vegas. PayPal separated from eBay earlier this year, and Chief Executive Officer Dan Schulman has stated he is looking to use PayPal's size to offer affordable financial services widely.

• Even As Oracle and AWS Circle Each Other, Oracle Will Not Build a Giant Cloud System Like AWS: Counter to the expectations of many industry watchers, Oracle, the world’s largest maker of software for businesses, is not planning a global computing system to rival Amazon Web Services or Microsoft Azure, the other big global cloud companies. While it has built out a network of 20 data centers, largely filled with Oracle equipment, it now plans to go after customers by offering faster updates of its core products, new ways of customizing applications and a much younger, retooled sales force. “We’ve made our investments,” Mark Hurd, co-chief executive of Oracle, said in an interview. Compared with A.W.S., he said, “the place we like is one of higher profit margins.” Besides applications, Amazon sells raw computing and data storage, which are generally lower-margin businesses. Oracle is expected Tuesday to announce better security inside its cloud because of changes from its proprietary hardware, but won’t sell access to the machines on their own. Oracle’s better margins, Mr. Hurd said, will come from selling large-scale software that can be customized by its buyers to suit local markets and products. He hopes to lower his sales costs and bring in younger companies with salespeople recruited straight from college and given crash courses in selling Oracle cloud products. In the last four years, he said, the company has hired 1,000 graduates a year. “We train them in products, sales skills and processes,” said Mr. Hurd. “They’re selling within a year, with a much lower cost of sales.” Oracle’s sales force, some 30,000 people globally, is considered among the most aggressive and highly compensated in the tech business. Now, Mr. Hurd said, “we have to do some branding” to entice the kind of smaller companies and start-ups the new sales team is chasing. The ease of modification and the faster sales force illustrate how, while still far apart, Oracle and A.W.S. are becoming more like each other as cloud computing goes mainstream. For its part, a few weeks ago A.W.S. dropped all pretense and made a direct bid for Oracle’s customers. A.W.S. even put up a thinly disguised picture of Oracle founder and executive chairman Larry Ellison.

• Japan's Carmakers Proceed With Caution on Self-Driving Cars: At this week’s Tokyo Motor Show, Nissan Motor Co. will display a concept car with retractable steering wheel and message-flashing windshield, joining Honda Motor Co. and Toyota Motor Corp. in exhibiting vehicles with autonomous modes for changing lanes and avoiding collisions on highways. But while Tesla deployed its Autopilot system this month and Google aims to have fully self-driving cars on the road by 2020, Japan’s automakers see a wait for such vehicles, with introductions coming only after 2025. The unwillingness to take a software-testing approach -- with beta versions used for trial periods and ongoing updates -- and apply this to car-making divides traditional auto companies and tech-industry challengers, said Tatsuo Yoshida, an auto industry analyst with Barclays Plc. Whereas Tesla beamed Autopilot into Model S sedans with the promise the system would continually learn and improve itself, Japan’s automakers view such an approach as putting features on the road before they’re ready. They’re also wary of exposure to liability if they introduce safety features that fail. Each of Japan’s three biggest automakers have set targets to start deploying the technology around 2020. Tesla Chief Executive Officer Elon Musk told reporters this month the company can probably develop a completely self-driving car in about three years, while Google has forecast about a five-year time frame.

• Rackspace Launches Carina, A Hosted Environment For Running Docker Containers: Rackspace is getting deeper into the container game. The company today announced the beta launch of its Carina container service. Carina gives developers access to a fully managed container environment that offers bare-metal performance and still allows them to use the same native Docker tools they are used to from their local development environments. Right now, the service — which will remain available for free during what the team expects to be a long beta period — focuses on Docker’s tooling, but over time, the idea here is to use the flexibility of Magnum and OpenStack to give developers the ability to use other container orchestration engines like Kubernetes and Mesos, as well. The team believes that the combination of a multi-tenant environment and (near) bare-metal access will allow it to deliver the right mix of a high-performance system and low cost. Otto acknowledged a multi-tenant system may not be the right choice for workloads that are highly security sensitive, but the service also gives users the choice to also run containers on Rackspace’s private cloud service. The service provides users with a set of defaults based on the company’s experience, but users can then tweak these as necessary. Otto believes most users will opt to stay with Docker Swarm as the container orchestration engine, simply because it gives users more control (and in an imperative way) than Kubernetes, which is far more opinionated. Because of the way the company architected the service without using a traditional hypervisor (using libvirt/LXC instead), containers will start significantly faster than on a similar service that uses more traditional virtual machines. Because there are still some advantages to running containers on virtual machines — especially when it comes to security — Rackspace also plans to support virtual machines. It’s no secret that large public cloud vendors like Google, AWS and Microsoft now all offer their own container services. The Rackspace team believes that it has an advantage over them in terms of speed, but also because they don’t abstract away the containers from developers. In addition — and this is no surprise coming from Rackspace — the company believes it can offer a level of service that is significantly higher than its competitors. Rackspace already worked with a number of partners to test the service in a private beta. These include O’Reilly Media, which is using containers to power parts of its online learning tools, as well as the Drupal and WordPress hosting service Pantheon, which has long used containers at the core of its platform.

