Daily Tech Snippet: Thursday February 19

• Uber expands Series E by $1B to $2.8B; Baidu among investors as Alibaba invests in rival Lyft: Facing overwhelming demand from institutional investors, Uber has expanded its Series E round of venture financing by $1 billion, according to documents filed Wednesday with the Delaware secretary of state, bringing the total capacity for the round up to $2.8 billion. The move, which was confirmed by Uber, occurred just weeks after the company closed a $1.2 billion round of financing. At the time, Uber said it had left capacity for about $600 million in additional strategic investments, according to a Delaware filing. The company is incorporated in Delaware and based in San Francisco. But the appetite for a piece of Uber has proved to be greater than the company had imagined. The $600 million was quickly oversubscribed, and Uber decided to raise the amount. Baidu, the Chinese Internet giant, accounts for part of the additional investment beyond the $1.2 billion round. The most recent expansion is on top of some $4 billion Uber raised, including a recent $1.6 billion round of convertible debt financing from the clients of the private wealth arm of Goldman Sachs, the investment bank previously confirmed. Uber’s $40 billion valuation, extraordinary by any private technology company’s standards, remains unchanged since the company announced the first part of the round in December. Uber is one of the most richly valued private technology start-ups, second only to Xiaomi, the Chinese smartphone manufacturer. Meanwhile, Uber’s largest United States competitor is also raising money. Lyft, identified by its signature pink mustache logo, is trying to raise at least $250 million in private capital, with participation from at least one previous investor, the Alibaba Group of China.

• Google is set to launch a subscription model for YouTube in a few months, CNBC quoted Robert Kyncl, the online video service's head of content and business operations as saying at the Code/Media conference. The company was "fine-tuning the experience", Kyncl said at the conference in California. (cnb.cx/1zOXElH) YouTube has been exploring a paid, ad-free version of its service for some time. The company launched a pilot program in May 2013 that allowed individual content creators to charge consumers a subscription fee to access a particular "channel" of videos. The plan would represent a significant change for the world's No. 1 online video, whose free videos, often accompanied by short commercials, attract more than 1 billion users a month.

• Snapdeal aims for $2B in fashion in 2015; acquires designer apparel e-tailer Exclusively.com: E-commerce major Snapdeal.com, run by Delhi-based Jasper Infotech Pvt Ltd, has acquired Indian luxury and lifestyle products site Exclusively.com (formerly Exclusively.in). The financials of the deal are not disclosed. According to Snapdeal, the acquisition has been made with an aim to strengthen its fashion business and reach $2 billion in gross merchandise volume (GMV) in the category in 2015. “We have witnessed a surge in the demand from consumers across the country for premium and luxury products. However, given that access to luxury brands is limited in our country, we have acquired Exclusively to provide our users with access to a range of aspirational, high end products and services,” said Kunal Bahl, co-founder and CEO, Snapdeal.com. As part of the acquisition, Exclusively will complement Snapdeal’s existing ecosystem and will provide a consolidated offering for the luxury and lifestyle shopper. It will continue to function as an independent site and all aspects of Exclusively’s online shopping experience will remain intact — with new collection and service augmentations in the pipeline. Snapdeal on the other hand will help the company scale up and expand its current business and reach. As of now, Exclusively retails products from designers like Manish Malhotra, Tarun Tahiliani, Manish Arora, Anita Dongre, Rohit Bal, Shivan & Narresh, Gaurav Gupta, JJ Valaya, Ritu Kumar, Varun Bahl, and Neeta Lulla, to name a few. This year, the company plans to launch leading international luxury brands and designers on its site. Founded in June 2010, Exclusively.com offers products in a number of categories including apparels, jewellery, handbags and accessories. While it started off targeting the US and the UK markets, the company now caters to the Indian market. Interestingly, the company was reported to have been acquired by fashion portal Myntra.com in 2012. At the time, Myntra had acquired Shersingh.com. The two sites (Shersingh.com and Exclusively.com) were functioning under the same umbrella back then. Exclusively.com could not be reached out to for an immediate response.

