Daily Tech Snippet: Friday, May 6th

• Alibaba's revenue soars, but new ventures hit profit: Alibaba Group Holding Ltd, China's biggest e-commerce company, said fourth-quarter sales rose 39 percent after its core online shopping business grew, but profit fell for the first time as it spent on ventures like food delivery. Net income excluding extraordinary items, Alibaba's preferred measure for earnings, shrank 1.4 percent to 7.6 billion yuan from the previous year, as the company continued to invest heavily in new but shakier businesses. Investors welcomed the higher-than-expected revenue, sending the firm's American Depository shares up 3.7 percent. But, not all of Alibaba's businesses looked rosy. Its online finance affiliate Ant Financial Services Group, one of founder Jack Ma's crown jewels in his e-commerce empire, recorded a net loss in the quarter. That business has spent heavily on its intense competition with WeChat Payment, one of the world's largest payments systems and owned by Alibaba arch-rival Tencent Holdings. Ant, which houses the massive Alipay online payment platform, is now valued at $60 billion and is gearing up for an IPO, despite the fact it is now losing money. Alibaba did not disclose how much Ant lost. Alibaba's revenues rose to 24.2 billion yuan ($3.7 billion) in the quarter ended March 31 from 17.4 billion yuan a year earlier. Gross merchandise volume (GMV), or the total value of goods transacted on its platforms on China retail marketplaces, rose 24 percent to 742 billion yuan. The previous quarter it had risen 22.5 percent - the slowest pace on record.

• Dorsey's Square posts bigger-than-expected loss as costs surge: Square Inc, the mobile payments company run by Twitter Inc Chief Executive Jack Dorsey, reported a bigger-than-expected quarterly loss on Thursday as costs surged, sending its shares sharply lower in after-hours trading. Slowing growth at formerly fast-growing Square Capital, which lends to small merchants, also aroused concerns. The company said Square Capital lent $153 million in the first quarter, up just 4 percent from the preceding quarter, largely due to "more challenging credit market conditions." The business acts as a middleman to offer funds to customers who can't otherwise borrow easily. Most funds are arranged by Square through third parties, who commit to buy the future receivables. "Lenders are no longer wanting to finance alternative lending," said Gil Luria, an analyst at Wedbush Securities. Square loses $2 for every $1 of hardware sales, Luria said. "The growth is coming from the wrong places." Square, which went public in November, facilitates payments between businesses and customers with a credit card reader that turns any mobile phone into a payment terminal. The company also makes point-of-sale registers and chip-enabled card readers. Square's shares were down 12.3 percent at $11.44 in after-hours trading despite several bright spots in the results. The company's net revenue jumped 51.4 percent and gross payment volume - the total dollar amount of all card payments processed by sellers - jumped 45 percent to $10.3 billion. Square also raised its annual adjusted revenue projection to $615 million-$635 million from $600 million-$620 million. But its net loss attributable to common stockholders widened to $96.8 million from $48 million in the same period a year ago as operating expenses jumped 72 percent to $207 million.

• SAP announces new partnership with Apple to expand iOS in the enterprise:  SAP announced a broad partnership with Apple today to bring iOS to SAP’s enterprise customer base. The announcement comes almost two years after Apple made a similar deal with IBM. Steve Lucas, president for SAP’s Digital Enterprise Platform says while it’s natural to see similarities between the two deals — two large enterprise companies making a deal with Apple — he says there are major differences. For starters, he says SAP is firmly an enterprise software company and it has built a cloud platform to access all of the software it has developed, whether its core ERP product, SuccessFactors or Concur. He says having that core certainly is a differentiating factor in his view. Still there are similarities too. As with IBM, SAP has been working closely with Apple to bring its profound design sense to this endeavor. The objective of this partnership is no less than to revolutionize work on the iPad and iPhone, Lucas says. It’s no secret that Apple wants a bigger piece of the enterprise market and these kinds of agreements help solidify their enterprise position and drive Apple hardware sales inside companies that were traditionally PC shops — and hence more often considered Microsoft territory. Finally, much like IBM it wouldn’t be a deal without an educational component to round it out, so SAP is also offering SAP Academy for iOS as a training ground for SAP programmers to learn to use the HANA iOS SDK. Lucas says the company is absolutely committed to this educational effort and it’s not something they will announce and go away in a few months, but a program that he sees lasting well into the future. While you might not see a natural fit between SAP and Apple, when the IBM partnership was launched in 2014, it certainly raised some eyebrows too, but by the end of last year the partnership had created 100 apps — and that number has surely increased since then. In fact, SAP is also planning on building 100 apps. The apps and the SDK are not yet available, but they say they should start to trickle out in Beta later this year. Many of the apps are in progress, according to Lucas, but they are not ready to ship yet. Apple also signed a partnership with Cisco last summer.