Daily Tech Snippet: Tuesday, July 21

• Here is an MP3 version of this snippet

• Ahead of Earnings, Amazon Surges on Confidence Over Cloud, Spending Discipline: Amazon.com’s shares reached another record, three days before the company’s earnings report, as investors expected upbeat results from the fast-growing cloud-computing business, a boost in sales from last week’s Prime Day promotion and signs that the company is controlling spending. The stock set records three days last week and is up 12 percent this month. The Seattle-based online retailer reports earnings Thursday. Analysts on average project earnings of $364 million on sales of $22.4 billion, according to data compiled by Bloomberg. The shares’ advance shows renewed faith that Amazon can boost profit margins despite Chief Executive Officer Jeff Bezos’s history of sacrificing short-term earnings to invest in growth. A year ago, the company’s shares tumbled almost 10 percent the day after reporting a $126 million quarterly loss, hurt by a surge in spending on such items as its new Fire smartphone. This year, the company has invested in online entertainment and same-day delivery in big cities, increasing the allure of a $99 annual membership in Amazon Prime. Investors see such investments -- rather than on hardware -- as a sign of greater discipline. Amazon this year also began reporting results for its Amazon Web Services cloud-computing division, revealing a fast-growing and profitable enterprise to complement the core retailing business. The inaugural Prime Day promotion helped boost memberships, which will increase revenue through the year, said Michael Pachter, an analyst at Wedbush Securities. Amazon Prime members spend significantly more than nonsubscribers. He estimated that Prime Day added about $500 million in new third-quarter sales. Pachter issued a report on Sunday encouraging investors to buy Amazon shares in advance of earnings, in part citing the company’s cloud-computing operation. “Amazon Web Services has a much higher profit than anyone thought, and we know it’s growing at a ridiculously fast rate,” he wrote.


• IBM Drops After Revenue Declines for 13th Straight Quarter: IBM fell after reporting second-quarter sales declines across all of its major business units, missing analysts’ estimates and marking the 13th straight period of falling revenue. “Investors are losing patience given the revenue miss,” said Bill Kreher, an analyst at Edward Jones “It’s a show-me stock.” IBM, based in Armonk, New York, fell as much as 5.3 percent to $164.01 in late trading. The stock has lost about 10 percent in the past year. Total revenue fell 13 percent from a year earlier to $20.8 billion, or a 1 percent decline adjusting for currency impact. Analysts estimated $20.9 billion on average. The company said it cut total expenses by 7.9 percent from the year-earlier period. Last quarter, IBM said full-year earnings would greatly hinge on its software business, which saw a sales decline of 10 percent in the second quarter, or a 3 percent decrease when excluding currency impact. The hardware business’ sales fell 32 percent as reported.


• JD.com launches online store to sell U.S. brands in China: JD.com Inc, the no. 2 Chinese e-commerce company, said it would start selling U.S. products to customers in China through a new store on its website, as it looks to battle competition from bigger rival Alibaba. Both companies have recently started exclusive stores that offer products from countries including Japan, France, South Korea and Australia. JD.com also said on Monday that it would be the first authorized seller of Taylor Swift merchandise in China, which will include a line of clothes designed by the singer exclusively for JD.com customers. JD.com said the "U.S. Mall" would feature American brands such as Converse, Samsonite, and major apparel labels that are part of the Global Brands Group, including Nautica Kids and Jeep apparel. JD.com's U.S.-listed shares were little changed at $35.39 on the Nasdaq. Up to Friday's close, the stock had gained about 53 percent this year.


