Daily Tech Snippet: Friday, July 22

• Startup Deal Activity Keeps Falling Worldwide: According to a new report from KPMG International and CB Insights, global deal activity for venture capital-backed startups continued a decline in the second quarter after hitting record levels one year ago. In fact, at the current rate, deal activity will just barely top 2013’s numbers. "Many of the high-profile tech [initial public offerings] from 2015 continue to trade well below their initial offering price, putting pressure on private company valuations," said Brian Hughes of KPMG. "This, combined with economic concerns in China and Europe, has continued to put a damper on VC investment." "It's a challenging time for VC investors," he concluded.The reason funding moved higher while deal activity dropped is that some larger startups such as those of Snapchat Inc., Didi Chuxing, and Uber Technologies Inc. all saw huge rounds, accounting for much of the funding. In fact, in North America, Uber and Snapchat accounted for more than $4.5 billion of the $17.1 billion in total investment.And while there might have been more billion dollar companies minted in the second quarter than in the first, there were yet again more "down events"—companies raising new money or being acquired at a lower valuation—than there were unicorns created. According to the report, seven startups reached the unicorn club in the past four months, but CB Insights’ downround tracker shows that 17 failed to live up to expectations and experienced down events over that time. Unicorn creation saw its most recent peak in the third quarter of last year, when 25 were birthed.

• Roger Ailes created another big problem for Fox News — the average age of its audience is 68: Roger Ailes, the closest thing in modern U.S. politics to a kingmaker, today stepped down as head of Fox News, the network he founded 20 years ago and turned into a potent political force. James Murdoch and his brother Lachlan, both named by father Rupert to run parent company 21st Century Fox last year, pushed Ailes out on the heels of a sexual harassment suit that led to more allegations of sexual misconduct from female anchors. The brothers saw the situation as a way to remove a longstanding obstacle to their power within the company. A lot of the news reports — most of the key details were first broken by New York Magazine’s Gabriel Sherman — centered on how the 76-year-old, a lifelong Republican, clashed with the two brothers politically, personally and as an executive. Ailes is known as a venal operator, specializing in deals with questionable reciprocity. His style was completely at odds with James, a data-driven technocrat, and Lachlan, the earnest Murdoch member. Mostly true. A lesser-known but perhaps more important reason had to do with more practical issues — namely, the business of Fox News itself, according to sources. The average age of Fox News viewers in primetime, the hours that draw the highest ad rates and so are the ones that matter, is 68 — a group that advertisers don’t pay to reach. In the world of cable news, marketers really only pay for viewers in the 25-54 age range. That means a good chunk of Fox News’ audience is worth little to nothing. Fox News still mints money — it accounts for as much as 24 percent of the parent company’s yearly profit, or more than $1.5 billion — but a lot of that comes from licensing fees paid by distributors to carry the network, which are only negotiated every few years. Fox News still leads in total viewership and in primetime, but it can’t capitalize on a lot of that audience since advertisers don’t pay for a lot of these viewers. That weighed on the future value of the network, as James saw it, according to one person familiar with the matter, and as much as Ailes’s style and politics were issues for both brothers, the more pressing concern was managing for the future of the network, this source said.

• Reddit is still in turmoil: Its been one year since Reddit revolted When the company cracked down on revenge porn and subreddits containing offensive content last summer, the backlash was swift and ultimately led to the ouster of interim CEO Ellen Pao. Although Pao was seen as the driving force behind efforts to make Reddit respectable enough to appeal to advertisers, the company continued its clean-up after her departure, making diverse hires and keeping up with the anti-harassment policy instituted during Pao’s tenure. But Reddit, led by CEO Steve Huffman, seems to be struggling with its reform. Over the past six months, over a dozen senior Reddit employees — most of them women and people of color — have left the company. Reddit’s efforts to expand its media empire have also faltered. Reddit let go of at least two key members of its team earlier this week, several sources with knowledge of Reddit confirmed to TechCrunch. Among those who lost their jobs are Reddit’s vice president of marketing, Celestine Maddy and Reddit’s editorial director, Vickie Chang. Also this week, Reddit HR generalist Nicole-Jasmin Clark left the company, according to our sources and confirmed by her LinkedIn, as well as a handful of people from the marketing team. The layoffs follow departures from the network’s video team last month, and the slow trickle of employees exiting the company over the past several months. Back in May, Reddit lost its head of community, Kristine Fasnacht, after being in the role for just nine months. In short, female and POC employees have been quietly leaving the company — by way of layoffs and resignations — from many departments, including engineering, marketing, operations and product. Reddit’s associate creative director Stephen Greenwood also left the company in June. sources say Reddit’s internal turmoil can be traced back to the company’s ongoing struggle to leave its antagonistic culture behind. Several employees fended off uncomfortable comments from users and management alike, sources claimed. “Management is terrible, a complete reflection of what the site is like,” one source said. Another source, a former Reddit employee who asked to remain anonymous described a management team with good intentions but poor execution.One individual speculated that the reemergence of the company’s drinking culture was to blame for the uncomfortable environment. Under Pao’s reign, Reddit tried to eradicate the bro-like amount of alcohol consumption at the office, but that went right out the window following Pao’s departure in July 2015.

