Daily Tech Snippet: July 21, 2016

• Dollar Shave Club hit the jackpot when Unilever agreed to buy the online men's razor merchant for $1 billion. Other e-commerce startups such as Birchbox and Stitch Fix can't necessarily expect their own suitor to sweep in with such sweet deals. That's because the key to Dollar Shave Club's appeal is not so much its online prowess but the fact that it built a powerful brand in four years.  Dollar Shave Club upended the industry's traditional business model by offering a subscription service that sells blades for as little as $3 a month (including shipping and handling). The day Dollar Shave Club started selling subscriptions in March 2012, the company released a YouTube video starring founder Michael Dubin. He tells viewers the product is f***ing great, "so gentle a toddler could use it." The website crashed, but the blades sold out in six hours. The video has been viewed about 23 million times. The company reached $150 million-plus in sales in 2015, Unilever said in a press release announcing the deal. That despite the fact that the blades lack many of Gillette's high-tech enhancements. Few other e-commerce startups can claim to have built a brand so quickly. Unilever and P&G are masters at traditional marketing, mostly offline, but they struggle with the direct-to-consumer brand-building at which upstarts like Dollar Shave Club excel.

• Intel's slowing data center growth overshadows strong profit: Intel on Wednesday reported slower revenue growth at its data center business, which makes semiconductors used in high-end servers, overshadowing a better-than-expected quarterly profit. Shares of the world's largest chipmaker fell 3 percent in after-hours trading. Hurt by weak demand from enterprises, revenue at the highly-profitable unit rose 5 percent to $4 billion, but lagged the previous quarter's 9 percent increase and remained below Intel's annual target of low double-digit growth.Net revenue rose 2.6 percent to $13.53 billion, narrowly missing the average analyst estimate of $13.54 billion.Intel reported a better-than-expected profit as its cost-cutting begin to pay off. In April it announced plans to slash 12,000 jobs, or 11 percent of its global workforce, of which it said about half was already complete. Intel's forecast for $14.9 billion in current-quarter revenue topped the average analyst expectation of $14.63 billion. Net income fell to $1.33 billion, or 27 cents per share, in the second quarter, from $2.71 billion, or 55 cents per share, a year earlier

• Uber Investors Said to Push for Didi Truce in Costly China Fight: Uber Technologies Inc. investors have a message for management: It’s time to wrap up the costly fight in China. Several institutional investors are pushing the ride-hailing company to ink a partnership agreement with China’s market leader Didi Chuxing, according to people familiar with the matter, stemming the billions of dollars Uber is spending to expand in the region.Uber and Didi are bleeding cash in China as they fight for dominance in the world’s most populous country. Uber has said that it is spending at least $1 billion a year to expand its business in the country. Both are giving out incentives for drivers and free rides to compete for market share.Benchmark’s Bill Gurley -- an Uber investor and board member -- spoke briefly with Didi President Jean Liu at the Code Conference in Rancho Palos Verdes, California, a few months ago, according to a person familiar with the matter. Didi is in the lead on its home turf, with 14 million drivers signed up in 400 Chinese cities. Uber has set a target of operating in 100 cities this year. Uber set up a separate corporate entity to insulate its Chinese business, which has gathered local Chinese investors. Still, the parent company has also invested its own money, keeping the units financially intertwined. Among private technology companies, the rivals are giants. Uber, which was last valued at nearly $68 billion, says it has access to more than $11 billion in cash and equity. Didi, which was last valued at $28 billion, says it has more than $10 billion at its disposal in cash and equity.

• Strong demand from China buoys Qualcomm forecast: Qualcomm Inc forecast current-quarter profit largely above market estimates as it sees strong demand for its mobile chips in China and expects to sign more licensing deals. Shares of the company, which also posted a better-than-expected third-quarter profit, rose about 7 percent in extended trading on Wednesday.The company, whose chips are used in Apple Inc and Samsung Electronics Co Ltd smartphones, is focusing on its flagship mobile processors to regain the market share. Qualcomm expects to launch Snapdragon 821, an advanced and a faster version of Snapdragon 820, which powers Samsung Galaxy S7 and S7 edge smartphones."I think it is pretty straightforward...Samsung is back as their customer and...more people in China are ready to pay to license their technology...so it looks like the company is well positioned for the coming quarters," said Patrick Moorhead, an analyst with Moor Insights & Strategy.Revenue rose to $6.04 billion quarter ended June 26 from $5.83 billion a year earlier. Net Income attributable to Qualcomm rose to $1.44 billion, or 97 cents per share, from $1.18 billion, or 73 cents per share.

• EBay beats revenue estimate, bumps up forecasts: Online retailer eBay Inc reported better-than-expected quarterly revenue and raised its sales forecast for the year as efforts to revamp its online marketplace start to pay off. EBay shares were up 8 percent after the bell on Wednesday after the company's board also authorized an additional $2.5 billion stock buyback program. The company, which spun off PayPal last July, has tackled slowing growth by focusing on small business sellers, while offering a bigger selection of products. Gross merchandise volume, or the total value of all goods sold on its sites, was up 4 percent at $20.9 billion in the second quarter ended June 30, helped by strength in its U.S. business. The number of active buyers rose 4 percent to 164 million. The company's revenue also got a boost from robust sales at Stubhub, which won a 6.5 year revenue-sharing deal to resell tickets for the New York Yankees last month.The company's net income rose to $435 million, or 38 cents per share, in the latest quarter from $83 million, or 7 cents per share, a year earlier. Revenue rose 5.7 percent to $2.23 billion, ahead of analysts' average estimate of $2.17 billion. Up to Wednesday's close, shares of the San Jose, California-based company had fallen 5.6 percent in the past 12 months.

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: Wednesday, April 20

• Intel to Cut 12,000 Jobs as PC Demand Slumps: Intel, the world’s largest maker of semiconductors, said on Tuesday that it was laying off 12,000 people, about 11 percent of its work force, as it continues to reel from a long downturn in global demand for personal computers. Intel, the world's largest chipmaker, lowered its revenue forecast for the year. It now expects revenue to rise in mid-single digits, down from its previous forecast of mid- to high-single digits. Intel's shares were down 2.2 percent at $30.90 in extended trading. Net revenue rose to $13.70 billion from $12.78 billion. Non-GAAP net revenue came in at $13.80 billion, compared with analysts' average estimate of $13.83 billion, according to Thomson Reuters I/B/E/S. Adjusted earnings of 54 cents per share topped Wall Street forecasts of 48 cents. Up to Tuesday's close, Intel's shares had fallen 8.4 percent this year. Yet Intel still gets 60 percent of its revenue from chips supplied to PCs, and its profit margins there are not as good as in data center chips, its other major business. The company’s other businesses have small profits, or else lose money. That means PCs are still core to what Intel does. Most of the layoffs, along with things like consolidating facilities and cut projects, are expected to be inside the PC business. Employees who are affected by the restructuring will be notified in the next 60 days, the company said. The layoffs are the largest since 2006, when the company let go 10,500 employees.