• EBay Reports Sale of Enterprise Unit as Earnings Beat Estimates: EBay is sailing into the split of its two businesses — PayPal payments and its online marketplace — with a reassuring show of strength as its second-quarter financial performance surpassed Wall Street forecasts. With its PayPal business to be spun off at the end of this week, eBay also did some last-minute corporate cleanup Thursday morning. The company announced that it was selling its eBay Enterprise unit, which handles warehousing and logistics for third-party sellers, for $925 million to an investors consortium led by two private equity firms, Permira and Sterling Partners. Both eBay’s profits and revenue were better than expected, after taking into account the sale of its warehouse and logistics arm. Shares in eBay, which reported its results before the stock market opened, were up about 3 percent in midday trading. The company’s revenue increased 7 percent from the year-earlier quarter to $4.38 billion. The reported revenue fell short of analysts’ average estimate of $4.49 billion. In the quarter, eBay pulled out the revenue from eBay Enterprise. If included, total revenue would have been $4.65 billion, above Wall Street forecasts. The split-up strategy is the byproduct of a drawn-out proxy fight with Carl C. Icahn, an activist investor, who advocated a PayPal spinoff. His pressure and logic prevailed, and the company declared in September that it planned to break itself up.

Daily Tech Snippet: Friday, July 10

• Here is an MP3 version of this snippet

• Facebook Redefines 'Clicks' In Significant Changes to Pricing Model on Online Ads: Facebook is redefining the term “click” to appease its many advertisers. The social network will no longer charge marketers for what are known as engagement clicks — things such as “Likes,” comments or shares of an ad. Instead, Facebook will only count a click that generates a desired result for a marketer, like a website visit or an app install. The change comes just a few weeks after Facebook also changed up its definition for video “views.” Essentially, it’s responding to advertisers that aren’t interested in paying for someone to “Like” their advertisement when they would rather have an app install instead. These clicks are typically more expensive, but Facebook argues that they are also more valuable. It’s a new approach for Facebook but not a new approach for the industry. Twitter started testing this kind of ad — called direct response ads — almost a year ago and rolled them out to all advertisers at the end of May. It’s clear that advertisers want this model; Facebook and Twitter wouldn’t change things up unless advertisers were clamoring for it.


• IBM Discloses Working Version of a Much Higher-Capacity Chip: IBM said on Thursday that it had made working versions of ultradense computer chips, with roughly four times the capacity of today’s most powerful chips. The development lifts a bit of the cloud that has fallen over the semiconductor industry, which has struggled to maintain its legendary pace of doubling transistor density every two years. Intel, which for decades has been the industry leader, has faced technical challenges in recent years. Moreover, technologists have begun to question whether the longstanding pace of chip improvement, known as Moore’s Law, would continue past the current 14-nanometer generation of chips. Each generation of chip technology is defined by the minimum size of fundamental components that switch current at nanosecond intervals. Today the industry is making the commercial transition from what the industry generally describes as 14-nanometer manufacturing to 10-nanometer manufacturing. Each generation brings roughly a 50 percent reduction in the area required by a given amount of circuitry. IBM’s new chips, though still in a research phase, suggest that semiconductor technology will continue to shrink at least through 2018. The semiconductor industry must now decide if IBM’s bet on silicon-germanium is the best way forward. It must also grapple with the shift to using extreme ultraviolet, or EUV, light to etch patterns on chips at a resolution that approaches the diameter of individual atoms. In the past, Intel said it could see its way toward seven-nanometer manufacturing. But it has not said when that generation of chip making might arrive. IBM also declined to speculate on when it might begin commercial manufacturing of this technology generation. This year, Taiwan Semiconductor Manufacturing Company said that it planned to begin pilot product of seven-nanometer chips in 2017. Unlike IBM, however, it has not demonstrated working chips to meet that goal.


• How to use Facebook’s new News Feed controls: Facebook made a pretty big announcement Thursday, saying it will now allow users much greater control over what appears in their News Feeds. Prioritize whom to see first: There are a few things you can customize in the new menu, starting with telling Facebook which friends of yours should always be at the top of your news feed. Facebook calls this the "See First" crowd. Unfollow people to hide their posts: The next step gives you a chance to unfollow people whose posts may have been making you avoid the news feed. Reconnect with people you unfollowed: Facebook also gives you the chance to "Reconnect with people you unfollowed" if you're in a forgiving mood. Discover new Pages: This section is more or less a way for Facebook users to find the more professional pages on the site — those run by brands, celebrities or other public figures.


