Daily Tech Snippet: Thursday January 15

• Facebook Ad Clicks Are Shifting to Mobile, so Why Aren't Conversions? Because users still convert on desktops - and as mobile traffic grows, overall conversions fall: 64 percent of Facebook ad clicks occurred on mobile devices during 2014's fourth quarter, just 34 percent of the social media giant's conversions—either a sale, download or completed lead-gen form—came from smartphones and tablets. This new stat, from Marin Software's quarterly Global Online Advertising Index, means nearly two-thirds of all Facebook ad conversions are happening on desktops even though the digital platform's usage is increasingly skewing toward mobile. The same study found that 39 percent of clicks on paid search ads from sites like Google were via mobile devices, yet 31 percent of the paid search category's purchases came from mobile viewers. So the clicks/conversions ratio clearly favors Google over Facebook. In Q4, Marin found that Facebook's desktop ads got a 1.1 percent conversion rate, while its mobile ads rendered a 0.3 percent conversion rate. Conversely, paid search on Google and other engines achieved a 10.1 percent conversion rate for desktop ads and a 6.6 percent conversion rate for smartphones and tablets. The reasons behind Google's appeal to direct marketers are obvious when looking at those numbers. But Marin CMO Matt Ackley touted Facebook's branding potential. "The disparity points to the value in Facebook advertising being closer to television or print than performance-marketing channels," he said. "Clicks on mobile ads are greater than desktop ads, indicating Facebook mobile ads are a great way for a retailer to build brand awareness and reach consumers on mobile devices. Consumers are not device or channel exclusive. They move from search to social sites." Therein may lie a challenge for Facebook: persuading retailers that their social ads can help search ads perform better. Meanwhile, there's absolutely no doubt that search is going mobile. Marin's data offers further proof, stating that as much as 49 percent of marketers' paid search budget is being manifested via tablet and smartphone. Finally, check out the software player's chart below that shows clickthrough rates for different marketing mediums.

Source: Adweek

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• Indian eCommerce pricing analytics Boomerang opines: Amazon.com is not always the cheapest place to buy everything. And neither is Wal-Mart. Both giants bill themselves as places for good deals, but a new report from retail analytics firm Boomerang Commerce compares their strategies and sheds light on the ways they engineer pricing to get that reputation. What the authors find is that Amazon has carefully priced some items low, while leaving others more expensive -- in some cases, much more expensive -- to bolster its reputation as a place for deals. For instance, items with high consumer ratings tend to be priced lower than what you'd find at Wal-Mart. Boomerang provided the example of the Belkin N450 Dual Band Wireless N Router (despite the complex name, it's just a standard WiFi router). On Amazon, it gets only 3.5 stars and is ranked 4,285 in the electronics department. Its price: $56.43. Wal-Mart's Web site has it for $39.99. Also, stuff that's highly visible -- products that either customers rave about or Amazon itself promotes -- also tend to be cheaper than at other places. But items that you wouldn't naturally associate with online retail, such as tires for cars, aren't cheap at all. And accessory items to highly promoted products -- think cable connectors for your new flat-screen TV -- aren't always that cheap. And then there's this: Amazon seems to know, likely by studying billions of shopping transactions, exactly the time of year when many people will buy an item even if the price is high, the study said. For instance, the online retailer seemed to know that a lot of people would be buying HDMI cables in the fall and the run-up to Christmas. Boomerang found that a pack of Twisted Veins HDMI cables went from just under $5 in the summer to more than $8 before Christmas. (Amazon.com chief executive Jeffrey P. Bezos is the owner of The Washington Post.) The good folks at Boomerang created a chart that shows how prices interact with people's perceptions of Amazon and Wal-Mart. Below, the firm's chart shows common categories of products -- listed in the left column. The next column looks at what percentage of each category of products are sold by both retailers. The last two columns show how customers perceive the price differences between the two retailers (PPI stands for Price Perception Index). in the war for perception, Wal-Mart consistently beats Amazon in several categories, including automotive products, pet-related items, and household and home goods. People think those items will be cheaper at the big-box store than they are on Amazon's site. And that perception appears to have encouraged Amazon to leave the prices of those items high. Amazon, meanwhile, takes the low-price perception prize for video games, toys and a variety of electronic goods such as wearable tech, accessories, phones, GPS units and cameras. And the researchers indeed could find examples where perception matched reality. The two retailers are more or less evenly matched when it comes to computers, televisions, cellphones and sports equipment, according to the report. In a statement, Amazon called the Boomerang paper “flawed” and said that Amazon is “obsessed” with providing low prices for its consumers.

