- China to open e-commerce, other sectors to foreign investment: newspaper: China will lift restrictions to investments by foreign firms in a range of service industry sectors, including e-commerce, logistics, accounting and auditing, the China Securities News quoted commerce minister Gao Hucheng as saying. Gao said China would also promote the orderly opening of other service fields including finance, education, culture and health care, the report published on Saturday said without elaborating or giving a time-frame. China's trade in services would exceed $1 trillion by 2020, the minister predicted. The Ministry of Commerce has previously said the value of China's services trade was expected to exceed $750 billion this year.
- Thiel-Gawker Fight Raises Concerns About Press Freedom: The story of Gawker versus Hulk Hogan — or, perhaps more accurately, Peter Thiel — has some asking whether press freedom in the United States is in peril if a scorned billionaire can help deliver a crippling blow to a media company. But since Mr. Thiel spoke to The New York Times on Wednesday about his reasons for funding the lawsuit against Gawker, the debate surrounding the dispute has expanded to encompass ideological battles in media, technology and politics. A variety of observers, including other billionaires and figures involved in GamerGate, have entered into the fray to address themes like Mr. Thiel’s political motivations, and the wider issue of Silicon Valley power players and their involvement with the news media. Several journalists felt that Mr. Thiel’s political views and connection withDonald J. Trump, the Republican presidential front-runner, could be worrisome based on Mr. Trump’s previous comments about changing libel laws to make it easier to sue media outlets.
- Twitter's retreat from 'Buy' buttons puts its payments partner Stripe in an awkward spot: In September, payments startup Stripe trumpeted a new product that would allow retailers to sell goods directly in social networking and content apps. The biggest partner app Stripe launched with was Twitter, whose 'Buy' buttons allowed users to buy items directly from a tweet. But just a month later, Twitter disbanded the team working on 'Buy' buttons, as Recode reported on Thursday, and shifted its focus on commerce to other initiatives. The 'Buy' button technology still exists, and retailers can still use Stripe's new product, Relay, to sell products on Twitter. But the perception that Stripe's biggest partner no longer considers it a priority doesn't look good. You could imagine the challenge convincing potential retail partners that they should invest in a program whose biggest platform partner no longer appears to be interested. The idea behind Relay is that people will increasingly want to purchase items online wherever they discover them, even if it's not on a shopping site or app. And as people spend more of their online time on Twitter and other social apps, they should have the option to complete transactions quickly without leaving those apps, the thinking goes, rather than getting redirected to another site that may be difficult to navigate on a mobile phone. In addition to Twitter, Pinterest and Facebook have also bought into this thinking to some degree. Each has introduced 'Buy' buttons, with varying levels of investment. But neither one of them currently works with Stripe on the Relay product. The open question for Stripe is whether retailers and users will show real interest in Twitter's Buy buttons without the company promoting them — and, if not, whether Stripe can find another big-name app to replace Twitter as the anchor partner.
- Amazon built a tool that puts Alexa in your browser: Amazon's Alexa personal assistant is super useful in the Echo and lot of fun to use. But if you don't have an Echo or can't buy one because you're outside of the US, it can be hard to appreciate Alexa's skill set. In light of this, Amazon has created a web app that lets you play with Alexa right in your browser. You can access the web app at echosim.io and it lets you ask Alexa all kinds of questions. What it doesn't let you experience is the always listening nature of the Echo device and its far field microphone array — you have to click and hold a button on the site before you speak to it. (That makes it closer to the experience you get with the Amazon Tap than the Echo itself.) The real purpose of this simulator is to let international devs see what Alexa is capable of, since Amazon doesn't yet the Echo or other Alexa devices outside of the US. Amazon says it was inspired by a project from a hackathon last year. Still, it's open to anyone with an Amazon account, so fire it up and start pelting Alexa with questions.