• Slew of Developer-Focused Announcements from Amazon, Including “Amazon Fling,” A Developer Toolkit For Sending Media From Mobile Apps To Fire TV: Amid a slew of developer-focused announcements from Amazon today focused on things like using AWS for app testing, and the arrival of a new API Gateway service, for example, the company also introduced the new “Amazon Fling” service. Available as an SDK for iOS and Android applications, Amazon Fling allows developers to build apps that can send media content to Amazon’s Fire TV as well as work as “second screen” or companion apps to what’s already running on Fire TV. “Flinging,” which is basically Amazon’s own version of Chromecast’s “casting,” lets a mobile app maker send a video, audio or images from their iOS or Android app to a user’s big screen TV by way of the Amazon Fire TV media player. It does this by simplifying the underlying network discovery and communication technologies that would otherwise be difficult to implement, the company explains. With Amazon Fling, Amazon made a point to appeal to developers who are already leveraging Chromecast functionality in their apps by making it possible to integrate the new Amazon SDK with an existing Android or iOS Chromecast app. To simplify the process, the company released developer documentation that explains how to modify an existing app that’s using the Google Cast Companion Library to also support Amazon Fling. Developers who have already built an Amazon Fire TV app can use the SDK to both control their app, if it’s already installed, or remotely install it if not. For developers without an Amazon Fire TV app, they’re able to use the Amazon Fire TV media player instead.

Daily Tech Snippet: Friday, June 26

• Here is an MP3 version of this snippet

• Marketers Will Drool Over Facebook’s New Signup Ads That Auto-Fill Your Email Or Number: Businesses desperately want your email address, but it’s annoying to enter it on mobile. Cue Facebook’s latest News Feed ads. A marketer can buy an ad asking for you to sign-up for a newsletter or request a sales call, and with two-taps you can auto-fill your email address, phone number, or other info you’ve registered with Facebook. Facebook is testing these “Lead Ads” with a small group of businesses around the world to gain feedback before considering rolling them out. Google has tested similar contact form ads for years, but they always required users to manually enter their info. To make Facebook’s ads privacy-friendly, Facebook won’t just hand your info over. You have to click the call-to-action button like “Subscribe,” and then “Submit” your info once you’ve reviewed what was auto-filled. Users can edit that info inside the ads, and businesses only get what’s voluntarily submitted. From there, advertisers can only use the data in accordance with a mini-privacy policy they embed in the ad, and can’t resell it to anyone else. Rather than ads that lead you offsite to fill out sign-up forms, it’s pulling that experience into the News Feed, so when you’re done, you keep right on social networking. Removing the click away and manual data entry could drastically boost conversion rates on these kinds of ads, making them easier to sell at higher prices.


• Alibaba affiliate launches Internet bank for small enterprises: Alibaba's financial affiliate launched on Thursday Internet bank MYbank, targeting the small- and medium-sized Chinese enterprises that have struggled to obtain credit from major financial institutions. MYbank, which is 30-percent owned by Alibaba-linked Ant Financial Services Group, has 4 billion yuan ($644 million) of registered capital and will offer loans of up to 5 million yuan. It will only be able to take in deposits when regulators approve a facial recognition technology that allow its customers to remotely open bank accounts, an Ant Financial spokeswoman told Reuters. MYbank follows in the footsteps of Alibaba arch-rival Tencent Holdings Ltd, which began trial operations of its WeBank, China's first online bank, in January. Credit conditions have remained tight for SMEs, despite a series of policy easing, as banks avoid the companies worst hit by an economic slowdown. State-owned banks have also avoided customers such as farmers and smaller businesses because of the difficulties in assessing their credit worthiness and they have little to offer as collateral.


• Clashes Erupt Across France as Taxi Drivers Protest Uber: Irate taxi drivers blocked roads, burned tires and attacked drivers who they thought were working for Uber, the ride-hailing company, during a day of protests Thursday that disrupted Paris and slowed traffic to a crawl. Fights broke out on streets, a couple of cars were burned and travelers were frustrated all over Paris and in major cities elsewhere in France, where the labor battle snarled several cities’ streets. “Economic terrorism” is the favored term of Parisian taxi drivers for Uber’s lower prices, flexible hours and the way it is operating outside French law. In France the UberPop service is illegal. It allows anyone who wants to become a driver to sign up without a professional chauffeur license and to pick up fares through the Uber smartphone app. Other Uber services are permitted under strict conditions, and the company is contesting the constitutionality of parts of the law limiting UberPop. The company has instructed its drivers to keep working. The French interior minister, Bernard Cazeneuve, who met Thursday evening with the taxi unions, deplored the violence, but saved his most angry words for Uber. He said the company behaved with “arrogance” in its flouting of French law and declared that “the government will never accept the law of the jungle,” referring to Uber’s stark form of competition.