• Verizon set to make Yahoo's bidder short list, as Yahoo reports tepid earnings: Verizon Communications Inc was set on Tuesday to advance to the second stage of bidding for Yahoo Inc's core assets, as the U.S. internet company went through offers to put together a short list, people familiar with the matter said. The field had whittled down ahead of Monday's first-round bid deadline as several companies that were mulling an offer, including Comcast Corp and Time Inc, decided to opt out, the people said. Meanhile, Yahoo, based in Sunnyvale, California, said revenue fell 11 percent to $1.09 billion, and its net loss was $99 million, or 10 cents a share, in contrast to revenue of $1.23 billion and net income of $21 million, or 2 cents a share, in the same quarter a year ago.

• Credit Suisse Says Instagram Is Going to Have a Huge Year: Facebook Inc.'s purchase of Instagram Inc. continues to look smarter and smarter. After buying Instagram for $1 billion in 2012, analysts at Credit Suisse Group AG now expect Facebook will get more than triple that price tag in revenue from the photo sharing app this year alone. "We are now forecasting $572.5 million and [circa] $3.2 billion in revenue contribution from Instagram in [the first quarter of 2016] and 2016, respectively," analysts led by Stephen Ju said in a recent note. Instagram and premium video will be a big driver for mobile and desktop ad revenue, the team writes. "Our projection for consolidated ad revenue of $5.24 billion in [the first quarter] reflects our projection for $573 million and $260 million in contribution from Facebook's Instagram and premium video ad product, respectively."  When Facebook acquired the startup, it had roughly 30 million users. Monthly active users have now ballooned to 400 million as of September 2015, topping that of Twitter Inc. Much of the recent expansion has been outside of the U.S.
 

Daily Tech Snippet: Tuesday, March 22

• Apple’s Modest Product Upgrades Take Back Seat to Worries on iPhone Encryption: Apple held one of its regular product showcases on Monday, but this time the products did not take center stage. Before the Silicon Valley giant unveiled modest upgrades to its device lineup, Timothy D. Cook, Apple’s chief executive, defended the company’s stance in its fight with the federal government over the encryption on iPhones. The case had been expected to head to a court hearing on Tuesday, but the Justice Department abruptly moved on Monday to cancel the hearing, saying it might not need Apple’s help to break into the phone used by a gunman in last year’s San Bernardino, Calif., mass shooting. In a news conference at Apple’s Cupertino, Calif., headquarters, Mr. Cook stressed that the company would stand fast. “We need to decide as a nation how much power the government should have over our data and over our privacy,” Mr. Cook said. “This is an issue that impacts all of us, and we will not shrink from this responsibility.”

• A Smaller iPhone, Cheaper iPad and Watch at Tepid Product Event By Apple:  Apple introduced a smaller iPhone, a smaller iPad Pro and new bands for the Apple Watch. The company introduced smaller versions of its flagship iPhone and iPaddevices, hoping to eke out more sales growth by filling gaps in its product lineup. The new devices, the iPhone SE and a 9.7-inch iPad Pro, represent a return to the form factors that prevailed before Apple supersized its smartphones in 2014 and added the large, business-oriented iPad Pro last year. So Apple upgraded the components of its new four-inch phone to largely match the speed and features of its flagship iPhone 6s, but at a lower price, starting at $399. The new 9.7-inch iPad Pro brings some of the features of last year’s 12.9-inch iPad Pro, including a stylus, a keyboard and four speakers, to a tablet the size of the consumer-oriented 9.7-inch iPad Air 2. The new Pro will start at $599, and Apple also cut the price of the Air 2 by $100 to start at $399. Apple also reduced the price of the Apple Watch by $100, to $299, and introduced new woven nylon wristbands for the device. More than one-third of Watch owners have more than one band, Mr. Cook said. Analysts say sales have been modest for the watch, which works as a companion to the iPhone. The price cut might encourage more people to give it a try. But Apple also acknowledges that the smartwatch category is in its infancy and it may take several more generations of the device before it really catches on.

• Apple's new iPhone faces challenge measuring up in China, India: Apple's new iPhone SE has first-rate features and a relatively low price tag, but its prospects in key markets like China and India may be limited by its diminutive size. At the product launch in Cupertino, California on Monday, Apple vice president of iPhone Product Marketing Greg Joswiak singled out China as a target market, saying four-inch displays like that on the iPhone SE were still popular with first-time smartphone buyers. Chinese buyers tend to start off with a phone with a 4-inch screen, just like the iPhone SE, he argued. China, Apple's second-biggest market, and India, one of the fastest-growing major markets in the world, are both seen as key for Apple, which expects overall iPhone sales to contract. The iPhone SE is seen as particularly important for India, where Anshul Gupta, research director at Gartner, expects the smartphones market to double to 200 million units in the next two years. But in India and China, smartphones are often the main connection to the digital world, and a big screen is highly valued, analysts said. "(In India) the majority of the low-end, $100 phones have a five-inch display. The key reason being smartphone users are becoming more mature are preferring bigger screen size as many of them don't own a tablet or laptop," said Neil Shah, research director at Counterpoint Technology Market Research based in Mumbai.Only 10 percent of smartphones sold in India at the end of December had a four-inch screen, according to Counterpoint, and Apple accounted for only two percent of overall smartphone shipments in India last year.