• Visa and PayPal have finally settled a long-standing feud: Two months ago, Visa’s CEO issued a thinly veiled threat to PayPal: Stop driving business away from us or risk increased competition like you’ve never seen. He got his wish. The two payment companies just announced a wide-ranging partnership that includes a promise from PayPal to stop steering Visa cardholders away from using their Visa cards for PayPal transactions. The new accord will also enable PayPal’s mobile app to work as a payment option in brick-and-mortar stores whose equipment accepts tap-and-pay Visa payments. The partnership appears to bring to a close tension between one of the world’s biggest credit companies and the biggest alternative online payment option in the U.S. PayPal has been viewed warily by the credit card companies that don’t appreciate PayPal pushing their customers to pay with a bank account hookup — known as ACH — rather than a payment card. PayPal historically makes more money on a transaction when a user funds his or her PayPal wallet with a direct bank account hookup, since that method carries lower transaction fees than payment cards do.“The agreement affords PayPal certain economic incentives, including Visa incentives for increased volume, and greater long-term Visa fee certainty,” according to the press release. Translation: Visa is paying PayPal for increasing the amount of PayPal transactions that flow through Visa pipes. It appears PayPal is also getting a promise that Visa will not raise the fees it charges PayPal when a PayPal customer uses a Visa card to make a PayPal purchase. But it still appears likely that the deal will eat into PayPal’s profits as more Visa customers choose to pay with cards through PayPal instead of bank accounts, according to Craig Maurer, an analyst with Autonomous Research. “Yes, PayPal will get some form of incentives from Visa, but we believe the off-set will be minimal while this drag will be material,” he wrote in research note to clients.

Daily Tech Snippet: Monday, July 13

Ellen Pao resigns as Reddit chief executive: Ellen Pao has resigned as interim chief executive of Reddit, the popular online message board, following widespread user criticism of the way she was running the company. Reddit announced the change Friday afternoon in a company post, saying that the resignation was "by mutual agreement." Pao will be replaced by Steve Huffman, Reddit's co-founder and original chief executive. Pao, who had been at the company only eight months, came under withering criticism for firing a popular employee, Victoria Taylor, the company’s director of talent. Taylor was beloved among Reddit's powerful moderators, who don't work for the company but have complete editorial control over the thousands of niche discussion sections on virtually every topic, including cute animals and depression. Reddit's message boards draw about 160 million active users. Taylor was also a rare, public female face at Reddit and in tech world. Amid the vitriol directed at Pao, many users pointed out the irony that Pao would have let go a prominent woman at Reddit right after losing a bruising, high-profile gender discrimination suit earlier this year. After Taylor's dismissal, moderators revolted, shutting public access to hundreds of discussion boards over several days. Users also circulated an online petition, that has gathered more than 200,000 signatures, calling for Pao to step down. Pao posted an apology this week for the way the Taylor firing was handled. On Friday, she released a statement on Reddit saying that she resigned because "the board asked me to demonstrate higher user growth in the next six months than I believe I can deliver while maintaining reddit’s core principles."

Carmakers to tech partners: Keep your hands off our data: Carmakers are limiting the data they share with technology partners Apple and Google through new systems that link smartphones to vehicle infotainment systems, defending access to information about what drivers do in their cars. Auto companies hope that the vehicle data will one day generate billions of dollars in e-commerce, though they are just beginning to form strategies for monetizing the information. Apple and Google already make money from smartphone owners by providing a variety of products and services, from digital music to targeted advertising, and connecting phones to car systems will almost certainly extend their reach. But as infotainment systems such as Apple's CarPlay and Google's Android Auto become more widespread, auto companies hope to keep tech providers from gaining access to a wealth of potentially profitable information collected by computer systems in cars. Some auto companies have specifically said they will not provide Apple and Google with data from the vehicle's functional systems - steering, brakes and throttle, for instance - as well as information about range, a measure of how far the car can travel before it runs out of gas. Auto companies hope to profit from in-vehicle data in a variety of ways, including the provision of travel planning services and auto repair and service information they hope will bring drivers to dealerships. They also expect to work with insurance companies, providing information that would allow insurers to base their rates on a driver's behavior behind the wheel.

