Daily Tech Snippet, Monday, May 2nd

• How Foursquare knew before almost anyone how bad things were for Chipotle: Chipotle announced its first loss as a public company Tuesday. But two weeks earlier, an unlikely source —the social media app Foursquare — had beat Chipotle to the punch,predicting in a blog post that the burrito maker’s sales would drop nearly 30 percent. Chipotle made it official Tuesday afternoon — reporting a drop of 29.7 percent.  The remarkably accurate prediction from a company consumers know for restaurant tips and the ability to check in at locations highlights the emerging power of the gobs of data our smartphones collect and the opportunity for savvy companies to convert that information into piles of cash. Foursquare has spent seven years collecting data and has 85 million places in its database. It describes its data trove as the “biggest foot traffic panel in the world.” Clients that buy Foursquare’s data to glean insights include retailers, real estate developers, Wall Street traders and consumer package-goods companies. Foursquare, the seven-year-old start-up, cleverly turned smartphone data into predictions on Chipotle sales that matched Wall Street analysts with far more experience in projecting the successes of businesses such as Chipotle. Last year, Foursquare used its foot-traffic data to predict how many iPhones Apple would sell on a given weekend. Foursquarepredicted sales of 13 million to 15 million. Apple then announced sales of more than 13 million.Once a handful of Foursquare users have checked in at a location, the company knows that a given location represents a certain store. If the smartphones of another Foursquare user move inside these premises — but doesn’t check in — Foursquare still knows the user was in the store. Foursquare relies on GPS data, WiFi, cell towers and beacons to pinpoint where smartphone users are. Data experts caution that there are limits to how far Foursquare can replicate its Chipotle predictions elsewhere. They say Foursquare’s success will work best at large chains. Foursquare needs a lot of data to make such predictions, so it would probably struggle to accurately predict the sales of a retailer that has only a handful of locations.Another limitation to Foursquare’s approach is the nature of a store. Chipotle lends itself to a foot-traffic analysis because customers overwhelmingly travel in person to a store to get their food. It would be more difficult to predict the sales at a business that sells a significant amount of goods online.

• Gas Delivery Startups Want to Fill Up Your Car Anywhere. Is That Allowed?: A new crop of startups are trying to make gas stations obsolete. Tap an app, and they'll bring the gas to you, filling up your car while you're at work, eating breakfast, or watching Netflix. Filld, WeFuel, Yoshi, Purple and Booster Fuels have started operating in a few cities including San Francisco, Los Angeles, Palo Alto, Nashville, Tennessee, and Atlanta, Georgia. But officials in some of those cities say that driving around in a pickup truck with hundreds of gallons of gasoline might not be safe. “It is not permitted,” said Lt. Jonathan Baxter, a spokesman for the San Francisco fire department. Baxter said if San Francisco residents see any companies fueling vehicles in the city, they should call the fire department. Yoshi, which operates in San Francisco, was surprised to hear Baxter's concerns. “We haven't talked to them. I don't know about that. It’s news to me,” said co-founder Nick Alexander. The next day, he said he believed Yoshi was following the law and that it had been careful to limit the size of their gas tanks to stay under limits outlined in the International Fire Code, a guideline followed by many U.S. states. Filld, an 18-month-old startup with thousands of customers in Silicon Valley, plans to start service in San Francisco on Monday, deploying three delivery trucks at 1 p.m. “You can never ask for permission because no one will give it,” said Chris Aubuchon, the chief executive officer at Filld. The Los Angeles Fire Department said it’s drafting a policy around gasoline delivery. “Our current fire code does not allow this process; however, we are exploring a wayhis could be allowed with some restrictions,” said Capt. Daniel Curry, a spokesman for the city’s fire department. “It’s just one of these things that nobody has really thought about before—kind of like how Uber popped up out of nowhere.” But he said it’s not a gray area: “All I can tell you at this time is it’s not allowed as per our current fire code.”

• Why is Facebook doing so well? Facebook reported yet another quarter of strong user growth, in marked contrast to Twitter, which has been eking out only very modest growth recently. In fact, over the past year Facebook’s monthly active users grew by roughly two-thirds the size of Twitter’s entire base. This wasn’t a one-off — Facebook has grown by over 150 million users year on year for the past four years at least, and growth has actually accelerated recently: Predictably, the strongest growth has been in the least mature markets — Asia and Facebook’s “Rest of World” geographic segments led the charge, with more than 75 million new users each over the past year, while North America and Europe added fewer users (but still grew decently). That reemphasizes the importance of Facebook’s efforts to grow usage in those emerging markets and, hence, projects like Free Basics (recently shut down in India) and its other connectivity projects. So far, though, it seems to be doing just fine in these countries.  Average revenue per user is also growing strongly across the board, led by the U.S. and Canada, where annual ARPU is approaching $50. Other regions have far lower ARPU — the rest of the world combined has an annual ARPU of just $7. That overall ARPU growth multiplied by the user growth is driving phenomenal overall revenue growth. And, because that growth requires a much more modest increase in costs, it’s also driving margin expansion. Revenue grew by 52 percent year on year for the second quarter in a row, and operating margin was up 11 points year on year. Just as a reminder, that revenue is almost all coming from ads at this point — the FarmVille era is well and truly over at this point, and payments are a tiny fraction of total revenue for Facebook today. One of the hardest things to get at in Facebook’s results is the role of Instagram. The app has been serving up ads for some time now, and management has been talking up the benefits in general terms for several quarters. But it doesn’t break out metrics other than monthly active users (400 million at last count). In addition, Instagram users are excluded from the MAU count Facebook reports and on which it bases its ARPU calculations, even though Instagram revenue is included in ARPU. As such, there’s a little misdirection going on, in that Facebook is including Instagram in the numerator but not the denominator here. There is, to be sure, a good chance that many Instagram users are also Facebook users, so there’s not too much double counting, but I do wonder how much of the growth in ARPU is from Facebook monetizing Instagram better. From a perspective of internal threats to success, Facebook is placing some biggish bets on future projects like virtual reality (through Oculus) and research and development into new forms of connectivity, both projects outside its core business, and therefore both potential distractions and financial sinkholes. But the scope of these efforts seems to be modest in the context of Facebook’s overall business, and its margins aren’t suffering yet. Government action on Free Basics, as we’ve already seen in India, is another possible threat, but a modest one at this point, and one few other governments seem willing to take on for now.  Perhaps the biggest threat of all is that platform owners like Apple and Google end up owning the next round of devices and platforms in the same way they have smartphones, despite Facebook’s VR investments, and steadily squeeze out third parties they perceive as a threat. Facebook seems aware of this possibility, and has invested not just in VR as a potential future interface but also an increasingly OS-like presence on smartphones.
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• According to its cofounder and CEO Snapchat is mainly “a camera company”:   Despite all of its new bells and whistles… and the billions of videos, ads, and effects that have been added to the service, Snapchat chief executive Evan Spiegel still thinks of the new media juggernaut he’s created as “a camera company”. While Snapchat Stories may be the feature that brings the company the revenue model it needs to validate its $16 billion valuation, and while the ephemeral messaging feature may be what initially attracted the hordes of millennials sending digital ephemera to each other billions of times a day, Spiegel says that the camera itself remains Snapchat’s unifying feature. Snapchat opens to the camera, Spiegel said. Chat is available to the left of the camera, and Stories is available to the right of the camera. That not only differentiates it from other social media products, but allows Snapchat to straddle the line between the defining features of several of them. “The beautiful thing is it sort of sits in the middle, but more importantly it opens to the camera,” Spiegel said. “The thing that feeds a social network is content… Similarly with communication… So in our view, when you take a snap and you choose this path between talking to your friends or adding it to your Story we end up with this harmony where both of these businesses feed themselves. I don’t think it’s one or the other.” In a way, even the company’s movement into filters, stickers, and lenses such as face swap are further extensions of the original thesis of Snapchat as a photographic communication tool. “Now you can put the way you feel… in the moment you’re experiencing. For us that’s just the beginning of some fun, creative tools,” he said.

Daily Tech Snippet: Wednesday, June 10

• Here is an audio (MP3) version of this snippet

• Asia is driving Facebook's growth - Facebook now earns 51 percent of ad revenue overseas - Asia revenue growing 57% Y/Y; by contrast Europe lags the US. For the first time, Facebook has detailed ad sales outside the United States and Canada as a percent of worldwide sales. Overseas markets bring in more advertising revenue than the United States for Facebook, amounting to 51 percent of global ad sales in the first quarter. Growth in Asia was the fastest at 57 percent. While Europe is growing slower than the United States, the Asia Pacific region is ahead and a focus for Facebook. By comparison, Google said that 57 percent of its revenue was from international markets in the first quarter, although it did not break out ad revenue specifically. Mobile advertising represents more than 70 percent of Facebook's total ad revenue, and mobile is particularly strong and attractive to advertisers in emerging markets. Facebook is benefiting from exporters in China trying to reach people outside its country and from an influx of venture capital funding into India, giving start-ups funds for advertising. Total advertising revenue for the quarter increased 46 percent to $3.3 billion, the vast majority of Facebook's $3.5 billion in quarterly revenue. International advertising revenue rose 36 percent from a year earlier, Facebook said.

