Daily Tech Snippet: Friday, August 26

• Four years and $22 billion later, WhatsApp has decided ads aren’t awful, after all: First rule about being bought by an advertising company: You’re probably going to end up selling advertising.  WhatsApp to share user data with Facebook for ad targeting. Facebook-owned messaging giant WhatsApp has announced a big change to its privacy policy which, once a user accepts its new T&Cs, will see it start to share some user data with its parent company — including for ad-targeting purposes on the latter service. “[B]y coordinating more with Facebook, we’ll be able to do things like track basic metrics about how often people use our services and better fight spam on WhatsApp,” WhatsApp writes in a blog on the change today. “Facebook can offer better friend suggestions and show you more relevant ads if you have an account with them. For example, you might see an ad from a company you already work with, rather than one from someone you’ve never heard of.” WhatsApp will also be sharing the data with the “Facebook family of companies” — so presumably its user data could also be fed to VR firm Oculus Rift, another Fb acquisition, and photo-sharing network Instagram. WhatsApp data that will be shared under the new T&Cs includes the phone number a user used to verify their account, and the last time they used the service. Two pieces of data which — on a creepiness scale of ‘personal intel you’d rather not hand over to a data-mining tech giant’ — are both right up there.

• Google Fiber is pulling back on its broadband rollout as pressure grows to cut costs: For the past year, Ruth Porat, the CFO of Google and its parent Alphabet, has told Wall Street that Google Fiber is her most expensive unit outside of the core business — and is well worth the costs. Her bosses may be telling Fiber employees the opposite. According to a report in The Information, Alphabet chiefs Larry Page and Sergey Brin recently instructed Fiber to severely trim staff and expenses, frustrated with mounting costs of delivering high-speed internet by digging up dirt. Creating broadband networks via traditional pipes is enormously expensive. And Fiber still hasn’t proven that it has figured out a better way to do it. The Information story comes on the heels of reports that Fiber has put plans to build broadband networks on hold in two cities as it ponders ways to roll out experimental wireless tech. Fiber, like the “Other Bets” businesses outside of Google, is facing ongoing scrutiny about its operations. Here are the key parts of The Information’s report. The unit initially shot for five million broadband subscribers in its first years, but has fallen short of that. Last month, Page told Craig Barratt, the CEO of Fiber (or Access, as it’s known), to halve his staff down to 500. Porat, who has developed a reputation as a cost cutter, interceded on Fiber’s behalf, arguing to Page that Fiber’s business model is defensible. Barratt considered leaving earlier in the year, reportedly irked by the changes at Alphabet. If he did, he would not be the first “Other Bets” exec to do so.

• Uber Loses at Least $1.2 Billion in First Half of 2016: The ride-hailing giant Uber Technologies Inc. is not a public company, but every three months, dozens of shareholders get on a conference call to hear the latest details on its business performance from its head of finance, Gautam Gupta. On Friday, Gupta told investors that Uber's losses mounted in the second quarter. Even in the U.S., where Uber had turned a profit during its first quarter, the company was once again losing money. In the first quarter of this year, Uber lost about $520 million before interest, taxes, depreciation and amortization, according to people familiar with the matter. In the second quarter the losses significantly exceeded $750 million, including a roughly $100 million shortfall in the U.S., those people said. That means Uber's losses in the first half of 2016 totaled at least $1.27 billion. Subsidies for Uber's drivers are responsible for the majority of the company's losses globally, Gupta told investors, according to people familiar with the matter. "You won't find too many technology companies that could lose this much money, this quickly," said Aswath Damodaran, a business professor at New York University who has written skeptically of Uber's astronomical valuation on his blog. "For a private business to raise as much capital as Uber has been able to is unprecedented." Bookings grew tremendously from the first quarter of this year to the second, from above $3.8 billion to more than $5 billion. Net revenue, under generally accepted accounting principles, grew about 18 percent, from about $960 million in the first quarter to about $1.1 billion in the second. Uber also told investors during the call that it was changing how it calculates UberPool's contribution to revenue in the second quarter, which had the effect of increasing revenue. Uber's losses and revenue have generally grown in lockstep as the company's global ambitions have expanded. Uber has lost money quarter after quarter. In 2015, Uber lost at least $2 billion before interest, taxes, depreciation and amortization. Uber, which is seven years old, has lost at least $4 billion in the history of the company.

• First driverless taxi hits the streets of Singapore: The first driverless taxi began work on Thursday in a limited public trial on the streets of Singapore. Developer nuTonomy invited a select group of people to download their app and ride for free in its "robo-taxi" in a western Singapore hi-tech business district, hoping to get feedback ahead of a planned full launch of the service in 2018.The trial rides took place in a Mitsubishi i-MiEv electric vehicle, with an engineer sitting behind the steering wheel to monitor the system and take control if necessary. The trial is on an on-going basis, nuTonomy said, and follows private testing that began in April. Parker, whose company has partnered with the Singapore government on the project, said he hoped to have 100 taxis working commercially in the Southeast Asian citystate by 2018.

Daily Tech Snippet: Wednesday, May 11

• Amazon and YouTube get ready to rumble over online video:  Amazon is moving into the space long held by YouTube, announcing on Tuesday thelaunch of a new platform that allows anyone to post original content. Called "Amazon Video Direct," the site offers creators a way to make money in a variety of ways, including royalties on videos streamed by paying Amazon Prime members, revenue shares for videos rented or purchased, ad impressions for free-to-watch videos, and any combination of these models. The new platform places Amazon in direct competition with Google's YouTube, the firm leader in the video upload space that counts 1 billion users. YouTube has its own revenue sharing model for its top creators. Starting in 2007, it launched its Partners Program, which gave popular content creators a cut of the ad revenue earned from views to their pages. But there has been controversy in connection with the cut that YouTube takes, which is 45% of the revenue, and the site does not offer to cover any video creation costs, leading some YouTube creators to speak out about comparatively unfair profits. Amazon has not yet detailed what percentage of revenue creators will get with the Video Direct service. But it is offering a pay-to-subscribe option direct to each individual channel, similar to Twitch, which allows users to “follow” specific content creators for a fee. The owner of the channel would make a percentage of the profit from those subscriptions. Amazon will also pay out $1 million as a bonus among the creators of the top 100 videos viewed by Prime members each month.

• Three More Signs Smartphone Downturn Is Going From Bad to Worse: Three suppliers that seldom command much attention, working behind the scenes to make devices sold under the brands of better-known customers, put out back-to-back earnings reports Tuesday. They spell trouble ahead for smartphone makers and other companies that once thrived on mobile mania. Pegatron Corp., which assembles iPhones, missed profit expectations and said April sales dived 16 percent. Minebea Co., which makes LED lights for mobiles, lagged its own forecasts for revenue and earnings. Japan Display Inc., which supplies screens to Apple and others, said profit has deteriorated so rapidly it will lose money for the fiscal year and suspend a promised dividend. Adding to the gloom, Lenovo Group Ltd. tumbled to a four-year low as analysts warned of rising competition. Pegatron and its peers are merely the latest in a string of ill omens for a market facing its worst pace of expansion since Apple introduced the iPhone in 2007. Much of the gloom centers on China, the phenomenal growth engine that’s now headed for an epicshakeout. Smartphones are no longer a novelty and most domestic brands target the mid- and low-price ranges, where buyers don’t upgrade as frequently as those for high-end Apple and Samsung phones.

• WhatsApp launches desktop apps for Mac and Windows: WhatsApp, the Facebook-owned messaging service that claims a billion users, has launched desktop clients for Mac and Windows. The release comes about 15 months after WhatsApp released its first web app. People who have already been using WhatsApp on their web browsers will find that software isn’t significantly different. The company said in an announcement “our desktop app is simply an extension of your phone,” with all messages synced between devices. WhatsApp’s success in countries like India, Brazil, and South Africa is of course driven by the high penetration of smartphones in those markets, but giving power users–including people who rely on WhatsApp for work communications–desktop options helps it competes against other messaging services, like iMessenger, WeChat, and Skype. WhatsApp is currently testing out B2C accounts, which would give it a new revenue source after dropping its 99 cent annual subscription fee.

Daily Tech Snippet: Tuesday, May 3rd

• This new apartment is like a college dorm for grown-ups: WeWork, a provider of co-working spaces in 28 cities, isn’t content to just offer you a place to do your job. This week it’s opening WeLive, which offers furnished living quarters and a range of extra amenities in a fresh take on what apartment life should be like. The apartments themselves are on the small side, and many lack a complete kitchen or a full-sized fridge. In some apartments the beds fold into the wall to create more space. But when residents step outside their own walls they have access to common areas including large kitchens stocked with appliances, game rooms, quiet areas and a community garden. WeLive is designed around flexibility — residents live month to month rather than signing a one-year lease. There’s no need to wait for the cable guy to hook up one’s TV or Internet service. And no one has to shop for a bed, couch or table. Residents need to arrive with little more than their clothes. A security deposit is required, but credit checks aren’t done. A private studio in Crystal City starts at $1,640 a month, and a studio with two beds starts at $1,880. There are also one-, two-, three- and four-bedroom apartments. A four-bedroom goes for $4,220 a month. Residents pay a $125 monthly fee that covers utilities, cable and Internet. The New York apartments are more expensive, with private units starting at $2,550. Stephanie Sutton, 31, moved into WeLive’s Crystal City location a month ago. WeLive has brought in some residents early as part of a test period. Sutton said her favorite aspect has been the sense of community. “It really does feel like home,” she said. “It’s a great way to develop friendships without any pressure. Here you passively make 10 friends instantly.”

