Daily Tech Snippet: July 21, 2016

• Dollar Shave Club hit the jackpot when Unilever agreed to buy the online men's razor merchant for $1 billion. Other e-commerce startups such as Birchbox and Stitch Fix can't necessarily expect their own suitor to sweep in with such sweet deals. That's because the key to Dollar Shave Club's appeal is not so much its online prowess but the fact that it built a powerful brand in four years.  Dollar Shave Club upended the industry's traditional business model by offering a subscription service that sells blades for as little as $3 a month (including shipping and handling). The day Dollar Shave Club started selling subscriptions in March 2012, the company released a YouTube video starring founder Michael Dubin. He tells viewers the product is f***ing great, "so gentle a toddler could use it." The website crashed, but the blades sold out in six hours. The video has been viewed about 23 million times. The company reached $150 million-plus in sales in 2015, Unilever said in a press release announcing the deal. That despite the fact that the blades lack many of Gillette's high-tech enhancements. Few other e-commerce startups can claim to have built a brand so quickly. Unilever and P&G are masters at traditional marketing, mostly offline, but they struggle with the direct-to-consumer brand-building at which upstarts like Dollar Shave Club excel.

• Intel's slowing data center growth overshadows strong profit: Intel on Wednesday reported slower revenue growth at its data center business, which makes semiconductors used in high-end servers, overshadowing a better-than-expected quarterly profit. Shares of the world's largest chipmaker fell 3 percent in after-hours trading. Hurt by weak demand from enterprises, revenue at the highly-profitable unit rose 5 percent to $4 billion, but lagged the previous quarter's 9 percent increase and remained below Intel's annual target of low double-digit growth.Net revenue rose 2.6 percent to $13.53 billion, narrowly missing the average analyst estimate of $13.54 billion.Intel reported a better-than-expected profit as its cost-cutting begin to pay off. In April it announced plans to slash 12,000 jobs, or 11 percent of its global workforce, of which it said about half was already complete. Intel's forecast for $14.9 billion in current-quarter revenue topped the average analyst expectation of $14.63 billion. Net income fell to $1.33 billion, or 27 cents per share, in the second quarter, from $2.71 billion, or 55 cents per share, a year earlier

• Uber Investors Said to Push for Didi Truce in Costly China Fight: Uber Technologies Inc. investors have a message for management: It’s time to wrap up the costly fight in China. Several institutional investors are pushing the ride-hailing company to ink a partnership agreement with China’s market leader Didi Chuxing, according to people familiar with the matter, stemming the billions of dollars Uber is spending to expand in the region.Uber and Didi are bleeding cash in China as they fight for dominance in the world’s most populous country. Uber has said that it is spending at least $1 billion a year to expand its business in the country. Both are giving out incentives for drivers and free rides to compete for market share.Benchmark’s Bill Gurley -- an Uber investor and board member -- spoke briefly with Didi President Jean Liu at the Code Conference in Rancho Palos Verdes, California, a few months ago, according to a person familiar with the matter. Didi is in the lead on its home turf, with 14 million drivers signed up in 400 Chinese cities. Uber has set a target of operating in 100 cities this year. Uber set up a separate corporate entity to insulate its Chinese business, which has gathered local Chinese investors. Still, the parent company has also invested its own money, keeping the units financially intertwined. Among private technology companies, the rivals are giants. Uber, which was last valued at nearly $68 billion, says it has access to more than $11 billion in cash and equity. Didi, which was last valued at $28 billion, says it has more than $10 billion at its disposal in cash and equity.

• Strong demand from China buoys Qualcomm forecast: Qualcomm Inc forecast current-quarter profit largely above market estimates as it sees strong demand for its mobile chips in China and expects to sign more licensing deals. Shares of the company, which also posted a better-than-expected third-quarter profit, rose about 7 percent in extended trading on Wednesday.The company, whose chips are used in Apple Inc and Samsung Electronics Co Ltd smartphones, is focusing on its flagship mobile processors to regain the market share. Qualcomm expects to launch Snapdragon 821, an advanced and a faster version of Snapdragon 820, which powers Samsung Galaxy S7 and S7 edge smartphones."I think it is pretty straightforward...Samsung is back as their customer and...more people in China are ready to pay to license their technology...so it looks like the company is well positioned for the coming quarters," said Patrick Moorhead, an analyst with Moor Insights & Strategy.Revenue rose to $6.04 billion quarter ended June 26 from $5.83 billion a year earlier. Net Income attributable to Qualcomm rose to $1.44 billion, or 97 cents per share, from $1.18 billion, or 73 cents per share.

• EBay beats revenue estimate, bumps up forecasts: Online retailer eBay Inc reported better-than-expected quarterly revenue and raised its sales forecast for the year as efforts to revamp its online marketplace start to pay off. EBay shares were up 8 percent after the bell on Wednesday after the company's board also authorized an additional $2.5 billion stock buyback program. The company, which spun off PayPal last July, has tackled slowing growth by focusing on small business sellers, while offering a bigger selection of products. Gross merchandise volume, or the total value of all goods sold on its sites, was up 4 percent at $20.9 billion in the second quarter ended June 30, helped by strength in its U.S. business. The number of active buyers rose 4 percent to 164 million. The company's revenue also got a boost from robust sales at Stubhub, which won a 6.5 year revenue-sharing deal to resell tickets for the New York Yankees last month.The company's net income rose to $435 million, or 38 cents per share, in the latest quarter from $83 million, or 7 cents per share, a year earlier. Revenue rose 5.7 percent to $2.23 billion, ahead of analysts' average estimate of $2.17 billion. Up to Wednesday's close, shares of the San Jose, California-based company had fallen 5.6 percent in the past 12 months.

Daily Tech Snippet: Wednesday, April 27

• Apple's nine-year iPhone juggernaut stops with first sales decline since 2003: Apple on Tuesday posted its first-ever decline in iPhone sales and its first revenue drop in 13 years as the company credited with inventing the smartphone struggles with an increasingly saturated market. The company's sales dropped by more than a quarter in China, its most important market after the United States, and it also forecast another disappointing quarter for global revenues. Its shares fell about 8 percent, dropping below $100 for the first time since February. A hike in Apple's share buyback and dividend as well as bumper revenue from services failed to mollify investors. While Apple executives had predicted iPhone sales would decline this quarter, they must reassure investors that the drop represents a momentary roadblock, rather than a permanent shift for the product that fueled its meteoric rise. After years of blockbuster sales, many investors fear the iPhone has reached saturation, spelling the end for Apple's exponential growth. Apple Chief Financial Officer Luca Maestri told Reuters that the success of the iPhone 6 a year earlier had set a difficult bar to beat in the second quarter. "The iPhone 6 is an anomaly," he said. He pointed to the services division, which includes Apple Music and the App Store, as a bright spot. Its revenue grew 20 percent to $6 billion and surpassed iMac and iPad sales. Apple forecast third-quarter revenue of $41 billion to $43 billion, short of the Wall Street consensus of $47.3 billion. The drop in after-hours shares wipes out roughly $46 billion in market capitalization, roughly the value of heavy equipment maker Caterpillar. In reaction to Apple's results, shares of its suppliers Skyworks Solutions, Qorvo, Broadcom  and NXP Semiconductors all fell 2 percent or more on Tuesday.