• Amazon wants the Echo to be your personal robot butler: Amazon's fuller ambitions for the Echo and its Alexa cloud-based voice software have become a little clearer. The company announced Thursday that it is opening up the system to developers, so that anyone can design their own programs to work with the sleek cylindrical in-home assistant. The company announced that its new developer's kit will make it easy for programmers to work with the device, even without previous knowledge of how to work with voice-recognition systems. That means amateur and professional developers alike can make programs for themselves. That means they could make custom commands for smart appliances such as thermostats and sprinklers, or custom programs that work with Web sites so you can get news updates fed to your Echo. It also means Amazon's set up the Echo to potentially be the central point from which you run your whole life. The Echo itself can't vacuum your home, but it could theoretically tell your vacuum when to start going. It may not do your dishes, but it can prompt your dishwasher to fire up as well. So while it won't be your robot maid, it could theoretically be your robot butler. Earlier this week, Amazon began selling the Echo widely -- it had previously been an invite-only device. Those moves set Amazon up a little more solidly as a competitor to Apple and Google, which have also laid out ambitions to create hubs for the smart homes of the future. Earlier this week, Apple released a new set of home-related prompts that will work with its Siri voice assistant for individual smart devices -- "turn on the coffee maker" -- as well as for groups of smart devices. So you can tell Siri to "turn off the upstairs lights," for example, if you want to save a little energy while your family is gathered in the living room.


• IBM Pushes Networking and Research to Catch Rivals in the Cloud - Mulls India Data Center: IBM will expand the networking services available through its SoftLayer cloud technology, trying to catch up with deep-pocketed rivals. IBM researchers and engineers are now making regular trips to SoftLayer’s headquarters in Dallas to discuss product plans and get educated about cloud operation, said Marc Jones, SoftLayer’s chief technology officer. Increasing cloud revenue is critical for IBM. It has tried to boost sales for operations like cloud computing and data analytics but that hasn’t been enough to make up for declines in longstanding operations -- such as services and hardware -- and revenue lost from divestitures. The initiative comes almost two years after the Armonk, New York-based company acquired SoftLayer for $2 billion to help IBM compete against Google, Microsoft and Amazon. SoftLayer also plans to open a data center in Sao Paulo, Brazil, and is looking at a location in India.


• Uber growing 40% month-over-month in India: Uber’s Asia Head: Uber may have had its share of challenges in the Indian market, but the ride sharing app has been growing at over 40 per cent month-over-month here. In fact, Bangalore and Kolkata are some of the fastest growing cities for Uber globally, Eric Alexander, Head of Business, Asia, Uber told Techcircle. The team at Uber India has their work cut out. The regulatory overhang over Uber, which started after a passengers’ sexual assault by an Uber driver in December, continues to play out. It has been facing ban calls in Delhi and other places. Earlier, it came under the RBI scanner over its payment system which automatically debited a user’s credit card after a ride.


• Amazon Puts a Store on Wheels, Continues to Flirt With Physical Retail: Amazon continues to explore new ways to bridge the gap between online and offline retail, even if the most recent example seems stunt-ish. The company today is introducing the Amazon Treasure Truck in Seattle, which will carry a limited quantity of one product each day that shoppers can order on Amazon’s app and then collect from the truck at a designated pickup location. The company said the truck will feature hard-to-find, heavily discounted or limited edition products and food, ranging from paddle boards to beach bikes to steak — yes, steak. The Treasure Truck introduction comes as Amazon flirts with physical retail: Amazon product vending machines have popped up in some airports, and a recent patent application lays out a vision for a new kind of technologically advanced retail store.

Daily Tech Snippet: Tuesday, June 16

• Here is an audio version of this MP3

• Companies - Including IBM and Cloudera - Are Moving On From Big Data Technology Hadoop: There is increasing evidence that Hadoop — one of the most important technologies of the past several years for big data analysis —is not keeping up with the world that created it. On Monday, IBM, which has champion ed Hadoop and put it at the center of its big data strategy, announced it is working on a faster data-processing engine, called Spark. Additionally, a senior executive at Cloudera, probably the largest Hadoop company, said Cloudera is prepared to see key parts of Hadoop diminish in importance, and was increasingly distributing Spark. Hadoop is an open-source architecture that drew heavily on work published by Google in 2004, in particular two different papers on managing, processing and generating very large data sets. Google’s File System and MapReduce, the subjects of the two papers, were based on computing systems that were not organized around drawing a lot of computer memory in a short time; there just hadn’t been that much data before. It did a good job, but it had inherent limitations, since it was adapting one style of computing to another. Spark, by contrast, assumes a world where digital information comes in massive volumes from web browsers, sensors, phones and other things. Does that mean old Hadoop is dead, and with it companies like Cloudera and Hortonworks? Not so fast – they may have been planning for this day. “We’re already the largest distributor of Spark in the world, including Databricks,” said Mike Olson, chief strategy officer at Cloudera. “If MapReduce becomes less important in how people do big data, and it will, we will be there.” Cloudera, he said, has “reset in a smart way, ahead of the others,” by focusing on tools and services for other kinds of analysis besides Hadoop.