• Andy Grove, Valley Veteran Who Founded Intel, Dies at 79: Andy Grove, who escaped the ruins of postwar Europe to become one of the architects of Silicon Valley’s growth into the world’s center of technology creation, died Monday. He was 79. The Hungarian-born refugee was one of the founders of Santa Clara, California-based Intel, playing a key role in building the company from a startup in the 1960s to the world’s largest semiconductor maker, a title it still holds. Grove, who literally wrote the book on how to foresee and overcome a corporate crisis with “Only the Paranoid Survive,” also broke new ground by making the component maker a household name central to the worldwide adoption of the personal computer.  Arriving in the U.S. with less than $20 in his pocket, Grove was taken in by relatives in New York. He studied chemical engineering at City College and graduated at the top of his class, teaching himself English along the way.He moved to the West Coast to attend the University of California at Berkeley, where he earned a Ph.D. in chemical engineering in 1963. After graduating, he joined Fairchild Semiconductor, home to a future group of semiconductor industry leaders who would give Silicon Valley its name. In 1968, he followed Gordon Moore and Robert Noyce out the door as Intel’s first hire. For the founders of Intel, Grove was the perfect fit. Moore and Noyce, both inventors in their own right, were opposite personalities: one studious and low-key, the other a born salesman. In the middle was Grove, a writer of scientific textbooks who brought a fear of failure to the laid-back culture of Silicon Valley in the early 1970s. As a detail-obsessed taskmaster, he forced Intel workers, including Moore, to sign in if they arrived at work after 8 a.m. Always seeking to pass along the benefits of his experiences, Grove acted as a mentor to many of Silicon Valley’s elite -- from Larry Ellison and Steve Jobs to Mark Zuckerberg.

Daily Tech Snippet: Friday, January 15

• Intel’s Earnings Fall; Despite Exceeding Investor Expectations, slowing data center revenue growth sends shares down 5%: Intel Corp's (INTC.O) strong quarterly profit beat was overshadowed by concerns about slowing revenue growth in its highly profitable data center business, sending its shares down about 5.6 percent in after-market trading. In quarterly earnings reported by Intel on Thursday, the company’s revenue was up slightly from the same period last year, but money from data center chips was up markedly. Intel reported that its net income in the fourth quarter of 2015 fell 1 percent to $3.6 billion, or 74 cents a share, from the year-earlier quarter. The company said revenue climbed 1 percent, to $14.9 billion. The net income was above the expectations of Wall Street analysts. They had anticipated 63 cents a share on revenue of $14.8 billion, according to a survey of analysts by Thomson Reuters. For all of 2015, Intel revenue was $55.4 billion, down 1 percent from 2014. Net income was $11.4 billion, down 2 percent. Intel’s share price was down about 4 percent in after-hours trading Thursday evening. Intel still gets 59 percent of its revenue from chip sales to PC makers like HP Inc. and Dell, just as Microsoft and other makers of PC software count on the demand for new PCs to sell their products. Now PCs are a tough business: On Tuesday, the market research firm IDC said 276 million PCs were shipped worldwide in 2015, a drop of 10.4 percent from 2014. On Thursday, Intel said data center chip sales, not just to clouds but to older kinds of computing, rose 4 percent in the fourth quarter of 2015. Along with Intel’s much smaller businesses in memory and sensor chips for devices, data center chips accounted for than 60 percent of the company’s operating profit margin. Keeping up with Moore’s Law is increasingly expensive. In 2001 research and development, along with marketing and sales, cost Intel about $8 billion. In 2015, Intel said Thursday, it cost $20.1 billion. Last year, Intel scared many technologists when it announced that a critical next step in delivering on Moore’s Law would happen about a year later than expected. The company has since released numerous charts showing this was a temporary blip. If it was more than a blip, developers of those self-driving cars, connected drones and other new devices will also struggle to make improvements. Relax, said Stacy Smith, the chief financial officer of Intel. “Moore’s Law is the heartbeat of our company,” he said. “It is the core of our competitive advantage.”

• Amazon Can Now Ship Packages From China to the U.S. by Sea - Enters the Ocean Freight Business: Amazon's China subsidiary has registered in the U.S. to operate as an ocean freight forwarder, an entity that organizes the shipment of goods from a supplier or factory in one region — say, China — to a company or customer somewhere far away, like the U.S. The registration was unearthed by Flexport, a San Francisco-based logistics startup that published a blog post on the news today. “Amazon China now has the appropriate paperwork to provide ocean freight services for other companies,” the blog post read. “This is Amazon’s first step toward entering the $350 billion ocean freight market.” The move comes as Amazon continues to make inroads in controlling more of what happens after a customer clicks “Buy” to ultimately cut down on shipping costs and improve speed and reliability of deliveries. In the blog post, Flexport CEO Ryan Petersen suggests that Amazon’s competitive advantage over old-school freight forwarders will be the automation of some steps of the shipment process through software, thus cutting labor costs along the way.

• You Already Knew Parents Post on Facebook More Than Others. Now Find Out How Much:  Its an old joke that moms and dads love to post photos of their kids on Facebook. But thanks to the social network's research with Ipsos Media—they surveyed 8,000 people in eight countries—and Facebook's internal data analysis, we now know just how true that idea is. Some of the more interesting findings came from its U.S.-based study. For instance, new American moms post 2.5 times more status updates, 3.5 times more photos and 4.2 times more videos than nonparents, per Facebook's internal stats. And hey, the updates work: New parents' posts (those from moms or dads) about their babies get 37 percent more interactions from family members and 47 percent more interactions from friends than their general posts. And more than most people, new moms and dads worldwide seem to be uploading posts from their smartphones. The global end of the research—which included 1,000 people from the U.S., U.K., Canada, Mexico, Spain, Brazil, Germany and Australia, respectively—found that new parents use Facebook mobile 1.3 times more often than nonparents, Facebook found.

Daily Tech Snippet: Wednesday, October 14

• Twitter to Cut More Than 300 Jobs: Twitter announced on Tuesday that it was laying off as many as 336 employees, or 8 percent of its work force, to streamline and refocus as it tries to find ways to attract new users to its social network. “We are moving forward with a restructuring of our work force so we can put our company on a stronger path to grow,” Mr. Dorsey, one of the founders of Twitter, wrote in an email to employees. “We feel strongly that engineering will move much faster with a smaller and nimbler team, while remaining the biggest percentage of our work force. And the rest of the organization will be streamlined in parallel.” The cuts, one of the first major moves by Mr. Dorsey since he was named chief executive, received a mixed reaction from Wall Street. News of the impending layoffs leaked out Friday, after the market closed, and Twitter’s shares fell nearly 7 percent on Monday. After the staff cuts were announced Tuesday morning, the stock rebounded briefly and ended the day at $29.06, up 1 percent. “Cutting 8 percent of your work force is a little jarring,” said Mark Mahaney, an Internet analyst at RBC Capital Markets. “You don’t normally see job cuts at this early stage for growth companies unless there is something materially going wrong with the operations or the strategy.” Twitter’s work force has grown quickly in recent years, through acquisitions and hiring. As of June 30, the company, which is based in San Francisco, had about 4,100 employees, an increase of more than 800 people, or 24 percent, from the previous June. Twitter said Tuesday that revenue and adjusted profit for the third quarter would meet or exceed previous forecasts. The high end of the company’s previous forecast predicted revenue of $560 million and adjusted earnings of $115 million. The company said it would provide “generous” exit packages to those who are losing their jobs, including 60 days of pay for San Francisco employees, which is required under a provision of state law governing large layoffs. Twitter intends to take a pretax charge of $5 million to $15 million in the fourth quarter in connection with the layoffs. Demand for software engineers is intense in Silicon Valley, and former Twitter employees were quick to reach out to those laid off and urge them to join them at other companies.

