Daily Tech Snippet: Friday, July 01

• Zenefits halves its previous valuation to $2B to head off investor lawsuits: Zenefits is executing a change in its current ownership structure that will increase the overall ownership of the company for late-stage investors; it’s a move that revalues the company’s Series C round at $2 billion and looks to placate investor concerns over the company’s regulatory investigations. As part of accepting the new ownership changes, the investors participating will sign a release of claims against the company. It’s another move that new CEO David Sacks is doing in what’s been a massive cleanup effort of the company following report after report of the company skirting insurance regulation. Since all those regulatory issues came to light, the company has laid off more than 350 employees and parted ways with its former CEO Parker Conrad. The biggest issue stemmed from a program called “The Macro” that would aid in circumventing state licensing requirements.All this is basically a way to reset expectations for investors, as well as try to retain employees following the changes in the company’s ownership structure. Shareholders were kept in the dark in relation to the existence and use of “The Macro,” which required a reset of the relationship. Zenefits grew like a rocket ship, reaching a $4.5 billion valuation in just about two years after the company started. That, at the time, labeled the company as one of the fastest-growing SaaS startups ever — but, obviously, there was a bunch of shady stuff going on behind the scenes to pad that growth.

• Apple is in “exploratory talks” to acquire Tidal, the streaming music service run by Jay-Z, the Wall Street Journal reports. Recode has confirmed that the companies are discussing a deal. The fact that Tidal, which has been shopping itself for some time, is now talking to a buyer with incredibly deep pockets — and a streaming service — is not a surprise. One thing seems certain: This is a different situation from when Tim Cook, Eddy Cue and companypaid $3 billion for Beats two years ago. Then, it was acquiring several executives, including Dr. Dre and Jimmy Iovine, plus the Beats Music team and a hardware business that was selling lots of expensive headphones. Tidal, on the other hand, has much less to offer: Tidal has about four million paying subscribers, according to the WSJ. (For context, Apple Music has 15 million.) Those can’t automatically be moved over to Apple Music, but Apple should be able to persuade many of them to come over. It has whatever Jay-Z brings to the table for consumer marketing and artist relationships. Perhaps most importantly, a deal would take Tidal off the market as a competitor for artist exclusives, which have created much of its buzz. This presumably means Apple wouldn’t have to worry about not being able to stream the new Beyoncé album, for example. (Though Tidal’s artist and label deals will likely expire upon acquisition, as is typical.) Apple also probably doesn’t have much competition for this deal, so it would be in a strong position. Samsung, the most logical buyer, walked away from its earlier talks with Tidal, according to a source close to the deal. Spotify can’t afford it. Google, which also owns a streaming service, could possibly also be interested for similar reasons as Apple. All this is worth something, but not a ton.

• Oracle ordered to pay HP $3 billion in Itanium case: A California jury ordered Oracle  to pay Hewlett-Packard $3 billion in damages in a case over HP's Itanium servers, an Oracle spokeswoman said on Thursday. Oracle said it would appeal the verdict. The Itaniuum processor is made by Intel. Oracle decided to stop developing software for use with HP's Itanium-based servers in 2011, saying that Intel made it clear that the chip was nearing the end of its life and was shifting its focus to its x86 microprocessor. But HP said it had an agreement with Oracle that support for Itanium would continue, without which the equipment using the chip would become obsolete."HP is gratified by the jury's verdict, which affirms what HP has always known and the evidence overwhelmingly showed," John Schultz, executive vice president and general counsel of Hewlett Packard Enterprise, said in an e-mailed statement, saying that Oracle's decision to stop the software development "was a clear breach of contract."

Daily Tech Snippet: Tuesday, May 10

• Report claiming bias in Facebook 'trending' topics sparks social media outcry: Facebook workers have often omitted conservative political stories from the website’s "trending" list, the technology news site Gizmodo said on Monday in a report that sparked widespread comment on social media. An unnamed former Facebook employee told Gizmodo that workers "routinely suppressed news stories of interest to conservative readers," according to Gizmodo, while "artificially" adding other stories into the trending list. Facebook told Reuters on Monday that there are "rigorous guidelines in place" to maintain neutrality and said that these guidelines do not prohibit any news outlet from appearing in trending topics. Facebook did not respond directly though to questions about whether employees had suppressed conservative-leaning news. "These guidelines do not permit the suppression of political perspectives. Nor do they permit the prioritization of one viewpoint over another or one news outlet over another," a spokesperson for Facebook said. The report alarmed some social media users, with several journalists and commentators criticizing Facebook for alleged bias. "Aside from fueling right-wing persecution, this is a key reminder of dangers of Silicon Valley controlling content," tweeted journalist Glenn Greenwald. Well, you go to Hell, Facebook," tweeted Kyle Feldscher (@Kyle_Feldscher), a reporter at the Washington Examiner, a conservative-leaning publication. "For anyone who cares about press freedom, this is frightening stuff," tweeted Bloomberg Editor Bill Grueskin (@BGrueskin), with a link to Gizmodo's story.

• As Lending Club Stumbles, Its Entire Industry Faces Skepticism: Renaud Laplanche and his crew steered a 105-foot racing boat through New York Harbor one day last spring, its towering sails ripping across the water at 30 knots. An accomplished sailor and founder of Lending Club, Mr. Laplanche was hosting executives from hedge funds, Goldman Sachs and other banks — part of his effort to win over Wall Street on his plans to upend traditional banking with a faster, more democratic form of lending. He already had endorsements from Lawrence H. Summers, the former Treasury secretary, and John Mack, the former chief of Morgan Stanley, who joined his board. At Lending Club’s initial public offering in December 2014, the company was valued at over $8 billion. But on Monday, Lending Club announced that Mr. Laplanche had resigned after an internal investigation found improprieties in its lending process, including the altering of millions of dollars’ worth of loans. The company’s stock price, already reeling in recent months, fell 34 percent. The company’s woes are part of a broader reckoning in the online money-lending industry. Last week, Prosper, another online lender that focuses on consumers, laid off more than a quarter of its work force, and the chief executive said he was forgoing his salary for the year. Marketplace lenders like Lending Club have created easy-to-use websites that match consumers and small businesses, hoping to borrow a few thousand dollars, with individuals or Wall Street investors looking to lend money. Freed from the costs of brick-and-mortar branches and federal regulations requiring that they reserve money against their loans, marketplace lenders have been able to grow quickly and with fewer expenses. The process is almost entirely online, with loans approved in days rather than the weeks a traditional bank might take. While marketplace loans account for less than 1 percent of the consumer loans in the United States, a recent report by the investment bank Jefferies said that in some segments — like installment loans — the new lending companies account for more than 10 percent of the market. But in the first quarter, lenders like Lending Club, Prosper and OnDeck Capital had difficulty convincing investors that their business models are sound. Wall Street’s waning demand for loans exposed the Achilles’ heel of marketplace lending. Unlike traditional banks that use their deposits to fund loans, the marketplace companies discovered how fleeting their funding sources can be.

