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- 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.
- WSJ's Scoop: Google's eCommerce play: Company will launch buy buttons on its search-results pages in coming weeks. Google Inc. will launch buy buttons on its search-result pages in coming weeks, a controversial step by the company toward becoming an online marketplace rivaling those run by Amazon.com Inc. and eBay Inc. The search giant will start showing the buttons when people search for products on mobile devices, according to people familiar with the matter. The buy button will appear only on mobile phones (and currently only to a small percentage of mobile traffic). 1. It’s currently available only in the US. 2. Shoppers will input their credit card information with Google once, or can use a variety of digital payment methods (Google hasn’t clarified which ones yet). 3. Shoppers will have the option to choose different colors, sizes and shipping options. 4. Shoppers will have their email and address information shared with retailers, if they opt in. (This is important.) 5. The program will continue to be advertising-based, instead of commission-based, which is substantially different from Amazon, eBay, and other marketplaces. So what does this mean for retailers and brands? At ChannelAdvisor, we think this could be big news — one of the biggest disruptions since Google launched Product Listing Ads (PLAs) — and something all retailers and brands need to watch closely. Our experience shows that early adopters of PLAs gained an early and sustainable lead, and we think this change has the potential to further separate the leaders from the laggards. So it makes a ton of sense to us at ChannelAdvisor that Google may be launching its own version of a marketplace by way of a buy button — think of it as a “transactional ad unit.” In fact, given Google’s assets — from Android to Google Wallet to PLAs and everything in between — it’s actually a bit of a surprise to us that this hasn’t happened sooner. Our verdict? This development could be huge for retailers, and those that get on the bus early are likely to widen the competitive gap between themselves and their competitors.
- Just Dial integrates e-commerce marketplace with its local business listings platform. Just Dial Ltd, which runs an India-specific local business listing platform Justdial.com, has expanded the scope of its B2C transaction based services by adding product e-commerce marketplace. The firm had started what it called ‘search plus’ or transaction services where it allowed people to order food online from local restaurants, book doctor’s appointment and flight tickets and much more. With product e-commerce it is now entering a much wider market which can add to its revenue stream. The company has added a ‘shop online’ feature on the homepage where it lists products across several categories such as mobile, appliances, electronics besides a host of others including those which are not pushed by big e-commerce marketplaces such as tiles, sanitaryware, bicycle, paints etc. Since it is a marketplace it essentially connects consumers to third party vendors and only acts as a platform linking the buyer and sellers while facilitating the transaction. In the process it comes across as another hyper local e-commerce platform which links local shops to consumers online. This makes sense for Just Dial as it extends the offering by allowing those local sellers already listed on its platform to sell products. Few weeks ago restaurant listing site Zomato started online ordering of food from its restaurant partners in a similar move to extend an existing business line. However, how seriously the consumer would absorb the Just Dial offering given there are specialised e-commerce ventures doing a similar job with better UI/UX, is something we would get to know as Just Dial starts sharing user stats, from next quarter. One area of differentiator could be its delivery promise. The site claims some products like grocery and medicine ordered through its platform will be delivered in an hour while for some others like electronics, Just Dial says it offers a ‘7-hour express delivery’ for orders placed before 2 PM and the offer comes with Just Dial’s written guarantee along with manufacturer’s warranty & original invoice. Orders post 2 PM will be delivered in the next 24 hours. Although most large e-commerce properties also offer same day delivery for some products, since Just Dial primarily leverages local sellers, it can actually cut down on delivery timelines. It would compete with several players such as Flipkart, Amazon, Snapdeal, ShopClues and Paytm. Indeed Paytm appears to be the closest peer to Just Dial in terms of the e-commerce business model. Others offer warehousing and even logistics services to their vendors.
- People Changes at Tiger Global. Tiger Global Management on Monday announced key personnel changes including the departure of Feroz Dewan, who has run the closely watched Wall Street firm's hedge fund operations and is leaving to start his own business. Dewan, a partner who has been with Tiger Global for 12 years, will leave at the end of June, the firm's founder, Chase Coleman, wrote to clients in a letter seen by Reuters. Tiger Global oversees roughly $20 billion in assets, with roughly half invested in its fast-growing private equity business. The remainder is invested in public equities with about $6 billion in its hedge fund and $3.5 billion in its long-only portfolios. Scott Shleifer, who had been running the private equity business with Lee Fixel, will take over as head of the firm's public equity business. Tiger Global has long been focused on technology investing and listed Chinese e-commerce company JD.com Inc as its biggest holding at the end of the first quarter. It also raised its stake in Alibaba Group Holding Co , which listed its shares in the biggest ever initial public offering last year, a regulatory filing shows. The hedge fund started the year on a rocky note but recovered some ground in April with a 3.2 percent gain, leaving it down 2.4 percent for the year to date, an investor said. Separately, Caleb Watts, also a Tiger Global partner, also will be leaving to focus on managing his own money, according to the letter. To streamline operations the firm is also merging its Tiger Global Internet Opportunities Fund into its Tiger Global Long Opportunities fund.
