Daily Tech Snippet: Monday February 23

• Apple wants to start producing cars as soon as 2020, and is hiring accordingly: Apple Inc., which has been working secretly on a car, is pushing its team to begin production of an electric vehicle as early as 2020, people with knowledge of the matter said. The timeframe -- automakers typically spend five to seven years developing a car -- underscores the project’s aggressive goals and could set the stage for a battle for customers with Tesla Motors Inc. and General Motors Co. Both automakers are targeting a 2017 release of an electric vehicle that can go more than 200 miles on a single charge and cost less than $40,000. “That’s the inflection point -- the proving ground -- that brings on the electric age,” Steve LeVine, author of “The Powerhouse,” a book about the automotive battery industry, said on Bloomberg TV Thursday. “Now you have Apple coming in and this is critical mass. Was GM really going to be able to match Tesla? Apple can.” Apple, which posted record profit of $18 billion during the past quarter, has $178 billion in cash with few avenues to spend it. The Cupertino, California-based company’s research and development costs were $6.04 billion in the past year, and Chief Executive Officer Tim Cook is facing increased pressure to return cash to shareholders. The CEO has been pushing the iPhone maker to enter new categories to further envelop users’ digital lives with Apple’s products and services. Apple’s possible foray into cars follows a similar path it’s taken to break into other industries. The company wasn’t the first to make a digital-music player or smartphone, and only entered those markets once it had a product that redefined those categories. hiring an auto team : A year and a half ago, Apple Inc (AAPL.O) had applied for just eight patents related to auto batteries. Recently, it has hired a bevy of engineers, just one of whom had already filed for 17 in his former career, according to a Thomson Reuters analysis. The recent spate of hires and patent filings reviewed by Reuters shows that Apple is fast building its industrial lithium-ion battery capabilities, adding to evidence the iPhone maker may be developing a car.

• Winning the Buy Box is at the top of most Amazon retailers’ wish lists; here is a look at how it works; To understand how Amazon views the Buy Box, it’s worth putting yourself in the shoes of a shopper to see how they experience the Buy Box. Let’s imagine that as a buyer you’re searching for a Sony H300 digital camera on Amazon.com and come across the listing below. You go to the product page, and the price is in your range so you click ‘Add to Basket’. You’ve just used Amazon’s Buy Box. Did you pay attention to who was selling this item? Probably not. You assume it’s sold by Amazon. But in this case, it’s not. A third-party seller sells it and Amazon fulfills it. As a consumer, you had 31 other third-party options on this product page, including 8 other Fulfillment by Amazon (FBA) offers. Amazon itself wasn’t selling this item through its first-party offering. Now that we know how consumers interact with the Buy Box, we have a clearer picture of how Amazon narrows down eligibility. Over at Amazon, a team is working on deciding Amazon’s Buy Box algorithm. Their mission is to define what buyers consider to be the ‘best’ offer when shopping on the marketplace. It’s truly a customer-centric attitude: Amazon’s top priority is to earn buyers’ trust, as Amazon believes that this maximizes profits in the long term. Predicting which offer is best for consumers at a product’s ASIN level is extremely complex. Amazon can’t allow this formula to be transparent for third-party sellers, and Amazon is okay with that. Overall, Amazons goal isn’t to increase retailers’ trust, but buyers’ trust. Since seller performance requirements can vary by category and are subject to change, Amazon does not disclose specific targets needed to win the Buy Box. However, we do know that becoming eligible requires meeting very high standards. To be in with a chance of winning the Buy Box, excelling in the qualifying criteria of pricing, availability, fulfillment and customer experience is the best way to work toward achieving this status. Pricing: Amazon looks at the total price the customer will pay for a product, including delivery, so make sure you price your products competitively, including the delivery rates. The lowest price doesn’t guarantee winning the Buy Box, as pricing is just one factor that is evaluated. Availability: Make sure you keep stock available, if you have no current stock for a product, you cannot win the Buy Box! Use inventory planning to keep your popular products in stock and make sure you maintain a consistent quantity threshold. Fulfillment: If you can, offer multiple shipping options on your products. Customer Experience: As a customer-centric company, it is no shock that customer metrics play their part in the Buy Box allocation. Make sure you keep on top of your Order Defect Rate, A-to-z claims, returns and other seller performance and delivery metrics (such as lead-time-to-ship time). Time and experience: In most categories you are not eligible for the Buy Box right away. You need to develop your business on Amazon and build a strong, positive reputation before you can qualify for the Buy Box. Your sales history is an important aspect – both number of sales and customer satisfaction on those sales. Amazon’s challenge is not just confirming that buyers prefer offers with low prices, fast delivery and sellers with better feedback. The key is providing each input with a value. To get the Buy Box algorithm right, a lot of testing is needed, with Amazon’s team updating and testing new releases, measuring success by monitoring GMV, unit uplifts and the percentage of items bought so that the best products are available to customers on the Buy Box.

