Daily Tech Snippet: Wednesday, August 31

• EU hits Apple with $14.5 billion Irish tax demand: The European Commission ordered Apple Inc to pay Ireland unpaid taxes of up to 13 billion euros ($14.5 billion) on Tuesday as it ruled the firm had received illegal state aid. Apple and Dublin said the U.S. company's tax treatment was in line with Irish and European Union law and they would appeal the ruling, which is part of a drive against what the EU says are sweetheart tax deals that usually smaller states in the bloc offer multinational companies to lure jobs and investment. Analysts said the size of the claim underlined the Commission's aggressive stance, but since each case involves different circumstances and tax rules, lawyers said it was hard to see if further big claims were any more or less likely. Apple, which had more than $200 billion in cash and readily marketable securities at the end of June, is likely to see the case drag out for years in EU and possibly Irish courts. Apple warned investors in a July regulatory filing that the Commission's investigation could lead to "material" liability for further tax payments, but that it could not estimate the impact. On Tuesday the company said it expects to place "some amount of cash" in an escrow account. Tax experts say the European Commission faces a tough battle to convince courts to back up its stand. While the EU has found that certain tax regulations are anti-competitive, it has never before ruled whether countries have applied tax regulations fairly in the way it has with Apple, Starbucks and others. As a result, some lawyers and accountants said they doubted Apple would end up paying back any tax.

• Twitter is finally paying its best users to create videos: Twitter wants the kind of video creators YouTube has — and the massive audiences that come with them. To make this dream a reality, the company is pulling a page from YouTube’s playbook: It’s going to sell ads alongside creator videos and share that ad revenue with the people making the content. And Twitter is offering very appealing terms. Unlike YouTube, which gives 55 percent of the money to creators and keeps 45 percent, Twitter is using the same revenue split it already offers other Amplify video partners, like the NFL: 70 percent to the content creator and 30 percent back to Twitter, according to a person familiar with the arrangement. Of course, Twitter needs to offer an appealing revenue split like this. It’s nowhere close to the video destination YouTube and even Facebook have become, and it’s late to the game when it comes to paying creators. The network’s high-profile stars have wanted a revenue split for some time — it’s been a point of contention for the company’s stable of “Vine stars,” many of whom have left for places like YouTube where their videos actually make money.

• A few dozen Nest Labs employees just headed to Google; here’s why: Nest Labs, the maker of smart thermostats and smoke detectors, is parting ways with a few dozen employees who work on its Internet of Things platform. According to a Fortunereport that we’ve independently confirmed, those employees are joining Google per a restructuring. Both companies are subsidiaries of parent company Alphabet. The move would seem to make sense. Like Nest, Google has delved into the business of the connected home, including with its OnHub wireless router and Google Home, a portable speaker that’s powered by voice assistance technology and will take direct aim at Amazon’s popular Echo product once it ships later this year. Nest’s thermometers and cameras promise to communicate with Google Home. Nest employs roughly 1,000 people, including in engineering, product marketing and product management. Though its platform team was responsible for building out Nest’s APIs (so Nest products can communicate with other devices), as well as Nest’s Weave protocol (which allows Nest devices to communicate with each other), Nest will continue to build and develop software around its app, site and other services.

Daily Tech Snippet: Wednesday, July 20

• Microsoft Earnings Are Up, Cushioned by Its Cloud Business: On Tuesday, in its quarterly earnings results, Microsoft offered strong signs that its cloud business was growing quickly. Revenue from Azure, a business Microsoft started to compete in cloud computing with Amazon, the market leader, rose more than 100 percent in the quarter. Revenue from Office 365, a subscription version of the old Office software, rose 54 percent from commercial customers and 19 percent from consumers.Microsoft’s chief executive, Satya Nadella, has made cloud computing a priority for the company since becoming chief executive two years ago. Many believed it was a move that Microsoft had long needed to make but was held back by the reluctance of its previous boss, Steven A. Ballmer. There is risk in this transition. The profit margins from renting software in the cloud are not as high as selling a license to customers, and Microsoft investors have always counted on the company to generate exceptional profits. But the cloud business model tends to be more stable — a trade-off for slimmer margins. After Microsoft’s misadventures in the smartphone market, it is a necessary trade-off. Last week, the company said it would fail to meet a goal of getting its Windows 10 operating system running on one billion devices before June 2018, largely because of its retrenchment in the mobile phone business.Now the company has laid off most of the thousands of people who joined Microsoft through the deal, written off the value of nearly all of the acquisition and whittled back the number of smartphones it sells. On Tuesday, Microsoft said that its phone revenue had declined 71 percent from a year ago. For years, people have put off purchases of new machines or avoided them entirely in favor of smartphones and tablets. Last week, IDC, the technology research firm, said worldwide PC shipments fell 4.5 percent in the most recent quarter compared with a year earlier.For the quarter ended June 30, Microsoft reported net income of $3.12 billion, or 39 cents a share, compared with a loss of $3.2 billion, or 40 cents a share, during the same period a year earlier. Revenue fell to $20.61 billion, from $22.18 billion a year ago. The decline was partly the result of a $2 billion deferral of revenue related to Windows 10, its latest operating system. Accounting rules require Microsoft to recognize revenue from the software to be recognized in pieces over time. Without the deferral, Microsoft’s revenue rose 2 percent from a year earlier to $22.64 billion. The company’s shares jumped about 4 percent in after-hours trading following the release of its results.

• Google has found a business model for its most advanced artificial intelligence: Two years ago, Google spent over half a billion dollars for the tiny artificial intelligence startup DeepMind. Since then, the unit has walloped Atari video games and beaten an impossible board game. Impressive stuff, that. But those AI demonstrations have yet to spell actual revenue. Until now — although the efforts are helping Google save money on its most expensive part. DeepMind chief Demis Hassabis told Bloomberg that his unit recently began applying its advanced AI to Google’s data centers, finding ways to reduce the company’s sizable energy bill. Google started using machine learning for its data centers two years ago, searching for ways to reduce costs for one of the company’s top expenses. A month ago, it aimed the more specialized AI tools from DeepMind at the problem of cooling these server farms. That cut the energy needed for cooling by 40 percent, the company said. It didn’t offer a dollar figure for that, but it’s safe to assume that it means hundreds of millions in savings over the long haul.DeepMind technically sits outside of Google in Alphabet. (I’ve heard people describe it as in the “Alphaverse,” whatever that means.) But a rep said that Google was not paying DeepMind for its cost-cutting research here.

• Facebook Pilots Offline Video for India in Duel With YouTube: Facebook Inc. is piloting a feature in India allowing users to save videos to watch offline, chasing a similar program from Google’s YouTube, as the companies attempt to crack a market ridden with poor internet connectivity. The move followed feedback from users in the country citing poor video experiences because of limited mobile coverage, Facebook said in a statement. “We’re testing an option for people to download videos to Facebook while they’re online on good internet connections, to view the video at anytime, online or offline, without using extra mobile data,” the company said. YouTube introduced offline video in 2014 to cater to Indians crazy about watching Bollywood song sequences, cricket snippets and comedy sketches. Despite the cost of downloads, an estimated 40 percent of data consumption on phone networks is video, said Nikhil Pahwa, editor of the New Delhi-based Medianama.com, which monitors news on the digital industry.Facebook, which has 142 million users in India, said the new feature helps users get through the lag between downloading and playing a video by saving it for later, similar to the YouTube feature. Only original videos posted on personal Facebook accounts and on the social network’s pages can be downloaded. The program is being tested on a small percentage of Indian users, the company said without providing details on broader rollout.