Across Asia, investments in technology start-ups have risen to levels comparable to the United States.: In the first six months of this year, 46 Asian start-ups, including Apus, have had fund-raising rounds of $100 million or more, just short of the 48 in North America, according to the research firm CB Insights. The focus of investors in Asia — China and India in particular — reflects an increasingly decentralized reality in global technology investment. Asian banks, private equity firms, venture capital funds and hardware and Internet giants are all willing to invest in domestic start-ups. And American investors are increasingly willing to back Asian players with advantages in their home markets. China and India have two of the world’s largest smartphone markets, and investors are particularly interested in finding ways to make money from these giants. Small hardware companies that use their knowledge of China’s electronics supply chain to make sensors and novel devices like drones are also drawing attention — realms of technology not yet dominated by the current power players in the industry, namely Apple, Google and Microsoft. In India, the two largest investments were made by the American hedge fund Tiger Global Management and the Chinese e-commerce giant Alibaba. Alibaba and its finance affiliate Ant Financial invested $575 million in the Indian mobile commerce company One97, while Tiger made a $500 million investment in India’s leading e-commerce site, Flipkart. Tiger Global has yet to make an investment in the United States this year and has focused 82 percent of its new investments in India at companies in their early stages, according to a June report from CB Insights. “India is one of the youngest countries, and their mobile penetration is low,” said Michael Dempsey, an analyst for CB Insights. “With more than a billion people, why wouldn’t it be one of the next major tech hubs? That’s what investors are thinking.”

Can SoundCloud Be the Facebook of Music?: SoundCloud has 150 million registered users, up from 10 million in 2011, and claims 175 million total listeners a month. According to ComScore, its traffic across desktop and mobile rose 14 percent in May from a year earlier, and 142 percent from two years ago. The audience skews younger than Spotify’s and Pandora’s. While SoundCloud has become a familiar feature of the digital landscape, it’s barely registered in most coverage of the Grand Streaming Wars of 2015, in which Apple Music, Spotify, Pandora Media, and others scrap for earshare. Then again, 8-year-old SoundCloud has a different mission. Its content is a creator-driven free-for-all: Anybody can upload a song (or other audio) and use SoundCloud’s tools to get it out there. Aspiring musicians, mainstream artists, DJs, podcasters, and others have uploaded 100-million-plus tracks and clips, creating a YouTube-like sprawl of unpredictable content.For listeners, SoundCloud is less like a music collection or radio station than an audio-based social network.

Daily Tech Snippet: Monday, July 6

• Here is an MP3 version of this snippet

• Euro markets set for major jolt after Greek 'No', look to ECB for calm: European stock and bond markets are set to take a sharp hit on Monday after Greece voted 'No' to harsh bailout conditions, and bankers said the European Central Bank's response was now key to the extent of contagion. "The ECB has the capacity to limit the spread of contagion. But we might still see a fall of 3 percent on European markets on Monday," said Antonin Jullier, head of equity trading strategy at Citi. With no immediate prospect of a bailout for the Greek government, its banks need further help to avoid collapsing. Oil prices tumbled as the US dollar strengthened. European officials are putting the onus on the Greek government to make the next move as Chancellor Angela Merkel heads to Paris on Monday for talks with President Francois Hollande to map out a way forward for Greece.