• Samsung Buys LoopPay, a Competitor to Apple’s Mobile Wallet: Samsung, the South Korean technology giant, announced Wednesday it had acquired LoopPay, a mobile payments company, signaling its interest in controlling smartphone-based purchases. The move comes just months after the release of Apple Pay, Apple’s mobile payments product, which allows consumers to buy things with little more than a wave of a smartphone. Though it has been available for only a handful of months, Apple Pay has gained significant traction with retailers and consumers. Whole Foods, the high-end grocery store, said it had processed thousands of Apple Pay transactions. Apple has also persuaded dozens of credit card issuers to sign up to support Apple Pay. LoopPay, however, believes its reach will extend far beyond that of Apple Pay. LoopPay’s underlying technology relies on a magnetic transmission sent from a user’s phone to a merchant’s payment terminal, mimicking a credit card swipe. The technology, according to LoopPay, can be accepted in more than 90 percent of existing point-of-sale terminals. It is unclear if LoopPay will work on chip-and-pin terminals, which use a more secure form of credit card technology and are being widely phased in this year. Apple Pay relies on near-field communication technology, which Apple says is available at approximately 220,000 American locations. MST v NFC: LoopPay uses magnetic secure transmission (MST) tech works with around 90 percent of existing payment terminals currently deployed in U.S. stores. “If you look at other competitor solutions in mobile payments [Apple Pay included], it’s actually based on near-field technology, which has very limited coverage in the U.S. We see the MST technology that LoopPay owns has a lot of potential to really solve the end-user coverage issues with respect to point-of-sale terminals.” Samsung spotted the potential early: LoopPay launched a Kickstarter project in November of 2013, and was contacted by Samsung only “shortly thereafter,” according to Graylin.

• Why Google Should Fear Facebook's New Product Ads Social network's targeting threatens retail search dominance: Yesterday, Facebook revealed that it's starting to serve ads for retailers' goods that use the targeting and personal-interest information it has on its 1.4 billion users. These product ads are an answer to a service that Google has offered businesses since 2013 with Shopping Ads (which were initially called Product Listing Ads). Google Shopping Ads show up as paid posts atop retailer-focused search results and render pictures and prices of items for sale. They are highly visual compared with text-based search results and have become a lucrative piece of Google's search business. In fact, according to Q4 2014 research from Adobe Digital Index, 20 percent of clicks on Google search links for retailers were on Shopping Ads. Also, Adobe said that merchants spent 47 percent more on Google Shopping Ads year-over-year last quarter, meanwhile they decreased spending on text-based ads by 6 percent during the same period. The interest in the format, which entails more dynamic creative, shows how digital advertisers prefer more visual marketing over simple text. Now, Facebook has the opportunity to mimic that success with its troves of consumer data while siphoning from its rival's digital dollars. Its product ads will let businesses zero in on users based on elements such as clothing preferences, musical tastes and location. "Facebook has the best targeting capabilities, so it can take some of the limelight from shopping ads on Google," said Tamara Gaffney, principal analyst for Adobe Digital Index (ADI). Facebook has made dynamic visuals a priority—not just with its new product ads—but with the whole design of the platform, encouraging more video and photos. And there's a bottom-line reason behind such moves. Gaffney and her ADI team's quarterly research last month read: "Advertisers are gravitating toward creating an image-based Web shopping experience for consumers. Facebook is also attracting more retailers, which means there will be a likely increase in demand for more effective shopping ads. By the second half of 2015, Adobe predicted that shopping ads will account for 30 percent of all search dollars. Also, Google and Facebook are not alone going for that market—Yahoo and Bing have a version; however, for now they control only a small market share.

