Daily Tech Snippet: Thursday, May 26

• Alibaba Facing SEC Investigation Over Accounting Practices: Alibaba Group Holding Ltd. fell the most in four months after the e-commerce giant said it’s being investigated by the U.S. Securities and Exchange Commission over its accounting practices and whether they violate federal laws. The company is providing documents and cooperating with the probe, according to the Hangzhou, China-based company’s annual report. The investigation is looking into consolidation practices, related party transactions and data reported from its Singles’ Day promotion. Singles’ Day is Alibaba’s biggest shopping day, attracting more than 90 billion yuan ($13.7 billion) of sales on its e-commerce platforms in a 24-hour period last year. Alibaba fell 6.8 percent to $75.59, the biggest drop since January. It was down less than 1 percent this year through Tuesday.

• In Silicon Valley, Gossip, Anger and Revenge: Silicon Valley likes to keep the media on a tight leash. Tech executives expect obedience, if not reverence, from reporters. They dole out information as grudgingly as possible. Sometimes they simply buy a chunk of a publication, a time-honored method of influencing what is deemed fit to write about. Valleywag declined to play the game. It was a gossip sheet for the digital age: abrasive, knowing, cynical, self-promoting, sometimes unfair. It dispensed snark by the truckload, printing things that people knew or surmised but were off the table. It said Google co-founder Larry Page had dated his then-colleague, Marissa Mayer. That the Google chairman Eric Schmidt was a playboy and a scamp. That the Napster co-founder and early Facebook executive Sean Parker’s wedding was seriously over the top. Most notoriously, at least in retrospect, the tech gossip blog said in late 2007 that Peter Thiel, who co-founded PayPal and was an early and significant investor in Facebook, was gay. This was gossip with an attitude, and an agenda. And what it unleashed was Mr. Thiel’s ire. He secretly financed a suit brought by the wrestler Hulk Hogan against Valleywag’s parent, Gawker Media, which has resulted in $140 million in damages. Gawker is appealing. The revelation of Mr. Thiel’s involvement in the suit this week brings the complicated relationship of Silicon Valley and the media once again to the forefront. The technology world is ever more important and richer, with smartphones in everyone’s pocket conveying a stream of news that Silicon Valley not only delivers, but helps shape. At the same time, the tech companies are less transparent about what they do.

• HP Inc profit beats Street amid weak market for PCs, printers: HP Inc, which houses the former Hewlett-Packard Co's legacy hardware business, reported a better-than-expected quarterly profit as aggressive cost cutting helped counter weak demand for personal computers and printers. The company's shares reversed course to trade up more than 2 percent at $12.45 after the bell on Wednesday. HP Inc, which houses the former Hewlett-Packard Co's legacy hardware business, reported a better-than-expected quarterly profit as aggressive cost cutting helped counter weak demand for personal computers and printers. The company's shares reversed course to trade up more than 2 percent at $12.45 after the bell on Wednesday.The company's revenue fell about 11 percent to $11.59 billion.Revenue in the personal systems business, the company's biggest, fell 9.9 percent in the second quarter, while revenue declined 15.8 percent in the printing division.Total costs and expenses fell by 10.3 percent to $10.75 billion in the second quarter ended April 30, from a year earlier.

• Salesforce inks deal with AWS to expand international presence: AWS announced today that it was expanding its relationship with Salesforce.com, with Salesforce naming the cloud giant a preferred cloud provider. The agreement should help Salesforce increase its international presence without having to build its own data centers in countries that have data sovereignty laws, which require that data stays in-country. It’s expensive to build their own, so they are turning to a public cloud infrastructure provider like Amazon to do the heavy lifting for them. Salesforce CEO Marc Benioff spoke glowingly of AWS. “There is no public cloud infrastructure provider that is more sophisticated or has more robust enterprise capabilities for supporting the needs of our growing global customer base,” he said in a statement. It’s worth keeping in mind, however that Salesforce also has a deep relationship with Microsoft — and CEO Satya Nadella appeared on stage at Dreamforce, Salesforce’s massive customer conference last fall. But the relationship has a flip side and the companies also compete with one another. R Ray Wang, who is principal at Constellation Research, points out that this announcement should help Salesforce compete with Oracle and Microsoft overseas.