• Twitter stock plunges as earnings miss estimates: Twitter disappointed investors yet again with first-quarter results that showed stagnant revenue growth as the microblogging service struggles to grab new users amid efforts to improve its complicated interface with several new features. Twitter shares plunged 13.6 percent to $15.34 in late trade on Tuesday after reporting lower-than-expected revenue, hurt by weaker than expected spending by big advertisers, and providing a current-quarter revenue forecast well below analysts' expectations. Twitter's user base grew modestly to 310 million monthly active users in the quarter ended March 31 from 305 million in the fourth quarter, above analysts' expectations. But investors were let down by the revenue miss since outlining a turnaround plan. First-quarter revenue rose 36 percent from a year earlier to $594.5 million, but widely missed the average analyst estimate of $607.8 million. Its net loss narrowed to $79.7.million, or 12 cents per share, from $162.4 million, or 25 cents per share, a year earlier. "It's obvious Twitter is having trouble," said Arvind Bhatia, analyst with CRT Capital. "It's not growing anywhere close to where people expected a while back."

• Alibaba Financial Affiliate Raises $4.5 Billion: The Alibaba Group of China has become a colossus in the global Internet world, with a market value of nearly $200 billion. Now its online payment affiliate is aiming for  similarly lofty financial goal: becoming one of the most valuable privately held technology companies in the world. The affiliate, known as the Ant Financial Services Group, said on Tuesday that it had raised $4.5 billion from investors. The private financing round suggests that the company is now valued at about $60 billion — or more than $10 billion over the market value of PayPal Holdings, its closest analogue. Ant Financial may not be as well known in the West as Silicon Valley darlings like Uber Technologies, which was most recently valued at about $62.5 billion. But Ant Financial — whose controlling shareholder isAlibaba’s billionaire founder, Jack Ma — has become an online power in its own right. It is one of the biggest electronic payment companies in the world by virtue of Alipay, a payment service that is commonly used in China. It is also one of the most prominent symbols of strength in China’s private sector, particularly in the field of online payments. Slow-moving state-run banks and an initial absence of regulation have allowed privately run companies to weave themselves into everyday life. Ant Financial now encompasses not only online payments, but also low-risk money market funds and a wallet app that enables easy payment from smartphones around China. Chinese consumers use Alipay to shop online, transfer money to one another, hail taxis, buy movie tickets and even invest their spare change. A money-market fund affiliated with Ant Financial was once one of the world’s largest. According to the announcement on Tuesday, Alipay has more than 450 million users, or more than double the number PayPal has. Such is the power of the company that its latest financing was led by some of China’s biggest state-controlled banks, including arms of the China Construction Bank and China Life Insurance. That indicates the level of government support that the company enjoys in a country where much of the economy is still state-directed. Ant Financial’s previous fund-raising round, which was held last year, included China’s national social security fund and an arm of the China Development Bank. In a move that could further endear the company to Chinese officials, Mr. Ma has said he hopes to take Ant Financial public in China. Still, if Ant Financial follows through on the plan, it would be one of the biggest initial public offerings since that of Alibaba itself, which raisednearly $22 billion in 2014 in the biggest public offering on record.

• EBay Forecast Beats Estimates as Traffic Efforts Pay Off: EBay projected sales on its marketplace for the second quarter and full year that will meet or exceed analysts’ estimates, suggesting efforts to boost traffic, such as using barcode scanning and a more searchable catalog, are gaining traction. Since separating from PayPal last year, Chief Executive Officer Devin Wenig has been under pressure to reverse sluggish growth at EBay in the face of competition from Amazon.com Inc., which continues to woo shoppers with fast delivery, and after Google changed its search algorithm in a way that hurt EBay traffic. The shares rose 2.1 percent to $24.98 in extended trading after the results were announced. They ended the day at $24.49, up 1.1 percent, and are down 11 percent so far this year. Revenue in the second quarter will be $2.14 billion to $2.19 billion EBay said in a statement Tuesday. The average analyst estimate was for $2.14 billion. For the full year, EBay said it expects revenue of $8.6 billion to $8.8 billion, compared with analysts’ estimates of $8.73 billion. Profit, excluding certain items, will be 40 cents to 42 cents a share in the current quarter, EBay said Tuesday, compared with analysts’ estimates of 44 cents. EBay’s Gross Merchandise Volume -- the total value of goods sold on the marketplace -- of $20.5 billion in the quarter was up 1 percent from a year earlier.

• As tide turns against chip industry, Samsung forges ahead of rivals: Gloom may be settling over much of the world's semiconductor industry but Samsung is expected to cope better than most due to its strong technological edge, enabling it to boost market share for some key products and possibly even lift revenue. A plunge in PC sales and slower growth for smartphones globally has hit the sector hard, prompting Intel Corp to say this month it would cut up to 12,000 jobs. Qualcomm has said fiscal third-quarter chip shipments could fall as much as 22 percent, while SK Hynix Inc on Tuesday reported a 65 percent slide in quarterly operating income - its weakest result in three years. Samsung, which reports its first-quarter earnings on Thursday, is also hurting. Chip profits - which accounted for just under half of its overall 2015 operating income - are widely expected to fall, with some analysts predicting a drop of more than 10 percent in January-March from a year earlier. But if its rivals are getting pummeled, the South Korean tech giant is merely bruised and is in many ways benefiting as clients shift towards premium power-conserving DRAM chips for smartphones, as well as solid-state drives for data storage using 3D NAND chips. "The technological gap between Samsung and its competitors in fields such as DRAM and NAND has been widening lately, which helps the company avoid the rate of profit decline seen at other firms," said Song Myung-sub, an analyst at HI Investment & Securities. Even with a first-quarter drop of around 10 percent, Samsung's chip operating profit is expected to be nearly five times that of SK Hynix. The world's No. 2 chipmaker also happens to run the world's biggest smartphone business, giving it a captive customer for its chips that none of its rivals have.

