Daily Tech Snippet: Thursday, May 14

• New Facebook Ads Come With a Call Button to Ring Up Businesses: Facebook has built a "call" button people can tap to call businesses directly from an ad. More than 30 million businesses have Facebook pages, and now they can add the instant call button or a "get directions" button in marketing campaigns. The buttons open more direct-response marketing opportunities on Facebook, which previously only offered businesses the ability to ask users for Likes. Facebook is calling them "local awareness ads," and they can target users by neighborhood. "Our new local awareness objective is the first Facebook ad objective created explicitly for local businesses," Facebook said in its post today announcing the new features. Local businesses can set up a campaign with the new buttons from their Facebook pages and see the results. According to Facebook, the ads reach the most people for the least money. One example showed an unnamed advertiser spending $40, reaching 6,500 people and generating six calls. Of course, Facebook is not the first to offer a call button. Google's search gives users call and directions links, and Twitter also has similar offerings. Facebook topped 2 million advertisers earlier this year, and it credited much of its new business to a focus on small and medium-size businesses.

• Wal-Mart to Challenge Amazon Prime With $50 Shipping Service: Wal-Mart Stores Inc. will offer a $50-a-year unlimited free-shipping service for online customers starting this summer, seeking to challenge the $99 Prime service offered by retail rival Amazon.com Inc. The service will be available by invitation only in select markets, said Ravi Jariwala, a spokesman for Bentonville, Arkansas-based Wal-Mart. More than 1 million items -- including apparel, sporting goods, electronics and toys -- will be available for delivery in three days or less, Jariwala said. Jariwala declined to say what markets will be included in the initial test of the service, how long it will last or how many people will be invited. The move ratchets up competition in e-commerce, where Wal-Mart has been trying to make inroads. While the company is the world’s largest retail chain, Amazon dominates online shopping. Prime has emerged as a key weapon for Seattle-based Amazon because it keeps customers loyal, making it ripe for imitation. In the U.S., customers pay $99 a year for Amazon Prime membership, which includes delivery discounts and online streaming of movies, television shows and music. Prime membership grew by more than 50 percent in 2014 from a base of “tens of millions,” according to Amazon. Prime members also spend more than occasional shoppers. For that reason, Amazon is trying to boost Prime membership with new perks. In December, it introduced same-day delivery for Prime members in Manhattan and has since expanded the service to additional cities, including Dallas and Miami. Macquarie Research analyst Ben Schachter estimated last month that Amazon has at least 35 million Prime members and that approximately 50 percent of U.S. households will have a membership by 2020. Wal-Mart, meanwhile, is trying to pull out of a broader slump and improve customer service. The company cut its sales forecast in February, and higher spending on wages and other investments have raised concerns for investors. Wal-Mart shares declined 1 percent to $78.16 at the close in New York on Wednesday. They have dropped 9 percent so far this year.

• Cisco Earnings: Quarterly Revenue $12.1B, +5% Y/Y; Net Income $2.4B; Shares Flat; Analysts Hail Cisco's Resilience: Cisco Systems delivered gains in quarterly profit and sales on Wednesday that slightly surpassed Wall Street’s expectations. The company reported a 12 percent increase in net profit, to $2.4 billion. Its operating earnings of 54 cents a share were just above analysts’ consensus estimate of 53 cents a share, as compiled by Thomson Reuters. Revenue rose 5 percent, to $12.1 billion, essentially in line with the average analyst forecast of $12.07 billion. Parts of the business were weak: Sales to telecommunications and cable companies were off by 7 percent and sales in emerging markets slipped, particularly in Russia and China. Cisco shares were down slightly in after-hours trading. Over the last year, Cisco shares have climbed 28 percent. Over the years, Cisco rivals have surfaced from Silicon Valley to China. But Cisco has managed to stay on top. “Its scale and breadth are extremely hard to replicate,” said Amitabh Passi, an analyst at UBS. That heft amounts to what Pierre Ferragu, an analyst for the research firm Sanford C. Bernstein, called “a powerful platform advantage” in a report last week.

• Its OK to Fail - India learns to 'fail fast' as tech start-up culture takes root: After ping pong tables, motivational posters and casual dress codes, India's tech start-ups are following Silicon Valley's lead and embracing the "fail fast" culture credited with fuelling creativity and success in the United States. Taking failure as a norm is a major cultural shift in India, where high-achieving children are typically expected to take steady jobs at recognized firms. A failed venture hurts family status and even marriage prospects. But that nascent acceptance, fueled by returning engineers and billions of dollars in venture fund investment, is for many observers a sign that India's $150 billion tech industry is coming of age, moving from a back office powerhouse to a creative force. "There is obviously increased acceptance," said Raghunandan G, co-founder of TaxiForSure, which was sold to rival Ola this year. He is now investing in others' early stage ventures. "My co-founder Aprameya (Radhakrishna) used to have lines of prospective brides to meet ... the moment we started our own company, all those prospective alliances disappeared. No one wanted their daughters to marry a start-up guy." Srikanth Chunduri returned to India after studying at Duke University in the United States, and is now working on his second venture. "I think what's encouraging is that acceptance of failure is increasing despite the very deep-rooted Asian culture where failure is a big no," he said. The shift has come about, executives say, as engineers began returning from Silicon Valley to cash in on India's own boom, as hundreds of millions of Indians go online. "Investors too want to find the next Flipkart, and most of them come from Silicon Valley backgrounds, so they bring that culture," said Stewart Noakes, co-founder of TechHub, a global community and workspace for tech entrepreneurs. "That's changing the Indian norms. It's becoming ok to fail and try again."

