Daily Tech Snippet: Tuesday, April 12

• Apple Watch verdict a year later: Half of those surveyed think it’s a dud: More than half of those surveyed by the advertising technology company Fluent said they considered the Apple Watch a flop. That sentiment — expressed by the majority of the 2,578 adults in the U.S. who responded last week to an online survey — reflects how the device is perceived by the tech press and industry insiders, many of whom have been pessimistic about the Apple Watch from the start. Asked whether they considered the Watch a successful product for Apple, 53 percent responded “no.” But Fluent’s survey also offers a more nuanced picture of Apple’s first wearable device,which launched on April 24, 2015. A significant majority of Apple Watch owners — 77 percent — consider the smartwatch a success and about two-thirds said they plan to upgrade when the next version comes out. Those owners surveyed said they take advantage of a range of the smartwatch’s features, including monitoring their activity and receiving notifications (79 percent), listening to music (75 percent) and checking email or chat (66 percent). This survey supports the more comprehensive findings of Wristly’s “Pulse on Wristware,” released earlier this year. The research group, which surveys some 2,500 smartwatch and fitness band owners every week, says that despite some views of the Apple Watch as a “mediocre novelty,” it enjoys “astoundingly high customer satisfaction ratings.”

• Israel to Levy New Taxes on Google, Facebook in Policy Shift: Israel has expanded its definition of who must pay taxes on commerce, targeting digital multinationals such as Facebook Inc. and Google that critics say get a free ride. Because much of today’s trade is carried out on the Internet, a foreign firm may now be considered a “permanent establishment” and subject to tax even if most of its presence is virtual, the Israel Tax Authority said in an e-mailed statement. The authority said Internet multinationals will be required to pay value-added tax, which is 17 percent for Israelis. The new taxes, which take effect immediately, will eventually add hundreds of millions of shekels a year to state revenue, the authority said. A Google representative in Israel couldn’t immediately be reached for comment. Facebook “pays taxes according to the law in every country it operates, including Israel,” a spokeswoman said via e-mail. Although Israel’s relatively small population of 8.5 million means the new taxes won’t clobber the international giants, they build on broader efforts worldwide to level the playing field between foreign Internet companies and local commerce. Russia is pushing to raise taxes on U.S. Internet companies to help its local industry and governments across Europe and beyond are trying to extract more revenue from Google, Apple Inc. and other multinationals with increasingly complex billing and ownership structures.

• Cloud-based video production platform 90 Seconds lands $7.5M Series A led by Sequoia India: Despite the increasing ubiquity of online videos, making a professional-looking one is still a complicated process that usually involves chains of emails and uploads. 90 Seconds wants to fix that problem with its cloud-based platform, which lets users handle almost every part of the video production process in one place. Today, the startup announced it has raised a $7.5 million Series A led by Sequoia India. Other investors in this round include pay television provider SKY TV New Zealand, Airtree Ventures, Beenext and Oleg Tscheltzoff, founder of stock image agency Fotolia.com. Now based in Singapore, 90 Seconds was launched in Auckland in 2010 by CEO Tim Norton after he struggled to find an online video production service for shoots in different places. 90 Seconds started with online production tools before launching its marketplace, which now lists 5,000 video professionals from 70 countries. The company plans to continue adding to the mobile version of its software until clients can manage every part of the production process — from commissioning a video to reviewing footage and uploading to YouTube and social media platforms — on their tablets or smartphones. Timeliness is important for 90 Seconds’ users, who have included Visa, Samsung and Microsoft, because they need to take advantage of trending topics and search terms. More companies are also using the platform to handle longer shoots, like TV spots. Hooking up companies with creators and giving them all the software tools they need to produce a video is how 90 Seconds differentiates from other video production sites (which include Visually, Userfarm and SmartShoot) and also what it hopes will future-proof its business model from new competitors as demand for online videos grows.