Daily Tech Snippet: Friday, March 4th

• Amazon Introduces 2 Alexa Voice-Controlled Devices: Amazon’s Alexa is gaining new powers, and a couple of new looks, too. Amazon, the Internet retailer, on Thursday announced two new siblings for the Echo, the voice-controlled household assistant that people address as “Alexa” and that became a surprise hit for the company last year. One new product, Amazon Tap, is a slimmer, shorter, portable version of the Echo. Rather than requiring an electrical wall connection, the Tap runs off a rechargeable battery. It connects with phones and the Internet through Bluetooth and Wi-Fi. The Tap acts as an ordinary wireless speaker for a phone, but it also provides Alexa on the go. People can ask about weather and traffic, ask for the news, tell it to play a song from a streaming service, or do any one of dozens of other tasks. The device, which will begin shipping at the end of the month, will sell for about $130. Amazon also announced the Echo Dot, essentially an Echo without that device’s powerful speaker. The Dot, which will sell for about $90, looks like a hockey puck, and is meant to provide Alexa’s voice functions for existing speaker systems. The Dot connects to those speakers either through a wire or over Bluetooth; after that, it functions as another Echo. Dot shipments also willbegin at the end of March. Sales will initially be limited to people who already own an Echo or one of Amazon’s Fire TV devices — a Dot buyer will have to ask Alexa to order one. The new devices suggest that Amazon has an expansive vision for the Echo, which looked like an experiment for the company when it was introduced in late 2014. The company has not provided sales data for the device, but it has said that sales exceeded its expectations and that customer reviews are rhapsodic. Amazon appears to have increased investment in the device — it keeps adding new features and capabilities to Alexa, and this year it ran Super Bowl ads about the gadget.

• EBay Banks on Bar Codes for a Comeback: Hoping to outgrow its image as a glorified garage sale and move up in Google searches, EBay is turning to technology developed 70 years ago: the bar code. The machine-readable symbol that keeps supermarket lines moving is helping EBay manage vast amounts of data associated with the 6 billion products—from smartphones to video games, handbags to tires—listed at the online marketplace each year. Merchants will be able to enter a full description of a sales item by using a smartphone camera to scan its Universal Product Code. EBay reads the scan and automatically lists the item’s specifications. Before, every detail, including brand, model, and dimensions, was entered manually. UPCs are a central part of what EBay calls its “structured data initiative,” started in June, to organize items into a catalog that shoppers can easily search using filters such as price, features, and condition. The switch started with auto parts and accessories, one of EBay’s fastest-growing categories. The UPC is also used to call up consumer reviews and product images, which create a degree of permanence on EBay that search engines will reward with better placement. EBay says the code provides a sufficient baseline of information because 80 percent of all products sold there are new. A key goal is to standardize the amount and type of information that merchants list. The initiative will eventually expand to most items on the site.So far, some merchants like the change. Quick Ship Electronics, which sells consumer devices on EBay, had some desktop computers and laptops languishing in its inventory. Once the company entered the UPCs on EBay’s catalog, the items sold within days, CEO Jordan Insley says. 

• HP Enterprise's revenue, profit beat estimates: Hewlett Packard Enterprise Co, which houses former Hewlett-Packard Co's corporate hardware and services division, reported better-than-expected quarterly revenue and profit, helped by strength in its hardware business. Hewlett Packard Enterprise's (HPE) shares were up 6.4 percent at $14.47 in extended trading on Thursday. Revenue in HPE's enterprise group business, from which it derives more than half of its total revenue, rose about 1 percent to $7.1 billion in the first quarter ended Jan. 31, from a year earlier. The company's revenue fell to $12.72 billion from $13.05 billion. 

• Apple supplier Broadcom to slash 1,900 jobs globally: Chipmaker Broadcom Ltd, the company created following the merger of Avago and Broadcom, said it would cut about 1,900 jobs globally across its businesses. Shares of Broadcom, which also supplies to Apple Inc, were up 8 percent at $148.20 in extended trading on Thursday. The company said it expects to take charges of about $650 million related to the job cuts through 2018.  Avago completed its $37 billion deal for Broadcom last month. Revenue for the legacy Avago business fell 4 percent to $1.77 billion in the three months ended January 31.

• Snapchat Raises $175 Million From Fidelity at Flat $16 Billion Valuation: Snapchat has raised $175 million in new venture funding from Fidelity at the same $16 billion valuation it raised at back in May, according to a source familiar with the deal. That means Snapchat has now raised around $1.4 billion in total. The Wall Street Journalfirst reported the new funding. A flat valuation isn’t usually a great sign, but the raise comes at a time when lots of tech companies — including Jawbone and Foursquare — are raising down rounds, or taking money at a lower valuation than their last fundraising. In that vein, this investment doesn’t look bad.

• Facebook Messenger adds music, starting with Spotify song sharing: First came the Transportation hub with Uber, and now Facebook Messenger is launching “its very first music integration” with Spotify. Inside the Messenger “More” section in chat threads, all iOS and Android users will now find a Spotify option. Tap it and they’ll be shuttled into Spotify’s app where they can “Search for something to share.” Once they select a song, artist or playlist, they’ll be popped back to Messenger with the option to share the photo of the cover artwork. When a friend taps that photo, they’ll be bounced over to Spotify to listen.If Messenger can become a richer social layer connecting Spotify users, it could inspire deep conversations about music, boosting its engagement. That generates platform lock-in and potential monetization opportunities for Facebook. And for Spotify, Messenger will provide virality that could help it fend off Apple Music and convince more non-streamers of its value.

Daily Tech Snippet: Thursday, January 28

• Facebook shares soar as mobile drives big jump in ad sales: Facebook smashed investors' expectations with a 52-percent jump in quarterly revenue as it sold more ads targeted at a fast-growing number of mobile users, sending its shares sharply higher after hours. Facebook shares rose almost 12 percent in after-hours trading to $105.32. The company said sales in the fourth quarter rose 52 percent from a year ago, to $5.84 billion, while profit increased to $1.56 billion, more than doubling from $701 million a year ago. For the full year, the company reported $3.69 billion in profit on $17.93 billion in revenue, an increase of 44 percent from 2014. The company has also begun monetizing some of its other units, such as photo-sharing app Instagram, which surpassed 400 million users last year and began selling ads in September. Facebook said mobile ads accounted for 80 percent of total ad revenue in the quarter, compared with about 78 percent in the third quarter and 69 percent a year earlier.The results offer a bright spot in a tumultuous climate for many American technology stocks. Shares of Twitter, Facebook’s most visible social networking competitor in the United States, have tumbled more than 55 percent during the last year. Yelp, the local-review service, is down about 60 percent. LinkedIn, the professional social networking service, is off more than 15 percent. Facebook is a much larger company than many of its peers, yet it is able to keep its growth rate high. The company has notched double-digit jumps in ad revenue and in the expansion of its user base. Facebook now has 1.59 billion monthly visitors, up 14 percent from a year ago. About 1.44 billion of those people visit the site on a mobile device; 1.04 billion visit Facebook every day. 