• Google Talent Departs for Unicorn Herd: Cloudera taps Google VP as Engineering Head, DropBox poaches Neal Mohan for top job: Cloud analytics software company Cloudera said today it has named Daniel Sturman as its VP of engineering. Sturman previously spent eight years at Google, where as VP of engineering he was in charge of keeping its computing infrastructure for services like Google Compute Engine and Google App Engine. Neal Mohan, Google’s VP for display and video advertising, is leaving for the top product job at Dropbox. He is part of a wave of execs departing the search engine in recent months for fast-growing, pre-IPO startups. More recently, Uber claimed Tom Fallows, who had led Google’s same-day delivery service, in November, followed by communication and policy chief Rachel Whetstone. Jawbone nabbed Fallows’s boss, Sameer Samat. Indian e-commerce unicorn Flipkart snatched two Googlers: The VP of product at Motorola and the person who ran the low-cost handset Android One project. On the smaller startup side, the ads product head at YouTube recently headed to Luxe, an on-demand parking startup. There’s more, but you get the idea. Google downplays exits, citing them as regular industry churn. But they come as Google’s core business faces rising threats and fears that it has grown too large and too uninspired to retain ambitious top tech talent. Apparently, the Google bench is not as rewarding for some as the thrill of a unicorn ride.

• Tinder Goes Through A Small Round Of Layoffs; spring-cleaning, not restructuring, company says. Tinder — one of the most popular dating apps currently available across the globe — laid off around 10 percent of its staff last week. TechCrunch has learned and confirmed that the company laid off six members of the 60-65 member team, including three marketing employees and three engineers. TechCrunch was told this wasn’t part of a re-structuring, or even a result of leadership changes with new CEO Chris Payne and VP of Engineering Hugh Williams, but rather a spring-cleaning of sorts. Tinder has gone through much larger transitions before, including a lawsuit waged by former VP of Marketing Whitney Wolfe, the resignation of CMO Justin Mateen, and the transition of Sean Rad from CEO to President. Since then, Chris Payne has joined the team as CEO and Hugh Williams has taken over the engineering squad. The first year of monetization can be tricky for any social startup, and with the complexities of Tinder Plus — ads, premium features, oddball pricing, etc. — it would make sense to double-check that the team is as lean as possible.
• Tesla CFO retires; Firm Will Start Delivering Model X SUV in 3 to 4 Months, Says Elon Musk; Tesla Motors will begin deliveries of the Model X sport utility vehicle in three to four months, keeping close to the timeline the electric-car maker laid out earlier this year, Chief Executive Officer Elon Musk said. “The Model X will be a better SUV than the Model S is a sedan,” Musk, 43, said Tuesday at Tesla’s annual shareholders meeting, held at the Computer History Museum in Mountain View, California. Musk said he’s been driving the latest prototype of the Model X, which Tesla first unveiled as a concept in February 2012 and previously sought to have ready by the end of 2014. More recently, Tesla told investors that initial deliveries to customers, several of whom have been waiting for more than three years, would begin late in the third quarter. Car-based SUVs are popular among female drivers, and in a January interview with Bloomberg, Musk said that the Model X is drawing more than half its orders from women. This is a contrast from the predominantly male customer base for its Model S sedan and the Roadster, which the Palo Alto, California-based company no longer sells. Tesla is also working on the Model 3, to be released in 2017 with a starting price of roughly $35,000. In addition, the company is readying another software upgrade for the Model S, including so-called autopilot driver-assist technology, and “may be able to get it out to early-access customers by the end of this month,” Musk said. Musk has said the company probably won’t turn net income positive until annual sales reach 500,000. “I expect we’ll achieve profitability in 2020,” he said. Musk is by far Tesla’s largest shareholder with 22 percent. He said in February that at the rate it’s growing, if all goes right, Tesla in a decade could be worth as much as Apple Inc., the world’s largest company by market valuation, is now. Musk also said CFO Deepak Ahuja will retire at the end of this year. Ahuja has been Tesla’s CFO since 2008, coming from Ford Motor and seeing Tesla through its June 2010 initial public offering. He said he’s retiring to pursue other life goals.
• Geek shortage stymies Israel's Tech Boom as Soviet emigre engineers retire, fewer youth study advanced science. Israel's technology miracle is threatened by a dearth of people in the very professions that made it happen: engineers and computer scientists. Companies say finding qualified workers is one of their biggest problems. And the shortage may worsen as fewer students sign up for the most advanced math classes, the building block for tech careers. This in an economy whose health depends on exports—about one-third of them from technology companies. One explanation for the shortage: Engineers who emigrated from the former Soviet Union in the 1990s are retiring. "We don't truly appreciate that immigration,'' says Adam Fisher, a partner at Bessemer Venture Partners. "Without that I'm not sure we would be 'Start-Up Nation'.Meanwhile, fewer of Israel's youth are choosing to study advanced math, and there's no increase in those studying advanced science, in part put off by the level of difficulty that could bring down overall grades. The number of high school students matriculating in advanced math dropped by a quarter from 2006, to 9,350 in 2014, according to the Trump Foundation, dedicated to improving education in Israel. Almost a year ago, a ministerial committee drew up a program to increase skilled manpower for the industry. Its plan includes recruiting more Israeli Arabs into the industry, training ultra-Orthodox men and women, luring Israeli engineers abroad to return home, and making it easier for non-Israelis to get work visas. It must be approved by the new cabinet and could be passed later this year. Some parts are in place: About 300 academics were persuaded to return to Israel last year out of 4,300 who registered as willing to do so.
• IBM plans Data Analytics push - bets on Spark, open-source software project that aims to be Hadoop successor.IBM has created a Technology Center in San Francisco to focus on a free open-source software project called Spark, according to IBM executive Rob Thomas. IBM hired 20 people within the last month, Thomas said in a video posted online June 3. “We’re going to be scaling this up to hundreds of people that are just focused on Spark open source and how we evolve that for the enterprise,” Thomas said. Spark is a framework developed originally at the University of California at Berkeley that helps companies process large amounts of data rapidly, by storing information within the fast memory of computers. It is seen by many in Silicon Valley as a potential successor to Hadoop, which has spawned a variety of companies including Cloudera, MapR Technologies and Hortonworks. “This is a much more significant bet than even what we have done on Hadoop to be frank,” Thomas said. “We think Spark is going to be enormous and change the face of enterprise IT.”
• Microsoft drops the price of the Xbox One and introduces a 1TB console; will sell $25 adapter that allows streaming games from console to PC. Microsoft announced Tuesday that it's dropping the price of the 500 gigabite Xbox One to $349, which had previously been advertised as a "promotional" price drop from $399. Now, Microsoft will offer a new 1 terabyte model -- that's double the storage of the old standard model -- for $399 instead, the company said in a blog post. The Xbox is still locked in a battle with Sony's PlayStation to control the console world, and this is a clear play to appeal to hardcore gamers. As gaming guide Kotaku and others have reported, Sony is, in fact, expected to release a 1 TB version of the PlayStation soon. Microsoft also had some more news on its growing efforts to mix Xbox and PC gaming; a major feature of its upcoming operating system is that users can stream games from their console to their computer. To that end, Microsoft also announced it will sell a $25 adapter that will allow players to use their wireless controllers with their current computers. The company has redesigned the controller to allow players to plug their gaming headsets into the controller, which gives them the option to control settings such as the volume of their microphone or the game's audio while they play. Microsoft has also improved the quality of the sound that comes through the controller. The new controller doesn't mean, however, that you have to buy all new headsets or other accessories. "All existing controller accessories will work with the updated controller," the company said.
• China's big biotech bet starting to pay off as country's patent portfolio burgeons. Years of pouring money into its laboratories, wooing scientists home from overseas and urging researchers to publish and patent is starting to give China a competitive edge in biotechnology, a strategic field it sees as ripe for "indigenous innovation." The vast resources China can throw at research and development - overall funding more than quadrupled to $191 billion in 2005-13 and the Thousand Talents Program has repatriated scientists - allow China to jump quickly on promising new technologies, often first developed elsewhere. These efforts were illustrated vividly in April - not without controversy - when scientists at Sun Yat-sen University in Guangzhou published results of a ground-breaking experiment to alter the DNA of human embryos using new gene editing technology. Data compiled by Thomson Innovation, a Thomson Reuters unit, shows China is a growing force in gene editing, with a burgeoning patent portfolio. More than 50 Chinese institutions are patenting in the field, led by the Chinese Academy of Sciences, universities, the Anhui Academy of Agricultural Sciences and Beijing Jifulin Biotech. Nearly a fifth of the 518 families of gene editing patents analyzed since 2004 were associated with Chinese entities. For top-tier institutions, "the level of available resources is incredible in terms of the freedom, the flexibility that gives key leading Chinese scientists to move very, very fast on a given research track if a new opportunity arises".