• Dell's SecureWorks valued at $1.42 billion in year's first tech IPO: Dell's cyber security unit, SecureWorks Corp, could be valued at up to $1.42 billion in its initial public offering, the first major U.S. listing of a technology company this year. Atlanta, Georgia-based SecureWorks said on Monday its offering was expected to be priced at $15.50-$17.50 per Class A share, raising as much as $157.5 million.  The share issue market worldwide plunged to a seven-year low in the first quarter, more than halving from a year earlier to $106.6 billion, as worries over slowing economic growth kept investors wary, according to Thomson Reuters data. In the past few years, several cyber security firms such as FireEye, Rapid7 and Mimecast have gone public to take advantage of growing investor interest in them after a spate of hacking attacks on companies including major banks and retailers. However, shares of Rapid7 and FireEye, which popped 70-80 percent in their debut, are now trading way below their IPO prices. Mimecast, which jumped 20 percent on its listing day, has also slipped below its offering price. Ritter warned against premium pricing for stocks of cyber security firms, saying that these companies were fighting for market share, which would keep their profit growth muted.

Daily Tech Snippet: Tuesday, January 12

• Flipkart, Amazon’s India Rival, Changes CEOs: In a move that has been rumored for some time, Flipkart co-founder Sachin Bansal has stepped down as CEO of the Indian e-commerce company, the company announced today. He will be replaced by his co-founder, Binny Bansal (no relation). Sachin Bansal will become executive chairman and “mentor the senior leadership of the company and look for new investment opportunities,” the company said in the announcement. Binny Bansal, formerly chief operating officer, will now run the business day to day. The move comes as competition for market share in India’s burgeoning online shopping industry has ramped up between Amazon, Flipkart and fellow Indian upstart Snapdeal. Amazon has promised to invest billions into its India business, which is run by Amit Agarwal, who spent two years earlier in his career working as Jeff Bezos’s right-hand man.

• Uber China Raises Financing at $7 Billion Valuation: Uber said its China division has raised financing that values that part of the ride-hailing company's operation at $7 billion. Travis Kalanick, Uber's chief executive officer, discussed the new funds at a press conference in Beijing on Monday. Uber is bumping up against local competitors around the world. Nowhere is the competition more fierce than in China, where Uber faces Didi Kuaidi. The company is backed by Alibaba and Tencent, the country’s two most valuable technology companies. Uber and Didi Kuaidi are each spending aggressively to expand, partly by subsidizing the costs of rides. In a letter to investors in 2015, Kalanick committed to spending $1 billion that year in China. It may have surpassed that figure. Didi Kuaidi said on Monday that it completed 1.43 billion trips in 2015. Uber said it increased its share of the private car market in China to 30 percent or 35 percent as of the end of 2015, from 1 percent in January 2015. (The Information reported a similar figure earlier on Monday.) Didi Kuaidi said it holds 87.2 percent of China's private car-hailing market, attributing the figure to a Chinese research firm. A recent round of financing gave Didi Kuaidi a valuation of $16.5 billion, a person familiar with the matter said in September. Uber, which owns a controlling stake in Uber China, was last valued at $62.5 billion, people familiar with the matter said in December. Uber China’s $7 billion valuation does not include the new cash. 

• Digital Display Ads to Overtake Search, Bringing a Reckoning for Google: As advertising keeps flooding over from television to digital screens, this year will mark a first: More online ad dollars will go to ads that aren’t for search results than to those that are. That’s per eMarketer, which measures this sort of stuff. A Monday report claims that spending on display ads — banners, videos, sponsored content and in-stream mobile promotions — will outpace search ads in 2016. The research firm estimates that U.S. spending on display will hit $32.2 billion this year (a 47 percent annual growth), overtaking spending on search (estimated at $29.2 billion, a 10 percent growth). That trend does not bode well for Google, which reaps the lion’s share of search ad revenue. Of course, the search giant also reaps other ad money — from its massive banner business and YouTube, primarily. But in this category of digital ads, Facebook is a far greater foe. Figures from eMarketer show that Facebook claimed just under 30 percent of U.S. display ads in 2015, more than twice Google’s share. Plus, many in the industry see Facebook’s nascent automated ad platforms as a potential threat to Google. Google knows this — that the tremendous profitability of its search business will peter out eventually. Hence the importance of Alphabet: It is scouring for some business after search.