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: Friday, November 6

• Why Health Care Start-Ups Like Theranos Need Investing Expertise: The Silicon Valley start-ups that often grab headlines are typically in the Internet and consumer technology world. But there’s another part of start-up land that is also highly active: health-related technology, which includes biotech, health care services and medical devices. Venture capitalists have been pouring money into health-related start-ups, with funding jumping 34 percent to $9.4 billion in 2014 from a year earlier, according to the National Venture Capital Association. What’s often left unsaid about these companies is that they behave very differently from the typical consumer start-up or business software company. The health-related start-up sector has produced fewer unicorns, which are the private companies with $1 billion-plus valuations, largely because it takes a long time to develop new medical tests, drugs or insurance systems. Regulators often weigh in. Even if an idea behind a start-up is truly great, it’s bound to fail if the science doesn’t work out, if the regulators don’t like what they see, or if insurers and the government won’t pay for the product.

• The High Price of Delivery App Convenience: When Emily Yang, a San Francisco tech worker, is running out of cat food, she taps an app called Instacart to order a new bag of kibble to be delivered to her door within hours. For dinner, she often orders through Sprig and Munchery, app-powered services that bring fresh organic meals to her home. Her experience highlights how a proliferation of instant-delivery apps has turned the smartphone into a sort of magic remote control that can almost beam items straight to your door: a burrito, a tennis racket, even a week’s worth of groceries. There are now so many of these apps, especially serving cities like San Francisco and New York, that you can tap an app even to do your laundry or mail packages. But instant gratification has a price. With the delivery apps, tech companies act as a middleman connecting merchants and couriers with customers, and they pass the service charges on to the consumer. The fees are also more obfuscated and complex than you might expect when you, say, order a pizza. The receipt for the pie would clearly state its cost and the delivery fee.

• People doing ‘crazy things’ with Tesla’s autopilot are spoiling it for everybody: Tesla chief executive Elon Musk is warning that some new limits may be coming to the company's autopilot feature because of "some fairly crazy videos on YouTube" showing drivers behaving dangerously while the car is in control. Tesla doesn't recommend taking your hands off the wheel while the car is in autopilot mode. Yet that's exactly what some people are doing, leading to things like near-misses with other vehicles:Even the New York Times' video review made a big deal out of being able to drive hands-free. "This is not good," Musk said on an earnings call this week. "We'll put on some constraints on autopilot to minimize people doing crazy things with it." Musk didn't elaborate on what kinds of new restrictions autopilot users could soon face, though it's likely that they would show up in the form of another software update.

• In a first, the FCC is fining a major cable company for getting hacked: In the first such case against a U.S. cable company, federal regulators are slapping Cox Communications with a $595,000 fine after Cox allowed hackers from Lizard Squad to penetrate its systems and steal private customer information. By posing as an IT administrator and tricking a couple of Cox employees into giving up their login credentials, a hacker known as "EvilJordie" broke into Cox's databases and gained access to customer names, addresses, password recovery information and even "partial" Social Security numbers and driver's license numbers, according to the Federal Communications Commission. They also got hold of some customers' telephone records. As many as 61 current or former Cox customers were affected by the breach, which occurred between Aug. 7 and Aug. 14 of 2014. The hackers changed 28 of these customers' passwords, locking them out of their own accounts, and posted eight people's personal information on social media.

• YouTube to support virtual reality video on its app: The Youtube app now supports VR video - a format that gives viewers what the company says are more realistic 360-degree perspectives of films. To view it, a user would call up a virtual reality video on the YouTube app, click a button on the video for VR mode, and place the phone in Alphabet Inc's "Cardboard" device, a handheld gadget made from the standard box material that creates a VR viewing experience. Makers of virtual reality content can upload VR videos compatible with the Cardboard viewer directly to YouTube. YouTube said there are about a dozen VR videos, including one stemming from the "Hunger Games" movies.

• Add a Fund to Amazon Cart? You Have Indian Regulator's Support: Indians are estimated to spend about $9 billion this year shopping online for everything from smartphones to cupcakes. The nation’s stock market regulator wants them to add another product to their shopping cart: mutual funds. The Securities & Exchange Board of India plans to change its regulations to allow online marketplaces such as Flipkart Online Services Pvt. and Amazon.com Inc. to offer funds alongside other products, Chairman U.K. Sinha said in an interview at his office in Mumbai. Mutual funds have gained popularity among Indian savers, receiving more money in the past 17 months than they did in the preceding 12 years. Yet just 3 percent of the nation’s 1.2 billion people invest in them, with majority preferring bank deposits or gold, according to the Association of Mutual Funds in India. Allowing e-commerce sites to sell funds will help money managers reach out to young investors accustomed to shopping online, providing the industry with a new distribution channel, Sinha said.

• In India, Tiny Owl Founder Reportedly Detained for Two Days By Laid-Off Employees — and the Police: Well that was strange — and scary. Hours ago, one of six cofounders of Tiny Owl, a two-year-old, Mumbai, India-based food ordering software startup, was released after being held captive for two days by disgruntled former employees at the company’s office in Pune. Tiny Owl had earlier this week announced $7.67 million in fresh funding from earlier backers Matrix Partners and Sequoia Capital. But the funding came with the understanding that Tiny Owl would follow through on a major restructuring to control its burn rate.As part of that restructuring plan, the company is shutting down its operations in four cities, including Pune. Which leads us to what happened to company cofounder Gaurav Choudhary. Choudhary had traveled to Pune earlier this week to oversee the office’s closure, while his fellow cofounders – all of whom are graduates of IIT Bombay — traveled to sites in Gurgaon, Chennai and Hyderabad to do the same. But according to various media accounts, soon after Choudhary informed Tiny Owl’s Pune-based employees of the layoffs, he was asked to pay them immediately. When he said he couldn’t, they reportedly refused to let him leave the building and return to Mumbai.

Daily Tech Snippet: Thursday, October 1

• Daily Report: The Buy Button Heads to YouTube and Twitter: On Tuesday, YouTube said it would make it easier for advertisers to pair their ads with videos highlighting a particular product. The new feature, available in the coming months, will allow viewers to get directly to a retailer’s site with a single click. No searching required. The new feature seems to be particularly appealing on the many videos of product reviews and tutorials, a type of video that has been growing in popularity on YouTube. It also, as Hiroko Tabuchi writes, brings “a shopping element to yet another corner of the Internet, as highly trafficked websites and social networking services increasingly fashion themselves into shopping hubs.” If there was any doubt about that trend, Twitter put it to rest on Wednesday. As Vindu Goel reports, the company is making it possible to put a buy button in a tweet. “A Twitter user,” he wrote, “can then purchase the product in as few as two taps — one tap on the buy button and a second to confirm the purchase.” It has been a big week for new online ad tools and features, several of which have been announced at Advertising Week in New York. As Sydney Ember wrote on Monday, Madison Avenue might still be the heart of the advertising industry, but much of the money — and influence — is coming from Silicon Valley.

• More on the Twitter Buy Button: Twitter Makes ‘Buy’ Button Widely Available: After two years of testing, Twitter is finally making it easy for millions of merchants to sell products through a tweet. The social network announced Wednesday that its “buy now” button will be available to any merchant in the United States that uses one of three major e-commerce platforms to run its online shopping operations. A store that is a customer of Demandware, Bigcommerce, or Shopify can use the software to tweet out a link to a product that will show up with a buy button. A Twitter user can then purchase the product in as few as two taps — one tap on the buy button and a second to confirm the purchase. (The first time people buy something through Twitter, they will also have to go through a screen to provide payment and address information.) Twitter’s expansion of its buy button, which builds on a partnership with the e-commerce platform Stripe announced earlier this month, comes as competing platforms are also beginning to offer e-commerce directly from their services. On Tuesday, Google’s YouTube service announced that advertisers can now place buy buttons in other people’s videos — allowing, say, Apple to offer a way to buy an iPhone from inside a fan’s video showing the unboxing of a new iPhone (yes, there are lot of videos like that). Pinterest, Facebook and Instagram, a photo-sharing service owned by Facebook, are also testing buy buttons. Facebook isn’t so sure about Buy Buttons. Sheryl Sandberg, the company’s chief operating officer, said that Facebook studied the behavior of its 1.5 billion users and concluded that buy buttons should not be a high priority right now.