• Mid-Career and Itching to Lead a Startup? This VC Firm Wants You: It’s easy to spot the silver hair among Jungle Ventures’ gallery of startup founders. Look closer and you’ll find many have called the shots at banks and Fortune 500 outfits.  That’s no accident. Jungle Ventures’ strategy involves betting on executive-suite veterans over starry-eyed twentysomethings who dream of changing the world, saidAmit Anand, co-founder and managing partner of the Singapore-based firm.  While peers crave youthful upstart vision, Jungle Ventures openly courts corporate bigwigs wondering where to take their careers. Singapore is an Asian base for global banking and technology firms such as Google Inc. and Microsoft Corp. -- and that’s its advantage, Anand said. Professionals more accustomed to navigating the corporate jungle than envisioning the next Facebook can become standout entrepreneurs with a little help, he said. And they know how to make a buck. Jungle’s unusual approach seems to have paid off: it’s cashed out of three startups in four years including ZipDial, bought last year by Twitter Inc. Its tactics have won investment from heavy-hitters like Singaporean state investor Temasek Holdings Pte, International Finance Corp. and the wealthy Thakral family. Anand said it’s close to raising a new $100 million fund to add consumer tech and Internet of Things to a portfolio spanning e-commerce, finance and software across Asia.Anand and co-founder Anurag Srivastava were professionals-turned-entrepreneurs themselves before they met through Sony Entertainment Television co-founder Jayesh Parekh and started Jungle in 2012. Over the next four years, the pair witnessed the Singaporean startup scene transform from young university dropouts into an arena dominated by mid-career professionals with serious banking and Internet chops.  They were “leaving their jobs, knowing their industries inside out, wanting to disrupt their own industry. More seasoned, more experienced, going after very large ideas,” Anand said. “That’s something we are going to double down on over the next years, to back more professionals turning into entrepreneurs in disruptive industries, trying to create new industries.”

• Oculus will sell its virtual reality headset in Best Buy stores beginning this week: Facebook-owned Oculus wants to take virtual reality mainstream, so it’s bringing its VR headset to the place mainstream shoppers can find it: Retail stores. Oculus announced Monday that it will begin selling “a small number” of Oculus Rift headsets in 48 Best Buy stores around the country later this week. It’s the first time the Rift has been available in-store, although Best Buy has already been selling the Rift online. Perhaps more important than actually selling the headset from a physical store is Oculus’ plan to set up demos for these devices at each Best Buy location. Virtual reality is still a very niche industry that appeals primarily to gamers. Simply getting the word out that Oculus exists and is available for purchase is still a challenge. Putting demo stations inside Best Buys could help educate shoppers who stumble upon the product for the first time. Oculus started selling the Rift in January and shipping them in March, but the process hasn’t been as smooth as expected. Lots of the orders have been delayed, so Oculus says that those waiting on a preorder can buy a Rift in-store and still get the rest of their preorder perks (like a game and first dibs on the Oculus controllers, which are alsodelayed). This backup was not-so-subtly hinted at in the company’s blog post Monday: “Quantities [in Best Buy] will be extremely limited while we catch up on Rift preorders.” So don’t hold your breath. In addition to selling in Best Buy starting May 7, Oculus will also sell online from Microsoft and Amazon beginning this week.

• Brazil orders cell phone carriers to block WhatsApp for 72 hours: WhatsApp, Facebook’s messaging service that recently rolled out end-to-end encryption to its users, will be blocked in Brazil for 72 hours, starting this afternoon. A judge from the small Brazilian state of Sergipe ordered telecom providers in the country to block WhatsApp today in a dispute over access to encrypted data. Judge Marcel Montalvao has ordered WhatsApp to turn over chat records related to a drug investigation, but WhatsApp has argued that it cannot access the chats in an unencrypted form and therefore cannot provide the required records to the court. Local newspaper Folha de S.Paulo reported that the ban would begin at 2 p.m. local time and that phone companies in the country would face fines if they did not comply. This isn’t Montalvao’s first clash with WhatsApp, which boasts more than 100 million Brazilian users. The judge ordered the arrest of Facebook’s vice president for Latin America, Diego Dzodan, in March. Facebook has said that WhatsApp operates with relative independence and that Dzodan has no control over WhatsApp data. Brazil also cut off access to WhatsApp in the country last December. Although the block was ordered to last for 48 hours, it was lifted after just 12 hours.

Daily Tech Snippet: Wednesday, April 6

• WhatsApp completes end-to-end encryption rollout: It’s a security project that’s taken around a year and a half to complete, but messaging giant WhatsApp has now fully implemented strong end-to-end encryption on its platform and across all mobile platforms for which it offers apps. This means users of the latest versions of the messaging app will have their comms and media end-to-end encrypted by default. And there are a lot of WhatsApp users; earlier this year the Facebook owned company announced it had passed a billion active users. Securing cross-platform video comms was the last piece of the puzzle, according to a WhatsApp spokesman. End-to-end encryption means the content of communications are not stored in plaintext on WhatsApp’s servers. Nor is the company able to decrypt users’ messages to access them since it does not hold the encryption keys. So WhatsApp will be unable to be compelled to hand over messaging data — even if served with a warrant by authorities demanding access.

• Virtual Reality Check: Rating the HTC Vive and the Oculus Rift: JUST a week after Facebook released the Oculus Rift, the first high-powered virtual reality device for consumers, a less publicized contender has arrived: the HTC Vive. Similar to the Rift, the Vive — a joint development by the Taiwanese manufacturer HTC and the video game distribution company Valve — is a virtual reality headset that connects to a powerful computer. The Vive is even more expensive than the Rift — it costs $799 for the headset and $1,000 to $2,000 for a compatible computer. Facebook’sOculus sells the Rift headset for $599, or $1,500 when the system is bundled with a computer. The main advantage of the HTC Vive headset is that it comes with motion controllers, which let you effectively reach out and grab objects in virtual reality. This kind of interaction feels much more natural for virtual reality than the game controller included with the Rift. Also, the Vive’s motion-sensing base stations capture richer movements, enabling people to walk around in a larger space or crouch and grab something while using virtual reality; the Rift’s camera can detect movements, too, but the Rift was primarily designed to be used while standing or sitting. Another benefit of the Vive is that the headset fits better. With the Rift, I could always see a small gap in the space beneath the nose. The Vive headset completely blocks the outside world. HTC also includes a piece of foam that can be inserted into the Vive for a better fit for a narrower face. But a major downside of the Vive is the setup, which is more demanding than the Rift’s. HTC recommends that you drill mounts into the ceiling to install the motion-sensing base stations to ensure that the sensors have a clear line of sight with the headset and your body. In other words, to take full advantage of the Vive, you probably need to dedicate a room to virtual reality; to use the Rift, you can get away with clearing out a bit of standing space. The other obvious downside of the Vive is the higher cost. With a computer and accessories included in the total price, the Vive will cost roughly $300 more than the Rift. Then again, if you are willing to spend more than $1,000 for virtual reality, that extra $300 might not matter much. This is Year 1 of powerful and capable virtual reality systems coming to the mainstream. Over time, the content that will become available for these devices will define their worth. There isn’t much to do with either system yet, and consumers would be wise to wait to see if any killer virtual reality apps or games emerge for the systems.

• After a Pause, Nutanix Signals IPO Plans Are Back on Track: Nutanix, a supplier of storage products for data centers, just updated its paperwork with the U.S. Securities and Exchange Commission, signaling that its plans for an initial public offering may no longer be on hold. The new filing shows that Nutanix, based in San Jose, Calif., nearly doubled its revenue in the six-month period ended Jan. 31, to $190 million from $102 million in the year-ago period. It ran a net loss of nearly $72 million, which increased from $56 million a year ago. Operating expenses rose to $190 million from $112 million previously. The company first filed for an IPO in December, but was reported to have put those plans on hold in February after markets turned south. After the Dell-owned security company SecureWorks, which is expected to offer about 20 percent of its shares in an IPO later this month, Nutanix would appear to be on track to be the second tech IPO of 2016.

• Amazon Acquires Image Analysis Startup Orbeus: The acquisition took place in the fall of 2015, said the person who asked not to be identified because Amazon hasn’t announced the deal. Orbeus developed photo-recognition technology based on a powerful type of AI called neural networks and made this available as a consumer application, as well as a service for other companies and developers called ReKognition. It automatically categorized and identified the contents of photos. Orbeus’s app, PhotoTime, came out before Google launched its successful AI-based Photos app. "ReKognition API is no longer taking new customers," Orbeus says on its website. "But we’re up to new/exciting things." Other startups applying neural networks to image-recognition and related computer-vision tasks include New York-based Clarifai Inc. and Palo Alto-based MetaMind. Big technology companies are interested in this field, and other areas of AI. Salesforce.com Inc. said Monday it acquired MetaMind, while Apple Inc. said in January it purchased Emotient Inc., which specialized in facial-recognition technology.

• Medium Chases Revenue With Promoted Stories; Adds Subscriptions: Medium, the 4-year-old online publishing platform from Twitter Inc. co-founder Ev Williams, now has a plan to pay the bills. The company will make money in much the same way Twitter and Facebook Inc. do -- by allowing brands to post stories and pay for them to be promoted to a wider audience through prominent placement in the news feed. Alphabet Inc.’s Nest and Intel Corp. are among the first advertisers taking this approach to reach Medium’s 25 million unique readers. The blogging site also plans to extend its tools for media publishers, so they can host their entire website within Medium, helping the companies save money on technology costs. The Awl and Pacific Standard are among new publications coming to Medium starting Tuesday. Publishers can also choose to put some stories behind a members-only paywall. On Medium, people can publish and annotate long-form articles and follow networks of authors. The company, backed by investors including Andreessen Horowitz, Greylock Partners and Google Ventures, last raised $57 million in September at a $400 million valuation, according to a person familiar with the matter.

