- Foreshadowing Tensions Between Hollywood and Tech, Twitter’s Periscope Disabled Dozens of Mayweather Fight Streams: Twitter Inc. said its Periscope streaming business scrambled Saturday night to take down users’ unauthorized live feeds of the championship boxing match between Floyd Mayweather and Manny Pacquiao. “Members of the Periscope team were on staff Saturday night working to disable streams of the fight,” Twitter said Monday in a statement. “We were able to respond to takedown requests within minutes.” The year’s biggest fight cost $100 to see live on pay-per-view television from Time Warner Inc.’s HBO and CBS Corp.’s Showtime. Some fans used their phones to capture the video and stream it to Periscope and a competing service, Meerkat. Twitter executives including Chief Executive Officer Dick Costolo appeared to boast of Periscope’s use, creating the impression they supported the copyright-violating streams. Periscope was trying to stop the streams, according to Twitter. The company received 66 reports from the rights holders, and took action on 30, it said today in a statement. The others either had ended already or weren’t available. “Our content policy expressly prohibits streaming content that is protected by copyright. This kind of use constitutes a clear violation,” San Francisco-based Twitter said. “We are working to ensure that there are robust tools in place that allow us to react expeditiously.” The use of Periscope on big televised events threatens to exacerbate longstanding friction between Hollywood and tech companies over piracy. In April, fans of HBO’s “Game of Thrones” streamed the show on Periscope and Meerkat, giving people who weren’t paying access to a grainy video rebroadcast. While Saturday’s streams are unlikely to dent the millions made by HBO and Showtime, the event signals a potential problem if more people use live-streaming apps to watch pay TV. Twitters investors and executives helped contribute to that perception with tweets on Saturday night. Costolo pronounced Periscope the fight’s winner, while Twitter investor Chris Sacca, also proclaimed Periscope a winner “by a knockout.” Sacca clarified those remarks with subsequent posts on Sunday, lauding the use of Periscope for behind-the-scenes footage by Showtime, HBO and Yahoo Sports. He also said: “1) The Scope team shut down countless streams last night 2) Scope was awesome second screen/behind the scenes.”
- Tech-centric Elementary School Chain Raises $100M from Zuckerberg, Others: Add an elementary school to the list of ventures attracting nine-figure sums from Silicon Valley investors. AltSchool, a chain of technology-centric private schools in San Francisco, has raised $100 million from Facebook Chief Executive Officer Mark Zuckerberg, through his family's charitable organization, as well as from Founders Fund, Andreessen Horowitz, and other backers. Founded by former Google executive Max Ventilla, AltSchool has been developing customized hardware and software that it says allows teachers to create more personalized education plans. Instead of having children follow the same curriculum throughout the year, lesson plans can be tailored to each student. Tuition costs about $21,000 a year, and the company eventually plans to sell its technology to other schools. "Everything is instrumented through technology," Ventilla says. Tech investors have been pouring money into education-related companies. Spending on education startups last year increased 55 percent, to a record $1.87 billion, according to CB Insights, which tracks venture capital spending. In 1999, when the researcher started tracking education, financing within the industry was $385 million. AltSchool is different from many other education-tech companies, which typically build applications to help with math or reading. That's because it operates its own schools. The company started last year in a single San Francisco classroom with 20 students. This year, it plans to have eight schools serving 500 kids. Its first school outside of California will open later this year in—where else—Brooklyn, N.Y. After Ventilla sold his search startup, Aardvark, in 2010 to Google, where he worked until 2013, he became increasingly interested in what he describes as a failing education system in the U.S. The country ranks 14th—below Russia and other developed nations—in a Pearson study on global math, science, reading, literacy and graduation rates. One reason for that is a lack of funding for public schools, something Ventilla's hot tech startup no longer needs to worry about.
- Startup Works to Translate Videos Into Structured Data: Vu Digital is launching new technology to help customers figure out what’s actually going on inside web online videos. B. Wade Smith, the company’s vice president of operations and development, said that as more and more online content moves to video, it will become increasingly important to extract data about those videos in a form that’s easy to analyze — namely, text. So as Smith demonstrated for me, Vu Digital’s Video-to-Data product actually breaks down a video frame-by-frame, identifies the objects in each frame, and then creates a chronological transcript identifying things like music, dialogue, faces, logos, text and graphics. What’s the point? Smith suggested this could be used by “anyone in the video value chain,” such as creators, publishers or marketers. The data could used for things like search engine optimization, personalization, ad targeting, and determining the “brand value” of a video, namely how long and how prominently a product or logo appeared. Smith admitted that the current product comes from a pivot, but a pivot that illustrates the problem Vu Digital is trying to solve. The company started out focused on web personalization, but Smith said, “We quickly found more and more website content was becoming video and we couldn’t make long tail content recommendations — the tags for the video were absolutely insufficient.” So the team decided to “drop everything” and focus on the video issue. Other companies have built video analysis and search tools — in fact, Microsoft acquired its own video search company back in 2011. However, Smith said he’s not aware of any competitors that can identify everything that Vu Digital can, nor can competitors do it with the product’s speed.
