- Tech’s ‘Frightful 5’ Will Dominate Digital Life for Foreseeable Future: There’s a little parlor game that people in Silicon Valley like to play. Let’s call it, Who’s Losing? There are currently four undisputed rulers of the consumer technology industry: Amazon, Apple, Facebook and Google, now a unit of a parent company called Alphabet. And there’s one more, Microsoft, whose influence once looked on the wane, but which is now rebounding. So which of these five is losing? A year ago, it was Google that looked to be in a tough spot as its ad business appeared more vulnerable to Facebook’s rise. Now, Google is looking up, and it’s Apple, hit by rising worries about a slowdown in iPhone sales, that may be headed for some pain. Over the next couple of weeks, as these companies issue earnings that show how they finished 2015, the state of play may shift once more. But don’t expect it to shift much. Asking “who’s losing?” misses a larger truth about how thoroughly Amazon, Apple, Facebook, Google and Microsoft now lord over all that happens in tech. Who’s really losing? In the larger picture, none of them — not in comparison with the rest of the tech industry, the rest of the economy and certainly not in the influence each of them holds over our lives. Indeed, the Frightful Five are so well protected against start-ups that in most situations, the rise of new companies only solidifies their lead. Consider that Netflix hosts its movies on Amazon’s cloud, and Google’s venture capital arm has a huge investment in Uber. Or consider all the in-app payments that Apple and Google get from their app stores, and all the marketing dollars that Google and Facebook reap from start-ups looking to get you to download their stuff. This gets to the core of the Frightful Five’s indomitability. They have each built several enormous technologies that are central to just about everything we do with computers. In tech jargon, they own many of the world’s most valuable “platforms” — the basic building blocks on which every other business, even would-be competitors, depend.
- Alibaba Teams With Nvidia in $1 Billion Bet on Cloud Computing: Alibaba Group Holding Ltd. will work with Nvidia Corp. on cloud computing and artificial intelligence, and plans to enlist about 1,000 developers to work on its big-data platform during the next three years. The arm of China’s biggest e-commerce operator, known as AliCloud, will boost investment in data analysis and machine learning, it said in a statement Wednesday. AliCloud is staking $1 billion on the belief that demand for processing and storage from governments and companies will boost growth during the next decade as its tries to compete with Amazon.com Inc. in computing services. The investment also reflects Alibaba’s own appetite for information processing as China’s online-retail market grows to 10 trillion yuan ($1.5 billion) by 2020, according to Bain & Co. The push into of cloud computing, where software and services are provided to customers via remote data centers the size of American football fields, prompted Alibaba to open its second data center in Silicon Valley in October and prepare its first in Europe. AliCloud is now extending its scope beyond basic cloud-computing services. It co-founded a quantum computing laboratory with the Chinese Academy of Sciences to help secure its data centers and develop machines capable of even faster calculations. The company will team up with Santa Clara, California-based Nvidia to provide customer support in the areas of deep-learning and high-performance computing, AliCloud said in a statement. AliCloud generates revenue mostly by charging clients a fee for using its computing infrastructure. For now, it contributes a mere sliver of total revenue, with computing and Internet infrastructure accounting for 3.1 percent of sales in the June quarter according to data compiled by Bloomberg. By comparison, Amazon Web Services’ revenue rose a better-than-expected 78 percent to $2.1 billion in the third quarter.
- News Corp denies rumors of Twitter bid: Rupert Murdoch's News Corp said rumors about the company's interest in buying microblogging site Twitter Inc or building a stake in it were untrue. Twitter's shares, which rose as much as 14 percent on Wednesday, pared some gains and closed up 4.1 percent at $17.38. The stock rose from a record low after unconfirmed chatter about News Corp's interest in Twitter circulated on Wednesday. The rumors intensified after a CNBC segment, tech website Re/code said. The social media site was evaluated as a takeover target because of the company's shrinking stock price
- How Amazon Is Slowly Building a World in Which It Takes Very Little Effort to Shop 'Replenishment' service nabs GE, other brands: If you use all of Amazon's technologies in the near future, you almost won't have to leave your home. And you won't even have to push buttons to get your household needs fulfilled. The Seattle-based retailer today revealed that General Electric, printer brand Brother and glucose-monitor player Gmate Smart are the latest brands to partner with Amazon Dash Replenishment. The 3-month-old program lets appliances and gadgets order products without any help at all. For instance, GE's washers that utilize what's called "smart dispense technology" can be programmed to automatically order detergent when the owner is running low on his or her go-to brand. You don't even need to push one of those Amazon Dash buttons the e-commerce giant unveiled in April. Essentially, the Replenishment system will send the order through your Amazon Prime account via its namesake mobile app—think items you always need like dog food, coffee beans or grounds, ink cartridges (when it comes to Brother), blood-sugar testing strips (for Gmate Smart), water filters for purifying pitchers, dish-washing soap, etc. No effort required, and if Amazon CEO Jeff Bezos gets his way with drones, very little human energy will be spent on delivering such items to your home. A new commercial world is emerging, indeed. Other brands that were already a part of Dash Replenishment include Whirlpool (for its high-tech dishwashers) and hand sanitizer Purell. The initiative builds on Amazon Echo, the 11-month-old speaker system with voice-control technology that lets folks order goods just by talking into the device.