- Archived snippets are here, and MP3 versions are here
- Twitter Shares Surge on Earnings Beat, then Slump on Slowing User Growth: After reporting quarterly sales that topped estimates, interim Chief Executive Officer Jack Dorsey and Chief Financial Officer Anthony Noto struck a critical tone, saying user growth won’t improve until the social-media company reaches a mass market -- something that will take a mixture of product improvements and marketing. The company’s efforts so far have had minimal success, they said. Shares dropped 11 percent in extended trading, after climbing as much as 12 percent following the earnings release. n the second quarter, revenue rose 61 percent to $502.4 million, the social-media company said Tuesday in a statement. That exceeded analysts’ average projection for $481.9 million, according to data compiled by Bloomberg. Twitter’s net loss narrowed to $136.7 million, or 21 cents a share. Profit excluding certain items was 7 cents, compared with the 4 cents analysts estimated. On a conference call, executives quashed any initial optimism generated by the report by confronting Twitter’s underlying problem: It’s much smaller than the competition. The company today reported 316 million monthly users, while Facebook has 1.4 billion. Twitter recently started counting feature-phone users in emerging markets as part of its tally. Without that extra boost, Twitter’s user count was 304 million. Noto said Twitter changed its tone on the call because growth slowed so meaningfully, the company wanted to explain how it’s working to address the deceleration. “In the past we may not have had the growth that investors wanted us to have, but it was still quite strong. And this quarter we barely had any growth.”
- Yelp Plunges After Reducing Sales Forecast, Ending Brand Ads: Yelp, the customer-review website, plunged as much as 18 percent when it reduced its revenue forecasts and said it will stop selling national brand advertising. Yelp lowered its third-quarter sales forecast to a range of $139 million to $142 million, below analysts’ average estimate of $152.7 million, according to data compiled by Bloomberg. Annual revenue was projected at $544 million to $550 million from an April forecast of $574 million to $579 million. The website attracts more than 160 million visitors looking for customer reviews about local businesses. National brand advertising revenue decreased 8 percent to $8.3 million in the second quarter and Yelp will phase out those sales by the end of the year to focus on its core local advertising. Yelp shares fell in April after the company reported declining advertising sales. The shares rebounded in May following reports that Yelp was exploring a possible sale. Yelp reported a net loss of $1.3 million, or 2 cents a share in the quarter, from a profit of $2.7 million, or 4 cents a share, a year earlier. “I certainly think they can survive, as to whether or not they can flourish time will tell,”
- Akamai forecasts revenue, profit below estimates; shares sink: Online content distributor Akamai Technologies forecast third-quarter revenue and profit below estimates, citing a stronger dollar. Shares of Akamai, which claims to deliver between 15 and 30 percent of all Web traffic, fell as much as 13 percent in after-hours trading on Tuesday. The company's second-quarter profit fell nearly 8 percent after 11 quarters of growth, as costs rose. Akamai, whose customers include MTV Networks and online home rental marketplace Airbnb, forecast an adjusted profit of 56-58 cents per share and revenue of $543 million-$555 million for the current quarter. Akamai and rivals Limelight Networks and Level 3 Communications face increasing competition as companies such as Amazon, Netflix and Comcast enter the content delivery market. Akamai has been trying to differentiate itself by investing in cloud security services, as well as investing to expand its content delivery platform to better handle rising video traffic. Revenue rose 13.6 percent to $540.7 million, beating the average estimate of $540.4 million. Overall net income fell to $67.2 million, or 37 cents per share, from $72.9 million, or 40 cents per share, a year earlier. Up to Tuesday's close of $73.65, Akamai's shares had risen about 17 percent this year.