• China's taxi app wars intensify: Alibaba-Backed Taxi App Said to Be Raising $500 Million: A taxi-booking service backed by Alibaba Group Holding Ltd. (BABA), is raising more than $500 million to expand in China, according to a person familiar with the matter. The Hangzhou-based company will issue new shares and receive investment from Alibaba, SoftBank Corp. (9984) and Tiger Global Management LLC, the person said, asking not to be identified because the matter is private. Kuaidi would be valued at more than $2 billion, the person said. Kuaidi competes with Uber Technologies Inc. and Didi Taxi, which is backed by Tencent Holdings Ltd. (700), for the 500 million people in China using mobile phones to access the Internet for services and entertainment. Kuaidi prefers to pursue an initial public offering rather than be bought in a takeover, the company said in July. Kuaidi’s taxi booking app attracted 100 million users, who place about 3 million orders a day, according to an e-mailed statement from the company in July, which are the latest figures available. The service has more than 1 million drivers in about 300 cities. Kuaidi also introduced Yi Hao Zhuan Che, a luxury car-booking service, last year to compete with Uber. The San Francisco-based company’s valuation reached $40 billion in its latest fundraising round. Background: China’s taxi app market is dominated by two apps – Kuaidi Dache and Didi Dache. They both focus on regulated, licensed cabs, and so have avoided much of the legal issues that have beset Uber. In December last year, Didi Dache flagged down US$700 million in funding, making it the second highest funded taxi app in the world, netting more than Lyft, GrabTaxi and Ola. Tencent has put money into Didi Dache, turning taxi apps into a new frontier in the wide-scale battle between Alibaba and Tencent. Last summer Kuaidi Dache ventured into Uber’s area by launching a high-end on-demand car service called Kuaidi One. Kuaidi Dache now covers over 1 million taxis in more than 300 cities in China, including Hong Kong.

• Snapchat maybe getting ahead of itself in its ad monetization efforts: charges more than YouTube, advertisers balk at poor reporting: Snapchat Is Asking Brands for $750,000 to Advertise and Won't Budge Some brands balk at paying top dollar for one day of disappearing ads. Snapchat is asking brands for $750,000 a day for its new ads, according to multiple industry sources who have heard the pitch, and some say that's too expensive for the young app. "They [Snapchat] have minimums, and they are very firm on them," said one agency executive who has talked with Snapchat about advertising. "From a monetization perspective, they are looking for fewer, bigger, better." However, there are drawbacks to Snapchat ads, including the platform's lack of sophistication, sources said. Snapchat has limited reporting capabilities, for one; it can't even tell brands how many men versus women saw an ad, and there are no age breakouts, the executive said. Also, brands are wary of paying top asking prices when their ads disappear, sources said. (Users can view a Snapchat post briefly, then it vanishes in a snap.) "It's very hard for marketers to get their hands around advertising that is so ephemeral," the source said. Snapchat has been trying to address data and reporting, and to be fair it is still very early in its ad business rollout. Last week, the service released its first study done with the help of MillwardBrown that showed users enjoyed the app's first round of ads and that the ads helped boost brand awareness. "I'm a big fan of Snapchat, but they are going to market with rates that are significantly higher than what's competitive out there," a top executive at a major brand said. "It is difficult to go forward with a deal with Snapchat at the prices they are quoting." Snapchat is asking for rates that are higher than a masthead on YouTube, where a day costs about $500,000, another source said.