• More on the YouTube Buy Button: YouTube to Expand Shopping Links to More Videos: YouTube announced on Tuesday that it would introduce shopping ads on its videos that let viewers jump directly to retailers’ websites and buy the products featured in the clips. The video-sharing site, owned by Google, already lets advertisers show links to products within their own videos. But the new service would place product ads on any video on the site, like product reviews uploaded by amateur reviewers, provided the clip’s owner opts in. YouTube’s new ads bring a shopping element to yet another corner of the Internet, as highly trafficked websites and social networking services increasingly fashion themselves into shopping hubs. Sites like Pinterest and Instagram have introduced “buy button” functions that let users purchase the products that appear in the millions of posts and photos shared on their platforms each day. Google itself has pushed to become a shopping destination in an increasingly direct challenge to Amazon, currently the web’s de facto shopping search engine. YouTube’s ads seek to tap into the fast growth in product reviews and tutorials posted by users. Susan Wojcicki, the company’s chief executive, announced the change at an advertising industry event in New York. In the last year alone, viewership for product-related clips on YouTube has jumped 40 percent, she said. YouTube users have already uploaded tens of thousands of reviews of a battery-powered self-balancing skateboardlike device that retailers expect to be a hot holiday gift this year. Once the service is available in the coming months, videos from users who opt into the program, and which contain products that match YouTube ads, will display an icon in the top-right corner. Users can click on the icon to view a list of images and prices of the products featured in the video, and to jump to retailers’ websites for more reviews, information and an option to buy. YouTube matches videos with ads based on the video’s content and audience. Similar to YouTube’s AdWords service, advertisers pay only when a user clicks on a shopping ad. The site will test the ads this fall, and will offer the service to AdWords clients in the coming months, it said. For users who upload YouTube videos, the shopping ads could mean a new revenue stream, the sites said. And for viewers, YouTube promises an unobtrusive way to shop as they surf videos.

• What it’s like to ride in a Google self-driving car: Google’s cars have been trained to be extremely conservative in unusual situations. “They understand their own limitations,” said Dmitri Dolgov, principle engineer on Google’s self-driving car project, at a briefing later. “They understand that there’s something really crazy going on and they might not be able to make really good, confident predictions about the future. So they take a very conservative approach.” A few blocks away from Google I got another glimpse of the SUV’s cautious nature. A car, also with a stop sign, arrived at the intersection just after us. The Google car inched forward in two spurts. After a pause we drove through the intersection. We got through it fine, but slower than I expect most drivers would have. Soon we pull back in front of GoogleX’s building, a 14-minute ride in the books. “Manual,” calls out the female voice as our driver took control again, and turned the car off. If I was grading the SUV on our brief trek I would give it a B+. It wasn’t perfect driving, but safe and effective. Of course, our route wasn’t especially difficult. The real challenges come when pedestrians, inclement weather, construction sites and cyclists arrive.

• Microsoft, Google stand down in patent battles: Microsoft and Google have agreed to bury all patent infringement litigation against each other, the companies announced on Wednesday, settling 18 cases in the United States and Germany. In another sign of the winding down of the global smartphone wars, the companies said the deal puts an end to court fights involving a variety of technologies, including mobile phones, wifi, and patents used in Microsoft's Xbox game consoles and other Windows products. The agreement also drops all litigation involving Motorola Mobility, which Google sold to Lenovo last year while keeping its patents. However, as Microsoft and Google continue to make products that compete directly with each other, including search engines and mobile computing devices, the agreement notably does not preclude any future infringement lawsuits, a Microsoft spokeswoman confirmed.

• Sources: Jack Dorsey Expected to Be Named Permanent Twitter CEO: Jack is apparently back — for good this time. Twitter co-founder Jack Dorsey, who has been serving as interim CEO for the past three months, is expected be named the company’s new permanent CEO as early as tomorrow, although that timeframe may change, according to sources. Dorsey will apparently continue to run Square, the payments company he founded where he’s also CEO. [UPDATE: Sources said that it’s not clear if the board has officially voted on Dorsey’s appointment, because it was still settling the status of other key execs this week, most specifically revenue chief Adam Bain and CFO Anthony Noto. Bain is widely expected to become COO, although Noto may also report directly to Dorsey. Both have indicated to the board, said multiple sources, that they want Dorsey in the top job. The Twitter board also has what one source called a “Plan B” of a single serious outside candidate, although every single person I have contacted who has been considered and also contacted by the company’s recruiting firm, Spencer Stuart, said that discussions did not progress very far.] Sources added that there is likely to be some shake-up of the board too, most immediately the departure of Costolo as a director.

• Google Is Acquiring Rich Messaging Startup Jibe Mobile: Google said on Wednesday that it has acquired Jibe Mobile, a messaging startup that specialized in helping carriers build support for native video messaging into their services. The effort, designed to make video chat as ubiquitous and interoperable as text messages, is known as Rich Communications Services, or RCS. Google said it is making the purchase as part of a commitment to supporting RCS as part of its messaging strategy. “SMS carrier messaging is used by billions of people every day and enables people to reach anyone around the world, regardless of their device, carrier, app or location,” Android engineer and “minister of messaging” Mike Dodd said in a blog post. “However, the features available in SMS haven’t kept up with modern messaging apps. Rich Communications Services (RCS) is a new standard for carrier messaging and brings many of the features that people now expect from mobile messaging, such as group chats, high res photos and more.” Financial terms were not disclosed.

Daily Tech Snippet: Monday, September 28

• Facebook, eyeing TV dollars, rolls out new ad products: Facebook introduced a slate of new advertising products on Sunday, most of which are aimed at luring television advertisers onto the 1.5-billion user social network. The advertising options, most of which will also be available on Facebook-owned Instagram, are designed to take advantage of the social network's strengths on mobile devices. It has the world's most popular smartphone app and generates more than three-quarters of its $10 billion-plus in annual ad revenue on phones. On television, advertisers can buy ads based on how many people they will reach, an approach Facebook has adopted to ease the transition between television spending and digital spending. In addition, it can target highly specific audiences, such as women aged 18 to 35 years old who have shopped on a specific website, which TV cannot do. Among the new products are "brand awareness" ads, which aim to reach a large number of people to promote a company's name and brand, such as Coca Cola. Advertisers will also be able to poll users on mobile phones about whether they saw an ad -- a feature that used to be available only on desktop computers -- and they can use a format that allows them to display multiple videos at once that users can scroll through.

• YouTube Is Prepping Its Subscription Launch: Two Services, One Price: YouTube, which spent the first 10 years of its life as a free service, is getting ready to start selling tickets. Google’s video site appears to be finalizing launch plans for its long-in-the-making subscription service, and industry sources say they’ve been told to expect a launch near the end of October. A blast email from YouTube to content owners, telling them they have to agree to new terms by Oct. 22 or their “videos will no longer be available for public display or monetization in the United States,” helps support that timeline. But YouTube, which floated the idea of a new subscription service nearly a year ago, has never publicly committed to a timeline. Last spring, YouTube executives were telling content owners they were aiming for a mid-summer launch. It’s possible the launch could keep slipping, even beyond 2015. Note that we’re referring to a single service, not multiple ones. Sources say that’s because YouTube intends to bundle two different services into one offering: An update of its music service, which it launched in beta as YouTube Music Key last fall, and another service, yet to launch, that will give users the ability to watch anything on YouTube without seeing ads. Video industry sources say Google has told them it intends to charge $10 a month for the combined offering. It’s hard to imagine how YouTube will make money at that pricing, since its music service was supposed to cost $10 on its own, with the music labels and other copyright owners pocketing the majority of that.