• Facebook’s new Moments app is meant to take the pain out of sharing pictures: Facebook on Monday announced a new mobile photo-sharing app that aims to solve a major modern headache: getting the pictures off of everyone's smartphone. The app uses Facebook's face-tagging technology to identify which friends are in your photos so you can sort through the collection by looking for particular people -- "Photos of Joe," for example. You can use Moments to post pictures to Facebook, Instagram and Facebook Messenger, but albums are set to stay between friends by default. Users also choose to sync certain photos to the app -- as can their friends -- so you won't necessarily have to share every photo you took at a particular event with everyone. The app will be available Monday, for iOS and Android devices. Google Photos, which the company announced earlier this month at its developers conference, goes even further than Facebook and lets you search through your pictures not only for faces but also for things such as "sunsets" or "beaches" to easily sift through your photo library. Apple revamped its iPhoto earlier this year to add pictures to the cloud. Flickr also updated its service this spring to make it easier to sort, sync and share your snapshots.

• Chinese Uber Rival Will Raise Funds at $15 Billion Valuation: Two recently merged taxi applications backed by Alibaba and Tencent are seeking to raise funds that value the company at $12 billion to $15 billion. The competing Didi and Kuaidi apps combined in February, and form China’s largest taxi and ride-sharing platforms after merging to limit the rising costs of competing with each other and Uber. Didi Kuaidi still runs separate apps that customers use to access their service, while combining their technology and data. Didi Kuaidi, accounts for 78 percent of ride bookings, while Uber has about 11 percent. Alibaba and Tencent own 10 percent and 13 percent, respectively, in the merged company and Tokyo-based SoftBank also has a stake. The new valuation would make Didi Kuaidi one of the most valuable startups in China after smartphone maker Xiaomi, valued at $45 billion. Meanwhile Uber has told investors it plans to invest $1 billion in China.

• The Growth Equity In Venture Capital: According to data by Dealogic, tech sector IPOs are off to their slowest start since 2009, totaling just $2.35 billion as compared to last year’s total of 62 IPOs valued at approximately $40.8 billion. Companies are now delaying their initial public offerings because they’re able to rely on private investors, such as those in the growth-equity sector, to help fund their next round of capital. Private funding is now filling their capital needs faster and making companies more profitable by raising the valuations. In fact, some companies that might have previously gone public in an effort to raise capital are now becoming acquired before ever hitting the public market. The technology industry is booming, and contrary to popular belief, it’s not just early-stage venture funding that’s steering the ship. Helping to propel this rapid expansion is actually another group of investors that specializes in growing established companies and taking them to the next level, aptly named “growth equity.” In the ecosystem of funding options, growth-equity investors tend to strategically focus on companies with proven technologies and established market adoption — many of which are already generating revenues between $5 million and $100 million. In recent years, growth equity has become its own asset class and is actively followed and monitored by investors. Growth equity enjoys the benefits of investing slightly later down the road in the growth of technology companies, thereby reducing the risk of future financing rounds, while at the same time avoiding the seniority of leverage utilized by private equity firms. The risk-adjusted results of this asset class indicate that better returns can be generated with lower associated risk. Additionally, growth-equity investors tend to be much more hands-on and often occupy seats on the boards of their portfolio companies. This helps to control and lessen the risk associated with investing at this stage. In some instances, growth-equity investors help provide liquidity to founding partners who might have been working for years with little to no return. They also offer the necessary guidance to structure growth-oriented deals that require more complex maneuvers, such as funding mergers and acquisitions.

Daily Tech Snippet: Wednesday, June 10

• Here is an audio (MP3) version of this snippet

• Asia is driving Facebook's growth - Facebook now earns 51 percent of ad revenue overseas - Asia revenue growing 57% Y/Y; by contrast Europe lags the US. For the first time, Facebook has detailed ad sales outside the United States and Canada as a percent of worldwide sales. Overseas markets bring in more advertising revenue than the United States for Facebook, amounting to 51 percent of global ad sales in the first quarter. Growth in Asia was the fastest at 57 percent. While Europe is growing slower than the United States, the Asia Pacific region is ahead and a focus for Facebook. By comparison, Google said that 57 percent of its revenue was from international markets in the first quarter, although it did not break out ad revenue specifically. Mobile advertising represents more than 70 percent of Facebook's total ad revenue, and mobile is particularly strong and attractive to advertisers in emerging markets. Facebook is benefiting from exporters in China trying to reach people outside its country and from an influx of venture capital funding into India, giving start-ups funds for advertising. Total advertising revenue for the quarter increased 46 percent to $3.3 billion, the vast majority of Facebook's $3.5 billion in quarterly revenue. International advertising revenue rose 36 percent from a year earlier, Facebook said.