• Tesla Falls on Cash Concerns, Doubt About Manufacturing Goals: Tesla Motors Inc. fell Thursday after the company, aiming to dramatically boost production, withdrew its projection to generate more cash than it uses this year and said it will probably need to raise capital. Shares in the electric-car maker fell 4.9 percent to $211.71 at 1:28 p.m. New York time. The shares had surged late Wednesday and early Thursday after Tesla moved ahead by two years its target date for reaching annual production of 500,000 vehicles before sinking on skepticism about the ambitious assembly goals and concerns about cash. Tesla said in a letter to shareholders Wednesday that to meet the new production target, capital expenditures this year will probably be about $750 million more than the $1.5 billion originally planned. A capital raise of about $2 billion would dilute current owners by about 7 percent, UBS analyst Colin Langan wrote in a note.

• Netflix reveals what images hook viewers on new shows: Netflix has found that its viewers spend only 1.8 seconds considering whether to watch a show or movie that is presented to them. With so little time to make a successful pitch to potential viewers, the company has become obsessed with making it easy for members to make a quick decision about whether a show is interesting. For Netflix that means perfecting the promotional artwork — imagery that runs alongside an explanation of the show. Members spend 82 percent of their time focusing on artwork while browsing Netflix, according to the company. This week Netflix released new findings about the power of the images its presents to viewers while introducing them to shows, and what traits in an image can encourage a viewer to watch a show. Netflix finds that images with expressive facial emotion that convey the tone of the show do well. Artwork featuring recognizable or polarizing characters also succeed. Even if a show has an ensemble cast, when it comes to promotional purposes — someone needs to hog the spotlight. “While ensemble casts are fantastic for a huge billboard on the side of a highway, they are too complex at small sizes and ultimately not as effective at helping our members decide if the title is right for them on smaller screens,” explained Netflix’s Nick Nelson in the blog post. While the Netflix show “Orange Is the New Black” featured eight cast members in its Season 1 image, Netflix scaled back to a single character for seasons 2 and 3. Netflix reached these conclusions through what’s called A/B testing, in which audiences are split into groups and shown different images. Analysts then gauge how audiences respond to the different options.

Daily Tech Snippet: Monday, April 11

• Elon Musk’s SpaceX nails landing at sea: After several unsuccessful attempts to land an unmanned rocket on a football field-sized floating platform in the Atlantic Ocean, Elon Musk’s SpaceX finally pulled off the dramatic feat Friday afternoon in its first launch to resupply the International Space Station since its rocket exploded last year. The landing, the first ever of a rocket’s first stage at sea, was heralded as a breakthrough for the burgeoning commercial spaceflight industry, and its leader, SpaceX. The companies’ efforts to recover their rockets is part of what Bezos calls the “Holy Grail” quest of lowering the cost of space flight, which has been so prohibitively expensive that it has long been the exclusive domain of governments. Typically, the first stages of rockets are ditched into the ocean after firing their engines for a few minutes and boosting a second stage, or a capsule, to space. But if the commercial sector can build innovative rockets that can be reused, many think that would dramatically reduce the costs, a key step toward making space travel more routine. SpaceX broadcast the launch and landing live on its website, where some 80,000 viewers watched the booster descend toward the platform. The first stage was hurtling toward space when it started a bit of aerial acrobatics, turning itself around and heading back toward Earth. As it approached the platform, the booster was tilted into the wind but was able to right itself just before touching down, about nine minutes after liftoff. Crews were expected to board the ship and secure the rocket to the platform.