• Rumors swirl that Samsung will buy Blackberry for its patents; Blackberry stock surges, then falls on Samsung denial: Samsung Electronics recently offered to buy BlackBerry Ltd for as much as $7.5 billion, seeking its valuable patents as it battles Apple in the corporate market, according to a person familiar with the matter and documents seen by Reuters. Representatives from the two companies, which are working with advisers, met last week to discuss a potential transaction, the source said, asking not to be identified because the conversations are private. The Waterloo, Ontario-based company said in a statement that it "has not engaged in discussions with Samsung with respect to any possible offer to purchase BlackBerry. Shares of BlackBerry, which soared nearly 30 percent following the Reuters report, fell back about 15 percent in after-hours electronic trading following the statement. Samsung also told Reuters in Seoul that it has no plans to acquire Blackberry. "Media reports of the acquisition are groundless," a company spokeswoman said. BlackBerry, a one-time investor darling that pioneered smartphones, has regained some of its lost swagger under Chief Executive John Chen, who is leading a bid to regain market share it has lost to Apple Inc, Google Inc and Samsung. “To get a hold of the BlackBerry network and all its secure features, that would be a real coup for Samsung, looking to differentiate themselves from Apple and from others," he said. BlackBerry's patent portfolio is composed of roughly 44,000 patents, worth more than $1.43 billion in net book value as of August last year, although many analysts think they could be worth much more. Edward Snyder, managing director of Charter Equity Research, said it made sense for Samsung to target BlackBerry's patents in its outgoing battle with Apple and others, and that it likely would need to bid for the whole company because BlackBerry management did not want to only sell specific assets. "Samsung will have to buy the whole thing and then and shutter what they don't need,” he said. In the third quarter, revenue at BlackBerry, which is increasingly focusing on providing services like secure corporate networks, fell to $793 million from $1.19 billion a year earlier, falling short of analysts' expectations of $931.5 million.

• Zomato is in talks to raise $100M: Zomato Media Pvt Ltd, the company behind the popular restaurant listing and review site Zomato.com, is in talks to raise $100 million (Rs 625 crore) in a fresh funding, says a Reuters report quoting its co-founder and CEO Deepinder Goyal. This comes close on the heels of Zomato sealing its sixth acquisition in as many months and its biggest yet of restaurant information and table booking property Urbanspoon in the US for $52 million (Rs 325 crore). In November last year, Zomato had raised $60 million in funding at a pre-money valuation of $600 million from existing investors

• Investors Put $186 Million Into Lynda.com, an Online Tutorial Service, as US education startups get hot: Investor confidence in the education technology sector suddenly looks a lot more serious — at least for digital learning companies with proven business models. Lynda.com, an online video tutorial service that provides professional skills training to individuals and enterprise clients, announced Wednesday morning that it had raised $186 million in financing. The round was led by TPG Capital, a private investment firm. The sum dwarfs the largest ed tech financing deal of last year; in that deal, Pluralsight, another online training platform for professional skill development, raised $135 million from venture capital and private equity firms. The amount raised by Lynda.com also represents the largest ed tech financing deal in the last six years, according to CB Insights, a venture capital database that has been tracking the sector since 2009. Industry analysts said the Lynda deal was notable for other reasons, too. “It’s interesting, for one thing, that the round was led by TPG, a private investor likely to do more research on the market and revenue model than an early-stage investor focused on growth,” said Matthew Wong, a research analyst at CB Insights. Founded in 1995 as a training program for web design, Lynda.com is hardly a start-up. The company currently offers 5,700 courses online in English and other languages for professionals in business subjects like management; technology skills like programming and web development; and creative fields like video and photography. Lynda.com generated more than $150 million in revenue in 2014, Mr. Robison said, and has been profitable since 1997. He added that the company planned to spend the capital it raised on acquiring firms that specialize in technical and business skills training for professionals; on expanding internationally; and on improving the product experience for subscribers.

• Indian capital market regulator Sebi is working on crowdfunding guidelines: SEBI is is holding consultations for “evolving guidelines” on crowd funding that will help start ups raise funds. Crowd-funding typically involves young entrepreneurs and small groups of people raising funds for their ventures through various online platforms involving individuals as well as organisations. Sebi whole-time member Rajeev Agarwal today said the regulator “was evolving guidelines in consultation with government for funding arrangements for star up entrepreneurs”. The market regulator had, in July last year, come out with draft norms on crowd funding. Under the proposed norms, the issuer entities and their promoters and directors would need to meet ‘fit and proper’ criteria of Sebi, while they can not use multiple platforms to raise such funds within a year, among others. According to Sebi, there is a need for funding for SME through alternative sources as 2008 global financial crisis made it difficult for banks to lend money to the ventures or start-ups, which may have high risk element. However, Sebi said there is possibility of systemic risk associated with crowd-funding as well as chances that investors could be defrauded.