Daily Tech Snippet: 11 January 2015

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

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

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

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

Daily Tech Snippet: Monday, January 4

• Facebook fights for Free Basics in India, global test-case: India has become a battleground over the right to unrestricted Internet access, with local tech start-ups joining the front line against Facebook founder Mark Zuckerberg and his plan to roll out free Internet to the country's masses. The Indian government has ordered Facebook's Free Basics plan to be put on hold while it decides what to do. The program, launched in around three dozen developing countries, offers pared-down web services on mobile phones, along with access to Facebook's own social network and messaging services, without charge. But critics say the program, launched 10 months ago in India in collaboration with operator Reliance Communications, violates principles of net neutrality, the concept that all websites on the internet are treated equally. It would put small content providers and start-ups that don't participate in it at a disadvantage, they say. "India is a test case for a company like Facebook and what happens here will affect the roll out of this service in other smaller countries where perhaps there is not so much awareness at present," said Mishi Choudhary, a New York-based lawyer who works on technology and Internet advocacy issues. Also at stake is Facebook's ambition to expand in its largest market outside the United States. Only 252 million of India's 1.3 billion people have Internet access, making it a growth market for firms including Google and Facebook.

• Uber’s No-Holds-Barred Expansion Strategy Fizzles in Germany: Uber is rapidly expanding its ride-hailing operations across the globe. But here in this city of 690,000 — less than the population of San Francisco, Uber’s hometown — the company recently did something unusual: It retreated. In early November, Uber shut its small office in Frankfurt’s centuries-old city center after just 18 months of operation, mothballing the online platform that had let people in the city hail rides through a smartphone app. The pullback was spurred in part by drivers like Hasan Kurt, the owner of a local licensed taxi business, who had refused to work with the American service. With more than 20 years of experience as a taxi operator, Mr. Kurt said he disliked how Uber barreled into Frankfurt in early 2014, using primarily unlicensed drivers who had not passed the same exams and health checks required of licensed drivers. That low-cost service, UberPop, which is similar to UberX in the United States, faced legal challenges and was eventually outlawed, last March, by German regulators. Uber then tried to recruit licensed operators like Mr. Kurt to build its service within the letter of the law. But Mr. Kurt would not budge. “It’s not part of the German culture to do something like” what Uber did, Mr. Kurt, 45, said over a cup of tea last month during a break in his busy holiday schedule. “We don’t like it, the government doesn’t like it, and our customers don’t like it.” Uber’s withdrawal from Frankfurt is just one of a multitude of retreats by the company — now valued at $62.5 billion — across Europe in recent months. In November, Uber also pulled out of Hamburg and Düsseldorf after less than two years of operating in each of those German cities. In Amsterdam, Uber recently stopped offering UberPop. And in other European cities, Uber faces the prospect of being beaten back — or at least contained. In Paris and Madrid, Uber has been confronted by often violent opposition from existing taxi operators, while in London, local regulators are mulling changes that could significantly hamper Uber’s ambitions there. Uber’s aggressive tactics also turned off potential customers like Andreas Müller, a financial analyst who tried the company’s Frankfurt service after first using Uber on a business trip in Chicago. Mr. Müller said he liked the convenience of paying through his smartphone, but soon turned against the company after reading that it had continued operating in violation of court orders and did not directly employ its drivers, who are independent contractors. “That might work in the U.S., but that’s not how things are done here in Germany,” said Mr. Müller, 37. “Everyone must respect the rules.”

• It’s Amazon and Also-Rans in Retailers’ Race for Online Sales: Two decades after Jeffrey P. Bezos started Amazon in his Bellevue, Wash., garage, his e-commerce juggernaut could be forgiven for letting up on its rapid growth. Not Amazon, though, which steamrolled through 2015, capturing an ever-growing share of United States retail sales. Of every additional $1 Americans spent for items online this year, Amazon captured 51 cents, according to a recent estimate by analysts at Macquarie Research. And of the expected $94 billion growth in all retail sales this year — both in stores and online — Amazon took a staggering $22 billion, or almost a quarter, Ben Schachter, a retail analyst at Macquarie, calculated. Two decades after Jeffrey P. Bezos started Amazon in his Bellevue, Wash., garage, his e-commerce juggernaut could be forgiven for letting up on its rapid growth. Not Amazon, though, which steamrolled through 2015, capturing an ever-growing share of United States retail sales. Of every additional $1 Americans spent for items online this year, Amazon captured 51 cents, according to a recent estimate by analysts at Macquarie Research. And of the expected $94 billion growth in all retail sales this year — both in stores and online — Amazon took a staggering $22 billion, or almost a quarter, Ben Schachter, a retail analyst at Macquarie, calculated. And at times, Amazon has seemed to be in danger of getting trapped in a race to the bottom that it brought on with its steep discounting. “They were just trying to sell more by underpricing everybody,” said Craig Johnson, president of Customer Growth Partners, a retail consulting firm. “But they realized they would never make any money that way. They evolved,” he said. “It’s much a different company than it was five years ago.”

• Bill Miller Is Misfiring on Twitter Options After Boon on Amazon: Bill Miller turned to an unusual strategy in mounting his comeback as a top stock picker, buying options on hard-hit technology companies to make leveraged bets with a big impact on his returns. The tactic paid off in 2013 and 2014 as Apple Inc. and Amazon.com Inc. rebounded and helped lift Miller’s $2.3 billion Legg Mason Opportunity Trust to a top ranking. The veteran manager is having less success so far with a similar wager on Twitter Inc. that he escalated last quarter, when he owned options allowing him to buy $350 million of the stock -- equal to 15 percent of the fund’s assets. The massive wager highlights how some managers are using derivatives to boost profits in mutual funds, tightly regulated investment vehicles that have strict limits on what they can invest in. The technique allows funds to make big wagers with relatively little money up front, though they can lose that money should their bet go wrong. Proponents of the strategy include bond manager Bill Gross, who has said managers need to use leverage to juice up gains in a low-return environment. “You are going to get a much bigger pop to the upside,” said Abraham Goodfriend, founder of Yedid Capital Management, a Miami Beach, Florida-based firm that employs options. “The downside is, if you are wrong you are going to lose all your money” paid for the contracts. Miller bought options on 9 million shares of Twitter in the third quarter, filings show. The drop in value of the options may be one reason the fund lost 4.6 percent over the past month and ranked among the bottom 5 percent of peers, according to data compiled by Bloomberg, though it’s still ahead of 95 percent for 2015. Buying options frees cash to invest elsewhere and allows a fund to bet on a large number of shares with a small down payment, boosting returns if the underlying stock gains. Miller said in an e-mailed response to questions that options occasionally provide more potential reward for the amount of risk being taken than the underlying stocks. “This almost always happens after the stock has gone down significantly, which was the case with” Amazon, Apple and Twitter, he wrote.

Daily Tech Snippet: Tuesday, December 29

• Universities Race to Nurture Start-Up Founders of the Future:  Ten years ago, it may have sufficed to offer a few entrepreneurship courses, workshops and clubs. But undergraduates, driven by a sullen job market and inspired by billion-dollar success narratives from Silicon Valley, now expect universities to teach them how to convert their ideas into business or nonprofit ventures. As a result, colleges — and elite institutions in particular — have become engaged in an innovation arms race. Harvard opened an Innovation Lab in 2011 that has helped start more than 75 companies. Last year, New York University founded a campus entrepreneurs’ lab, and this year Northwestern University opened a student start-up center, the Garage. Ten years ago, it may have sufficed to offer a few entrepreneurship courses, workshops and clubs. But undergraduates, driven by a sullen job market and inspired by billion-dollar success narratives from Silicon Valley, now expect universities to teach them how to convert their ideas into business or nonprofit ventures. As a result, colleges — and elite institutions in particular — have become engaged in an innovation arms race. Harvard opened an Innovation Lab in 2011 that has helped start more than 75 companies. Last year, New York University founded a campus entrepreneurs’ lab, and this year Northwestern University opened a student start-up center, the Garage. Some of that spirit was on display at Rice in October. In an engineering department design lab, teams of students in the university’s global health technologies program were working on assignments to develop products for real clients — many of them for hospitals in Malawi, in southeastern Africa, seeking low-cost medical devices.