• Billing by Millionths of Pennies, Cloud Computing’s Giants Take In Billions: Imagine building an enormous beach resort, maybe the best in the world. Instead of renting the rooms, you charge guests based on the grains of sand they touch. You charge very little per grain, but if they lie on enough of them, it adds up. That is one way to think about what is going on at the world’s biggest cloud-computing companies. Instead of grains of sand, think about computing cycles, the activity that goes on in a computer server that is running software. For a price, think about one line of software code for two one-millionths of a penny. When tolls that tiny are paid often enough, they can make a billion-dollar business. At Amazon Web Services, which pioneered this method late last year, there is no charge for the first million times a customer runs code. Thereafter, A.W.S. charges by the million times, or for the hundreds of milliseconds the computer is used. “The scale at which we operate allows us to do innovative things,” said Matt Wood, general manager of product strategy at A.W.S. “When we get better economies of scale, we’ll use that to our advantage.” This economics of tiny things demonstrates the global power of the few companies, including Microsoft and Google, that can make fortunes counting this small and often. In other words, you have to be really big to worry about making money off things that are really tiny.

• China's $6 Billion Tech Funding Boom Signals Flight to Quality: If the startup funding party is finally breaking up, somebody forgot to tell China. The second-largest economy is avoiding the pitfalls affecting venture capital elsewhere, as investors around the world rein things in after an unprecedented technology financing boom. Ride-hailing app Didi Kuaidi, Alibaba Group Holding Ltd.’s finance affiliate and online property service Homelink are close to raising at least $6 billion, people familiar with the separate deals say. The operator of Alipay, Alibaba’s affiliate, is targeting more than $3.5 billion alone, which would mark the technology industry’s largest single round of financing. All those numbers emerged over the space of just three days last week. In China, larger startups like them are attracting major backers and garnering the lion’s share of the money even as smaller operators are left to struggle. The frenetic pace is remarkable at a time venture investment globally is plateauing: there were fewer U.S. deals in the first three months than at any time in the past four years, according to research firm PitchBook Data. “China’s VC market is becoming very polarized," said Jarod Ji, an analyst at Beijing-based research firm Zero2IPO. “There’s not a lack of money in the market, but investors do feel that there’s a lack of good projects and that’s why companies like Didi are getting so much money.” The top 20 percent of Chinese startups could get 80 percent of the funding, he added.

• SAP quarterly results fall short as U.S. market slows: Europe's largest software company, SAP (SAPG.DE), warned late on Friday that first-quarter results would be weaker than expected due to slower sales of software licenses to corporate customers, particularly in Brazil and the United States. Software license revenues fell 13 percent while the company's newer, but lower-margin cloud software business grew 33 percent. Business customers are shifting to cloud-based software delivered over the Internet instead of relying on older software packages they install and run on in-house computers. "America was a little more lumpy in terms of the signing of contracts," Chief Executive Bill McDermott told reporters on a conference call, noting that U.S. revenue from its classic on-premise software business grew more slowly than expected. First-quarter operating profit, excluding special items, rose 5 percent to 1.10 billion euros ($1.25 billion). Analysts, on average, had been looking for a first-quarter operating profit, excluding special items, of 1.15 billion euros, with 12 estimates ranging from 1.09 billion to 1.25 billion euros, according to Thomson Reuters I/B/E/S data. The company also reported revenue of 4.73 billion euros, shy of the I/B/E/S average forecast of 4.83 billion euros.

Daily Tech Snippet: Tuesday, October 13

• Facebook adds dedicated shopping section in continued move into e-commerce: Facebook Inc (FB.O) wants its users to shop for clothes and other products from their mobile phones without ever leaving its app. In an effort to move further into e-commerce and compete with Amazon Inc’s (AMZN.O) retail offerings, Facebook announced Monday it is testing several ad features that allow users to shop directly through its app. Few users make purchases on mobile phones because it is slow and cumbersome, but Facebook hopes to win over more ad dollars by smoothing the process. Mobile purchases make up less than 2 percent of all retail sales, according to research firm eMarketer. Among the new features are ads that take a user through a specific brand's products without redirecting them to another site. For example, a user who clicks on an ad from a boutique could see an expanded page that displays numerous clothing items. Businesses on Facebook will also be able to display products for purchase directly on their own pages. And users will be able to purchase products directly on Facebook through a “buy now” button that will be more widely available. The 1.5-billion-member social network has also added a new section on its app that takes users directly to a shopping page where they can browse among numerous brands from a select group of small businesses that will gradually expand. “From Facebook’s perspective, they’re addressing a pain point for retailers,” said Catherine Boyle, an analyst at eMarketer. “They will attract serious ad dollars with this offering.”