- Adding to India investments, News Corp buys VCCircle: News Corp is continuing its focus on India after it announced a deal to buy tech and startup-focused media company VCCircle. Founded in 2005, VCCircle runs news sites VCCircle.com and Techcircle.in, in addition to research platform VCCEdge, VCCircle Training and an events business. The Noida-headquartered company has over 100 staff, and it will become part of the News Corp India organization, which already includes Dow Jones and Wall Street Journal. The undisclosed deal is Media Corp’s third piece of business in India, each of which has closed in the past six months. The U.S. media giant put $30 million into property company PropTiger back in November, and it bought financial planning service Bigdecisions.com in December. “This significant investment is a sign of our faith in India’s future and our enthusiasm for working with and building up emerging talents in the country. India is an increasingly meaningful part of our portfolio, which is itself increasingly digital and global,” News Corp Chief Executive Robert Thomson said in a canned statement. P.V. Sahad, Founder and CEO of VCCircle, said that the company’s acquisition would “accelerate our already aggressive growth plans,” although he did not provide more specific details of those goals. India’s booming tech scene is attracting investors in large numbers — including SoftBank, Google Capital and a new Tiger Global fund — and higher funding rounds, all of which increases the importance of quality on-the-ground reporting, analysis and events. Added to that, this is an interesting deal because we don’t often see ‘pure-play’ media companies being acquired in India.
- Jet, an American marketplace is gaining traction by focusing on the merchant experience rather than the customer experience: The Jet business model is pretty simple. Jet plans on making their revenue from a $50/yr subscription paid for by members. Like a warehouse club model (Costco, BJ’s, Sams) that will be the primary driver. Also like a wholesale club model, Jet plans on passing a lot of savings to the member. The merchant model is similar to what you would find at an eBay or Amazon marketplace – you pay a commission for sales based on category. BUT there are two important differences: A merchant can choose a variable commission based on your own rules (see example below) for shipping, email opt-in, returns and more. Jet takes the commission and instead of pocketing it as profit as other marketplaces do, it returns it to the consumer in the form of Jet savings and behavior based incentives (more on this later).
- Amazon opens store on Alibaba's online marketplace Tmall: Amazon.com Inc has opened an online store on Alibaba Group Holding Ltd's fast-growing online marketplace, Tmall.com as it seeks to expand in China, an Alibaba spokesman said. Alibaba's Tmall offers virtual storefronts and payment portals to merchants. Several western retailers, including Zara owner Inditex, Britain's Burberry and ASOS, have joined TMall this year as they look to boost their presence in China. Imported food, shoes, toys and kitchenware are listed on Amazon's store, one of the many on Tmall that sell brand-name goods to Chinese shoppers, Bloomberg, which first reported the news, said on Thursday. Amazon also operates its own e-commerce site in China. U.S. retailer Costco Wholesale Corp last year opened an online store in China using Tmall, entering the country's booming e-commerce market to combat slowing sales at home. Amazon’s China website has long struggled in the country, trailing behind Alibaba’s two marketplaces (Taobao and Tmall) as well as other homegrown rivals like JD and Suning. Amazon was China’s eighth biggest estore at the end of 2014, with just 1.3 percent market share of transaction value, according to data from iResearch. Tmall dominates the market with 57.6 percent market share. It’s an awkward but inevitable situation for Amazon. It’s as if Amazon opened up a huge shop on the wrong side of town and then had to suffer the indignity of opening up a branch in Alibaba’s crowded shopping mall where there’s much greater foot traffic. This move means Amazon is effectively an Alibaba customer and has to pay a commission for each sale that occurs in the Tmall outlet. A number of major brands and retailers use Tmall for their flagship stores, even though many have their own standalone ecommerce sites in China. Other online retailing companies have opened up stores on Tmall before, such as Walmart’s Yihaodian.