• EBay's disappointing forecast fuels stock decline: EBay forecast weaker-than-expected revenue and profit for the current quarter and full year, as the e-commerce company struggles against a strong dollar while trying to revamp its core marketplace business. Shares of the retailer fell more than 12 percent to $23.51 in extended trading on Wednesday. The online retailer, which faces intense competition from e-commerce giant Amazon.com, has also been hit by brick-and-mortar rivals like Wal-Mart Stores that are aggressively boosting their online presence. The company said its gross merchandise value, or the total value of all goods sold on its site, rose 5 percent after accounting for foreign exchange impact. In its second quarter without PayPal, eBay's revenue was $2.32 billion in the fourth quarter ended Dec. 31, flat with a year earlier during the crucial holiday shopping season and in line with analysts' average expectations. EBay began testing a paid shipping membership program in Germany last year, responding to shoppers' increased demand for faster delivery. Wenig on Wednesday said there were "no plans for now" to expand the program. EBay derives nearly 60 percent of its revenue from overseas and faces headwinds from a strong dollar.

• PayPal's revenue beats Street view on higher transactions, customers: Revenue rose about 17 percent to $2.56 billion.  Payment processor PayPal Holdings Inc on Wednesday reported better-than-expected quarterly revenue, as new customer additions and payment processing volumes surged, and it announced a buyback of $2 billion of its stock. PayPal said it expects 2016 full-year earnings of $1.09 to $1.14 per share, and revenue growth of 16-19 percent on a currency neutral basis. It expects currency fluctuations to impact net revenue by 3 percentage points during the year. The company's share buyback program was a reminder of the strength of its free cash flow. PayPal ended the year with $5.7 billion in cash reserves. PayPal's net income rose to $367 million, or 30 cents per share, from $286 million, or 23 cents per share. Shares of PayPal, which completed its spin-off from eBay Inc in July, rose 6.4 percent to $33.66 in extended trade.

• Samsung Electronics warns of difficult 2016 as smartphone market peaks:  Tech giant Samsung on Thursday warned of possible weaker earnings this year compared with 2015 due to softer sales of gadgets such as smartphones, a trend that is also hurting rival Apple and major chipmakers. The South Korean firm's warning came a day after Apple shares fell more than 6.5 percent, the biggest percentage drop in two years, as the iPhone maker forecast its first quarterly sales drop in 13 years.

• Qualcomm forecasts weak profit as demand slows for mobile chips:  Qualcomm forecast current-quarter profit below analysts' expectations as demand weakens for its chips used in mobile devices in a slowing market. Revenue fell 18.7 percent to $5.78 billion. The company, whose customers include Apple, said it expected its mobile chip shipments to fall by 16-25 percent in the second quarter from a year earlier. Qualcomm also expects 3G and 4G device shipments to decline by 4-14 percent, hurting its licensing revenue. The chipmaker's weak outlook comes a day after Apple forecast its first quarterly revenue drop in 13 years and reported the slowest-ever rise in iPhone shipments as the critical Chinese market shows signs of weakness. Qualcomm shares fell 3 percent in extended trading on Wednesday.

• Google ships five million Cardboard virtual reality devices: Alphabet's Google said it had shipped 5 million units of the Google Cardboard viewer, a wearable device that allows users to experience virtual reality through mobile apps. Oculus, the virtual reality company Facebook Inc (FB.O) bought in 2014, started accepting pre-orders this month for its much-awaited headset, Rift, which will ship in first quarter. Google said in November that its video-sharing site, YouTube, supported virtual reality videos. Viewers can watch virtual reality videos using a mobile device and the Google Cardboard viewer. Google said more than 350,000 hours of YouTube videos had been watched in virtual reality.

• Theranos Lab Poses ‘Immediate Jeopardy to Patient Health,’ Says U.S. Agency:  The Centers for Medicare and Medicaid Services has decided that Theranos’ Newark, Calif., facility poses “immediate jeopardy to patient health and safety.” A letter sent to the company on January 25th says that the lab has been given 10 days to provide “acceptable evidence of correction.” Specifically, the document cites problems with the laboratory director, the technical supervisor, hematology and the lab’s analytic systems. CMS has not released the laboratory inspection report that led to this letter, so the details of these infractions remain unclear. But the level assigned to these determinations — “Condition-level deficiencies” — are among the most serious that CMS can make. They mean that Theranos’ Newark lab was found to be in violation of accepted professional standards. CMS declined to comment on the letter.

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.

Daily Tech Snippet: Thursday, October 29

• Flipboard's Fanfare Fades as Executives Exit, Sale Talks Stall: Flipboard Inc. debuted in 2010 with the kind of fanfare any startup would envy. The news-reading app piggybacked perfectly on the debut of Apple’s iPad tablet and Steve Jobs’s promise of a new era for digital media. Critics loved Flipboard’s magazine-like layout, created by one of the first software designers of the iPhone, and investors poured money into the company. Almost five years later, Flipboard is struggling to live up to the praise. Several senior executives have departed, including co-founder Evan Doll, and talks to sell the company haven’t reached the finish line, according to people familiar with the plans, who asked not be named discussing private matters. Flipboard’s woes are indicative of a larger malaise gripping startups across the technology landscape as questions emerge about the sustainability of the tech-investment boom. Flipboard is performing well enough -- and, after raising more capital earlier this year, is at no risk of going out of business -- but is no longer a breakaway hit. People are finding media through their Facebook or Twitter feeds, limiting the need for a stand-alone application like Flipboard. Meanwhile, advertising rates -- the company’s main revenue stream-- have been in decline. While Flipboard’s reading app was a showpiece for the iPad five years ago, the company is now working to adjust to a changing digital-news market and live up to its $800 million valuation. Other companies facing similar questions about whether they can make good on early investor expectations -- and lofty private-market valuations -- include online storage service Dropbox Inc., note-taking company Evernote Corp., music-streaming service Deezer SA and blood-testing company Theranos Inc., said Anand Sanwal, chief executive officer of CB Insights, a firm that tracks startup investing. The companies face a challenge in that they could be too expensive for another company to buy, yet may not have the business fundamentals to justify their valuations to public investors through an initial public offering, he said.

• Samsung Deploys Cash Pile With $10 Billion Buyback, Capex Boost, As Phones Fail To Revive Growth: Samsung Electronics is tapping its $50 billion cash pile to buy back shares and invest in its components business after struggles in the smartphone division battered investors. Shares surged. The company will buy back and cancel 11.3 trillion won ($10 billion) of shares and boost capital spending by 14 percent this year, Samsung said Thursday. The announcements came after the company posted profit that trailed analyst estimates. Capital expenditure will rise to 27 trillion won this year as the company invests in chips and display plants.  Samsung is struggling for an answer to Apple Inc. in high-end smartphones, trying price cuts, a $120 rebate program and new models to tempt consumers from buying iPhones. That has prompted a renewed focus on making components for earnings growth, with new semiconductor and display plants to get its parts into other vendors devices. Samsung said it will increase capital spending after posting profit that missed analysts’ estimates as price cuts on new Galaxy S6 smartphones failed to sway consumers from buying iPhones. Capital expenditure will rise 14 percent to 27 trillion won ($24 billion) this year, the company said Thursday. Net income, excluding minority interests, was 5.31 trillion won ($4.7 billion) in the third quarter with profit to fall in the current period, Samsung said. Increased marketing spending, including a $120 rebate program, hasn’t sparked sales of the premium devices that generate fatter profit margins. Samsung is investing in computer chip plants as it tries to revive Galaxy smartphone demand through a new mobile payment service and by releasing larger devices at least a month before the new iPhones to recapture market share from Apple Inc. Shares of Samsung rose 4.9 percent in Seoul, the highest since May. The rally erased their decline for the year.