• Google Talent Departs for Unicorn Herd: Cloudera taps Google VP as Engineering Head, DropBox poaches Neal Mohan for top job: Cloud analytics software company Cloudera said today it has named Daniel Sturman as its VP of engineering. Sturman previously spent eight years at Google, where as VP of engineering he was in charge of keeping its computing infrastructure for services like Google Compute Engine and Google App Engine. Neal Mohan, Google’s VP for display and video advertising, is leaving for the top product job at Dropbox. He is part of a wave of execs departing the search engine in recent months for fast-growing, pre-IPO startups. More recently, Uber claimed Tom Fallows, who had led Google’s same-day delivery service, in November, followed by communication and policy chief Rachel Whetstone. Jawbone nabbed Fallows’s boss, Sameer Samat. Indian e-commerce unicorn Flipkart snatched two Googlers: The VP of product at Motorola and the person who ran the low-cost handset Android One project. On the smaller startup side, the ads product head at YouTube recently headed to Luxe, an on-demand parking startup. There’s more, but you get the idea. Google downplays exits, citing them as regular industry churn. But they come as Google’s core business faces rising threats and fears that it has grown too large and too uninspired to retain ambitious top tech talent. Apparently, the Google bench is not as rewarding for some as the thrill of a unicorn ride.

• Tinder Goes Through A Small Round Of Layoffs; spring-cleaning, not restructuring, company says. Tinder — one of the most popular dating apps currently available across the globe — laid off around 10 percent of its staff last week. TechCrunch has learned and confirmed that the company laid off six members of the 60-65 member team, including three marketing employees and three engineers. TechCrunch was told this wasn’t part of a re-structuring, or even a result of leadership changes with new CEO Chris Payne and VP of Engineering Hugh Williams, but rather a spring-cleaning of sorts. Tinder has gone through much larger transitions before, including a lawsuit waged by former VP of Marketing Whitney Wolfe, the resignation of CMO Justin Mateen, and the transition of Sean Rad from CEO to President. Since then, Chris Payne has joined the team as CEO and Hugh Williams has taken over the engineering squad. The first year of monetization can be tricky for any social startup, and with the complexities of Tinder Plus — ads, premium features, oddball pricing, etc. — it would make sense to double-check that the team is as lean as possible.
• Tesla CFO retires; Firm Will Start Delivering Model X SUV in 3 to 4 Months, Says Elon Musk; Tesla Motors will begin deliveries of the Model X sport utility vehicle in three to four months, keeping close to the timeline the electric-car maker laid out earlier this year, Chief Executive Officer Elon Musk said. “The Model X will be a better SUV than the Model S is a sedan,” Musk, 43, said Tuesday at Tesla’s annual shareholders meeting, held at the Computer History Museum in Mountain View, California. Musk said he’s been driving the latest prototype of the Model X, which Tesla first unveiled as a concept in February 2012 and previously sought to have ready by the end of 2014. More recently, Tesla told investors that initial deliveries to customers, several of whom have been waiting for more than three years, would begin late in the third quarter. Car-based SUVs are popular among female drivers, and in a January interview with Bloomberg, Musk said that the Model X is drawing more than half its orders from women. This is a contrast from the predominantly male customer base for its Model S sedan and the Roadster, which the Palo Alto, California-based company no longer sells. Tesla is also working on the Model 3, to be released in 2017 with a starting price of roughly $35,000. In addition, the company is readying another software upgrade for the Model S, including so-called autopilot driver-assist technology, and “may be able to get it out to early-access customers by the end of this month,” Musk said. Musk has said the company probably won’t turn net income positive until annual sales reach 500,000. “I expect we’ll achieve profitability in 2020,” he said. Musk is by far Tesla’s largest shareholder with 22 percent. He said in February that at the rate it’s growing, if all goes right, Tesla in a decade could be worth as much as Apple Inc., the world’s largest company by market valuation, is now. Musk also said CFO Deepak Ahuja will retire at the end of this year. Ahuja has been Tesla’s CFO since 2008, coming from Ford Motor and seeing Tesla through its June 2010 initial public offering. He said he’s retiring to pursue other life goals.