• India Replaces China as Next Big Frontier for U.S. Tech Companies: Two years ago, India’s rise as a digital nation was hard to imagine. Internet penetration was modest, mobile phone networks were glacially slow, and smartphones were a blip in a sea of basic phones. Since 2013, however, the number of smartphone users in India has ballooned and will reach 168 million this year, the research firm eMarketer predicts, with 277 million Internet users in India expected over all. India already conducts more mobile searches on Google than any country besides the United States. Yet “we are barely scratching the surface of availability of Internet to the masses,” said Amit Singhal, Google’s senior vice president in charge of search, who emigrated from India to the United States 25 years ago.  India and its 1.25 billion residents have become the hottest growth opportunity — the new China — for American Internet companies. Blocked from China itself or frustrated by the onerous demands of its government, companies like Facebook, Google and Twitter, as well as start-ups and investors, see India as the next best thing. The increasing appeal of India, now the world’s fastest growing major economy, was underscored in recent days. During a meeting in Seattle on Wednesday with American technology executives, China’s president, Xi Jinping, was unwavering on his government’s tough Internet policies. India’s prime minister, Narendra Modi, on the other hand, was on a charm offensive during his own American tour. After a stop in New York City, he headed to Silicon Valley, where he visited Tesla and attended a dinner with tech chieftains like Satya Nadella of Microsoft and Sundar Pichai of Google. On Sunday, Mr. Modi participated in a town hall discussion with Mark Zuckerberg, Facebook’s chief executive. He also planned to drop by Google and Stanford University, mingle with entrepreneurs and address a sold-out arena of 18,000 people in San Jose, Calif., before heading back to New York to meet with President Obama on Monday. ”For India to keep making progress, it needs to be a leader online,” Mr. Modi said during the Facebook event. He acknowledged that tech companies like Facebook were not connecting people out of pure altruism, but he told Mr. Zuckerberg, “I hope this will not just be something to enhance your company’s bank balance.” The overall message to Silicon Valley from Mr. Modi, who posts regularly on Twitter and Facebook: Help India become an Internet powerhouse.

• Solving the Amazon Puzzle: In a battle of tech titans, some investors may have reason to prefer Bezos over Brin and Page. Which company is a better investment, Google or Amazon.com? Conventional wisdom suggests Google, which turns huge profits, enjoys better gross margins, and has a far lower price-to-earnings ratio. Yet Amazon’s stock has returned 62.6 percent in the past year, compared with 9.6 percent for Google. That’s a phenomenon Steve Hanke, an economics professor at Johns Hopkins University, and Ryan Guttridge, a fellow there, have named the “Amazon Puzzle,” and one they say they’ve figured out. The key is hidden in asset turns, or how effective companies are at getting revenue out of their investments. Asset turnover is defined as sales divided by total assets; the higher the number, the better. “Google is just abysmal, and Amazon is really good,” says Guttridge, who once worked for legendary stock picker Bill Miller at Legg Mason in Baltimore. How abysmal? Try 0.54 in 2013, 0.55 in 2014, and 0.53 so far this year, versus 2.05, 1.88, and 2.12 for Amazon, according to data compiled by Bloomberg. Guttridge and Hanke credit Amazon’s cash flow–focused CEO, Jeff Bezos. Bezos has a salary of just $81,840 a year, though he gets a further $1.6 million to cover his personal security. Beyond that, he receives nothing atop the return on the 18 percent of Amazon that he owns. It’s the same stock shareholders own. He makes money only if the stock goes up and must keep shareholders happy or be held accountable. Larry Page and Sergey Brin of Google, while they earn only $1 a year in salary, control classes of stock outside investors can’t touch. That puts Google’s lucrative search and YouTube services further out of reach of the little guy. And that’s why Guttridge is betting on Bezos. “You buy equities because you expect to benefit from the free cash flow of the business,” he says. “With Amazon, you have a clear line between asset turns and cash flow.”

Daily Tech Snippet: Friday August 28

Uber China closes $1 billion fundraising round at $7 billion valuation: sources: Uber’s China arm has closed its $1 billion fundraising round early, according to two people with knowledge of the matter, with investors still hopeful for the U.S.-based ride service despite strong domestic competition in the car-hailing market. The deal was oversubscribed, said the second source directly familiar with the fundraising. According to a fundraising document seen by Reuters last week, this round values Uber China at $7 billion, with the unit planning to list on the mainland by 2020.

One Billion People Log In to Facebook for First Time: For the first time, a billion people used Facebook in a single day on Monday. Facebook’s chief, Mark Zuckerberg, observed the occasion with a post on his Facebook page, saying that one out of seven people on Earth logged in to the social network to connect with their friends and family. The one billion figure is different from the daily user numbers Facebook discloses each quarter when it reports its financial results. Those are the average number of daily users, counted over a 30-day period. Facebook had 968 million daily active users in June. Most people on Facebook live outside the United States and Canada.

YouTube gets super serious about gaming videos: Enter player two: YouTube stepped into the world of game-streaming Wednesday with the official launch of YouTube Gaming -- its answer to Amazon's popular gaming site, Twitch. The new section of YouTube allows gaming companies and everyday gamers to share live or recorded videos about the games of the moment. It also gives YouTube an official home for video game content as the business of watching other people play video games continues to gain popularity. Google first announced it would launch YouTube Gaming early this summer, ahead of the industry's big Electronic Entertainment Expo trade show, known more widely as E3. The debut comes a year after Google lost a bidding war with Amazon to buy Twitch, the Web's current leader in video game streaming. Amazon bought Twitch last August for nearly $1 billion dollars. Twitch is Google's main competition here. But YouTube isn't starting from scratch: it already has a huge amount of gaming content across its site. The company boasts "billions" of views across its site and says that time its users spend with gaming videos is up 75 percent in the past year. ZEFR, a technology firm that crunches YouTube data, estimates that videos of the walkthrough genre of what is known as "Let's Play" has garnered 40 billion views in the lifetime of YouTube.

Shazura: A More Efficient Way to Search Images: While most image-search software finds photos using keywords or phrases, Shazura’s binary system behaves more like the human brain, visually matching images that look the same with greater speed and efficiency. Pérez de la Coba, an electrical engineer by training, began coding Shazura in 2011 out of frustration. She’d snapped a photo of a pair of shoes she wanted but had trouble finding them online with existing image-comparison services such as Google’s. Upload a file, outline what you want to search for, and Shazura’s algorithm converts the image to a lengthy “numeric signature” containing extensive descriptive information. The number for a willow, say, is distinct from that for a cypress, or a green bag from a blue one. By cutting out the intermediary translation steps, Shazura sifts through a customer’s image database more quickly and accurately and uses less computing power than traditional search engines. Without having to rely on keyword tags or extensive if-then instructions, Shazura can make large-scale image searches much easier for government agencies, advertisers, or social networks, says Pérez de la Coba. Shazura has raised $1.2 million from investors and so far the 10-employee company has licensed its technology to clothiers El Corte Inglés and RichRelevance.

Facebook's Instagram adds new photo sizes to keep users, attract ads: Instagram has added new layout options in addition to its signature square for pictures and videos in a bid to attract more advertisers and to stop users defecting to more flexible services such as Snapchat. The move is the first major alteration to the photo-sharing, social media service since Facebook Inc bought it for $1 billion in 2012, and addresses the wishes of many of its 300 million users, who have been constrained by the square format. One in five photos and videos posted on the service do not fit the square format, Instagram said in a blog post. "Friends get cut out of group shots, the subject of your video feels cramped and you can’t capture the Golden Gate Bridge from end to end," it said. From Thursday, Instagram's web-based service and its mobile apps running on Google Inc's Android system and Apple Inc's iOS will allow portrait and landscape formats, giving both users and paying advertisers more options. The move should help Instagram in its battle with newer rivals such as Snapchat for users in the fast-moving messaging and media-sharing market. At the same time, it should attract more advertising revenue for Instagram, which said in June it would open its platform to all advertisers by the end of the year, rather than just to select brands. Instagram is expected to generate nearly $600 million in advertising revenue by the end of this year and $2.8 billion in 2017, according to projections from research firm eMarketer.