• After weeks of turmoil, China stocks rocket 8 percent at open after weekend rescue moves: China's stock markets rose 8% at the start of a make-or-break week after officials rolled out an unprecedented series of steps at the weekend to prevent a full-blown stock market crash that would threaten the world's second-largest economy. The government is anxiously awaiting the market opening on Monday to see if the new measures will halt a 30 percent plunge in the last three weeks, or if panicky investors who borrowed heavily to speculate on stocks will continue to sell. In an extraordinary weekend of policy moves, brokerages and fund managers vowed to buy massive amounts of stocks, helped by China's state-backed margin finance company which in turn would be aided by a direct line of liquidity from the central bank. China has also orchestrated a halt to new share issues, with dozens of firms scrapping their IPO plans in separate but similarly worded statements over the weekend, in a tactic authorities have used before to support markets. The Shanghai Composite Index had surged more than 150 percent in the 12 months prior to June 12 as investors assessed that monetary stimulus would revive China’s economy. Now, those hopes seem to be fading, and Chinese equity markets are plunging. The Shanghai Composite Index fell 5.8 percent Friday, bringing the decline since its June 12 peak to 29 percent. More than $2.8 trillion of value has been erased from the Chinese stock market during that time, an abrupt end to the longest bull market in the nation’s history. Stocks entered a bear market on June 29 as leveraged investors headed for the exits; China’s securities regulator that day urged investors to be rational. In response, China is suspending initial public offerings, creating a market stabilization fund and telling investors not to panic in an effort to shore up its stock market, which has had the largest three-week drop since 1992. According to company filings to the exchanges Saturday evening, 10 companies will suspend IPOs on the Shanghai Stock Exchange and 18 will do the same at the Shenzen Stock Exchange. Halting IPOs may stem the diversion of funds away from current listings. The move came hours after major Chinese brokerage firms pledged billions of dollars to form a stock market rescue fund.


• New, Simple ‘Buy’ Buttons Aim to Entice Mobile Shoppers: Despite spending close to three hours of each day staring at their mobile phones, Americans continue to do the vast majority of their online shopping through desktop and laptop computers, which have larger screens and physical keyboards that are more amenable to browsing and typing in credit card numbers. Mobile phones are projected to account for about half the time Americans spend online this year, but only about one-fifth of retail e-commerce sales, according to eMarketer. Now several companies, including Google, Facebook, Twitter and Pinterest, are trying to bridge the gap between mobile browsing and desktop purchasing with a simple “buy” button. Buy buttons have been around since the early days of the web, of course, notably with Amazon’s “One-Click Ordering,” where people set up a button that runs their credit card and ships whatever they have bought to a designated address. But these new buy buttons allow technology companies to act as middlemen between mobile shoppers and retailers — extending one-click ordering to thousands of small retailers and eliminating exasperating typing on a phone’s touch screen. The logic for the companies working on the new buy buttons is that, in an increasingly mobile world, where people do less typing and more tapping, a more predictable checkout process will drive sales by reducing “friction,” which is a technology industry euphemism for any inconvenience, no matter how small, that might cause people to wonder why they are opening their wallets.


• Alibaba Arm Eyes More Capital to Build China Finance Empire: Ant Financial, which dominates e-commerce payments in China, was said to be valued at over $40 billion in its latest round -- making it one of the world’s largest private tech companies. It manages the nation’s biggest money market fund Yu’E Bao and is targeting smaller borrowers to tap a market overlooked by traditional banks. Investors may be drawn by Ant Financial’s exponential growth. Since it began life as Alipay in 2004, the company has become the country’s largest online provider of financial services, helped by its role as the preferred payment method across Alibaba platforms. It has since expanded into adjacent industries such as insurance and online credit. One of the more aggressive of China’s new breed of online finance companies, Ant Financial’s maneuvers have courted controversy in the past. Ma spun off Alipay into a new company he controlled in 2011, citing the risk of foreign ownership of domestic financial firms. Major shareholder Yahoo protested and said it was caught unaware.


• Tesla Rises After Second-Quarter Deliveries Top Forecast: Tesla Motors gained the most since April after the electric-car maker beat its car-sales forecast for the second consecutive quarter with a 52 percent surge in the three months through June. The shares rose 4 percent at the close in New York for the biggest daily advance since April 27. Tesla has climbed 26 percent this year, outpacing the Russell 1000 Index’s 1.3 percent increase. Tesla delivered 11,507 Model S sedans in the second quarter, according to a statement of preliminary figures Thursday. The Palo Alto, California-based company predicted in May that it would sell 10,000 to 11,000 of the cars, its only model, during the period. The preliminary total brings first-half sales to 21,552, less than 40 percent of Tesla’s full-year target of 55,000 vehicles. Output and deliveries are projected to increase with the introduction of the Model X sport utility vehicle this quarter. “Tesla still has to deliver on the Model X promise,” Dan Dolev, a Jefferies analyst, said in a telephone interview. With the Model S, “the execution is there, the demand is there, the delivery is there, so that all these areas are positive is encouraging.”