- Stripe, Digital Payments Start-Up, Raises New Funding and Partners With Visa: Stripe is gaining more financial allies to help it take on the digital payments industry. The start-up, based in San Francisco, said on Tuesday that it had raised new funding from investors like Visa, American Express and Sequoia Capital, among others, valuing the young company at $5 billion. That is a significant jump for Stripe, coming roughly six months after it garnered $70 million at a $3.5 billion valuation. Stripe declined to disclose the amount of new funding, except to say it was “less than $100 million.” Founded five years ago, Stripe has quickly gained traction by offering simple software and services for online small and medium-size businesses. Similar to Square and PayPal, Stripe accepts credit and debit cards for merchants who have not taken them previously. Stripe charges a small fee per transaction. On Tuesday Stripe also announced a partnership with Visa, one of the world’s largest credit card companies, in which the two will work on ways to improve digital transactions. The companies said they expected to collaborate on initiatives like payments security, as well as software like website “buy buttons.” Stripe said it would rely on Visa’s global footprint to expand its international availability. Stripe is currently available to businesses in more than 25 countries, and hopes to expand further with help from Visa. That Visa is partnering with Stripe instead of a larger payments processor is something of a coup for the start-up. Visa has become increasingly wary of other payments companies, such as PayPal, which processed more than $220 billion in online transactions last year and this month was spun off from its onetime parent, eBay. While PayPal has handled online credit transactions since the early days of e-commerce, Visa said it became concerned by PayPal’s ability to siphon customer relationships away from card companies and steer customers to debit transactions, in which PayPal sees healthier profit margins.
- LinkedIn, Notorious for Sending Too Many Emails, Cuts Back: On Monday, LinkedIn decided that less is more. In a blog post, the site acknowledged its history of overzealous email habits and said it was taking steps to reduce the amount that users would receive. Among the examples, users who receive too many requests to connect will now get just one weekly digest, and users who subscribe to several of the site’s groups will get updates in a streamlined format. “For every 10 emails we used to send, we’ve removed 4 of them,” Aatif Awan wrote in the post. “Already, member’s complaints have been cut in half.”
- Price Is Only One Weapon Amazon Is Using to Win the Cloud War: Remember how a few months ago there was talk of a “price war”in the world of cloud computing services? It’s over and all the signs point to Amazon having won. As we reported last week, Amazon posted a stunning 81 percent rise in revenue at its Amazon Web Services cloud computing unit, along with a five-fold surge in the unit’s operating income, giving it an operating margin of 21 percent. During the quarter Amazon said it cut prices on many of its cloud services for the 49th time since the service launched in 2006. Meanwhile, at least one of Amazon’s rivals — Microsoft’s cloud computing service Azure — raised some of its prices in Europe and Australia. Portions of emails to Azure customers published by the Dublin-based blogger Aidan Finn earlier this month detailed price increases of 11 percent in Europe and up to 26 percent in Australia. The last time Amazon gave a ballpark estimate for how many customers it had on AWS was late last year when it said it had more than one million active customers. It hasn’t updated that figure since then. Whatever the number, it suggests that the average revenue per customer is on the rise. If Amazon’s margins are increasing it implies that its operational costs are coming down at the same time that its customer count is going up. Logically speaking, that implies that quality of service might suffer. There’s a few reasons that it doesn’t, and it has to do with how Amazon’s costs come down as it scales up. As Amazon’s cloud footprint grows, its fixed costs per customer on things like commodity memory chips and electricity decrease. The more chips and power it buys, the more negotiating leverage it has to squeeze a good deal from suppliers. Meanwhile, business and administrative costs associated with keeping the system running — billing and personnel, for example — shrink as more customers sign on and processes become more efficient. Finally, there’s more that those customers can do with AWS all the time. Amazon has added 350 individual new features to AWS in the first half of the year. Two new services include one called AWS Device Farm which allows mobile app developers to run their software on simulated Android mobile phones. At its current pace it will by sometime this fall have added about 700. And the pace at which those features are being added is increasing too. Last year it added 516 new features. The year before that, it was 280, and the year before that 159.
