Daily Tech Snippet: Wednesday, February 10, 2016

• Amazon Building Global Delivery Business to Take On Alibaba: In recent weeks, speculation has mounted that Amazon.com Inc. plans to launch a global shipping and logistics operation that will compete with United Parcel Service Inc. and FedEx Corp.Asked about reports that the company was leasing planes and had registered an ocean freight booking business, Chief Financial Officer Brian Olsavsky downplayed Amazon’s ambitions last month in an earnings call. He said the company was simply looking to supplement its delivery partners -- not replace them -- during peak periods like the Christmas shopping season. Amazon documents reviewed by Bloomberg News reveal a far bolder plan.A 2013 report to Amazon’s senior management team proposed an aggressive global expansion of the company’s Fulfillment By Amazon service, which provides storage, packing and shipping for independent merchants selling products on the company’s website. The report envisioned a global delivery network that controls the flow of goods from factories in China and India to customer doorsteps in Atlanta, New York and London. The project, called Dragon Boat, is proceeding, according to a person familiar with the initiative, who asked not to be identified because the information isn’t public. The ambitious strategy promises to turn FedEx and UPS into Amazon rivals, but also will pit the Seattle giant against Chinese counterpart Alibaba Group Holding Ltd. Both companies are vying for dominance of the rapidly growing cross-border e-commerce market, which by 2020 is expected to swell into a $1 trillion industry serving 900 million shoppers, according to a June report from Accenture and AliResearch, Alibaba’s research arm. Amazon’s plan would culminate with the launch of a new venture called “Global Supply Chain by Amazon,” as soon as this year, the documents said. The new business will locate Amazon at the center of a logistics industry that involves not just shippers like FedEx and UPS but also legions of middlemen who handle cargo and paperwork associated with transnational trade. Amazon wants to bypass these brokers, amassing inventory from thousands of merchants around the world and then buying space on trucks, planes and ships at reduced rates. Merchants will be able to book cargo space online or via mobile devices, creating what Amazon described as a “one click-ship for seamless international trade and shipping.”

• Federal Government Will Treat Google’s Driverless Car System as a Legal Driver: Google’s robot just got its driver’s license. On Tuesday, the federal agency that sets road rules — the National Highway Traffic Safety Administration (NHTSA) — released a letter to the Internet giant that supports its interpretation of a driverless system as legally adequate for roadways, a key victory for the critical initiative within Alphabet, Google’s parent company. Previously, the NHTSA only considered humans as drivers under law, because that’s how cars worked until Google came along. Now the agency has said it will consider Google’s self-driving system a driver, too. The letter came in response to a November petition from Chris Urmson, the director of Google’s self-driving car project. Urmson argued that regulators should treat Google’s homemade cars, built without a steering wheel and brakes, on par with human drivers. It’s been a persistent sticking point for the Google unit, particularly after California issued draft autonomous vehicle rules expressly prohibiting driverless cars. Ensuring that its driverless fleet has regulatory approval to get on the roads is critical to Google’s car strategy.

• Public Markets Are Sending Some Ominous Signals to Private Tech Companies: After years of rapidly growing valuations and additions to the "Unicorn" club, a number of private companies have seen their valuations take dramatic cuts. From Foursquare Labs Inc. raising funds at a roughly $250 million valuation versus a former round in 2013 at $600 million, to Fidelity writing down its Snapchat Inc. holding, there's a lot of interest in where private tech companies might be valued right now. One way to think about private tech valuations is to look at publicly-traded entities that might reasonably seen as proxies. Here's a few examples: The Bloomberg IPO index tracks the performance of companies during their first year of trading, and it has certainly taken a tumble. Cracks began to show late in 2015 as many of them fell below their IPO price. Charlie Bilello, Director of Research at Pension Partners, pointed out just how rare the positive performance of Facebook Inc. actually is, with firms like Groupon Inc., Etsy Inc., Twitter Inc., GoPro Inc., and LendingClub Corp. all down more than 40 percent from their offering price. The index is down 30 percent over the past year and 36 percent from recent highs. One company to keep an eye on is SVB Financial Group, which is the holding company for Silicon Valley Bank. This commercial bank serves emerging and middle-market growth companies in the fields of technology and life sciences.You could see it as a gauge of red-hot tech since it has done business with Pinterest, BuzzFeed, and others. Shares are down 43 percent from recent highs and 31 percent over the past year.

• SolarCity Beats Q4 Estimates, But Stock Plunges 30 Percent On Soft Outlook: SolarCity, which is down more than 50 percent over the past year, just released its Q4 2015 earnings. The market has reacted negatively, with the stock trading down about 30 percent after-hours at a price of around $17.50 per-share. While Q4 revenue of $115M and loss of $2.37 per share beat estimates of $111M in revenue and a loss of $2.59 per share, the company’s Q1 2016 forecast was lower than expected. Additionally, the company missed its quarterly installation estimates for Q4, installing 272 MW, below the guidance of 280 MW – 300 MW. In its shareholder letter, SolarCity said they expect to install 180 MW of solar panels in Q1 2016, which represents 18 percent year-over-year growth, but a 34 percent decline compared to the previous quarter. While some seasonal slowdown for Q1 is normal, the company said that this estimate reflects a “higher-than-usual” seasonal slowdown.

• GitHub Updates Its Enterprise Product With Clustering Support, Updated Design: GitHub Enterprise, the company’s on-premises solution for managing code, is getting a major update today. It comes at a time when there seems to be some upheaval in the company around the importance management has been putting on this product. The marquee feature of GitHub Enterprise 2.5 is support for clustering. With this, businesses can now set up a cluster of GitHub Enterprise servers that act as a single installation, enabling it to support significantly larger teams. “With GitHub Enterprise 2.5 more users can be enabled on one system as teams grow,” Kakul Srivastava, GitHub’s VP of Product, tells me. “We have customers with tens of thousands of developers who need to be able to work together, and this is really important functionality to enable them to do this in a scalable way.” She also noted that clustering doesn’t currently come at an additional cost to GitHub’s enterprise users. This new version also includes interface improvements with updated designs for everything from log-in screens to the look and feel of the GitHub repositories. This brings GitHub’s enterprise product in line with its hosted version. Also new in this version is improved Subversion support — for those who aren’t using git as their version control system — as well as an API for managing protected branches (that is, branches developers can neither delete nor force-push their code to). This new API is currently in preview.