• Researchers say computer screens change how you think about what you read: You probably spend a lot of time staring at screens -- but all that computer time may be making you miss the big picture, new research has found. Reading something on a screen -- as opposed to a printout -- causes people to home in on details and but not broader ideas, according to a new article by Geoff Kaufman. a professor at Carnegie Mellon, and Mary Flanagan, a professor at Dartmouth.  "Digital screens almost seem to create a sort of tunnel vision where you're focusing on just the information you're getting this moment, not the broader context," Kaufman said. The article is based on a series of studies involving a total of more than 300 participants that were carried out while the two researchers worked together at Tiltfactor, a Dartmouth game design lab. The studies covered in the latest article were prompted by earlier research from Kaufman and Flanagan that found players using the iPad version of a disease prevention strategy game struggled with long-term strategy much more than those playing a physical copy of the game.

• Zenefits Was the Perfect Startup. Then It Self-Disrupted: Zenefits makes online software that automates health insurance, payroll, and other essential office drudgery—kind of a human resources version of TurboTax. It’s not a sexy idea, but with 6 million small businesses in the U.S., it’s enormously useful. The company was founded in 2013 by Parker Conrad, who realized he could streamline small businesses’ managerial needs, saving them hundreds of hours of mind-numbing paperwork—not to mention the cost of staffing an HR department—by putting everything online. Conrad was known to be a little frenzied and disorganized but fiercely intelligent. “From an investment philosophy … we look for the magnitude of the genius, as opposed to the lack of issues,” says Andreessen’s founding partner Ben Horowitz. “And in a way, [Conrad] was like the prototype.” Conrad had no background in health insurance but quickly learned the intricacies of the business as well as any veteran. “If you’re an insurance broker,” he said at the TechCrunch Disrupt conference in 2013, “we’re going to drink your milkshake.”  Then In California, they found, some of the sales team used Conrad’s macro to systematically cheat on the state’s training course, which included a section on ethics. “As far as a company doing what Zenefits has done, I don’t know that we have seen this before,” says Nancy Kincaid, press secretary for the California Department of Insurance, which has also opened an investigation. In March, Massachusetts’ division of insurance opened a third. Zenefits confirms that other states have since followed but won’t say which ones or even how many. Sacks became CEO and is guiding Zenefits through its crisis cleanup. He has banned alcohol at the office and changed the company motto from “Ready. Fire. Aim.” to “Operate With Integrity.” In February the company laid off 250 employees, including the enterprise team. Sales Vice President Blond, Semaan’s boss, and any executive or manager known to have helped disseminate the macro are also gone. Zenefits says it has self-reported the findings of its internal investigation to all 50 states and is working with those that have opened formal inquiries. Fidelity Investments, which owns a stake, has slashed its valuation of Zenefits from $4.5 billion to less than $2 billion. There are rows of empty desks at the San Francisco office; the company plans to downsize from four floors to three. The Star Wars-themed conference rooms will soon be renamed after inspirational entrepreneurs. Kegs have been replaced with cold-brew coffee. The stairwells are condom-free. Zenefits might also survive for the one reason that made its product so appealing to business owners in the first place: Shopping for health insurance remains really frustrating. The company says it now has 20,000 accounts. “As long as their problems don’t affect our company, we’ll stay,” says Todd Harmond, vice president for finance and operations of the e-book service Scribd, which uses Zenefits to offer Kaiser Permanente and Anthem health insurance plans to its 85 employees. “Unless something else goes really wrong with Zenefits, we’ll stick with them for a while,” says BlogMutt’s Yates. “It’s too much of a hassle to switch.”

Daily Tech Snippet: Monday, February 29th

• Morgan Stanley fund marks down Flipkart stake value by 27%: A mutual fund investor in Flipkart Ltd, India’s largest e-commerce firm, has slashed the value of its holdings by as much as 27%, the latest indication that the investor rush of the past two years into Indian startups has led to unsustainable valuations.Morgan Stanley Institutional Fund Trust valued its stake in Flipkart at $58.9 million as of 31 December, down from $80.6 million in June 2015. The company reported the number late Friday in a filing with the Securities and Exchange Commission, the US stock markets regulator. Morgan Stanley Institutional Fund Trust also cut the value of its stake in other high flying startups including file storage company Dropbox Inc. and data analytics company Palantir.Flipkart was valued at $15 billion when it received $700 million from Tiger Global Management, Qatar Investment Authority and other investors in June. That was its fourth round of fund raising in a year. Its valuation shot up roughly 5 times from $2.5-3 billion in May 2014. Morgan Stanley’s latest estimate implies that the mutual fund currently values Flipkart at $11 billion. Mint reported on 4 February that China’s Alibaba Group is in early talks to buy a stake in Flipkart and increase its holding in Flipkart rival, Snapdeal. The talks are at a very initial stage and the likelihood of a deal is a function of Flipkart’s willingness to offer a discount on its current valuation of $15 billion, Mint had reported then. There are not too many takers for India’s top e-commerce firms at their current valuations, prompting both Flipkart and Snapdeal  to approach Alibaba Group for cash. Early last year, Flipkart set a target of generating annualized gross merchandise value (GMV) of $8 billion by December. However, the company’s current average monthly annualized GMV is roughly $5 billion, Mint reported on 17 February. This number, which includes sales at Flipkart’s unit Myntra, indicates Flipkart missed its internal sales target.