- API-for-payments Startup Stripe In Talks For Up To $500 Million In New Funding That Could Value the Firm at $5B: Stripe is raising a new round of funding, according to sources with knowledge of the talks. One source with direct knowledge of the talks tells us that one of the leading investors in the deal is Yuri Milner’s DST Global. While all sources maintained that the round was “big,” there wasn’t a consensus on how much Stripe is looking to raise. The aforementioned source said that the round could be as big as $500 million and another source said the financing round would raise Stripe’s valuation to $5 billion. A Stripe spokesperson declined to comment on rumors and speculation. Stripe has seen rapid growth and is known for being very developer-friendly, having impeccable customer service, and being easy to implement. Processing payments can be quite a headache for young startups, and Stripe tries to make the process as easy as possible so that they can focus on what’s important: building a company. So far, the company has raised $190 million from some high-profile investors, including PayPal cofounders Elon Musk and Peter Thiel, Box CEO Aaron Levie, Khosla Ventures, Andreessen Horowitz, and Sequoia Capital. Stripe has been adding products and high-profile partners over the past year as it expands across the globe. Earlier this week, Stripe announced a private beta program for Japan, and there are rumors that the company is looking to move to Singapore as well. It also added a new product called Stripe Connect to help marketplace companies — like Lyft, which needs to accept payments from customers and send payments to drivers —and partnered with Twitter and Facebook to power the respective companies Buy buttons. Stripe also inked a deal to support AliPay, which might be coming to the US soon. The fundraising round could be used to further spur global expansion. Milner has invested in social media giants Facebook and Twitter, and more recently turned his focus to international e-commerce and marketplace companies, like FlipKart and Ola Cabs. International expansion costs money — Stripe currently operates in 20 countries, while competitors like Braintree support worldwide coverage. That being said, Stripe will be facing some increased competition from an independent PayPal when the latter spins off from parent company eBay sometime during the Q3 of this year. PayPal acquired payment processor Braintree in 2013 for $800 million, which has some big clients, like Uber and Hotel Tonight, and launched v.zero, a new payment API to help developers. Smaller competitors are itching to go abroad as well — WePay raised $40 million to expand marketplace payment processing across the globe.
- Spotify Takes on Apple and YouTube: to start offering videos: Spotify just laid out its plans to be more than a streaming music service, moving to add videos and podcasts in a new service that will now be available in the U.S., U.K., Germany, and Sweden. The changes chart a path that puts Spotify into direct competition with YouTube at a time when Apple is planning to relaunch its own streaming service. Spotify touted a wide roster of content partners that include Comedy Central, Vice News, NBC, ABC, ESPN, and MTV The focus is on short clips. Digital video is a much bigger business than streaming music. Subscription revenue from audio service will top $5 billion in 2020, according to Generator Research, and by that date 100 million users will be paying for streaming music. This year, however, advertisers are already set to spend $7.8 billion on digital video, according to market research firm EMarketer. By adding video, Spotify is asking users to interact with its service in a new way: Stare at the app on your phones; don't just press play and stick it back in your pocket. Podcasts are an easier connection. While the podcasting industry can hardly match the financial heft of online video, it is having a bit of a moment. Spotify is launching with a number of high-profile partners in podcasting and radio. Slate, Radiolab, and American Public Media have all signed on. Spotify will also offer some original programming in both video and audio, including radio shows hosted by the rap group Odd Future, a video series showing a new dance move each day, and a podcast about new music. Spotify is taking a cue from Songza, an online radio startup acquired by Google last June, and will offer playlists that correspond to specific moods or activities (such as “chill” or “travel”). The company also announced a new feature that will use the sensors in a user’s phone to determine their pace when they’re out on a jog and then play music with beats that complement the workout. The timing of Spotify’s announcement isn't an accident. Next month Apple is expected to unveil its own streaming service built on its $3 billion acquisition of Beats. Sure, Spotify faces plenty of competitors already, but it hasn’t faced a serious rival since it broke away from the streaming music pack several years ago. Apple is hardly guaranteed success. It launched a music-based streaming service, Ping, which failed. Then it tried a Pandora competitor, iTunes Radio, which has been underwhelming. Nor is it clear how Apple can fundamentally improve on music subscription services that are a pretty good deal for serious music fans. “Subscription music is a good category. There really isn’t a problem here for Apple to fix,” says Andrew Sheehy of Generator. “The only actual advantage that Apple has is the install base and its market power.”