Daily Tech Snippet: Thursday, April 30

• Paytm’s big day: IRCTC adds Paytm wallet as a payment option: Government-owned railway ticketing platform IRCTC, which is the one of the most used internet commerce site in the country clocking on an average over half a million tickets a day, has added Paytm’s wallet as an online payment option. IRCTC, the primary seller of railway tickets online (others OTAs act as secondary link) in the country, has been offering various online payments options besides the conventional credit/debit cards and net banking. It allows payments through cash cards, its own co-branded pre-paid Rupay card with Union Bank and with Paytm wallet it adds another payment option. Last we checked the Paytm payment option was integrated on IRCTC’s web portal but was not yet available on its mobile app on Android. The development means a big move for Paytm as it is already available as an alternate payment option in several key internet ventures such as the country’s top online food ordering venture Foodpanda, cab hailing app Uber (in India), eBay and Jabong. Although IRCTC has come a long way in terms of streamlining online payment process on its site, given the huge load on its servers it is not uncommon to see payment failures in a multi-authentication process which comes with a credit and debit cards. Paytm wallet would look to capitalise in partly solving this pain point for users and hopes to also expand its reach in tier-II and tier-III markets, where trains are a primary mode of long distance travel and IRCTC by default is the booking platform.

• This too shall pass: Secret Shuts Down: Anonymous sharing app Secret will shut down soon, according to sources close to the company. The announcement could be made as soon as today or tomorrow, and there’s some talk of current employees receiving modest severance packages. Having raised $35 million, it’s unlikely that the company is out of money. But after a major redesign sterilized the app’s identity and made it look just like its much more popular competitor Yik Yak, and its co-founder Chrys Bader-Wechseler left, Secret may see shutting down as the best outcome. Many employees, including top talent like Sarah Haider, Safeer Jiwan, and Amol Jain have left the company over the past month or so. One source says the company has been whittled down to under 10 employees from over 20 several months ago and has been in “maintenance mode.” More here: Secret’s trajectory illustrates the flash-in-the-pan nature of Silicon Valley’s current technology boom. Even as a handful of start-ups rise to stratospheric valuations and take in billions of dollars in financing, other privately held companies cannot sustain their following. Fab.com, a onetime e-commerce darling, was once valued at more than $1 billion and had raised more than $150 million before ending up in a fire sale this year, when it was bought for about $15 million. Other start-ups are dealing with a cooling-off process as big companies muscle in on their turf. Meerkat, a live-streaming video app that gained great traction early this year, is now grappling with the entrance of Twitter and its Periscope live-video app, for example.

• Cloud CRM major Salesforce is exploring a sale - shares up 17%; seen as pricey but valuable target: Cloud software company Salesforce.com Inc is working with financial advisers to help it field takeover offers after being approached by a potential acquirer, Bloomberg said, citing people with knowledge of the matter. The company's shares rose as much as 17.3 percent to touch an all-time high of $78.46 on Wednesday. They closed up 11.6 percent at $74.65, valuing the company at about $49 billion. Salesforce Seen as Attractive, If Pricey, Target for Cloud Push: Salesforce.com, the software provider that has hired bankers to field takeover offers, would make sense as a partner for a buyer willing to spend a lot to become the leader in cloud computing. Salesforce jumped 12 percent to close at $74.65 in New York on Wednesday, giving the company a market value of about $49 billion. Salesforce’s business is entirely cloud-based. That means that as the company adds clients, it can lower costs-per-customer through economies of scale and by improving operations in its software and data centers. It also can update products and roll out new business lines quickly via the Internet. Also, customers are flocking to software and service contracts that tend to be simpler for cloud computing than for traditional software. Cloud clients also can avoid the sunk costs of buying hardware. “Specific to the cloud, the shift is accelerating and it’s happened more quickly than the big guys were hoping,” Steven R. Koenig, an analyst at Wedbush Securities Inc., said in an interview. The San Francisco-based company would give an acquirer “a lot of critical mass in the cloud.” Salesforce had 16 percent of the customer-relationship management market in 2013, compared with 13 percent for SAP SE, 10 percent for Oracle Corp. and 7 percent for Microsoft Corp., according to Gartner Inc. Salesforce will have more than 15 million end users in 2018, up from around 6 million last year, Gartner wrote in a November report. The CRM market has “gone to Salesforce, and no one is going to catch up,” Koenig said. Around 40 percent of organizations with greater than a billion dollars in annual revenue ran all their CRM applications within their own data centers last year, according to Gartner. That will shrink to 25 percent by 2020 as companies move to the cloud, Gartner said. As customers start to move into cloud CRM systems offered by Salesforce, Microsoft, Oracle and SAP, they also to tend to buy related products, such as analytics or marketing services, from the same company. That stitches clients tightly to their provider, making it less likely for them to move away. “There is still room for Salesforce.com and competitors to grow rapidly in CRM without reaching capacity for at least the next five years,” Gartner wrote. Salesforce has begun investing in data centers around the world. Chief Executive Officer Marc Benioff has said the company would open “multiple” data centers in Germany, along with ones in France and Canada. Local facilities help the company serve customers with stringent data regulations, without having to give up the economies of scale and operational expertize gained by being a cloud company. Salesforce also has expanded into data analytics through investments and product development. Lashing these various products together with its Salesforce1 program has allowed the company to pursue larger contracts with bigger firms. Salesforce closed 550 deals valued more than a million dollars each in its most recent fiscal year, up around 100 from the prior year, the company said in February.

• Yelp Shares Tumble on as First-Quarter Earnings, Outlook Disappoint: Yelp Inc., an operator of user-review websites, declined as much as 17 percent in extended trading after its profit and sales forecast missed analysts’ estimates. The San Francisco-based company reported a first-quarter loss of $1.28 million, or 2 cents a share, from $2.64 million, or 4 cents, a year earlier. Analysts’ estimated a profit of 1 cent. Revenue was $118.5 million, the company said Wednesday in a statement, trailing estimates of $119.8, according to data compiled by Bloomberg. Yelp forecast second-quarter sales of $131 million to $134 million, falling short of analysts’ average estimate of $137.4 million. “There’s not a lot of forgiveness for technology companies right now,” said Blake Harper, an analyst at Wunderlich Securities Inc.. “They are valued pretty well and there’s an expectation that they’ll perform well.” Yelp operates websites that let users search local businesses for free and read reviews about them. The company charges for advertising on those sites. It had 142 million unique monthly visitors in the period, an increase of 7.6 percent from a year earlier. Yelp’s local advertising revenue dropped as a result of a sales-force restructuring implemented in the first quarter, Harper said. Shares of Yelp dropped to a low of $42.68 in extended trading after closing at $51.28. The company competes with Angie’s List Inc. as well as new features offered by companies including Amazon.com Inc.

• Baidu Sees Revenue Growth And Profit Slump In Q1 2015: China's dominant Internet search engine Baidu Inc on Thursday posted its slowest revenue growth rate in almost seven years in the first quarter of 2015, as customers spent less money on its core online marketing business. The company's bid to create new avenues of income from mobile in China, the world's biggest smartphone market, also took their toll. Baidu's profit margins sank to their lowest in a decade, or 19 percent, as promotional costs for new businesses and research and development expenses skyrocketed. The search company's bid to promote new mobile-centric businesses like food delivery to compete with Tencent and Alibaba saw selling, general and administrative expenses rocket 47.2 percent to $477 million from a year ago. Revenues of 12.73 billion yuan ($2.05 billion) came in below forecasts of 12.9 billion yuan, according to a Thomson Reuters SmartEstimate poll of 16 analysts. Coupled with a 3.4 percent decline in net profit from the previous year, this prompted shares to slide 2.6 percent in trading after market close in New York. Baidu said it expected second-quarter revenue to be between 16.37 billion yuan and 16.75 billion yuan. A hiring spree for research and development also pushed the department's expenses up 79.1 percent to $368.8 million. Baidu's net income, its lowest in two years, was 2.4 billion yuan for the first three months of 2015. Profit margins of 19 percent were the lowest in almost a decade.