• It’s not just Twitter: Snapchat is laying off workers, too: Snapchat, the app that's best known for its disappearing messages, is stepping back from creating Netflix-style original content. You might not have realized Snapchat was even in the business of creating scripted shows. But in a move that likely reflects its poor performance, the effort has been shut down — and now the 15-member team responsible for it is being disbanded. Among those leaving? Marcus Wiley, a former Fox comedy executive whom Snapchat hired to run its program planning and development. Snapchat's "Snap Channel" was one of a number of content streams available on the company's app. It appeared on the Discover tab, running alongside partner channels from CNN, BuzzFeed and ESPN, among others. As those companies ran their content on their Snapchat feeds, Snapchat itself produced shows such as "Literally Can't Even" and "Pillow Talk," a casual talk show set in a bedroom where the host and guests appeared on camera in their pajamas. Unfortunately for Snapchat, these shows weren't enough to keep the channel going. After less than a year, the company made the decision to shut down the Snap Channel, a move that convinced Wiley it was time to go.

• Starbucks Is Testing Coffee Delivery to Office Workers in the Empire State Building; Opens a 'secret' kitchen on the ground floor: ree weeks after rolling out mobile ordering in its U.S. stores—a service that lets people pay for drinks in a branded app and pick them up in stores—Starbucks is bringing coffee delivery to the office door. Today, the coffee chain launched its first foray into food delivery with a store on the bottom floor of New York's Empire State Building, which houses 12,000 workers. The program—dubbed "Green Apron Delivery"—lets staffers in 150 offices order food and drinks through a website that only tenants in the iconic building can utilize, meaning that tourists will not be able to participate in the program.  The new store isn't your typical Starbucks, though, mainly because you can't walk inside. Instead, it's more of a kitchen where baristas whip up a small menu of drinks and food. Once someone places an order, a barista makes the drink and delivers it to an office within 30 minutes. Through October, the delivery option is free, and it will cost $2 per coffee run starting next month. Starbucks was quick to emphasize its project in the skyscraper is only a test, but it's the latest example of how the company wants to make digital ordering mainstream. Last month, the coffee chain launched mobile payment at 7,400 stores, and later this year, it will launch another pilot program in its Seattle hometown as part of a partnership with on-demand app Postmates. 

• In Boost to Uber, Ola, India Said to Issue Guidelines for Ride-Hailing Apps: The rules, which aren’t binding, if implemented by the states will be a boost for Uber Technologies Inc. and its bigger competitor Ola that have faced bans in some cities such as capital New Delhi. This month China also proposed rules for ride-booking services that also ask operators to obtain licenses from local authorities and offer cars that are registered for commercial use. The guidelines, prepared by the Ministry of Road Transport and Highways, mandate ride-hailing companies obtain permits from respective state transport departments to operate in a region, the people said asking not to be identified before a public announcement. The states may set the maximum fares to be charged to provide a level playing field with taxis, according to the advisory. The vehicles to be offered must be equipped with a location tracking device as well as an emergency safety button. Drivers, who offer their services on multiple platforms, will need to have a commercial license and the company will have to obtain a police verification certificate.

• Intel’s Earnings Beat: $14.5B Revenue Despite Shrinking PC Market Reflect Move to Cloud Computing; Shares Flat: Intel’s net income for the third quarter was 64 cents a share, above the projections of Wall Street analysts. According to a survey by Thomson Reuters, analysts thought Intel would make 59 cents a share, down from 66 cents a year ago. Revenue was $14.5 billion, down slightly from $14.6 billion a year ago, and above projections of $14.2 billion. Intel shares were down about 3.5 percent in after-hours trading, in part because of a projected fourth-quarter dip in demand from cloud companies. Intel became the world’s biggest producer of semiconductors thanks mostly to personal computers, which eventually led to chips for server computers. Now, the new hot trend of cloud computing — data centers filled with tightly connected servers — is remaking Intel. On Tuesday, Intel, based in Santa Clara, Calif., said that in the three months that ended Sept. 26, PC chips brought in $8.5 billion and chips for servers in cloud computing data centers brought in $4.1 billion. A year ago, PC chips brought in $9.2 billion and data center chips brought in $3.7 billion. Making PC chips is still a big business, but not the way it once was. The data center group also has much higher profit margins: Operating profit from PC chips was $2.1 billion, down 20 percent from a year ago, while data center chips had an operating profit of $2.1 billion, up 9 percent. Intel’s mix of cloud-computing customers shows how much influence is wielded by just a handful of big operations. Of 200 cloud company customers that Intel tracks, just seven take one-third of those chips: Google, Amazon Web Services, Microsoft and Facebook, as well as Baidu, Alibaba and Tencent of China. While the rest are now growing at twice the rate of the top seven, Ms. Bryant said, the big companies are unusually demanding customers, even designing their own chip modifications to make their global clouds work better.

• Facebook Is Building Its Own YouTube Inside Facebook: Facebook has started serving up billions and billions of videos to its users by placing the clips in their feeds, between pictures of your friends’ kids and stories about people who don’t have kids. But what if you wanted to watch a video on Facebook, without looking at kids or reading about them? Like you can on YouTube? Now Facebook is going to let you do that, too: The social network says it is testing a “dedicated place on Facebook for people to go when they exclusively want to watch video,” which will help “people discover, watch and share videos on Facebook that are relevant to them.” Just like you can do on YouTube, the world’s biggest video site. The parallels between the two platforms aren’t a coincidence, and Facebook’s announcement is one that video industry insiders have expected for at least a year, starting when Facebook began its video push in earnest: If Facebook was going to really take on YouTube for video viewers’ time — and, eventually, advertisers’ dollars — then it would have to offer an experience like YouTube, where you could go look for things you want, instead of waiting for Facebook to show you something you didn’t know you wanted.