• In ‘Strategic Refocus,’ Troubled Zenefits Lets 250 Employees Go: Zenefits, the troubled benefits software company that three weeks ago fired its founding CEO, said today that it has laid off 250 employees, mostly in its sales recruiting organization. In a memo to employees, CEO David Sacks said the move signals an intention to “rebuild in line with our new company values.” Zenefits, which sells employee health insurance plans alongside free software to administer those plans, was been rocked by disclosures that many of its employees are not properly licensed to sell insurance. The job cuts amount to about 17 percent of the Zenefits workforce. The company has until recently been considered a Silicon Valley high-flyer, having raised $500 million from investors at a valuation of $4.5 billion. From an email from new CEO David Sacks: "We are reducing our headcount by roughly 250 employees, or about 17 percent of total employees. These changes are almost entirely in the Sales organization, with about a dozen employees in Recruiting. Within the Sales organization, we are eliminating the Enterprise team (although some members will be offered other roles). We are also making a large reduction in Sales Development Representatives (SDR), the organization that prospected for the largest accounts.I want to make clear that this is a reduction in force (RIF), meaning that we are not cutting these jobs for performance reasons. We are letting go of many great people today, and it is not their fault. It is no secret that Zenefits grew too fast, stretching both our culture and our controls. This reduction enables us to refocus our strategy, rebuild in line with our new company values, and grow in a controlled way that will be strategic for our business and beneficial for our customers."

• IHOP Is Releasing Special Snapchat Geolocation Filters, but You Have to Visit the Restaurant to Use Them - The Geo-fencing feature is all about engagement: IHOP today announced a Snapchat campaign that targets patrons inside its restaurants. To push its Double-Dipped French Toast, the all-day breakfast brand is essentially using the same custom geo-filters Snapchat introduced to the masses on Monday. But it's working directly with the Los Angeles social app to serve the ad just to IHOP customers. IHOP and Snapchat developed what they are calling "chain geo-filters," location-based dynamic art that can be added to photo and video snaps. When using the app at a restaurant, customers who take a snap will be able to swipe to reveal IHOP-themed creative overlays. Kirk Thompson, IHOP's vp of marketing, told Adweek that his team quietly released its custom Snapchat filter a few days ago, and it's already garnered 3 million views. On why the new promotion is only zeroing in on people already in stores, he explained, "IHOP receives Snapchats from users every day, a lot of them taken while in our restaurant. Introducing customized filters was a great way to further engage with our guests and at the same time extend our brand message when they share that content with their friends."

Daily Tech Snippet: Thursday, February 18

• Zenefits Scandal Highlights Perils of Hypergrowth at Start-Ups: Zenefits may be among the first of several cautionary tales to highlight a sobering lesson: For a start-up, growing too quickly can produce just as spectacular a failure as growing too slowly. Zenefits is a three-year-old company that makes software for small businesses. In its short life span, it has been called both the most unsexy company in tech, and one of the most promising.Its investors have argued that Zenefits, which makes money by acting as a health-insurance brokerage firm for its customers, has the potential to cut the red tape that small businesses have to battle to provide benefits for their employees.These grand promises were bolstered by Zenefits’ early growth. Its annual recurring revenue — an accounting measure preferred by subscription-based software companies — reached $1 million by the end of 2013, the year Zenefits was founded. Recurring revenue hit $20 million by late 2014, and was projected to reach $100 million by late 2015. The exponential growth was catnip to investors. The start-up raised $500 million last year at a $4 billion valuation, one of the largest financing rounds in a year of mega-fundings. At one point, Andreessen Horowitz, Silicon Valley’s pre-eminent venture firm, had invested more in Zenefits than in any other company. In total, Zenefits has raised about $581 million. Then, last week, poof. Zenefits announced that Parker Conrad, its co-founder and chief executive, had resigned. In emails to employees, David O. Sacks, the former chief operating officer and new chief executive, explained that Mr. Conrad had overseen a company that had become derelict in its culture and ethics. Zenefits has sought to paint the executive changes as a new beginning. One person close to the company said when Mr. Sacks briefed employees on Mr. Conrad’s exit last week, there were celebrations and tears of relief at the San Francisco headquarters of Zenefits.  Yet the story is more complicated than the single instance of a founder’s misdeeds. Zenefits’ recklessness seems to have been merely the worst symptom of a larger sickness that infected the company, according to investors, former employees and others who worked with the management team (and who all requested anonymity because no one in Silicon Valley wants to be seen as kicking a start-up when it’s down).  That sickness: Zenefits was a company consumed by impossible expectations. In return for fund-raising at a stratospheric value, Mr. Conrad promised the moon to investors. Then, to reach the moon, he began to transform a tiny start-up into a mighty rocket ship — only to watch it careen out of control as it stretched to accomplish the impossible. Though many noticed trouble, neither Mr. Conrad, nor the board of directors, nor anyone else in management could afford to stop, take a breath and fix the problems. Growth was the only imperative.

• Cybersecurity concerns - Why US Naval Academy students are learning to sail by the stars for the first time in a decade: batteries run out, systems get hacked, and even advanced technology can be balky. In a pinch — or in a war — sailors need something to fall back on. And stars and sextants have been working pretty well for hundreds of years. So the Naval Academy started teaching its sailors how to navigate ships by looking to the heavens again this academic year. The training was dropped altogether in 2006. “I thought that we had computers and all that for navigation,” Hogan, 20, a Charleston, S.C., native said this week during a class on the subject. But amid concerns about cyberattacks and new weapons that can shut off the electricity of a ship or a plane, the Naval Academy made celestial navigation a requirement for third-year students. “Redundancy is the best policy,” said Lt. Alex Reardon, who taught three sections of the class. Especially because, when it comes to a Navy ship on the open seas, “we’re typically alone in what we do.” That could be a major problem in the event of a cyberattack, said Salvatore Mercogliano, an assistant professor focused on naval history at Campbell University and a former merchant mariner. During World War II, the U.S. began using land-based radio beacons known as the LORAN system to help guide ships. And the space race helped further celestial navigation’s decline: The Navy sponsored the development of the first operational satellite navigation system, dubbed TRANSIT, which went into active service in 1964 — providing navigation assistance for naval submarines and surface vessels. But TRANSIT was retired in the mid-’90s after the Air Force completed the modern GPS system, which uses dozens of satellites circling the globe.