- Alibaba-backed Visualead rolls out new dotless QR codes that aim to reduce counterfeiting. In January, Alibaba disclosed its investment in Visualead, an Israeli startup that helps brands make colorful, visually appealing QR codes. While the company’s product was cute, its value to Alibaba is growing clearer now that it has revealed a new QR code alternative that aims to prevent counterfeit sales. Alibaba is using Visualead’s technology to power Blue Star, a new tool that prints out individual, scannable codes for individual packages. When scanned using the mobile app for Taobao, an image appears confirming (or denying) the product’s authenticity. Brands can choose from a set number of templates to customize these landing images and throw in links to promotions or e-commerce pages… perhaps even ones that are on an Alibaba property. Visualead co-founder and CEO Nevo Alva tells Tech in Asia that Alibaba only opens Blue Star to genuine brands. That means Nike can sign up, but FakeNikes.com will get turned away. Alva also adds that Alibaba is providing Blue Star free-of-charge for the time being, irrespective of where the goods will be sold. That means that Nike can pin the codes to packages that will go to an Alibaba competitor.
- Spotify Inks Deal With Starbucks Tasking Customers With Picking In-Store Music. Spotify and Starbucks just announced a clever deal to promote Spotify Premium while giving Starbuck customers and employees the opportunity to influence the music played at their local Starbucks. This is the latest in a line of high-profile deals Spotify bagged that puts its brand in front of an important consumer demographic. Soon baristas will be tasked with making coffee and picking the music in their locations. The deal links Starbucks’ loyalty program with Spotify’s massive music ecosystem, giving My Starbucks Reward members unique access to Spotify. Program users will then be able to influence which songs makes it on in-store playlists. The program starts with 150,000 U.S.-based Starbucks store employees who will receive a Spotify Premium membership in the fall. The plan is then to roll out the service to Starbucks customers shortly after. Streaming music companies such as Spotify, Rdio and others are racing to differentiate themselves. Since most platforms offer similar music and experiences, the war is mostly in public relations. And Spotify is winning this part of the war signing deals to allow Uber riders to DJ from the backseat and getting the streaming service into BMW and Mini cars. Starbucks has long associated itself with emerging music and this deal with Spotify pushes the coffee retailer (along with its legions of dedicated customers) into the age of streaming media.
- Singapore’s Postal Service Reinvents for the Digital Age, Derives a Quarter of its Revenue from eCommerce: With traditional mail services in decline, post offices around the world are scrambling to reinvent themselves for the digital age. “Sitting on that burning platform, we looked around and said, ‘Where could we develop?’” said Wolfgang Baier, the chief executive of SingPost. Japan Post is buying the largest private package and freight delivery company in Australia, Toll Holdings, in a bid to create a rival to UPS and FedEx. The United States Postal Service, which lost $5.5 billion last year, is providing Sunday deliveries for Amazon. Australia Post is working with the Chinese Internet giant Alibaba to help local businesses connect with consumers in China. There are at least two business trends unfolding before us. One is the death of mail,” said Frank Lavin, chief executive of the e-commerce consultancy Export Now. “The second is this boom in e-commerce.” SingPost’s makeover is among the most ambitious. Besides its regular postal duties, it offers a basket of services for companies, including website development, online marketing, customer service and, of course, package delivery. Following the Amazon model, it is building a network of 24 warehouses in 12 countries to stockpile goods for companies. The e-commerce team is staffed with former Silicon Valley executives. Singapore’s central location, said Mr. Baier, makes it a natural hub for e-commerce in Asia. He recited numbers to demonstrate the scale of the opportunity: Over 600 million consumers live in the region around Singapore, and 2.2 billion people are within a five-hour flight. The shift has been stark for the postal service, once a state-owned company that went public in 2003. Four years ago, e-commerce barely figured into its bottom line. Today, it accounts for more than a quarter of the group’s revenues, which have grown by 60 percent during that same period. Others are taking notice. Last year, Alibaba paid $250 million for a 10 percent stake in SingPost. Alibaba and SingPost are now in discussions to form a joint venture focused on e-commerce logistics in Southeast Asia. Then, two years ago, SingPost made its biggest digital push, creating