• Apple loses patent lawsuit to University of Wisconsin, faces up to $862M in damages: Apple Inc could be facing up to $862 million in damages after a U.S. jury on Tuesday found the iPhone maker used technology owned by the University of Wisconsin-Madison's licensing arm without permission in chips found in many of its most popular devices. The jury in Madison, Wisconsin also said the patent, which improves processor efficiency, was valid. The trial will now move on to determine how much Apple owes in damages. Representatives for the Wisconsin Alumni Research Foundation (WARF) and Apple could not immediately be reached for comment. WARF sued Apple in January 2014 alleging infringement of its 1998 patent for improving chip efficiency. The jury was considering whether Apple's A7, A8 and A8X processors, found in the iPhone 5s, 6 and 6 Plus, as well as several versions of the iPad, violate the patent. Cupertino, California-based Apple denied any infringement and argued the patent is invalid, according to court papers. Apple previously tried to convince the U.S. Patent and Trademark Office to review the patent's validity, but in April the agency rejected the bid. According to a recent ruling by U.S. District Judge William Conley, who is presiding over the case, Apple could be liable for up to $862.4 million in damages. He scheduled the trial to proceed in three phases: liability, damages, and finally, whether Apple infringed the patent willfully, which could lead to enhanced penalties.

Daily Tech Snippet: Thursday, July 23

• Archived snippets are here, and MP3 versions are here

• Qualcomm Reports Lower Earnings and Says It Will Cut Jobs: Qualcomm had one of the best playbooks in tech, but it looks like the game is changing. The semiconductor designer and maker helped develop much of the technology used in mobile communications, particularly in smartphones. Qualcomm was a pioneer in the radio technology that makes it possible to send enormous amounts of data over wireless networks without clogging them. Virtually every maker of phones and wireless infrastructure needs to draw off Qualcomm’s intellectual property, which the company leases. The knowledge and profits Qualcomm earned from that business gave it both capital and a head start in building chips for phones, first in advanced third-generation, or 3G, digital networks, then in the succeeding 4G systems.With a market capitalization of $100 billion, over the last 15 years it became the world’s third-largest chip company in terms of revenue. Little of that was on display Wednesday, when Qualcomm reported lower earnings, and, under pressure from Wall Street, announced it would cut about 15 percent of its staff, or somewhere between 4,500 and 5,000 people. Spending will be reduced by $1.4 billion, the company said, including $300 million in shares that Qualcomm has been giving to its top executives and employees. Three new board members, approved by Jana Partners, a Wall Street investment firm that had been pressing for changes, will be put on Qualcomm’s 15-member board. Qualcomm said its third fiscal quarter’s net income was $1.2 billion, down 47 percent from a year earlier. Net income was 73 cents a share, down from $1.31 a share. Revenue fell 14 percent, to $5.8 billion, from $6.8 billion last year. The numbers were slightly higher than analysts had expected. The price of Qualcomm shares was down about 1.8 percent in after-hours trading.


• Amazon is expanding its on-demand home services business -- "Amazon Home Services" -- to 15 new cities: Amazon announced Wednesday that it's expanding its on-demand home services business -- transparently named "Amazon Home Services" -- to 15 new cities. The program was already operating in New York, San Francisco, Seattle and Los Angeles, offering users an easy way to book plumbers, electricians, cleaners and other people who can handle the things you may need around the house. The company announced that it is also expanding the service to let people request help with custom jobs, rather than just the pre-packaged services previously offered. The competition in the on-demand space for home tasks is heating up. Companies such as TaskRabbit jumped in early to the "gig" economy -- in fact, it integrates with Home Services -- and now a host other of cleaning, laundry and other service companies such as Handy, Thumbtack and others have found success providing on-demand workers to take care of your home needs. Amazon says its Home Services "pros," as the service calls them, are vetted and required to keep all appropriate licenses to continue working with the service. Some use Amazon to expand their own businesses. Google is also thought to be jumping into the space. The company recently hired the technical team from Homejoy, a home-cleaning startup that shut down in part because it faced a lawsuit for classifying its workers as contractors rather than employees, Recode reported. The report suggested that Google may try and bake some sort of services link into its search results -- a sort of instant referral from the search page.


• Intel Issues $7 Billion in Bonds to Help Fund Takeover of Altera: Intel tapped the bond market for $7 billion to finance part of its $16.7 billion takeover of Altera Corp. at lower rates than initially offered to investors. The world’s biggest chipmaker sold the longest portion of the four-part deal, $2 billion of 30-year, 4.9 percent securities, to yield 1.85 percentage points more than similar-maturity Treasuries, according to data compiled by Bloomberg. The spread tightened as the day went on, according to a person with knowledge of the matter. Similar-maturity debt was traded at a 1.8 percentage point spread in the secondary market on Tuesday, Bloomberg data show. Intel may have offered generous terms to appease investors dealing with a turbulent market, CreditSights analysts led by Erin Lyons wrote in a research note Wednesday, as a disappointing earnings forecast from Apple sent technology stocks tumbling. Speculation that Intel peer Qualcomm would split may have also “soured investors’ opinions of highly rated tech companies,” they wrote.


• Amazon’s Latest Prime Perk: A Five Percent Cash-Back Credit Card: Amazon continues to make a concerted effort to add new perks to Amazon Prime as it tries to funnel new shoppers into the membership program that turns casual shoppers into Amazon addicts. Here’s another Prime benefit that many people might not know about: Access to an Amazon credit card that pays back 5 percent on every Amazon.com order. Amazon quietly introduced the card, the Amazon Prime Store Card, in March and has been slowly rolling out marketing for it on Amazon.com since then. But the company hasn’t done any PR around it, which is why I first learned of the Prime card by seeing a message on the site last week. The card has no annual fee and allows Prime members to get 5 percent back in the form of a statement credit on all Amazon.com orders — not just Prime purchases — that they place with the card. The card also comes with some promotional financing options, but you should read the fine print yourself because credit card application fine print ain’t nothing to mess with. The card is obviously great for Amazon if it attracts new shoppers to the Prime program, which costs $99 a year and comes with two-day shipping and media streaming, or helps retain current ones. But it’s also important because Amazon will likely be paying lower transaction fees on purchases made with Prime cards compared to purchases made with mainstream credit cards. That’s because store-branded cards typically carry low processing fees when they aren’t associated with Visa, MasterCard or American Express’ networks. As a result, expect Amazon to try its best to get cardholders to make the Prime Store Card the default payment option.