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• Twitter Built a New Button So You’ll Send More Private Messages:  Reply. Retweet. Like. And now Send. Twitter is adding a new button to the bottom of each tweet so that it’s simpler to send that tweet to another user within a private message. The new icon, a small envelope right next to the heart-shaped Like button, automatically attaches the tweet to a private message which you can then address to another user.  But the fact that Twitter is putting a new button onto each tweet is a pretty good indication of how important direct messaging is to the company. Twitter was late to building out its messaging service and as a result has always lagged behind other messaging apps like Facebook’s Messenger or Snapchat. But Twitter DMs are increasing in popularity — Twitter claims that 60 percent more messages were sent in 2015 than 2014. Adding a new button to encourage more private messages should bump that number even higher. It should also make it easier for users to send tweets to brands or retailers, a customer service use case Twitter is starting to build features for. It’s one of the reasons the company removed the 140-character text limit for direct messages last summer; it’s hard to have a conversation with a customer service agent when you can’t send more then two sentences at a time. The customer service use case was also one of the reasons Twitter has considered spinning DMs into its own app. It ultimately decided against the idea.

Daily Tech Snippet: Friday, February 19

• Uber is profitable in the US, but is losing $1 billion a year to compete in China: Uber is burning through more than a billion dollars a year in China as it wages a fierce price war against local rival Didi Kuaidi, its chief executive said. The company's Chinese business boosted its valuation last month to more than $8 billion after raising more than $1 billion in its latest funding round, but the U.S. ride-hailing app is not yet profitable in mainland China because of the intense competition. "We're profitable in the USA, but we're losing over $1 billion a year in China," Uber CEO Travis Kalanick told Canadian technology platform Betakit.  "We have a fierce competitor that's unprofitable in every city they exist in, but they're buying up market share. I wish the world wasn't that way."  The $1 billion figure was confirmed by Uber officials in China in an email to Reuters on Thursday. Uber and China's Didi Kuaidi, backed by Chinese technology giants Tencent Holdings and Alibaba Group Holding, have both spent heavily to subsidise fares to gain market share, betting on China's Internet-linked transport market becoming the world's biggest.

• Facebook Plans To Put Ads In Messenger: A leaked document Facebook sent to some of its biggest advertisers reveals that Facebook will launch ads within Messenger in Q2 2016. The document, obtained by TechCrunch but kept private to protect its verified source, says businesses will be able to send ads as messages to people who previously initiated a chat thread with that company. To prepare, the document recommends that businesses get consumers to start message threads with them now so they’ll be able to send them ads when the feature launches. The document also notes that Facebook has quietly launched a URL short link fb.com/msg/ that instantly opens a chat thread with a business. Facebook confirmed the existence of the URL short link. That seems to back up the validity of the leaked document. Messenger is one of Facebook’s most popular and fastest-growing products, with 800 million monthly active users. Yet the social network has never monetized it directly before. Thankfully for users, Facebook isn’t going to let brands send ad messages to just anyone or even people who’ve liked their Pages. Only those who have voluntarily chatted with a business can be sent ads. This should somewhat limit the spam potential and annoyance. Right now, almost all messages come from one’s friends, so Facebook will likely try to preserve this high signal-to-noise ratio with limits on advertising.

• Secondary Shops Flooded With Unicorn Sellers: Until recently, shares of some of the highest-flying unicorn companies have been so hard to come by that secondary buyers have battled each other, not to mention other investors, to acquire some of the startups’ common shares. As the fortunes of billion-dollar companies like Evernote have fizzled, however, so has their shareholders’ enthusiasm. Says the cofounder of one secondary shop who asked not to be named, “We aren’t seeing huge discounts yet in the top 10 names, but people are trying to dump them. It’s not just one person calling you about a particular company. It’s four.” Says another secondary investor, who also asked not to be identified for this story, “We’re seeing an enormous uptick in inbound selling interest.” The situation is changing so quickly that several people with whom we spoke say a number of new characters are now peddling shares of so-called “A List” companies whose shares would have been beyond nearly anyone’s reach six months ago. “We’re seeing a lot of sketchy people advertising these deals,” says one insider. It didn’t used to be like this. Just a year ago, demand for unicorn stock was at an unprecedented level, as were the number of companies establishing billion-dollar valuations for themselves. Unicorn coverage became a cottage industry unto itself, with tech outlets and even data analysis firms poring over which unicorns were the best employers, which companies were positioned to become unicorns, and which venture firms were the best at spotting unicorns early on, among other angles. Alas, by late August, China’s market was in a nose-drive, and both late-and early-stage investors began applying the brakes. It wasn’t long before non-traditional venture investors like Fidelity and Blackrock were slashing the valuations of some of the startups in the portfolio. A parade of well-reported WSJ pieces about what isn’t quite right at high-flying Theranos seemed to cement what many had started to think: That many unicorns really weren’t worth what their ambitious investors had settled on. (It didn’t help when, last week, the human resources startup Zenefits asked its CEO to resign over sloppy and possibly damning business practices. Ten months ago, the company was valued at $4.5 billion by investors.) Partly, such nervousness owes to employees, some of whom are getting laid off as companies cut back on costs in order to lengthen their runway. These former staffers have to exercise their options within 90 days or else lose them, and they’re calling secondary firms for help in figuring out what to do. Some sellers are venture capital firms that thought they could exit some of their investments in 2016 and are now concluding that they can’t. (As some readers will know, the clock is always ticking on a venture fund. Most have 10 or 11 years, tops, to invest in startups and get some cash back to investors before losing the confidence of those backers.)

• Why Carriers Want to Delete WhatsApp: Two years ago, Mark Zuckerberg took the stage at the Mobile World Congress, an annual industry gathering held in Barcelona, to reassure phone companies that Facebook is their natural ally. He’d just announced the $22 billion purchase of the WhatsApp messaging service and was touting an initiative called Internet.org, a low-bandwidth suite of basic services carriers would offer in conjunction with Facebook to get hundreds of millions of people online for the first time. He pledged to “build what is going to be a more profitable model with more subscribers for carriers.” By sticking together, the Facebook founder said, both sides could benefit handsomely.As Zuckerberg prepares to return to Barcelona for this year’s MWC on Feb. 22, phone executives say his company looks more like a competitor than a partner. Last year, WhatsApp introduced free voice calls—something Facebook already offered—and both brands have messaging apps. These so-called over-the-top services cut into mobile carriers’ voice and texting revenue because they’re offered over the Internet. Some phone companies say Facebook and its ilk are freeloaders that rely on carriers’ network infrastructure without spending any money to support it. “WhatsApp is competing with us, not only with messaging but with voice, too,” Telefónica Chief Operating Officer José María Álvarez-Pallete said in August at a telecommunications industry event in the Spanish coastal city of Santander. “The premise should be, same services, same rules.” Not all carriers are lining up against Facebook. The company has more than a dozen partnerships with phone companies from Paraguay to the Philippines. Many of them say teaming up with Facebook is beneficial, because it boosts data usage and has the potential to increase revenue. Millicom International Cellular, a carrier with more than 63 million subscribers in Africa and Latin America, has run promotions in certain markets where it offers free access to Facebook and Internet.org for a couple of months. The company reported last year that 33 percent of subscribers who take part end up upgrading to fee-paying data plans. Similarly, South Africa’s No. 3 mobile company, Cell C, offers Facebook and WhatsApp for free in certain subscription packages, because they draw new users. “If we don’t innovate around these services and drive value to our customers, we run a higher risk of being left out of the future entirely,” said Cell C Chief Executive Officer José Dos Santos in an e-mail. In the long run, say some industry analysts, WhatsApp and other alternatives shouldn’t be seen as a threat to the voice service of phone companies. The typically superior sound quality of the voice calls in the apps uses lots of data. “If carriers price their data offerings correctly, it could drive up revenues,” says John Delaney, an analyst at researcher IDC. And when people graduate to video apps like Skype, data consumption grows exponentially. Says Delaney, “What carriers resent is investing heavily and having others piggyback on their investments.”

• Scientists created a three-armed cyborg to play the drums like no human can: Georgia Tech researchers have built a robotic arm that attaches to a drummer’s shoulder and plays along. This allows drummers — now equipped with three arms — to play sequences that two-armed humans can’t even attempt. “It’s a richer and more sophisticated rhythm because you can hit one more thing,” said Gil Weinberg, director of the Center for Music Technology at Georgia Tech. The robotic arm is capable of hitting a drum up to 20 times per second, a rate that’s impossible for humans. And it never needs a break. The computerized arm listens to the sound of the human playing and improvises to accompany the beat. Currently it can’t be programmed to play specific songs. The robotic arm will generally mirror the volume and speed that the human is playing. Weinberg stopped short of saying the three-armed solution is presently better than what a drummer can do with two hands. The arm, finalized last week, hasn’t been tested yet to see how it complements professional drummers. Weinberg’s next step is having drummers wear a brain-scanning headband, and see whether the robotic arm can interpret their intentions and play exactly what they desire. Since 2006, he has worked to create memorable music through artificial intelligence. In one project, Weinberg built a robotic prosthesis for a drummer who lost an arm in an accident.

Daily Tech Snippet: Tuesday, January 19, 2016

• Social media ‘buy buttons’ are n't off to a great start, but they might still be big: In the past year, there’s been a flurry of experimentation with “buy buttons,” a way for social-media sites to allow users to purchase cocktail dresses, throw blankets, candle-making kits and sundry other items from retailers without leaving the social network. Pinterest launched “buyable pins” in June, the same month Instagram released its similar “shop now” feature. Those offerings joined ongoing tests by Facebook and Twitter for similar ­functionality. The rush by tech giants and retailers to join the buy-button arms race would suggest that these businesses see money-making potential. And given how much time people spend on social media — an estimated 1 of every 5 minutes spent on a mobile phone in the United States is on Facebook or Instagram, for example — it would be logical to assume that these buy buttons are bringing retailers a blast of online sales. But this holiday season, social channels accounted for 1.8 percent of overall online sales, according to data from Custora, whose software platform is used by many retailers. That’s just a tiny sliver of purchases, and it’s not even growing: In 2014, Custora found that social media led to 1.9 percent of sales during the same time period. But even if buy buttons have not had an explosive launch, experts say they could prove to be a crucial solution to some of retailers’ biggest online shopping problems. Right now, stores are seeing a massive “conversion gap” on mobile devices, meaning that there has been a surge in the number of people browsing sites from mobile devices, but only a small share of them are actually making purchases. In studies, shoppers frequently say they don’t buy on their smartphones because it is a hassle to enter payment information and go through a checkout process on the small screen. Buy buttons could also help retailers re-create the idea of the impulse buy for the online era. On the web, a shoppers’ journey so often begins with a search in Amazon or Google for a specific item. That has made it hard for retailers to do what they’ve long done in stores with elaborate window displays and sweet treats near the checkout counter: Persuade you to buy something eye-catching on a whim.