• Dell buys EMC for $67 billion in largest deal in tech history: Dell announced Monday it had reached a deal to acquire cloud computing giant EMC for $67 billion -- the largest acquisition in the history of the technology industry. The deal signals that Dell believes it is best to go big at a time when many older technology firms such as Hewlett-Packard are paring down and becoming smaller, nimbler companies. Traditionally known as a personal PC-maker, Dell has more recently set its ambitions on the high-tech business world and portrayed itself as an all-in-one provider of equipment and services. Dell and equity firm Silver Lake Partners said in a press release Monday that buying EMC, a major data storage company, broadens its appeal to those lucrative corporate customers. In 2007, Dell returned to run the company he founded and took the company private again in 2013 with backing from Silver Lake Partners. The EMC transaction is expected to close in the “middle of next year,” executives said on a call with analysts Monday morning. It will take time for Dell and EMC to integrate their businesses if the deal closes, Hewitt said. For one, he noted that EMC has carved its niche by offering comprehensive — and not inexpensive — software solutions to businesses, which is where Dell wants to go. But, he noted, Dell's philosophy is deeply rooted in providing cost-efficiency. As Dell has struggled to adapt its PC business for the modern age, EMC has also been under pressure from activist investors to spin off its cloud and virtualization business called VMWare for more than year as its faced heavy competition from flash storage and cloud storage firms. It has also faced pointed questions about its "federated" business structure, which strung together three firms -- its traditional business, VMWare and its software development firm Pivotal. Analysts had formerly counted Dell, as well as HP, Cisco and Oracle, as potential buyers for the firm. 

• SAP third-quarter operating profit beats estimates on mature markets: SAP said third-quarter operating profit, excluding special items, rose to 1.62 billion euros ($1.84 billion), beating the most optimistic estimate among 14 analysts, with individual estimates ranging from 1.45 billion to 1.59 billion euros, according to Thomson Reuters data. Third-quarter total revenue of 4.98 billion euros was slightly ahead of the average expectation of 4.93 billion. Europe's largest software maker said it was sticking to its outlook for the full year for non-IFRS operating profit of 5.6 billion euros to 5.9 billion euros at constant currencies, which represents flat growth to a rise of as much as 5 percent from 5.6 billion euros last year.

• Financing in the Dell-EMC Deal: Under the terms of the deal announced Monday, EMC has negotiated a "go-shop" provision in the preliminary deal that gives it the opportunity to seek out other buyers. Yet analysts say that while the Dell deal may slightly undervalue EMC shares, it's still a good deal. Shares of EMC rose about 1.5 percent during regular trading Monday. While the company will be a private concern after the deal is closed, a portion of its shares will continue to trade publicly. EMC investors will receive roughly $33.15 per share — they will receive $24.05 per share and a type of publicly tradeable stock "linked to a portion of EMC’s economic interest" in VMWare. Dell plans to pay $24.05 a share in cash plus tracking stock in EMC’s prize holding, software maker VMware Inc., valued at about $9 for each EMC share. EMC’s stock climbed 1.8 percent Monday to $28.35. Dell will add almost $50 billion to its debt load to complete the purchase, people familiar with the matter said, on top of the $11 billion it already is carrying. The combined company will be run by Michael Dell, the chief executive officer of the company he founded and took private for about $25 billion two years ago. He is financing the takeover with his MSD Partners investment vehicle, Silver Lake and Singapore state-owned investment company Temasek Holdings. He also is using debt, the VMware tracking stock and cash on hand. The deal will combine EMC’s dominance in devices that store data with closely held Dell’s No. 2 position in servers, the powerful machines that help companies handle big computing challenges.