Apple is closing in on Fitbit: Apple, which launched the Apple Watch in June, is within striking distance of leader Fitbit Inc in the wearable devices market, market research firm IDC said. Apple shipped 3.6 million Apple Watches in the second quarter of 2015, just behind Fitbit's 4.4 million wearable fitness and health trackers, IDC said. The Apple Watch, which sports many health-related features and apps, is seen as the biggest rival to Fitbit's trackers. Shipments of wearable devices more than tripled to 18.1 million units in the second quarter, IDC said. "It's worth noting that Fitbit only sells basic wearables - a category that is expected to lose share over the next few years, leaving Apple poised to become the next market leader for all wearables," the IDC report said. Fitbit Inc's stock market listing in June got a rousing response from investors, with shares jumping as much as 60 percent. They closed at $38.40 on Wednesday, nearly double their IPO price.

Daily Tech Snippet: Friday, July 17

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• Google Shares Rise 11% as CFO Porat Signals She’ll Rein In Spending: In the first earnings report for Ruth Porat, the chief financial officer Google lured from Morgan Stanley, Ms. Porat said the company was keeping a closer eye on costs. “People are realizing it’s a new era,” said Colin Gillis, an analyst at BGC Financial LP. “She’s coming in and she’s expressing what investors wanted -- that’s there’s going to be cost rationalization, a degree of discipline.” The numbers backed her up, with revenue and profits outpacing the expectations of Wall Street. The company reported that revenue rose 11 percent to $17.7 billion from a year earlier, with net revenue — a figure that excludes payments to advertising partners — increasing to $14.35 billion. That was above the $14.28 billion projected by analysts, according to Bloomberg. Google said that absent currency fluctuations, overall revenue would have risen 18 percent from a year ago. Google’s cash pile swelled to $70 billion in the second quarter. In the recent quarter, the number of clicks on ads rose 18 percent, compared with a 13 percent increase in the first quarter, while the average cost per click fell 11 percent after dropping 7 percent in the prior period. Google’s mobile cost-per-click is climbing, helping to close the gap with desktop ads, Porat said on the call. Watch time on YouTube, the company’s video-sharing site, was up 60 percent, with mobile watch time more than doubling, she said. The slower growth in costs, along with suggestions from Ms. Porat that Google will try to be more forthcoming with investors — and may be open to redistributing some of the company’s cash pile down the line — suggested a new era of cooperation from a company that has historically had an antagonistic relationship with Wall Street. She confirmed that they are more open to focusing on expense controls, more open to providing new disclosures and more open to potentially returning cash,” said Ben Schachter, an analyst with Macquarie Securities. “Those are the three things people wanted, and she came through.” Analysts like Mr. Schachter were impressed by her investor-friendly tone, and Google shares jumped nearly 11 percent in after-hours trading.


• The surprising way smartphones are changing the way we shop: Smartphones and tablets now account for up to 68 percent of the traffic to the videogame chain’s Web site, where customers are frequently browsing products and looking up trade-in values for their old games. One thing they’re not doing much of on mobile devices? Buying stuff. In fact, “purchasing through that phone probably wouldn’t even make the top ten list of engagement activities that they do,” said Jason Allen, the retailer’s vice president of multichannel. “We’re not overly focused on conversion on mobile, we really see it as a tool to drive traffic in our stores” This reflects a trend seen throughout the industry: While there has been a surge in traffic to retailers' Web sites from smartphones, a proportionately big boom in sales on these gadgets have yet to appear. In other words, for all the time we spend swiping and tapping on our phones, we still aren’t especially willing to make purchases on them. At Kohl’s, executives say they have spent the last year and a half updating their app, in part to accommodate an in-store shopper who is more frequently searching for product reviews, watching video content about merchandise and sharing their finds on social media. When customers are in Kohl’s stores and on the retailer’s Wifi network, customers spend more time on the app than when they’re not in the store, company officials said. These behaviors have led Kohl’s to develop a new “in-store mode” for its app, in which users who walk into a Kohl’s store will be asked if they want to use a special version that is tailored for wandering the store. Kohl’s declined to say how the in-store mode will be different from its regular app experience, but said it would be available in September. Big-box behemoth Target is also catering to shoppers who are using their phone to guide them through stores with a relaunched app that has a stronger emphasis on a tool that helps them building their weekly shopping list and an interactive map of each store in its fleet. It’s easy to see why the company has moved in this direction: Since it installed free WiFi in its stores a few years ago, Target has found that the most-visited site, by far, is the retailer’s own Web site. This enthusiastic embrace of in-store phone use might have seemed unthinkable in corners of the retail industry only a few years ago, when many brick-and-mortar chains were panicking about showrooming, the industry term for when shoppers would go to a store to check out merchandise, only to ultimately buy it online for a better price. But that fear has largely dissipated as study after study has shown showrooming is not a huge threat. In fact, several studies have found that the opposite behavior -- browsing online before buying in a physical store -- is more common.



• As Google and Microsoft push app developers to reveal their content, coders balk at making apps searchable: The giants of the Web have been pressing developers of mobile apps to index their content so it can be parsed by search engines or linked to from other sites. That’s already possible with most Web pages, thanks to pieces of embedded code known as deep links. Imagine a future in which a Google search for a “tulle mini” would call up results from Wish, a fashion app, along with links to e-commerce sites. A Facebook user who wanted to share a recipe for vegan chocolate chip cookies from the Yummly app would be able to post a link that would take viewers to the relevant page instead of forcing them to download the app first. So far, the effort has been a bit like herding cats: Only a few thousand apps—a tiny fraction of the millions out there—have adopted the competing tech protocols that Google, Facebook, Apple, and others are pushing. Google’s pitch to developers is that deep links benefit them by driving more traffic to their apps. The company says traffic on the Yellow Pages and Etsy apps increased by 8 percent and 12 percent, respectively, after they began using Google’s indexing. Rajan Patel, a principal engineer at Google, says more than 1,000 apps—mainly those designed for its Android mobile operating system but also some for Apple’s iOS—use its deep linking. “To us, the main advantage that we see coming from this is removing friction—not having to find the app on your phone and fire it up,” says Atul Kakkar, principal product manager at Eventbrite, a website that helps people publicize and sell tickets to yoga classes, tech conferences, and other happenings. The company plans to start indexing its app to enable Google searches. Some developers have resisted using deep links because it’s costly and laborious to create separate code for each mobile platform. (Android and iOS are the predominant ones.) Inserting the links eats up as much as 5 percent of the time it takes developers to build an app, says Alex Matjanec, managing partner at AD:60, a New York-based ad agency that creates apps for clients.


• YouTube's Top Advertisers Increased Their Spending by 60% in Q2: Google's second quarter earnings report today, the tech giant revealed that YouTube viewership is growing faster than it has in two years, and advertiser money is following. YouTube's mobile users averaged 40 minutes per session during Q2, which represents a 50 percent increase year over year while ultimately helping the Mountain View, Calif.-based player beat Wall Street expectations. The number of advertisers rose 40 percent year over year on the video platform, while the average spend of YouTube's top 100 advertisers rose 60 percent. Google does not break out how much revenue YouTube generates, but executives were clearly satisfied with the performance. There are more 18- to-49-year-olds on YouTube than there are consumers who watch cable TV, Porat said.

Daily Tech Snippet: Wednesday, July 8

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• China stocks are 8% down this morning; Alibaba stock is at its lifetime low: China's securities regulator said there was "panic sentiment" in mainland stock markets on Wednesday, acknowledging the recent increase in irrational selling, Reuters reported. Shortly after, the People's Bank of China said it will closely watch stock market direction and guard against systematic regional financial risks. The comments did little to soothe investor worries about tumbling mainland equities, with the Shanghai Composite sinking more than 8 percent in early trade on Wednesday. In US trading, Alibaba was traded at its lifetime low.


• Worldwide spend on gadgets will fall year-on-year this year for the first time since 2010: According to a new forecast from Gartner, shoppers worldwide will spend less on gadgets in 2015 than they did in 2014 — the first drop since 2010. Analysts from Gartner still predict we'll spend a total of $606 billion in 2015. But it's still a decline of 5.7 percent compared with 2014 — lower than Gartner had forecast just three months ago. So what's behind the softer sales? Its because sales of desktops, tablets and smartphones are all slowing. Fewer people are buying desktop computers in Western Europe, Japan and Russia. In addition the tablet market is reaching its saturation point, and that analysts expect users to upgrade their tablets an average of once every three years — far less than smartphones. Sales of mobile devices such as smartphones as well as of high-end laptops will continue to grow, the firm said. Still, even within that bright spot, there is some hint of a slowdown. The rates of first-time smartphone buyers in China, one of the world's fastest-growing and most important mobile markets, have slowed.