• Flipkart acquires Delhi-based analytics and visual A/B testing platform Appiterate: India’s largest e-commerce platform Flipkart has acquired Delhi- and San Francisco-based DSYN Technologies Pvt Ltd, which provides a native mobile analytics and A/B testing platform for app developers and enterprises under the brand name Appiterate. The terms of the transaction were not disclosed. The acquisition is in line with Flipkart’s ‘mobile first’ focus, the firm said on Wednesday. Post the acquisition, Appiterate’s mobile marketing automation platform will be integrated with Flipkart’s mobile app which will help the e-commerce firm in targeting users based on their activity on the app and website. Appiterate is a WYSIWYG (what you see is what you get) A/B testing platform for native mobile apps. It allows app publishers to A/B test and iteratively optimise the designs (UX) and functionality of their mobile apps to improve in-app purchases, user engagement and conversion metrics. It also allows app publishers to run tests based on user segments and see real-time conversion metrics. The company says it has been delivering more than 100 million personalised notifications each month through its platform for leading e-commerce companies. Last year, it raised Rs 3 crore in seed funding from SAIF Partners, with participation from a group of individuals, including Greg Badros, former VP (product & engineering) at Facebook and Prashant Malik, former tech lead at Facebook and co-creator of Apache Cassandra.

• Twitter Troubles Lie in Marketers’ Reluctance to Buy New Kind of Ad: As a company, Twitter is an adolescent — gangly, starry-eyed, growing like a weed and unpredictable. No wonder advertisers and investors are having trouble figuring it out. The social networking company shocked Wall Street on Tuesday by reporting slower-than-expected growth in advertising sales, which account for nearly all of its revenue. Shares of Twitter, which fell 18 percent on Tuesday after the first-quarter results were disclosed, dropped an additional 9 percent on Wednesday. Although revenue rose a brisk 74 percent in the quarter compared with the same quarter a year ago, it was less growth than in Twitter’s five previous quarters and well below the high bar that the company had set. Twitter attributed the disappointment to advertisers’ reluctance to spend heavily on ads that prompt the viewer to take an action, like download a smartphone app or apply for a credit card. This type of ad, known as direct response, is a newer area for Twitter, which originally focused on general brand image ads. Marketers say they are indeed more cautious about Twitter’s direct-response ads because the microblogging service has not yet shown that it can target or track those ads with the level of precision that advertisers want. Compared with mature rivals like Google and Facebook, Twitter doesn’t know as much about its users, and it is more difficult to measure results. Facebook has so much data on its users, “you could actually target a premium credit card to a businessman you know is traveling all the time,” said Bryan Wiener, chairman of 360i, a digital marketing agency that works with brands like Capital One, NBCUniversal, Spotify, Oreo and Oscar Mayer. “That’s the kind of information that’s missing from Twitter,” he said. “There’s not this rich history of your holistic life.” As a result, he said, many brands are unwilling to commit big money to Twitter ad campaigns. Mr. Freeman said that, in general, Twitter is best for building brand awareness and recall. Its weakness is the ability to measure direct-response effectiveness. “A lot of times, brands don’t really know what to do with it,” he said. “And that was Twitter’s fault because I don’t think they had a very clear direction.”

Daily Tech Snippet: Wednesday, April 15

• Intel Q1 earnings: revenue flat at $12.8B, earnings up 3% at $2B; Shares up 3% on strong sales of chips for data centers, internet-of-things; capex cut: Intel reported that net income rose 3 percent to $2 billion, compared with the year-ago quarter. Intel’s per-share income rose 8 percent, to 41 cents a share, reflecting a smaller number of shares outstanding because of stock buybacks. Revenue was flat, at $12.8 billion. The earnings were about even with Wall Street’s expectations. Analysts forecast that Intel would make 41 cents a share on revenue of $12.9 billion, a survey by Thomson Reuters said. Intel shares increased 3 percent in after-hours trading. The earnings were not surprising, given slow PC sales. Last week, the research firm IDC said that worldwide first-quarter PC shipments were 68.5 million, a decline of 6.7 percent from the year-earlier period. That was slightly better than expected. Chips for PCs and related items make up over half of Intel’s revenue. Intel was slow to move into mobile devices and is overshadowed there by companies like Qualcomm and ARM. Under Mr. Krzanich, who took over two years ago, Intel has redoubled its efforts to get into mobile devices. Progress has been slow, however, with significant financial losses. Other areas of Intel’s business have fared better. Sales of chips for data centers were up 19 percent in the quarter. Intel expects that market to grow about 15 percent annually for several more years. A newer market, chips for the so-called Internet of Things, or appliances and other objects with a two-way network connection, grew 11 percent. That revenue was only $533 million, but Stacy Smith, Intel’s chief financial officer, said annual growth in this area should be about 20 percent for many years. More on margins, mobile, Altera: Strength in the server unit is keeping profit margins healthy. Gross margin, or the percentage of sales left after deducting production costs, will be about 62 percent in the current period, Intel said. Analysts were predicting 61 percent. Last year, Intel’s mobile business racked up operating losses of more than $4 billion as it paid subsidies to customers to build market share in tablet chips. This year, Intel Chief Executive Officer Brian Krzanich has promised to reduce that loss by about $800 million. Smith said the company is on track to meet that goal. As it struggles to boost its mobile business, Intel is seeking to make a bigger bet on the data-center market. The company held discussions to acquire chipmaker Altera Corp., according to people familiar with the talks. Buying Altera would bring in chips that are increasingly being used in data centers and help Intel put its factory network to greater use. Intel made a $54-a-share bid for Altera, which the programmable chipmaker’s board has rejected, breaking off talks, people familiar with the negotiations said last week. Altera is now coming under pressure from its shareholders to reconsider Intel’s offer, because they think it values Altera at more than what it can achieve itself, people with knowledge of the matter said. CapEx cut to improve cash flow: Intel said it would cut 2015 capital expenditures to $8.7 billion from $10 billion, a reduction that analysts said should improve free cash flow.

• IBM makes a big healthcare analytics play, ties up with Apple, J&J and Medtronic: IBM is taking its Watson artificial-intelligence technology into health care in a big way with industry partners, a pair of acquisitions and an ambitious agenda. The initial three industry partners are Apple, Johnson & Johnson and Medtronic. On Monday afternoon, after the close of stock trading, IBM also announced it would buy two start-ups: Explorys, a spin-off from the Cleveland Clinic whose data on 50 million patients is used to spot patterns in diseases, treatments and outcomes; and Phytel, a Dallas maker of software to manage patient care and reduce readmission rates to hospitals. The IBM plan, put simply, is that its Watson technology will be a cloud-based service that taps vast stores of health data and delivers tailored insights to hospitals, physicians, insurers, researchers and potentially even individual patients. “We’re going to enable personalized health care on a huge scale,” said John E. Kelly, a senior vice president who oversees IBM’s research labs and new initiatives. To date, IBM has done some individual projects using Watson technology with leading medical centers, including Memorial Sloan Kettering Cancer Center in New York, the University of Texas MD Anderson Cancer Center in Houston and the Cleveland Clinic. But the creation of the Watson Health unit, Mr. Kelly said, is an effort to apply the technology to the mainstream of health care. And while IBM has been commercializing Watson technology with tools for mining Twitter, weather and Internet of Things data, Mr. Kelly said Watson Health was the first move into a specific industry. The Watson Health announcement is also the latest in flurry of initiatives IBM has announced this year that include new corporate partnerships as well as moves in cloud computing, data analytics and Watson. They are evidence that IBM is intent on investing for future growth, and showing it is doing so, in a year when its financial performance is likely to lag. IBM has reported disappointing earnings recently, and Virginia M. Rometty, IBM’s chief executive, has told industry analysts and investors that 2015 would be a transition year in which new growth businesses like Watson did not yet overcome the profit erosion in some of its traditional hardware and software products.

• Zomato buys cloud-based PoS system; to help restaurants manage inventory, payments: Zomato.com, has acquired MapleGraph Solutions Pvt Ltd, which operated a point-of-sales business, for an undisclosed amount in what is its first acquisition outside its core business of restaurant listings and reviews, it said on Tuesday. Zomato is now launching its own version of the product under Zomato Base which would allow restaurants manage inventory and payments as well as provide real time analytics and more. The move would expand the revenue streams for Zomato, which currently draws bulk of its business from ads from restaurants. The firm has been looking at new ways to generate revenues and is starting an online food ordering and table reservation service. Zomato Base offers inventory and recipe management, analyses sales data to track restaurant’s performance, generates electronic receipts, as well as does payment gateway integration and menu management. Delhi-based MapleGraph was founded in 2011 by Arun Tangri (earlier worked with Microsoft and IBM India), Varun Tangri, (also co-founded Tokkri.com and DealerConnect.in) and Abhishek Rohilla (previously worked with Unisys and Siemens Information Systems). “Technology has seen very little penetration in the restaurant industry, and we are excited to be driving this change at large scale,” said Arun Tangri, co-founder and CEO, MapleGraph. “There is a lot that can be done if we are able to build a technology platform that connects consumers to restaurants and vice versa, and we believe that a world-class cloud-based POS system is the first step towards building that platform,” said Deepinder Goyal, co-founder and CEO, Zomato. Zomato will work on integrating the POS product’s services with the consumer product over the next few months. After the integration, Zomato will start offering Zomato Base to restaurant businesses across the world this fall.