• Israel brings tech expertise to protecting connected cars: Most cars today are equipped with some level of connectivity and self-driving vehicles are being developed. Given this level of sophistication, protecting cars from contamination with malicious software has become big business. Building on its expertise in technology, Israel is emerging as a leader in the race to keep cars secure and prevent the nightmare scenario of a hacker commandeering your vehicle. The threat appears real enough. Fiat Chrysler recalled 1.4 million vehicles to install new software last year after cybersecurity researchers showed they could turn off a Jeep Cherokee's engine as it drove. Software manipulation, albeit intentional, was also behind Volkswagen's emissions scandal. From its headquarters in Tel Aviv, Check Point, one of the world's largest cyber security firms, pioneered the computer firewall two decades ago. It hopes to repeat that success with a security capsule for vehicles. Connected cars need a two-pronged defense. First, they must make sure nothing bad gets in, like a virus sneaking through a navigation system. Then they have to keep internal communications secure to allow functions like side-view mirrors which angle down when vehicles are put into reverse.

Daily Tech Snippet: 11 January 2015

• Zuckerberg Plea for Free Web in India Wins Support in Review: A majority of Indians who submitted comments to the nation’s telecommunications regulator said they support Facebook Inc.’s Free Basics plan that would allow free Web access. Telecom Regulatory Authority of India said that 1.35 million responses in support of the plan -- or 56 percent of all comments -- came from Facebook’s @supportfreebasics.in, according to a report on the agency’s review of different pricing for data services. It received another 544,000 responses from @facebookmail.com, with most backing Facebook’s plan, the regulator said, without providing a percentage. Comments either supporting or opposing differential pricing were “basically template responses" and "identical in nature," the regulator said Saturday on its website, without explaining how the views would be used in the review. The agency’s chief, R.S. Sharma, told The Hindu newspaper in an interview published Jan. 1 that such responses were "not helpful at all" and didn’t represent meaningful input. The regulator has appealed to respondents and Facebook to solicit more detailed opinions. Facebook Chairman Mark Zuckerberg made a personal appeal in one of India’s leading newspapers last month for the country to allow a free Internet service. Facebook’s proposed Free Basics plan allows customers to access the social network and other services such as education, health care and employment listings from their phones without a data plan. Industry groups say the program threatens the principles of net neutrality and could change pricing in India for access to different websites.

• Aerodrome Is The First Commercial Airport For Drones: Aerodrome is working with the City of Boulder, Nevada, to launch the first commercial drone airport — the Eldorado Droneport. It’s one of only a handful of FAA-appointed UAS test sites in the United States. The plan is to offer training, maintenance and other support functions for the commercial drone industry, as well as for individual drone pilots. The company already operates teaching facilities in Detroit, Michigan and Henderson, Nevada.

• Israel’s Best-Performing Tech Stock Hasn’t Sold a Single Product: Occupying a small, second-floor space in the same office park as 3D printing giant Stratasys, a tiny Israeli upstart is trying to sell investors on a future in which physical objects materialize with the press of a button. Nano Dimension is nowhere near achieving that goal, yet somehow has become Israel’s best-performing technology stock in 2015. While Stratasys lost nearly three-quarters of its value last year, the much smaller Nano Dimension rallied 261 percent. Not bad for a company with no customers or revenue. This little 3D printing shop, with 44 employees and a market cap of 193 million shekels ($49 million), has become a source of hope for Israeli entrepreneurs struggling to secure venture capital. That’s because Nano Dimension took an unorthodox route to raise about $18 million and become a public company, while managing to avoid the long, costly process of an initial public offering.  Nano Dimension found its way onto the Tel Aviv Stock Exchange using what’s known as a reverse merger. This involves a private company taking over a public one, bypassing the formalities of an IPO. “We’re selling shares like any other public company,” said Amit Dror, the chief executive officer of Nano Dimension. “It’s just that it happens to be that our case is a public company that’s pre-revenue.”