• Alibaba boosts Singapore Post stake, invest in SingPost's e-commerce unit: Chinese e-commerce giant Alibaba is investing about $206 million to expand its holdings in Singapore Post and its e-commerce subsidiary, the two companies said in a statement. SingPost is seeking to boost its e-commerce business to offset weak postal revenues, and last year an Alibaba unit bought an over 10 percent stake in SingPost for $249 million. In the latest deal, Alibaba said it was buying an additional 5 percent stake in SingPost for S$187.1 million. Alibaba will also invest up to S$92 million to buy a 34 percent stake in Quantium Solutions, a SingPost subsidiary that provides e-commerce logistics across the Asia Pacific. Alibaba is currently the second largest shareholder in SingPost after Singapore Telecommunications


• Music streaming firm Saavn raises $100M from Tiger Global, others: Saavn (South Asian Audio Video Network), a US-based Indian music streaming firm, has raised $100 million in Series C funding from existing investor Tiger Global Management and others. The company will use the money to improve product development efforts and to speed up customer acquisition. Saavn is said to be preparing for the launch of a video streaming service. The company claims to be adding one million users every month. Earlier this year, Saavn had appointed former Google executive Mahesh Narayanan as COO. Last year, Saavn added Twitter-powered radio station to its service. It also entered into licensing agreements with Warner Music and EMI Music that helped it add 800,000 tracks from international artists.


• ClipMine Improves Videos With Crowdsourced Tagging And Annotations: So this happens to me pretty often: I pull up an online video that I want to watch, only to be taken aback when I realize that it’s 10 or 20 or 30 minutes long. It’s particularly frustrating when there’s just one section or just one quote that I’m looking for. I end up skipping around trying to find that one bit — not exactly a great experience. A new startup is trying to fix that. With ClipMine, you get searchable videos, with a table of contents. For example, here’s a curated collection of videos related to startups. With each video, not only can you see an outline of all the big topics covered and jump to the section that interests you, you can also search for every time something gets mentioned (though your success will depend on how thoroughly the video has been tagged and annotated). To be clear, ClipMine isn’t trying to build its own video player. Instead, it sits on top of players like YouTube. You can also install a plugin to see the ClipMine player anywhere you see YouTube videos.

Daily Tech Snippet: Thursday, July 2

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• As More Tech Start-Ups Stay Private, So Does the Money: Something strange has happened in the last couple of years: The initial public offering of stock has become déclassé. For start-up entrepreneurs and their employees across Silicon Valley, an initial public offering is no longer a main goal. Instead, many founders talk about going public as a necessary evil to be postponed as long as possible because it comes with more problems than benefits. Silicon Valley’s sudden distaste for the IPO. — rooted in part in Wall Street’s skepticism of new tech stocks — may be the single most important psychological shift underlying the current tech boom. Staying private affords start-up executives the luxury of not worrying what outsiders think and helps them avoid the quarterly earnings treadmill. It also means Wall Street is doing what it failed to do in the last tech boom: using traditional metrics like growth and profitability to price companies. Investors have been tough on Twitter, for example, because its user growth has slowed. They have been tough on Box, the cloud-storage company that went public last year, because it remains unprofitable. And the e-commerce company Zulily, which went public last year, was likewise punished when it cut its guidance for future sales. During a recent presentation for Andreessen Horowitz’s limited partners — the institutions that give money to the venture firm — Marc Andreessen, the firm’s co-founder, told the journalist Dan Primack that he had never seen a sharper divergence in how investors treat public- and private-company chief executives. “They tell the public C.E.O., ‘Give us the money back this quarter,’ and they tell the private C.E.O., ‘No problem, go for 10 years,’ ” Mr. Andreessen said.

• PayPal to Acquire Xoom for $890 Million Ahead of EBay Split: PayPal agreed to purchase Xoom Corp, a service for sending international money transfers, in a deal valued at $890 million. PayPal will acquire Xoom for $25 per share in cash, a 21 percent premium to Wednesday’s closing price. The purchase is expected to slightly reduce PayPal’s earnings per share for fiscal 2016, the company said. The acquisition puts PayPal in the international money transfer market with Western Union, the dominant player in what PayPal President Dan Schulman estimated is a $600 billion market. “It’s an industry that’s ripe for disruption,” Schulman, who will become chief executive officer of the stand-alone PayPal, said in an interview. Xoom, based in San Francisco, enables U.S. customers to send as much as $3,000 in a single transaction to friends and family around the world using their mobile phones, tablets or computers. Its 1.3 million users transferred $7 billion to 37 countries, including Mexico, China and India, in the 12 months ended March 31, the company said. Xoom’s first-quarter revenue gained 24 percent to $44.4 million.

• India Now Uber’s Second Largest Market - By City Coverage - Following Expansion To 7 New Cities: Uber is continuing its focus on Asia after announcing that it will expand into seven new cities in India, taking it to a total of 18 locations in the country. With 18 cities served, India becomes the company’s biggest market based on city coverage, behind only the U.S..The U.S. firm recently claimed one million rides per day in China following rapid growth, and it is also sweet on India. It has hired a president to run its business in India and has seemingly invested significant sums to grow its visibility and presence in India, now it’s time to crank its plans up a gear. Uber said that this expansion — which will see it drive into Bhubaneswar, Coimbatore, Indore, Mysore, Nagpur, Surat and Visakhapatnam — is the “largest number of new international cities [it] has ever launched together.” A leaked letter to investors recently suggested that China will overtake the U.S. as Uber’s largest market based on rides handle per day. While the company isn’t spilling raw figures for its business in India, it did say that it is seeing “unprecedented” 40 percent month-on-month growth across the country.

• Facebook Will Start Sharing Ad Revenue With Video Creators: Facebook is offering video creators like the NBA, Fox Sports and Funny or Die a revenue split from ads sold alongside their videos beginning this fall. It’s the first time Facebook has done any kind of revenue share around video, and the pitch to content creators is pretty transparent: Share your content with us and we’ll share some of the money we make back with you. The move is a full-on attack against YouTube, which has dominated the digital video market for the better half of a decade. Facebook has been able to attract content creators because of its massive reach, but now it’s offering them the one thing YouTube has offered for years: Money. YouTube also uses a revenue split to entice content creators — the same revenue split, actually — with 55 percent going to the video creator and the remaining 45 percent staying with the platform. But Facebook’s argument is that it can get more eyeballs for your video. People don’t have to hunt to find your video — Facebook will show it to them. And those people don’t need to be following your Facebook Page, either. The revenue share on Facebook doesn’t apply to all videos in News Feed. Instead, the company is rolling out a new feature called Suggested Videos, a News Feed of sorts that’s exclusively video content. For example, if you click on a video in your News Feed about snowboarding, you’ll be taken to the Suggested Videos feed where you can watch that video, then scroll down to see others that are similar. There will be ads in this stream — standalone, autoplay ads like you might find in News Feed — and this is where the revenue share comes into play.

• Google Tests Price Comparison Within Product Listing Ads To Compete with Amazon, Jet: Google is testing a new Product Listing Ad format that informs shoppers of their percentage savings within a PLA. In the examples that our digital marketing experts uncovered, Google states about the product, “Price is X% lower than average online prices.” At first glance, it looks like this could be an extension of the “Value Alert” feature covered earlier this year in Search Engine Land. Where Google pulls the data to find the average online price has not yet been disclosed. However, based on some quick calculations for a “KitchenAid Mixer” (showing as 14% off in the image below), for the 47 listed on Google Shopping the price was 13.9% off inclusive of shipping but exclusive of tax. This makes sense because tax would vary based upon your location. This suggests that Google is using all of the models that are listed on Google Shopping, as opposed to just the subset featured in the Product Listing Ad. Channel Advisor, which first reported this, theorizes the experiment could have come about because larger marketplaces like Amazon, and potentially newcomer Jet.com, have the potential to continue to eat away at Google’s business. That is, instead of turning to Google’s search engine to locate products, consumers just go directly to Amazon’s website to find low-priced items.