• Opera launches new version of its Opera Mini browser with enhanced data compression; targets 350 million mobile browser users in 2017: Norway's Opera Software on Tuesday launched a new version of the Opera Mini browser for Android phones, hoping to more than double its smartphone user base by the end of 2017. Google's Android is the most widely used operating system among mobile phone makers. With the launch of Mini 8, Opera aims to lift its smartphone user base to 275 million by 2017 from the current 130 million, increasing the total to 350 million when including around 75 million users of less advanced feature phones. The purpose of using Mini, which has become particularly popular in many developing countries, is both to speed up online surfing and to cut costs, as the browser can compress data by up to 90 percent. Smartphone customers generally do much more online surfing, making them far more valuable than users of feature phones although Opera Software doesn't give revenue figures per user. "It's complicated, we have customers in 200 countries and more and more of them are using smartphones and fewer are on feature phones," Opera investor relations chief Petter Lade told Reuters. "Our target is to have 275 million smart phones and 75 million on feature phones, this will be our total target for mobile users for 2017," he added.

Daily Tech Snippet: Monday, April 13

• Apple Watch Sold Out Despite Scarce In-Store Crowds: (More here) Few people lined up at Apple Inc. stores from Beijing to New York to get a peek of the company’s new smartwatch, while online pre-orders pushed delivery dates for some versions into July. The Apple Watch, a test of Chief Executive Officer Tim Cook’s ability to innovate, arrived Friday in stores in eight countries and Hong Kong for customers to preview. It officially goes on sale April 24, when delivery begins of devices that have been ordered. Delivery times quickly pushed passed that date, after Apple began taking online pre-orders about 3 a.m. in New York. By about 9 a.m. shipments of high-end versions, which can cost as much as $17,000, were delayed until June. All 10 versions of the entry-level Sport, which starts at $349, were delayed until June, according to the company’s U.S. website. Mid-tier models were being promised for delivery in four to six weeks, with four versions stretching into June or July. “We view this as an indication of solid demand paired with very limited supply, with supply being the most significant limiting factor,” Gene Munster, an analyst at Piper Jaffray Cos., said Friday in a note to investors.

• Amazon, Google aim to be Home Services Marketplaces: Some of the biggest names in e-commerce, along with a growing pool of start-ups, are vying for a chunk of the fragmented, quotidian, heretofore entirely local market of electricians, plumbers, dog walkers and other manual labor, known broadly as home services. The work may be mundane but the money and stakes are huge. Angie’s List, the 20-year-old subscription service that offers reviews of local service providers to members, estimates the home services industry is $400 billion. Others put it at more than $800 billion. “There are few pots of gold left as big as this on the Internet,” said Marco Zappacosta, chief executive and a co-founder of Thumbtack, a start-up that connects consumers with providers of a multitude of services, who then bid for their business. The idea is to bring the efficiency and capabilities of the web to some of the lowest-tech and least-transparent enterprises by connecting consumers with vetted service providers through online marketplaces. Most companies will then take a cut of each transaction that ensues. Last summer, Thumbtack received a big lift with a $100 million investment from Google Capital. Now, Google is exploring entering the same business itself. How Thumbtack fits into those plans is unclear, Mr. Zappacosta said. Other start-ups, like Pro.com, Porch and Redbeacon, are creating similar online marketplaces. Angie’s List, meanwhile, is elevating its game — last year it introduced a mobile app, called SnapFix, that lets a homeowner take a photo of, say, a broken screen door and receive bids to fix it. The efforts shuddered last month when Amazon announced it was starting Amazon Home Services, which provides consumers with a list of vetted and insured professionals to do things like mount a new television. Price quotes and scheduling are available during the checkout process. Jeff Bezos, Amazon’s founder and chief executive, had already invested in Pro.com, and Amazon is working in partnership with TaskRabbit, another player. Already, said Peter Faricy, vice president of Amazon Marketplace, the company has 2.4 million serve offers covering more 700 types of services. “I can tell you that with 85 million customers purchasing products from Amazon that needed installation or assembly, customers have told us that Amazon Home Services fills an important need,” he said. Of course, this is not just about building your cat tree or mounting your TV. For Amazon it is another step toward becoming the conduit through which we buy everything, not just goods but services and entertainment as well. Amazon also takes a cut of each transaction, 20 percent for a TV mounting job, for example. Meanwhile, the offerings are veering away from the everyday and into the wacky. Amazon’s “other services” section lists goat grazing and “silk aerialist.” “Amazon is always focused on having the widest selection on earth,” Mr. Faricy said, “and we will do the same with services.”

• Twitter - which already makes 10% of its revenue from data licensing - shuts off its firehose to boost its data analytics business: Late on Friday, Twitter announced that it would no longer license the full stream of half a billion daily messages on its service to third-party resellers. Anyone who wants access to the stream, known as the fire hose, will soon have to license the data from Twitter directly. On the surface, the announcement affects just the two remaining buyers of Twitter data, DataSift and NTT, and also suggests that Twitter no longer wants to sell its data wholesale, just retail. But it’s also a deeper sign of the company’s intention to compete with — and perhaps cut out — many middlemen that profit from helping marketers make sense of the flood of tweets to run their businesses more intelligently. In a blog post, Twitter said the decision was a natural outgrowth of its acquisition of Gnip, the leading reseller of Twitter data, about a year ago. “Direct relationships help Twitter develop an understanding of customer needs, get direct feedback for the product road map and work more closely with data customers to enable the best possible solutions for the brands that rely on Twitter data to make better decisions,” wrote Zach Hofer-Shall, head of the company’s ecosystem program. What he didn’t say is that Twitter also thinks direct relationships will make more money. Last year, the company generated $147 million, or roughly 10 percent of its revenue, from data licensing and other services, and Twitter’s leaders see data as an area that they have only begun to mine. Chris Moody, the former chief of Gnip and now Twitter’s vice president for data strategy, sketched out the data vision at a November meeting with Wall Street analysts. “In the future, every significant business decision will have Twitter data as an input, because why wouldn’t you?” he said. “Why wouldn’t you add into your business decision-making, ‘What does the world think about this topic at this particular time or at a previous moment of time, maybe last year when we ran this campaign,’ that type of thing?” As an example, Mr. Moody described how T-Mobile scanned tweets from customers suggesting they were planning to dump the carrier because it didn’t offer the iPhone. T-Mobile later used that data to target those customers and persuade them to stay, cutting its churn by 50 percent. While Twitter primarily works with dozens of data analysis and software companies, such as Adobe, Spredfast and Salesforce.com, as a data supplier, it also wants to move up the value chain and eventually compete with those very same companies. It is already packaging its feed with data from other social sources, such as Yahoo’s Tumblr, and wants to expand that further. That’s a service that DataSift, one of the two resellers that were just cut off, also provides. And Twitter is working with business services companies like IBM to train thousands of consultants and conduct case studies of how Twitter data can transform specific industries. “We see the data licensing business as extremely complementary to the advertising business,” Mr. Moody said in a February interview. Once businesses understand the customer insights they get from tweets, he said, “when I want to advertise something, where would I turn? Twitter.”