• Amazon expanding deliveries by its 'on-demand' drivers: Amazon.com Inc (AMZN.O) is quietly inviting drivers for its new "on-demand" delivery service to handle its standard packages, as the online retailer known for low prices and razor-thin profit margins looks to speed up delivery times and tamp down its growing multi-billion dollar logistics bill.The move, which has not been announced publicly, is the latest sign that the world's biggest e-commerce company wants to control more of its own deliveries. Media reports have said the company plans to lease its own fleet of jets, and CEO Jeff Bezos eventually wants to use drones to get packages to customers. Amazon outlined details of its latest plan over the last few weeks in an email to contract drivers who deliver parcels for Amazon Flex, a program launched last year to handle speedy deliveries of common household goods to customers using Prime Now, a mobile app that comes with Amazon's popular $99-a-year Prime membership. They are not Amazon employees. If the gambit works, industry analysts said it could help Amazon contain its shipping costs, which grew more than 18 percent to $11.5 billion last year. It might also create a logistics network to compete with UPS and FedEx.

• Blippar’s New Augmented Reality App Is Supposed to Recognize Any Object You Point It At. Augmented reality app Blippar has been around since 2011, but until recently it focusedmostly on advertising and content for brands: Point your Blippar smartphone app at a bold “B” embossed on the pages of a magazine or a bottle of ketchup and more information would pop out on your phone’s display. But it’s safe to say that augmented reality is coming into a new phase: The contextual information being supplied is getting smarter, and people are gradually becoming more aware of the capabilities of AR and virtual reality (some are even excited to wear headsets, if you can believe it). So Blippar, in an effort to evolve along with the rest of the AR world, has just launched a new version of its smartphone app that is supposed to recognize literally any object you point at it — whether it has been “tagged” with an AR code or not. Blippar co-founder and CEO Ambarish Mitra showed off the new version of the mobile app today at the Code/Media conference at The Ritz-Carlton, Laguna Niguel in Dana Point, Calif. He pointed the app at a variety of random objects — a magazine, a salad and an apple — to demonstrate how the app’s image recognition capabilities work. “This is a really big change in our business model,” Mitra had said in an interview before the conference kicked off. “Initially, AR was about very static image recognition. You store images of Starbucks or Coca-Cola or General Mills in our database, and the images match. But now you’re able to analyze any environment in the world in real time, over a 3G connection.” Mitra said over the past year and a half he has moved his technology team from the U.K. to Mountain View, Calif., to focus on machine learning, which is all the rage in Silicon Valley right now, with everyone from small upstarts to behemoths like Google trying to crack the code on how to make accurate predictions from large sets of data. (Google, actually, has an app that works similarly called Google Goggles, but it works when you point the app at a QR code or a famous landmark or something else recognizable — not necessarily everyday objects.) In short, this is not an easy thing to do. In fact, ahead of the event, one of our staffers tried it out by pointing the app at his dog, and it thought the pup was a goat. Mitra has said that, right now, the technology has elementary capabilities, like the brain of a six-year-old; it can recognize “car,” but not “Prius,” or it can recognize an item of clothing, but not the label. However, with machine learning, the app should be able to get to the level of an 18-year-old pretty quickly, Mitra said, in terms of its recognition abilities. And during the onstage demo, it did properly identify a pug named Milton as a dog.

Daily Tech Snippet: Wednesday, February 17

• Virtual Reality Companies Look to Science Fiction for Their Next Play: Tech companies have spent years developing better, cheaper devices to immerse people in digital worlds. Yet they are still figuring out how to make virtual reality the kind of technology that people cannot live without. So for inspiration, they are turning to science fiction. At Oculus, a leading virtual reality company, a copy of the popular sci-fi novel “Ready Player One” is handed out to new hires. Magic Leap, a secretive augmented reality start-up, has hired science fiction and fantasy writers. The name of Microsoft’s HoloLens headset is a salute to the holodeck, a simulation room from “Star Trek.” “Like many other people working in the tech space, I’m not a creative person,” said Palmer Luckey, 23, a co-founder of Oculus, which was bought by Facebook for $2 billion in 2014. “It’s nice that science fiction exists because these are really creative people figuring out what the ultimate use of any technology might be. They come up with a lot of incredible ideas.” Those ideas are especially relevant now, as some of the biggest technology companies are nearing a major push of a new generation of virtual reality products. In the next few months, virtual reality headsets from Oculus, Sony and HTC go on sale. Venture capital money is pouring into the industry. But how people will interact with the imaginary worlds remains largely unknown territory. And that is where science fiction comes in. Science fiction is shaping the language companies are using to market the technology, influencing the types of experiences made for the headsets and even defining long-term goals for developers. “Science fiction, in simplest terms, sets you free,” said Ralph Osterhout, chief executive of the Osterhout Design Group, which builds augmented reality glasses. Techies do not need any encouragement from their employers to read or watch science fiction, long a pillar of geek culture. The genre has influenced many corners of technology, from smartphones to robotics to space exploration. But there is something unique about the interplay between science fiction and virtual reality, a technology that is essentially an instrument for fooling people into believing they are someplace — and often someone — they are not. Virtual reality is a medium, like television or video games, that can borrow liberally from the virtual worlds experienced by fictional characters. Magic Leap, based in Dania Beach, Fla., and which counts Google as one of its big investors, has gone even further than most companies by hiring three science fiction and fantasy writers on staff. Its most famous sci-fi recruit is Neal Stephenson, who depicted the virtual world of the Metaverse in his seminal 1992 novel “Snow Crash.” In an interview, Mr. Stephenson — whose title is chief futurist — declined to say what he was working on at Magic Leap, describing it as one of several “content projects” underway at the company.

• How to write emails if you want people to actually respond:  Having trouble getting replies to your emails? Apparently, one of the best ways to get a reply is to write as if you're 9 years old. That's according to the makers of the Boomerang mail plug-in, who found that writing at a third-grade reading level seems to be the right level of complexity for the average message, after mining their user data for information on what kind of writing actually gets replies. Here's a full list of the tips from the makers of Boomerang: Use shorter sentences with simpler words. A 3rd grade reading level works best. Include 1-3 questions in your email. Make sure you include a subject line! Aim for 3-4 words. Use a slightly positive or slightly negative tone. Both outperform a completely neutral tone. Take a stand! Opinionated messages see higher response rates than objective ones. Write enough, but not too much. Try to keep messages between 50-125 words.