• Ebay Exceeds Expectations While Paypal Flops: PayPal CEO Dan Schulman defended his strategy of inking deals with big merchants and smartphone applications and offering free peer-to-peer payments as investors sent shares down on concerns the efforts are hurting the company’s quarterly profit. PayPal, in its first quarter as a stand-alone company separate from EBay Inc., said it added 4 million accounts to reach 173 million users. Its total payments volume gained 20 percent to $69.7 billion from a year earlier. But investors reacted to the company’s declining take rate, a measure of how much money PayPal keeps from each payment made on its platform. That metric fell to 3.24 percent in the third quarter from 3.39 percent a year earlier, the company reported Wednesday in a statement, and shares dropped as much as 7.8 percent in extended trading. The goal of the July split with EBay was to make sure that each company could focus on their main businesses. EBay last week reported quarterly profit and sales that topped analysts’ estimates and raised its outlook, sending shares up the most in 10 years. PayPal’s strategy is to attract more customers and merchants and offer them expanded services as competition in the payments industry intensifies with startups Square Inc. and Stripe Inc. as well has Apple Inc. and Google Inc. who are trying to create digital wallets. Even JPMorgan Chase & Co., entered the digital payments race Monday. PayPal is processing more payments in stores like Macy’s and on popular smartphone applications like Uber and Airbnb. But PayPal keeps less money from each transaction because the clients that bring bigger volume to the payments company also have the leverage to negotiate lower rates. The downside of that strategy was on display when Square disclosed its money-losing relationship with Starbucks Corp. The challenge for Schulman is to differentiate PayPal as competition intensifies. Among the additional services the company offers is a merchant cash advance program called PayPal Working Capital, which gives preapproved loans to businesses that process payments through PayPal. PayPal also is getting into the international money-transfer business by purchasing Xoom Corp. for $890 million in a deal announced in July.

• Yelp - struggling so far this year - beats Street expectations on revenue sending shares up 7%: Yelp reported a bigger-than-expected 40 percent jump in quarterly revenue as more local businesses advertised on Yelp.com, its consumer review website. Shares of the company, whose website and app allow users to rate restaurants and a variety of other businesses, rose about 7 percent after the bell on Wednesday. To Wednesday's close of $22.07, Yelp's stock had fallen nearly 60 percent this year. San Francisco-based Yelp, which gets about four-fifths of its revenue from local advertisers, said the number of local advertising accounts rose about 37 percent to 104,200 in the third quarter. Yelp has been investing to grow its website beyond user reviews by investing in services such as restaurant reservations, food ordering and delivery. The company reported a net loss attributable to common stockholders of $8.1 million, or 11 cents per share, for the quarter ended Sept. 30, compared with a profit of $3.6 million, or 5 cents per share, a year earlier. Revenue rose to $143.6 million from $102.5 million.

• Verizon says Internet of Things revenue at $500 million year-to-date. Aimed at connecting to the Internet everything from household devices to industrial machines, the business is growing at a "double-digit" rate, Mike Lanman, senior vice president of enterprise products at Verizon said at an event in San Francisco. "A large portion of our revenue comes through connectivity but a significant part of it comes from the application layer already," he said in a phone interview after introducing a platform to help customers develop applications in healthcare, agriculture, utilities and connected cars. Last year, Verizon's annual revenue from the business totaled $585 million. The global Internet of Things market is expected to grow to $1.7 trillion in 2020 from $656 billion in 2014, according to market research firm IDC. Examples include Verizon's fleet management tracking application and a partnership with Intel Corp (INTC.O) to provide water management sensors in vineyards, Lanman said. At the event, Verizon also unveiled a chip that Lanman said halves the cost of connecting low data usage devices like dog trackers to high-speed networks. AT&T has also been working on growing its "Internet of Things" business and previously launched initiatives such as a cloud-based data-analytics platform for companies and a global SIM card for connected cars. AT&T said last week it added 1.6 million connected devices including 1 million connected cars in the third quarter of 2015.

• Alphabet, Indonesian companies to expand Web access via balloons: Alphabet, the new holding company for Google, has teamed up with three Indonesian telecommunications companies to expand Internet access in that country using solar-powered balloons. Alphabet officials, including co-founder Sergey Brin, and representatives from Indonesian companies Telkomsel, XL Axiata Tbk PT (EXCL.JK) and Indosat Tbk PT (ISAT.JK) signed an agreement Wednesday to bring so-called Project Loon to the nation of 250 million people. The project sends solar-powered balloons 16,000 feet (5,000 meters) into the air to deliver Internet access through radio frequency signals to antennae connected to buildings on the ground. The balloons use algorithms to find the best winds to carry them along their charted course. Project Loon is part of Alphabet's secretive X division, where the company experiments with far-off technologies dubbed "moonshots" such as its self-driving car technology. Alphabet and its partners will deploy hundreds of balloons in 2016 over the country of more than 17,000 islands in an effort to determine where gaps in service lie as part of the tests before full-scale service is launched. The U.S. tech company has already tested the project in Brazil, New Zealand and Australia but with only a single carrier. Project Loon Vice President Mike Cassidy said the Indonesian partnership marks the first time it will send signals from multiple telecommunications companies through a single balloon, and that it will be the service's largest deployment to date and could eventually reach 100 million users. Cassidy said the effort is also a model for how Alphabet will move the product into the commercial market. He said the telecommunications companies will use the trial period to determine pricing and billing while Google works out technical issues.

• GoPro Plunges 15% After-Hours Following Q3 Earnings Miss: GoPro took a dive Wednesday after releasing Q3 financials that disappointed street expectations. At the market’s close, GoPro reported a miss on its Q3 earnings, posting an adjusted $0.25 per share on $400.3 million non-GAAP revenue during the period. Those figures compared to street expectations of a $0.29 per-share profit, and revenue of $433.6 million. The action camera maker’s $400.3 revenues represented a 43% year-over-year increase from $280.0 in Q3 2015, with EPS also up significantly from $0.12 in the corresponding quarter last year. The company shipped 1.6 million camera devices in Q3, up 46% from Q3 2014, but still less than the street had expected. Interestingly, GoPro emphasized how important foreign markets, specifically China, had been to the company’s growth. Sales outside of the U.S. reportedly made up more than 50% of the company’s revenue. The company said China was “the fastest growing market in GoPro’s history.”