- As programming becomes ubiquitous, Yale's weak Computer Science program is driving top students to Stanford, Harvard instead: One of the world's top universities in most respects, Yale has fallen way behind in computer science. Yale, one of the world's top universities in most respects, has fallen behind in computer science. It doesn't crack the highest tier of schools measured by the number of graduates in software companies or by salaries for majors in the discipline; it's struggling to educate throngs of students with a faculty about the same size as three decades ago; top students in the field are opting to enroll elsewhere; the head of its computer science department is publicly complaining; and undergraduates are circulating a petition in protest. “The best universities in the world are now judged by the quality of their computer science departments,” reads the petition, distributed this week and signed by more than 450 students. “We are distraught by the condition of Yale's.” Yale has long been known for its strength in the humanities. Literature scholars deconstructed texts in cloistered seminar rooms at the center of its Gothic campus, while the more quantitative-minded had to trek up “Science Hill” for their classes. Famed English literature professor Harold Bloom once told the Paris Review that he favored the ballpoint pen over the typewriter and “as far as I'm concerned, computers have as much to do with literature as space travel, perhaps much less.” Yale's computer science department has focused more on theory than practical applications, unlike Stanford University, known as the birthplace of Google, or Harvard, associated with Facebook and Microsoft. Though many of Yale's science Ph.D. programs such as biology, math, physics, and chemistry are top-ranked, Yale is struggling to adapt to a U.S. economy and educational system reordered by the ascendance of technology. With fewer students majoring in the humanities and a generation of graduates worried about getting good jobs, universities are scrambling to shift resources from traditional subjects into fields once scoffed at as vocational. “These are skills needed by anyone in the modern age,” says Jeannette Wing, who oversees research labs worldwide for Microsoft. All students should learn programming, even those studying such fields as archeology and English, she says.
- Apple's Secret Lab Lets Facebook Fine-Tune Apps Before the Watch's Debut: In a lab shut off from communication with the outside world and where visitors can't bring in a pad of paper, let alone a phone, Apple Inc. has given some companies special early access to Apple Watch. Bayerische Motoren Werke AG, Facebook Inc., United Continental Holdings Inc. and others have spent weeks at Apple's headquarters in Cupertino, California, working hands-on with the smartwatch to test and fine-tune applications that will debut alongside the device next month, according to people familiar with the process, who asked not to be identified because of non-disclosure agreements. Apple, which will share more details about the gadget at a March 9 event, uses extreme measures to keep the work secret. Internet access is blocked inside the rooms, and no outside materials can be brought in to the labs with the test watches, a person who attended said. The companies, sometimes sharing a room, must bring in source code for their apps on a computer hard drive that can't leave Apple's headquarters. To prevent information from leaking out, Apple is storing the code and sending it to the companies closer to the watch's introduction date, the person said. "There's a lot of confidentiality," said Stephen Gates, a vice president and creative director for Starwood Hotels & Resorts Worldwide Inc., which is building a watch application to unlock hotel-room doors. Apple featured Starwood's application in September, when it first announced the watch. Gates said he's made several trips to Cupertino to develop the software, but declined to comment on what those visits included. As Apple's first new device since the iPad in 2010, the stakes are high for Apple Watch, and the sophistication of the apps available is critical in wooing buyers. Just as the App Store has been a key reason for the iPhone's success, tools for Apple Watch will help determine how customers use the gadget and whether it will be a sales hit. The watch must be paired with an iPhone to fully work, and anything less than seamless integration may alienate potential customers. Apple has made the yet-to-be-released watch available to some companies so they can test out their apps, check for glitches and adjust the tools to the watch's design. Hundreds of applications may immediately be available once the Watch reaches stores, according to Jim Suva, an analyst at Citigroup Inc. A big challenge for Apple and its developers is building applications that are useful without being annoying. Apple has recommended that developers be judicious about interrupting people with constant alerts that will buzz their wrist or drain the battery. If desktop computers can be used for hours at a time, and smartphones for minutes, the watch is being measured in seconds. Apple is suggesting developers design their applications to be used for no longer than 10 seconds at a time.