• Amazon Unveils Advertising Platform for Mobile-App Developers: Amazon.com Inc. unveiled a new advertising platform for mobile-applications developers, a push by the largest Web retailer to grab a bigger piece of the smartphone advertising market dominated by Google Inc. and Facebook Inc. The service lets developers promote their apps on Android smartphones and tablets as well as Amazon tablets, paying Amazon each time a user clicks an advertisement displayed through the system. Campaigns start at $100. Amazon is a small player in the $28.7 billion U.S. mobile-advertising industry. The Seattle-based company has less than a 1 percent share of the market, compared with Google’s 35 percent and Facebook’s 17 percent, according to EMarketer Inc. Spending to market apps alone is projected to rise 80 percent this year to $3 billion, with Facebook leading that category.

• Facebook Begins Testing Instant Articles From News Publishers: Facebook’s long-rumored plan to directly host articles from news organizations will start on Wednesday, concluding months of delicate negotiations between the Internet giant and publishers that covet its huge audience but fear its growing power. Nine media companies, including NBC News and The New York Times, have agreed to the deal, despite concerns that their participation could eventually undermine their own businesses. The program will begin with a few articles but is expected to expand quickly. Users of iPhones will see glossy cover videos and photos tagged with map coordinates. Most important for impatient smartphone users, the company says, the so-called instant articles will load up to 10 times faster than they normally would since readers stay on Facebook rather than follow a link to another site Facebook has gone to unusual lengths to court the publishers participating in the project, some details of which were previously published by The New York Times and The Wall Street Journal. The news publishers can either sell and embed advertisements in the articles, keeping all of the revenue, or allow Facebook to sell ads, with the social network getting 30 percent of the proceeds. Facebook is also permitting the news companies to collect data about the people reading the articles with the same tools they use to track visitors to their own sites. For publishers, the Facebook initiative represents the latest in a series of existential balancing acts. The social network, which has more than 1.4 billion active users worldwide, captures more attention of mobile users — and prompts more visits to news sites — than virtually any other service. Publishers have little choice but to cooperate with Facebook, said Vivian Schiller, a former executive at NBC, The New York Times and Twitter who now advises media companies and brands. “That’s where the audience is,” Ms. Schiller said. “It’s too massive to ignore.” But Facebook’s role as a powerful distributor of news makes many people in the industry uneasy. The fear is that it could become more of a destination than their own sites for the work they produce, drawing away readers and advertising. Facebook clearly plays an important role as a gatekeeper to news. Nearly half of American Internet users said they got news about politics and government on Facebook during the course of a week, almost as many as got such news from local television, according to a survey last year by the Pew Research Center. Facebook has a long history of changing the algorithm that determines what people see in their feeds. Zynga, the mobile gaming company, built its business on Facebook only to lose much of its traffic when the company changed the rules to make a user’s game activity less visible to friends. Last year, Facebook decided to downgrade the prominence of viral content like cat videos and promote “high quality” news content. A month ago, it changed course again to highlight personal posts by users’ friends and family.

• Diverging Internet Usage Patterns: Facebook, Instagram Rule in the US, Messaging Apps Score Elsewhere: Messaging apps are becoming the most heavily-used type of app in a majority of key markets worldwide, based on both smartphone sessions and time spent in apps. However, according to new data from App Annie, the U.S. is an exception to that trend. Here, Facebook still dominates in terms of smartphone sessions, while both Facebook and Instagram led by time spent in apps. The data collected was based on Android sessions in the first quarter of this year, so it’s not necessarily a full picture of the mobile application ecosystem or app usage – but it is sourced from one of the industry’s largest datasets on mobile data. In fact, App Annie’s dataset recently grew following its acquisition of mobile measurement firm Mobidia last week. The firm is able to now detail app usage data from millions of users across 60 countries. With Mobidia and App Annie’s data combined, the company put out its first-ever report examining usage-level trends regarding mobile applications, which looked, in particular, at countries like the U.S., U.K., Germany, Japan, and South Korea. Not surprisingly, given that smartphones are primarily communication devices, the report found that within every key market, apps in the Communication and Social categories accounted for at least 40% of smartphone sessions on Android. And that trend was similar to how users spent time in apps, says App Annie. In the U.S., Social remained the top category based on sessions per active user, thanks to Facebook’s prominent position here. But in the U.K., Germany, Japan, and South Korea, Communication was in the #1 position, referring to their preference for messaging apps.