• Twitter not reliable predictor of election outcomes: study: In politics, it is said that all press is good press. But that does not necessarily apply to tweets, according to a study released this week. In fact, it is difficult to predict the outcome of an election based on the amount of Twitter buzz a candidate gets, according to the study from the Social Science Computer Review. The study, whose relevance to this year's U.S. election was sharply disputed by Twitter, focused on the 2013 German federal election and found that Twitter data was a more accurate measure of the level of interest in candidates rather than the level of support they will receive. The daily volume of Twitter messages referring to candidates or parties fluctuates heavily depending on the events of the day - such as televised leaders’ debates, high-profile interviews with candidates - or the coverage of political controversies and scandals," the study said. The data also showed that Twitter users did not necessarily reflect the demographics of the population as a whole. In the United States, social media platforms like Twitter and Yik Yak are often more popular among millennial voters. A Twitter spokesman argued the study was not relevant to the 2016 U.S. presidential election. "I'd advise passing the next time someone sends along German Twitter data from three years ago in the context of the 2016 U.S. election," said Nick Pacilio, a spokesman for the social media site's government and news department. Pacilio cited a Time magazine website report that showed Twitter chatter favored the winning candidates, Democrat Hillary Clinton and Republican Donald Trump, in the Iowa caucuses this month.

• After Zenefits, Will VCs Rein in Their Unicorns? The $4.5 billion benefits startup moved fast and broke things—maybe even the law: In a Feb. 1 meeting at its blandly luxurious Sand Hill Road offices, venture firm Andreessen Horowitz urged the chief executive officer of one of its most prized and promising companies to resign. Zenefits makes software designed to simplify and automate such HR tasks as health insurance signups. At three years old, it’s valued at $4.5 billion and is one of the fastest-growing business software companies ever. Under founding CEO Parker Conrad, it also made software that allowed its employees to skirt state regulatory requirements, the company now admits. Days after Chief Operating Officer David Sacks gave that information to Lars Dalgaard, an Andreessen partner who sits on Zenefits’ board, Conrad was out, say three people familiar with the matter. At Conrad’s suggestion, they replaced him with Sacks, a Silicon Valley fixture who’s worked at Microsoft and co-founded Yammer, the business chat company. In Zenefits’ early days, the people say, Conrad created a deceptive program called “the Macro,” which made it look like employees were watching legally mandated online training when they weren’t. Workers who claimed to have completed the training may have been well short of the required 52 hours. Conrad used it himself, the people say. California regulators are investigating Zenefits’ use of the Macro, as well as whether its employees had licenses when they started selling insurance. On Feb. 8, Sacks announced Conrad’s resignation in an internal e-mail. “For us, compliance is like oxygen. Without it, we die,” Sacks wrote. “Many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong. As a result, Parker has resigned.” Conrad declined to comment. Zenefits’ financial issues were discussed during the Feb. 1 board meeting. Andreessen co-founder Ben Horowitz, who isn’t a Zenefits director, attended. But two people close to the post-Conrad Zenefits say the Macro, not sales misses, was responsible for the CEO’s resignation. At the meeting, Conrad tentatively agreed to resign, relinquish his board seat, and make Sacks CEO, say three people close to the company. People close to Conrad now say he’s agitated by how Sacks’s very public letters to employees have characterized his departure and blamed him for Zenefits’ compliance problems. The accusations that unlicensed Zenefits brokers were selling insurance became public on Nov. 25 when BuzzFeed reporter Will Alden began publishing articles on the matter. California and Washington state are investigating Zenefits’ sales. The company says it’s cooperating with those probes and conducting its own, and it’s hired PricewaterhouseCoopers for a third-party assessment. Sacks declined to comment. Two people close to Sacks say he first began to worry about the Macro’s possible criminal implications in late January, after receiving new information from the internal investigation. To verify that an insurance sales applicant has completed the 52 hours of training, California requires a signature that carries a perjury charge if violated.

• After Nearly Going Pop, Google’s Project Loon Heads Into Carrier Testing This Year:  Google’s “moonshot” to deliver Internet to remote parts of the world using high-flying balloons has survived a brutal development phase, and will enter testing with carriers in Indonesia and elsewhere this year. But Project Loon almost didn’t make it. Google struggled to find a balloon design that could be inexpensive and durable enough to not only float but navigate to predictably travel through the stratosphere. “We busted a lot of balloons,” said Astro Teller, head of Alphabet’s X unit (formerly Google X), showing off some of the designs to the crowd at the annual TED conference, which kicked off Monday in Vancouver. There were shiny balloons and round balloons and balloons that looked like giant pillows. But eventually the company found a design that could be made cheaply and still navigate precisely. That balloon, Teller said, last year travelled around the world 19 times over 187 days. “So we are going to keep going,” Teller said, noting that what was once a slow connection has advanced enough to deliver about 15 megabits-per-second Internet access, which he pointed out is enough to deliver video — such as a live broadcast of his TED talk. The next step will be seeing how it works delivering real Internet service to consumers. In addition to Indonesia, Alphabet has reached a deal with the Sri Lankan government to exchange access to needed radio frequency spectrum for a stake in the project. Alphabet is in talks with carriers around the world, Teller said, adding that the prospect is very real and that a further five billion people will have Internet access within five to 10 years. On the TED stage, Teller also talked about two moonshots that Google abandoned. The first, he said, was vertical farming, which would have used one-tenth the water and one one-hundreth of the land demanded by traditional agriculture. But although Google grew some lettuce, it never managed to grow staple crops like grain or rice. Another effort would have allowed landlocked countries to ship goods far more cheaply using a rocket-like air cargo ship that could land without a runway. The idea itself might have worked, Teller said, but just building the first unit would have cost $200 million. Even for a company with Google’s riches, that proved too much to gamble. “If there is an Achilles’ heel in one of our projects, we want to know it right now,” Teller said.

