Daily Tech Snippet: Thursday, August 4

• Tesla misses Q2 earnings, delivers 14,402 vehicles: Tesla missed its Q2 earnings targets today in a report released after the close of the market. Tesla executives are not wavering on yearly targets, despite a slower than expected quarter. All of this comes amidst a seemingly never-ending wave of Tesla headlines dominating Silicon Valley over the last few weeks. The energy company born out of an automobile company reported non-GAAP Q2 revenue of $1.56 billion up from last year’s Q2 revenue of $1.2 billion. The company came close but ultimately missed analyst estimates of $1.6 billion. Tesla closed down 0.62 percent today at $225.79. After the news was released, Tesla shares moved up almost instantly in after-hours trading after the news dropped but have been fluctuating up and down by 2 percent since.Wall Street analysts expected an adjusted net loss of $52 cents a share but found themselves with a worse than expected loss of $1.06 per share. Tesla delivered 14,402 new vehicles consisting of 9,764 Model S and 4,638 Model X in Q2, slightly ahead of last month’s estimates. Tesla had originally aimed to deliver 80,000 vehicles by the end of the year. It is growing tougher by the day for the company to hit that goal. On the bright side, the company noted that almost half of Q2 production occurred in the final four weeks of the quarter. Moreover, Tesla had an additional 5,000 cars in transit at the quarter end on their way to be delivered.

• Why it makes sense for Walmart to buy Jet.com — even for $3 billion: Walmart missed out on a Marc Lore company once, when Amazon swooped in to beat it to the purchase of Diapers.com’s parent company several years back. The giant retailer may not let it happen again. Walmart is in talks to acquire Jet.com, Lore’s new startup that has raised more than $800 million in financing in an attempt to build a new online megastore, according to a person familiar with the talks. It is not clear how far along they are. News of the talks was first reported by the Wall Street Journal, which said the tie-up could value Jet at as much as $3 billion. A Walmart spokesman did not respond to a request for comment. A Jet spokesman declined to comment. A $3 billion price tag would be a steep one for Walmart, considering that Jet is largely still unproven and burning more than $20 million a month on advertising alone. A deal would also certainly not be what Lore had in mind when he set out to build a legitimate competitor to Amazon, Walmart and others after his non-compete agreement with the Seattle-based retailer expired two years ago. But it would be a marriage of necessity for both sides, and one that probably makes too much sense not to happen. On the Walmart side, its e-commerce efforts have largely been viewed as a failure in recent years for a retailer of its size and power. Annual revenue for the division is around $14 billion, compared to $99 billion for Amazon, excluding Amazon’s AWS cloud computing unit.Five years ago, it would have seemed possible, but unlikely, that Walmart could catch up with Amazon. Today, that notion is laughable.For Lore and Jet, the deal would be something of a shocker. Lore pocketed dozens of millions of dollars when he sold Diapers.com to Amazon so he doesn’t exactly need the money. That’s one of the reasons his backers believed him when he said his goal was to build a company worth tens of billions. But the hurdles to get there have been significant from the start and perhaps even larger than Lore imagined. Jet only really works long-term as a standalone company if it can convince millions of people to order multiple items at a time to earn discounts; individual product prices aren’t typically better than its competitors.

• Dorsey's Square reports 41.5 percent jump in quarterly revenue: Mobile payments company Square Inc on Wednesday reported a 41.5 percent jump in revenue and diminishing losses as more large merchants make sales using Square's technology, a sign the company has moved beyond serving only pop-up shops and food trucks.Square stock was up more than 14 percent to about $12 in after-hours trading following the second-quarter earnings call. The price at closing bell was $10.44. Square's revenue reached $438.5 million, up 41.5 percent from its earnings of $310.0 million a year earlier. It processed $12.5 billion in payments, up 42 percent from a year ago, mostly due to new and larger retailers using Square, the company said. About 42 percent of total payments is coming from larger retailers, signaling a dramatic transition for Square. The company started seven years ago as a card reader that turns a mobile phone into a payment terminal, and was sold primarily to pop-up stores, coffee shops, food trucks and other small merchants that couldn't afford elaborate payment systems.Square, which went public in November, has expanded to offer an array of services for businesses such as point-of-sale registers, invoice software and loans. Square Capital, the loan program, saw a 123 percent increase over last year, with $189 million in loans made to businesses. Square added five investors to the program, which will provide capital for additional borrowers, said Sarah Friar, Square chief financial officer. About 90 percent of borrowers renew their loans.Friar said Square's familiarity with borrowers - the company lends to merchants it has already done business with - and the low cost of the program distinguishes it from other lenders.Still, the company is not profitable. Its losses narrowed to $27.3 million from $29.6 million during the same period last year.

Daily Tech Snippet: Monday, December 28

• Apple Pay Seeks Growth in Asia, Europe After Slow U.S. Adoption:  After a sluggish start in the U.S. since its debut more than a year ago, Apple Pay is ramping up in markets where people are more comfortable with so- called contactless payments. The service, which lets consumers pay in an app or by tapping their iPhone on store terminals, will be introduced next year in China, Hong Kong, Singapore and Spain. Apple is counting on its brand recognition as it enters markets that are further along than the U.S. in all things mobile payments, particularly in advanced technologies needed to accept them in retail outlets. Still, it won’t be easy. The iPhone maker will compete with local banks and Internet companies that already offer the service -- not to mention Samsung Electronics Co., the world’s leader in smartphones. The mobile-payment service, which only works with Apple devices, is a way for the company to make products more appealing and spur customer loyalty. After Chief Executive Officer Tim Cook called 2015 the “year of Apple Pay” in January, the service has been slow to take off domestically, partly because of a lack of promotion and a limited number of store terminals able to accept it. China: Apple said its service will be rolled out as soon as early 2016.   Last week, Apple teamed up with Chinese bank-card association UnionPay, which will make Apple’s market entry “a lot easier,” said James Wester, an analyst at researcher IDC. Still, Apple Pay will compete with services like Tencent’s WeChat and Alibaba’s Alipay that control more than 75 percent of the mobile-payments market. And Apple should be prepared to race with Samsung, which also announced a partnership with UnionPay and plans to bring Samsung Pay to China as soon as early 2016.

• Jet.com’s Strategy: Low Prices, Fast Delivery, Happy Workers: You can’t accuse Jet.com of timidity. Jet has had some bumps and turns since last summer, when it began selling products as varied as cans of chili, exercise bikes and WowWee personal robots. It changed its business model, dropping a membership fee. It is burning through cash as it continues to scale up, now with more than 900 employees. When it went out to raise more money in the fall, it encountered skepticism. A week before Christmas, it told some customers they would not get their orders in time. Jet said only about 500 shipments out of a million were affected, but such admissions never look good. Yet Marc Lore, Jet’s founder and chief executive, says he is not worried. What will separate Jet from Fab and every other failed company, he says, is happiness. In particular, employee happiness. “I’m constantly asking people at Jet if they’re happy,” he said. “It’s really important for me to know that they love working here and think this is the best place they’ve ever worked.” Jet supplies its employees with typical start-up perks like free food (weekly lunches, plus Red Bull in the refrigerator and protein powder in the kitchen cabinet), four months of paid parental leave, unlimited vacation and an ownership stake that could one day be worth a lot. But it also has some decidedly less common policies, like standardized, no-negotiation pay packages and worker-friendly employment agreements. Employees can see, every day, how the business is doing. “Transparency” is a big word with Mr. Lore. So is “fairness.” Make people feel good, he says, and they will do their best. Trust them and they will reward you. As the holiday shopping season was beginning in late November, Mr. Lore convened his top executives in Jet’s Hoboken, N.J., headquarters for their regular weekly meeting. Here are some of the things that were not on the agenda: warehouse logistics, customer concerns, fine-tuning prices, potential shipping bottlenecks, supplier issues or any of a dozen other topics that could have bedeviled Jet’s first December. Instead, the executives discussed the mood and well-being of Jet’s employees. The preliminary results of Jet’s first “Happiness Pulse” were in. More than 500 employees responded to the survey, which means basically everyone who had been at Jet for at least a month. Two-thirds of them said they viewed Jet favorably. Only 4 percent had a negative opinion. “So only 25 people are basically unhappy,” Mr. Lore said. In an interview a few weeks after Jet’s official debut in July, Mr. Lore pulled out his phone and opened an app. It showed that Jet sold $667,200 in gross merchandise value in one day, up 89 percent in a month. Jet had 6,100 first-time buyers the previous day, and 7,800 orders. The company had $153 million in cash. The app is bulging with data, and it is available to investors and the salaried — but not the hourly — employees. Some information is available even to casual visitors. Dominating one wall in the reception area in Hoboken is a board posting constant updates of the day’s sales by number and dollar volume. For technology companies, this is radical openness. Also radical is a practice to keep salaries the same for jobs grouped together, a process called “leveling.” This is meant to rule out the common ploy “I got a job offer, can you match it?” Extroverts who promote themselves and introverts who keep their heads down are paid the same for jobs of the same value to the company.