• China Is Said to Use Powerful New Weapon to Censor Internet: Late last month, China began flooding American websites with a barrage of Internet traffic in an apparent effort to take out services that allow China’s Internet users to view websites otherwise blocked in the country. Initial security reports suggested that China had crippled the services by exploiting its own Internet filter — known as the Great Firewall — to redirect overwhelming amounts of traffic to its targets. Now, researchers at the University of California, Berkeley and the University of Toronto say China did not use the Great Firewall after all, but rather a powerful new weapon that they are calling the Great Cannon. The Great Cannon, the researchers said in a report published on Friday, allows China to intercept foreign web traffic as it flows to Chinese websites, inject malicious code and repurpose the traffic as Beijing sees fit. The system was used, they said, to intercept web and advertising traffic intended for Baidu — China’s biggest search engine company — and fire it at GitHub, a popular site for programmers, and GreatFire.org, a nonprofit that runs mirror images of sites that are blocked inside China. The attacks against the services continued on Thursday, the researchers said, even though both sites appeared to be operating normally. But the researchers suggested that the system could have more powerful capabilities. With a few tweaks, the Great Cannon could be used to spy on anyone who happens to fetch content hosted on a Chinese computer, even by visiting a non-Chinese website that contains Chinese advertising content. “The operational deployment of the Great Cannon represents a significant escalation in state-level information control,” the researchers said in their report. It is, they said, “the normalization of widespread and public use of an attack tool to enforce censorship.” The researchers, who have previously done extensive research into government surveillance tools, found that while the infrastructure and code for the attacks bear similarities to the Great Firewall, the attacks came from a separate device. The device has the ability not only to snoop on Internet traffic but also to alter the traffic and direct it — on a giant scale — to any website, in what is called a “man in the middle attack.” China’s new Internet weapon, the report says, is similar to one developed and used by the National Security Agency and its British counterpart, GCHQ, a system outlined in classified documents leaked by Edward J. Snowden, the former United States intelligence contractor. The American system, according to the documents, which were published by The Intercept, can deploy a system of programs that can intercept web traffic on a mass scale and redirect it to a site of their choosing. The N.S.A. and its partners appear to use the programs for targeted surveillance, whereas China appears to use the Great Cannon for an aggressive form of censorship.

• Spotify Said to Seek Financing to Value Music Site at $8 Billion: Spotify Ltd. is in the process of raising new financing that would value the largest subscription music-streaming service at about $8 billion, according to people familiar with the matter. That valuation is double what the company was worth when it raised money in November 2013. The latest round totals about $400 million, according to one of the individuals, and comes from a group that includes Goldman Sachs Group and an Abu Dhabi sovereign wealth fund, the Wall Street Journal reported Friday. Spotify continues to raise money as it tries to build a global subscription music service before Apple Inc. or Google Inc., which are both pursuing the same market. Spotify has more than 60 million users, a quarter of whom pay $9.99 for a monthly, ad-free version. Like Pandora Media Inc., a public company valued at $3.55 billion, Spotify pays a large percentage of its revenue to record labels and publishers for the right to license their music. With sales of both CDs and digital downloads in decline, the three major record labels -- Vivendi SA’s Universal Music Group, Sony Corp.’s Sony Music Entertainment and Access Industries’ Warner Music Group -- view streaming as the key to future growth. Though the labels own a stake in Spotify, they have complained about the money they receive from the company and pushed for greater restrictions to its free service. Spotify has resisted those overtures, arguing that an appealing free service is the best way to lure customers who will then subscribe. Listeners must have a subscription to access the full offering on a mobile phone.

• Whatever Happened To PaaS (Platform-as-a-Service)? Why do people still spin up and set up their own AWS and Compute Engine instances? Why have App Engine and Heroku and Elastic Beanstalk not conquered all? Is fine-grained control really that important? I suspect the reason is three-pronged: cost, lock-in, and culture. App Engine’s prices drop regularly, but they’re voluminous and confusing, and a single instance — a pretty puny virtual machine — costs more than a dollar day, not counting storage or bandwidth. Same for Heroku. You get more bang-per-buck by simply buying and running your own servers. You also get enormously larger headaches, and significantly slower development time; but that tradeoff isn’t worth it for many. Then there’s lock-in. Once you build your app atop App Engine’s custom APIs, you’re committed; there’s no easy way to back away and go to another provider. The lock-in is less for other PaaS providers, but it’s still there. There is no universal PaaS equivalent of de facto IaaS (infrastructure-as-a-service) standards such as OpenStack or Docker. The third, least valid, and arguably most powerful reason is culture. Companies don’t want to give up perceived control over their systems–even if that control is never worth its associated complexity–and sysadmins, understandably, don’t want to evolve themselves out of a job. The thing about all three of those reasons not to go PaaS, however, is that they’re temporary. Costs keep dropping. Culture keeps changing. And there are signs of slow movement towards interchangeable PaaS services and standards. (You could argue that Docker itself is a stride in that direction.) In the early days of electricity, factories all had their own generators; then, eventually, they moved to the grid. IaaS is the equivalent of every individual company getting their raw electrical power from the grid … but stepping it down with their own transformers and converting from three-phase to one-phase in-house. I suspect we’re still en route towards a largely PaaS world where server code mostly just runs, without developers knowing or caring about the servers in question. It’s just happening a little slower than I’d like.

Daily Tech Snippet: Wednesday, March 18

• Facebook continues edging into commerce - introduces free friend-to-friend payments through messages: (More here and here) Facebook‘s instant messaging service isn’t just for sending smiley faces and photos anymore. Now you can use it to send money instantly to your friends. Facebook, the social networking company, announced Tuesday that American users of its Messenger app would be able to link their debit cards to the service and use it to message money to one another just as easily as they send a snapshot or text. Given Facebook’s huge size and reach, the introduction of its payments feature — which has been highly anticipated by Wall Street — is likely to cause tremors in the nascent market for instantly sending money to individuals, known as peer-to-peer payments. And analysts said that if the payment system succeeded, Facebook would extend it to other types of purchases, such as consumers’ buying of products directly from advertisers. “Facebook could use this as a back door to get people’s debit cards to enable the buy button,” said Robert Peck, an Internet analyst with SunTrust Robinson Humphrey. WeChat, which is essentially the Facebook of China, and other Asia-based communications services like Alipay already allow their hundreds of millions of users to send money via instant message. But the technology is only beginning to appear in the United States, where email payment services like PayPal have long been more popular. As messaging has begun to eclipse email as the preferred form of electronic communication, especially among younger users, Facebook has sought to dominate that market much as it dominates social networking. The company’s Messenger app is one of the largest platforms in the world, with more than 500 million monthly users. And last year, Facebook spent nearly $22 billion to buy WhatsApp, a separate messaging platform that now counts more than 700 million active users globally. In the United States, a host of peer-to-peer money transfer services have emerged and are trying to capture the wallets of messaging enthusiasts.

• "Insights as a service" - IBM introduces twitter-fueled data services for business: IBM is betting a fair share of its future on exploiting large troves of data for its business customers, and Twitter is a big-data fire-hose with 6,000 tweets a second, more than half a billion each day. And Twitter’s data-licensing business, though still a small part of the company, is growing rapidly. IBM and Twitter are bringing out the first products on Tuesday, developer tools and cloud-based data analysis services that mine Twitter data. The data services run on IBM’s Watson artificial intelligence technology and on its flavor of Hadoop, the open-source software for processing big data across computer clusters, IBM BigInsights. The developer tools will allow people to write applications that pull in Twitter data. In recent months, IBM has trained more than 4,000 engineers and consultants on using Twitter data in business projects. Its goal is to have 10,000 IBM employees with Twitter data-handling skills. And IBM has worked with more than 100 corporate clients so far, in a range of industries and projects. “We thought the early interest would be in consumer products and marketing, but it has turned out to be much broader than that,” said Alistair Rennie, general manager of IBM’s analytics business. The early work, he said, included companies that want to tap the Twitter data to help guide product development and plan manufacturing schedules. IBM is not naming the companies that have tried out its Twitterized technology, but it did describe a few examples of what it calls “insight as a service.” It combined tweets with hyper-local weather data to help predict where disgruntled telephone or cable customers, whose service might be impaired by severe weather, were most likely to switch suppliers. Using the data-fueled predictive models, customer churn was reduced by 5 percent, IBM says. Another case involved an unnamed drink and food retailer with thousands of shops. IBM blended Twitter data with sales tracked on loyalty cards and smartphone apps, as well as employee data. It found that the company’s best customers were the ones most influenced by turnover in the chain’s sales associates. In short, the human touch matters most to your most loyal customers. IBM has plenty of competition in mining social media data for insights. Rivals include big companies like SAS Institute, Adobe, Oracle and Salesforce, and start-ups like Crimson Hexagon and DataSift. IBM’s deal with Twitter is not exclusive. But David Schubmehl, an analyst at IDC, said that more than its competitors, IBM was focused on applying the Twitter data to a wide range of uses, beyond marketing to tasks like churn analysis, talent management and product development. IBM, Mr. Schubmehl said, is ahead of most of its rivals in its knowledge of many industries. “And it’s the combination of internal corporate data and external data from sources like Twitter where the real payoff is going to come from,” he said.