• Son's SoftBank Vision at Risk as Sprint Goes From Bad to Worse: The acquisition of Sprint Corp. was supposed to help Masayoshi Son realize his vision of transforming SoftBank Group Corp. into the world’s most-valuable company. Instead, the 2013 deal has become his biggest setback so far, dragging down SoftBank shares and cutting into the billionaire’s wealth. SoftBank tumbled yesterday to its lowest level since the Sprint deal closed 2 1/2 years ago. Son’s fortune has shrunk by $3.2 billion over the past 12 months, according to the Bloomberg Billionaires Index, as the Japanese company’s stock plunged. SoftBank paid $22 billion for a controlling stake in the No. 3 U.S. wireless operator at the time. That investment has lost $7.3 billion in value, according to SoftBank, and Sprint is now the No. 4 carrier.  At the same time, a slowdown in China brought down shares of Alibaba Group Holding Ltd., SoftBank’s biggest holding, by 22 percent last year. “There will always be fans of SoftBank, it’s just at this moment in time, no one cares --it’s out of fashion,” said Andrew Clarke, director of trading at Mirabaud Asia Ltd. in Hong Kong. “They have too many concerns about Sprint and Alibaba because those shares are being crushed.”

• Upstarts Are Leading the Fintech Movement, and Banks Take Heed: Ryan Craine hates carrying cash and finds writing checks to be a headache. He doesn’t do much of either anymore — he mostly uses his smartphone to pay for things. Mr. Craine, a 28-year-old tech support worker in Washington, D.C., uses Apple Pay at the stores and restaurants that accept it. About 20 times a month, he turns to Venmo, a digital wallet for transferring money from one person to another, to pay his share of rent, meals, groceries and utility bills. To refinance his student loans last year, he went to an online lending start-up, Earnest. Mr. Craine’s money choices point to the millennial-led shift toward new digital financial services, a change in behavior that threatens to upend the consumer banking industry. The popularity of the services has left the major banks rushing to adapt, even as they have regained their footing after the financial crisis. Americans in their 20s and early 30s, analysts say, offer a glimpse of tomorrow’s banking market. “Their relationship with the financial system is very different — it’s an electronic one, on their smartphones,” said Mark Zandi, chief economist at Moody’s Analytics. “That can and will be very disruptive to the banking system.” Money is pouring into so-called fintech start-ups. And major technology companies — Apple, Google, Amazon, Facebook and Samsung — are all entering consumer banking, typically starting with digital payment apps. Investment worldwide in start-ups focused on retail banking markets rose to nearly $6.8 billion in 2015, according to CB Insights, a research firm. That is more than triple the $2.2 billion in 2014. In 2010, 40 percent of Americans with bank accounts visited a physical branch once a week, while only 9 percent made a mobile transaction weekly, according to survey research by Javelin Strategy and Research. By 2014, the percentage reporting weekly visits to bank branches fell to 28 percent, while the weekly mobile banking share tripled, to 27 percent.

• WhatsApp drops $1 subscription, studies making businesses pay: The world's most popular messaging service, WhatsApp, is dropping its token $1 fee still levied on some users as it experiments with making businesses pay to reach their customers, Chief Executive Jan Koum said on Monday. In addition, the Facebook-owned communications service expects in the coming months to offer complete encryption of messages, in a move to ensure the privacy of user conversations that is likely to draw further criticism from some governments. The authorities in the United States, Britain and elsewhere say the growing prevalence of encryption on services such as WhatsApp and Apple's iMessage, hamstring their ability to monitor criminal suspects or thwart militant plots and have threatened to pass new laws to block these changes. WhatsApp, the service that offers free text, picture and video messages, has been slowly working to develop end-to-end encrypted communications services for more than a year. It has already introduced full encryption for users on Android phones. "We are a couple of months away from calling it done," Koum said, noting that once completed, WhatsApp will represent the world's largest service offering completely private messaging. "Soon we will be able to talk more about this," he said. Once fully introduced, WhatsApp will be the largest encrypted communications service in the world, he noted.

Daily Tech Snippet: Friday, December 18

• Big IPO, Tiny Payout for Many Startup Workers: Side deals and volatile shares make stock options a bigger gamble for startup employees.The frustrated expectations of early employees have become a common thread in the latest round of technology IPOs. It used to be “the get-rich story happened for people who joined in the early days,” says Saar Gur, general partner at Charles River Ventures. Now they can be among the few left behind. Many executives, early investors, and even later investors are able to cash out before the rank and file, or bargain for guarantees that help ensure a bonanza. Whatever happens with an IPO, executives tend to hang on to enough equity to guarantee huge payouts when they sell their shares. Most early investors get a chance to sell options on secondary markets before a company’s IPO. Later investors increasingly demand preferential treatment, including agreements that if an IPO underperforms the terms of their investment, they’ll be made whole with an equivalent amount of additional shares. Late-stage investors in both Box and Square had such so-called ratchet agreements in place, further devaluing locked-up employee equity. When those kinds of deals are in place, employees often find their payouts disappointing because they’re so diluted, says Clara Sieg, a partner at Revolution Ventures. Box and Square declined to comment for this story. Ordinary employees are typically without meaningful financial protections or even a clear sense of what their equity stakes mean, says Chris Zaharis, who’s worked at startups for about 20 years and as a volunteer teaches people about their equity rights. Options grants often don’t come with information on strike prices (discounts on shares), preferential treatment, or even the total number of shares outstanding. “People on average overestimate what they are going to make by about 10X,” he says.

• Driverless Cars Have A Crash Rate Twice As High As Regular Cars - Because They Always Follow The Rules. They  The self-driving car, that cutting-edge creation that’s supposed to lead to a world without accidents, is achieving the exact opposite right now: The vehicles have racked up a crash rate double that of those with human drivers. The glitch? They obey the law all the time, as in, without exception. This may sound like the right way to program a robot to drive a car, but good luck trying to merge onto a chaotic, jam-packed highway with traffic flying along well above the speed limit. It tends not to work out well. As the accidents have piled up -- all minor scrape-ups for now -- the arguments among programmers at places like Google  and Carnegie Mellon University are heating up: Should they teach the cars how to commit infractions from time to time to stay out of trouble? “It’s a constant debate inside our group,” said Raj Rajkumar, co-director of the General Motors-Carnegie Mellon Autonomous Driving Collaborative Research Lab in Pittsburgh. Turns out, though, their accident rates are twice as high as for regular cars, according to a study by the University of Michigan’s Transportation Research Institute in Ann Arbor, Michigan. Driverless vehicles have never been at fault, the study found: They’re usually hit from behind in slow-speed crashes by inattentive or aggressive humans unaccustomed to machine motorists that always follow the rules and proceed with caution. Last year, Rajkumar offered test drives to members of Congress in his lab’s self-driving Cadillac SRX sport utility vehicle. The Caddy performed perfectly, except when it had to merge onto I-395 South and swing across three lanes of traffic in 150 yards (137 meters) to head toward the Pentagon. The car’s cameras and laser sensors detected traffic in a 360-degree view but didn’t know how to trust that drivers would make room in the ceaseless flow, so the human minder had to take control to complete the maneuver.

• Brazil court lifts suspension of Facebook's WhatsApp service: A Brazilian judge on Thursday ordered the lifting of a 48-hour suspension of the services in Brazil of Facebook Inc's WhatsApp phone-messaging application, overturning an order from a lower court. The ban, which went into effect at midnight Wednesday, lasted about 12 hours until an appeals court judge overturned it. The interruption of WhatsApp's text message and Internet telephone service caused outrage in Latin America's largest country, where the company estimates it has 100 million personal users, and led to angry exchanges on the floor of Congress. WhatsApp is installed on 92.5 percent of Android devices in Brazil, making it the most installed app in the country, according to SimilarWeb, an internet intelligence and marketing company. Rival messaging system Telegram said on Twitter that it received 1 million downloads in Brazil in one day due to the outage. Telegram was installed on 2.35 percent of android devices before the blackout and Facebook Messenger on 74 percent, SimilarWeb said. A judge in Sao Bernardo do Campo, an industrial suburb of Sao Paulo, had ordered the suspension of WhatsApp's services from midnight on Wednesday (0200 GMT Thursday). The order was made after the California-based company, despite a fine, failed to comply with two judicial rulings to share information in a criminal case. 

• Apple names Jeff Williams COO, a job once held by Tim Cook: Apple Inc promoted longtime executive Jeff Williams to the role of chief operating officer, reinstating the title previously held by Chief Executive Tim Cook, as part of a series of changes to the company's leadership team. Williams, who joined Apple in 1998, previously served as senior vice president of operations and oversaw development of the Apple Watch, the company's first new product since the iPad. "Jeff is hands-down the best operations executive I've ever worked with," Cook said in a statement. While it was unclear if the appointment meant Apple was grooming Williams to be Cook's successor, the Wall Street Journal reported, citing a source, that the move did not necessarily signal that.

• Yelp, OpenTable part ways amid heightened competition: Review site Yelp Inc and restaurant reservation service OpenTable have quietly ended a long-running partnership, the companies confirmed on Thursday, as the one-time allies increasingly eye each other's businesses. The companies parted ways in April under mounting competition, with OpenTable facing new rivals to its reservation business and Yelp dogged with questions about stalling growth. Both companies are trying to take charge of the entire customer experience, said an analyst. "If they have to share that customer with someone else, it threatens their long-term viability," he said. The companies halted a deal that since 2010 had allowed users to make OpenTable reservations through Yelp, home to a trove of reviews from diners.