• LinkedIn Rival Viadeo Exits China: Viadeo, the French rival to LinkedIn, is to exit China in order to focus on becoming a profitable business. In a further cost-cutting move, it will also shutter its data center in California and migrate to the cloud. The company moved into China eight years when it acquired local professional social network Tianji.com, but that site will cease to exist on December 31. Viadeo claims that Tianji has 25 million users, but it has struggled to attract the “very considerable development resources” necessary to drive it forward in “China’s fiercely competitive market”. Viadeo had planned to use one-third of the proceeds from its 2014 IPO to develop Tianji.com, but the listing didn’t raise enough capital and the firm wasn’t able to pull in money from private investors. Post-China, Viadeo said it will refocus on its home market of France and other French-speaking countries, while putting great emphasis on its B2B sales model. Viadeo’s foray into China was a fascinating one, since it doubled down on the country in 2011, a time when Twitter and Facebook were heavily linked with opening local operations there. The company two-sided play — having a global site (Viadeo.com) and a China-only one (Tianji.com) — was a model that both of the U.S. social networks had reportedly shown interest in. In contrast to Viadeo’s troubles in China, LinkedIn seems to be finding some success there. The U.S. social network opened a joint-venture with Sequoia China last year. LinkedIn China isn’t a totally separate site, but it does block some content from China based on the country’s web censorship regulations.

• Facebook Pitches Free Basics to India as Net Neutrality Activists Clash With Facebook: Facebook Chairman Mark Zuckerberg made a personal appeal in one of India’s leading newspapers for the country to allow a free Internet service that has stirred controversy and invited questions from regulators. Facebook’s proposed Free Basics plan allows customers to access the social network and other services such as education, health care, and employment listings from their phones without a data plan. Yet activists say the program threatens the principles of net neutrality and could change pricing in India for access to different websites. The backlash in India centers on net neutrality, the principle that all Internet websites should be equally accessible. Critics accused the world’s largest social networking company of favoring a limited swath of the Internet and excluding rival services. And Facebook’s broader Internet.org initiative, including Free Basics, is seen as an effective way to draw more users onto a social network already used by over a billion people. Zuckerberg’s Facebook is spending billions of dollars on Internet.org, including projects to deliver the Web to under-served areas via drones, satellites and lasers. The billionaire co-founder has said Facebook or its partners will not make money off this initiative and that the goal is to bring Internet access to the developing world and alleviate poverty. “This isn’t about Facebook’s commercial interests – there aren’t even any ads in the version of Facebook in Free Basics,” Zuckerberg wrote in an opinion piece in the Times of India. “If people lose access to free basic services they will simply lose access to the opportunities offered by the Internet today.” This month, the Telecom Regulatory Authority of India asked in a “consultation paper” whether telecommunications service providers should be allowed to charge different pricing for data usage on websites, applications and platforms. The initial comment period for the Indian consultation paper ends Dec. 30. Activists have argued that Free Basics is a “land grab on government property” and that with data rates in India already being low, eventually “everybody will be on the full and open Internet.”

• TVF and AIB, Stars of India’s Online Video Scene Struggle to Make a Living: It’s not just the streaming video services that are struggling to make a profit in India. Even the country’s most popular YouTube stars have trouble making a living from digital video. The Viral Fever, a troupe of actors that creates TV-style episodic comedies, has one of the country’s most popular channels on YouTube, with about 1.3 million subscribers. Its most recent series, “Pitchers,” focused on a group of young tech workers trying to decide whether to form their own start-up. But the ad revenue from YouTube is so low that the group, known as T.V.F., has turned to sponsors like Kingfisher beer and Pond’s cold cream for funding to create its shows. T.V.F. also makes corporate videos and does live comedy shows at Indian colleges to help pay the bills. All India Bakchod, a four-man comedy troupe, has had similar challenges. The group has produced videos making fun of topics like Bollywood, Indian weddings and politics and has nearly 1.5 million followers on its YouTube channel. About two months ago, A.I.B. finally hit the big time, when Star India, a group of television channels owned by 21st Century Fox, began airing a weekly news satire show starring the group on its Hotstar app and on TV. Mr. Joshi said that A.I.B. essentially breaks even on video production costs and makes extra income from branded content it creates for Red Bull, Xbox and Quiksilver.

Daily Tech Snippet: Thursday, December 24, 2015

• Indian Regulators Suspend Facebook’s Free Basic Services:  Telecommunications regulators in India have ordered the suspension of Facebook’s controversial program to bring free basic Internet services to mobile phone users in the country. Facebook’s program, called Free Basics, is one of the signature projects of Internet.org, the company’s ambitious plan to bring the Internet to the billions of people around the world who do not have it. Under the initiative, the company works in partnership with local telephone carriers in 35 countries to offer free access to a text-only version of the Facebook social network as well as to certain news, health, job and other services. The idea is to give novices a taste of the Internet and encourage them to buy paid data services when they want to explore the Internet more widely. But critics say that by offering a free package of handpicked services, Facebook and its partners are discouraging people from using competing services and violating the principle of net neutrality, which calls for telecommunications carriers to treat all Internet services equally. In India, for example, the program offers free web searches using Microsoft’s Bing service but Google searches incur a charge. Mark Zuckerberg, Facebook’s chief executive, has been particularly keen to expand Free Basics in India, which already has more Facebook users than any other country except the United States. Facebook has waged an aggressive advertising campaign in newspapers and on its own social network to build support for the program. But Facebook has encountered a series of setbacks, including intense opposition from net neutrality advocates, the poor marketing efforts and weak network of its Indian phone partner, and skepticism from regulators. One of those regulators, the Telecom Regulatory Authority of India, has now told Reliance Communications, Facebook’s partner in India, to stop offering Free Basics. The order — which was quietly issued about two weeks ago but leaked to the Indian news media this week — came after Reliance failed to turn over information about the terms and conditions of the service, which it had planned to expand across the country beginning last month.

• When a Unicorn Start-Up Stumbles, Its Employees Get Hurt:  On Sept. 4, employees of Good Technology, a mobile security start-up in Sunnyvale, Calif., awoke to discover that their company was being sold to BlackBerry, the mobile device and software maker. Some workers immediately began trying to figure out what it meant for Good to abandon its long-anticipated plan to go public — a move that would have potentially turned their shares in the start-up into gold. They didn’t get firm answers that day, but the prospects did not look great. In an investor document about the sale that was distributed to shareholders, employees discovered their Good stock was valued at 44 cents a share, down from $4.32 a year earlier. In contrast, preferred stock owned by Good’s venture capitalists was worth almost seven times as much, more than $3 a share. The paperwork also showed that Good’s board had turned down an $825 million cash offer just six months earlier, in March. For some employees, it meant that their shares were practically worthless. Even worse, they had paid taxes on the stock based on the higher value. A few nights after the investor document went around, a glass conference room wall at Good’s headquarters was broken, according to an incident report. At a subsequent company meeting, Ms. Wyatt told employees that counselors were available to talk to people who needed to vent. “Many employees may not recover what they’ve lost,” said Matthew Parks, Good’s director of cloud products, who has worked at the company since 2006. His Good shares are now worth a fraction of the six-figure tax bill that he paid for the stock allotted to him before the company was sold. What Good’s employees experienced is an example of who loses out when a company backed by venture capital goes south. While plenty of people — including founders, top executives and investors — are involved in the rise of a start-up, those hit the hardest during a company’s fall are the rank-and-file employees. Investors and executives generally get protections in a start-up that employees do not. Many investors have preferred stock, a class of shares that can come with a guaranteed payout. Executives frequently get special bonuses so they will not leave during deal talks. In Good’s case, the six investors on the board had preferred shares worth a combined $125 million. After the sale to BlackBerry, Ms. Wyatt, who has since left the company, took home $4 million, as well as a $1.9 million severance payment, according to investor documents. In contrast, start-up employees generally own common stock, whose payout comes only after those who hold preferred shares get their money. In Good’s case, the board’s preferred stock was worth almost the same as all 227 million common shares outstanding. Missing out on the upside of the sale was bad enough, but that wasn’t the half of it. Some Good employees actually lost money when BlackBerry bought the company. Good was a unicorn, that is, a private company with a valuation of more than $1 billion. The high valuation increased the paper value of employee shares — and thus the income tax bills levied on their stock when they received the stock grants, or when they bought and sold shares. To pay those taxes, some employees emptied savings accounts and borrowed money. Some of Good’s common shareholders have sued most of the board for a breach of fiduciary duty, asserting that directors looked after the interests of only preferred shareholders.