• Geek shortage stymies Israel's Tech Boom as Soviet emigre engineers retire, fewer youth study advanced science. Israel's technology miracle is threatened by a dearth of people in the very professions that made it happen: engineers and computer scientists. Companies say finding qualified workers is one of their biggest problems. And the shortage may worsen as fewer students sign up for the most advanced math classes, the building block for tech careers. This in an economy whose health depends on exports—about one-third of them from technology companies. One explanation for the shortage: Engineers who emigrated from the former Soviet Union in the 1990s are retiring. "We don't truly appreciate that immigration,'' says Adam Fisher, a partner at Bessemer Venture Partners. "Without that I'm not sure we would be 'Start-Up Nation'.Meanwhile, fewer of Israel's youth are choosing to study advanced math, and there's no increase in those studying advanced science, in part put off by the level of difficulty that could bring down overall grades. The number of high school students matriculating in advanced math dropped by a quarter from 2006, to 9,350 in 2014, according to the Trump Foundation, dedicated to improving education in Israel. Almost a year ago, a ministerial committee drew up a program to increase skilled manpower for the industry. Its plan includes recruiting more Israeli Arabs into the industry, training ultra-Orthodox men and women, luring Israeli engineers abroad to return home, and making it easier for non-Israelis to get work visas. It must be approved by the new cabinet and could be passed later this year. Some parts are in place: About 300 academics were persuaded to return to Israel last year out of 4,300 who registered as willing to do so.
• IBM plans Data Analytics push - bets on Spark, open-source software project that aims to be Hadoop successor.IBM has created a Technology Center in San Francisco to focus on a free open-source software project called Spark, according to IBM executive Rob Thomas. IBM hired 20 people within the last month, Thomas said in a video posted online June 3. “We’re going to be scaling this up to hundreds of people that are just focused on Spark open source and how we evolve that for the enterprise,” Thomas said. Spark is a framework developed originally at the University of California at Berkeley that helps companies process large amounts of data rapidly, by storing information within the fast memory of computers. It is seen by many in Silicon Valley as a potential successor to Hadoop, which has spawned a variety of companies including Cloudera, MapR Technologies and Hortonworks. “This is a much more significant bet than even what we have done on Hadoop to be frank,” Thomas said. “We think Spark is going to be enormous and change the face of enterprise IT.”
• Microsoft drops the price of the Xbox One and introduces a 1TB console; will sell $25 adapter that allows streaming games from console to PC. Microsoft announced Tuesday that it's dropping the price of the 500 gigabite Xbox One to $349, which had previously been advertised as a "promotional" price drop from $399. Now, Microsoft will offer a new 1 terabyte model -- that's double the storage of the old standard model -- for $399 instead, the company said in a blog post. The Xbox is still locked in a battle with Sony's PlayStation to control the console world, and this is a clear play to appeal to hardcore gamers. As gaming guide Kotaku and others have reported, Sony is, in fact, expected to release a 1 TB version of the PlayStation soon. Microsoft also had some more news on its growing efforts to mix Xbox and PC gaming; a major feature of its upcoming operating system is that users can stream games from their console to their computer. To that end, Microsoft also announced it will sell a $25 adapter that will allow players to use their wireless controllers with their current computers. The company has redesigned the controller to allow players to plug their gaming headsets into the controller, which gives them the option to control settings such as the volume of their microphone or the game's audio while they play. Microsoft has also improved the quality of the sound that comes through the controller. The new controller doesn't mean, however, that you have to buy all new headsets or other accessories. "All existing controller accessories will work with the updated controller," the company said.
• China's big biotech bet starting to pay off as country's patent portfolio burgeons. Years of pouring money into its laboratories, wooing scientists home from overseas and urging researchers to publish and patent is starting to give China a competitive edge in biotechnology, a strategic field it sees as ripe for "indigenous innovation." The vast resources China can throw at research and development - overall funding more than quadrupled to $191 billion in 2005-13 and the Thousand Talents Program has repatriated scientists - allow China to jump quickly on promising new technologies, often first developed elsewhere. These efforts were illustrated vividly in April - not without controversy - when scientists at Sun Yat-sen University in Guangzhou published results of a ground-breaking experiment to alter the DNA of human embryos using new gene editing technology. Data compiled by Thomson Innovation, a Thomson Reuters unit, shows China is a growing force in gene editing, with a burgeoning patent portfolio. More than 50 Chinese institutions are patenting in the field, led by the Chinese Academy of Sciences, universities, the Anhui Academy of Agricultural Sciences and Beijing Jifulin Biotech. Nearly a fifth of the 518 families of gene editing patents analyzed since 2004 were associated with Chinese entities. For top-tier institutions, "the level of available resources is incredible in terms of the freedom, the flexibility that gives key leading Chinese scientists to move very, very fast on a given research track if a new opportunity arises".