Daily Tech Snippet: Tuesday, February 9

• Facebook Loses a Battle in India Over Its Free Basics Program: For years, Mark Zuckerberg has had a grander vision than just connecting the more than one billion people who already use Facebook: He wants to connect the entire world. That effort hit a major roadblock on Monday, when Indian regulators banned free mobile data programs that favor some Internet services over others. The regulations, issued after months of intense public debate over how to extend the Internet to India’s poorest citizens, effectively block Facebook’s controversial Free Basics program in the country. Free Basics offers people no-fee access to a text-only mobile version of the Facebook social network, as well as to certain news, health, job and other services. Facebook describes the program as a way to introduce the poor and the technologically unskilled to the potential of the Internet. Free Basics came out of Mr. Zuckerberg’s program for universal Internet access, which was started in 2013 under an initiative called Internet.org. The idea was to simplify phone applications to run more efficiently and to offer these apps to users in developing countries. Half a dozen of the world’s tech giants, including Samsung, Nokia, Qualcomm and Ericsson, agreed to work with Facebook as partners on the initiative. Free Basics is now in 38 countries, from Indonesia to Panama. Facebook is investing heavily in other parts of the project, including experiments to deliver cheap Wi-Fi to remote villages and to beam Internet service from high-flying drones. In India, where Facebook already has at least 132 million users, the company began offering Free Basics last year through Reliance Communications, a local mobile phone carrier. A Reliance spokesman could not be reached for comment. The program quickly became the target of critics, who said that it was an attempt to steer unsophisticated new Internet users to Facebook and other services that were working with the company. They argued that Free Basics and other so-called zero rating programs, which are a set of apps or sites that a mobile operator or I.S.P. does not charge customers to use, violated the concept of net neutrality. Facebook embarked on a blitz of paid lobbying and advertising to promote Free Basics, spending millions of dollars in media campaigns to convince locals its offering would be positive for the population. The company ran special banners in the Facebook news feeds of Indian users urging them to petition the government to allow Free Basics. Mr. Zuckerberg personally lobbied against the new rules, including writing an opinion column in The Times of India. Experts said that campaign may have had an adverse effect on Indian thinking. Locals were wary of the company’s unknown long-term plans for advertising or other parts of Facebook’s business.

• Job Site Hired Raises $40 Million and Forecasts Profit by 2017: When Mehul Patel, Hired Inc.'s chief executive officer, began talking to venture capitalists last year for the company's latest fundraising round, they were no longer interested in hearing about market potential or user growth. Investors wanted to know when the job recruitment website would become profitable. Patel tailored his pitch to highlight the ways he'd made his startup run more efficiently while showing that Hired would roughly triple annual revenue in 2016. He forecast a profit by early 2017. "The conversation had really changed from a year ago," he said. Hired faces many larger and more established competitors. CareerBuilder.com, Indeed Inc., LinkedIn Corp., and Monster Worldwide Inc. each control segments of the online jobs market. Monster generated revenue of $770 million in 2014. Although LinkedIn had a rough time last week, the site generated $862 million in just its last quarter. Hired said it has a 2016 revenue "run rate" of $100 million. (The number is generally calculated by using the performance during one period as the basis to project a full year.) Hired is cost-free for job seekers, who create profiles listing their skills and backgrounds. About 4 percent of applicants are accepted. Recruiters from companies such as American Express Co., Comcast Corp., and Facebook Inc., pay to target those high-skill candidates and send them offers via e-mail. Since it began in 2012, Hired has expanded from tech workers in San Francisco to sales, marketing, and other professionals in 15 cities. The company has acquired two small startups in Paris and Melbourne to help it continue expanding internationally. Patel said he's constantly looking for ways to cut costs. The startup has moved three times in as many years because it was unwilling to commit to a long-term lease. The chairs at the company's San Francisco office are mostly from Ikea. Patel said he bought a Herman Miller model for his home office from a startup that shut down during the first dot-com crash. "That's still my office chair," he said. "It reminds me not to let things get too crazy."

• Sacked! Twitter and Facebook Experience a Super Bowl Down Round: Sunday’s Super Bowl was, to put it bluntly, pretty boring. That was reflected on the Internet as well: Despite it being the 50th Super Bowl and most likely the last game for future Hall of Fame quarterback Peyton Manning, both Facebook and Twitter saw significantly less Super Bowl chatter than they did last year. Facebook reported that 60 million people created some 200 million posts, comments and “likes” throughout the game. Those numbers are down from last year, when 65 million people generated 265 million posts, comments and likes. That’s about 25 percent less activity for those keeping score. Twitter had it even worse. Much worse, in fact. Roughly 3.8 million people created 16.9 million tweets during the game, according to Nielsen. That’s down from 25.1 million tweets sent during last year’s game, a drop of roughly 33 percent*. In fact, Twitter didn’t even share its total tweet metrics this year like it did in 2015. The company also didn’t immediately reply to our request for comment on Nielsen’s numbers. Yes, a lousy game doesn’t help. But a dip like this is not a great sign for either platform, both of which offered new features this year intended to increase engagement for a game just like this. On Twitter, that feature is Moments, a curated stream of tweets around a particular event. On Facebook, it’s Sports Stadium, a new area of the app dedicated to following live sporting events and talking with your friends about them. (The new feature had some technical difficulties Sunday afternoon.) Twitter CEO Jack Dorsey will be hit hardest from a poor showing like this. User conversations around live events are where Twitter is supposed to dominate. This kind of regression is exactly why the company stock is at an all-time low; investors are concerned about slowing user growth and the resulting engagement. Those same investors are bracing for the company’s earnings this week, and it could have used a nice Super Bowl boost to highlight on the earnings call. Apparently it’ll need to find something else. 

• Zenefits CEO Parker Conrad Out Amid Compliance Concerns:  There’s a big shuffle happening at Zenefits today — with Zenefits CEO Parker Conrad exiting the company and COO David Sacks taking over. Conrad is also stepping down as a director of the company. In an email to employees, Sacks noted that compliance issues that have plagued the company contributed to Conrad’s exit. Zenefits has hit significant turbulence, including missing revenue targets according to a Wall Street Journal report, and also running into issues with regulators. Regulatory issues have plagued the company, as has been reported by BuzzFeed. Zenefits allowed unlicensed brokers to sell health insurance, leading to at least one commissioner to investigate the company in Washington State, according to a BuzzFeed report. Most recently, BuzzFeed reported 80 percent of the company’s deals in Washington State were done by unlicensed brokers.

• Verizon enlists AOL CEO to explore Yahoo deal: Bloomberg: Verizon Communications has given Tim Armstrong, chief executive officer of its AOL unit, a leading role in exploring a possible bid for Yahoo's assets, Bloomberg reported, citing a person with knowledge of the situation. Verizon, the largest U.S. wireless carrier, hasn't hired bankers to conduct an offer and there have been no formal talks, according to the report. Yahoo said last week that it would consider "strategic alternatives" for its core Internet business, even as it continues with its plan to revamp the business and spin it off. Yahoo's core business, which includes popular services like Yahoo Mail and its news and sports sites, could attract private equity firms, media and telecom companies or firms like Softbank, analysts had said. Verizon's Chief Financial Officer Fran Shammo said in December that the U.S. wireless carrier could look at buying Yahoo's core business if it was a good fit. Earlier this year, Verizon bought AOL Inc in a $4.4 billion deal to push into targeted advertising and mobile video. Verizon's shares were down 1.1 percent, while Yahoo's shares were down 4 percent in afternoon trading on Monday.