• Apple, banks at odds over who is to blame for high fraud rates on Apple Pay: A raft of headlines over the last week about unusually high fraud rates from thieves using stolen credit numbers on Apple Pay has exposed what many of the banks privately acknowledge they have been trying to fix for months. An industry consultant, Cherian Abraham, put the fraud rate at 6 percent, compared with a traditional credit card fraud rate that is relatively minuscule, 10 cents for every $100 spent. Mr. Abraham wrote in a blog post, one of the first to spotlight the issue, that the Apple Pay fraud “is growing like a weed, and the bank is unable to tell friend from foe. No one is bold enough to call the emperor naked.” It is not clear, however, that Apple is the naked emperor. More likely it is at least as much the banks’ fault, if not more. Apple Pay itself should, in theory, cut down on fraud because it makes stealing credit card information almost impossible. Each time a transaction takes place, Apple generates the equivalent of a new credit card number so the merchant never actually sees a customer’s information. The vulnerability in Apple Pay is in the way that it — and card issuers — “onboard” new credit cards into the system. Because Apple wanted its system to have the simplicity for which it has become famous and wanted to make the sign-up process “frictionless,” the company required little beyond basic credit card information about a user. Nor did it provide much information to the banks, like full phone numbers and addresses, that might help them detect fraud early. The banks, desperate to become their customers’ default card on Apple Pay — most add only one to their iPhones — did little to build their own defenses or to push Apple to provide more detailed information about its customers. Some bank executives acknowledged that they were were so scared of Apple that they didn’t speak up. The banks didn’t press the company for fear that they would not be included among the initial issuers on Apple Pay. Within weeks of Apple Pay’s introduction, a second set of banks joined: Barclays, Navy Federal Credit Union, PNC Bank, USAA and U.S. Bank. It also appears that banks set up a flawed process to deal with the credit cards that it did flag. Affected users were directed to a customer care phone center, not a fraud prevention center. A customer care center’s mission is to help customers use their cards, leading more fraudulent cards to be approved for use on Apple Pay. Call centers are a poor approach for two reasons,” Mr. Abraham wrote. “One — fraudsters are better at social engineering than call center reps are at sniffing out fraud. In some cases, fraudsters are calling the call center themselves to ‘alert the bank about a trip out of town’ so that fraud rules looking for transaction anomalies (like a customer living in California and transacting in Miami) do not trip them up.” Some Apple supporters have sought to discredit Mr. Abraham based on his affiliation as an adviser to a company that is based on Apple’s main competitor, Android. While he may indeed be conflicted, he has rightfully raised an important security issue that all sides have acknowledged is a problem, though perhaps not to the extent he has contended. All of this has led to a thriving black market in which thieves enter stolen credit card numbers into iPhones, essentially turning the devices into physical credit cards, which they in turn take to stores and walk out with merchandise. Thieves have even used Apple Pay at Apple Stores. In a statement, Apple put the problem squarely on the shoulders of the banks: “During setup, Apple Pay requires banks to verify each and every card and the bank then determines and approves whether a card can be added to Apple Pay. Banks are always reviewing and improving their approval process, which varies by bank.” Apple has now begun providing additional information to the banks that should help deter some of the fraud. The banks, which are responsible for the costs of the frauds, have toughened standards to review customer sign-ups on Apple Pay. No bank executive would speak with me on the record for fear of upsetting their company’s relationship with Apple. If you’re asking yourself, “Why are criminals more inclined to use Apple Pay than just use stolen credit cards at an online retailer?” it’s a good question. It is apparently much easier for banks to catch thieves using stolen credit cards with online retailers because of the delay in shipping a product — it can often take days — as well as the extra information that every online retailer requires, like an address where the product is to be shipped.

• Oracle quarterly earnings: revenue $9.33B, 0% Y/Y. Shares up 1.7% on dividend hike, strong PaaS revenues: Oracle Corp. reported fiscal third-quarter sales that missed analysts’ estimates, hurt by a rise in the U.S. dollar and weak corporate demand for cloud software. Revenue in the period that ended Feb. 28 was little changed from a year earlier at $9.33 billion, and profit before certain costs was 68 cents a share, the Redwood City, California-based company said Tuesday in a statement. On average, analysts projected $9.47 billion in sales and profit of 68 cents, according to data compiled by Bloomberg. Without the effect of the stronger dollar, revenue would have gained 6 percent, Oracle said, sparking optimism that the company is making headway with its push into corporate cloud services and sending the shares up in extended trading. The software maker also boosted its dividend by 25 percent to 15 cents a share, up from the prior payout of 12 cents. The company last raised its dividend in 2013, according to data compiled by Bloomberg. Oracle shares rose 1.7 percent in late trading following the report and dividend increase. The stock fell 1.2 percent to $42.87 at the close in New York, leaving it down 4.7 percent this year. Third-quarter net income fell to $2.5 billion, or 56 cents a share, from $2.57 billion, or 56 cents, a year earlier. Combined sales in Oracle’s cloud software, platform-as-a-service -- known as PaaS -- and infrastructure businesses were $527 million, up 29 percent from $408 million a year earlier. The company started disclosing cloud revenue in June. In the long term, Oracle’s transition to the cloud should benefit the bottom line, Catz said on the conference call. “For every million dollars of license we sell, we expect to collect another million dollars of support over five years for a total of $2 million,” she said. “While for every million of PaaS we sell, we actually expect to collect $5 million over five years.”

• Adobe quarterly earnings: revenue $1.11B, shares slide 3.8% on weakness in cloud sales: Adobe shares fell late Tuesday after the company reported lower-than-expected subscription growth for its Creative Cloud service and forecast second-quarter earnings and revenue below analysts’ estimates. Adobe increased its Creative Cloud subscriptions 28 percent to 517,000 in the fiscal first quarter, missing the 575,000 average of two analysts’ estimates compiled by Bloomberg. The company projected second-quarter sales of $1.125 billion to $1.175 billion and profit, excluding some items, of 41 cents to 47 cents a share. Analysts expected $1.18 billion and 48 cents, according to the average of 19 estimates. Adobe has introduced cloud-based marketing and creative-design tools as part of its push to generate more sales from subscriptions instead of software installed on computers. Revenue and profit declined in 2013, the year after the transition began, but have recovered as customers are getting used to the new way of buying software. “People are realizing they don’t necessarily need the full suite,” said Norman Young, an analyst with Morningstar Inc., who has a hold rating on the stock. “Our worry is, how are they going to raise prices over time and get people to move over from the point solutions to the full suite?” To encourage people to buy more products, Adobe will add more services, such as stock photos from Fotolia, a company it acquired last quarter. The new offerings should lead to a boost in revenue per user “this year” from that integration, Chief Financial Officer Mark Garrett said in an interview. Adobe fell 3.8 percent to $76.66 in extended trading at 7:25 p.m. New York time. The San Jose, California-based company had gained 17 percent in the past 12 months through the close. Sales were $1.11 billion and profit, excluding some items, was 44 cents a share in the period ended Feb. 27, Adobe said Tuesday in a statement. Analysts had on average projected revenue of $1.09 billion and profit of 39 cents, according to data compiled by Bloomberg.

• Rumor negates rumor: Alibaba may not invest in Snapdeal: Alibaba may scrap plans to invest in Indian online marketplace Snapdeal, technology website Recode reported, citing a person who was familiar with the matter. Last week, a person informed about the deal had told Reuters that Alibaba was in talks with Snapdeal over a potential cash investment in what could have been the Chinese e-commerce giant's first direct investment in India. Alibaba has held discussions with Snapdeal about a possible investment, but the Chinese company is leaning away from investing in Snapdeal right now, Recode said. Snapdeal competes in India with bigger rivals Flipkart.com and Amazon.com, and media reports had said it was seeking $1 billion in its latest funding round to fuel growth. Alibaba and Snapdeal's talks, however, did not involve a deal close to the $1 billion number reported, Recode cited the source as saying.

• Pinterest valued at $11B on new round of fund-raising: Less than a year after being valued at $5 billion, Pinterest has joined the 11-digit valuation start-up club. Pinterest, an online scrapbooking service, disclosed on Monday that it raised about $367 million in a new round of financing from new and existing investors. It valued the company at $11 billion, putting the start-up in roughly the same range as the Silicon Valley darling Dropbox and the data analysis company Palantir Technologies. In a regulatory filing, Pinterest disclosed that it could raise as much as $211 million in additional financing, bringing its potential haul to $578 million. That would be on top of the $764 million that the nearly five-year-old start-up has raised in previous rounds. Interest has been so ardent that the start-up has nearly tripled its valuation in just about a year and a half. Pinterest has shown strides in expanding and developing revenue, especially with so-called promoted pins that advertisers can buy. Advertising will continue to be a main focus this year, company executives have said.