• Implications for the Data Center Business: The deal will help Dell raise its profile in data centers, the modern factories of the digital age that house servers, networking gear and storage systems. EMC had 21 percent of the storage market last year, about twice what Dell had, according to data compiled by Bloomberg. While Dell has been outperforming some of its rivals, the company is grappling with sagging demand for personal computers. During the third quarter, overall shipments declined 7.7 percent, according to Gartner Inc. Still, Dell was able to post a small gain of 0.5 percent while larger rivals declined.

• Implications for VMWare: EMC investors will receive roughly $33.15 per share — they will receive $24.05 per share and a type of publicly tradeable stock "linked to a portion of EMC’s economic interest" in VMWare. VMware declined 8 percent to $72.27 on Monday amid concern that the creation of a tracking stock will weigh on the company’s valuation. Analysts at Mizuho Securities USA Inc. lowered their target price for VMware to $75 from $95. EMC rival Pure Storage Inc. rose 8.8 percent to $18.06, exceeding its public offering price of $17 for the first time since shares began trading Wednesday.

• Silver Lake Had Explored Sale of Dell’s PC Business Ahead of EMC Deal: Private equity firm Silver Lake, co-owners of Dell, last week approached Hewlett-Packard, Lenovo and Huawei to explore the possibility of selling off Dell’s personal computing business, sources familiar with the matter told Re/code. But by Monday, Dell proposed to pay a combined $67 billion to acquire the data storage company EMC and its subsidiary VMware in what is the largest proposed technology M&A deal in history. It was not immediately clear if Silver Lake acted alone or if Dell was consulted. It is also unclear if Silver Lake or Dell would continue to explore a sale at this point. The approach comes as the once thriving PC industry grapples with declining sales. That’s partially why none of the parties that were approached engaged further. Nearly half of Dell’s annual revenue come from the PC business, or about $27 billion, according to estimates by Goldman Sachs.

Daily Tech Snippet: Thursday, May 7

• Facebook's Oculus to sell virtual reality headsets for consumers from early 2016. Virtual reality technology company Oculus said it would start shipping the much-awaited consumer version of its Rift headset in the first quarter of 2016. Pre-orders for Rift will start later this year, Oculus, which Facebook Inc bought for $2 billion last year, said. Previous versions of the VR headset, available since 2012, were aimed at developers to make games and run tests. The consumer version was widely expected sometime this year. "In the weeks ahead, we'll be revealing the details around hardware, software, input, and many of our unannounced made-for-VR games and experiences coming to the Rift," the company said on a blog post.

• Apple Is Planning Another Big Bond Sale: Apple Inc. is planning to sell bonds in the iPhone maker’s fourth multi-billion dollar offering since 2013 as it borrows to return capital to shareholders while preserving its cash holdings abroad. The company will issue the securities in as many as seven parts today, with the longest-dated bonds maturing in 30 years, according to a person with knowledge of the offering. Proceeds will back stock repurchases, capital expenditures, acquisitions and debt repayment, said the person, who asked not to be identified because of a lack of authorization to speak publicly. Apple may sell the bonds due in 2045 at a yield of 1.5 percentage points more than similar-maturity Treasuries and 10-year notes at a 1.10 percentage-point premium, said the person. The company is also planning to issue fixed and floating-rate notes maturing in two and five years and a seven-year fixed-rate bond. The Cupertino, California-based company has issued the equivalent of $40.35 billion of bonds since April 2013, including the $17 billion it sold in what at the time was the biggest corporate-bond offering ever. The company may also sell its first yen bonds and has arranged a series of fixed-income investor calls starting Thursday, Goldman Sachs, one of the underwriters of that offering, said in an e-mailed statement. A sale would be the first in the Japanese currency for Apple, according to data compiled by Bloomberg.