Daily Tech Snippet: Thursday, June 25

• Here is an MP3 version of this snippet

• Driven by smart acquisitions, Facebook stock at all-time high; Company valued at ~$250 billion : Facebook set an all-time high today, closing at $88.86 per share, valuing the company at just under $250 billion. However, what’s most interesting in the Facebook bump isn’t the simple fact that it is now worth more — shares and markets gyrate. Instead, it’s the reasons why analysts are more bullish that are notable: Piper cited the Oculus Rift headset as a coming revenue source, while RBC gave the top line potential of Instagram as key to Facebook’s value. Translating those points slightly, it seems that investors are taking into account the revenue side of Facebook’s past purchases, and are adjusting their expectations higher as those acquisitions mature into income streams. That concept underscores how well the social company has done its recent acquisitions.


• How Beacons Are Helping People Network at Cannes, As Festival Tests the Technology for a Second Year: The Cannes Lions festival is testing out beacon technology in the official Cannes Lions app for the second year in row, upping the number of location-based devices set up around venues from fewer than 10 last year to 100. The Around Me section of the app employs location-based targeting to find people who have check into venues. Festival goers can also see which sessions are the buzziest. On top of the geo-targeting, the app crawls LinkedIn profiles to connect online connections offline. And as many ad executives know from cold LinkedIn pitches, that often means meeting someone in real life for the first time. The app sends out mass push notifications to everyone about schedule changes and information about the event. If the beacons detect that someone has stayed in a session for 15 minutes or more, the app will automatically save the session as a favorite. The liked panels then serve as a virtual icebreaker for attendees to find common interests.


• What Online Retailers Should Know About Amazon Business: Amazon Business has replaced AmazonSupply. Amazon Business features a simplified layout with fewer ads and includes products suitable for business purchase. Plus, unlike AmazonSupply, third-party sellers are invited to join Amazon Business. Sellers must be approved to sell on Amazon Business. There are 45 active professional categories within this new marketplace umbrella. To be accepted on Amazon Business, you must meet a sales minimum and have an acceptable seller rating to demonstrate a high level of customer satisfaction. Once approved, you’ll need to set up a Business profile. You’ll then be able to use special features like business-only pricing, quantity-based pricing and more. Buyers must be approved to buy on Amazon Business. To get a buying account on Amazon Business, shoppers need to create a new account and register tax information. Once done, they can add buyers and share payment and shipping information. Amazon Business supports business credentials. Credentials include “ISO 9001 certified,” “Minority Owned” and other quality, sourcing and social responsibility goals.


• The Internet of Things Has Vast Economic Potential, McKinsey Report Says: A study by the McKinsey Global Institute predicts that the Internet of things, a term for sensor-laden machines connected to the web, will in the year 2025 create between nearly $4 trillion to $11 trillion in economic benefits globally. That includes profits to device-makers, efficiencies, new businesses and savings to consumers from better-run products. It is difficult to measure the current economic benefit though, because most people now working with the technology are still in the early investment phase. The biggest gains will be made by companies that figure out how to adapt to the new technology, the report said. On an oil-drilling platform, for example, this might mean knowing by the temperature or chemical changes in a pump that something may have happened upstream, away from the pump. In managing city traffic, this could mean learning how to correctly balance information from cars, roads and traffic lights. “This puts a premium on predicting incidents based on data from a multitude of sources,” said Michael Chui, one of the report’s authors. But it will be a challenge for companies to find ways to both organize and take advantage of that information.


• Dropbox Is Struggling and Competitors Are Catching Up: Dropbox made itself a household name by giving away cloud storage. The eight-year-old company, valued at $10 billion, had 300 million registered users a year ago; now it’s got 400 million. Its two-year-old effort to make money from business users has been less impressive. While Dropbox led the $904 million global market for business file-sharing last year with about a 24 percent share, No.?2 Box and No.?3 Microsoft each took about 21 percent and doubled their slice of the pie, growing almost twice as fast, according to researcher IDC.


• Now you can use Facebook Messenger without Facebook: Are you one of the 1.44 billion people who use Facebook? Then this post isn't for you. The company made an announcement Wednesday for those other folks -- the Facebook holdouts who are probably tired of being pestered by their friends to give in and sign up already. Now they can talk to their friends on Facebook without having to open account, via Messenger. The option is limited, for now, to people in the United States, Canada, Peru and Venezuela. But non-Facebook users in those countries can use all of the Messenger features, including group and multimedia messaging, by simply signing up for a Messenger account. "With this update, more people can enjoy all the features that are available on Messenger – including photos, videos, group chats, voice and video calling, stickers and more," the company said in an official blog post. "All you need is a phone number."Communication, generally, has become a bigger focus for Facebook, which is attempting to to build a family of social apps that extends beyond its core social network. Giving Messenger a larger potential install base is an easy way for Facebook to continue that spread, although its growth shouldn't worry WhatsApp users. Facebook chief executive Mark Zuckerberg has made clear that he has no plans to merge the two services any time soon.

Daily Tech Snippet: Monday, March 30

• To Grow in the Data Center Market, Intel Is Said to Be in Talks to Acquire Chipmaker Altera: Intel Corp. is in talks to acquire Altera Corp., people with knowledge of the matter said, as the world’s largest chipmaker searches for growth beyond a moribund personal-computer market. The people asked not to be identified discussing private information. The Wall Street Journal reported earlier on the discussions. Altera shares jumped 28 percent to $44.39 at the close in New York, giving the company a valuation of about $13.4 billion. Intel rose 6.4 percent to $32. Chuck Mulloy, a spokesman for Santa Clara, California-based Intel, and Sue Martenson, a spokeswoman for San Jose, California-based Altera, declined to comment. Intel is on the hunt for growth as it faces a slowdown in the market for PCs that forced a $1 billion cut in its first-quarter sales forecast earlier this month. Sales in the worldwide PC market will shrink 4.9 percent this year, IDC said, as consumers around the world spend more on mobile devices typically based on processors using designs from Intel rivals such as Qualcomm Inc. That decline comes on top of heavy losses in Intel’s mobile division. The group reported an operating loss of $4.21 billion for 2014. A bright spot for Intel is the data-center group, where profits soared to $7.28 billion on sales of $14.4 billion in 2014. The company benefited from a boom in the amount of data being generated and held in computing centers around the world. Altera makes a broad range of low-power programmable semiconductors, which are used in small embedded devices and computer servers for big data centers. In buying Altera, Intel could expand into markets for automotive, industrial and communication applications, while cementing its lead in data centers, said Betsy Van Hees, an analyst at Wedbush Securities Inc. Hees has a neutral rating on the stock. “This would be a significant move for Intel, it would be a significant change in strategy,” she said. “They need diversification beyond the PC market. Data center has been a tremendous source of strength. Mobile has been a tremendous financial drain. Intel and Altera announced a manufacturing partnership in February 2013, agreeing that Altera chips would be made in Intel’s cutting-edge plants. That deal was extended in March last year when the companies agreed to do more detailed work together on chip packaging and design. An acquisition of Altera would help Intel make further inroads into corporate data centers and reduce its dependence on a PC market pressured by the rise of mobile computing, according to Stacy Rasgon, an analyst at Sanford C. Bernstein & Co. who has the equivalent of a sell rating on Intel’s stock. “It makes sense that they would potentially be looking for other opportunities to grow the other part of the business,” Rasgon said. “There are synergies, say, in Intel’s data-center business.” Intel could use Altera’s technology to create new processors that pair its traditional products with low-power communications chips, wrote Jefferies Group LLC in a note circulated after the market close on Friday. That would let the company “offer cloud-service providers like Google, Amazon and Facebook the ability to pull communication processing from expensive networking equipment into much lower-cost server blades, effectively enabling Intel to take share in the data-center networking-equipment market,” Jefferies wrote. Altera reported operating income of $543.4 million on sales of $1.93 billion in 2014, compared with Intel’s full-year revenue of $55.9 billion.

• GitHub has been battling a DoS attack for days - alleged source of attack: China: U.S. coding site GitHub said on Sunday that it was deflecting most of the traffic from a days-long cyber attack that had caused intermittent outages for the social coding site, with the Wall Street Journal citing China as the source of the attack. "Eighty-seven hours in, our mitigation is deflecting most attack traffic. We're aware of intermittent issues and continue to adapt our response," a tweet from the GitHub Status account said. The attack took the form of a flood of traffic, known as a distributed denial of service, or DDoS, attack. Those kinds of attacks are among the most common on the Internet. The Wall Street Journal reported that the flood of Internet traffic to GitHub came from Chinese search engine Baidu Inc, targeting two GitHub pages that linked to copies of sites that are banned in China. On its blog, GitHub said that the attack began early on Thursday "and involves a wide combination of attack vectors." "These include every vector we've seen in previous attacks as well as some sophisticated new techniques that use the web browsers of unsuspecting, uninvolved people to flood github.com with high levels of traffic," the blog post continued. "Based on reports we've received, we believe the intent of this attack is to convince us to remove a specific class of content." GitHub supplies social coding tools for developers and calls itself the world's largest code host. A Beijing-based Baidu spokesman said the company had conducted a thorough investigation and found that it was neither a security problem on Baidu's side nor a hacking attack. "We have notified other security organizations and are working to get to the bottom of this," the spokesman said.