• Palantir Technologies raises $880 million from investors: Palantir Technologies, a data analytics and security company that helps government agencies track down terrorists and uncover financial fraud, said on Wednesday it has raised $880 million in its latest financing round. Founded in 2004, Palantir, which is considered Silicon Valley's most secretive company, does highly confidential work for U.S. defense and intelligence agencies. Its data mining system, which uses algorithms to search for patterns and connections, helped the U.S. government track down al Qaeda leader Osama bin Laden. The company's large staff of consultants also work with large businesses, police departments, banks and branches of the U.S. military. Palantir has raised close to $2 billion from investors. Its valuation earlier this month reached $20 billion, up from $15 billion in late 2014, making it the fourth-highest-valued, venture-backed private tech company in the world. The company has bucked growing skepticism among late-stage investors about plowing millions into highly valuable companies. Other "unicorns," or venture-backed companies ostensibly worth $1 billion or more, have watched their valuations come under heightened scrutiny. Palantir's strong government ties and an annual revenue estimated by some at more about $1 billion likely set it apart from other cash-burning startups. The company was co-founded by Peter Thiel and Joe Lonsdale, two of Silicon Valley's more influential investors and entrepreneurs.

Daily Tech Snippet: Thursday, November 25

• Xiaomi's $45 Billion Valuation Seen `Unfeasible' as Growth Cools: Things were going so well for Xiaomi Corp. Customers were lining up, investors were swooning and the Beijing-based startup closed funding at a $45 billion valuation. That was last year. Now the high-flying smartphone maker is stumbling. Founder Lei Jun’s latest business, one of China’s most exciting startup stories of the past few years, is likely to miss its own goal of selling 80 million smartphones this year, according to two people with knowledge of its production plans. Suppliers also cut their internal targets for Xiaomi in anticipation of the shortfall, they said. Xiaomi’s falter shows the startup’s challenge in trying to maintain momentum after a meteoric ascent past Apple Inc. and Samsung Electronics Co. in China. Investors bought into the company’s story of youthful disruption and online sales, yet the subsequent lowering of China’s growth target and the copying of its sales strategy by rivals have neutralized Xiaomi’s first-mover advantage, putting its high price tag in doubt. "All those expectations of growth aren’t being realized, which now makes that $45 billion valuation unfeasible," said Alberto Moel, an analyst at Sanford C Bernstein in Hong Kong. "The argument was that their business is kind of like Apple and they’re growing very fast, but they’re no longer growing so fast and they’re not as good as Apple." Domestic shipments of Xiaomi smartphones, including its premium Mi 4 and more economical Redmi series, dropped 8 percent in the third quarter from a year earlier, its first-ever decline, according to researcher Canalys. IHS, another research firm, estimates that Xiaomi shipments dropped 3.9 percent, barely maintaining the lead over Huawei Technologies Co. That’s a big change from the bold growth projections used to justify Xiaomi’s tag as one of the world’s most-valuable technology startups. In March of last year, Lei predicted selling 100 million smartphones in 2015. Through the first nine months of this year, Xiaomi shipped about 53 million smartphones. With its optimistic forecast, Xiaomi secured $1.1 billion in December from investors including GIC Pte., All-Stars Investment Ltd. and DST. Xiaomi drew comparisons to Alibaba, the Chinese e-commerce company that months earlier held the largest initial public offering ever.

• Black Friday Deal or Dud? How to Shop Smart This Holiday Season: Black Friday, which has traditionally been the moment to flock to stores for steep discounts, and which has evolved to also include major online sales events for retailers like Amazon, Best Buy and Walmart, is not all that it is billed to be. We asked J. D. Levite, the deals editor of the product recommendations website The Wirecutter, for some data on just how beneficial the deals are on Black Friday — and the answer was not encouraging. Year round, Mr. Levite and his team track product prices across the web to unearth discounts on goods of all types, from gadgets to kitchenware. They also look at whether the product is high quality and durable based on their own testing and other reviews, and whether the seller or brand has a reasonable return or warranty policy. By those measures, Mr. Levite said, only about 0.6 percent, or 200 out of the approximately 34,000 deals online, which typically carry the same price tags inside retailers’ physical stores, will be good ones on Black Friday. “There are just more deals on that day than any other day of the year,” he said. “But for the most part, the deals aren’t anything better than what you’d see throughout the rest of the year.” There’s a smarter way to shop than relying on Black Friday. With the plethora of web tools now available, consumers can research online and then use trackers to follow product pricing for drops throughout the year. While it’s a time-consuming effort, the method is more precise for understanding pricing trends, both online and in stores. One useful tracking tool is Camel Camel Camel, which is geared toward users of the online retail behemoth Amazon. Using the Camel Camel Camel website, people can view a product’s price history on Amazon.com and then create alerts to receive an email as soon as the item’s price falls to a certain threshold. Over time, interesting trends emerge. One is that some product prices are raised in October, a few weeks before Black Friday. The prices are reduced again on Black Friday. Camel Camel Camel’s database also shows some items have predictable pricing patterns over the course of a year. A pair of bookshelf speakers made by Pioneer are typically $127, but that tends to drop significantly in August — to $60 in August 2014 and to $88 in August 2015, timed to the back-to-school season. This week, the same pair of speakers was again $127. In other words, there are times of year when different types of products decline in price — and Black Friday isn’t one of them.

• All In: Why Nikesh Arora Bet $483 Million on SoftBank's Future: It began late one night this year when he and Son were talking about people’s tolerance for risk and how it tends to decline over time. Arora took a chance as a kid by leaving India for the U.S. with only $200 in cash, but he had since gone on to a lucrative career. So Son prodded him. “Masa said, ‘How much risk appetite do you have?”’ Arora says. “‘Do you believe you can transform SoftBank into a company two, three, five times its size? Now is the time to take the risk.”’ A week later, Arora came back with a plan to buy 60 billion yen ($483 million at the time) in SoftBank shares, more than any insider purchase by an executive in Japan in at least 12 years, according to Bloomberg data. He would become the company’s second-largest individual shareholder and borrow heavily to do it. Arora says investors don’t yet appreciate what SoftBank is becoming. The company has been battered recently because of struggles at two major holdings, the China e-commerce powerhouse Alibaba Group Holding Ltd. and the U.S. wireless operator Sprint Corp. SoftBank is still valued at less than the public shares it owns, meaning investors deem its operating businesses practically worthless.Arora professes not to be worried. He says investors will come around once the company makes progress in reviving Sprint, lets Alibaba recover and demonstrates that it’s more than a Japanese telecommunications company with a spotty investment record.“I’m very relaxed,” Arora said. “I’m here for at least the next 10 years.”  Arora was hired last year after a decade at Google Inc. and promoted to president in June. Since then, he has been quietly building his own operation within SoftBank, an investment arm that will take stakes in technology companies around the world. Though SoftBank put money into startups for decades, including a tumultuous foray during the dot-com bust, the effort had dwindled in recent years to what Son called a “hobby” next to his wireless and broadband businesses. Arora is reviving the venture push and making it much more ambitious. He is hiring a team of 15 to 20 outsiders and plans to put about $3 billion into startups each year. Arora’s recruits, from companies such as Google and LinkedIn Corp., are hand-picked for the expertise they can offer startups in key areas like personnel, product development and acquisitions. He says SoftBank will hold a competitive advantage by operating at a financial strata few can reach. He plans to make five to 10 investments a year of $100 million to $1 billion. The idea is to back startups that have proven products and need to expand -- the rapid phase of growth Arora helped manage at Google.