• Common Stock Ownership Spreads Among Start-Up Investors: When institutional investors put money into companies backed by venture capital, they typically end up owning a type of stock called preferred shares. Now, institutional investors are also becoming owners of a different class of start-up stock: common shares. The competition among investors to get into hot start-ups has been so fierce that many hedge funds, sovereign wealth funds and others have been unable to participate when the up-and-coming companies sold preferred shares, a kind of stock that generally comes with many protections. So to make sure they got a stake in private companies like Palantir Technologies, Dropbox and One Kings Lane, the institutional investors instead began buying common stock — generally owned by employees of start-ups — often from workers directly or from platforms that sell employee shares. In doing so, the investors chose to forgo the protections that come with preferred shares. Common stock usually comes with no guarantees and is paid out only after the preferred shareholders get their money. The spreading of common stock may have some unintended consequences, especially as the air begins to come out of the Silicon Valley boom and some companies get sold for modest amounts of money. For one, institutional investors who own common stock could take home much less than other investors in the same company who have preferred shares. That gap, in turn, could lead to more litigation between investors.

Daily Tech Snippet: Wednesday, December 23

• Elon Musk's SpaceX Successfully Lands Rocket After Launch of Satellites Into Orbit: People living along the central Atlantic coast of Florida have for decades enjoyed the spectacle of rockets headed for space. On Monday night, they were treated to a new sight that may become common: a rocket coming back down to a gentle landing. “It really felt like it was right on top of us,” Elon Musk, the chief executive of Space Exploration Technologies Corporation of Hawthorne, Calif., or SpaceX for short, said during a telephone news conference afterward. For SpaceX, the 8:29 p.m. liftoff of the Falcon 9 rocket from Cape Canaveral Air Force Station was a threefold success. First, it marked the company’s return to flight after half a year. In SpaceX’s last launch attempt, a rocket taking supplies to the International Space Station disintegrated. Second, SpaceX’s upgraded design for its Falcon 9 rocket worked flawlessly. The liquid oxygen was chilled to minus 340 degrees Fahrenheit, about 40 degrees colder than on earlier flights, and the kerosene fuel was cooled to 20 degrees instead of 70 degrees. Most significant to SpaceX’s ambitions, however, is that after the second stage of the rocket with the satellites continued on to orbit, the engines of the booster stage reignited to turn it around, back to Cape Canaveral. Currently, most rockets are launched just once, the boosters falling back to Earth as expensive junk. Making spaceflight more like air travel, with rockets capable of being refueled and sent up again, is essential for SpaceX’s long-term goal of sending people to Mars. “It’s all the difference in the world,” Mr. Musk said, “absolutely fundamental.”

• Google, Ford in talks on self-driving car partnership: source: Google and Ford Motor Co are in talks about forming a partnership to develop autonomous car technology, a person briefed on the matter said on Tuesday. The extent of a partnership between the second-largest U.S. automaker and search engine giant Alphabet Inc remains under discussion and the precise framework of any effort is unclear but it could include jointly building and developing cars. The two sides have been talking for months, the source said. A partnership between a major automaker and Google could speed the introduction of self-driving vehicles by giving the car company access to Google's wealth of software development while Google would benefit from the industrial and automotive know-how of a firm such as Ford. Fully autonomous cars could eventually prevent thousands of crashes, deaths and injuries, reduce oil use through better traffic management and extend personal mobility to people unable to drive.

• Jet.com Misses Last-Minute Christmas Sales and Shows Downside of Its Model: The heavily funded e-commerce startup began notifying customers 10 days before Christmas that it could not guarantee delivery by the holiday, citing “nationwide shipping delays that have affected many of our shipping partners.” On December 16, Jet.com added an alert to the top of its homepage. The company has still been guaranteeing two-day delivery for items it ships out of its own warehouses, but those are mostly household goods like toilet paper, detergent and packaged groceries that are typically not bought as gifts.While Jet.com is less than six months old, the incident highlights one big downside of its current model compared to Amazon’s. Jet’s pitch is that its large network of warehousing partners helps it choose the most efficient way to fulfill an order, thus stripping out excess costs and passing along discounts of 5 percent to 10 percent to shoppers if they order multiple items at once. But the model also means Jet doesn’t currently have as much control over the experience shoppers have after they complete a purchase for a large number of orders. Some items on Amazon also come from someone else’s warehouse. But Amazon can still guarantee two-day shipping on more than 20 million items through Amazon Prime, thanks to its huge Fulfillment by Amazon program that lets merchants store goods with Amazon for a fee.

• Google Calls Its New Ad Option for App Developers 'an Install-Seeking Machine' Google says developers running "universal app campaigns" across its network are finding them to be more cost-effective than ads run than other digital platforms. The Adwords-based campaign option, which Google introduced in September, allows developers to run a campaign across Google search, YouTube, Google Play store and the Google Display network. A developer designates a target cost per install and budget, and then Google automates where across its platforms the promos should go."Basically, think of it as an install-seeking machine," Anthony Chavez, Google's product management director for mobile ads and Universal App Campaigns, told Adweek. As an example, Google pointed to Sparkpeople, which has 15 million users in the U.S. and Canada for its fitness and dieting apps and has been testing the sytem. Joe Robb, the digital marketing director for the company, said that while the cost per install has been slightly higher than he expected, his team is still spending between 30 and 50 percent less than they do on Facebook. The campaign is also now driving about 20 percent of the company's total downloads.

Daily Tech Snippet: Wednesday, November 25

• Apple plans to launch Apple Pay in China by February: WSJ Apple Inc (AAPL.O) plans to launch its mobile payment system Apple Pay in China by early February, the Wall Street Journal reported. The iPhone maker has struck deals recently with China's big four state-run banks, the newspaper reported late Monday, citing people familiar with the discussions. When launched, Apple Pay will mainly compete with Alipay, the online payment platform run by Alibaba affiliate Ant Financial, and UnionPay, a state-controlled consortium that has a monopoly on all yuan payment cards issued and used in the country. Apple's plans could still face regulatory hurdles in China, where banking and e-commerce are overseen by a number of government agencies, WSJ said. Launched in the United States in October last year, Apple is bringing its payment service to China, the most important market for smartphones. The company's sales nearly doubled in Greater China in its fiscal fourth quarter from a year earlier. The amount Apple would make off such transactions has been a sticking point in negotiations to bring Apple Pay to China, the Journal quoted the people as saying.

• Google’s Answer to Facebook Instant Articles Gets (Tentative) Launch Date, Ad Partners: Accelerated Mobile Pages, Google’s initiative for mobile news publishing and its open source riposte to similar efforts from Facebook and Apple, is arriving “early next year,” the company said in a post on Tuesday. Last month, Google rolled out a preview version of the product, which Re/code readers learned of first. Google has already roped in marquee publishers, including* the New York Times, Washington Post and BBC. Some 1,600-plus newspapers and television stations have “voiced their support,” according to Google. On Tuesday, the company also announced it had signed up a slew of analytics and advertising providers for the back end.

• Hewlett-Packard ended its life as one public company with a whimper. For the quarter that ended Oct. 30, Hewlett-Packard had net earnings of $1.32 billion, or 73 cents a share. Revenue was $25.7 billion, down 9 percent from a year earlier. The earnings were below Wall Street’s expectations, which used nonstandard accounting popular in analyzing tech companies. By the nonstandard formula, HP earned 93 cents a share. Analysts had expected HP to make 96 cents a share, on revenue of $26.4 billion, according to a survey by FactSet. Shares of HP Inc. were down more than 7 percent in after-hours trading Tuesday, while HPE shares were up more than 2 percent. Of the two firms, Ms. Whitman’s HPE drew more attention, as she is trying to remake a business that sold things like computer servers and data networking into something with more software and high-value services, which can compete in the era of cloud computing. HP, considered the grandfather of Silicon Valley, began November as two separate entities. One, called HP Inc., sells primarily personal computers and printers. The other, HPE, sells computer hardware, software and services that are used by large companies. Meg Whitman, who was chief executive of the old HP and now runs HPE, split the entity in the hope of increasing efficiency and growth. After months of planning, the two companies began operating separate financial reporting systems in August, although they were legally one company until Oct. 30. Ms. Whitman’s strategy now is led by high-value consulting, in particular helping customers in planning, managing, protecting and using hybrid cloud and on-site systems to get and analyze more data, faster. Next week HPE and Microsoft are expected to make a joint announcement that Microsoft is a “preferred partner,” meaning they will make sales calls together and recommend each other to customers. It is a plausible plan, Mr. Bittman said, that only needs revenue and profits. “It’s a good series of slides, but we need to see it in action,” he said.

• Amazon Challenger Jet.com Announces $350 Million Investment, Eyes $150 Million More: E-commerce startup Jet.com announced a $350 million cash infusion Tuesday led by Fidelity Investments, providing money to help the company attract customers during its first holiday shopping season. An additional $150 million investment is “expected shortly,” the Hoboken, New Jersey-based company said Tuesday in a statement. The investment values Jet at $1 billion before the new funding round, the company said. Jet, which began operations in July, offers free shipping on orders exceeding $35 without a membership. Web giant Amazon.com Inc. charges customers $99 annually for delivery discounts. Founded by former Amazon executive Marc Lore, Jet is trying to undercut its chief rival’s prices to attract customers. Last month, it abandoned a $50 subscription membership fee. The total value of merchandise sold on Jet was $33.2 million in October, an increase of 65 percent from September, the company said in the statement. Jet expects to end the year with gross merchandise value of $500 million on an annualized basis. Jet offers customers unique ways to save on orders, including discounts for paying with a debit card or waiving their right to return products they buy. Consumers can also amass savings by loading up their carts with more items, which minimizes the number of shipments. Jet is attracting new customers by subsidizing their purchases with big discounts, which is a lower-cost way of gaining business than advertising, said a person familiar with the matter. The company is considering offering an option to buy online and pick up in a store with its retail partners, which would help Jet compete with Amazon’s larger inventory and faster shipping, said the person, who asked not to be identified because the strategy is private.