• Tata Communications plans to sell data centre business: Tata Communications plans to sell a 74% stake in its subsidiary Tata Communications Data Centre Pvt Ltd, reports indicate. Talks with some private equity and strategic investors have begun, and the deal size would likely be around $300 million and help Tata Communications reduce debt on its books. According to Tata Communications’ 2014 annual report, the data centre subsidiary is profitable, and returned a net profit of Rs. 23 crore for 2013-14 on a revenue of Rs. 375 crore. The company is yet to announce its numbers for 2014-15. “In the long run, unless the company is able to raise equity funding, its ability to raise additional debt funding may be restricted. This, in turn, could adversely affect the capital expenditure programme in the long run,” the annual report said. Tata Communications Data Centre has facilities in Delhi, Mumbai, Bengaluru, Chennai, Kolkata and Pune and some tier-II, and tier-III towns. The company also provides data centre services in the US, the UK and Singapore. It owns over 1 million sq. ft of data centre and co-location space across 44 global locations and also has eight partner sites in Australia, Malaysia, Germany and the Netherlands, according to the company’s website. In 2013-14, the Tata Communications had a 28% market share of the Indian data market and a 25% market share of the Indian data centre market, according to the company’s annual report. Several global and Indian firms are in the process of setting up data centres in India.

Daily Tech Snippet: Thursday, July 16

• Here is an MP3 version of this snippet

• Google Unveils Buy Button on Ads in Mobile-Commerce Push, Ties Up With Flipkart, Ebay on Deep Links: Google Inc. is testing a feature to let consumers purchase products by clicking through advertisements, seeking to expand options for mobile retail sales. The Internet-search company’s service, Purchases on Google, will let people using smartphones click on select search ads that take the users directly to a retailer-branded product page hosted by Google, according to an e-mail. The tools will work with a “limited number of retailers” for now, the company said. The company also announced an effort to alert smartphone users to information such as sales and loyalty programs at nearby stores, through its Google Now program. Google is expanding information on product ratings in ads and giving users more data on local inventory, as well. The Mountain View, California-based company will make it simpler for ads to drive consumers to shopping apps, rather than to retailer’s websites. EBay and Flipkart, an e-commerce site based in India, are among the early partners in the initiative, which uses a technology called deep links.


• Facebook Adds Buy Button Integration As It Continues To Reinvent Pages: It’s been over a year since Facebook started testing its buy button in ads on the newsfeed, and it appears that the company is now ready to take the service to its next logical progression with dedicated shops on Pages where users can browse for and purchase items. This is a pretty major step in Facebook’s marked plans to take over ecommerce and turn pages into destinations where users can go to grab the information they need and make quick orders. With Facebook’s recent efforts of adding business hours and OpenTable integrations, it’s clear that the shop feature is the next step towards making Pages a more visible part of the user experience. The newsfeed has dominated how users have absorbed information from businesses on Facebook for the past decade. Now, it seems the company is ready to revitalize Facebook Pages and transform them into commerce destinations where users can not only quickly grab business info, but as of today, also buy stuff. Today, Facebook made a pretty clear statement that Pages is shifting to become a major priority for them in terms of user traffic. BuzzFeed reported that the company had recently started testing shops with ‘buy buttons’ inside of Facebook Pages.


• More Fizzle Than Sizzle on Amazon’s Prime Day: Has Amazon Prime Day been everything it was advertised to be? The reaction online at the halfway mark has been less than effusive, with the Twitter hashtag #PrimeDayFail gaining traction Wednesday alongside complaints of lackluster merchandise, paltry discounts and all-around disappointment. The day seemed to start with excitement. But shoppers were quickly grumbling about a less-than-stellar lineup. Others were underwhelmed by the discounts. Clunky navigation on Amazon was an issue. When the deals were good, shoppers reported being put on endless wait lists. Some shoppers even said their Prime Day experience drove them to other shopping sites, including Walmart. An Amazon spokeswoman said the much-deplored, confusing “Join wait list” button simply meant that all available discounts had been placed in customers’ carts. But if those customers didn’t complete their purchases within 15 minutes, that discount was passed on to the next customer in line. The wait list, she said, often allowed Amazon to secure more inventory. After long wait lists for Bose headphones on Wednesday morning, Amazon added more units to the sale, she said.


• Netflix Posts Mixed Results, but New Memberships Surge - Shares up 10% on Earnings: These are heady times for Netflix. On Wednesday, investors even looked past a 63 percent drop in second-quarter profits to send shares in Netflix surging nearly 10 percent in after-hours trading, on news that it added a record 3.3 million global streaming members during the second quarter, eclipsing expectations. There are reasons for caution. The big falloff in net income Netflix reported on Wednesday underscored the huge level of investment required to execute its strategy of pressing deeper into original programming and aggressively moving overseas. Netflix has warned investors that it doesn’t expect to break even globally until the end of 2016. The company has said that it will deliver material global profits after that period of expansion. Total revenue was $1.6 billion in the second quarter, up 23 percent from the period last year.


• Intel Earnings Surpass Forecasts, Driven by Data Centers: Overall for the second quarter, Intel reported net income of $2.7 billion, or 55 cents a share. That was down $100 million from a year earlier, but was the same in per-share terms because Intel has bought back a lot of its stock. Net income was also lifted by a lower tax rate. Revenue fell 5 percent, to $13.2 billion. Intel has been working on making a new future for itself by investing more in chips for data centers and Internet-connected products for industry — and some of those investments are paying off. Sales of chips for data centers rose 10 percent from a year earlier. In total, data center, Internet of Things and high-level memory chip sales were 40 percent of revenue and 70 percent of profits. Intel reported on Wednesday that second-quarter revenue from chips for PCs fell 14 percent.

Daily Tech Snippet: Tuesday, June 2

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

• The Chip Industry Consolidates - In The Third Big Chip Merger of the Year, Intel Agrees to Buy Altera for $16.7 Billion. Recent months have seen a flurry of deals in the semiconductor sector, a business that has become prohibitively expensive for all but the biggest players. On Monday, Intel, the world’s largest maker of chips, said it would pay $16.7 billion for chip company Altera. Last week, Avago Technologies agreed to pay $37 billion for Broadcom. And in March, a company called NXP Semiconductors paid $11.8 billion for Freescale Semiconductor, which began life as part of Motorola and specializes in chips for sensors and cars. “Ten years ago the cost from designing a new chip to making it a product was $10 million to $50 million,” said Mark Hung, an analyst with Gartner. “Today it’s $100 million to $200 million. Solving weird and challenging physics problems at this small size requires a lot of expensive equipment. That’s why there’s all this M.&A.” Besides gaining so-called economies of scale, Intel hopes Altera puts it in better shape for two of the biggest emerging markets, large data centers and the so-called Internet of Things, or computer-enriched machines that work with other devices. Altera’s primary chips help Intel target that market. The San Jose, Calif., company’s chips can be reprogrammed once they leave the foundry, altering some of their functions. Intel’s semiconductors are more powerful, but lack that flexibility. By combining the two types on a single chip, Intel thinks that by late next year it can start offering its big business customers ways of fine-tuning performance to suit specific needs. Also, Intel has fallen behind another big chip company, Qualcomm, in the market for low-powered chips that run mobile devices even as sales of chips for personal computers have slowed. For Intel, improving what it can do in newer, growing sectors is essential. Shares of Altera closed Monday up 5.8 percent. Intel shares were down about 1.6 percent.