• Yelp posts smaller-than-expected loss; CFO to step down; Shares plunge: Consumer review website operator Yelp Inc reported a smaller-than-expected loss on Monday, but its shares slumped 11 percent, swept up in a broader selloff in the technology sector coupled with a weak adjusted EBITDA forecast. The company said results were released about 3 hours ahead of schedule during trading hours on Monday, due to an error by PR Newswire, leading to a spike in volatility in its shares. Yelp also said Chief Financial Officer Rob Krolik would step down later this year but did not elaborate. Krolik, who joined in 2011, will continue in his role until Dec. 15, 2016, or until a replacement is hired, the company said in a statement. Yelp's revenue rose about 40 percent in the fourth quarter, topping analysts' estimates, helped by the strength in its advertising business and a rise in mobile usage. Local advertising accounts in the quarter rose 32 percent to about 111,000, in line with estimates from market research firm FactSet StreetAccount. Revenue rose to $153.7 million from $109.9 million. Yelp reported a net loss of $22.2 million, or 29 cents per share, for the quarter ended Dec. 31, compared with a profit of $32.7 million, or 42 cents per share, a year earlier.

Daily Tech Snippet: Thursday, November 25

• Xiaomi's $45 Billion Valuation Seen `Unfeasible' as Growth Cools: Things were going so well for Xiaomi Corp. Customers were lining up, investors were swooning and the Beijing-based startup closed funding at a $45 billion valuation. That was last year. Now the high-flying smartphone maker is stumbling. Founder Lei Jun’s latest business, one of China’s most exciting startup stories of the past few years, is likely to miss its own goal of selling 80 million smartphones this year, according to two people with knowledge of its production plans. Suppliers also cut their internal targets for Xiaomi in anticipation of the shortfall, they said. Xiaomi’s falter shows the startup’s challenge in trying to maintain momentum after a meteoric ascent past Apple Inc. and Samsung Electronics Co. in China. Investors bought into the company’s story of youthful disruption and online sales, yet the subsequent lowering of China’s growth target and the copying of its sales strategy by rivals have neutralized Xiaomi’s first-mover advantage, putting its high price tag in doubt. "All those expectations of growth aren’t being realized, which now makes that $45 billion valuation unfeasible," said Alberto Moel, an analyst at Sanford C Bernstein in Hong Kong. "The argument was that their business is kind of like Apple and they’re growing very fast, but they’re no longer growing so fast and they’re not as good as Apple." Domestic shipments of Xiaomi smartphones, including its premium Mi 4 and more economical Redmi series, dropped 8 percent in the third quarter from a year earlier, its first-ever decline, according to researcher Canalys. IHS, another research firm, estimates that Xiaomi shipments dropped 3.9 percent, barely maintaining the lead over Huawei Technologies Co. That’s a big change from the bold growth projections used to justify Xiaomi’s tag as one of the world’s most-valuable technology startups. In March of last year, Lei predicted selling 100 million smartphones in 2015. Through the first nine months of this year, Xiaomi shipped about 53 million smartphones. With its optimistic forecast, Xiaomi secured $1.1 billion in December from investors including GIC Pte., All-Stars Investment Ltd. and DST. Xiaomi drew comparisons to Alibaba, the Chinese e-commerce company that months earlier held the largest initial public offering ever.

• Black Friday Deal or Dud? How to Shop Smart This Holiday Season: Black Friday, which has traditionally been the moment to flock to stores for steep discounts, and which has evolved to also include major online sales events for retailers like Amazon, Best Buy and Walmart, is not all that it is billed to be. We asked J. D. Levite, the deals editor of the product recommendations website The Wirecutter, for some data on just how beneficial the deals are on Black Friday — and the answer was not encouraging. Year round, Mr. Levite and his team track product prices across the web to unearth discounts on goods of all types, from gadgets to kitchenware. They also look at whether the product is high quality and durable based on their own testing and other reviews, and whether the seller or brand has a reasonable return or warranty policy. By those measures, Mr. Levite said, only about 0.6 percent, or 200 out of the approximately 34,000 deals online, which typically carry the same price tags inside retailers’ physical stores, will be good ones on Black Friday. “There are just more deals on that day than any other day of the year,” he said. “But for the most part, the deals aren’t anything better than what you’d see throughout the rest of the year.” There’s a smarter way to shop than relying on Black Friday. With the plethora of web tools now available, consumers can research online and then use trackers to follow product pricing for drops throughout the year. While it’s a time-consuming effort, the method is more precise for understanding pricing trends, both online and in stores. One useful tracking tool is Camel Camel Camel, which is geared toward users of the online retail behemoth Amazon. Using the Camel Camel Camel website, people can view a product’s price history on Amazon.com and then create alerts to receive an email as soon as the item’s price falls to a certain threshold. Over time, interesting trends emerge. One is that some product prices are raised in October, a few weeks before Black Friday. The prices are reduced again on Black Friday. Camel Camel Camel’s database also shows some items have predictable pricing patterns over the course of a year. A pair of bookshelf speakers made by Pioneer are typically $127, but that tends to drop significantly in August — to $60 in August 2014 and to $88 in August 2015, timed to the back-to-school season. This week, the same pair of speakers was again $127. In other words, there are times of year when different types of products decline in price — and Black Friday isn’t one of them.