• Affirm, consumer lending start-up raises $275M to lend to young borrowers using data science: Affirm is adding $275 million in debt and equity to accelerate its growth plans. The big Series B funding round is a vote of confidence by investors in one of the more ambitious entrants into the emerging field of financial technology. The firm is at the forefront of start-ups trying to use the new math of data science to more accurately assess credit risk than traditional scoring, which relies heavily on a person’s credit history. Conventional techniques, the new lenders say, do not do a good job of predicting the default risk on people with limited credit histories, like young people and recent immigrants. Traditional credit analysis tools, they add, tend to overly punish borrowers for single missteps such as a missed student loan payment or falling behind on medical debt. Affirm is building its business by focusing on lending to the millennial market, those under 35 years of age. They tend to have thin credit histories, and surveys show they generally have a lowly opinion of banks. “We’re building a financial technology company for the next generation,” said Max Levchin, the chief executive of Affirm, who was a co-founder of PayPal. To date, Affirm’s main product is a credit-card alternative for online merchants — installment loans from three months to a year. To seek a loan, an applicant provides a few items of personal information — name, cellphone number, birth date and the last four digits of the person’s Social Security number. Then, Affirm’s algorithms pore through all kinds of data from credit bureau reports to social networks. Affirm’s technology makes the underwriting decision almost immediately. More than 100 online merchants have signed up with Affirm, which has made more than $100 million in loans. Merchants using Affirm, the company says, report 20 percent higher sales, reflecting the appeal of Affirm’s alternative to credit cards. The tryout phase for the two-year-old company’s technology, Mr. Levchin said, is over. “We’ve come of age, so we want to have the resources to expand,” he said. New products, Mr. Levchin said, are part of the plan, including a credit-card offering.

• SAP Takes SuccessFactors and Concur to the Cloud: The new integration is being offered as a sort of “multi-tenant” business, akin to the public clouds of Amazon Web Services or Microsoft Azure, only for a set of fewer, but more high-level, functions. What that means is that it will be possible for customers of SAP, along with independent software developers, to make software applications that can take data from different elements of their business and build new kinds of information services. Both Ariba and SuccessFactors were independent online software companies that SAP purchased to hasten its transition from selling packaged software to a rental model. The features and data from another SAP acquisition, Concur, which does travel procurement and management, will also be integrated into S4 in the near future. Cloud-based revenue in the first quarter of the year was about $564 million, up 129 percent from a year ago. That was still a relative sliver of the $5 billion in total revenue the company scored, but total revenue was up 22 percent.

• India Start-up Action: Logistic services firm Delhivery raises $85M to ride on India’s ecommerce boom: Riding on the back of an ecommerce boom, India-based logistics service Delhivery raised a series D round of US$85 million led by Tiger Global Management. Last year, the company received US$35 million from Multiples Alternate Asset Management, Nexus Venture Partners, and Times Internet Limited. These investors have also participated in this round. This has so far been the biggest deal for an ecommerce support venture in India. Delhivery has a range of proprietary commerce technologies that they’ve built in-house to tackle logistics problems. The company has over 10,000 employees in more than 200 cities along with nearly a million square feet of warehousing space in 11 fulfilment centers. It handles over 3 million monthly transactions for 70,000 merchants and 1,500 ecommerce companies. With the funding, it plans to tap into India’s rural market and build 2.5 million square feet fulfilment centers. The startup aims to expand its reach four-fold. Delhivery is also expected to invest heavily in expanding the senior management team. It has recently appointed Sandeep Barasia, senior partner of Bain and Company and Suraju Dutta, ex-FedEx executive, as managing directors.

• IBM and Facebook in Marketing Partnership: Personalized marketing — the product pitch or message that really hits its target, the right person at the right time — is the much-discussed ideal in advertising and sales. The truth is that personalized marketing is, well, mostly marketing today. With modern tools of data analysis, it is becoming increasingly possible to identify customer groups in smaller segments than the big demographic buckets of the past, which filtered by age, gender, income and place of residence. But smaller audiences are still a long way from personalized marketing. On Wednesday, IBM and Facebook are announcing a partnership to take a step closer to the ideal. The partnership stems from how the companies bring complementary strengths to the lucrative business of data-fueled marketing. IBM’s data analytics business caters to major retailers and big consumer product brands. And Facebook, the social networking giant, does too. IBM’s data scientists do a lot of social media and sentiment analysis, but not with the vast laboratory of human behavior and preferences that Facebook has. The partnership is intended to combine data that marketers have on customers — like purchase behavior, responses to a marketer’s email campaigns and call center inquiries — with Facebook data including likes, comments and complaints. IBM’s data analytics will then be used to help big brands find and communicate with more finely targeted audiences on Facebook. Mr. Chandlee called this “personalization at scale.” And the insights gleaned from analyzing Facebook and other data should also help companies better target consumers in other marketing channels, such as ads on the web and email programs. Facebook will also be the first company to join IBM’s new Commerce ThinkLab. The new lab is a collaborative setting for applied research involving teams from major consumer brands and retailers, IBM industry experts and data scientists, and teams from Facebook as well. For IBM, the Facebook partnership is the most recent alliance the enterprise technology company has forged with consumer-focused technology companies, notably Apple and Twitter .