• Morgan Stanley Said Struggling to Sell EBay Enterprise Deal Loan: Morgan Stanley is struggling to unload $640 million of loans backing the private-equity buyout of EBay Inc.’s enterprise business after investors shunned the debt, according to people with knowledge of the deal. The bank has been trying to sell the loans since mid-October and continues to hold the debt even after EBay said on Nov. 2 that the sale was completed. Morgan Stanley has discussed a steeper discount to lure buyers and has been probing investors in recent days about the price at which they may be willing to buy the debt, said the people, who asked not to be identified because the talks are private. One concern investors have raised is that the company’s projected earnings may be too optimistic. Buyout targets often make adjustments to forecast earnings, called add-backs, that can reduce a borrower’s leverage.

• HP Inc plunges after printer business underwhelms: Shares of HP Inc, which houses former Hewlett-Packard Co's legacy hardware business, plunged 16.3 percent on Wednesday after the company's lackluster results fueled concerns about its ability to weather a slowdown in the printer and PC markets. HP Inc's revenue from both its printer and PC businesses fell 14 percent each in the fourth quarter, their worst performance in the year ended Oct. 31, and forecast current-quarter profit below market expectations."Things got worse. Not only did they not get better - they got worse," said Shebly Seyrafi, an analyst at FBN Securities.HP Inc Chief Executive Dion Weisler called the printing business a "much greater challenge" than the PC business.The company has been cutting printer prices to tackle stiff competition, particularly from Japanese printer makers Canon and Epson.However, the price cuts, coupled with the effect of a stronger dollar, have reduced the value of income from overseas markets.Revenue from HP Inc's printer supplies such as ink cartridges and laser toner fell 10 percent this quarter. Supplies account for most of the profits for HP Inc.HP Inc's PC unit has been suffering as sales have been falling worldwide for several quarters and the launch of Windows 10 has so far failed to rekindle the industry."Ultimately I think (HP Inc), the way it's structured, it's going to be more of a sort of dividend yield play," said Jeffrey Fidacaro, an analyst.HP Inc's sibling, Hewlett Packard Enterprise, saw its shares rise as much as 8.5 percent on Wednesday, after it maintained its profit forecast for fiscal 2016.

• Zenefits Under Investigation For Allegedly Allowing Unlicensed Brokers To Sell Health Insurance: Cloud HR platform Zenefits may have allowed salespeople to illegally act as insurance agents in at least seven states. According to a BuzzFeed investigative report, the startup let unlicensed brokers sell health insurance, leading to at least one commissioner to investigate in Washington State. Those unlicensed solicitations go back to at least the summer of 2014, and the Washington State office of the insurance commissioner started looking at the potential violations earlier this year, according to the report. This is not the first time Zenefits has faced legal scrutiny for possible insurance violations. The Utah Insurance Department took the startup to task over claims it was illegally giving insurance software away for free. Regulators at the time said that the company violated local laws and that it was unfair to traditional insurance brokers. Utah legislators threw out the complaint and let Zenefits get back to business after both the Utah House and Senate overwhelmingly voted to let the startup continue operations. The broker license violation looks a bit more serious and could be considered a Class B felony, under Washington State law. Violators may be subject to a prison sentence of up to 10 years as well as face a $20,000 fine. According to the report, Zenefits execs may have known about the violations and were aware of the consequences, but were prompted to get sales agents licensed in the state only after learning of the insurance commission’s investigation. State records show 22 agents became licensed brokers just days after the report said Zenefits realized there was a state inquiry. The startup has since launched a “license management system” to help track which sales agents are properly licensed.

• Facebook’s Internet.org Now Available Throughout India: Internet.org, Facebook’s initiative to provide free Internet services in developing countries, is now available to all Indians through the Free Basics app on Reliance Communication’s network. The project is meant to give people in emerging economies easy access to the Internet, but has been hit by a slew of criticism. Reliance Communications is India’s fourth-largest telecom operator, with about 110 million subscribers as of June. According to its site, Free Basics will enable users to use Facebook and Facebook Messenger and access sites like Wikipedia, BBC News, Bing Search, Dictionary.com, and local news services. Detractors say that by making a handful of services available on its platform, Internet.org gives preferential treatment to its partners, therefore violating the tenets of net neutrality. In response, Facebook founder and chief executive officer Mark Zuckerberg said Internet.org will focus on offering basic services for free (hence the branding of its app) and is not meant to limit access to other providers. The company has also taken steps to make joining Free Basics easier to join for developers and other potential partners. This has done little to ameliorate critics who are concerned about the potential drawbacks of having a company as large and powerful as Facebook control what millions of new Internet users see. In addition to India, Free Basics is available in 30 countries throughout Africa, South and Southeast Asia, and Latin America.

Daily Tech Snippet: Monday October 26

• Big headlines from last week: Smashing earnings from  Alphabet (the new Google), Amazon and Microsoft. Markets loved Google for lower spending and a share buyback; and Microsoft and Amazon for gushers of cash from their cloud businesses. Amazon Posts an Unexpected Profit, and Its Shares Soar; Microsoft Earnings Climb, Lifted by Strong Growth in Cloud Computing; Google Announces Stock Buyback as Earnings Rise. 

• Twitter's Jack Dorsey gave back a third of his stock to Twitter employees to lift morale. 

• Google's first earnings amid a change of guard led to this headline: The New Google: ‘All the Assholes Have Left’

• Zuckerberg Flies to India, Where Facebook’s Web Access for All Has Been a Tough Sell: The Internet.org suite, rebranded last month as Free Basics, is now in 25 countries, from Indonesia to Panama. Facebook is investing heavily in other parts of the project, including experiments to deliver cheap Wi-Fi to remote villages and to beam Internet service from high-flying drones. Mr. Zuckerberg is also determined to win over the Indian public. Last month, he hosted a live-streamed chat with India’s prime minister, Narendra Modi, from Facebook’s Silicon Valley headquarters. And this week, Mr. Zuckerberg will be in New Delhi, where he will take questions from some of Facebook’s 130 million Indian users. Internet.org’s free services — which include news articles, health and job information and a text-only version of Facebook — are deliberately stripped down to minimize data use and the cost to the phone company. Facebook says the primary goal is to show people what the Internet is all about. But many Indians want more and complain that, contrary to its altruistic claims, the project is simply a way to get them onto Facebook and to sign up for paid plans from Reliance. Internet activists have also attacked Facebook, accusing it of cherry-picking partners to include in its walled garden rather than simply offering a small amount of free access to the whole Internet. Their concerns have struck a chord with the Indian government, which is considering new rules that would govern such free services. The magnitude of the task ahead was apparent during a reporter’s visit in August to Dharavi, home to as many as a million of Mumbai’s poor. Several billboards advertised Freenet, Reliance’s version of Internet.org. But in the neighborhood’s narrow alleys, where rivulets of raw sewage competed with sandaled feet, there was little evidence that anyone had taken notice. At Yahoo Mobilewala, a nearby phone shop named in honor of the American Internet company, the owner, Rizwan Khan, offered service from every major carrier. But his stack of Reliance chips — each in a blue Freenet envelope that said “Go free Facebook” — was gathering dust in its display case.