Daily Tech Snippet: Wednesday, July 1

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• Facebook is testing a more conservative definition of video views, but is still far more aggressive than YouTube in charging advertisers: While Facebook charges advertisers for videos the second they appear in a news feed, views are defined differently since users can easily scroll past the ads. Facebook considers a view to last three seconds compared with YouTube's 30-second rule. This has resulted in marketers' clips uploaded to Facebook to amass a wealth of views compared with those published on YouTube in recent months. But those views don't necessarily mean people are watching ads. Now, advertisers can start paying for videos with a cost-per-view rate that kicks in after a user watches for 10 seconds, making the ad seemingly more valuable to advertisers who want to pay for qualified views. Until now, advertisers have paid for videos immediately after they show up in a news feed—something akin to a cost-per-impression model. When Twitter launched autoplay video earlier this month, it tried to address concerns by promising brands 100 percent viewability: promising only to charge on video ads that have been seen 100 percent in full view of the user..


• Xiaomi Continues International Push, Starts Selling $160 Redmi 2 Phone in Brazil: Xiaomi made its expected move into the Brazil market on Tuesday, announcing plans to sell its affordable Redmi 2 smartphone for 499 Brazilian reals ($161). To avoid hefty taxes placed on foreign imports, Xiaomi is working with Foxconn to have the devices built in Brazil, with additional products coming soon.


• Online recharge and mobile wallet app MobiKwik targets $700M GTV in 2015-16, profits by 2016-17: MobiKwik.com, is gunning for a nearly four-fold jump in gross transaction value to $700 million (Rs 4,270 crore) this year. “We don’t have the audited numbers right now, but I can tell you that we have crossed the 2014-15 target of Rs 1200 crore ($190 million) sales and are looking forward to $700 million sales this year,” Upasana Taku, co-founder of the company told Techcircle. The Gurgaon-based company aims to turn profitable by financial year 2016-17. “We expect to meet our goal of 100 million users for the mobile wallet by 2016-17 and so next year we anticipate to start generating profits,” she added. Profitability is the holy grail for India’s fast growing consumer internet firms. MobiKwik’s competitor, the Alibaba-backed Paytm saw the gross value of the transactions conducted on its network rise to around Rs 4,000 crore by 2014-end from around Rs 1,000 crore the year before. Paytm is said to be targeting gross merchandise value (GMV) run rate of $3-4 billion by March 2015. MobiKwik plans to spend about Rs 100 crore on marketing this financial year. Most of the money will be deployed on television and online campaigns. MobiKwik is also betting big on joining hands with offline service provider. It started a service for offline players in March 2015 and has the likes of quick service restaurants, grocery stores and coffee stores on its platform. It has tie ups with Big Bazaar, Cafe Coffee Day and other players for the same.


• Apple Music First Look: Rich, Robust — But Confusing: Paid streaming music has arrived on Planet Apple, where it was regarded as unworthy for years. Today, the tech giant has entered the streaming music business with its much-anticipated Apple Music subscription service. Like other streaming services, it offers access to tens of millions of tracks for a monthly fee. Would I pay $10 a month — $120 a year — to use it? My answer is a tentative yes, with some caveats. Apple has built a handsome, robust app and service that goes well beyond just offering a huge catalog of music by providing many ways to discover and group music for a very wide range of tastes and moods. But it’s also uncharacteristically complicated by Apple standards, with everything from a global terrestrial radio station to numerous suggested playlists for different purposes in different places. One of the most confusing aspects of Apple Music is that it moves all your iTunes Music to the cloud, along with the streaming catalog. On the other hand, the service has three big strengths, in my view. First, it smoothly integrates the existing library of iTunes songs you own with the much larger catalog of music you are merely, in effect, renting. Second, while the service does use some algorithms, it suggests numerous playlists, albums and songs curated by 300 human editors, based on your tastes. Third, while Apple’s $10 monthly fee per user is both standard — and for some, pricey — the company is offering a family plan that cuts the price dramatically.


• LTE-U versus WiFi: The future of mobile data pits cellphone carriers against cable giants: To cellular providers, WiFi represents a huge missed opportunity. Internet consumption on cellular data networks — your 3G or 4G connection - could've grown by a whopping 84 percent last year, according to Cisco. But because consumers shunted so much traffic to WiFi, that figure was much lower, at 69 percent. Carriers could charge you for all that extra access to the mobile data network. Instead they're losing out when you hop onto WiFi at your home or office. And LTE-U is the industry's solution. The cable industry, on the other hand, wants to keep you on WiFi as much as possible. This is the math they fear: By 2019, Americans are expected to consume nearly 10 times more mobile data than they did in 2014. By then, 77 percent of all Internet traffic will be sent and received over mobile devices rather than stationary PCs. That's not good for cable, an industry that built its reputation on running fast (but fixed) Internet service into people's homes and businesses. You're probably familiar with 4G LTE, the current cutting edge of mobile data technology. Under ideal conditions, it provides download speeds that rival what you can get on a wired connection — fast enough to download a song in less than a minute. LTE-U is virtually identical to LTE, but with one key difference: It runs on the same frequencies that WiFi does. Unlike regular LTE, which piggybacks on airwaves owned exclusively by your carrier, LTE-U travels on public airwaves that are free to anyone. Garage door openers, cordless phones, WiFi routers — all also transmit over these open channels. Interference between the two technologies can slash WiFi transmission rates by 75 percent, according to a Google white paper filed last month to the federal government. The cable industry's top trade group, the National Cable and Telecommunications Association, argued the technology could be "disastrous" without further protections and "will severely degrade consumers' Wi-Fi experience, rendering unusable many services that are widespread today, to say nothing of the innovative new uses currently on the horizon."


• Google's Local Search, unlike Google's Organic Search, Favors Google+ Results, Yelp Claims: According to a highly critical new paper out from legal scholar Tim Wu, Harvard Business School professor Michael Luca and data scientists at Yelp, many of us are totally missing out on the information that’s most relevant, and critical, to our lives. In a statement to The Washington Post, Yelp vice president of public policy Luther Lowe uses this example: If a parent searches “pediatrician NYC,” he or she will, in a prominent first-page listing, see the names of seven pediatricians who happen to have Google+ or Google+ Local pages. “The Google organic ranking algorithm does a great job at identifying helpful content on the Web,” Lowe said. “But it’s sadly not being deployed in the most common user behavior on Google: local search.” According to Yelp, from one-third to one-half of all Google searches are local. They primarily involve something called the “Local OneBox” — the special, extra-prominent list of seven links that Google displays at the top of local search results. Local OneBox takes up a big chunk of first-page real estate, frequently at the very top of the page, which means people are disproportionately more likely to click into it than they are into regular links. Local OneBox also pulls exclusively from Google’s versions of specialized search sites, such as Google+ Local.


• Samsung, HTC suffer blowback from phone financing schemes of years past, as consumers turn slow to upgrade: It’s payback time for handset makers that long profited from Americans’ tendency to upgrade their mobile phones early and often. U.S. consumers got a taste for phone financing two years ago and never looked back. They bought fancy new devices for a few more dollars a month with no service contract attached. Now they’re holding on to their old smartphones longer than they did when they signed two-year contracts and got freebies, spelling further trouble for manufacturers like Samsung Electronics Co. and HTC Corp. that have struggled with declining sales. “When people spend $600 to $700, they are not in the mood to upgrade every year,” said independent wireless analyst Chetan Sharma. Thrifty consumers are starting to buy devices every 20 to 24 months instead of every 15 months when carriers subsidized all of their devices and made up the cost through higher service charges, he said. While iPhone maker Apple Inc. -- whose customers tend to be less price sensitive -- has remained largely unaffected, Samsung and HTC may see the most impact, analysts said. In a sign that the end of subsidies is on the horizon, Dallas-based AT and T asked in May that retail partners like Apple and Best Buy stop offering subsidized phones with two-year contracts and to sell them on its Next financing program instead. Verizon, which has been slower to move to phone financing, expects 50 percent of new sales to be on its Edge installment payment plan this year.