• Tango, Chat App Unicorn, Lays Off 9% Of Staff Following Failed Move Into E-Commerce: Tango, the mobile messaging unicorn that reached a billion-dollar valuation when Alibaba invested $280 million in it early last year, has laid off around 9 percent of its workforce after it shuttered a brief effort at e-commerce. The Mountain View-based company launched an in-app commerce feature powered by Alibaba and Walmart back in May of this year, initially in the U.S. market, but it has confirmed to TechCrunch that ‘Tango Shop’ was closed down last month, leading to the lay-off off around 30 employees working on it. “The initiative didn’t really pan out,” Tango CTO Eric Setton told TechCrunch. “We didn’t see the conversations we wanted. [There was a] good amount of traffic but the volume didn’t materialize. [We recently] updated the app to take the e-commerce flow out, but unfortunately couldn’t keep the team working on that initiative.” Following the reorganization, Tango now has 270 staff across its U.S. office and a smaller presence in Beijing, China. Interestingly, one high-profile exit from that reshuffle was Chi-Chao Chang — formerly VP of Tango Labs and the lead on Tango’s commerce initiative — who is now working at Facebook, although he is involved with the social network’s search business not Messenger. Despite the retrenchment, Setton claimed Tango is on track to have its highest quarter of revenue to date. “This year, [revenue] is an order of magnitude above what we’ve ever seen before,” he said, although he declined to provide a specific revenue figure. Setton also declined to give an update on Tango’s current user base. The last figure given by the company came in May, at the launch of Tango Shop, when it claimed 300 million registered users. That wasn’t a big jump on the 200 million registered users that it announced in March 2014, when Alibaba invested and Tango announced its first (and only) monthly active user count: 70 million. The lack of fresh user metrics suggests that Tango’s user growth is stalling, particularly as the mobile messaging scene matures and network effects come into play to drive users to the most established, more popular apps. Because, after all, chat apps are about chatting, which is hard to do if your friends all moved to Snapchat (estimated at 100 million monthly users), Kik (240 million registered users), Facebook Messenger (700 million monthly users) or WhatsApp (900 million monthly users).

• Alphabet Trying to Mix Heft With Start-Up Agility: Alphabet was created to separate Google, the search giant, from the constellation of appendages — the self-driving cars, the pharmaceutical company, the two venture capital funds — that many current and former employees say had made the company too sprawling to manage. The last three months of 2015 were the first quarter of the new holding company’s life, and the contours of the organization are starting to fall into place. It has hired new leaders, such as an auto industry veteran who was recently tapped to run the self-driving-car project. It is developing new processes, like an internal system that would have Alphabet companies pay Google for dull but important services like human resources, accounting or access to Google’s technological infrastructure, according to people familiar with the matter, something first reported by The Wall Street Journal. These are normal processes in large companies, used to make sure business units have a handle on expenses. But the company is also asking questions about how it might achieve the dream that has eluded so many other big companies: find a way to take advantage of its heft while being nimble like a start-up. Larry Page, Google’s co-founder and chief executive of Alphabet, has said that he wants his company to be a home for entrepreneurs. If the Alphabet concept plays out as advertised, company chiefs would have more autonomy to make strategic decisions on such matters as whom they hire and how they spend money, or even to raise their public profiles. But the pitch — in particular to acquisition targets — is also about what they would not have to do. They would not have to worry about building a large server infrastructure for their technology to run on. They would not have to worry about whether to use their money to hire another accountant or another engineer. In the case of more mature companies, they could skip the mounds of paperwork and reporting requirements that come with going public. That broad idea — that entrepreneurs do best when they are focused squarely on new technology rather than distracted by corporate building blocks that every company needs but also take lots of time to build — has taken root across Silicon Valley. It is why, in addition to money, venture capital firms now give their companies access to all kinds of marketing, sales and other services in hopes that their start-ups can more quickly become grown-ups. The first good glimpse of all this will come early next year, when Alphabet, for the first time, will separate Google’s search and advertising businesses from Alphabet’s more speculative divisions. But it will take months or years for Alphabet to figure out how to create the best of all possible worlds. If such a thing exists.

• When and Where Do Black Friday's Biggest Crowds Actually Hit? Google's look at foot traffic finds a few surprises:  Google wants to help shoppers navigate the wretched non-holiday known as Black Friday. Today, the online Santa of search is showing when and where people head for doorbusters. Pulling aggregated, anonymized data from Google Maps users, the company is revealing for the first time traffic insights for various retailers in the month leading up to Christmas Eve. The data isn't just relevant to shoppers. Understanding peak traffic for shopping malls, department stores, electronic stores, cellphone stores, discount stores and dollar stores could help marketers better reach consumers when they're keenest to buy. Google also announced today it would provide a more detailed view of offline measurement by giving advertisers the ability to break out store visits at a keyword or ad-group level. "By reviewing data at this level, advertisers can understand which keywords or ad groups drive the most store visits," according to a Google blog post. "For example, a toy store may learn that certain dolls or action figures bring in the most visitors. With this insight, that toy store might invest in search terms that drive both online and offline sales, and display those products at the front of their store." Here are a few key insights from Google's foot-traffic analysis: Store traffic peaks between 2 p.m. and 4 p.m. on Black Friday, with Thanksgiving Day department store visitors peaking between 6 p.m. and 7 p.m. Shopping malls, superstores and discount stores experience the highest traffic on the Saturday before Christmas. Dollar stores are busiest on Christmas Eve.

Daily Tech Snippet: Thursday, November 5

• Facebook Revenue Surges 41%, as Ads and Users Keep Growing: It takes money, the adage goes, to make money. And Facebook is spending a lot of dollars to do just that. The social media giant on Wednesday posted another quarter of robust revenue growth — up 41 percent in the third quarter from a year earlier, to $4.5 billion — fueled by its mobile advertising business and an increase in daily users. Net profit rose to $896 million, up 11 percent from a year ago. The revenue and profit increases came alongside a surge in spending. Facebook’s expenses totaled more than $3 billion in the third quarter, a 62 percent leap from a year earlier, meaning that spending growth is outpacing sales growth. The company, based in Menlo Park, Calif., emphasized that it had no intention of slowing that down as it invested heavily in hiring, marketing, new technologies and other initiatives.

• Airbnb and Uber Mobilize Vast User Base to Sway Policy: Over the last few years, so-called sharing companies like Airbnb and Uber — online platforms that allow strangers to pay one another for a room or a ride — have established footholds in thousands of communities well before local regulators have figured out how to deal with them. Now, as cities grapple with the growth of these services and try to pass rules for how they should operate, the companies are fighting back by turning their users into a vast political operation that can be mobilized at any sign of a threat. Airbnb offered the latest and most vociferous example of this on Wednesday. Fresh off defeating a San Francisco measure that would have severely curtailed the company’s business in its hometown, Airbnb staged a news conference that functioned as a warning shot to other cities thinking about proposing new regulations. The event was billed as a debriefing to discuss the defeat of Proposition F, which would have toughened existing rules for the service by, among other things, cutting the number of nights people could rent out rooms in their homes. In this city of about 840,000 people, roughly $8 million was raised by groups opposed to Proposition F — about eight times the amount raised by the proposition’s backers, according to records filed with the San Francisco Ethics Commission. Airbnb is preparing for more fights. Mr. Lehane said the company was working to organize voting blocs in other cities where it operates. By the end of next year, he said, the company has a goal of creating 100 “clubs” made up of Airbnb home-sharers — sort of like local unions. Companies like Airbnb and Uber have become multibillion-dollar companies by employing a kind of guerrilla growth strategy in which they set up a modest team of workers in a city and immediately start providing their services to the public, whether local laws allow them to or not.

• Jet.com to Raise Funds Valuing the Amazon Rival at $1.5 Billion: Jet.com, the much-hyped Amazon.com competitor, is close to raising $500 million to $550 million in a funding round led by Fidelity Investments, according to a person familiar with the plans. The investment would give the year-old online shopping startup a valuation of at least $1.5 billion, said the person, who asked not to be identified because the deal isn't finalized. Founded by a former Amazon executive, Jet is aggressively trying to undercut its chief rival’s prices and attract customers quickly. To achieve that goal, it had raised $220 million before selling a single product and abandoned its subscription membership fee a few months after opening its doors in July. Jet is attracting a loyal following by offering customers unique ways to save on orders, including discounts for paying with a debit card or waiving their right to return products they buy, said Scot Wingo, chairman of ChannelAdvisor. Customers can also amass savings by loading up their carts with more items, which minimizes the number of shipments.