• China Setting Up Fund for Its Electronics Industry:  A Chinese technology regulator said on Friday that it would cooperate with a bank to set up a $30 billion fund to support the country’s huge electronics supply chain. The creation of the new fund underscores China’s ambitions to expand its tech capabilities and also signals how those ambitions are being threatened by slowing growth and recent market turmoil. Official accounts of the fund did not make clear precisely how the money would be spent. But given the recent weakness in Chinese manufacturing and lower-end electronics manufacturers, it may be intended as a form of stimulus to the tech industry. The terminology used in media accounts signals China’s bold technology ambitions. Reports about the new fund said it would be used to build a “strong manufacturing country” and an “Internet power.” A report in state-run media said the fund was created to address problems faced by small and medium enterprises that have come under pressure or folded recently because of a lack of funding. The report made reference to recent factory closures, specifically pointing out the closing in October of Fu Chang Electronic Technology, a supplier to the telecom equipment makers Huawei and ZTE. The fund will be created through a partnership between an industry group controlled by China’s Ministry of Industry and Information Technology and Ping An Bank. Signaling the importance of the initiative, the signing ceremony was held at the Diaoyutai State Guesthouse, which is often used to host visiting dignitaries, and was attended by representatives of many of China’s largest technology companies, including Lenovo and Alibaba, according to an official release. The new fund seems to resemble a separate multibillion-dollar fund, announced in 2014, to provide financing and enable acquisitions to increase the size and sophistication of the country’s semiconductor industry.

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: Tuesday January 27

• Microsoft Q4 earnings: revenue $26.5B, +8% Y/Y, profit $5.86B, shares fell 3% on earnings miss: (more coverage here, here and here): Microsoft reported profit of $5.86 billion, or 71 cents per share for the latest quarter, compared with $6.56 billion, or 78 cents per share, in the year-ago quarter. Sales rose 8 percent to $26.47 billion, largely due to the acquisition of Nokia's phone handset business last year. Analysts had expected revenue of $26.3 billion and earnings of 71 cents per share, on average, including some restructuring costs. Shares of the world's largest software company, which have surged to 14 year highs in the past few months, fell 3 percent in after-hours trading, to $45.63. The company ended the quarter with $90.25 billion in cash and equivalents. According to Microsoft, its commercial cloud revenue grew 114 percent compared to the year-ago period. In the sequentially preceding quarter, the company noted a 128 percent rise. It ended the current quarter on a $5.5 billion run rate.

• Long overshadowed by its rival Alibaba, JD has emerged as China’s other online goliath by carving out its own distinct identity: While Alibaba’s marketplace serves as a platform to connect buyers and sellers, JD buys goods from manufacturers and distributors and holds the inventory in its own warehouses, in a model that echoes Amazon’s. It then arranges for quick delivery of virtually everything from television sets and refrigerators to socks and T-shirts, using motorbikes that weave in and out of traffic in some of the country’s biggest cities. Like Amazon, JD has invested heavily in infrastructure, pumping more than $1.5 billion into building and leasing warehouses and order-fulfillment centers around China. But JD has gone even further, venturing into home delivery with its own fleet of trucks and more than 20,000 couriers, all in the hope of capturing what is projected to be a $1 trillion Chinese e-commerce market by 2020. JD, which is publicly traded in the United States, is now China’s biggest direct-sales retailer, with 46 million active users and an estimated $20 billion in revenue last year. “This isn’t a business model for everyone, but they were smart to build it,” said Elinor Leung, a Hong Kong-based Internet analyst at CLSA, an investment bank. “Now, their traffic is exploding.” And yet this costly approach to building an online retailer has worried some analysts, who say that JD could be weighed down by its physical assets and mounting debt. Several analysts say the company won’t turn a profit before 2017. Competitors like Jack Ma, chairman of Alibaba, have even disparaged the company’s business model, calling it tragically flawed. “It’s not that we are better,” Mr. Ma said in a recently published interview. “It’s an issue of direction. So, I tell my people: Definitely do not get involved with JD.com. Don’t come blaming us if you die one day.” He later apologized for his comments. Executives at JD, which is based in Beijing, insist they are building a company that will eventually have a commanding advantage in e-commerce, with strong customer service, speedy delivery and assurances that the products it ships are authentic, not counterfeit. Among the biggest challenges now, they say, is keeping up with an enormous volume of online orders, which have doubled in each of the last three years. “If we wanted, we could be profitable right now,” said Shen Haoyu, chief executive of JD Mall, the company’s biggest division. “But our immediate goal is to grow our customer base.” the company boasts seven fulfillment centers and 118 warehouses in 39 cities. There are also 1,045 smaller pickup centers in about 500 cities. And since 2010, the company has pledged that most online orders placed before 11 at night will be delivered by 3 p.m. the next day. Morgan Stanley calls JD’s business model a combination of Amazon and UPS; other analysts say the company is beginning to look like Walmart, steeped in logistics and infrastructure and backed by a website.