• Terrapattern is reverse image search for maps, powered by a neural network: Terrapattern is a visual search engine that, from the first moment you use it, you wonder: Why didn’t Google come up with this 10 years ago? Click on a feature on the map — a baseball diamond, a marina, a roundabout — and it immediately highlights everything its algorithm thinks looks like it. It’s remarkably fast, simple to use and potentially very powerful. Go ahead and give it a try first to see how natural it is to search for something. How does that work? And how did a handful of digital artists and developers create it — and for under $35,000? The secret, as with so many other interesting visual computing projects these days, is a convolutional neural network. It’s essentially an AI-like program that extracts every little detail from an image and looks for patterns at various levels of organization — similar to how our own visual system works, though the brain is infinitely more subtle and flexible. In Terrapattern’s case, the neural network was trained to look at small squares of the landscape and, comparing those patterns to a huge database of tagged map features from OpenStreetMap, it learned to associate them with certain concepts. Think of how a camera recognizes a face and knows when it is blinking or smiling. It doesn’t actually “know” what faces, smiles and eyes are, but it associates them with certain patterns of pixels, and can reliably pick them out. Once Terrapattern had been trained to recognize and categorize all manner of geographical features, from boats to water towers, its creators set it free on detailed maps of the greater New York, Pittsburgh, Detroit and San Francisco areas. It scoured the landscape and built a huge database of features and similarities — which can be quickly queried and the results returned immediately (the neural network isn’t doing any “thinking” when you click on a feature — its work is done for this dataset). Of course, you could just search for “tennis fields in Oakland” or the like and get perfectly good results, but this allows one to search for things that may not be listed so formally. What if you were looking for houses in the middle of fields, or cul de sacs, or dead lawns, or circular parking lots? Terrapattern knows where those are just as much as it knows where the airports and ferry terminals are. They’re all just assemblages of features to the neural network.

• Facebook will shut down FBX, its desktop ad exchange: Facebook plans to shut down FBX, the ad exchange that allows advertisers to buy retargeted desktop ads using third-party tools like Criteo and AppNexus. The news was first reported in The Wall Street Journal and we’ve confirmed it with Facebook. In an emailed statement, Vice President of Monetization Product Marketing Matt Idema suggested that this is part of Facebook’s shift to mobile (in its most recent earnings report, mobile accounted for 82 percent of Facebook’s ad revenue). He said: "Mobile is now a necessary component of effective marketing campaigns, and Facebook is helping millions of businesses understand their customers’ purchase path across devices. Dynamic Ads and Custom Audiences have mobile at their core and are delivering excellent results for businesses, so Facebook Exchange spending has shifted towards those solutions. This is about giving people more relevant ads and marketers more effective formats, especially in an increasingly mobile world. Our ads API is open to all developers so they can innovate on our platform and build great ad experiences for brands and their customers." Facebook launched FBX back in 2012, but its focus seemed to have shifted away from the exchange in recent years.

• Microsoft is giving up on consumer smartphones, too: The company is taking a $950 million charge to unwind the last vestiges of the Nokia deal. Microsoft is further scaling back its flagging phone business, exiting the consumer market and cutting another 1,850 jobs. As part of the move announced Wednesday, Microsoft will take a $950 million charge and cut what little remained of its Finland-based phone hardware business, unwinding the last of its disastrous $7.2 billion acquisition of Nokia's phone unit. Last week, Microsoft announced separately that it was selling what was left of its low-end"feature phone" business.  The company has been scaling back its phone ambitions ever since the Nokia deal closed, with CEO Satya Nadella quickly shifting to a strategy focused on bringing Microsoft's software and services to Android and iOS rather than trying to convince phone buyers to shift to Windows. Despite all the cuts — and having already seen its market share dip below 1 percent — Microsoft says it isn't totally out of the phone-making business. The company insists it will continue to serve phones aimed at the business market and license Windows 10 to any other hardware makers that want to give Windows Phone a try.