• India's capital markets regulator Sebi on listing norms for start-ups: SEBI is likely to put out a discussion paper on the listing norms for start-ups next week. Securities and Exchange Board of India (Sebi) Chairman U K Sinha today met an eight-member team from start-up think-tank iSpirt Foundation here to discuss the way forward for start-ups to raise funds from the primary markets. “Sebi would put out a discussion paper next week suggesting a series of improvements. The first draft guidelines are expected by the end of June,” iSpirt Foundation co-founder and governing council member Sharad Sharma told PTI. The think-tank has been in touch with Sebi since mid-December to facilitate the rapidly burgeoning start-up space to go public and raise funds. “This will stop the exodus of start-ups that choose to list on international markets currently,” Sharma said. He, however, declined to comment on the contents of the discussion paper. At the last meeting with Sebi on December 19 last year, the industry had sought regulatory intervention in easing the existing regulations and guidelines which make it difficult for companies to get right investors and advisors. Another suggestion was to make the listing process faster and easier so that investors could exit. Minutes of the past meeting with Sebi posted on the thinktank’s website say the Sebi chairman had indicated that the regulator was exploring putting in place a framework for crowd-funding which will provide a much-needed new mode of financing for start-ups and SME sector and increase flow of credit to SMEs and other users in the real economy. In this mode, small and medium enterprises (SMEs) and start-ups will be able to raise funds at a lower cost of capital without going through rigorous procedures.

• BlackBerry Reports $28 Million Profit in 4th Quarter - business no longer on brink of collapse, but future still unclear: John S. Chen, executive chairman of the ailing smartphone maker BlackBerry, was again asking for patience on Friday after the company produced a surprise, but slim, profit while also posting an unexpected drop in revenue. The $28 million profit in BlackBerry’s fourth quarter was mainly thanks to a patent sale and tax recovery. The company lost $106 million on an operating basis. For the entire year, the company lost $304 million on revenue of $3.3 billion. Despite the introduction of two new phones and a push by the company to sell software that allows businesses and governments to manage all of their employees’ mobile phones regardless of their brand, fourth-quarter revenue was $660 million, down from $793 million in the previous quarter. Analysts had expected revenue of about $792 million. The revenue drop suggests that the company has yet to revive its phone business, said Brian Colello, an analyst at the firm Morningstar. During the period, BlackBerry offered two new phones: the Classic, which restored features found on older BlackBerrys, and the Passport, which has an unusual square screen. They were aimed at BlackBerry’s traditional customers, like people in the financial industry. Neither has sold well. There was one bright spot. ITG Investment Research reported that retail data it collected in BlackBerry’s home market in Canada showed that BlackBerry sales at Rogers Communications, the country’s largest wireless carrier, rose by 27 percent in the final quarter of last year compared with the third quarter. Sales at Bell Canada were up 12 percent, but BlackBerry sales fell by 13 percent at Telus, the other large carrier in Canada. ITG added that “the solid quarterly trends seen at Canadian carriers may not be representative of global sales trends.” BlackBerry’s software business rose by 24 percent over the previous quarter and 20 percent over the same period a year earlier. But Mr. Chen told analysts that an older version of the company’s mobile device management software, which is more oriented toward BlackBerrys, was outselling the new version, which the company is promoting heavily. Although BlackBerry no longer appears to be on the brink of collapse, Mr. Colello said it was still unclear if Mr. Chen could now make his company grow while maintaining profitability. “The entire business is very uncertain at this point,” he said.

• Founder of mobile buying app Fetch: "Mobile Messaging Conjures A Commerce Platform" This week brought two announcements that reflect a seismic shift in the future of mobile messaging: 600 million users of Facebook Messenger will soon be able to order food, buy products and text directly with businesses; and meanwhile, Magic is raising an astonishing $12 million from Sequoia to allow you to order any on-demand service simply by sending a text message. America is finally discovering what Asia has known for years: mobile messaging is a commerce platform. These developments herald what Chris Messina recently described as a new trend towards “conversational commerce,” in which users will be able to shed the need for countless apps from different companies in favor a simple mobile messaging interface. “Conversational Commerce is about delivering convenience, personalization, and decision support while people are on the go, with only partial attention to spare,” Messina says. Put more simply: we all text more than ever, so why not expand texting’s potential to sending payments, buying products, ordering on-demand services, paying bills, and more? Facebook and Sequoia are not alone in making a big bet that Conversational Commerce marks the next stage of texting’s evolution. We’re in the midst of a veritable messaging gold rush. Earlier this month, Alibaba poured $200 million into SnapChat, which now lets you send money to a friend or buy a product using their newly-launched SnapCash. This follows Alibaba’s $215 million investment in Tango last year. Rakuten recently snapped up Viber for $900 million with an eye towards integrating mobile commerce into the messaging app. Other start-ups in the “conversational commerce” space include Scratch and BRANDiD, which provide curated shopping recommendations; and Native, whose personal travel assistant service allows you to book flights and hotels by sending a text. Path Talk was the first messaging app to allow users to message directly with businesses, making restaurant reservations as easy as sending an SMS. The inevitable evolution of messaging apps like Facebook Messenger and SnapChat into commerce platforms will change the way we think about mobile commerce. It won’t be long until you’ll be texting your food order to DoorDash, paying bills by SMS, or firing off a quick Facebook Message to send flowers to your loved one. Magic may not be able to be deliver on their promise of bringing a tiger to your front door, but it’s clear that mobile messaging is about to get a whole lot more powerful.

• For Hardware Makers, Sharing Their Secrets Is Now Part of the Business Plan: Facebook showed plans last week for drone aircraft that beam lasers conveying high-speed data to remote parts of the world. As powerful as that sounds, Facebook already has something that could be even more potent: a huge sharing of its once-proprietary information, the kind of thing that would bring a traditional Silicon Valley patent lawyer to tears. Facebook is not alone. Technology for big computers, electric cars and high-technology microcontrollers to operate things like power tools and engines is now given away. These ideas used to be valued at hundreds of millions of dollars. To the new generation of technologists, however, moving projects and data fast overrides the value of making everything in secret. “You now don’t need a lot of people or a lot of capital to manufacture a prototype,” said Jay Parikh, vice president for connectivity at Facebook. “The entire world is going to accelerate its technology development.” Facebook has already shared designs for data storage, computer servers and rack designs, among other hardware, Mr. Parikh said, and has seen rapid improvements as a result. Rather than just building and testing a handful of designs, Facebook gets to see dozens of variations that individuals and companies manufacture inexpensively. They often contract with prototype makers over marketplaces like the Chinese e-commerce site Alibaba, or they may even use three-dimensional printers. When companies do make hardware free, Mr. Dougherty said, it is not usually altruistic. “It can create competition for your enemy without spending money on a new product,” he said. He noted that IBM went into open-source software in the 1990s, and Microsoft suffered. Sometimes companies want to kick-start business. Facebook’s open designs have enabled commercial relationships that lower its supply costs as well as speed innovation.

Daily Tech Snippet: Friday February 20

• A Year Later, $19 Billion For WhatsApp Doesn’t Sound So Crazy: Without WhatsApp, Facebook’s international situation would look a lot dicier. And if a competitor like Google acquired it instead, it could have been disastrous. Instead, Facebook possess the most popular messaging app, and has neutralized the biggest threat to its global domination of social networking. No apps get opened as often as messaging apps. While you might spend longer in total scrolling through Facebook, Instagram, Twitter, or Pinterest, the frequent short sessions with chat apps make them a vector for other experiences. That means they’re more valuable than they might first appear. How do you monetize chat? It’s a tough question. Sure there’s stickers, but there’s too much competition to charge much upfront for an app and its too interruptive to show ads. But platforms, hubs, portals — whatever you want to call them — hold plenty of opportunities to cash in. The messaging apps from Asia are proving this as we speak. China’s WeChat also lets you call a taxi, pay friends, search, shop, buy movie tickets, and more. Japan’s Line hosts Line Pay, Line TV, and an identity platform for games. Why fumble with a bunch of different apps, passwords, and payment methods when you can do it all while you chat? Even Snapchat is expanding far beyond messaging. Its Stories product for broadcasting sequences of photos and videos is a hit with star content creators. Its Snapcash feature lets you quickly pay friends through Square Cash. And its new Discover portal collects Snap-formatted content from premium producers like Comedy Central, CNN, ESPN, and Vice. A lot of critics wondered how Facebook could earn money from messaging on WhatsApp, considering it’s vowed not to show ads and only charges its skimpy $1 subscription fee in a few markets. The answer is it doesn’t have to. By taking a cut of commerce, or charging for promotion of content, it could keep chat lean and clean while monetizing other parts.

• HP becomes a reseller of networking equipment; move away from hardware in quest of software-company margins takes aim at Cisco: Hewlett-Packard said on Thursday that it would sell a new line of networking switches that are manufactured by a Taiwanese company and depend on Linux-based, open-source software from another company. HP, once at the center of high-tech manufacturing, will not make the new networking equipment but will act as a reseller, providing both online ordering and worldwide support for the product. It is the most consequential announcement from HP since its chief executive, Meg Whitman, announced last October that the company would split into two separate enterprises. One will be focused on business, and the other on consumer-type products. The networking move, firmly in the area of business technology, shows the type of changes HP and other older tech giants must make to survive in a transforming marketplace. In its last fiscal year, HP took in $2.6 billion from its proprietary networking business, which started in earnest in 2009. In the long term, cheap, open-source networking equipment could threaten HP’s existing business, particularly if the open-source products make expected gains in power and capability. HP is not the only networking equipment maker threatened by the changing marketplace. Cisco Systems is still by far the biggest maker of networking gear, with $47 billion in annual revenue, and it depends heavily on proprietary products. Networking gear has been considered an important part of HP’s future, however. “We see a shift,” said Mark Carroll, the chief technology officer of HP’s networking business. “The traditional market, the one-vendor market, is transitioning to many suppliers.” By offering an open-source product consisting largely of mass-market chips, the thinking runs, HP will be in a position to dislodge Cisco. Mr. Carroll called HP’s embrace of open source “an evolution” of his company’s strategy. “You look at which markets are growing and go there,” he said. Sold complex and proprietary combinations of servers, data storage, networking and software for decades, customers are now demanding systems that can be arranged in different ways, with open-source software they can tinker with in-house. The new methods promise advantages in speed, cost and innovation. In addition, new entrants are affecting the business. Companies now rely on Amazon’s computing-rental business for many needs. Facebook last week announced an open-source switch intended to undermine prices and speed innovation in the industry. Mr. Carroll said HP “absolutely” sees Facebook’s switch “playing in the same space” as HP’s open-source networking. The actual manufacturer of the HP boxes, Accton Technology, has been making gear for HP for 20 years. The open-source software will be supplied by Cumulus Networks, which last year announced it would supply Dell with software for inexpensive networking boxes. The Cumulus relationship with HP is not exclusive, and HP could add more suppliers in the future. HP “wants the software and service margins and to get rid of being in the hardware business,” said JR Rivers, chief executive and one of the founders of Cumulus. “You’ll see other networking providers get on board with this.” The initial target customers for the product, available in March, are telecommunications and financial companies. Both use a lot of cloud computing, mobility, social media and big-data resources in their data centers.