• Rumor: Uber Refueling Its Warchest Yet Again, At A Valuation Of Up To $70B: Another month, another billion for Uber… The ride-hailing business is reportedly raising yet again — planning to raise close to $1 billion in new investment according to the NYT citing “people close to the matter”, with investors looking at a valuation of between $60 billion and $70 billion for the six-year-old startup. If the NYT’s report is on the money, it comes mere months after the WSJ reported Uber had raised almost $1 billion in new financing, with a valuation then, in July, of more than $50 billion.

• Facebook updates its search feature to drive more conversation: On Thursday, Facebook announced that it's making a few updates to the way search works on the site to make it easier than ever to find conversations running through your social circle. In a company blog post, Facebook said that it wants to make search a better tool for sparking conversation on the social network. For example, public posts or posts made by your friends will begin showing up in search results, as will what Facebook calls "public conversations." Basically, that enables Facebook to become a place where people can more easily dip into discussions about the topic of the day. "When a link gets shared widely on Facebook, it often anchors an interesting public conversation," the company said in a post. "With one tap, you can find public posts about a link, see popular quotes and phrases mentioned in these posts, and check out an aggregate overview of sentiment." So if you found yourself completely perplexed by "pizza rat" or "pirate cat" or, you know, "Hillary Clinton Benghazi hearing," you should be able to hop into Facebook and look up what your friends and others are saying about it. The updates to search will start rolling out for its U.S. English users Thursday, Facebook said, with more plans for search  in the pipeline.

• YouTube has a new music service... What is YouTube Music? YouTube Music is a new app from Google that lets you specifically search for music on the site. That means you get more focused results — a search for "Prince," for example, won't bring up videos about royalty. Well, not of the non-musical variety, anyway. The app will also suggest other songs that you may like, based on your preferences. Doesn't YouTube already have a music service? You may remember that YouTube previously launched a service called YouTube Music Key, which was in an open beta, and seems to have been discontinued in light of the new service. how does this work with YouTube's new subscription service, YouTube Red? Subscribing to YouTube Red, Google's new ad-free subscription service, will get you access to ad-free versions of YouTube, YouTube Gaming and YouTube Music, plus Google Play Music. That will cost you $10 per month if you're an Android user and $13 per month if you're on iOS. You will be able to use the YouTube Music app for free, but those who don't pay will still see ads and not have access to some of the more advanced features. How does this stack up against other services? You could always listen to YouTube, with ads, for free, so why would you pay for that? There are a few perks that may convince you. For one, you no longer have to leave the soundtrack of your day up to the whim of the auto-play algorithm or take the time to actually make your own playlists. Plus, on mobile, you couldn't just keep it running in the background — if you wanted to listen to YouTube, that was all you were going to do. YouTube Music fixes all of these problems. Can I download it now? Not yet. You will have to wait a little while. Although YouTube Red will launch next Thursday, the Music portion of it is scheduled to be out only by the end of the year.

• ..and that caused Disney's ESPN to withdraw content from YouTube: Walt Disney Co's sports network ESPN said it will not make its content available on YouTube, due to the recently announced ad-free subscription-based offering coined YouTube Red. ESPN would not be part of the subscription service at launch due to "rights and legal" issues, a YouTube spokeswoman told Reuters.

• Microsoft Goes Upscale With Fifth Avenue Flagship Store: Most of the luxury brands on the storefronts of Fifth Avenue in Manhattan, one of the world’s most famous shopping thoroughfares, seem to belong together, like the notes of a song. There are Tiffany & Company, Gucci, Armani, Valentino, Rolex and — cue the sound of a record needle sliding off vinyl — Microsoft? Yes, the company that brought us Windows and Office is opening a store on the street that brought us $5,000 handbags and $20,000 watches. The doors of the striking new flagship Microsoft Store will open to the public on Monday. It’s an expensive gamble on a retail strategy that is still a long way from paying off. It does not take a detective to see that the foot traffic is often light at the Microsoft stores the company has opened — the Fifth Avenue store will be its 113th — over the last six years. That’s a contrast with the jamborees usually found over at Apple’s stores, inevitably a few blocks away or across the mall from Microsoft’s electronics boutiques. I got a preview tour of the store last week. It’s clear the building renovation cost a fortune, though Microsoft executives wouldn’t say how much. The company gutted a building from the 1930s that was previously a Fendi store, replacing all but the top of its facade with huge sheets of glass. Walking into the store, what hits you first are the Microsoft devices arrayed on large open tables in the middle of the room. There is a collection of Surface Books, the company’s first laptop, which has received positive reviews and goes on sale Monday. Nearby is the Surface Pro 4, the latest version of the company’s popular tablet computer. An Xbox set up in the front corner of the store — an area Microsoft calls the living room — lets people play Halo 5: Guardians, the science-fiction shooter game that goes on sale Tuesday. Microsoft’s chief executive, Satya Nadella, is showing more patience with the company’s stores than he has with other unfulfilled initiatives begun under his predecessor, Steven A. Ballmer. Mr. Nadella shut down a Microsoft group that made television shows for people with Xboxes, and he cut the staff working on Microsoft’s phone hardware to a fraction of its former size. Why do Microsoft Stores survive? The bricks-and-mortar alternatives for showing new Microsoft products in their best light are not great. The number of electronics stores has dwindled, leaving just one giant in the United States, Best Buy. And while the stores of wireless carriers are good for putting smartphones in front of the public, category-bending tablets and laptops often require explanations from more-trained specialists.

• Hackers Demand Ransom From TalkTalk, British Telecom Firm ...BAE Hired to Investigate: The chief executive of TalkTalk, a British telecommunications provider, said on Friday that she had received a ransom demand from hackers who had claimed responsibility for stealing data on some of the company’s four million customers. TalkTalk, which offers cable and fixed-line services in Britain, said local authorities had opened a criminal investigation into the widespread data breach. The hackers may have gained access to personal data on the company’s customers, including sensitive information like credit card details, dates of birth and addresses. TalkTalk’s shares fell as much as 11 percent in morning trading in London, but recovered by the afternoon and were down 2.3 percent in midafternoon trading. Despite the claims of responsibility, it remained unclear whether the group that had contacted TalkTalk was behind the breach or whether the ransom demands were credible. Yet TalkTalk’s data breach — the third successful attack on the company in the past 12 months — is the latest in a number of online hackings that have affected a wide range of companies, including Target, Home Depot and JPMorgan Chase. It also potentially represents a high-profile example of hackers’ efforts to ransom stolen online data to companies or individuals. Such tactics, commonly known as ransomware, have often involved hackers encrypting people’s computer data and holding it hostage until a fee is paid. In certain instances, hackers have also stolen data directly from companies and demanded payment for not publishing the material online.