• Intel’s $16.7 Billion Altera Deal Is Fueled by Data Centers: Intel Corp. agreed to buy Altera Corp. for $16.7 billion to defend its presence in data centers, forging a deal that will add to a record year for industry consolidation. The world’s largest chipmaker will pay $54 a share in cash for the maker of programmable logic semiconductors, Intel said in a statement Monday. That’s a premium of 11 percent over Altera’s closing share price on Friday and 56 percent from March 26, the day before the possibility of a transaction was first reported. Intel, like other chipmakers, is seeking to contend with growth and rising costs, while trying to defend its most profitable business. The largest deal ever in the $300 billion semiconductor business was announced last week when Avago Technologies Ltd. agreed to buy Broadcom Corp. for $37 billion. Acquiring Altera may help Intel defend and extend its most profitable business: supplying server chips used in data centers. While sales of semiconductors for PCs are declining as more consumers rely on tablets and smartphones to get online, the data centers needed to churn out information and services for those mobile devices are driving orders for higher-end Intel processors and shoring up profitability. Sales at Intel’s data-center division rose 19 percent in the first quarter as Internet companies such as Google Inc. and Facebook Inc. built out their server operations. As a part of Intel, Altera will continue to support designs that couple its chips with others designed on ARM Holdings Plc technology. Companies such as Qualcomm Inc. are preparing to use that to try to break Intel’s dominance in data-center chips, where it has more than 98 percent of the market.

• The history of the Border Gateway Protocol (BGP) - the long life of a quick fix: Internet protocol from 1989 leaves data vulnerable to hijackers: “Short-term solutions tend to stay with us for a very long time. And long-term solutions tend to never happen.” Such is the story of the “three-napkins protocol,” more formally known as Border Gateway Protocol, or BGP. At its most basic level, BGP helps routers decide how to send giant flows of data across the vast mesh of connections that make up the Internet. With infinite numbers of possible paths — some slow and meandering, others quick and direct — BGP gives routers the information they need to pick one, even though there is no overall map of the Internet and no authority charged with directing its traffic. The creation of BGP, which relies on individual networks continuously sharing information about available data links, helped the Internet continue its growth into a worldwide network. But BGP also allows huge swaths of data to be “hijacked” by almost anyone with the necessary skills and access. The main reason is that BGP, like many key systems on the Internet, is built to automatically trust users — something that may work on smaller networks but leaves a global one ripe for attack. Hijackings have become routine events that even experts struggle to explain: What made traffic between two computers in Denver take a 7,000-mile detour through Iceland? How could a single Pakistani company crash YouTube? Why did potentially sensitive Pentagon data once flow through Beijing? To these questions, there are technical answers. But they all boil down to this fact: BGP runs on the honor system, allowing data to get pushed and pulled across the planet in curious ways, at the behest of mysterious masters. In 1989, when BGP was devised, the big issue of the day was the possibility that the Internet might break down. A halt in its furious expansion would have hurt the network’s users and the profits of companies supplying gear and services. Rekhter at the time worked for computing giant IBM; Lougheed was a founding employee of Cisco, maker of networking hardware. “We needed to sell routers. And we had a strong economic motive to make sure this party would continue,” Lougheed said. “When Yakov and I showed up with a solution and it seemed to work, people were quite willing to accept it because they didn’t have anything else.” There were other efforts underway to build routing protocols. BGP won out because it was simple, solved the problem at hand and proved versatile enough to keep data flowing as the Internet doubled in size, again and again and again. Networks across the world embraced the protocol, giving it an edge it has never relinquished. Once technologies are widely deployed, they become almost impossible to replace because many users — including paying customers of technology companies — rely on them and resist buying costly new hardware or software. The result can be a steady buildup of outdated technology, one layer on top of another. It’s as if today’s most important bank vaults sit on foundations of straw and mud.

• Just Dial’s Q4 revenue up 26%: mulls buy-back of shares: Online local business search engine company Just Dial Ltd reported earnings: Annual operating revenue increased by 28 per cent to Rs 589.80 crore over FY14 for the full year ended March 31, 2015. The firm’s operating income rose 25.8 per cent at Rs 156.28 crore during the quarter against Rs 124.21 crore in Q4 FY14. Founded by Mani in 1994, Just Dial is a local search firm that provides listings of small and medium businesses across the country. Lately it has been expanding its business by adding transaction services for its merchants allowing consumers to buy products and services from third-party vendors like a marketplace. With the most recent addition of products, it has become the first significant listed firm involved in product e-commerce marketplace. Last month, one of the early investors of the company, Tiger Global exited from the firm. Meanwhile, the company said that a meeting of the board of directors will be held on June 4, to consider the proposal to buy-back the fully paid-up equity shares of the firm.

Daily Tech Snippet: Monday, June 1

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

• Snapchat Said to Be Valued at $16 Billion in New Fundraising: Snapchat raised $537.6 million in a sale of common stock, with the funding round valuing the messaging startup at about $16 billion. The company may raise as much as $650 million in the round, according to a filing Friday with the Securities and Exchange Commission. That would bring Snapchat’s total financing to more than $1.2 billion, according to Crunchbase, as the company builds its business in pursuit of an eventual initial public offering. By raising the latest funding in common stock, Snapchat is bucking convention for later-stage venture deals, which tend to include preferred-stock provisions that allow investors to decrease their risk. “Investing in common stock, especially at a $16 billion valuation, is not normal,” said Anand Sanwal, chief executive officer of venture-capital data firm CB Insights. “It highlights the leverage that Snapchat had in these negotiations because the investors aren’t getting the protections they normally ask for.”

