Daily Tech Snippet: Wednesday, March 2, 2016

• Fidelity Writes Down Value of Corporate Software Startups: Fidelity Investments slashed the value of its holdings in several corporate software startups in January, while taking a more optimistic view of private consumer-technology companies such as Snapchat and Uber. The value of Dropbox Inc. shares were marked down 10 percent in January from the price in December, according to data compiled by Bloomberg from public filings. Fidelity also wrote down its stake in the cloud storage company last year. The fund manager periodically readjusts the value of its private stock holdings, based on a variety of factors, and is required to disclose the new values publicly. CloudFlare Inc., maker of Web performance and cybersecurity software for businesses, took a much bigger hit. Fidelity marked down its holdings in that company by 31 percent. CloudFlare Chief Executive Officer Matthew Prince blamed the writedown on market conditions and said Fidelity had marked up the company's value twice before. "When the market recovers, we'll recover with it," he said. Although Prince wasn't happy about the decrease, he saw it as a "baby step" toward becoming a public company, when a company's stock price fluctuates constantly. DocuSign Inc., which makes electronic signature technology for contracts and other documents, and Nutanix Inc., a maker of software and hardware for data centers that filed to go public in December, were each written down by 17 percent. Fidelity also marked down Twilio Inc., which makes tools for app developers, by 13 percent. Consumer apps fared better in January. Fidelity did not change its valuations for Airbnb Inc., Pinterest Inc., Snapchat, and Uber, despite a rough month in the public markets and signs of a slowdown in private investments. About a quarter of mature startups raised money at lower valuations in the fourth quarter than in previous rounds, according to a study by Silicon Valley law firm Fenwick & West LLP. More than half of those later-stage deals included terms that guarantee new investors get their money back before other shareholders. Fidelity's markdowns of corporate software startups came after a brutal month for their publicly traded peers. IBM and VMware Inc. reported disappointing earnings forecasts in January. Many technology companies said they expected a tough IT climate for 2016 and often cited a deteriorating macroeconomic environment as a factor. The Standard and Poor's 500 Index was down 5.1 percent in January, but several enterprise software companies were well below that. Box Inc., a Dropbox rival, plunged 23 percent. Workday Inc. fell 21 percent. Salesforce.com Inc. dropped 13 percent. Despite the dismal climate, Fidelity didn't write down every enterprise startup. For example, the fund manager kept the value of its shares in Cloudera Inc., a Silicon Valley Big Data company, unchanged in January.

• Facebook executive jailed in Brazil as court seeks WhatsApp data: Brazilian police arrested a senior Facebook Inc executive on Tuesday as a dispute escalated over a court's demand that the company provide data from its WhatsApp messaging service to help in a secretive drug-trafficking investigation. Court officials in Sergipe state confirmed that a judge had ordered the jailing of Facebook Vice President for Latin America Diego Dzodan. Federal police in Sao Paulo state said he was being held there for questioning. Law enforcement officials withheld further information about the nature of their request to the messaging service that Facebook Inc acquired in 2014, saying that doing so could compromise an ongoing criminal investigation. The arrest, which Facebook called an "extreme and disproportionate measure," came as social media and Internet companies face mounting pressure from governments around the world to help them eavesdrop on users and filter content. Arrests of officials from social media companies are extremely rare, though not unprecedented, because the companies typically comply with local court orders, especially from countries where they have branch offices.

• SurveyMonkey to Lay Off 100 and Retool Business Product: Cloud-based polling service SurveyMonkey informed employees today that it is letting go of about 100 people in a plan to retool its product aimed at businesses, which is not living up to expectations. The layoffs were to be disclosed at an internal meeting this afternoon. The cuts amount to about 13 percent of SurveyMonkey’s workforce of about 750. The cuts were made primarily among the sales team devoted to SurveyMonkey for Business.  The move comes six weeks into the tenure of SurveyMonkey’s new CEO Zander Lurie, the former GoPro exec who joined in January. In an interview, Lurie told Re/code that SurveyMonkey, which is privately held, is on track to post $200 million in 2016 with an Ebitda profit margin of north of 30 percent.

• LinkedIn Is Now Allowing Marketers to Target Ads at Specific Companies: On Tuesday, the company announced that marketers running native ads through Sponsored Updates or Sponsored InMail campaigns can target user profiles based on a list of companies they want to target specific products or other sales to. The feature, which is appropriately named LinkedIn Account Targeting, allows marketers to provide a list of as many as 30,000 companies they want to target in a campaign. LinkedIn then checks to see which of those are among the 8 million companies on the platform before targeting those pages—and profiles of people at those companies based on criteria such as job duties and seniority. According to Lindsey Edwards, senior product manager for LinkedIn Marketing Solutions, LinkedIn has traditionally focused on bringing profile data—job titles, seniority level, skills and groups—to advertisers and marketers for targeting purposes. But this is the first time LinkedIn is letting companies bring their own data to the platform. Previously, marketers could only target up to 100 companies, mostly only by manual selection. In some ways, LinkedIn is bucking the trend by opening its "walled garden" (a commonly used metaphor for how companies like Google and Facebook withhold data from marketers using their closed ad buying systems). Edwards said marketers can start "digging in" by bringing their own data.