Daily Tech Snippet: Monday, September 14

• High-profile busts signal caution in start-up investing, especially in on-demand B2C businesses: At the end of July, Homejoy, a start-up company that used the Web to offer house cleaning, hung up its mops, leaving customers in the lurch and Google Ventures and other top-tier private equity backers out the more than $35 million they had sunk into the company. Now, with public markets on a see-saw and venture capitalists thinking the turmoil may hit private markets, many investors are wondering if more Homejoys lie ahead. That is leading them to look extra hard at companies that hold similar characteristics to Homejoy: on-demand, logistics-heavy businesses that cater to consumers rather than businesses. "They are caught on a treadmill" because to keep running requires more cash infusions, though often without an accompanying move to profitability, said Venky Ganesan, a venture capitalist at Menlo Ventures. He said he looked at about a half dozen such companies in the spring and early summer, passing on all of them, only to see all raise money elsewhere. While the failure of one start-up might not seem like much, Homejoy's folding attracted outsized interest because it had already raised more than $35 million from high-caliber firms. Most start-ups fail, of course, but they generally do it at earlier stages and lower cost to their backers. Homejoy is one of at least four high-profile collapses or retrenchments so far in 2015, counting those that raised at least as much cash, also from top firms. In recent years, among consumer-oriented tech companies, just one or two such start-ups have failed each year. At the end of July, Homejoy, a start-up company that used the Web to offer house cleaning, hung up its mops, leaving customers in the lurch and Google Ventures and other top-tier private equity backers out the more than $35 million they had sunk into the company. Now, with public markets on a see-saw and venture capitalists thinking the turmoil may hit private markets, many investors are wondering if more Homejoys lie ahead. That is leading them to look extra hard at companies that hold similar characteristics to Homejoy: on-demand, logistics-heavy businesses that cater to consumers rather than businesses. "They are caught on a treadmill" because to keep running requires more cash infusions, though often without an accompanying move to profitability, said Venky Ganesan, a venture capitalist at Menlo Ventures. He said he looked at about a half dozen such companies in the spring and early summer, passing on all of them, only to see all raise money elsewhere. While the failure of one start-up might not seem like much, Homejoy's folding attracted outsized interest because it had already raised more than $35 million from high-caliber firms. Most start-ups fail, of course, but they generally do it at earlier stages and lower cost to their backers. Homejoy is one of at least four high-profile collapses or retrenchments so far in 2015, counting those that raised at least as much cash, also from top firms. In recent years, among consumer-oriented tech companies, just one or two such start-ups have failed each year.
  

• Partnership Boosts Users Over China’s Great Firewall: A partnership between an American start-up and a Chinese Internet behemoth has created a sort of fast lane to speed traffic across the border. In the process, the two companies are establishing a novel business model with implications for other American technology firms looking to do business in China’s politically sensitive tech industry. The partnership, signed in July 2014, is between CloudFlare, a security company based in San Francisco, and Baidu, China’s equivalent of Google. Using a mixture of CloudFlare’s web traffic technology and Baidu’s network of data centers in China, the two created a service that enables websites to load more quickly across China’s border. The service, called Yunjiasu, began operating in December. It has a unified network that makes foreign sites more easily accessible in China, and allows Chinese sites to run in destinations outside the country. At the heart of the arrangement is an unusual structure known as a virtual joint venture. Under that arrangement, CloudFlare does not actually operate in China. Instead, CloudFlare cooperates primarily from afar as Baidu runs the business in China. Baidu and CloudFlare’s virtual joint venture relies on a principle generally considered anathema to foreign companies looking to do business with China: trust. CloudFlare transferred its intellectual property that is used to manage and speed up Internet traffic to Baidu and works closely with its engineers to run that technology on Baidu’s network in China. The two share revenue from the service. For CloudFlare, a five-year-old company that manages Internet traffic for millions of websites and makes browsing quicker and more secure, the central question was whether to transfer its intellectual property and give up local control or to forgo the vast business opportunities in China. Outside of the high-profile sites that Beijing sees as a threat and blocks — like Facebook and Twitter — are a huge number of businesses that suffer under China’s network inefficiencies. Those are the customers the service is targeting. And since the fast-lane service began operating, CloudFlare and Baidu said they have registered 450,000 businesses that account for 57 billion page views per month. Customers can try the service free, though CloudFlare and Baidu added supplemental security features and greater control over web traffic last month, both of which must be paid for. Matthew Prince, CloudFlare’s chief executive, said transferring the company’s intellectual property to Baidu enabled a deeper trust and a partnership. He added that the intellectual property is not the most critical part of the company. “We had much less apprehension about sharing our code, because we don’t think there’s any line of code we write that’s so clever that gives us a sustained advantage,” Mr. Prince said. “That comes from the network itself.”  Still, to be safe, Baidu and CloudFlare worked out a contract that gives each company control over crucial elements and would inflict penalties if either partner withdrew. For example, Baidu controls customer information within China, but CloudFlare owns the web address through which the entire operation works.

• EBay Revamps Seller-Rating System in Appeal to Merchants: EBay is overhauling its ratings system so that sellers aren’t penalized for late shipments beyond their control or for routine returns and exchanges, seeking to boost sales as an independent company. While the online marketplace has long relied on a five-star rating system and commentaries that lets merchants and buyers grade each other on transactions, sellers have long complained that these also make them vulnerable to customer angst over minor issues that are unavoidable or easily resolved. EBay’s seller rankings can make or break the merchants selling everything from sweaters to smartphones, because they influence how prominently products appear in search results and the likelihood that shoppers will conduct business with them. EBay is stepping up efforts to keep its sellers happy, following its split in July from the PayPal Holdings Inc. transactions business. "Our relationship with our sellers needs to be improved," Jordan Sweetnam, EBay’s vice president of seller experience, said in an interview. "These are the biggest changes we’ve made in years." The new rating system is more simple and objective, according to Sweetnam. Sellers won’t be penalized for late deliveries as long as they get orders to couriers on time, while returns or exchanges won’t affect ratings if they’re resolved and the customer is satisfied with the process.

• Lyft automatically opts you into receiving robocalls. That doesn’t sit well with the FCC. Lyft and First National Bank are on notice for violating federal telemarketing rules, regulators said Friday. The two companies allegedly required that their customers accept robocalls and automatic text messages as a condition of using their services — a no-no under the Federal Communications Commission's regulations. The rules are meant to prevent companies from coercing customers into consenting to robocalls. Although Lyft allows users to opt out of robocalls, doing so bars consumers from using the ridesharing service, the FCC said. If the two companies don't change their behavior, that could lead to more than a warning — fines or other legal action.