Daily Tech Snippet: Monday, July 27

• Archived snippets are here, and MP3 versions are here

• Yelp Cries Foul at Google’s Mobile App Ad Declaration: Those ads that splash on your phone, nudging you to install an app? You know the ones. Earlier this week, Google released an internal study showing that these app download “interstitials” were not merely obnoxious but ineffective, hindering the intended goal of encouraging app installation. Google said it was retiring them and asked the mobile Internet to do the same. Some were pleased. Some were not. Firmly in the latter camp is Jeremy Stoppelman, Yelp CEO and frequent Google sparring partner. On Friday, he pointed to the study and cried hypocrite. Here’s the background: Google’s test paired the full-page ads against subtler banner promotions on mobile websites. Nine percent of mobile users tapped through to the app from the first ads, while 69 percent ran away from the site. With the second version, Google reported an uptick of 17 percent in traffic to the app. Innocuous enough. But Stoppelman is not just accusing Google of a double standard (running its own app ads while nixing others). Behind his beef is the suspicion, percolating in the mobile industry now, that Google is trying to replicate its Web search position with apps. In the past year, Google has pushed aggressively to index the entirety of the app world, while positioning itself, through deep-linking features like the upcoming Now on Tap, as the facilitator. And with Google as facilitator, that leaves less room for other app go-betweens, a la Yelp. It doesn’t help Google’s case here that the interstitial study relied on its own Google+ social app, a Google application that, to be kind, is not terribly in demand.


• Using Algorithms to Determine Character: A company in Palo Alto, Calif., called Upstart has over the last 15 months lent $135 million to people with mostly negligible credit ratings. Typically, they are recent graduates without mortgages, car payments or credit card settlements. Those are among the things that normally earn a good or bad credit score, but these people haven’t been in the working world that long. So Upstart looks at their SAT scores, what colleges they attended, their majors and their grade-point averages. As much as job prospects, the company is assessing personality. “If you take two people with the same job and circumstances, like whether they have kids, five years later the one who had the higher G.P.A. is more likely to pay a debt,” said Paul Gu, Upstart’s co-founder and head of product. “It’s not whether you can pay. It’s a question of how important you see your obligation.” The idea, validated by data, is that people who did things like double-checking the homework or studying extra in case there was a pop quiz are thorough and likely to honor their debts. Analytics, meet judgment of people. “I guess you could call it character, though we haven’t used that label,” said Mr. Gu, who is 24. The same personality dynamic holds for people go to great schools or have top grades. Douglas Merrill, the founder and chief executive of ZestFinance, is a former Google executive whose company writes loans to subprime borrowers through nonstandard data signals. One signal is whether someone has ever given up a prepaid wireless phone number. Where housing is often uncertain, those numbers are a more reliable way to find you than addresses; giving one up may indicate you are willing (or have been forced) to disappear from family or potential employers. That is a bad sign. Zest recently branched into “near prime” borrowers, who have either fallen from the prime category or risen from subprime. The question is why these people have changed categories, and Zest tries to figure out if a potentially reliable borrower has had some temporary bad luck, like a one-time medical expense. “‘Character’ is a loaded term, but there is an important difference between ability to pay and willingness to pay,” said Mr. Merrill. “If all you look at is financial transactions, it’s hard to say much about willingness.”


• Facebook and Other Tech Giants Expand Internet Access in Africa: Africa has become a hotbed of experimentation by big American technology companies as well as local start-ups. In addition to Facebook’s efforts, which included developing a Swahili language version of Facebook, Google, Microsoft and IBM have all been promoting tech projects on the continent. Google, for example, has built a high-speed, fiber-optic Internet network in Kampala, Uganda. But unlike the similar Google Fiber project in major American cities, Google doesn’t offer the service, called Project Link, directly to Ugandans but instead sells access cheap on a wholesale basis to local Internet providers. The result was a sharp drop in the price of Internet access in Kampala as new entrants competed with the traditional carriers to offer services. Microsoft has been supporting various projects to transmit Internet signals via “white spaces,” which are basically unused portions of the television broadcast spectrum. On Friday, the company announced that it was working with the United States government’s Overseas Private Investment Corporation to provide financing to Mawingu Networks to build solar-powered Internet access stations across rural Kenya using white spaces technology. And IBM said on Saturday that it would begin a formal program to assist entrepreneurs in Nairobi’s iHub innovation and collaboration space. And Africa seems to have brought a bit of kumbaya to the traditional tech rivals. “It’s the one place where I have seen Microsoft and Google and Facebook as allies,”


• Facebook partnership a boon for video technology firm Bidalgo: Facebook marketing partner Bidalgo targets a tripling in sales in 2015 as its new technology to automate the process of making personalized online video advertising benefits from Facebook's growing share of the video market. Facebook is becoming a leader in the video market as users prefer to watch video ads over static images, said Peleg Israeli, general manager of Bidalgo's Israeli operations. Videos are expensive to make and an advertiser usually makes only one or two versions. The Bidalgo executive said his company's technology, called ADaptation, can automatically turn one video into as many versions as needed, so that targeted audiences will see images they respond to most. For example, a German audience might see a German flag in one video while users in France will see their flag. Automated videos will give Facebook an advantage over Google's YouTube, as Facebook's core technology can identify users "in the most accurate way". U.S.-Israeli Bidalgo's technology targets mobile app and game developers, who have been quick to adopt mobile advertising. Clients include online gaming firm 888 Holdings and Zynga. Bidalgo, which has 40 employees, has been profitable for about a year, with a target of $100 million in sales this year, Israeli said. It competes with San Francisco-based Ampush and Boston-based Nanigans. Companies wishing to advertise on Facebook must bid for users that they wish to see their advertising. Bidalgo's algorithms test an ad against multiple audiences to understand which segments are relevant and what is the right price the advertiser should offer.

Daily Tech Snippet: Monday, June 22

• An MP3 version of this snippet is here

• Amazon Upgrades Its Review Software: Amazon is giving its reviews system an overhaul, using new software it says will surface more helpful commentary from buyers. The company says it is using machine learning to provide more frequent, more useful updates to reviews on its U.S. site. Among other things, that means that more recent reviews will show up near the top of a product listing, and a product’s five star review score may change more often. Via CNET: “The new system will give more weight to newer reviews, reviews from verified Amazon purchasers and those that more customers vote up as being helpful. A product’s 5-star rating, which previously was a pure average of all reviews, will also become weighted using those same criteria.” While Amazon doesn’t mention this, it’s also reasonable to assume that the company hopes the overhaul will help push down bogus reviews, a problem that has long-plagued the site but which it usually doesn’t want to talk about.


• Twitter Expands Shopping Experience With Product Pages: Twitter is finally taking advantage of its massive amount of tweet data to encourage its users to shop.The social network is rolling out product pages and what the company calls Collections on Friday, distinct pages within the service where you can see info on specific products or places and actually make a purchase. A product page will include things like tweets about the product, user reviews, pricing and, in some cases, a buy button. Collections are more of a browsing experience, which include a handful of recommended products and places selected by a brand or high-profile curator. For example, Ellen DeGeneres has a Collection highlighting the “Best of the Ellen Shop,” where you can browse Ellen-branded products or others she has featured on her show. The new feature is a pretty expansive change to Twitter’s previous shopping experiments. Those were limited to promoted tweets that included a buy button for a single item. The Collections and product pages aim to take advantage of the fact that Twitter already has lots of information about products and services from its user base. It’s now collecting that info to help educate a potential buyer. For now, Twitter is simply getting the product off the ground and isn’t taking a cut of sales revenue from most partners, but taking a slice off the top seems like a logical next step.


• How Oculus and Cardboard Are Going to Rock the Travel Industry: Relegated to geeky fantasy for years, Virtual Reality hardware is suddenly cheap, portable, and there for the travel-brand taking. Travel companies such as Thomas Cook, Qantas Airways, and Destination BC in Canada are also creating their own promotional VR videos. Currently, in 10 select Thomas Cook store locations in the U.K., Germany, and Belgium, you can strap on a Gear VR headset and try your tour before you buy: Walk through the billowing blue curtains of a Santorini hotel balcony, ride a helicopter above Manhattan's skyline. This year Cook has seen VR-promoted New York excursion revenue increase 190 percent. The next step, according to Ryan, is to go beyond brick-and-mortar stores and deliver VR brochures into homes.