Daily Tech Snippet: Friday February 27

• Google story#1: Finally, Google will test ads on the Google Play Store: More coverage here and here : Google Inc. plans to show search ads targeting customers who use its application and media store for Android devices under a pilot program, as the company looks for new ways to generate revenue from mobile devices. In the next few weeks, Google will let application developers buy advertising spots that consumers can see when they search for software in the Google Play store, Michael Siliski, a product management director, said in a blog post Thursday. So, a query for coupon or travel options in the marketplace may show a sponsored result at the top of the query page, the Mountain View, California-based company said. Google, grappling with competition from Facebook Inc. and Apple Inc., is looking for new ways to boost interest from businesses in advertising on wireless devices, where prices for promotions often are less than they are on desktops. The company’s share of the mobile ad market dropped to 41 percent last year from 46 percent in 2013, according to recent research by EMarketer Inc. “We’ve seen how search ads shown next to organic search results on Google.com can significantly improve content discovery for users and advertisers, both large and small,” Siliski said. “Search ads on Google Play will enable developers to drive more awareness of their apps and provide consumers new ways to discover apps that they otherwise might have missed.” Google, the world’s biggest Internet services company, is looking to expand its mobile ad presence as users favor applications such as those from Priceline Group Inc.’s Kayak on handheld devices, which bypass browser-based ads. The new service aims to bolster its appeal to developers that are looking for new ways to attract new consumers. Smartphones using Android dominate the global market with more than 80 percent of the share in 2014, according to IDC. Separately, the company also announced today it has paid out more than $7 billion to developers of games and apps on Google Play in the past year.

• Quantity and value of data is an overlooked benefit to delaying an IPO: It’s taking longer for startups to get to IPO, but that’s not necessarily bad news for investors in private companies. Why? Because startups today aren’t just valuable for their future exit potential, but for the proprietary data they produce while still private. Market statistics clearly show companies are staying private longer. The average time to IPO has doubled to nine years today from four in 1999, and the median amount raised prior to IPO has increased steadily from $48 million in 2008 to $101 million in 2013. Of the 100 largest VC rounds in history, 90 have occurred in the last five years. There are several reasons startups are staying private longer, including volatile public markets, healthy secondary markets, and a preference by some for mega-M&As. Whatever the reason startups don’t seek IPOs early, there is a real and often overlooked benefit to investors when startups stay private longer – the value of their data.

• Google story#2: Google moifies Search algorithm to increase weight of mobile-friendliness, expand indexing of app deep links: Google today announced two notable changes that will affect the rankings of search results for users accessing Google search on mobile devices. It will now take into consideration a site’s mobile-friendliness as one of its ranking signals, and information from indexed mobile applications will also begin to influence ranking for signed-in users who have the app installed on their smartphone. “As more people use mobile devices to access the internet, our algorithms have to adapt to these usage patterns,” explains Google in its announcement. The changes follow a number of previous efforts Google has made to improve its search results for mobile users. In 2013, for example, it rolled out ranking changes that would affect sites that were misconfigured for smartphone users, including those frustrating situations where a specific URL would redirect all smartphone users to the website’s mobile homepage instead of their preferred destination. This was common among news sites, in particular, as users would often click a link to read a certain story and would end up landing on the site’s main webpage, the story nowhere to be found. Last summer, meanwhile, Google began flagging sites that wouldn’t display on mobile devices due to the technology they used – like those built with Adobe Flash, which meant they wouldn’t display on iOS devices or Android 4.1 and higher. And in November, Google began adding a “mobile-friendly” label to its search results accessed on mobile devices to indicate they would display well on your smartphone’s small screen, after first testing “warning labels” earlier in the year. It noted at the time it was also testing the use of the mobile-friendly criteria as a ranking signal. In a blog post detailing the changes, the company points website owners to a number of resources that can help them prepare for this shift, including its guide to mobile-friendly sites, its Mobile-Friendly Testing tool, and its Mobile Usability Report. In addition, the company also said it will begin taking advantage of its efforts with deep-linking technology to begin to surface information from mobile apps higher in its search results. Deep links, for those unfamiliar, point to specific pages within mobile applications themselves. That means developers who implement these links in their apps allow Google to index their apps in a similar way as it does websites today.

• The future of health care is a dongle attached to your smartphone: app-based diagnostics are taking off The latest development in this new direct-to-consumer health model is a new breakthrough from a team of biomedical engineering researchers at Columbia University in New York City that makes it possible to test for both HIV and syphilis in 15 minutes after hooking a plastic dongle into your smartphone’s headphone jack. You simply insert a pinprick of blood onto a disposable plastic collector, connect the plastic collector to a microfluidic chip used to analyze the sample and insert the chip with the blood sample into the dongle. Once you’ve logged into an app, your smartphone can start to determine the presence of HIV or syphilis in your blood and display the results on your smartphone’s screen 15 minutes later. More than its ease of use, the cost factor of the dongle is what makes it possible to speculate that this type of smartphone diagnostics could one day lead to a new direct-to-consumer model for health care. The equipment needed to perform a laboratory-quality HIV test can cost upwards of $18,450 apiece. Contrast that to the cost of a cheap plastic dongle, which costs an estimated $34 to make. That makes it possible to imagine a future where tests are faster, simpler and cheaper than anything available today. What makes the lab-on-a-smartphone so innovative is that, even though you’re significantly reducing cost, you’re not sacrificing power. The results delivered by the new device suggest that a full laboratory-quality immunoassay can be run on a smartphone accessory. Moreover, in a small field study in Rwanda, the team of researchers found that patient preference for the dongle was 97 percent compared to laboratory-based test

• Why the U.S. Has Fallen Behind in Internet Speed and Affordability: Downloading a high-definition movie takes about seven seconds in Seoul, Hong Kong, Tokyo, Zurich, Bucharest and Paris, and people pay as little as $30 a month for that connection. In Los Angeles, New York and Washington, downloading the same movie takes 1.4 minutes for people with the fastest Internet available, and they pay $300 a month for the privilege, according to The Cost of Connectivity, a report published Thursday by the New America Foundation’s Open Technology Institute. The report compares Internet access in big American cities with access in Europe and Asia. Some surprising smaller American cities — Chattanooga, Tenn.; Kansas City (in both Kansas and Missouri); Lafayette, La.; and Bristol, Va. — tied for speed with the biggest cities abroad. In each, the high-speed Internet provider is not one of the big cable or phone companies that provide Internet to most of the United States, but a city-run network or start-up service. The reason the United States lags many countries in both speed and affordability, according to people who study the issue, has nothing to do with technology. Instead, it is an economic policy problem — the lack of competition in the broadband industry. “It’s just very simple economics,” said Tim Wu, a professor at Columbia Law School who studies antitrust and communications and was an adviser to the Federal Trade Commission. “The average market has one or two serious Internet providers, and they set their prices at monopoly or duopoly pricing.”

• India Startup Action: Five startups showcased at Techcircle E-commerce Forum 2015: Pumpkart.com: It is an online store for agricultural and domestic pumps. It offers a variety of pumps that include basement toilet pumps, booster pumps, car cleaning pumps, drainage pumps, hydropneumatic pumps, borewell pumps, rainwater pumps, waste water pumps, monoblock pumps, high pressure pumps, solar pumps etc. Crunch Commerce: It extends a layer of m-commerce tools to traditional e-commerce backend. Its flagship product is Crunch Adaptive, a mobile-web platform which works across mobile devices and brings an app like experience in mobile web browser. NGA Technologies Pvt Ltd: It has developed AUTOnCAB, an Android/iOS based mobile application which provides on demand one tap hailing of autorickshaws. The app also calculates distance/fare for a ride. It has the ability to monitor all drivers and rides in real time. Voconow Enterprises: Voconow’s mobile ad-tech product makes static print ads interactive and transactional and transforms them into a sales channel and a revenue centre. It connects the offline print media to the online digital media. In that sense, it operates at the intersection of print and digital. Retail Labs: It has developed Getnow.at which seeks to change how people shop in India by bringing local shopping online. Consumers can order products from stores in their city with guaranteed delivery in six hours. Local stores list their products on our marketplace and the firm handles distribution for them.

• Google story#3: Google Acquires Mobile Startup That Manages Facebook Ads: Google Inc. agreed to acquire Red Hot Labs Inc., a mobile startup that helps companies manage advertising on rival Facebook Inc., bolstering its marketing tools on wireless devices. Red Hot Labs, which provides the Toro service for application developers, will join the mobile ads team at Google, the search giant said, declining to disclose terms of the deal. San Francisco-based Red Hot Labs helps software makers boost their user numbers through Facebook, owner of the world’s largest social-networking service. “With greater resources and distribution now available at our disposal, we’re excited to join Google and continue our mission of making the lives of app developers easier,” the start-up said on its website. Google, expanding beyond its desktop-based tools, is investing in new ways to help companies market on smartphones and tablets as users increasingly access digital services via wireless devices. The Mountain View, California-based company last month reported fourth-quarter sales and profit that missed estimates as its advertising business faced more competition on mobile gadgets.