• Alibaba, Baidu Turn `Kingmakers' as China Sees Dealmaking Surge: To understand why China is in the midst of a surge in dealmaking and why that won’t slow down anytime soon, consider the arranged marriage of two of the country’s largest travel websites. Qunar Cayman Islands Ltd. and Ctrip.com International Ltd. were bitter rivals for years, bickering in public and sacrificing profits to grab customers in the growing China market. Then Qunar’s largest shareholder, Baidu Inc., forced it into a deal that gave Ctrip control over the combined entity, according to a person familiar with the matter. Qunar’s management learned their fate only two days before the announcement, the person said. China’s Internet market, after a surge in startups and record venture-capital investments, is entering a new phase of consolidation as investors grow weary of money-losing battles for customers and push for profitability. Acquisitions by Chinese companies rose 75 percent this year to $413.2 billion, according to data compiled by Bloomberg, with domestic deals in the Internet industry nearly quadrupling to $55.6 billion.

• Facebook Hits 8 Billion Daily Video Views, Doubling From 4 Billion In April: Facebook video viewership is growing by leaps and bounds. It now sees 8 billion average daily video views from 500 million users. That’s up from just 4 billion video views per day in April. Mark Zuckerberg made the announcement on the call to investors followingFacebook’s blockbuster Q3 2015 earnings report. Some might contend that this stat isn’t totally accurate since Facebook counts just 3 seconds of watching as a “view”. But the 100% growth in seven months shows that even when controlling for this limitation of the metric, users are still voraciously consuming videos. Even at just 3 seconds per view, Facebook is generating 760 years of watch time each day. That means there’s a ton of space for Facebook to lure in TV commercial dollars that are shifting to digital. It also has an opportunity to grow viewership further with an ongoing test where it pays a revenue share to top video creators.

Daily Tech Snippet: Thursday, October 8

• Singapore Post, Like Amazon, Tests Package Delivery by Drone: Singapore Post Ltd. is testing package delivery by drone, echoing attempts by Amazon.com Inc. to extend the commercial capabilities of unmanned aerial vehicles. The company known as SingPost said a drone it developed with the Infocomm Development Authority of Singapore carried a packet containing a letter and T-shirt on a five-minute, two-kilometer (1.2 miles) flight. This marks the first time any postal service has successfully used a drone for “point-to-point recipient-authenticated mail delivery,” it said in a statement Thursday. SingPost is looking to such unmanned aircraft as online transactions increase in the Asia-Pacific region and as Singapore plans to develop itself into a so-called Smart Nation through technology usage. There is “immense potential” in drone technology for last-mile mail and e-commerce delivery, Bernard Leong, SingPost’s head of digital services, said in the statement.

• An Amazon Rival, Jet.com, Eliminates Its Membership Fee: Just three months after its introduction, Jet.com, the much-hyped rival to Amazon and Costco, has done a 180-degree turn in its business model by making its members-only shopping club freely accessible. On Wednesday, Jet said it would eliminate its $50 annual membership fee, but continue to provide better prices on items, along with high-quality customer service and free shipping on orders of more than $35, among other benefits. The about-face raises questions of whether Jet was struggling to gain the traction it needed to expand its business. But Marc Lore, the company’s chief executive, said in a blog post that customer response to Jet over a three-month free trial period had exceeded expectations. The average amount of items per order was twice what it expected, for instance, he said. While eliminating a membership fee may help expand Jet.com’s customer base, the move could diminish the company’s chances of turning a healthy profit. Mr. Lore had raised more than $200 million from investors to fund the site. In an interview with The New York Times, he had predicted that the company would take five years to grow to a point where it was not losing money on every shipment. The $50 membership fee would have been a major revenue stream contributing to Jet’s profit. Now Jet’s revenue will rely on raking in commissions on sales from retailers. Discounts for customers come from what Jet calls Smart Cart savings, which let shoppers lower costs by adding more products to their shopping carts, resulting in orders that are more efficient and cheaper to fulfill.

• Amazon Seeks Cloud Computing Growth With New Data Products: Amazon Web Services announced products Wednesday that give businesses new ways to transfer, manipulate and derive insights from data they store in the company’s cloud. The products span diverse areas of information technology from a business intelligence service named Quicksight, to security systems, to new tools to help people migrate databases from proprietary versions into free ones hosted within Amazon. The company also unveiled a new product, called Snowball, that is a hardware device that lets businesses securely transfer large amounts of data into the Amazon Web Services cloud. And Amazon announced a deal with consulting giant Accenture Plc to focus on corporate customers. The products and services shown at the company’s re:invent customer conference in Las Vegas represent a further expansion by Amazon into competitors’ territories, whether database vendors such as Oracle Corp. or business intelligence companies such as Tableau Software. The effort also keeps the pressure on traditional hardware providers, who are seeing their businesses slow as more of their customers opt for cloud computing offered by Amazon and others. Amazon’s Web Services division generated $1.8 billion in sales in the Seattle-based company’s most recent quarter and almost $400 million in operating profit. The e-commerce company created the AWS division almost 10 years ago, giving it a lead on competitors such as Microsoft, Google  and IBM. that were slow to release their own cloud services. In recent years that has changed. Microsoft is now a major competitor to AWS via its Azure service, and companies like Oracle are converting more applications to run in the cloud.

• Snapdeal invests $20M more in logistics firm gojavas: Jasper Infotech Pvt Ltd, which runs online e-com marketplace Snapdeal, has invested $20 million (Rs 131 crore) more in logistics firm QuickDel Logistics Pvt Ltd, which runs operations under the gojavas brand, it said on Wednesday. Snapdeal had first invested in gojavas, which was previously a part of Jabong, a lifestyle e-tailer incubated by Rocket Internet, in March this year. It had not disclosed the investment amount but said it has picked a minority stake in the logistics firm. “The company’s average timeline for delivering Snapdeal orders has reduced by a full 24 hours in the last six months and our teams have worked closely to come up with innovative solutions that are enhancing customers’ shopping experience on Snapdeal. With the freshly infused funds, our aim is to help gojavas become more successful and expand their reach,” said Rohit Bansal, co-founder of Snapdeal. Snapdeal said it has invested $100 million in the last six months to improve it delivery timelines by 70 per cent and it will invest $200 million more in next 12 months to strengthen its supply chain. gojavas will be using the capital for expanding its operations to 100 more cities within 12 months. Vijay Ghadge, COO at gojavas, said the partnership with Snapdeal has helped it become one of the largest independent logistics players in the country with a revenue run rate of Rs 500 crore currently. gojavas currently manages over 1 lakh sq ft of fulfilment centres and helps more than 400 companies reach consumers in close to 350 cities and towns in more than 3,000 PIN-codes. It claims to deliver over 1.8 lakh packages every day and closed FY15 with revenues of over Rs 200 crore. It was originally an in-house delivery venture of Jabong but later spun out as a separate third-party logistics firm.

• Pandora Buys Ticketfly, a Competitor to Ticketmaster: Pandora Media, the biggest player in Internet radio, has moved into the ticketing business with an agreement to buy Ticketfly, an independent firm that competes with Ticketmaster and is popular with clubs and festivals in the United States and Canada. Pandora announced early Wednesday that it would acquire Ticketfly for $450 million, in a mix of cash and stock. The deal further expands Pandora’s interests in providing services to artists. Last year, it introduced a data system, the Artist Marketing Platform, or AMP, that shows musicians which songs are most popular on the service and where. And in May, Pandora bought Next Big Sound, another data service, which studies the listening and searching patterns of streaming music customers. Pandora, which has nearly 80 million regular listeners, said that its acquisition would benefit artists and listeners. The deal will also add a level of complexity to the sometimes delicate system of alliances in the ticketing world, which is dominated by Ticketmaster, a unit of Live Nation Entertainment. Ticketfly, which was founded in 2008 and was an early proponent of using social media and the web to market tickets, has become a popular choice for promoters that want to avoid the Ticketmaster system. Last year, according to its announcement with Pandora, Ticketfly sold 16 million tickets worth more than $500 million. Among Ticketfly’s clients are the club Brooklyn Bowl and the Pitchfork Music Festival in Chicago. This year, the independent ticketing world was jolted when Ticketmaster bought Front Gate Tickets, another service popular with clubs, festivals and acts, a move that led some bands, like Wilco, to shift their alliances to other companies. Pandora’s control of Ticketfly could pose a challenge to Ticketmaster, particularly given Pandora’s history of using its user data for marketing. The company, which derives about 80 percent of its revenue from ad sales, has long pitched advertisers on its ability to identify its users based on their demographic data and listening habits — even going so far as to say it can predict its listeners’ political affiliation. “The combination of Ticketfly and Pandora will be a marketing and event discovery powerhouse.”

• Amazon considering online TV service: Amazon.com Inc is considering the creation of a live online TV service and has reached out to networks such as CBS Corp and Comcast's NBCUniversal to express interest in carrying their channels, Bloomberg reported. The e-commerce giant's talks with the networks are in preliminary stages, Bloomberg reported, citing people familiar with the matter. Such a move would increase Amazon's already growing presence in online video. Amazon currently offers an on-demand video streaming service similar to that of Netflix. Amazon signed an exclusive deal with former "Top Gear" host Jeremy Clarkson in July to present a new motoring show for its Amazon Prime subscription service. The company last month said it would launch six TV show pilots for its video streaming service in the United States, the UK, Germany and Austria for the 2015 fall pilot season.

