Daily Tech Snippet: Friday, May 19

• Alibaba Profit Lags Estimates on Tax as Sales Defy Slowdown: Alibaba Group Holding Ltd.’s earnings lagged estimates after it swallowed a higher tax bill and splurged on the entertainment and cloud computing businesses that are fueling revenue growth. The shares dropped the most in almost a year. China’s biggest e-commerce company posted adjusted earnings-per-share of 4.35 yuan, missing the 4.51 yuan average of estimates compiled by Bloomberg. That came even as revenue rose at a faster-than-expected 60 percent to 38.6 billion yuan ($5.6 billion). Core commerce revenue surged 47 percent to 31.57 billion yuan with the business delivering operating income of 16.5 billion yuan, the company said. While cloud unit revenue doubled in the March quarter to 2.2 billion yuan, the business had an operating loss of 505 million yuan as it slashes prices to snatch market share from Amazon.com Inc. and Tencent. Revenue from digital entertainment more than tripled to 3.9 billion yuan with an operating loss of 2.6 billion yuan as it spends on content for video site Youku Tudou and other platforms. Income tax expenses soared 149 percent to 4.6 billion yuan in the March quarter. Its effective tax rate climbed to 29 percent from 23 percent a year earlier.

• Paytm raises $1.4 billion from SoftBank, valuation soars to $7 billion: Paytm has raised $1.4 billion from SoftBank Group Corp. in the largest funding round by a single investor in India, making the digital payments firm the Japanese company’s biggest bet in India’s start-up ecosystem. The deal includes $400 million worth of shares that SoftBank will buy largely from Paytm’s early investor SAIF Partners in a secondary transaction, and a minor stake from founder Vijay Shekhar Sharma, according to two persons close to the development. The deal values the company at about $7 billion post-money (including the investment) and will take SoftBank’s stake to about 20%, the two people said, requesting anonymity. Paytm, India’s second-most valuable internet firm, will use the money to acquire 500 million new customers and launch a slew of financial services products such as wealth management, insurance and deposits and loans. “This business will require a lot of capital before it can start generating cash and hence we need long-term investors like SoftBank and Alibaba,” founder Sharma said in a telephone interview.

• Walmart Reports 63% Rise in Online Sales: On Thursday, the company said e-commerce sales had grown 63 percent in the United States in the latest quarter. The unexpected leap offered the strongest evidence yet that Walmart, the country’s largest retailer, is making headway in its effort to be as prominent online as it is across the American landscape. Walmart’s latest strategy, put in place by its current chief executive, Doug McMillon, has several parts: expand the number of products available online, better leverage its huge physical warehouses and distribution centers to reach customers quickly across the country, and aggressively pursue deals for online stores. The biggest of those deals, in which Walmart paid $3.3 billion for the bulk e-commerce retailer Jet.com last year, was part of the plan to offer customers more products through the web. The earnings results on Thursday gave only hints of about how much the acquisitions gave the company a one-time bump in sales, rather than long-lasting fruit from other changes the company has made. Comparable-store sales, one measure of growth that looks at stores that have been open for at least a year, rose 1.4 percent. That number includes Walmart’s core online business, but not items sold through Jet.com. Walmart completed its purchase of Jet in September. Smaller digital acquisitions followed, including ModCloth, a women’s clothing retailer, and the outdoor apparel site Moosejaw. The deal for Jet was also widely seen as a play for its founder, Marc Lore, a serial digital entrepreneur who could help fix Walmart’s online strategy. Mr. Lore was put in charge of running Walmart.com after the acquisition, spearheading the face-off between the world’s largest brick-and-mortar retailer and its biggest online competitor.

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