- Canadian eCommerce software maker Shopify valued at $1.27 billion at IPO price: Canadian e-commerce software maker Shopify Inc said its U.S. initial public offering was priced at $17 per share, valuing the company at about $1.27 billion. The company's IPO of 7.7 million class A subordinate shares raised about $131 million, after it was priced above the top end of the expected range of $14-$16. The offering was earlier expected to be priced at $12-$14. The company sold all the shares in the offering. "Pricing reflects big enthusiasm for these type of deals. It's a unique company in a hot area with lots of growth," said Josef Schuster, founder of IPO investment firm IPOX Schuster LLC. "There's going to be a big pop coming tomorrow." Ottawa-based Shopify, which is also expected to debut on the Toronto Stock Exchange on Thursday, makes software that helps small and medium-sized retailers to set up online storefronts. Shopify charges a monthly subscription fees of $29-$179. The company has also created online stores for a variety of retailers ranging from tattoo companies to fashion boutiques and vintage book sellers. Shopify said 162,261 merchants had subscribed to its platform from about 150 countries as of March 31. Shopify's biggest investors are venture capital firms Bessemer Venture Partners, with a 30 percent stake, and FirstMark Capital LP, which has a nearly 12 percent stake.
- Cinematic Pins: Pinterest has launched a new ad format - a new kind of Promoted Pin—one that is animated. The ad updates come more than a year after Pinterest first started selling Promoted Pins, and the changes are a big step for its ad technology. Brands will be able to target about a dozen audience types from foodies to gardening enthusiasts to millennials. The new animated ads are called Cinematic Pins, and they are a bit different from the moving ads developed by rivals like Facebook and Twitter. On those platforms, videos start when you stop scrolling over them and stop when you scroll away. On Pinterest, the opposite happens. The Cinematic Pins are seen in motion as the user scrolls, but the motion stops when the scrolling stops. "Users want to feel like they're in control, and we've done a bunch of user testing—users are delighted by this experience," said Tim Kendall, Pinterest's gm of monetization. "They wind up scrolling back and forth. They love controlling the motion." A number of brands already have tested the feature, including Unilever, The Gap, L'Oreal, Nestlé, Walgreens, Target, Visa and Wendy's. The Cinematic Pins and audience targeting are part of Pinterest's new three-stage advertising offering that starts with awareness marketing. The advertisers pay on a cost-per-thousand-view basis. Then there's a marketing model based on consumer intent—when they're still deciding on a potential purchase. This type of marketing lets brands buy ads based on a cost-per-click or cost-per-engagement basis—they pay when users click on or share a Promoted Pin. In the third phase, ads are sold on a cost-per-action basis when an app is installed or a sale completed. "We only want them to pay us when the ads create that value," Kendall said. "It takes the risk out of it for marketers." Kendall said Pinterest is showing brands impressive engagement rates—for every 100 Promoted Pin impressions, brands see 30 free views thanks to repinning. "That's a really high rate of earned media," he said. Pinterest does not say how much revenue it generates in ad sales annually, and it still is a private company. But, it gets about 76 million monthly visitors, according to comScore. The platform, which lets people curate digital pin boards for projects and wish lists, is seen as an accurate marketing window into consumer behavior.
- Salesforce Earnings: Quarterly Revenue $1.5B, +23% Y/Y Despite Dollar Strength: Shares Up 3%: Salesforce today reported adjusted profit of $0.16 per share on revenue if $1.51 billion in the first quarter of its fiscal 2016. The market had expected the SaaS firm to report $0.14 in adjusted, per-share profit on revenue of $1.5 billion. Shares of Salesforce are up around 3 percent in after-hours trading, a gain that is tempered by the firm’s 1.85 percent decline in regular trading. For the current quarter, the second of its fiscal 2016, Salesforce expects revenue of $1.59 billion, generating adjusted profit of between $0.17 and $0.18. A $7 billion run rate implies fourth-quarter revenue of $1.75 billion, or around $250 million more than in the now-past period. Salesforce’s revenue grew 23 percent in its most recent quarter. For the full fiscal year, Salesforce expects revenue of between $6.52 billion, and $6.55 billion, numbers that it calculates to include $175 million to $200 million in “FX headwind.” In short, the company is taking a hit, as is nearly every U.S.-based tech shop that sells abroad. The strong dollar can hurt revenue growth, given that top-line earned overseas converts more weakly into dollars. All told, it seems that Salesforce is on solid footing.