• Two Retail Veterans Take Aim at Amazon’s E-Commerce Reign: In the last few months, two retail veterans have been working on companies that explore these different avenues of breaking into online commerce. Ron Johnson, who, with Steve Jobs, created Apple’s lucrative physical stores, has been working on something out of left field — a selective online store called Enjoy, which, for no additional cost, will send an expert to hand-deliver tech products and spend an hour helping people set up and learn to use their new things. The service, Mr. Johnson said, is a smartphone-era take on his past at Apple — an effort to create the friendliness of an Apple Store in people’s homes and offices. Then there’s Marc Lore, an e-commerce veteran who in 2010 sold his company, Quidsi, to Amazon for about $550 million. Mr. Lore’s new service, Jet.com, represents a frontal assault on Amazon. Mr. Lore has raised more than $200 million — a staggering sum before even opening up shop — to create a nationwide e-commerce giant to compete with Amazon on selection, service and, especially, price. Jet’s promise is simple and, if the company can keep it, potentially momentous: to offer the absolute lowest price on just about everything, from paper towels to oatmeal to tennis rackets, guaranteed. Enjoy is starting small. The company, which has raised around $30 million from investors, is starting out in just the San Francisco Bay Area this week and in New York City next Wednesday. Enjoy does not compete with Amazon on selection; it offers only about a dozen or so high-margin tech products for sale, among them laptops, GoPros, drones and, in an exclusive deal, smartphones and tablets purchased from AT&T. Mr. Johnson believes that by limiting selection, Enjoy can offer free delivery and setup. Because it only needs to stock high-end products, the company hopes to squeeze enough out of each purchase to cover delivery and personal consultation. Enjoy is in stark contrast with Jet, which, when it opens to the public in early July, does not aim to start small. Right out of the gate, it makes a huge promise: “You should never find an item that’s more expensive on Jet than anywhere else,” Mr. Lore told me this week. Mr. Lore says he believes he can keep that promise thanks to an unusual business model. Like Costco, Jet will charge an annual membership fee, in this case $49.99. That fee is intended to free Mr. Lore from making any profit on each item — and thus pass all potential savings to customers. Right now, Jet is working well enough to bolster Mr. Lore’s basic claim — on dozens of items I searched for, Jet was cheaper, sometimes unbelievably so, than Amazon, Walmart or anywhere else online. For instance, a 40-pack of Duracell AA batteries on Amazon sells for $16.99. On Jet, the same pack is $13.70. If you add more items to your cart, Jet reduces the cost further. So, by ordering the batteries as part of a larger cart, I cut the price down to just under $11, about a third less than Amazon’s price. I noticed this effect on multiple orders across a wide range of household staples I usually order, from cooking oil to aluminum foil to shampoo to baby diapers. Jet’s sticker prices are low, but when I created large carts, the prices shrank even more. My child’s diapers, ordered in bulk, cost me 21 cents each, compared with 29 cents at Amazon. Still, there are some disadvantages: Jet’s fastest items ship in two days, slower than Amazon’s next- or same-day shipping, and a huge number of its goods ship in three to five days. It also does not offer an Amazon Prime-like free shipping service; you pay $5.99 for all orders under $35, after which your order ships free. These limitations suggest that Jet is going after an audience that’s different from Amazon’s — one that is less affluent, less hooked on impulse buying and more interested in discounts. “For most households, the proposition of paying $50 to Jet and saving $200 for the year, that’s a no-brainer thing,” Mr. Lore said. Over the holidays, Amazon sold a record $29.3 billion in merchandise, more than many large e-commerce companies combined. But Americans spent around $1.2 trillion in the same period, meaning that Amazon accounted for just 2 percent of our purchases. In other words, there’s lots of room for new ways to get Americans shopping online.