• Housing crisis puts SoftBank in a spot amidst its headline grabbing announcements: The fall of Housing.com from one of the hottest tech startups in India to a big public relations disaster has been quick, thanks to its just ousted CEO Rahul Yadav. And this has put the largest owner of Housing—Japanese internet giant SoftBank, one of the biggest internet investors from Asia with $70B in revenue—in a delicate spot. Only six months ago it wrote a $90 million cheque for this college startup in exchange of a 32.5 per cent stake, but it appears SoftBank is already exploring a sale. Sources familiar with developments at the online real estate company said Quikr-Housing.com deal, as reported by VCCircle, is in works but it may not be easy to fructify due to several reasons including a mismatch in valuation expectations. SoftBank, Housing’s biggest stakeholder, is said to be seeking a price of $350 million which none of its rivals would want to cough up considering the startup’s main asset is its product and technology and not so much the business (revenues). As an immediate sale may prove to be daunting, sources say SoftBank’s current priority would be to stabilise the affairs at the startup while also increase the monetisation efforts rather than stepping up the sell-off initiatives. “They wanted to make a big bang entry into India with a $1 billion investment, make a splash, and get a meeting with (Prime Minister) Modi..,” said a venture capital investor who manages a diverse portfolio, indicating the Japanese giant might have made a mistake in a hurry to invest.


• Reddit Moderators Revolt Over Site's Firing of Popular Talent Director Victoria Taylor: Hundreds of Reddit's community forums—called subreddits—have been made inaccessible to the public in protest after the San Francisco-based company dismissed its director of talent, Victoria Taylor, who ran its Ask Me Anything (AMA) feature. The extremely popular AMA subreddit has been temporarily shut down by its moderators, while the reasons for Taylor's exit haven't been revealed. According to Business Insider, Reddit user "Karmanaut" posted about Taylor's departure, stating: "We have been really blindsided by all of this. As a result, we will need to go through our processes and see what can be done without her." The Business Insider story added that Taylor replied in a subbredit thread that she was "dazed" by the development but planned to stay in the public relations/communications field. For the AMA program, she has been credited for booking everyone from Hollywood stars like Madonna and Will Ferrell to political players such as President Barack Obama and conservative commentator Ann Coulter. Taylor was widely beloved by Redditors for cultivating such an intriguing mix of content. Reddit may be wise to shed more light on Taylor's departure sooner rather than later, otherwise the subject could continue to explode throughout the July 4 weekend. Already, many users are threatening to leave Reddit for good in an exodus similar to the user backlash that gutted competing site Digg in 2010.


• Reports that Amazon is trying Special Price Discounts on Prime, possibly to challenge Jet, the Hot Discount Shopping Site: The last time the companies run by Jeff Bezos and Marc Lore squared off, there were fireworks. We’re about to see what happens the second time around. The first time, Amazon instigated a pricing war with Lore’s company, Diapers.com, ultimately pressuring it into a $550 million sale to Amazon. It wasn’t exactly the outcome Lore was hoping for, but was a pretty good exit nonetheless. Now, as Lore’s new, members-only shopping site Jet.com preps for its public launch, there are some signs that Bezos once again doesn’t plan to sit aside idly. In the last few months, Amazon has been offering discounts on different products as exclusive deals for members of Prime, its two-day shipping and streaming media program. Last week, reports surfaced showing that Amazon was giving special discounts on video games to Prime members. Amazon has sporadically offered special discounts to Prime members in the past, such as exclusive discounts on Vizio TVs dating back to 2013. But the timing of the current set of discounts across multiple product categories could have to do with the fact that Jet, which is operating in private beta currently, is also a membership program built on the idea of discount pricing. For $50 a year, Jet is promising its members the best prices on the Web thanks to a complex system of discounting by stripping costs out of the order fulfillment and shipping process of e-commerce.

Daily Tech Snippet: Friday January 23

• Amazon buys an Israeli chip startup for $350-370M; Annapurna Labs makes chips optimized for the cloud business: (More coverage here and here) Amazon agreed to acquire Israeli semiconductor company Annapurna Labs, seeking to improve performance within its Amazon Web Services cloud unit. A deal has been reached but hasn’t yet closed, said Mary Camarata, a spokeswoman at Amazon Web Services. She declined to comment on the terms. Acquisition talks were reported earlier by Israeli newspaper Calcalist, which said the purchase price could be as much as $370 million. Annapurna Labs develops microprocessors that allow fast data traffic for power-efficient computing and storage servers, according to the newspaper. Seattle-based Amazon, the world’s largest online retailer, is constantly seeking to improve the cost and performance of the equipment in its data centers and has been hiring more semiconductor engineers to add to its capabilities, James Hamilton, a vice president of Amazon Web Services, said in a November interview. The unit rents out computing power on its servers to businesses for access through the Web.