- Generational Shift at Cisco as longtime CEO John Chambers Steps Down: On Monday, perhaps the last veteran leader of the old guard signaled it was time to leave the corner office — if only for a move down the hall. John T. Chambers, chief executive of Cisco Systems since 1995, said he was stepping down effective July 26, to be succeeded by a longtime Cisco sales executive. “He is the last of the lions, presiding over years of incredible growth,” said George Colony, chief executive of Forrester Research, a market research firm. Cisco makes much of the gear that runs the Internet, notably digital information switches. It also supplies equipment for the world’s telecommunications infrastructure, and for teleconferencing, video and Wi-Fi networks. It had sales of $47.1 billion in the 2014 fiscal year, compared with $1.2 billion in 1994, just before Mr. Chambers took over. Mr. Chambers’s successor, Charles H. Robbins, is 49, and joined Cisco, the networking equipment maker, in 1997, just two years after Mr. Chambers became C.E.O. Mr. Chambers, 65, will remain as executive chairman. The company said that Mr. Chambers would spend time supporting the company’s new chief and “engaging closely with customers and governments around the world.” The transition is another sign of a generational shift in Silicon Valley. In September, Lawrence J. Ellison announced he would leave the C.E.O. position at Oracle, the world’s largest maker of database software. Like Mr. Chambers, Mr. Ellison became the company’s executive chairman and remains active. In August 2013, Steven A. Ballmer said he would step down as head of Microsoft, and he was succeeded in February 2014 by Satya Nadella. Unlike Mr. Ellison or Mr. Chambers, Mr. Ballmer cut his ties with Microsoft and left the board in August. He now gives commands from the courtside of the Los Angeles Clippers basketball team, which he purchased for $2 billion in May 2014. In addition, just months before Mr. Ballmer announced his decision to step down as Microsoft chief, there was a passing of the guard at the chip maker Intel, with Brian M. Krzanich becoming chief executive to succeed Paul S. Otellini. The year before, in 2012, Virginia M. Rometty took the place vacated by Samuel J. Palmisano as head of IBM. Even as the executive suites at these large companies have turned over, a web-focused and mobile-proficient group of companies now dominate the technology scene, including Facebook and Google. Many of these are run by much younger leaders than Mr. Chambers, especially Google’s Larry Page, 42, and Facebook’s Mark Zuckerberg, 30. Their companies have powerful networks but are primarily devoted to software, and an ethos that information should be ubiquitous and shared. “Now it’s a young man’s game,” Mr. Colony said.
- With Big Names and Money Flowing In, Tech Start-Ups in India Heat Up: Intense interest from prominent investors is helping to drive eye-popping valuations among Indian tech start-ups. Venture capital firms, hedge funds and the likes of business executives such as Rupert Murdoch are all vying for a piece of India’s rapidly growing e-commerce market — particularly companies aimed at the growing number of aspiring middle-class consumers. It is a radical turnaround from just a few years ago, when fewer smartphones, a smaller number of Internet users, general government inertia and a lack of funding hampered many entrepreneurs and start-ups. Well-known investors like Masayoshi Son, the chief executive of SoftBank; Jack Ma, the executive chairman of Alibaba; and Mr. Murdoch, the media tycoon, have all made investments in India’s e-commerce companies. They are going head-to-head with other experienced tech investors like Sequoia Capital and Accel Partners. Mr. Son said he would pump $10 billion into India, joking during a visit that he was “speed dating” entrepreneurs to gauge their passion. Amazon’s chief executive, Jeff Bezos, posed on a festooned truck holding a $2 billion check to be invested in the company’s India unit. India’s market potential is enticing. Only 300 million Indians, or less than 25 percent of the country, are Internet users, and while that is already the second-largest Internet market in the world, after China, five million users are added each month, according to Rajan Anandan, Google India’s managing director. The number of Internet users in India is expected to reach 500 million in three years, he said. As investors rush in, the stampede has brought its own set of challenges. Despite the optimism, none of India’s e-commerce players are profitable yet. For now, it is a game of capturing market share, and the expenses are high as rivals try to distinguish themselves in front-page newspaper ads and prime-time TV commercials. There is also the matter of the aggressive valuations that start-up founders are demanding. News reports this year suggested that a deal between Alibaba and Snapdeal fell through because the two could not agree on a valuation. With such inflated prices, investors ought to be wary. Any downturn could take with it hundreds of millions of dollars of their money. “Follow-on financing offers land even before entrepreneurs have closed the previous round. It is a little chaotic,” said Shailendra Singh, managing partner at Sequoia Capital in India, which has investments in the cab-summoning app Ola and the restaurant and food platform Zomato. Investors get sticker shock as entrepreneurs demand outrageous multiples and stiff premiums. Mr. Singh said some demands were “uncomfortably high.” Still, the investor interest and money are being aggressively put to use by start-ups like Flipkart, which has tripled its number of employees in one year, to 33,000 as of March. It says it has averaged eight million shipments a month (compared with three million a year ago). It recently hired two Silicon Valley-based Google executives: Punit Soni, as its chief product officer, and Peeyush Ranjan, as its head of engineering. Both will be based in Bangalore, where Google has leased 1.5 million square feet for its new campus in an office park backed by the Blackstone Group, the private equity firm. Already, the value of goods sold on Snapdeal — which offers goods as varied as bulletproof cars and luggage made in Mumbai’s slums — exceeds that of India’s largest offline retailers, said Mr. Bahl, its co-founder. Experts see India’s e-commerce market at an inflection point. A recent Morgan Stanley report titled “The Next India” said Indian e-commerce would expand to $100 billion in revenue by 2020, from $2.9 billion in 2013, making it the world’s fastest-growing market. India’s youthful market makes it an e-commerce sweet spot, said Vijay Shekhar Sharma, founder of India’s largest mobile payments platform, Paytm. As in China, India’s smaller cities and towns lack retail infrastructure. In 5,000 cities and towns, tapping an app is the new equivalent of a visit to the mall, and it could unleash pent-up demand for the latest fashion or the newest device. India resembles China of seven to 10 years ago in its broadband Internet growth, creation of digital-native marketplaces and rapid user adoption. Even ideas like online grocers, which have just started to gain a foothold in places like Silicon Valley could do well in India. “So investors who won in China are playing in India. Those who missed in China, too, are playing in India. This is the land of opportunity,” Mr. Gururaj said.