• Cisco to buy OpenDNS for $635 million to boost security business: Cisco said it would buy OpenDNS, a privately held cloud-based security firm, for $635 million, the latest move to boost its security business as cyber attacks increase in number and sophistication. Cisco has been buying a number of security companies, which has made its relatively tiny security business one of its fastest growing areas in the past two years. OpenDNS uses predictive intelligence to block malware, botnets and phishing threats that antivirus and firewalls miss. Cisco was a minority investor and was one of the backers that invested $35 million in OpenDNS in May last year. When Cisco buys stakes in startups, it often receives defensive rights that give it an edge to acquire companies it has invested in ahead of competitors. Cisco, whose security business is known for its firewalls, expanded into intrusion detection and prevention systems with the $2.7 billion acquisition of Sourcefire in 2013. Cisco, which has acquired dozens of companies over the years, is transitioning towards high-end switches and routers and investing in new products such as data analytics software and cloud-based tools for data centers. It bought malware analysis company ThreatGRID in 2014 and security advisory firm Neohapsis this year.

Daily Tech Snippet: Tuesday, June 23

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• India's government proposes tax benefits for merchants for promoting card payments: Government today proposed income tax benefits for people making payments through credit or debit cards and doing away with transaction charges on purchase of petrol, gas and rail tickets with plastic money. In a draft paper for moving towards cashless economy and reduce tax avoidance, the government also proposed to make it mandatory to settle high value transactions of more than Rs 1 lakh through electronic mode. In order to incentivise shopkeepers, it has proposed tax rebate to them provided they accept a significant value of sales through debit or credit cards. The proposals are aimed at building a transactions history of an individual to enable improved credit access and financial inclusion, reduce tax avoidance and check counterfeiting of currency. “Tax benefits in terms of income tax rebates to be considered to consumers for paying a certain proportion of their expenditure through electronic means,” said that draft proposals for facilitating electronic transactions on which the government has invited comments till June 29. The paper said the tax benefits could be provided to merchants for accepting electronic payments. “An appropriate tax rebate can be extended to a merchant if at least say 50 per cent value of the transactions is through electronic means. Alternatively, 1-2 per cent reduction in value added tax could be considered on all electronic transactions by the merchants,” it added.


• Facebook gaining ground on YouTube in video ads: Facebook is gaining ground on Google's YouTube as an outlet for big companies to market their products via online videos, the fastest growing category of Internet ads, a report published on Monday said. London-based Ampere predicts a new advertising "arms race" between the two rivals, neck and neck in terms of audience sizes with around 1.4 billion to 1.3 billion monthly active users, respectively for Facebook and YouTube. Facebook is morphing from a platform most advertisers use for building general brand awareness to one that can deliver "pre-roll" advertisements that marketing companies prefer for ensuring their messages are actually viewed. Currently, YouTube remains a more flexible marketing platform, offering advertisers the full range of video ads which run before, during or after a video program is shown. Differences in ad formats translate into the rates the Internet platforms can charge advertisers. While YouTube charges advertisers when an advertisement has been viewed, Facebook offers the less advertiser-friendly model of charging once three seconds of the video have been delivered, Ampere noted. Most content providers now use Facebook for branding and awareness purposes, but trial revenue-sharing deals with the National Football League and Fox Sports in the United States pose a serious challenger to YouTube's lead. Online video is now growing faster than any other digital category or subcategory, rising 33 percent in 2014, and is forecast to grow 29 percent a year through 2017, Zenith said.


• Oracle extends cloud offerings, looks to compete with Amazon: Oracle Corp founder and Executive Chairman Larry Ellison said his database company is expanding its cloud-computing offerings, bringing Oracle into more direct competition with Amazon. "We're prepared to compete with Amazon.com on price," said Ellison in a webcast presentation on Monday, after announcing that Oracle would offer online storage and capability for customers to run their applications entirely in Oracle's cloud. The expansion is a major new step for Oracle, which is shifting its traditional database and customer relationship management businesses to the cloud. Oracle, which calls its cloud offering the Oracle Cloud Platform, will provide a cost-effective alternative to Amazon, said Ellison. "Our new archive storage service goes head-to-head with Amazon Glacier and it's one-tenth their price," said Ellison. Amazon did not immediately return a request for comment. Oracle's cloud business is growing quickly, running at a rate of about $2.3 billion a year in revenue, based on last quarter's figures. By comparison, Amazon and Microsoft get about $6.3 billion each in cloud revenue per year.


• Tech Titans Come Together To Develop Common Container Standard: Docker, CoreOS, Google, Microsoft and Amazon are now working on a new standard for software containers with the help of the Linux Foundation. Docker may have become synonymous with containers, but it’s not the only container format around and not everybody agrees that it should become the standard format. Docker and CoreOS had looked like they were on a collision course, and having even more container formats wasn’t likely going to help the overall ecosystem. Now, however, the two companies are going to work together with other stakeholders on the Open Container Project (OCP), which will be housed under the Linux Foundation. The OCP is a nonprofit organization that is “chartered to establish common standards for software containers.” The Docker container format and runtime will form the basis of the new standard, and Docker is donating both the draft specifications and the code around its image format and runtime engine to get the project started. The main idea here is that developers should be able to package their applications in a container and be confident that it will run in any runtime, whether that’s Docker, CoreOS’s rkt, or projects like Kurma or Jetpack. That standard should be vendor neutral and development should happen out in the open. Containers are isolated user instances that allow applications to be deployed easily; Docker uses resource isolation features of the Linux kernel such as cgroups and kernel namespaces to allow independent "containers" to run within a single Linux instance, avoiding the overhead of starting and maintaining virtual machines.


• As Quick as a Taylor Swift Tweet, Apple Had to Change Its Tune: Taylor Swift’s victory in a one-day battle against Apple this week showed she has a rare power to influence the music business itself, at a time of deep anxiety among artists big and small about the value of their work. On Sunday morning, Ms. Swift wrote a diplomatic but stern Tumblr post taking Apple to task for not paying royalties on test drives of its new streaming music service, set to open on June 30. “We don’t ask you for free iPhones,” she wrote. “Please don’t ask us to provide you with our music for no compensation.” By midnight Sunday, Apple — one of the most powerful companies in the world — had capitulated to the 25-year-old pop star, saying it would pay royalties on all music for the three-month trials. One of its senior executives, Eddy Cue, even said he called Ms. Swift personally to give her the news. The backdrop to that decision was much more complex than the quick exchange might have indicated. For more than a week, independent labels around the world had been complaining about Apple’s proposed terms, saying that even for 90 days, a big drop in revenue from Apple — by far the music industry’s largest sales outlet — could be devastating. But even though Mr. Cue carefully noted in interviews that the company’s decision had been made with those labels in mind, its hurried announcement late Sunday suggested that it was Ms. Swift’s shaming that led Apple to change its tune. “She is the most powerful person in the music industry,” said David Lowery of the bands Cracker and Camper Van Beethoven, and an advocate for artists’ rights. “She is able to bring the debate to the mainstream.”


• Uber Is Negotiating a $2 Billion Credit Line With Banks: Uber is negotiating a $2 billion credit line from a group of Wall Street banks. The car-booking company that has roiled transportation markets worldwide by letting people hail rides from their smartphones, had initially sought a $1 billion revolving loan before boosting the size as more banks sought to participate, the Wall Street Journal reported Friday. San Francisco-based Uber raised $1.6 billion in convertible debt at the beginning of the year from Goldman Sach’s wealth-management clients