• Google is gearing up to sell wireless service directly to customers as a mobile virtual network operator (MVNO), by acquiring excess network capacity from Sprint and T-Mobile and reselling it to customers under its own brand. This is the same approach used by Cricket Wireless, MetroPCS, Pure Talk, Republic Wireless and many others in the U.S., but Google’s arrangement apparently required special consideration, according to The Wall Street Journal, given the potential threat network providers perceived in giving the search giant and Android maker too much control. Sprint built a volume clause into their agreement with Google, per WSJ, which triggers if the Google wireless service acquires a large number of users and lets Sprint renegotiate the terms of the deal. There’s no word on how T-Mobile’s arrangement works, but given comments about the U.S. carrier by its parent company Deutsche Telekom, the provider is probably looking for ways to shore up the sustainability of its prolonged “Uncarrier” campaign. More analysis here: What is Google planning? The company hasn't confirmed anything, but reports suggest that Google wants to offer its own brand of cellular service by partnering with Sprint and T-Mobile, the nation's third- and fourth-largest carriers, respectively. This means you'd buy minutes and data from Google, but it would all ride over the other two companies' pipes. Is this like Google Fiber for cellphones? Not quite. With Google Fiber, Google is connecting homes to high-speed fiber-optic infrastructure that, in many places, the search giant laid down itself. But in this case, it doesn't appear that Google is building its own cell towers; it would simply resell Sprint and T-Mobile under the Google banner. Would this shake up the wireless industry? Google probably hopes so, but unlike the wired broadband industry that Google Fiber has been so successful at disrupting, the wireless industry is actually fairly competitive already. You have four major national carriers that are engaged in a major battle over pricing and customers right now. You also have dozens if not hundreds of smaller carriers who operate on the same basis as Google's rumored plan — paying the national carriers a wholesale rate and then repackaging the service into a different product. These piggyback carriers are called MVNOs, short for mobile virtual network operators. Why would Google want to become a wireless provider? If there's one thing driving Google, it's a thirst for your commercial data. Think about all the data generated by your Google searches that gets scooped up and used for advertising. Now think about all the data you generate when you place a phone call: whom you're calling, for how long, what time of day and so on. This information is incredibly personal and can be used to help build a profile of you — which, if you'll recall, is partly why everyone was so outraged when they found out about the National Security Agency's snooping into phone records. Then there's the business information Google can collect about which data plans people find most attractive and how they use those plans. And naturally, all of Google's handsets would likely run on Android, so there's that software integration.

• Box prices IPO - implied valuation of $1.6B, 33% discount to last funding as Box struggles to rise from storage play to platform play: (More here) Box Inc. is set to price its initial public offering at a discount to its latest financing round, as stiff competition overshadows the cloud-storage company’s plans to expand into new areas. The IPO comes almost a year after Box, which lets businesses manage, store and have access to data over the Web instead of through onsite computers, first filed to go public. The company’s financials in its March prospectus underwhelmed some investors just as deep-pocketed competitors including Microsoft Corp. (MSFT) were entering the fray, and the IPO was delayed. Ten months later, Box’s losses have narrowed as revenue surged 70 percent in the most recent quarter, and the company is offering new services that could help it retain and increase its customer base. The company, led by 29-year-old Aaron Levie, is still valuing itself below the level it fetched in a July private-financing round, betting the combination of its turnaround plan and cheaper price will lure buyers. “Investors are either going to have to buy into that story that they can diversify their business, or that this is coming cheap and that there will be consolidation,” said James Gellert, the president and chief executive officer of Rapid Ratings International Inc., which uses quantitative models to grade securities. Box, based in Los Altos, California, is seeking as much as $163 million from the IPO, scheduled to price Jan. 22. It is offering 12.5 million shares for $11 to $13 apiece, according to a Jan. 9 filing with the U.S. Securities and Exchange Commission. Those terms indicate a valuation as high as $1.6 billion, reflecting a 33 percent discount to the $2.4 billion Box was valued at during a private round by investors including TPG Capital and Coatue Management LLC. The market for file sharing and synchronization software is forecast to grow 23 percent a year on average to $2.3 billion in 2018, market researcher IDC said in a report looking at 2013. The enterprise side of the market, where Box fits, is growing slightly faster at 27 percent a year. Box had 14 percent share in the overall market, behind Dropbox Inc. with 27 percent and Microsoft with 17 percent. The challenge for Box, said IDC’s Maureen Fleming, is that Microsoft has been dropping prices for its OneDrive and including it free for customers who are signing up to use its Office apps online. That means many corporate customers decide to at least try OneDrive, curbing Box’s growth rates. Fleming regards Box as superior to OneDrive for companies looking for cloud-based systems but said product quality doesn’t always matter to chief information officers in the market for software. In response to those price wars, Box has created ancillary services on top of storage to differentiate its offerings. They include programs to help companies to build custom applications as well as security features that can be customized. The company also has a consulting arm, which helps customers navigate its services. Said Eli Lilly CIO Mike Meadows: “They are doing the right things and saying the right things,But we haven’t come across the use case that would drive us using them in more of platform mode rather than just a storage mode.”