• Trillenium takes virtual reality into online shopping: Trillenium, a start-up that creates virtual stores for brands aimed at marrying the experience of real-life shopping with the convenience of e-commerce on smartphones and computers. Shoppers can tour the virtual store by focusing their gaze on products, browse items from different angles and socialize with friends online, bringing to life an e-commerce industry currently dominated by search boxes and static pictures. "The current dot.com experience is pretty sterile. So if they can improve the experience, you might dwell a bit longer, spend a bit longer online exploring products because you can get closer to them, and buy more," said Dave Evans, commercial director at Kantar Retail Virtual Reality, which uses virtual reality technology to help retailers develop real-world stores. Trillenium hopes to capitalize on the release of virtual reality headsets next year aimed at the consumer market, such as Facebook's Occulus Rift and Google's Cardboard. Trillenium has raised 335,000 pounds so far from Seedrs as well as two business angel investors. It hopes to raise an additional 1.8 million pounds in separate funds from venture capitalists. In three years, Prpic hopes to launch a multiple platform service where clients can use his technology to build and customize their own stores from a template.

• Jet.com: Taking Off, Full Throttle. Respected seller blog ChannelAdvisor reports - "Jet has gained altitude so rapidly that it’s currently our number 4 marketplace by GMV, out of the marketplaces we support worldwide. That means that just a month after its public debut, it’s already bigger for ChannelAdvisor than incumbents like Sears, Best Buy, Newegg, Tesco and Rakuten — marketplaces that have been operating for years (check out the growth of these marketplaces here). It’s not out of the realm of possibility that in 2016 it will be our number 3 marketplace, after Amazon and eBay. That would be remarkable. Just a few weeks after officially launching, the average Jet seller GMV is twice that of seller GMV on Sears or Newegg. Our sellers have seen tens of thousands unique consumers buying on Jet since its public launch, and a 23% repeat buyer rate. Over the same time period, eBay had a 17% repeat buyer rate and Amazon had a 11% repeat buyer rate. This indicates early shoppers on Jet find the values compelling enough to come back more frequently than on eBay and Amazon, although our sample size is still small."

Daily Tech Snippet: Tuesday, July 28

• Archived snippets are here, and MP3 versions are here

• Google Loosens Ties to Google Plus: On Monday, Google said it would move features once integrated into Google Plus out of the social network and into other Google services. Photo features have already been moved to the newly introduced Google Photos. Location-sharing will go to Google Hangouts, the company’s chat app. Users will also no longer need a Google Plus account to comment on YouTube, long a point of contention among customers who felt as if they were being roped into using a social network they did not ask for. Altogether, the moves, announced in a blog post on Monday, are a moment of reckoning for Google Plus and those who created it. “While we got certain things right, we made a few choices that, in hindsight, we’ve needed to rethink,” Bradley Horowitz, who oversees Google Plus, wrote about the moves. He was even more contrite on his personal Google Plus page: “We want to formally retire the notion that a Google+ membership is required for anything at Google.” Driving home that point, Google said it would make it easier for users to delete Google Plus accounts, if they choose to. Started in 2011 and promoted as Google’s answer to Facebook, Google Plus initially appeared popular on paper. The social network reached 300 million monthly active users in just two years, according to the company. But much of that growth, analysts say, came because users needed to create Google Plus accounts to use some of the company’s other services, like YouTube, annoying many longtime users of those services. But Google’s decision to dismantle Google Plus may have less to do with appeasing users’ anger than with meeting the demand of mobile phone owners, who expect apps for each individual service. Rather than make an app or website that is a one-stop shop, tech companies instead are introducing stables of services. Twitter has Vine, a video-sharing app, and Periscope, a live-streaming app, separate from the main Twitter platform. Facebook not only broke out photos and messaging into separate apps, but also decided to acquire Instagram and WhatsApp, direct competitors to those services, and maintain them both as yet another set of options for smartphone owners.


• In its next move, Amazon could turn to physical grocery stores: Amazon wants to set up drive-through grocery stores where consumers can pick up goods they've ordered online, according to the Silicon Valley Business Journal. Where this could have the biggest impact is on perishables, which obviously require timely delivery. Although shoppers can already buy some perishables through Amazon Fresh and get them delivered the same day, the $300 annual membership isn't for everyone. And the logistics of delivering fresh groceries right to people's homes is still a big challenge. Amazon has reportedly explored retail locations before, but doing it just for groceries would be a different thing entirely.


• EBay Ends Same-Day Delivery in U.S. in Face of Amazon Effort: EBay Inc. is killing its U.S. same-day delivery service EBay Now, an acknowledgment it won’t try to match the speedy delivery of e-commerce giant Amazon.com. The online marketplace hinted the service wasn’t performing last year when it canceled the EBay Now mobile application and encouraged its use on desktops. The program had been available in the San Francisco area, New York, Dallas and Chicago. Amazon has invested heavily in same-day delivery, offering the service for free to Amazon Prime subscribers in New York, Seattle, San Francisco and other large cities.


• Baidu Sales Outlook Misses Estimates on Weaker Chinese Economy; Shares Tumble: Baidu shares fell as much as 9.5 percent after U.S. markets closed, after already being down 6.3 percent at during the Asian trading day; forecast quarterly sales missed estimates as China’s biggest search-engine provider expands into delivery services and movie ticketing amid a weakening domestic economy. The company’s second-quarter net income climbed 3.3 percent to 3.66 billion yuan, missing the 3.9 billion-yuan average of analyst estimates. Second-quarter revenue rose 38 percent to 16.6 billion yuan, compared with the company’s April forecast of 16.365 billion yuan to 16.75 billion yuan. Mobile accounted for 50 percent of sales, in line with the prior quarter, Baidu said. Active users of its mobile wallet climbed by 9 million to reach 35 million in June, Li, the chief executive officer, said in a conference call Tuesday. Revenue for its IQiyi service climbed to 1 billion yuan during the second quarter, he said. Baidu is also said to be in talks to buy a new stake in the local unit of car-booking provider Uber Technologies Inc., adding to its investment in the company’s global operations. Baidu last month sold $1.25 billion of debt to fund Chinese operations and said it will invest 20 billion yuan over three years into Nuomi.