• Being fully transparent in pricing can be costly, finds online ticket seller StubHub : In January 2014, StubHub attempted something radical. Addressing the frustration of its customers, the online ticket reseller began including its bevy of fees in the first price a customer sees, rather than tacking them on just before purchase. Now when you click “buy,” a pair of tickets listed at $100 will cost $100, not $125. According to StubHub, customers said they wanted—and say they love—the transparency. But the change hasn’t improved sales. Because StubHub, which generated $500 million in revenue last year, baked its fees into the list price, its tickets looked more expensive than those of rivals. Sales for the company fell more than 10 percent in the months that followed the pricing change, according to Wedbush Securities, as competitor Ticketmaster gained market share. StubHub further trimmed its profit margins by cutting its take from each sale. By November, Chris Tsakalakis, who championed the new pricing, was out as president. (He declined to comment.) Still, the ticket reseller has stuck with the policy, which spokesman Glenn Lehrman says is among the most popular moves the 15-year-old company has ever made.

• Startups continue to try and crack the attribution problem of omnichannel shoppers and cross-device conversions: The proliferation of smartphones and tablets has given rise to the “omnichannel shopper,” a retail industry term for a customer who might scope out a product from their phone, computer and local store before making a purchase. Major retailers are waging advertising wars across an increasing number of screens and storefronts in an effort to win these shoppers’ business. After all, that customer could decide to buy at any point. But serial entrepreneurs Hemang Gadhia and Christopher Brown discovered a simple albeit significant problem: Retailers have a hard time tracking when that customer using their app, visiting their Web site and entering their store is actually the same person. The pair’s latest venture, District-based Revmetrix, uses software to identify omnichannel shoppers as they move from smartphone to computer to tablet to store, then helps retailers determine what will motivate that specific customer to actually spend money. How will Revmetrix track omnichannel shoppers? Data, of course. As customers visit retailers online and in stores, they leave digital footprints along the way, such as the make and model of a smartphone, an IP address and a geographic location. That information can then be matched with information the retailer may already collect about its customers, such as their online shopping habits, purchase history and demographic data. At present, Gadhia said the Revmetrix software can identify the same customer on different devices with more than 80 percent accuracy. The more data that’s collected, the more accurate the technology becomes. “The problem that we’re solving is a problem that exists for every single large retailer on the planet,” Gadhia said.

• Flipkart is valued at more than AirBnB, as billion-dollar startups proliferate; as Snapchat proves, though, these rankings change very quickly though: Flipkart Internet Pvt. is now valued at $11 billion, making it the fifth-most valuable startup on the list. That puts Flipkart ahead of Airbnb, a company that is challenging the business models of global hotel giants with its online room rentals, and online storage firm Dropbox. These rankings are volatile though: Less than 12 months after investors valued Snapchat, the red-hot messaging app, at about $10 billion, the start-up is again in the market for money — and poised to nearly double that valuation. A range of other popular start-ups are also poised to propel their net worths to similar multibillion-dollar heights, including the virtual scrapbooking service Pinterest and the ride-hailing app Lyft. Uber, Lyft’s top competitor, has raised more than $3 billion in the last year and now has an eye-popping valuation of $40 billion. Giant sums of money and sky-high valuations are nothing new in the technology industry. But the latest burst of activity has put on clear display the frenzied pace of investors, who are eager to catch the next blockbuster company like Facebook. The action is also again spurring talk that overeager investors are poised to relive the dot-com boom and bust at the turn of the century, when overinflated start-ups led to a quick and painful downturn. For investors, the hunt is for the next proverbial so-called unicorn, a nascent business worth $1 billion or more — on paper, at least. Just last year, 38 privately held companies backed by venture capital joined the billion-dollar club, putting the membership of that group at 54, according to the data firm CB Insights. Digi-Capital, a mobile Internet advisory firm, estimates that the total value of mobile Internet start-ups worth $1 billion or more increased $28 billion in just the last quarter of 2014.

Daily Tech Snippet: Tuesday January 27

• Microsoft Q4 earnings: revenue $26.5B, +8% Y/Y, profit $5.86B, shares fell 3% on earnings miss: (more coverage here, here and here): Microsoft reported profit of $5.86 billion, or 71 cents per share for the latest quarter, compared with $6.56 billion, or 78 cents per share, in the year-ago quarter. Sales rose 8 percent to $26.47 billion, largely due to the acquisition of Nokia's phone handset business last year. Analysts had expected revenue of $26.3 billion and earnings of 71 cents per share, on average, including some restructuring costs. Shares of the world's largest software company, which have surged to 14 year highs in the past few months, fell 3 percent in after-hours trading, to $45.63. The company ended the quarter with $90.25 billion in cash and equivalents. According to Microsoft, its commercial cloud revenue grew 114 percent compared to the year-ago period. In the sequentially preceding quarter, the company noted a 128 percent rise. It ended the current quarter on a $5.5 billion run rate.

• Long overshadowed by its rival Alibaba, JD has emerged as China’s other online goliath by carving out its own distinct identity: While Alibaba’s marketplace serves as a platform to connect buyers and sellers, JD buys goods from manufacturers and distributors and holds the inventory in its own warehouses, in a model that echoes Amazon’s. It then arranges for quick delivery of virtually everything from television sets and refrigerators to socks and T-shirts, using motorbikes that weave in and out of traffic in some of the country’s biggest cities. Like Amazon, JD has invested heavily in infrastructure, pumping more than $1.5 billion into building and leasing warehouses and order-fulfillment centers around China. But JD has gone even further, venturing into home delivery with its own fleet of trucks and more than 20,000 couriers, all in the hope of capturing what is projected to be a $1 trillion Chinese e-commerce market by 2020. JD, which is publicly traded in the United States, is now China’s biggest direct-sales retailer, with 46 million active users and an estimated $20 billion in revenue last year. “This isn’t a business model for everyone, but they were smart to build it,” said Elinor Leung, a Hong Kong-based Internet analyst at CLSA, an investment bank. “Now, their traffic is exploding.” And yet this costly approach to building an online retailer has worried some analysts, who say that JD could be weighed down by its physical assets and mounting debt. Several analysts say the company won’t turn a profit before 2017. Competitors like Jack Ma, chairman of Alibaba, have even disparaged the company’s business model, calling it tragically flawed. “It’s not that we are better,” Mr. Ma said in a recently published interview. “It’s an issue of direction. So, I tell my people: Definitely do not get involved with JD.com. Don’t come blaming us if you die one day.” He later apologized for his comments. Executives at JD, which is based in Beijing, insist they are building a company that will eventually have a commanding advantage in e-commerce, with strong customer service, speedy delivery and assurances that the products it ships are authentic, not counterfeit. Among the biggest challenges now, they say, is keeping up with an enormous volume of online orders, which have doubled in each of the last three years. “If we wanted, we could be profitable right now,” said Shen Haoyu, chief executive of JD Mall, the company’s biggest division. “But our immediate goal is to grow our customer base.” the company boasts seven fulfillment centers and 118 warehouses in 39 cities. There are also 1,045 smaller pickup centers in about 500 cities. And since 2010, the company has pledged that most online orders placed before 11 at night will be delivered by 3 p.m. the next day. Morgan Stanley calls JD’s business model a combination of Amazon and UPS; other analysts say the company is beginning to look like Walmart, steeped in logistics and infrastructure and backed by a website.

• Verizon’s mobile ‘supercookies’ show how telcos are monetizing user data: Verizon is now at the forefront of telecommunications companies selling intelligence about their customers to advertisers. AT&T experimented last year with a similar ad-targeting program, which involved inserting a unique numeric code into a subscriber’s web requests. But after scrutiny in the news media, AT&T said it was halting its program, at least until it came up with a better approach. The ad-targeting experiments by Verizon and AT&T are striking examples of the data-mining opportunities open to phone carriers now that they have become the nexus of the information universe, providing a connection to the Internet for people anywhere they go, at any time. Verizon’s marketing efforts are part of a high-frequency digital ad trading system called real-time bidding, in which many kinds of players track and analyze users’ online activities to identify the characteristics of those who would be most receptive to certain ads. A Verizon service called Relevant Mobile Advertising, for instance, combines details obtained from information resellers like Acxiom and Experian with the wireless carrier’s own data to classify its mobile subscribers by gender, income, interests or other criteria; the company allows its subscribers to opt out of receiving ads customized through this program. Another service, called Verizon Selects — which consumers can opt in to in exchange for reward points — segments subscribers based on their web browsing and use of apps. Verizon says its customer categorization programs offer an advantage to advertisers because the company has a direct relationship with subscribers and it can understand their general location based on the places from which they make calls or send texts. The services use a unique alphanumeric code for each subscriber, rather than real names or contact information, to group them into ad clusters. Mr. Atreya, the Verizon director, says the company changes these customer codes every few days.