• Reddit's Pick for New Ad Leader Shows the Site Is Getting Serious About Mobile Hires Zubair Jandali away from Google. The company hired Zubair Jandali from Google, who started this month as Reddit's first vp of sales. Jandali had been with Google since 2009 when the company bought ad network AdMob, where he also worked. His hiring is yet another sign Reddit is serious about developing a mobile advertising presence. Reddit recently bought Alien Blue, the app that lets readers access Reddit on mobile, to hone a more sophisticated approach to smartphones and tablets. Alien Blue is Reddit's first in-house app. Now, it has a vp of sales with experience in mobile advertising to go along with the product. "Mobile is definitely one big area of investment for the company, so my background certainly plays into that," Jandali said in a phone interview this week. Reddit offers brands two ways to advertise on its site, which reaches 150 million people a month: banners and sponsored headlines. Headlines are the items that users and brands post to Reddit, and users can vote up or down on whether they like them. The user-submitted headlines that accumulate the most positive votes rise to a higher position on the page, but brands pay for top placement. There are over 8,000 "active" user-generated groups on the site called subreddits dedicated to different categories; they can attract fans of brands, movies, science fiction or just about any interest you can imagine. Advertisers can target a subreddit or buy ads on the front page of the site, which gets 50 million views a day, Jandali said. For instance, on Wednesday TBS promoted a headline on reddit.com at the top of the page for the show King of the Nerds. Jandali said visitors who click on sponsored headlines can spend up to five minutes in the posts. Jandali reports to CEO Ellen Pao, who took the role after a shake-up late last year that saw the exit of the former CEO and the return of co-founder Alexis Ohanian to board chairman. The ad sales teams are based in New York, Los Angeles and San Francisco.

• Twitter pleads with power users not to use Instagram: Twitter appears to be sending out a message to a group of very high-profile users suggesting that these users post photos directly to Twitter instead of sharing through Instagram. Mashable secured a screenshot of the prompt, which shows the aesthetic differences between sharing an Instagram link and posting a photo directly through Twitter. In 2012, Instagram shut off Twitter Cards integration, meaning that the images would no longer appear in-line on the Twitter feed. Instead, Instagram photos shared out to Twitter would simply show as an Instagram.com link and push the user to the website for viewing. At the time, many people were upset that Instagram would interfere with the user experience for Twitter. It’s also worth noting that parent company Facebook has always displayed and still proudly shows Instagram images right in the feed. The original backlash over Instagram shutting down Twitter integration has long been forgotten, and in many ways, Instagram has won. In December, Instagram announced that it had surpassed 300 million active users, surging past Twitter’s 284 million active users. Twitter, which is older than Instagram, has struggled to keep up with the young gun in the media department. Twitter has released countless updates to the web product and the mobile apps to try to bring more attention to images and videos. It added a tab under user profiles to view media only, and put more focus on images that are used on profiles, like the addition of the Facebook-style header image and the now-larger profile photos. The company also added photo filters and editing tools long ago to deal with Instagram’s exodus from the feed in 2012. This latest message from Twitter to its mega-users, asking them to post photos from the app itself, only shows the severity of that struggle as consumers hungrily consume more and more multimedia content.