Stripe doubled its valuation to $3.5B; payment start-up that partners with Apple Pay, Alipay, Facebook, Twitter: Stripe, an e-commerce start-up based in San Francisco, announced on Tuesday that it had raised a new $70 million round in venture capital. The round, which includes Sequoia Capital and Thrive Capital, values Stripe at $3.5 billion, twice the amount the company was valued at less than one year ago. The company, which was founded by brothers, John and Patrick Collison, in 2009, offers payment processing services for small and medium-size businesses that want to sell items online. It competes with the likes of companies like PayPal, which has long dominated the online payments industry. The company has also secured partnerships with Facebook and Twitter — which allow for users to buy things directly inside of these social platforms — and recently announced a deal with Alipay, one of the largest e-commerce platforms in China. Stripe plans to use its new capital to continue to add to its existing staff of 180 employees, and push harder into international markets. It also plans to bolster the set of tools it offers to developers who use Stripe to process payments for their businesses. More here and here.
IBM signs $1.25B cloud deal with WPP, and differentiates with hybrid focus: IBM seeks to differentiate its offering by focusing on hybrid clouds, which mix together the private, on-premise computer systems for which it has long been known with newer public-facing Internet, mobile and analytics systems, allowing clients to move existing systems to the cloud at their own pace. This hybrid approach means companies can wait for years before they consider moving their most sensitive core financial systems to the cloud computers. It also gives them the option of never having to move. Secondly, European clients demand that their data remain stored locally in European data center, a requirement IBM has met by building seven public cloud data centers across Europe in London, Amsterdam, Paris and one in Germany, with another to follow there shortly.
Tumblr adds action buttons - simpler than Twitter buy button, but no payment integration: Tumblr, which has apparently overtaken Instagram as the fastest-growing social media property — has today announced a test of a new feature that will give it more interactivity, and more of a social commerce spin. Users that post links from a selection of sites — Etsy, Artsy, Kickstarter and Do Something — will now automatically see action buttons appear in the top right corner of the posts for people to “buy”, “browse”, “pledge”, or “do something”. For now, the actions are limited to these four sites. Down the road, if Tumblr decides to integrate the buttons into links from a wider range of properties — taking in e-commerce behemoths like Amazon and eBay, for example — it could feasibly become much more of a competitor against the likes of Pinterest, Facebook and others, positioning Tumblr not just as a place to consume content but to transact, too. the buttons on Tumblr are somewhat reminiscent of the buttons that Twitter has been adding to Tweets,but Tumblr’s buttons are much more simple for anyone (not just businesses or power users) to create — they come up literally when you a copy/paste of a link. And while Twitter has integrated with payments companies to underpin its own buy button, Tumblr’s implementation is, well, a bit more rough and tumble. It’s unclear, for example, if Tumblr is getting an affiliate cut on any traffic that it sends to these sites as a result of the button. If anything, it feels more like Tumblr has added these buttons to test the waters, looking at how such a feature might potentially get monetised in the future, perhaps as an ad unit for businesses using the button. The offering is desktop only — not mobile.
Smart home-audio market continues to heat up - Sonos raises $130M: After Amazon's launch of Echo, and Apple's purchase of Beats, Sonos, in the smart home audio business since 2002, just raised $130 million, according to an SEC filing. The funding adds to Sonos’ previous $325 million, bringing it to around $455 million. That makes it a very, very well capitalized startup. It’s so big that probably no one but Google or Apple could afford to acquire it. Considering Apple’s personal audio buyout of Beats’ headphones business, and Google’s invasion of the smart home, either could be a smart alternative to an IPO for Sonos. Sonos has been steadily improving its core product — home stereo systems where each room can be separately controlled to wirelessly play music from online and local sources. It ditched its proprietary controller to let you use iOS and Android devices as remotes, and eliminated the need for its “Bridge” gadget you had to plug into your wireless router. Alongside Spotify, Pandora, iTunes, Deezer, Sirius XM, and your own music library, Sonos recently added support for SoundCloud and Google Music. What’s left is to become a household name. Sonos has already begun buying expensive commercials on primetime music TV shows like The X Factor. It’s also running huge outdoor ad campaigns on the sides of buildings in Europe