• Microsoft buys R startup Revolution Analytics to boost the data analytics offering of its cloud suite: Microsoft bought Revolution Analytics which makes tools to sift through data, to help the company build up its cloud-services business. Terms weren’t disclosed. The deal was driven by the growing volumes of data that companies are contending with and the need for more software that can help analyze the information, Microsoft said in a blog post on Friday. Revolution Analytics, based in Mountain View, California, makes a statistics programming language called R that helps analyze data. David Smith, chief community officer at Revolution Analytics, said in a blog post that the deal will spread the usage of advanced analytics within Microsoft products, including the Azure cloud service. Revolution Analytics counts financial companies such as American Century Investments and Northern Trust as customers, according to the company’s website. The R programming language is widely used by statisticians and scientists and has surged in popularity as people have turned to it to manipulate large pools of data. R was the world’s 18th most popular programming language in January, according to a study conducted by Tiobe Software, compared to 44th a year earlier. In a separate study, researcher RedMonk put R as the world’s 13th most popular programming language in January, up from 15th in 2014.

• The line between eCommerce and messaging is blurring, as messaging apps are increasingly becoming distribution and moneymaking platforms: Developers have been expanding the uses of the apps, making new functions possible. And investors, seeing huge potential, have driven the apps to ever-higher valuations. “The most popular apps that sustain themselves day after day, month after month, at the top of the leader board, are messengers,” said Fred Wilson, managing partner at Union Square Ventures and an investor in Kik, a messaging app popular with young users. “That’s a reflection of what people do on their phones.” He added, “Once they become full-blown ‘portals’ for mobile content and mobile commerce, we will really see how massive this opportunity is.” The initial appeal of the apps is simple. They are faster to use than email, and they generally allow you to send text, links, video and photos to friends more cheaply than traditional texting services offered by wireless carriers like Verizon or AT&T. The uses are multiplying, though. On the app KakaoTalk, for example, people can discover other new smartphone apps and share them with their friends. On Snapchat, users can send money to one another inside the app. And Line, a messaging app popular in Japan, lets people pay for things at brick-and-mortar retail stores using Line Pay, the company’s payments service. Soon, media outlets like ESPN, Vice and CNN will be publishing original content directly to a new editorial section in Snapchat, according to people familiar with the matter who spoke on condition of anonymity because they were not authorized to speak publicly. “Media and communication are converging,” said Jonah Peretti, chief executive of BuzzFeed. “Some of what we’re all creating now will be a huge part of these messaging apps over the next one or two years.” Some of the most popular options are Viber, which says it has more than 200 million monthly visitors; Line, Japan’s most popular messaging app, with 170 million users; and WhatsApp, the leading service, which has more than 700 million regular visitors. For now, though, not all of the apps are generating big revenue. WhatsApp, which is owned by Facebook, reported just $10.2 million in sales in 2013. The revenue came from the small fraction of users who paid $1 to use the app. Still, the valuations of many messaging start-ups continue to rise. In February, Rakuten, the big Japanese online retailer, bought Viber for $900 million. The next month, the Chinese e-commerce behemoth the Alibaba Group led a $280 million investment in Tango, valuing the nearly six-year-old start-up at about $1 billion. Facebook paid $21.8 billion for WhatsApp in February. For investors, the thesis is a Silicon Valley adage: Get millions of people to use the service first, and eventually it will find a way to make money. Many entrepreneurs see WeChat, the hugely popular Chinese service run by the Internet giant Tencent, as the ideal model for building a business in messaging. Released four years ago, the app now claims nearly 500 million monthly active users — who not only send image-laden messages, but play games and book car rides and plane tickets. The rapid growth in messaging apps, some say, has been a response to the more public nature of popular apps like Twitter and Facebook, where status updates and posts are visible to the many rather than the few. “It’s a much more intimate experience,” said Marissa Campise, a partner at SoftBank Capital, the venture arm of Japanese telecom giant SoftBank. “Messaging apps are smaller and less visible than the public networks and far more engaged and trusted. It often feels like a more controlled, real-time replacement for email,” she said. Messaging users tend on average to pick up their phones several times an hour, Talmon Marco, the chief executive of Viber, noted in an interview late last year. That makes messaging apps an ideal place to introduce other offerings like games, virtual stickers or even physical goods. Asia has been a particularly fertile breeding ground for expanding the uses of the apps. In 2013, for example, WeChat joined Xiaomi, the Chinese smartphone giant, to offer a limited quantity of the company’s newest phone for purchase on the chat app. Users could reserve and then buy the new smartphone entirely inside the WeChat app using Tenpay, the payments service owned by Tencent. Xiaomi said it sold 150,000 phones in less than 10 minutes.

• Online Storage Company Box Has Strong Debut in First Day of Trading: Although questions had arisen about how Box’s initial public offering would fare, public investors gave the company a warm welcome on Friday, its first day of trading. Shares in Box, the online file storage company, opened at $20.20 on Friday morning, 44 percent higher than its I.P.O. price of $14 a share. The stock continued to surge to close the day at $23.23, up nearly 66 percent, giving the company a market value of $2.7 billion. At that level, the start-up has surpassed the $2.4 billion valuation that it fetched in its most recent private financing round last summer. Its strong first-day performance may ease some concerns among investors that highflying Silicon Valley start-ups were looking overvalued. Now that it has gone public, nearly a year after kicking off the process during a period of market upheaval, Box can focus on a more pressing issue: standing out in an industry that has quickly filled with competition, particularly from much bigger rivals like Google and Microsoft.

• Yahoo likely to announce plans to avoid huge tax hit on Alibaba windfall - two possible structures considered plausible: Yahoo on Tuesday is expected to reveal something most companies usually try to keep secret: how it plans to avoid a multibillion-dollar tax bill. The Web portal has spent more than a year figuring out how to cash out a chunk of its $40 billion stake in China-based Alibaba Group Holding Ltd. Typically, a U.S. company faces a federal tax bill of about 35 percent when it sells stock in another enterprise for cash. Yahoo took a $3 billion tax hit last year when it sold about $10 billion in Alibaba shares. This time around, activist investors are leaning on the Sunnyvale, California-based company to be more savvy. Marissa Mayer, Yahoo’s chief executive officer, probably will maintain at least part of the Alibaba holding to keep a finger in China’s fast-growing Web market. Were Yahoo to sell the entire stake, it could face a federal tax bill of as much as $14 billion.Here are some of Yahoo’s options to avoid capital-gains tax, both legal: Option One: Last summer, John Malone’s Liberty Ventures wanted to avoid taxes on selling its stake in travel website TripAdvisor Inc. Liberty did so by transferring that stake, as well as online costume-retailer BuySeasons, to a new unit created specifically for the deal. Under the plan, the new unit took out a $400 million bank loan. Most of that cash was destined for Liberty and the new unit’s stock spun off to Liberty shareholders. The expectation was that TripAdvisor would acquire the new unit in exchange for the travel site’s own stock. TripAdvisor also agreed to repay the $400 million loan. When it’s all wrapped up, Liberty Ventures gets cash and exits TripAdvisor -- without incurring the tax bill a straight sale would trigger. Liberty’s shareholders get stock in TripAdvisor as though Liberty had distributed its holding in the site to its own investors. Liberty’s investors also don’t face taxes on the deal. In Yahoo’s case, it would spin off its stake into a new entity, which would borrow money and distribute the cash to the Internet company. “The tax savings sort of gets carved up between the two parties and they each get a chunk,” Option Two: Another option is to follow Warren Buffett’s lead, with what’s known in tax circles as the cash-rich split. Berkshire Hathaway Inc. and Graham Holdings Co. last March agreed to a deal that lets Buffett’s company unload its stake in the former Washington Post Co. while avoiding capital-gains tax. That deal called for Graham to transfer cash and a Miami television business -- combined, roughly equal to Berkshire Hathaway’s investment -- into a new subsidiary. Graham then shifts stock in that new unit to Berkshire Hathaway, while Buffett’s company moves its Graham stake back to the media company. Economically, it’s as though Berkshire Hathaway sold its Graham stake for cash -- and a TV station. But because the deal is structured as an exchange of shares, not a straight-up sale, it gets tax-free treatment. Were Yahoo to follow this route, it would exchange Alibaba shares for a stake in a new unit that would consist mostly of cash. Alibaba would have to shed some assets for Yahoo to get the advantage of such a deal; a cash-only transaction probably would trigger a tax bill. Accounting experts say it shouldn’t be difficult to find something to throw in the pot.

• As Alibaba and Chinese investors pour into Israel, the nation's high-tech startups scored big exits in 2014: With nearly $15 billion in exits through mergers and acquisitions and public offerings, 2014 was an all-time record year for the Israeli hi-tech industry, compared with a mere $1.2 billion raised in 2013, according to a PwC report for 2014. The exits were spread out between a variety of tech industries, including Internet, IT, life sciences, communications and semiconductors. Semiconductors had a 38% of the share, but just one semiconductor IPO out of the 18 in total. The road accident avoidance technology developerMobilEye raised $1.023 billion in its August IPO, a record an Israeli company. As for new giant exits emerging, most argue that Israel’s hi-tech diversity is its strength. “While there seems to be a general hype around IoT, security and fintech, I find Israel to be a very unique place in the fact that entrepreneurs don’t tend to have group think and as such, we are seeing ventures tackling a very wide array of industries.” said Yaron Carni, the founder of two Israeli VC fundsMaverick Ventures and Tel Aviv Angel Group. And more international companies are beginning to take notice of Israel’s technological strengths. In fact, 2014 ended with a news item that might indicate China’s increasingly hefty presence in the Israeli hi-tech sector. Last year might be remembered as the time when Chinese technology companies embraced Israeli startups in a big way. On December 20, The Chinese eCommerce giant Alibaba invested in Visualead, a company that specializes in QR code generation. Based in Herzliya, the Israeli equivalent of Silicon Valley, the 15-person start-up was Aliababa’s first Israeli acquisition. Last September, China’s Yuanda Enterprise Group bought AutoAgronome, a maker of smart irrigation and fertilization systems for $20 million in order to move into high-tech agriculture.