• Button, a mobile start-up, looks to deep link apps with commerce: It took years for the web to become what it is today: a sprawling, interconnected network of sites endlessly linking back and forth to one another. It will likely take years for the same thing to happen to smartphone applications, which are mostly stuck in silos, disconnected from one another. One New York-based start-up believes it can help speed that process. “The mobile app world is so very fragmented that for users, it makes interactions between apps much more difficult than they should be,” said Michael Jaconi, chief executive of Button, which announced a $12 million round of venture financing on Thursday morning. “Our thesis is, can we connect the mobile economy in a smarter way?” Button’s value proposition is largely technical: The company wants to create the plumbing behind what’s known as deep-linking between apps that make sense to be connected. So for example, if a customer books a table at a restaurant using Resy, a restaurant reservation app, Button could suggest you book a ride to the restaurant using Uber, the ride-hailing service, and link the customer directly to the Uber app to request a ride. That connection may come with a commerce-based incentive — say, a $30 credit toward an Uber ride. Button makes its money based solely on the amount of traffic it drives to its app partners. The idea, Mr. Jaconi said, is similar to what Google did for search more than a decade ago. When a user wants to find something specific, they type in a search query and Google serves up a list of suggestions, along with a series of advertisements. Google has made billions capitalizing on what technologists call the moment of intent — that is, the exact time when a person wants to see a paid advertisement. Button believes it can pinpoint that moment of intent inside apps, a problem that Google has yet to crack. “The future, we think, is one where we’re no longer living in a world of typing, but rather in a world of taps,” Mr. Jaconi said. “Using your phone, we’ll be able to infer what you want to do next based on your location, the time of day, the context of the other apps you’re using.” “It’s increasingly difficult for app developers to rise above the noise and acquire users, and then re-engage these users over time,” said Chris Moore, a partner at Redpoint Ventures, a venture capital firm that led Button’s recent funding round. “Button enables a new channel for user acquisition and engagement.” Button is not the only company taking on deep app links. Facebook wants its deep-linking solution, announced last year, to become the standard for developers. And start-ups like Branch Metrics, URX and Quixey offer different approaches to the same problem as well.

Thursday October 30, 2014

• Line reported strong results (rev: $192M, 104% Y/Y, income not revealed); 30 million users in India: Unlike rival Whatsapp (600M users), which effectively does not monetize at all (a luxury available to Whatsapp thanks to Facebook's spectacular overall profitability), Line makes its money as a digital content platform — most of its revenue comes from in-app purchases within its connected games platform, which includes more than 50 titles, but it also sells stickers and operates a marketing channel which lets brands run official accounts and pay to reach consumers. Line  stated that it has 170 million monthly active users worldwide, 87 million of which come from Taiwan, Thailand, and and Japan. The app claims 30 million users in India. By the end of the year it will introduce payments, taxi hailing, and food delivery services, which will accompany new gaming, manga, and music initiatives. Line recently postponed plans to go public in a rumored dual US-Japan IPO that could value it at $10 billion.

• Xiaomi is now the world’s third largest smartphone maker, while Samsung's mobile division has its worst quarter since 2011: Xiaomi is now the world’s third largest smartphone maker, due in large part to the success of its high-end Mi4, says new research by IDC. This is also the first time that Xiaomi has broken into the research firm’s list of the top 5 smartphone makers in the world. Samsung remains at the lead despite declining shipment volume, followed by Apple, Xiaomi, and Lenovo and LG, which tied for fourth place. Samsung spent most of the quarter without launching a new flagship device, and continued to struggle in the mid-to-low tier markets against cheaper and value-packed offerings like Xiaomi's Redmi 1S. Profit for the mobile division fell 73.9 percent to 1.75 trillion won in the third quarter, its worst performance since the second quarter of 2011.

• Dating/hook-up app Tinder has staggering engagement levels, based on a simple psychological truth: looks matter: In the two years since Tinder was released, the smartphone app has exploded, processing more than a billion swipes left and right each day (right means you “like” someone, left means you don’t) and matching more than 12 million people in that same time, the company said. Tinder’s engagement is staggering. The company said that, on average, people log into the app 11 times a day. Women spend as much as 8.5 minutes swiping left and right during a single session; men spend 7.2 minutes. All of this can add up to 90 minutes each day. While conventional online dating sites have been around longer, they haven’t come close to the popularity of Tinder.
• Reddit launches a crowd-funding site as it attempts to monetize non-intrusively: Reddit, where users find, share and talk about web links and photos, has been faithful to an antiquated design and still looks like an online message board plucked from the 1990s — think Craigslist, but with more Lolcats. You don’t need to hand over any personal data, not even an email address, to sign up and post or view an item. The huge online community message board site unveiled Redditmade on Wednesday, a crowdfunding initiative that allows Reddit users to raise money to manufacture and sell customized items. The move will add another revenue stream to Reddit, which has tried to find creative ways to make money from the millions of people who visit the site without angering its quirky community of Internet denizens. Reddit has grown enormously in popularity over the last five years but only recently started focusing more on making money. Reddit now makes money from a small e-commerce site, Reddit Gifts. It also sells Reddit Gold, a subscription program that offers perks for signing up. Its largest moneymaker by far, however, is advertising.