• Verizon’s mobile ‘supercookies’ show how telcos are monetizing user data: Verizon is now at the forefront of telecommunications companies selling intelligence about their customers to advertisers. AT&T experimented last year with a similar ad-targeting program, which involved inserting a unique numeric code into a subscriber’s web requests. But after scrutiny in the news media, AT&T said it was halting its program, at least until it came up with a better approach. The ad-targeting experiments by Verizon and AT&T are striking examples of the data-mining opportunities open to phone carriers now that they have become the nexus of the information universe, providing a connection to the Internet for people anywhere they go, at any time. Verizon’s marketing efforts are part of a high-frequency digital ad trading system called real-time bidding, in which many kinds of players track and analyze users’ online activities to identify the characteristics of those who would be most receptive to certain ads. A Verizon service called Relevant Mobile Advertising, for instance, combines details obtained from information resellers like Acxiom and Experian with the wireless carrier’s own data to classify its mobile subscribers by gender, income, interests or other criteria; the company allows its subscribers to opt out of receiving ads customized through this program. Another service, called Verizon Selects — which consumers can opt in to in exchange for reward points — segments subscribers based on their web browsing and use of apps. Verizon says its customer categorization programs offer an advantage to advertisers because the company has a direct relationship with subscribers and it can understand their general location based on the places from which they make calls or send texts. The services use a unique alphanumeric code for each subscriber, rather than real names or contact information, to group them into ad clusters. Mr. Atreya, the Verizon director, says the company changes these customer codes every few days.

• Microsoft buys R startup Revolution Analytics to boost the data analytics offering of its cloud suite: Microsoft bought Revolution Analytics which makes tools to sift through data, to help the company build up its cloud-services business. Terms weren’t disclosed. The deal was driven by the growing volumes of data that companies are contending with and the need for more software that can help analyze the information, Microsoft said in a blog post on Friday. Revolution Analytics, based in Mountain View, California, makes a statistics programming language called R that helps analyze data. David Smith, chief community officer at Revolution Analytics, said in a blog post that the deal will spread the usage of advanced analytics within Microsoft products, including the Azure cloud service. Revolution Analytics counts financial companies such as American Century Investments and Northern Trust as customers, according to the company’s website. The R programming language is widely used by statisticians and scientists and has surged in popularity as people have turned to it to manipulate large pools of data. R was the world’s 18th most popular programming language in January, according to a study conducted by Tiobe Software, compared to 44th a year earlier. In a separate study, researcher RedMonk put R as the world’s 13th most popular programming language in January, up from 15th in 2014.