• China to promote cross-border e-commerce as incomes rise: China will increase support for cross-border e-commerce as the world's second-largest economy shifts from manufacturing to higher-value services, the government said. The government released policy guidelines on Saturday that include tax policies aimed at boosting domestic consumption and pilot projects to ease overseas payments. Chinese e-commerce firms will be given state support on international projects while credit insurance services will also be introduced. Customs will streamline clearance of goods and quality supervision agencies will allow collective declaration, examination and release of goods. There will be tax sweeteners on e-commerce retail exports and settlement of payments in yuan will be promoted, it added. The policy document followed Friday's announcement that China will allow full foreign ownership of some e-commerce business to boost competitiveness.


• Chinese firms pour money into U.S. Research and Development in shift to innovation: Surging investment by Chinese companies in U.S. research labs is yielding a fast-growing trove of patents, part of a push to mine America for ideas to help China shift from being the world's factory floor to a driver of innovation. Largely absent from American research hubs a decade ago, Chinese firms including Huawei and ZTE Corp are now using U.S. researchers to create patents ranging from new software to internet infrastructure, according to an analysis of Thomson Reuters' global intellectual property database. Patented inventions by Chinese firms that involved at least one U.S. researcher roughly doubled worldwide in each of the last three years, reaching 910 in 2014.


• Attack Gave Chinese Hackers Privileged Access to U.S. Systems: Undetected for nearly a year, the Chinese intruders executed a sophisticated attack that gave them “administrator privileges” into US government networks. The hackers began siphoning out a rush of data after constructing what amounted to an electronic pipeline that led back to China, investigators told Congress last week in classified briefings. The hackers’ ultimate target: the one million or so federal employees and contractors who have filled out a form known as SF-86, which is stored in a different computer bank and details personal, financial and medical histories for anyone seeking a security clearance. “This was classic espionage, just on a scale we’ve never seen before from a traditional adversary”


• US carrier Sprint bows to net neutrality, saying it won’t throttle data anymore: To make sure it stays on the right side of net neutrality, Sprint will no longer slow down its customers' mobile data when its cell sites are congested, the company says. The decision is an early sign that the federal government's new rules for Internet providers are having an effect. Sprint's policy, which it said lasted for less than a year, was to slow down mobile data temporarily for data hogs in a congested area. The throttling affected the heaviest 5 percent of data users covered by a given cell site, and when the congestion eased, the restrictions were lifted.

Daily Tech Snippet: Monday, June 1

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

• Snapchat Said to Be Valued at $16 Billion in New Fundraising: Snapchat raised $537.6 million in a sale of common stock, with the funding round valuing the messaging startup at about $16 billion. The company may raise as much as $650 million in the round, according to a filing Friday with the Securities and Exchange Commission. That would bring Snapchat’s total financing to more than $1.2 billion, according to Crunchbase, as the company builds its business in pursuit of an eventual initial public offering. By raising the latest funding in common stock, Snapchat is bucking convention for later-stage venture deals, which tend to include preferred-stock provisions that allow investors to decrease their risk. “Investing in common stock, especially at a $16 billion valuation, is not normal,” said Anand Sanwal, chief executive officer of venture-capital data firm CB Insights. “It highlights the leverage that Snapchat had in these negotiations because the investors aren’t getting the protections they normally ask for.”

• Intel is close to clinching a takeover of fellow chip maker Altera for more than $15 billion, the latest sign of consolidation in the semiconductor industry. Intel is expected to pay about $54 a share for Altera, whose specialized chip designs would help Intel expand beyond chips for personal computers. An agreement could be announced as early next week, though sources cautioned that talks are continuing and might still collapse. The two sides had been in talks already this year, though the discussions were eventually delayed when Altera rejected an offer in the ballpark of $54 a share. But after the talks ended, Altera reported quarterly earnings that fell below expectations. Meanwhile, one investor, TIG Advisors, began to publicly campaign for a resumption of talks with Intel. If completed, a takeover would be the latest among chip makers as companies seek larger scale and more diversified offerings. Growing and having more products can give those manufacturers greater savings and negotiating leverage with customers. On Thursday, Avago Technologies struck a roughly $37 billion acquisition of Broadcom to break into the top tier of semiconductor companies. Intel and Altera both make semiconductors, but vastly different types. Intel is known primarily for the standard chips that go into personal computers and computer servers. They consist of millions of transistors, and once created, their performance can be adjusted only slightly by changing the software that works with them. Altera’s chips — known as field programmable gate arrays, or F.P.G.A.s — are lower in power and performance but can be altered after manufacturing to carry out different functions. That gives them far greater flexibility. Intel may be seeking Altera to create computers that combine the power of a standard semiconductor with the flexibility of an F.P.G.A., by means of a board with both types of chip. This could potentially give Intel the ability to build, for example, a computer server that can add functions so it lasts longer inside a corporate data center. This move would reflect several recent trends in the industry. Giant cloud computing centers have become an increasingly large part of Intel’s business, made even more significant as smartphones have lowered the demand for “Intel Inside” personal computers. Intel now has dedicated sales teams working with big chip consumers, like Amazon.com, that tell the company its specific computing needs for its giant cloud systems. In addition, Intel is now concentrating on at least 200 companies that are building significant computing clouds. Adding F.P.G.A.s might be a good way to help companies customize those data centers.

• Social Networking App Path Sells Itself To Korean Messaging Heavyweight Daum Kakao. It isn’t often that a company in Asia acquires a U.S. rival, particularly one that has surfed a wave of hype in Silicon Valley. But that’s exactly what happened this week after Path announced the sale of its flagship app to Korea’s Daum Kakao. The deal is undisclosed, but, as a real acquisition involving two consumer messaging apps, it is notable, particularly as the mobile messaging space transitions from a period of hyper growth to one of consolidation and services. Most people interested in tech are familiar with Path. The five-year-old service burst onto the scene as a beautifully designed, mobile-first alternative to Facebook with a number of features to set it apart from the social network. Ultimately, Path didn’t break out of Silicon Valley and go mainstream in the U.S., but it did make inroads in Asia — particularly in Indonesia. The company is said to have 23 million registered users, four million of whom are in the Southeast Asia country, as of October last year. Path began to focus more intently on Asia with its redesign in 2013, while it took money from Indonesia’s Bakrie Global Group as part of a $25 million Series C last year. Daum Kakao is less known, particularly in the U.S.. The organization was formed when Korean internet firm Daum merged with domestic messaging app company Kakao in a $2.9 billion deal last year. The company’s Kakao Talk app is perhaps the best example of how a messaging app has impacted media and internet distribution — which is where the trend is moving in the U.S. and other countries. Though it has a small global presence — its 160 million registered userbase is far lower than key rivals — the app is installed on over 95 percent of smartphones in its native Korea, where it offers free texts and calls, games, a payment service, taxi-hailing and more. The 2015 Mary Meeker internet trends report, released this week, ranked Kakao Talk as the top messaging app worldwide based on user engagement. Another indicator of its stickiness is that its games business utterly dominates Korea’s iOS and Android app stores, according to data from App Annie. Indonesia is the largest country in Southeast Asia with a population of over 250 million. It was well-known for being the last major market where BlackBerry had any kind of mainstream presence but that’s changed now. The rise of affordable Android smartphones — particularly glamorous sub-$300 devices from the likes of Xiaomi — sent BlackBerry’s sales plummeting. But, the result of BlackBerry’s years of dominance is that there is no single messaging app that dominates Indonesia. That’s unlike other parts of Asia — China (WeChat), India, Singapore and Malaysia (WhatsApp), Japan, Thailand and Taiwan (Line), Philippines (Viber) — where the leadership has been established. With a large population up for grabs and the sizable following that Path enjoys in the country, Daum Kakao is buying itself a larger chunk of the market with this deal. It may also bolster its presence in other parts of Asia, where Daum Kakao claimed Path has 10 million registered users.