• Chinese online education startup raises $100M: On the eve of the Chinese new year, online education platform 17zuoye has announced that it has raised a series D round worth US$100 million, according to Duozhi. This brings the company’s total valuation to US$600 million. The round was led by H Capital (which also invested in 17zuoye’s series C), and other investors included Temasek, Yuri Milner/DST, and Lei Jun’s Shunwei (which has invested in every 17zuoye round starting with its series A). 17zuoye is an online learning platform for students K-12, as well as teachers and parents. The name means “homework together” in Chinese, and the site aims to serve as a nexus for all three groups to facilitate the educational experience, focusing on English and Math classes. For example, for students one service it offers is an automated system that allows them to record English sentences and get instant feedback on pronunciation. Teachers can then listen to their students’ recordings at any time. Parents can even get real-time reports on their kids via WeChat. Online education is a hot market in China right now, but 17zuoye, which was founded in 2007, has shown especially explosive growth. Two years ago the site had just over 1 million students; now it has more than 7 million. In July of last year alone, for example, the site added more than 130,000 students to its rolls.

• Sony seeks to re-invent itself: sees 25-fold profit jump by 2018; could exit TVs, phones: Sony aims to boost operating profit 25-fold within three years by growing its camera sensors and PlayStation units, its chief executive said, outlining a strategy that could see the company exit the cut-throat TV and smartphone sectors. CEO Kazuo Hirai said on Wednesday the Japanese consumer electronics firm would no longer pursue sales growth in areas such as smartphones where its has suffered competition from cheaper Asian rivals as well as industry leaders like Apple Inc (AAPL.O) and Samsung Electronics (005930.KS). Sony would instead focus its spending on more profitable businesses such as camera sensors, videogames and entertainment as it seeks to return to growth after forecasting for this financial year its sixth net loss in seven years. The comments, made just as the Tokyo market was closing, helped Sony's shares (SNE.N) rise 1.4 percent in New York. "The strategy starting from the next business year will be about generating profit and investing for growth," Hirai told a briefing, adding that Sony's units would be given greater autonomy to make their own business decisions. Asked about the TV and mobile phone units, Hirai said he would not "rule out considering an exit strategy", Sony's clearest statement to date about the possibility of selling or finding partners for these struggling units. Sony is in the midst of a restructuring that has so far seen it sell off its personal computer division and spin off the TV business. It has also axed thousands of jobs. Sony shares have risen more than 80 percent over the past year as investors applauded the restructuring, which accelerated since Hirai appointed Kenichiro Yoshida as his chief strategy officer in late 2013. Hirai said Sony would target return on equity of more than 10 percent by the end of March 2018, adopting a yardstick Prime Minister Shinzo Abe has been promoting as a way to attract foreign investors. He also said Sony aimed to post an operating profit of at least 500 billion yen ($4.2 billion) for 2017/18, a jump from the 20 billion yen forecast for the year ending March 31. Sony's revamp is starting to pay off. This month, it forecast an operating profit instead of a loss for the financial year ending March 31. But it still expects to book a net loss in 2014/15, albeit a smaller amount than previously estimated.

• Microsoft seeks to re-invent itself: has suddenly gotten serious with mobile. This is the same Microsoft that spent almost a half-decade trying to offer a credible alternative to Apple’s iPhone and mobile devices running Google’s Android. And it’s the same Microsoft that paid more than $7 billion to buy Nokia’s once-mighty handset business, only to see its mobile business sink further. The company now clings precariously to a 3 percent share of new smartphone sales. Make no mistake, Microsoft still wants its mobile operating system, Windows, to be the software in our smartphones. But mobile developers continue to focus on making apps for Apple or Android devices instead, making Windows phones an increasingly hard sell. That reality has finally sunk in at Microsoft, and a new strategy is afoot. When Satya Nadella, Microsoft’s chief executive, took the top job at the company about a year ago, he signaled that the company’s priorities were shifting. Microsoft, he said, was in a “mobile-first, cloud-first world.” Since then, the company has brought more of its apps and services to the Apple and Android devices people actually use, rather than the ones Microsoft would like them to use — those that run Windows. What’s even more surprising is that Microsoft’s heart seems to be in the effort. Over the last several months, Microsoft has been taking up more and more space on my own iPhone’s home screen. I’ve installed mobile versions of its Office apps as well as OneDrive, the company’s answer to Dropbox, Google Drive and other cloud storage services.