• The line between eCommerce and messaging is blurring, as messaging apps are increasingly becoming distribution and moneymaking platforms: Developers have been expanding the uses of the apps, making new functions possible. And investors, seeing huge potential, have driven the apps to ever-higher valuations. “The most popular apps that sustain themselves day after day, month after month, at the top of the leader board, are messengers,” said Fred Wilson, managing partner at Union Square Ventures and an investor in Kik, a messaging app popular with young users. “That’s a reflection of what people do on their phones.” He added, “Once they become full-blown ‘portals’ for mobile content and mobile commerce, we will really see how massive this opportunity is.” The initial appeal of the apps is simple. They are faster to use than email, and they generally allow you to send text, links, video and photos to friends more cheaply than traditional texting services offered by wireless carriers like Verizon or AT&T. The uses are multiplying, though. On the app KakaoTalk, for example, people can discover other new smartphone apps and share them with their friends. On Snapchat, users can send money to one another inside the app. And Line, a messaging app popular in Japan, lets people pay for things at brick-and-mortar retail stores using Line Pay, the company’s payments service. Soon, media outlets like ESPN, Vice and CNN will be publishing original content directly to a new editorial section in Snapchat, according to people familiar with the matter who spoke on condition of anonymity because they were not authorized to speak publicly. “Media and communication are converging,” said Jonah Peretti, chief executive of BuzzFeed. “Some of what we’re all creating now will be a huge part of these messaging apps over the next one or two years.” Some of the most popular options are Viber, which says it has more than 200 million monthly visitors; Line, Japan’s most popular messaging app, with 170 million users; and WhatsApp, the leading service, which has more than 700 million regular visitors. For now, though, not all of the apps are generating big revenue. WhatsApp, which is owned by Facebook, reported just $10.2 million in sales in 2013. The revenue came from the small fraction of users who paid $1 to use the app. Still, the valuations of many messaging start-ups continue to rise. In February, Rakuten, the big Japanese online retailer, bought Viber for $900 million. The next month, the Chinese e-commerce behemoth the Alibaba Group led a $280 million investment in Tango, valuing the nearly six-year-old start-up at about $1 billion. Facebook paid $21.8 billion for WhatsApp in February. For investors, the thesis is a Silicon Valley adage: Get millions of people to use the service first, and eventually it will find a way to make money. Many entrepreneurs see WeChat, the hugely popular Chinese service run by the Internet giant Tencent, as the ideal model for building a business in messaging. Released four years ago, the app now claims nearly 500 million monthly active users — who not only send image-laden messages, but play games and book car rides and plane tickets. The rapid growth in messaging apps, some say, has been a response to the more public nature of popular apps like Twitter and Facebook, where status updates and posts are visible to the many rather than the few. “It’s a much more intimate experience,” said Marissa Campise, a partner at SoftBank Capital, the venture arm of Japanese telecom giant SoftBank. “Messaging apps are smaller and less visible than the public networks and far more engaged and trusted. It often feels like a more controlled, real-time replacement for email,” she said. Messaging users tend on average to pick up their phones several times an hour, Talmon Marco, the chief executive of Viber, noted in an interview late last year. That makes messaging apps an ideal place to introduce other offerings like games, virtual stickers or even physical goods. Asia has been a particularly fertile breeding ground for expanding the uses of the apps. In 2013, for example, WeChat joined Xiaomi, the Chinese smartphone giant, to offer a limited quantity of the company’s newest phone for purchase on the chat app. Users could reserve and then buy the new smartphone entirely inside the WeChat app using Tenpay, the payments service owned by Tencent. Xiaomi said it sold 150,000 phones in less than 10 minutes.

• Online Storage Company Box Has Strong Debut in First Day of Trading: Although questions had arisen about how Box’s initial public offering would fare, public investors gave the company a warm welcome on Friday, its first day of trading. Shares in Box, the online file storage company, opened at $20.20 on Friday morning, 44 percent higher than its I.P.O. price of $14 a share. The stock continued to surge to close the day at $23.23, up nearly 66 percent, giving the company a market value of $2.7 billion. At that level, the start-up has surpassed the $2.4 billion valuation that it fetched in its most recent private financing round last summer. Its strong first-day performance may ease some concerns among investors that highflying Silicon Valley start-ups were looking overvalued. Now that it has gone public, nearly a year after kicking off the process during a period of market upheaval, Box can focus on a more pressing issue: standing out in an industry that has quickly filled with competition, particularly from much bigger rivals like Google and Microsoft.