• If Your Wi-Fi Is Terrible, Check Your Router: Bob McConnell, a retired engineer, set up a new wireless router in his home this year to get faster Internet speeds. Instead, he got the opposite, with his iPad often getting no wireless connection in his bedroom. For days, he tinkered with the router’s settings, but couldn’t figure out a fix. “It was totally ruining my life,” said Mr. McConnell, who lives in a condominium building in Kirkland, Wash. “Things would work, and then the next morning they wouldn’t work again.” What Mr. McConnell experienced is a situation we call “Wi-Fi headache,” and it’s an ailment that many can relate to. The condition is rooted in the networking devices called routers that people install in their homes for Wi-Fi connectivity. Most routers are difficult to configure for anyone who doesn’t work in an information technology department. Jargony tech terms like 802.11 or dual-band add to the confusion when people upgrade a router or try to decide which one to pick. So to diagnose and cure Wi-Fi headaches, we teamed up with The Wirecutter, the product recommendations website. The Wirecutter put dozens of top-rated routers and devices through hundreds of hours of testing to pick out the best router for most people and come up with other recommendations tailored to different living situations and budgets. It also ran new tests for The New York Times to come up with best practices for getting a stronger, faster Wi-Fi signal. The bottom line: People with devices both new and old will see an improvement by upgrading to a recent router that supports the latest Wi-Fi standards. But they should be wary of buying a cheap router that isn’t any good, or spending too much on one that is too complex for their needs.

• Pure Storage Falls In Public Debut, CEO Optimistic: Pure Storage, the enterprise storage company, went public on the New York Stock Exchange Wednesday. After pricing at $17, shares traded down in its debut, closing the day at $16.01. CEO Scott Dietzen spoke to TechCrunch about why the company executed an IPO during what has been a lackluster year for tech stocks. “We were ready to be a public company,” said Dietzen. “We don’t worry about market conditions. Great companies can come out when it’s right for them.” The company’s IPO performance, slipping in its first day’s trading, isn’t big news. Other recent IPOs that have seen sharp declines in value following their flotation have performed more strongly. For example, Box, a tech company that went public this year, surged on its initial day as a public company. In the ensuing months, its shares have sagged. For industry watchers, any current public technology offering is a bellwether. The IPO cadence for technology firms has been infamously slow in 2015, causing concern among those both seeking liquidity for their investments, and executives worried about where their private valuation might square with the public markets. To underscore that point, Dropbox, a company that could formerly do no wrong, recently endured an embarrassing haircut. Pure Storage’s offering went off mid-range. It fell a modest 5.8 percent. These things are not the end of the world. But they may describe public investor uncertainty about the value of firms that are burning large quantities of cash to expand their top line. Box, MobileIron, and a host of others have endured related declines.

Daily Tech Snippet: Monday, September 14

• High-profile busts signal caution in start-up investing, especially in on-demand B2C businesses: At the end of July, Homejoy, a start-up company that used the Web to offer house cleaning, hung up its mops, leaving customers in the lurch and Google Ventures and other top-tier private equity backers out the more than $35 million they had sunk into the company. Now, with public markets on a see-saw and venture capitalists thinking the turmoil may hit private markets, many investors are wondering if more Homejoys lie ahead. That is leading them to look extra hard at companies that hold similar characteristics to Homejoy: on-demand, logistics-heavy businesses that cater to consumers rather than businesses. "They are caught on a treadmill" because to keep running requires more cash infusions, though often without an accompanying move to profitability, said Venky Ganesan, a venture capitalist at Menlo Ventures. He said he looked at about a half dozen such companies in the spring and early summer, passing on all of them, only to see all raise money elsewhere. While the failure of one start-up might not seem like much, Homejoy's folding attracted outsized interest because it had already raised more than $35 million from high-caliber firms. Most start-ups fail, of course, but they generally do it at earlier stages and lower cost to their backers. Homejoy is one of at least four high-profile collapses or retrenchments so far in 2015, counting those that raised at least as much cash, also from top firms. In recent years, among consumer-oriented tech companies, just one or two such start-ups have failed each year. At the end of July, Homejoy, a start-up company that used the Web to offer house cleaning, hung up its mops, leaving customers in the lurch and Google Ventures and other top-tier private equity backers out the more than $35 million they had sunk into the company. Now, with public markets on a see-saw and venture capitalists thinking the turmoil may hit private markets, many investors are wondering if more Homejoys lie ahead. That is leading them to look extra hard at companies that hold similar characteristics to Homejoy: on-demand, logistics-heavy businesses that cater to consumers rather than businesses. "They are caught on a treadmill" because to keep running requires more cash infusions, though often without an accompanying move to profitability, said Venky Ganesan, a venture capitalist at Menlo Ventures. He said he looked at about a half dozen such companies in the spring and early summer, passing on all of them, only to see all raise money elsewhere. While the failure of one start-up might not seem like much, Homejoy's folding attracted outsized interest because it had already raised more than $35 million from high-caliber firms. Most start-ups fail, of course, but they generally do it at earlier stages and lower cost to their backers. Homejoy is one of at least four high-profile collapses or retrenchments so far in 2015, counting those that raised at least as much cash, also from top firms. In recent years, among consumer-oriented tech companies, just one or two such start-ups have failed each year.
  

• Partnership Boosts Users Over China’s Great Firewall: A partnership between an American start-up and a Chinese Internet behemoth has created a sort of fast lane to speed traffic across the border. In the process, the two companies are establishing a novel business model with implications for other American technology firms looking to do business in China’s politically sensitive tech industry. The partnership, signed in July 2014, is between CloudFlare, a security company based in San Francisco, and Baidu, China’s equivalent of Google. Using a mixture of CloudFlare’s web traffic technology and Baidu’s network of data centers in China, the two created a service that enables websites to load more quickly across China’s border. The service, called Yunjiasu, began operating in December. It has a unified network that makes foreign sites more easily accessible in China, and allows Chinese sites to run in destinations outside the country. At the heart of the arrangement is an unusual structure known as a virtual joint venture. Under that arrangement, CloudFlare does not actually operate in China. Instead, CloudFlare cooperates primarily from afar as Baidu runs the business in China. Baidu and CloudFlare’s virtual joint venture relies on a principle generally considered anathema to foreign companies looking to do business with China: trust. CloudFlare transferred its intellectual property that is used to manage and speed up Internet traffic to Baidu and works closely with its engineers to run that technology on Baidu’s network in China. The two share revenue from the service. For CloudFlare, a five-year-old company that manages Internet traffic for millions of websites and makes browsing quicker and more secure, the central question was whether to transfer its intellectual property and give up local control or to forgo the vast business opportunities in China. Outside of the high-profile sites that Beijing sees as a threat and blocks — like Facebook and Twitter — are a huge number of businesses that suffer under China’s network inefficiencies. Those are the customers the service is targeting. And since the fast-lane service began operating, CloudFlare and Baidu said they have registered 450,000 businesses that account for 57 billion page views per month. Customers can try the service free, though CloudFlare and Baidu added supplemental security features and greater control over web traffic last month, both of which must be paid for. Matthew Prince, CloudFlare’s chief executive, said transferring the company’s intellectual property to Baidu enabled a deeper trust and a partnership. He added that the intellectual property is not the most critical part of the company. “We had much less apprehension about sharing our code, because we don’t think there’s any line of code we write that’s so clever that gives us a sustained advantage,” Mr. Prince said. “That comes from the network itself.”  Still, to be safe, Baidu and CloudFlare worked out a contract that gives each company control over crucial elements and would inflict penalties if either partner withdrew. For example, Baidu controls customer information within China, but CloudFlare owns the web address through which the entire operation works.

• EBay Revamps Seller-Rating System in Appeal to Merchants: EBay is overhauling its ratings system so that sellers aren’t penalized for late shipments beyond their control or for routine returns and exchanges, seeking to boost sales as an independent company. While the online marketplace has long relied on a five-star rating system and commentaries that lets merchants and buyers grade each other on transactions, sellers have long complained that these also make them vulnerable to customer angst over minor issues that are unavoidable or easily resolved. EBay’s seller rankings can make or break the merchants selling everything from sweaters to smartphones, because they influence how prominently products appear in search results and the likelihood that shoppers will conduct business with them. EBay is stepping up efforts to keep its sellers happy, following its split in July from the PayPal Holdings Inc. transactions business. "Our relationship with our sellers needs to be improved," Jordan Sweetnam, EBay’s vice president of seller experience, said in an interview. "These are the biggest changes we’ve made in years." The new rating system is more simple and objective, according to Sweetnam. Sellers won’t be penalized for late deliveries as long as they get orders to couriers on time, while returns or exchanges won’t affect ratings if they’re resolved and the customer is satisfied with the process.