• Alibaba Appoints Tsai to Lead Board at New Local Services Unit Koubei: Alibaba Vice Chairman Joseph Tsai will head up the board at Koubei, underscoring the strategic importance of a new business unit that will spearhead the e-commerce company’s drive into the local services market. Tsai’s new responsibilities as Koubei’s chairman come on top of his current role as the number two executive at Alibaba, the company said in an email confirming his appointment on Monday. Alibaba executives have stressed the importance of establishing a foothold beyond e-commerce in what they call an “online to offline” market, which refers to the increasing use of mobile devices to buy physical goods and services. Tsai joined Alibaba in 1999 and he helped transform Alibaba into a global powerhouse, leading negotiations on dozens of acquisitions and early financing rounds, including with SoftBank Corp. Koubei, a joint venture set up by Alibaba and its financial services affiliate, is competing with Baidu and Tencent in a market for local services that’s expected to reach 7.28 trillion yuan ($1.17 trillion) by 2017. Local services is a key area of contention for Chinese Internet companies as people turn to the web to order take-out, beauty treatments and domestic helpers. Chinese users of location-based services could rise 29 percent to 400 million people in 2017 compared with this year, according to a research report by Shanghai-based Internet consultant IResearch. Baidu said in June it would invest 20 billion yuan in three years to expand its own location-based services platform, called Nuomi. And group discount website Meituan.com, which is also competing in the same field, raised $700 million in January this year to fund expansion.


• Pepperfry raises $100M from Goldman Sachs, Zodius, others: Mumbai-based Pepperfry.com, an e-commerce marketplace for furniture, home decor and appliances, has secured $100 million in funding from Goldman Sachs Group Inc and Zodius Technology Fund. The company’s existing investors Norwest Venture Partners and Bertelsmann India Investments have also participated in this round of funding, according to its founder and CEO Ambareesh Murthy. TrendSutra Platform Services Pvt Ltd, the company behind Pepperfry.com, will use the money to expand its logistics footprint in over 300 towns and for ‘quadrupling’ the size of its technology team, Murthy told Techcircle.in. The company will also use the funds to add new ‘experience centres’ and for upping digital marketing spend. Avendus Capital was the exclusive financial advisor to Pepperfry for this round of funding. Started in January 2012 with categories like home, lifestyle, fashion and more, Pepperfry now specialises in furniture and home products on its managed marketplace platform. The company not only markets furniture and home decor products through its site, but also employs carpenters and operates a fleet of over 350 delivery vehicles. Prior to the latest transaction, Pepperfry had bagged close to $30 million in funding. Pepperfry is expected to have crossed Rs 500 crore in GMV this year.

Daily Tech Snippet: Tuesday, July 21

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• Ahead of Earnings, Amazon Surges on Confidence Over Cloud, Spending Discipline: Amazon.com’s shares reached another record, three days before the company’s earnings report, as investors expected upbeat results from the fast-growing cloud-computing business, a boost in sales from last week’s Prime Day promotion and signs that the company is controlling spending. The stock set records three days last week and is up 12 percent this month. The Seattle-based online retailer reports earnings Thursday. Analysts on average project earnings of $364 million on sales of $22.4 billion, according to data compiled by Bloomberg. The shares’ advance shows renewed faith that Amazon can boost profit margins despite Chief Executive Officer Jeff Bezos’s history of sacrificing short-term earnings to invest in growth. A year ago, the company’s shares tumbled almost 10 percent the day after reporting a $126 million quarterly loss, hurt by a surge in spending on such items as its new Fire smartphone. This year, the company has invested in online entertainment and same-day delivery in big cities, increasing the allure of a $99 annual membership in Amazon Prime. Investors see such investments -- rather than on hardware -- as a sign of greater discipline. Amazon this year also began reporting results for its Amazon Web Services cloud-computing division, revealing a fast-growing and profitable enterprise to complement the core retailing business. The inaugural Prime Day promotion helped boost memberships, which will increase revenue through the year, said Michael Pachter, an analyst at Wedbush Securities. Amazon Prime members spend significantly more than nonsubscribers. He estimated that Prime Day added about $500 million in new third-quarter sales. Pachter issued a report on Sunday encouraging investors to buy Amazon shares in advance of earnings, in part citing the company’s cloud-computing operation. “Amazon Web Services has a much higher profit than anyone thought, and we know it’s growing at a ridiculously fast rate,” he wrote.


• IBM Drops After Revenue Declines for 13th Straight Quarter: IBM fell after reporting second-quarter sales declines across all of its major business units, missing analysts’ estimates and marking the 13th straight period of falling revenue. “Investors are losing patience given the revenue miss,” said Bill Kreher, an analyst at Edward Jones “It’s a show-me stock.” IBM, based in Armonk, New York, fell as much as 5.3 percent to $164.01 in late trading. The stock has lost about 10 percent in the past year. Total revenue fell 13 percent from a year earlier to $20.8 billion, or a 1 percent decline adjusting for currency impact. Analysts estimated $20.9 billion on average. The company said it cut total expenses by 7.9 percent from the year-earlier period. Last quarter, IBM said full-year earnings would greatly hinge on its software business, which saw a sales decline of 10 percent in the second quarter, or a 3 percent decrease when excluding currency impact. The hardware business’ sales fell 32 percent as reported.


• JD.com launches online store to sell U.S. brands in China: JD.com Inc, the no. 2 Chinese e-commerce company, said it would start selling U.S. products to customers in China through a new store on its website, as it looks to battle competition from bigger rival Alibaba. Both companies have recently started exclusive stores that offer products from countries including Japan, France, South Korea and Australia. JD.com also said on Monday that it would be the first authorized seller of Taylor Swift merchandise in China, which will include a line of clothes designed by the singer exclusively for JD.com customers. JD.com said the "U.S. Mall" would feature American brands such as Converse, Samsonite, and major apparel labels that are part of the Global Brands Group, including Nautica Kids and Jeep apparel. JD.com's U.S.-listed shares were little changed at $35.39 on the Nasdaq. Up to Friday's close, the stock had gained about 53 percent this year.


• EBay Reports Sale of Enterprise Unit as Earnings Beat Estimates: EBay is sailing into the split of its two businesses — PayPal payments and its online marketplace — with a reassuring show of strength as its second-quarter financial performance surpassed Wall Street forecasts. With its PayPal business to be spun off at the end of this week, eBay also did some last-minute corporate cleanup Thursday morning. The company announced that it was selling its eBay Enterprise unit, which handles warehousing and logistics for third-party sellers, for $925 million to an investors consortium led by two private equity firms, Permira and Sterling Partners. Both eBay’s profits and revenue were better than expected, after taking into account the sale of its warehouse and logistics arm. Shares in eBay, which reported its results before the stock market opened, were up about 3 percent in midday trading. The company’s revenue increased 7 percent from the year-earlier quarter to $4.38 billion. The reported revenue fell short of analysts’ average estimate of $4.49 billion. In the quarter, eBay pulled out the revenue from eBay Enterprise. If included, total revenue would have been $4.65 billion, above Wall Street forecasts. The split-up strategy is the byproduct of a drawn-out proxy fight with Carl C. Icahn, an activist investor, who advocated a PayPal spinoff. His pressure and logic prevailed, and the company declared in September that it planned to break itself up.

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.