• Mobile app-install ads have fueled the rise of Facebook and Twitter, now Pinterest wants in: Mobile app-install ads have been fundamental to Facebook and Twitter's rise as mobile advertising players over the past two years, and now Pinterest wants in on the action. Last week, Pinterest teamed up with Apple to roll out App Pins—a feature that lets users save and share apps to boards. For example, someone looking for a recipe on Pinterest may see a meal-planning app pop up in search results. Clicking on the posts then lets a user download the app straight from Pinterest. With 75 percent of the social network's traffic coming from mobile, the new tool seems like a natural fit for Pinterest marketers. But Pinterest may also be too late to capitalize on the tactic since Facebook and Twitter are already bolstering their revenues with app-install ads. "They're definitely a little behind, but there is still a massive opportunity for them to integrate an app-install format," said Guillaume Lelait, general manager at mobile marketing agency Fetch. "Pinterest is different in that users are already coming to the platform with a discovery and purchasing mindset." As part of the partnership, social media-averse Apple has also set up an account with a few boards of themed apps. App Pins are the latest attempt from Pinterest to make it easier for users to find things they're interested in. In 2013, the company started packing more text into pins. And last year, Pinterest started testing Promoted Pins—ads that are bought based on keywords. The San Francisco company told The New York Times it doesn't plan to make money off App Pins. But app install ads have been a boon for Facebook and Twitter, and it's hard to imagine that Pinterest isn't interested in tapping into the lucrative opportunity. Mobile accounted for 69 percent (or $2.5 billion) of Facebook's revenue during the fourth quarter, while smartphone and tablet ads generated 85 percent of Twitter's third-quarter ad money. While Pinterest doesn't plan to use its new tool for advertising, a new case study from financial savings app Acorns shows that app-install ads pay off. Acorns launched in August as an app that saves spare change on credit and debit card purchases. Users first link a credit card number to the app, which then rounds up the amount of a transaction to the next dollar. The extra money is then saved away to use later. The financial startup used mobile app install ads on Facebook, Twitter and mobile ad networks to drive downloads of the app. Promoted Tweets on Twitter ran from August to November 2014, targeting money-related keywords. The paid tweets generated a 3 percent engagement rate. "Basically we were able to find who was our audience and serve the ads directly to them," said Sami Khan, director of user acquisition at Acorns. In the first 90 days that Acorns launched, one in five of the company's downloads came from Twitter. The company paid less than $4 per app install, which it claims is significantly lower than the $8 to $10 that financial companies typically pay to acquire users. The Acorns team also experimented with the ad's creative, changing up images on the fly. Khan said pictures that were simple and to the point performed well. "Twitter ads for mobile app installs work better when they have pictures attached," Khan said. "So we needed to create images that related to our value proposition."

• Pinterest is in talks to raise $500M at valuation of $11B, twice its previous valuation: US-based visual discovery startup Pinterest Inc. is in talks to raise $500 million at a valuation of $11 billion, according to a report by The Wall Street Journal , citing sources. The new funding will more than double the valuation of the company from its last round, when it had raised $200 million at $5 billion valuation. To date, Pinterest has raised a total of $764 million in funding from SV Angel, Bessemer Venture Partners, Fidelity, Andreessen Horowitz, FirstMark Capital, and Valiant Capital Partners. In October 2013, Pinterest had raised $225 million led by Fidelity Investments at a valuation of $3.8 billion. Previously, the company had bagged $100 million from Japanese e-commerce giant Rakuten.

• India startup action: Payments firm Citrus Pay crosses a milestone: $1B in gross transaction runrate: Citrus claims of having crossed $1 billion in gross transactions as a run rate from its 11 million registered users, according to a top executive of the company. It crossed the milestone in December which means it processed transactions worth over Rs 515 crore in that month. “We process more than 1.6 lakh transactions per day compared with 278 transactions in January 2011 when we started operating,” said Satyen Kothari, co-founder, Citrus. This means it is doing roughly 5 million transactions per month with an average ticket size of around Rs 1,000. It says it now has over 2,500 merchants using its services and it is adding more than 100 every month. Airtel, IndiGo, Sun Direct, Tata AIA, Fun Cinemas, Pepperfry and Delhi Metro are among its clients. The firm charges 2.5 per cent fee of the transaction from the merchants, which means it is now generating around Rs 13 crore as net revenues a month. The firm has launched direct-to-consumer app which is a personal payments manager that tracks, pays & reminds users of their bills. Called Cube, it gives a dashboard on what’s late, what’s due and what’s already paid. “Most Indian pay about 8-10 bills every month. RBI has estimated that Indians pay 30 billion bills in a year. These could be paid by physical means or going online on different websites which is a waste of time. Going to banks for paying it is not meant for our fast moving lifestyle and so we came up with Cube,” said Kothari. “Besides paying bills, it can create analytical graphs that helps the user track spending habits, brings exhaustive billing history to the users fingertips and ‘automagically’ adds reminders for payments made by users,” he explained. For circumstances where users cannot pay through the app, the tracking history does not break as it also allows users to manage bills that are paid offline or on other sites by manually adding that data. The unique quotient is that it also allows users to track micro bills like maid’s salary etc and make notes. The app also allows users to ask friends or spouse to pay for it. Presently, the app operates in seven categories including mobile, DTH, power, credit card, data card, landline and gas and also other miscellaneous categories. This is the company’s second direct-to-consumer app. It had earlier launched an app called Death of Chutta which allows users to exchange money with friends. The money in that wallet can also be used to pay across 700 portals which Citrus has partnered. According to the founder, these products were launched for making India’s digital currency. The idea is also to gear up for the payments banking license, for which it has applied. “There are infinite things that we can do with the consumer’s money. Right now we are restricted to Rs 5000 per transaction and Rs 10,000 per month which really hits the ceiling to how much we can automate and innovate very fast. With the license, we can hold up to Rs 1 lakh,” said Kothari. In December 2013, the Mumbai-based company had raised about $5.5 million from econtext Asia Ltd, a Japanese online payments firm, and Beenos Asia Pte Ltd, a subsidiary of Japanese e-commerce and incubation company Netprice, with participation from existing investor Sequoia Capital. Prior to that, it has raised $1.8 million from Sequoia Capital in January 2012. Citrus competes with CCAvenues, ibibo Group’s PayU, One97’s Paytm Payments, ZaakPay and PayPal.