• Lyft automatically opts you into receiving robocalls. That doesn’t sit well with the FCC. Lyft and First National Bank are on notice for violating federal telemarketing rules, regulators said Friday. The two companies allegedly required that their customers accept robocalls and automatic text messages as a condition of using their services — a no-no under the Federal Communications Commission's regulations. The rules are meant to prevent companies from coercing customers into consenting to robocalls. Although Lyft allows users to opt out of robocalls, doing so bars consumers from using the ridesharing service, the FCC said. If the two companies don't change their behavior, that could lead to more than a warning — fines or other legal action.

• Trillenium takes virtual reality into online shopping: Trillenium, a start-up that creates virtual stores for brands aimed at marrying the experience of real-life shopping with the convenience of e-commerce on smartphones and computers. Shoppers can tour the virtual store by focusing their gaze on products, browse items from different angles and socialize with friends online, bringing to life an e-commerce industry currently dominated by search boxes and static pictures. "The current dot.com experience is pretty sterile. So if they can improve the experience, you might dwell a bit longer, spend a bit longer online exploring products because you can get closer to them, and buy more," said Dave Evans, commercial director at Kantar Retail Virtual Reality, which uses virtual reality technology to help retailers develop real-world stores. Trillenium hopes to capitalize on the release of virtual reality headsets next year aimed at the consumer market, such as Facebook's Occulus Rift and Google's Cardboard. Trillenium has raised 335,000 pounds so far from Seedrs as well as two business angel investors. It hopes to raise an additional 1.8 million pounds in separate funds from venture capitalists. In three years, Prpic hopes to launch a multiple platform service where clients can use his technology to build and customize their own stores from a template.

• Jet.com: Taking Off, Full Throttle. Respected seller blog ChannelAdvisor reports - "Jet has gained altitude so rapidly that it’s currently our number 4 marketplace by GMV, out of the marketplaces we support worldwide. That means that just a month after its public debut, it’s already bigger for ChannelAdvisor than incumbents like Sears, Best Buy, Newegg, Tesco and Rakuten — marketplaces that have been operating for years (check out the growth of these marketplaces here). It’s not out of the realm of possibility that in 2016 it will be our number 3 marketplace, after Amazon and eBay. That would be remarkable. Just a few weeks after officially launching, the average Jet seller GMV is twice that of seller GMV on Sears or Newegg. Our sellers have seen tens of thousands unique consumers buying on Jet since its public launch, and a 23% repeat buyer rate. Over the same time period, eBay had a 17% repeat buyer rate and Amazon had a 11% repeat buyer rate. This indicates early shoppers on Jet find the values compelling enough to come back more frequently than on eBay and Amazon, although our sample size is still small."

Daily Tech Snippet: Monday, August 31

The CEO of the company behind Ashley Madison is resigning: The chief executive of the parent company of Ashley Madison, a dating site targeting people looking for extra-marital affairs, resigned Friday after a massive hack exposed the personal information of millions of its users. Earlier this month, personal information about millions of Ashley Madison customers, including e-mails, member profiles, credit-card transactions and other sensitive information, showed up online. A group known as Impact Team took credit for the hack, which is now under investigation by the FBI and Canadian authorities.The information was initially only accessible on the dark Web, where users must use anonymous browsing tools. But soon after the hack, databases showed up on the broader Web allowing people to search some parts of the data. Analysis of that data seemed to suggest that most of the female profiles on the site were fake. Those millions of Ashley Madison men were paying to hook up with women who appeared to have created profiles and then simply disappeared. Were they cobbled together by bots and bored admins, or just user debris? Whatever the answer, the more I examined those 5.5 million female profiles, the more obvious it became that none of them had ever talked to men on the site, or even used the site at all after creating a profile. Actually, scratch that. As I’ll explain below, there’s a good chance that about 12,000 of the profiles out of millions belonged to actual, real women who were active users of Ashley Madison. When you look at the evidence, it’s hard to deny that the overwhelming majority of men using Ashley Madison weren’t having affairs. They were paying for a fantasy.

Uber hires two security researchers who hacked a moving Jeep to improve car technology: Uber has hired two top vehicle security researchers, the company said on Friday, high-profile additions that come as the ride-hailing service ramps up its work on technology for self-driving cars. Charlie Miller, who had been working at Twitter Inc, and Chris Valasek, who worked at security firm IOActive, have resigned from their jobs and will join Uber next week. Miller and Valasek won wide attention this month after demonstrating that they could hack into a moving Jeep. Uber on Tuesday announced a partnership with the University of Arizona, offering the school grant money to fund research into the mapping and safety technology needed for autonomous vehicles, which Uber will test on the streets of Tucson, Arizona. This partnership follows the more tumultuous effort earlier this year at Carnegie Mellon University that resulted in Uber hiring away more than 40 of its top scientists and researchers, leaving one of the world's top robotics research institutions reeling.

Jet.com CEO: We May Have the Lowest Prices, but Many Shoppers Can’t Figure That Out: Jet.com may have the lowest prices on the Web, but a lot of people who visit the site still don’t realize it. That is something CEO Marc Lore acknowledged when asked about confusion among people who hear about Jet.com’s low prices but don’t see them displayed clearly when they visit a Jet.com product page. “Believe me, we have this discussion every single day,” Lore said in an interview Thursday evening. “We keep tweaking the [user experience] to make it more clear and are bringing in research groups. But you’re right, it’s still frustrating to [some].” Before we get to the confusion, a reminder about how Jet works: Jet marks down most of the products it sells below the lowest price elsewhere on the Web. How? The retailers that sell goods through Jet give Jet a fee for each sale, but Jet doesn’t pocket that fee, as competing online marketplaces do. Instead, it gives a large portion of it back to shoppers in the form of discounts on each item they buy. Lore has said the company will simply break even on the actual sale of goods, and then generate a profit through the $50 membership fee Jet shoppers have to pay each year. Many smart people in the industry are skeptical that Jet can become big enough to make this model work.The confusion among potential shoppers stems from how Jet displays these discounted prices. Lore said the reason it doesn’t show the fully discounted price is straightforward: Some of the product brands that sell on Jet have asked Jet not to display the discounted price because it is angering other retailers they sell their products to. Lore didn’t name these brands, but said the company wanted to do good by them even if it led to some short-term confusion among shoppers. For now, Jet has opted for a uniform design strategy even though it has only heard complaints from some of the brands they sell. That said, Jet is considering making a change so that the fully discounted price will be shown for brands that don’t object and leave the pricing display as is for the brands that do, Lore said.

Is the Tech Market Hitting Middle Age?: First it was PCs. Now it’s tablets. And very soon, it will be smartphones. Each of these markets has — or will — hit its peak in both revenue and unit shipments in short order. Each has moved (or will soon move) from the soaring grandeur of youth and young adulthood to the dowdiness of mature middle age. As these inevitable market developments occur, important shifts are starting to happen. Not only will device manufacturers and their key component suppliers have to evolve their businesses — as many have started to do — but very soon, so will companies offering software and services used by those devices. While some argue that these software and services companies are taking over the world, it’s naive to think that their growth can be maintained completely independent of the devices. At a fundamental level, the two are linked, and when the device numbers peak, so too do the potential users of any software or service. Admittedly, there’s more of a growth opportunity over the short term for these software and service companies, but that won’t last forever, either. As with any major industry transformation, this means that some of the biggest industry players may not survive in their current form (or at all), while others are likely to go through some dramatic transformations. This also means that there will be tremendous opportunities for today’s smaller or even yet-to-be started companies. The tech industry’s transition to a more mature market does bring with it the opportunity for some potentially boring baggage when it comes to things like stagnant unit-growth rates. However, instead of viewing this as a midlife crisis, smart, innovative companies will figure out ways to see these developments as a midlife celebration that can open up new opportunities.

Your First 10 Customers Can Make Or Break You: Early in a startup’s life, the main focus is building the right product for the right market. For most B2B startups, this is the period when you start winning your first 10 customers. These 10 customers are unlike any others you’ll have over the course of your company. You’ll sell to them differently, charge them differently and try to get different things out of the relationship than you will from those that follow. This is the group that will teach you how to refine your product, whether or not you are targeting a large enough market and how to craft a scalable sales process that will help you land your next 100 customers. You’re The First Head Of Sales. It will be tempting to hire an experienced sales veteran when you’re busy trying to get the product right and grow the company, but there is a strong argument against that. The first 10 customers should be sold by you, the CEO or founder. Look For Young And Ambitious Customers. While it’s admirable to target big-name customers, the chances are unlikely that they’ll take a meeting or make a bet on a brand new product. Similarly, a potential customer who is far along or at the end of his career may not have a high tolerance for risk or change. Focus On Engagement, Not Revenue. As you land more customers and add them to your client roster, it is essential that each initial customer uses your product at the engagement level to be considered an active user. Engagement levels — not revenue numbers — are often a stronger indication of long-term product adoption. This should be your top priority. Your first set of customers will inevitably serve as reference accounts — and the more engaged users are, the better references they’ll provide. Know Who To “Sign” And When To Walk Away. Focus your initial sales efforts on prospects who aren’t your friends. To be scalable, your product will need validation outside of your network, and you need the type of honest feedback that friends don’t often provide.