• Yahoo likely to announce plans to avoid huge tax hit on Alibaba windfall - two possible structures considered plausible: Yahoo on Tuesday is expected to reveal something most companies usually try to keep secret: how it plans to avoid a multibillion-dollar tax bill. The Web portal has spent more than a year figuring out how to cash out a chunk of its $40 billion stake in China-based Alibaba Group Holding Ltd. Typically, a U.S. company faces a federal tax bill of about 35 percent when it sells stock in another enterprise for cash. Yahoo took a $3 billion tax hit last year when it sold about $10 billion in Alibaba shares. This time around, activist investors are leaning on the Sunnyvale, California-based company to be more savvy. Marissa Mayer, Yahoo’s chief executive officer, probably will maintain at least part of the Alibaba holding to keep a finger in China’s fast-growing Web market. Were Yahoo to sell the entire stake, it could face a federal tax bill of as much as $14 billion.Here are some of Yahoo’s options to avoid capital-gains tax, both legal: Option One: Last summer, John Malone’s Liberty Ventures wanted to avoid taxes on selling its stake in travel website TripAdvisor Inc. Liberty did so by transferring that stake, as well as online costume-retailer BuySeasons, to a new unit created specifically for the deal. Under the plan, the new unit took out a $400 million bank loan. Most of that cash was destined for Liberty and the new unit’s stock spun off to Liberty shareholders. The expectation was that TripAdvisor would acquire the new unit in exchange for the travel site’s own stock. TripAdvisor also agreed to repay the $400 million loan. When it’s all wrapped up, Liberty Ventures gets cash and exits TripAdvisor -- without incurring the tax bill a straight sale would trigger. Liberty’s shareholders get stock in TripAdvisor as though Liberty had distributed its holding in the site to its own investors. Liberty’s investors also don’t face taxes on the deal. In Yahoo’s case, it would spin off its stake into a new entity, which would borrow money and distribute the cash to the Internet company. “The tax savings sort of gets carved up between the two parties and they each get a chunk,” Option Two: Another option is to follow Warren Buffett’s lead, with what’s known in tax circles as the cash-rich split. Berkshire Hathaway Inc. and Graham Holdings Co. last March agreed to a deal that lets Buffett’s company unload its stake in the former Washington Post Co. while avoiding capital-gains tax. That deal called for Graham to transfer cash and a Miami television business -- combined, roughly equal to Berkshire Hathaway’s investment -- into a new subsidiary. Graham then shifts stock in that new unit to Berkshire Hathaway, while Buffett’s company moves its Graham stake back to the media company. Economically, it’s as though Berkshire Hathaway sold its Graham stake for cash -- and a TV station. But because the deal is structured as an exchange of shares, not a straight-up sale, it gets tax-free treatment. Were Yahoo to follow this route, it would exchange Alibaba shares for a stake in a new unit that would consist mostly of cash. Alibaba would have to shed some assets for Yahoo to get the advantage of such a deal; a cash-only transaction probably would trigger a tax bill. Accounting experts say it shouldn’t be difficult to find something to throw in the pot.

• As Alibaba and Chinese investors pour into Israel, the nation's high-tech startups scored big exits in 2014: With nearly $15 billion in exits through mergers and acquisitions and public offerings, 2014 was an all-time record year for the Israeli hi-tech industry, compared with a mere $1.2 billion raised in 2013, according to a PwC report for 2014. The exits were spread out between a variety of tech industries, including Internet, IT, life sciences, communications and semiconductors. Semiconductors had a 38% of the share, but just one semiconductor IPO out of the 18 in total. The road accident avoidance technology developerMobilEye raised $1.023 billion in its August IPO, a record an Israeli company. As for new giant exits emerging, most argue that Israel’s hi-tech diversity is its strength. “While there seems to be a general hype around IoT, security and fintech, I find Israel to be a very unique place in the fact that entrepreneurs don’t tend to have group think and as such, we are seeing ventures tackling a very wide array of industries.” said Yaron Carni, the founder of two Israeli VC fundsMaverick Ventures and Tel Aviv Angel Group. And more international companies are beginning to take notice of Israel’s technological strengths. In fact, 2014 ended with a news item that might indicate China’s increasingly hefty presence in the Israeli hi-tech sector. Last year might be remembered as the time when Chinese technology companies embraced Israeli startups in a big way. On December 20, The Chinese eCommerce giant Alibaba invested in Visualead, a company that specializes in QR code generation. Based in Herzliya, the Israeli equivalent of Silicon Valley, the 15-person start-up was Aliababa’s first Israeli acquisition. Last September, China’s Yuanda Enterprise Group bought AutoAgronome, a maker of smart irrigation and fertilization systems for $20 million in order to move into high-tech agriculture.