• Intel is close to clinching a takeover of fellow chip maker Altera for more than $15 billion, the latest sign of consolidation in the semiconductor industry. Intel is expected to pay about $54 a share for Altera, whose specialized chip designs would help Intel expand beyond chips for personal computers. An agreement could be announced as early next week, though sources cautioned that talks are continuing and might still collapse. The two sides had been in talks already this year, though the discussions were eventually delayed when Altera rejected an offer in the ballpark of $54 a share. But after the talks ended, Altera reported quarterly earnings that fell below expectations. Meanwhile, one investor, TIG Advisors, began to publicly campaign for a resumption of talks with Intel. If completed, a takeover would be the latest among chip makers as companies seek larger scale and more diversified offerings. Growing and having more products can give those manufacturers greater savings and negotiating leverage with customers. On Thursday, Avago Technologies struck a roughly $37 billion acquisition of Broadcom to break into the top tier of semiconductor companies. Intel and Altera both make semiconductors, but vastly different types. Intel is known primarily for the standard chips that go into personal computers and computer servers. They consist of millions of transistors, and once created, their performance can be adjusted only slightly by changing the software that works with them. Altera’s chips — known as field programmable gate arrays, or F.P.G.A.s — are lower in power and performance but can be altered after manufacturing to carry out different functions. That gives them far greater flexibility. Intel may be seeking Altera to create computers that combine the power of a standard semiconductor with the flexibility of an F.P.G.A., by means of a board with both types of chip. This could potentially give Intel the ability to build, for example, a computer server that can add functions so it lasts longer inside a corporate data center. This move would reflect several recent trends in the industry. Giant cloud computing centers have become an increasingly large part of Intel’s business, made even more significant as smartphones have lowered the demand for “Intel Inside” personal computers. Intel now has dedicated sales teams working with big chip consumers, like Amazon.com, that tell the company its specific computing needs for its giant cloud systems. In addition, Intel is now concentrating on at least 200 companies that are building significant computing clouds. Adding F.P.G.A.s might be a good way to help companies customize those data centers.

• Social Networking App Path Sells Itself To Korean Messaging Heavyweight Daum Kakao. It isn’t often that a company in Asia acquires a U.S. rival, particularly one that has surfed a wave of hype in Silicon Valley. But that’s exactly what happened this week after Path announced the sale of its flagship app to Korea’s Daum Kakao. The deal is undisclosed, but, as a real acquisition involving two consumer messaging apps, it is notable, particularly as the mobile messaging space transitions from a period of hyper growth to one of consolidation and services. Most people interested in tech are familiar with Path. The five-year-old service burst onto the scene as a beautifully designed, mobile-first alternative to Facebook with a number of features to set it apart from the social network. Ultimately, Path didn’t break out of Silicon Valley and go mainstream in the U.S., but it did make inroads in Asia — particularly in Indonesia. The company is said to have 23 million registered users, four million of whom are in the Southeast Asia country, as of October last year. Path began to focus more intently on Asia with its redesign in 2013, while it took money from Indonesia’s Bakrie Global Group as part of a $25 million Series C last year. Daum Kakao is less known, particularly in the U.S.. The organization was formed when Korean internet firm Daum merged with domestic messaging app company Kakao in a $2.9 billion deal last year. The company’s Kakao Talk app is perhaps the best example of how a messaging app has impacted media and internet distribution — which is where the trend is moving in the U.S. and other countries. Though it has a small global presence — its 160 million registered userbase is far lower than key rivals — the app is installed on over 95 percent of smartphones in its native Korea, where it offers free texts and calls, games, a payment service, taxi-hailing and more. The 2015 Mary Meeker internet trends report, released this week, ranked Kakao Talk as the top messaging app worldwide based on user engagement. Another indicator of its stickiness is that its games business utterly dominates Korea’s iOS and Android app stores, according to data from App Annie. Indonesia is the largest country in Southeast Asia with a population of over 250 million. It was well-known for being the last major market where BlackBerry had any kind of mainstream presence but that’s changed now. The rise of affordable Android smartphones — particularly glamorous sub-$300 devices from the likes of Xiaomi — sent BlackBerry’s sales plummeting. But, the result of BlackBerry’s years of dominance is that there is no single messaging app that dominates Indonesia. That’s unlike other parts of Asia — China (WeChat), India, Singapore and Malaysia (WhatsApp), Japan, Thailand and Taiwan (Line), Philippines (Viber) — where the leadership has been established. With a large population up for grabs and the sizable following that Path enjoys in the country, Daum Kakao is buying itself a larger chunk of the market with this deal. It may also bolster its presence in other parts of Asia, where Daum Kakao claimed Path has 10 million registered users.

• Netflix now accounts for almost 37 percent of American Internet traffic: Netflix's share of Internet traffic is exploding. The streaming service now accounts for 36.5 percent of all bandwidth consumed by North American Web users during primetime, according to the Canada-based network firm Sandvine. That's way up from even last November, when Sandvine estimated Netflix's bandwidth footprint at 34.9 percent of Internet traffic. Sandvine's regular reports on Internet usage — based on traffic as it passes through its systems — have become a reliable indicator of which services are taking up the most bandwidth. Both the season five premiere of "Game of Thrones" and the most recent "Call of Duty" downloadable content led to massive spikes in data consumption, the latest report also finds.

• Netflix, for better or worse, has become the symbol for net neutrality, which has become a key issue in how regulators analyze proposed cable and telecom mergers. To many in the cable and broadband businesses, the invisible hand of Netflix has been apparent in the failed Comcast-Time Warner Cable combination; in likely restrictions on the merger between AT&T and DirecTV; and in the Obama administration’s embrace of net neutrality, to cite just three prominent examples. A pivotal moment in the net neutrality struggle came last year when Netflix agreed to pay Comcast so-called interconnection fees, a deal that Netflix’s Mr. Hastings last month called a “deal with the devil.” (While Comcast has drawn the brunt of Mr. Hastings’s ire, Netflix also reached similar interconnection deals with every other major Internet service provider.) But securing payment from Netflix for fast and more reliable access may have been a Pyrrhic victory for Comcast and the other the broadband providers. Until then the notion of net neutrality had been something of an abstraction. But when Netflix subscribers found their programs constantly interrupted for “buffering” (an interruption to download more data), the ability of Internet providers to play favorites seemed all too real. Once Netflix started paying fees to Comcast, its customers suddenly found their service improved substantially. Netflix’s experience with Comcast became Exhibit A with the F.C.C. when Netflix opposed the proposed Comcast-Time Warner Cable merger. “The combined company would possess even more anti-competitive leverage to charge arbitrary interconnection tolls for access to their customers,” Netflix said in a letter to shareholders opposing the merger. It probably didn’t hurt Netflix’s case that just about everyone in Washington watches the hit Netflix series “House of Cards,” and Comcast is the dominant Internet provider there. Tom Wheeler, the F.C.C. chairman, said he, too, had suffered buffering problems, which he called “exasperating.”

Daily Tech Snippet: Monday, April 20

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

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

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

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

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

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

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