IZettle, a Swedish Payments Start-Up, Begins a Lending Program: Jacob de Geer, who is a Swedish entrepreneur and the co-founder of iZettle, a payments service that offers merchants a device for processing credit card transactions, says banks don’t meet the needs of many small businesses. “Financial institutions focus more on their large clients than on the small ones,” he said. “Most of them were founded way before the invention of the Internet or the smartphone.” But he thinks he has a solution. On Friday, iZettle announced a program to lend money to small businesses that use its service, providing cash advances to companies for a one-time fee. IZettle, which operates in 11 countries from Britain to Brazil, raised a further $67 million from its existing backers, including Intel Capital and American Express, to take its total fund-raising to roughly $180 million. The steps by iZettle follow similar announcements from Square, the six-year-old American payments start-up, that also has expanded from its payments roots to offer additional financial products for its small-business customers. Square also offers a device to process credit card transactions. For iZettle, the new lending program will initially be available only in Europe, and the company will charge small businesses a flat fee ?equivalent to roughly 10 to 15 percent ?of each cash advance. To recoup the money it lends to businesses, the start-up will take a small percentage of each transaction that small businesses process through its payments system. To reduce defaults, the company says it will crunch data from businesses’ existing transactions to determine their credit risk.

Daily Tech Snippet: Wednesday, July 22

• Archived snippets are here, and MP3 versions are here

• Apple Profit Up 38%, but iPhone Sales Disappoint Wall Street: Apple reported double-digit increases in sales and profit for its fiscal third quarter, a rate of growth that is highly unusual for a company of its size. Yet the results still fell short of estimates by Wall Street analysts, who are accustomed to Apple blowing past projections and had been predicting sky-high sales of iPhones and the company’s brand-new Apple Watch. In total, Apple reported a 38 percent increase in profit, to $10.7 billion, from a year ago, with revenue surging 33 percent to $49.6 billion. Sales of the company’s biggest revenue and profit generator, the iPhone, soared 35 percent to 47.5 million units. IPhone sales faced some tough sequential comparisons. The 47.5 million units sold in the quarter was below the roughly 50 million that analysts had calculated Apple would sell, and was also down from the 40 percent growth in the previous quarter and the 46 percent growth two quarters earlier. Still, the rate of growth exceeded the 13 percent increase in the same period a year ago. And while Apple did not share numbers on sales of the Apple Watch, which began selling in April, analysts on Tuesday calculated that the company had sold between 1.5 million and three million watches, far less than the three million to five million watches they had predicted ahead of Apple’s earnings report. Apple’s sales in the quarter were fueled by overseas buyers, with international regions accounting for 64 percent of the quarter’s overall revenue. Sales in the greater China region, one of Apple’s prime growth areas, more than doubled to $13.2 billion. The company also reported healthy growth for its Macintosh computer business. Apple sold 4.8 million Macs, up 9 percent from a year ago. Shares were down 7% in after-hours trading.


• Jet.com Will Launch With Amazon Prices Front and Center: Jet, the new shopping site that launches on Tuesday, promises shoppers “the lowest prices on everything.” To hammer home the point, the online mall will compare its price with Amazon’s price on every one of its product pages. As a way to prove its marketing promise, Jet tested its service with some customers who were given early access by showing its prices against those found on multiple competing websites. But after some people were confused by the appearance of the various competitors, Jet has decided to show its prices against just one competitor, Amazon, which typically has very low prices. “So it’ll be very easy for customers to understand that savings means savings compared to Amazon,” Jet CEO Marc Lore said of the changes in an interview on Monday. “They’re clearly the dominant player, so they’re a great reference point.” Lore said about 90 percent of Jet’s product listings at launch will show Jet’s discounted price compared with Amazon’s lowest price for the same item. The remaining 10 percent of Jet product pages will be updated with Amazon price comparisons over the next two months. There are some caveats. While Amazon often has the lowest prices, it doesn’t always. When that’s the case, Jet will discount the product below the lowest price found elsewhere on the Web, but will still show Amazon’s price for consistency’s sake, the company said. The Amazon prices also won’t factor in the fact that some of the products wouldn’t carry shipping fees for Amazon customers who pay $99 a year for Amazon Prime. Jet, meanwhile, charges $5.99 for orders under $35, while Amazon also charges delivery for orders of this size for non-Prime members. “If you have Prime, you’re not our target customer,” Lore said, explaining the rationale. “You’re getting video, you’re getting faster shipping. It’s a completely different animal.”


• More on the launch of Jet - Jet is here. Let the price wars begin.: After months of testing and tweaking, the e-commerce start-up Jet.com opened its digital storefront on Tuesday, marking the official kickoff of the company's ambitious effort to battle Amazon and Wal-Mart for budget-conscious customers. Jet is taking a new approach to pricing. Its algorithm doesn't simply look at the price of each individual item in your online shopping cart. It looks at all the items you want to buy, as well as your Zip code, to determine which retailer or warehouse can ship that unique combination of items to you the cheapest. Shoppers can only buy things on Jet if they've signed up for a $49-per-year membership. Ad Week reports that in this online store, viewing ads could lead to discounts as Jet.com is lowering bills wherever it can. It's a risky business model. Lore has to get Jet.com to $20 billion in revenue by 2020 to make the site profitable. That kind of revenue means it would have to become one of the most successful e-commerce players in the world. The only money Jet.com would make comes from the $50 membership fee users pay to access the savings, which average about 15 percent on everything from detergent to sofas. The site offers deeper discounts depending on variables such as whether a customer pays with a credit or debit card, whether the order can be filled with an efficient shipping route, and whether the consumer waves the right to return items. All these little options help whittle down the price of a basket of goods.


• A $7 Billion Charge at Microsoft Leads to Its Largest Loss Ever: An accounting charge wiped out Microsoft’s profit for the quarter, leading to its largest loss ever, the company said on Tuesday, making clear the cost of its missteps in the mobile business. The $7.5 billion accounting charge, stemming from Microsoft’s troubled acquisition of Nokia’s cellphone business, was disclosed by the company earlier this month, along with plans to eliminate 7,800 jobs, mostly in the company’s phone operations. While the accounting charge was on paper and will not diminish the company’s huge cash hoard, it was a psychic blow to Microsoft, one of the biggest money makers in tech. Investors, however, seemed to mostly look beyond Microsoft’s struggles in the phone market. They appeared to focus on two of the company’s most important businesses, Windows and Office, which showed some signs of weakness. Those were somewhat offset by strong growth in its cloud services business, Xbox games and Surface tablets. For its fiscal fourth quarter, which ended June 30, Microsoft said its net loss was $3.2 billion, or 40 cents a share, compared with net income of $4.61 billion, or 55 cents a share, during the same period last year. While the company’s stumbles in smartphones have shown the bruising downsides of the hardware business for Microsoft, it had success with other devices, including its Surface tablet, the revenue from which grew 117 percent, to $888 million. Revenue from its Xbox game business rose 27 percent. In total, Microsoft said it had nearly $2 billion in computing and gaming hardware revenue in the quarter. Revenue from Microsoft’s overall commercial cloud business grew 88 percent during the quarter, one of the brightest spots in its results. Microsoft’s shares fell about 4 percent in after-hours trading


• Yahoo Posts Loss, Despite Rise in Its Display Ad Business: Yahoo’s revenue in the second quarter rose 15 percent, the company said on Tuesday. But it spent heavily to achieve the gains, wiping out all of its profits and then some. For the quarter, Yahoo reported revenue of $1.24 billion, up 15 percent from the $1.08 billion it reported in the same quarter last year. But after deducting the share paid to partners, revenue was flat. The company posted a net loss of $22 million, or 2 cents a share, compared with the profit of $270 million, or 26 cents a share, it reported a year ago. Executives also warned that expenses would continue to be high through the rest of the year. “We are investing heavily to grow market share through traffic acquisition,” Marissa Mayer, Yahoo’s chief executive, said in a conference call with investors to discuss the results. Yahoo shareholders were unimpressed, sending the company’s stock down more than 1 percent in after-hours trading. Not that Yahoo’s core business — selling advertising — matters much to investors right now. Wall Street is far more interested in the fate of the company’s 15 percent stake in Alibaba, China’s biggest e-commerce company. Yahoo plans to spin off the holdings, worth more than $30 billion, into a separate company called Aabaco Holdings in the fourth quarter. The deal is designed to avoid incurring a capital-gains tax bill, but Wall Street analysts are concerned that the Internal Revenue Service will reject Yahoo’s argument that the spinoff should be tax-free.


• Targeted ads to drive mobile video business, Verizon CFO says: Verizon Communications Inc 's upcoming mobile video service will drive revenue with a combination of highly targeted ads, exclusive content and pay-per-view live concerts and sporting events, Chief Financial Officer Fran Shammo said in an interview on Tuesday. Most Americans own a mobile phone and Verizon is looking at offering video content to increase data consumption on mobile devices and grow revenue. The digital video service, which it expects to release this summer, is aimed at families and younger viewers who increasingly view content on mobile devices. The video service will be offered through a mobile app, and will include some free sponsored content, Shammo said.