• All In: Why Nikesh Arora Bet $483 Million on SoftBank's Future: It began late one night this year when he and Son were talking about people’s tolerance for risk and how it tends to decline over time. Arora took a chance as a kid by leaving India for the U.S. with only $200 in cash, but he had since gone on to a lucrative career. So Son prodded him. “Masa said, ‘How much risk appetite do you have?”’ Arora says. “‘Do you believe you can transform SoftBank into a company two, three, five times its size? Now is the time to take the risk.”’ A week later, Arora came back with a plan to buy 60 billion yen ($483 million at the time) in SoftBank shares, more than any insider purchase by an executive in Japan in at least 12 years, according to Bloomberg data. He would become the company’s second-largest individual shareholder and borrow heavily to do it. Arora says investors don’t yet appreciate what SoftBank is becoming. The company has been battered recently because of struggles at two major holdings, the China e-commerce powerhouse Alibaba Group Holding Ltd. and the U.S. wireless operator Sprint Corp. SoftBank is still valued at less than the public shares it owns, meaning investors deem its operating businesses practically worthless.Arora professes not to be worried. He says investors will come around once the company makes progress in reviving Sprint, lets Alibaba recover and demonstrates that it’s more than a Japanese telecommunications company with a spotty investment record.“I’m very relaxed,” Arora said. “I’m here for at least the next 10 years.”  Arora was hired last year after a decade at Google Inc. and promoted to president in June. Since then, he has been quietly building his own operation within SoftBank, an investment arm that will take stakes in technology companies around the world. Though SoftBank put money into startups for decades, including a tumultuous foray during the dot-com bust, the effort had dwindled in recent years to what Son called a “hobby” next to his wireless and broadband businesses. Arora is reviving the venture push and making it much more ambitious. He is hiring a team of 15 to 20 outsiders and plans to put about $3 billion into startups each year. Arora’s recruits, from companies such as Google and LinkedIn Corp., are hand-picked for the expertise they can offer startups in key areas like personnel, product development and acquisitions. He says SoftBank will hold a competitive advantage by operating at a financial strata few can reach. He plans to make five to 10 investments a year of $100 million to $1 billion. The idea is to back startups that have proven products and need to expand -- the rapid phase of growth Arora helped manage at Google.

• Morgan Stanley Said Struggling to Sell EBay Enterprise Deal Loan: Morgan Stanley is struggling to unload $640 million of loans backing the private-equity buyout of EBay Inc.’s enterprise business after investors shunned the debt, according to people with knowledge of the deal. The bank has been trying to sell the loans since mid-October and continues to hold the debt even after EBay said on Nov. 2 that the sale was completed. Morgan Stanley has discussed a steeper discount to lure buyers and has been probing investors in recent days about the price at which they may be willing to buy the debt, said the people, who asked not to be identified because the talks are private. One concern investors have raised is that the company’s projected earnings may be too optimistic. Buyout targets often make adjustments to forecast earnings, called add-backs, that can reduce a borrower’s leverage.

• HP Inc plunges after printer business underwhelms: Shares of HP Inc, which houses former Hewlett-Packard Co's legacy hardware business, plunged 16.3 percent on Wednesday after the company's lackluster results fueled concerns about its ability to weather a slowdown in the printer and PC markets. HP Inc's revenue from both its printer and PC businesses fell 14 percent each in the fourth quarter, their worst performance in the year ended Oct. 31, and forecast current-quarter profit below market expectations."Things got worse. Not only did they not get better - they got worse," said Shebly Seyrafi, an analyst at FBN Securities.HP Inc Chief Executive Dion Weisler called the printing business a "much greater challenge" than the PC business.The company has been cutting printer prices to tackle stiff competition, particularly from Japanese printer makers Canon and Epson.However, the price cuts, coupled with the effect of a stronger dollar, have reduced the value of income from overseas markets.Revenue from HP Inc's printer supplies such as ink cartridges and laser toner fell 10 percent this quarter. Supplies account for most of the profits for HP Inc.HP Inc's PC unit has been suffering as sales have been falling worldwide for several quarters and the launch of Windows 10 has so far failed to rekindle the industry."Ultimately I think (HP Inc), the way it's structured, it's going to be more of a sort of dividend yield play," said Jeffrey Fidacaro, an analyst.HP Inc's sibling, Hewlett Packard Enterprise, saw its shares rise as much as 8.5 percent on Wednesday, after it maintained its profit forecast for fiscal 2016.

• Zenefits Under Investigation For Allegedly Allowing Unlicensed Brokers To Sell Health Insurance: Cloud HR platform Zenefits may have allowed salespeople to illegally act as insurance agents in at least seven states. According to a BuzzFeed investigative report, the startup let unlicensed brokers sell health insurance, leading to at least one commissioner to investigate in Washington State. Those unlicensed solicitations go back to at least the summer of 2014, and the Washington State office of the insurance commissioner started looking at the potential violations earlier this year, according to the report. This is not the first time Zenefits has faced legal scrutiny for possible insurance violations. The Utah Insurance Department took the startup to task over claims it was illegally giving insurance software away for free. Regulators at the time said that the company violated local laws and that it was unfair to traditional insurance brokers. Utah legislators threw out the complaint and let Zenefits get back to business after both the Utah House and Senate overwhelmingly voted to let the startup continue operations. The broker license violation looks a bit more serious and could be considered a Class B felony, under Washington State law. Violators may be subject to a prison sentence of up to 10 years as well as face a $20,000 fine. According to the report, Zenefits execs may have known about the violations and were aware of the consequences, but were prompted to get sales agents licensed in the state only after learning of the insurance commission’s investigation. State records show 22 agents became licensed brokers just days after the report said Zenefits realized there was a state inquiry. The startup has since launched a “license management system” to help track which sales agents are properly licensed.

• Facebook’s Internet.org Now Available Throughout India: Internet.org, Facebook’s initiative to provide free Internet services in developing countries, is now available to all Indians through the Free Basics app on Reliance Communication’s network. The project is meant to give people in emerging economies easy access to the Internet, but has been hit by a slew of criticism. Reliance Communications is India’s fourth-largest telecom operator, with about 110 million subscribers as of June. According to its site, Free Basics will enable users to use Facebook and Facebook Messenger and access sites like Wikipedia, BBC News, Bing Search, Dictionary.com, and local news services. Detractors say that by making a handful of services available on its platform, Internet.org gives preferential treatment to its partners, therefore violating the tenets of net neutrality. In response, Facebook founder and chief executive officer Mark Zuckerberg said Internet.org will focus on offering basic services for free (hence the branding of its app) and is not meant to limit access to other providers. The company has also taken steps to make joining Free Basics easier to join for developers and other potential partners. This has done little to ameliorate critics who are concerned about the potential drawbacks of having a company as large and powerful as Facebook control what millions of new Internet users see. In addition to India, Free Basics is available in 30 countries throughout Africa, South and Southeast Asia, and Latin America.