SP eCommerce to tap into the Internet retail boom in Asia. Today, it counts nearly 1,000 companies as clients, including Philips, Uniqlo, Deckers and Muji. SP eCommerce’s offices feel more start-up than mailroom. There is a Foosball table in one corner. Employees can play Ping-Pong. The group’s chief executive, Marcelo Wesseler, created his first e-commerce website in 1997 and worked in Silicon Valley before moving to Singapore. Other employees have come from technology stalwarts like Amazon and Hewlett-Packard. The company also created a customer-care department. At its Singapore offices, 30 or so employees handle the phones, answering questions or addressing complaints. An additional 200 customer-service agents work elsewhere. As part of the e-commerce expansion, SingPost upgraded its core delivery services. It has bolstered its network of warehouses and fulfillment centers, most of which are in Asia. The centers handle freight and customs clearance so goods can move faster through the region, where regulations differ from country to country. In Singapore, SingPost has invested $182 million in building a high-tech warehouse that will merge logistics and sorting into one assembly line. Workers punch or scan an order on a screen, and robotic trays deliver products from shelves for them to pack and ship. SingPost is pitching itself as a conduit to the Asian consumer, particularly in countries like Indonesia, Vietnam and Malaysia. With its swelling population of young and mobile consumers with newly disposable incomes, the region offers a rich seam of new opportunities. Looking beyond its borders for growth, the Chinese smartphone maker Xiaomi last year opened a regional headquarters in Singapore, using it as a launching pad to move into Malaysia, the Philippines and Indonesia. Next, it is targeting Vietnam and Thailand. It teamed up with SingPost for support on logistics for e-commerce, which accounts for 80 percent of Xiaomi’s sales in Southeast Asia. At its campus in Singapore, SingPost built a warehouse specially for Xiaomi, where orders from the first click to the final delivery are handled. Inside the 11,000-square-foot space, a smartphone battery is stuffed into a cardboard box, sent flying down a green conveyor belt and zipped off to the customer a few miles away. A video camera is perched above, controlled by someone who watches from Beijing.
Facebook’s Audience Targeted News Feed is fundamentally changing the news business (including in India): Facebook is increasingly becoming to the news business what Amazon is to book publishing — a behemoth that provides access to hundreds of millions of consumers and wields enormous power. It drives up to 20 percent of traffic to news sites - even more on mobile devices, the fastest-growing source of readers. Roughly once a week, Facebook adjusts the complex computer code that decides what to show a user when he or she first logs on to Facebook. The code is based on “thousands and thousands” of metrics, Mr. Marra said, including what device a user is on, how many comments or likes a story has received and how long readers spend on an article. The goal is to identify what users most enjoy, and its results vary around the world. In India, he said, people tend to share what the company calls the ABCDs: astrology, Bollywood, cricket and divinity. Analysis here and here
Tencent invests in Blink a Chinese Snapchat variant; investment in a potential rival could be to pre-empt competition: Tencent has made a new social play in the same vein as Snapchat to appease China’s “post-90s” youths. The web giant made a fresh US$20 million series A investment into Blink, a new photo sharing and messaging app out of China. Sequoia Capital, H Capital, ZhenFund, and Innovation Works also participated in the round, according to Techweb.Tencent became king of China’s online social messaging sphere with the mass adoption of QQ Messenger and kept the throne when it unleashed WeChat. But even though QQ earlier this year boasted a record 200 million concurrent users and WeChat’s growth is only now starting to show signs of saturation, the web giant is actively looking for the next big thing for young people who no longer think WeChat is cool.
Just Dial plans slew of new products, announces Q3 earnings: Rev INR 147 Crore (30.8% Y/Y) Net Profit INR 32 Crore (9% Y/Y): Revenues growth was driven by a strong 24.1% rise in paid campaigns and 5.5% increase in revenue per campaign (after a recent price rise), over the year-ago quarter. Listings increased 44 % year-on-year (y-o-y), to 14.5 million.The company's product Search Plus offers 20 live services currently and has not been monetised so far. The firm plans to launch many new products such as ‘Just Dial Cash’, On-line cab booking, ‘Just Dial Guaranteed’, amongst others, which will start contributing to revenues from FY16. The firm hopes these will help it improve monetization and to translate its strength in voice to online.