Daily Tech Snippet: Monday, July 6

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• Euro markets set for major jolt after Greek 'No', look to ECB for calm: European stock and bond markets are set to take a sharp hit on Monday after Greece voted 'No' to harsh bailout conditions, and bankers said the European Central Bank's response was now key to the extent of contagion. "The ECB has the capacity to limit the spread of contagion. But we might still see a fall of 3 percent on European markets on Monday," said Antonin Jullier, head of equity trading strategy at Citi. With no immediate prospect of a bailout for the Greek government, its banks need further help to avoid collapsing. Oil prices tumbled as the US dollar strengthened. European officials are putting the onus on the Greek government to make the next move as Chancellor Angela Merkel heads to Paris on Monday for talks with President Francois Hollande to map out a way forward for Greece.


• After weeks of turmoil, China stocks rocket 8 percent at open after weekend rescue moves: China's stock markets rose 8% at the start of a make-or-break week after officials rolled out an unprecedented series of steps at the weekend to prevent a full-blown stock market crash that would threaten the world's second-largest economy. The government is anxiously awaiting the market opening on Monday to see if the new measures will halt a 30 percent plunge in the last three weeks, or if panicky investors who borrowed heavily to speculate on stocks will continue to sell. In an extraordinary weekend of policy moves, brokerages and fund managers vowed to buy massive amounts of stocks, helped by China's state-backed margin finance company which in turn would be aided by a direct line of liquidity from the central bank. China has also orchestrated a halt to new share issues, with dozens of firms scrapping their IPO plans in separate but similarly worded statements over the weekend, in a tactic authorities have used before to support markets. The Shanghai Composite Index had surged more than 150 percent in the 12 months prior to June 12 as investors assessed that monetary stimulus would revive China’s economy. Now, those hopes seem to be fading, and Chinese equity markets are plunging. The Shanghai Composite Index fell 5.8 percent Friday, bringing the decline since its June 12 peak to 29 percent. More than $2.8 trillion of value has been erased from the Chinese stock market during that time, an abrupt end to the longest bull market in the nation’s history. Stocks entered a bear market on June 29 as leveraged investors headed for the exits; China’s securities regulator that day urged investors to be rational. In response, China is suspending initial public offerings, creating a market stabilization fund and telling investors not to panic in an effort to shore up its stock market, which has had the largest three-week drop since 1992. According to company filings to the exchanges Saturday evening, 10 companies will suspend IPOs on the Shanghai Stock Exchange and 18 will do the same at the Shenzen Stock Exchange. Halting IPOs may stem the diversion of funds away from current listings. The move came hours after major Chinese brokerage firms pledged billions of dollars to form a stock market rescue fund.


• New, Simple ‘Buy’ Buttons Aim to Entice Mobile Shoppers: Despite spending close to three hours of each day staring at their mobile phones, Americans continue to do the vast majority of their online shopping through desktop and laptop computers, which have larger screens and physical keyboards that are more amenable to browsing and typing in credit card numbers. Mobile phones are projected to account for about half the time Americans spend online this year, but only about one-fifth of retail e-commerce sales, according to eMarketer. Now several companies, including Google, Facebook, Twitter and Pinterest, are trying to bridge the gap between mobile browsing and desktop purchasing with a simple “buy” button. Buy buttons have been around since the early days of the web, of course, notably with Amazon’s “One-Click Ordering,” where people set up a button that runs their credit card and ships whatever they have bought to a designated address. But these new buy buttons allow technology companies to act as middlemen between mobile shoppers and retailers — extending one-click ordering to thousands of small retailers and eliminating exasperating typing on a phone’s touch screen. The logic for the companies working on the new buy buttons is that, in an increasingly mobile world, where people do less typing and more tapping, a more predictable checkout process will drive sales by reducing “friction,” which is a technology industry euphemism for any inconvenience, no matter how small, that might cause people to wonder why they are opening their wallets.


• Alibaba Arm Eyes More Capital to Build China Finance Empire: Ant Financial, which dominates e-commerce payments in China, was said to be valued at over $40 billion in its latest round -- making it one of the world’s largest private tech companies. It manages the nation’s biggest money market fund Yu’E Bao and is targeting smaller borrowers to tap a market overlooked by traditional banks. Investors may be drawn by Ant Financial’s exponential growth. Since it began life as Alipay in 2004, the company has become the country’s largest online provider of financial services, helped by its role as the preferred payment method across Alibaba platforms. It has since expanded into adjacent industries such as insurance and online credit. One of the more aggressive of China’s new breed of online finance companies, Ant Financial’s maneuvers have courted controversy in the past. Ma spun off Alipay into a new company he controlled in 2011, citing the risk of foreign ownership of domestic financial firms. Major shareholder Yahoo protested and said it was caught unaware.


• Tesla Rises After Second-Quarter Deliveries Top Forecast: Tesla Motors gained the most since April after the electric-car maker beat its car-sales forecast for the second consecutive quarter with a 52 percent surge in the three months through June. The shares rose 4 percent at the close in New York for the biggest daily advance since April 27. Tesla has climbed 26 percent this year, outpacing the Russell 1000 Index’s 1.3 percent increase. Tesla delivered 11,507 Model S sedans in the second quarter, according to a statement of preliminary figures Thursday. The Palo Alto, California-based company predicted in May that it would sell 10,000 to 11,000 of the cars, its only model, during the period. The preliminary total brings first-half sales to 21,552, less than 40 percent of Tesla’s full-year target of 55,000 vehicles. Output and deliveries are projected to increase with the introduction of the Model X sport utility vehicle this quarter. “Tesla still has to deliver on the Model X promise,” Dan Dolev, a Jefferies analyst, said in a telephone interview. With the Model S, “the execution is there, the demand is there, the delivery is there, so that all these areas are positive is encouraging.”


• Housing crisis puts SoftBank in a spot amidst its headline grabbing announcements: The fall of Housing.com from one of the hottest tech startups in India to a big public relations disaster has been quick, thanks to its just ousted CEO Rahul Yadav. And this has put the largest owner of Housing—Japanese internet giant SoftBank, one of the biggest internet investors from Asia with $70B in revenue—in a delicate spot. Only six months ago it wrote a $90 million cheque for this college startup in exchange of a 32.5 per cent stake, but it appears SoftBank is already exploring a sale. Sources familiar with developments at the online real estate company said Quikr-Housing.com deal, as reported by VCCircle, is in works but it may not be easy to fructify due to several reasons including a mismatch in valuation expectations. SoftBank, Housing’s biggest stakeholder, is said to be seeking a price of $350 million which none of its rivals would want to cough up considering the startup’s main asset is its product and technology and not so much the business (revenues). As an immediate sale may prove to be daunting, sources say SoftBank’s current priority would be to stabilise the affairs at the startup while also increase the monetisation efforts rather than stepping up the sell-off initiatives. “They wanted to make a big bang entry into India with a $1 billion investment, make a splash, and get a meeting with (Prime Minister) Modi..,” said a venture capital investor who manages a diverse portfolio, indicating the Japanese giant might have made a mistake in a hurry to invest.


• Reddit Moderators Revolt Over Site's Firing of Popular Talent Director Victoria Taylor: Hundreds of Reddit's community forums—called subreddits—have been made inaccessible to the public in protest after the San Francisco-based company dismissed its director of talent, Victoria Taylor, who ran its Ask Me Anything (AMA) feature. The extremely popular AMA subreddit has been temporarily shut down by its moderators, while the reasons for Taylor's exit haven't been revealed. According to Business Insider, Reddit user "Karmanaut" posted about Taylor's departure, stating: "We have been really blindsided by all of this. As a result, we will need to go through our processes and see what can be done without her." The Business Insider story added that Taylor replied in a subbredit thread that she was "dazed" by the development but planned to stay in the public relations/communications field. For the AMA program, she has been credited for booking everyone from Hollywood stars like Madonna and Will Ferrell to political players such as President Barack Obama and conservative commentator Ann Coulter. Taylor was widely beloved by Redditors for cultivating such an intriguing mix of content. Reddit may be wise to shed more light on Taylor's departure sooner rather than later, otherwise the subject could continue to explode throughout the July 4 weekend. Already, many users are threatening to leave Reddit for good in an exodus similar to the user backlash that gutted competing site Digg in 2010.


• Reports that Amazon is trying Special Price Discounts on Prime, possibly to challenge Jet, the Hot Discount Shopping Site: The last time the companies run by Jeff Bezos and Marc Lore squared off, there were fireworks. We’re about to see what happens the second time around. The first time, Amazon instigated a pricing war with Lore’s company, Diapers.com, ultimately pressuring it into a $550 million sale to Amazon. It wasn’t exactly the outcome Lore was hoping for, but was a pretty good exit nonetheless. Now, as Lore’s new, members-only shopping site Jet.com preps for its public launch, there are some signs that Bezos once again doesn’t plan to sit aside idly. In the last few months, Amazon has been offering discounts on different products as exclusive deals for members of Prime, its two-day shipping and streaming media program. Last week, reports surfaced showing that Amazon was giving special discounts on video games to Prime members. Amazon has sporadically offered special discounts to Prime members in the past, such as exclusive discounts on Vizio TVs dating back to 2013. But the timing of the current set of discounts across multiple product categories could have to do with the fact that Jet, which is operating in private beta currently, is also a membership program built on the idea of discount pricing. For $50 a year, Jet is promising its members the best prices on the Web thanks to a complex system of discounting by stripping costs out of the order fulfillment and shipping process of e-commerce.