• Netflix now accounts for almost 37 percent of American Internet traffic: Netflix's share of Internet traffic is exploding. The streaming service now accounts for 36.5 percent of all bandwidth consumed by North American Web users during primetime, according to the Canada-based network firm Sandvine. That's way up from even last November, when Sandvine estimated Netflix's bandwidth footprint at 34.9 percent of Internet traffic. Sandvine's regular reports on Internet usage — based on traffic as it passes through its systems — have become a reliable indicator of which services are taking up the most bandwidth. Both the season five premiere of "Game of Thrones" and the most recent "Call of Duty" downloadable content led to massive spikes in data consumption, the latest report also finds.

• Netflix, for better or worse, has become the symbol for net neutrality, which has become a key issue in how regulators analyze proposed cable and telecom mergers. To many in the cable and broadband businesses, the invisible hand of Netflix has been apparent in the failed Comcast-Time Warner Cable combination; in likely restrictions on the merger between AT&T and DirecTV; and in the Obama administration’s embrace of net neutrality, to cite just three prominent examples. A pivotal moment in the net neutrality struggle came last year when Netflix agreed to pay Comcast so-called interconnection fees, a deal that Netflix’s Mr. Hastings last month called a “deal with the devil.” (While Comcast has drawn the brunt of Mr. Hastings’s ire, Netflix also reached similar interconnection deals with every other major Internet service provider.) But securing payment from Netflix for fast and more reliable access may have been a Pyrrhic victory for Comcast and the other the broadband providers. Until then the notion of net neutrality had been something of an abstraction. But when Netflix subscribers found their programs constantly interrupted for “buffering” (an interruption to download more data), the ability of Internet providers to play favorites seemed all too real. Once Netflix started paying fees to Comcast, its customers suddenly found their service improved substantially. Netflix’s experience with Comcast became Exhibit A with the F.C.C. when Netflix opposed the proposed Comcast-Time Warner Cable merger. “The combined company would possess even more anti-competitive leverage to charge arbitrary interconnection tolls for access to their customers,” Netflix said in a letter to shareholders opposing the merger. It probably didn’t hurt Netflix’s case that just about everyone in Washington watches the hit Netflix series “House of Cards,” and Comcast is the dominant Internet provider there. Tom Wheeler, the F.C.C. chairman, said he, too, had suffered buffering problems, which he called “exasperating.”

Daily Tech Snippet: Friday, March 13

• Cash burns fast for Uber-like startups that grow city by city - "You have an operations team that is on a city-by-city basis, but you make sure your engineering team is not city-by-city" : The list of city-by-city startups includes mobile car-booking companies Uber Technologies and Lyft, food delivery startup Munchery, parking provider SpotHero, shopping service Instacart and laundry startup Washio. While they rely on technology to deliver new products and services, their business models are a departure from the low-cost ventures built by a few programmers working in a cramped office. Instead, they're setting up kitchens, renting warehouses and hiring local staff. Among the startups that raised a third financing round in 2013 or 2014, 14 are expanding from city to city and have attracted an average of $65 million in funding, more than double the amount raised by the rest, according to PitchBook Data, a financial information provider. Uber is leading the pack, with a presence in almost 300 cities in 55 countries. Valued at $40 billion, the mobile car-hailing startup is on a hiring spree for operations staff, with more than 200 job postings for staff outside of the company's headquarters in San Francisco, from Miami to Moscow. CEO Travis Kalanick's steady ramp-up has required Uber to raise an enormous amount of cash totaling more than $5 billion. In January, Bloomberg News reported the car-booking startup raised $1.6 billion in convertible debt, and that it was still on the lookout to collect more financing. Some investors warn that cash-intensive startups are at risk of flopping, pointing to previous attempts by delivery companies Kozmo.com and Webvan, which also sought to expand city to city in the late 1990s, only to crash when the dot-com bubble burst in the new millennium. Marc Andreessen, Silicon Valley investor and startup veteran, cautioned last year that enterprises rapidly burning cash may be unable to survive in an adverse environment.1 Apoorva Mehta, Instacart's CEO, is betting his delivery startup will be nimble enough to avert a crunch. The San Francisco-based company, which raised $220 million at a $2 billion valuation in January, initially sold groceries to customers with a markup. Now, Instacart is more focused on cutting deals with food stores to deliver produce and other goods for a fee. Instacart needs less cash to expand (compared with Amazon, which also delivers groceries in some urban areas) since it doesn't have to build warehouses or large stores. "You have an operations team that is on a city-by-city basis, but you make sure your engineering team is not city-by-city," Mehta said.

• Alibaba hiring in Amazon, Microsoft backyard as U.S. cloud unit expands: Alibaba has begun hunting staff in Seattle, home turf of Amazon.com Inc and Microsoft Corp, focusing on savvy cloud computing hires as it ramps up U.S. operations. Several recruiters in the region said they had registered the firm's hiring drive, suggesting Alibaba is eyeing staff at rival Amazon as well as Microsoft and Facebook Inc. According to LinkedIn's data, Alibaba has already hired staff away from Microsoft and Amazon. LinkedIn data list Microsoft as the top company from which former employees have joined Alibaba, not specifying the location of the hires, with 20 recruits for unspecified posts at the Chinese company having previously worked at the software giant. With the job openings Alibaba joins the increasingly fierce fight for cloud computing talent in Silicon Valley and Seattle, where it opened a research and development center in what is Microsoft and Amazon's backyard late last year. The Chinese company's arrival on the tech job market is - for now - unlikely to pose a concern to major industry incumbents, who in past years have resorted to increasingly imaginative tactics to recruit scant human resources. Alibaba's moves in the region are at an early stage, and the amount of hiring still comparatively low, said recruiters. The company has fewer than 300 employees in the United States. But Alibaba is looking at Amazon, Microsoft and Facebook in the Seattle area for new blood, particularly developers, said Jerry Taylor, president of Executive Recruiters Inc in Bellevue, Washington. "I'm sure they're going to be web-based as well as mobile-type folks," he said. "They're trying to get a footprint in the United States. What better place to go than their direct competitor in Amazon?" An Alibaba spokesman declined to give details of recruitment. Alibaba's talent hunt coincides with a broader push in the United States this year to win over U.S. business, offering American retailers new ways to sell to China's vast and growing middle class. On March 4 it launched a cloud computing hub in Silicon Valley, its first outside of China. Alibaba has hired at least 10 software engineers or computing experts from either Microsoft or Amazon since July 2014, all but one based in the greater Seattle area, according to their LinkedIn profiles. Li Xiaolong, one of the 10 and a senior staff engineer at Alibaba, openly advertises for like-minded talent on his profile: "We are actively hiring talents in machine learning, data mining and distributed computing, as well as hardcore software engineers to improve the world's biggest e-commerce platform. The location can be Seattle, Silicon Valley, Beijing or Hangzhou."

• Brands Are Now Posting More to Instagram Than Facebook Photo app is marketers' new fave: Instagram is luring brands away from Facebook, according to a new report from research firm L2, which found that brands now post more content on the photo-sharing app. The reason? Brands know everything they post on the platform will appear in fans' feeds, the study says. But on Facebook, if brands don't pay to promote their posts, much of their content doesn't appear in followers' News Feeds. That trend is turning Instagram, which is owned by Facebook, into a growing marketing force. The report outlines how brands have been building their followings on the app, which recently topped 300 million monthly users. Facebook does not comment on Instagram's growth outside of official announcements. However, considering the Instagram audience was 100 million two years ago, that tripling of users approaches Facebook's biggest leaps. Facebook went from 100 million to 300 million in an even shorter time span. Another reason Instagram is a marketing darling at the moment is it's attracting younger users than Facebook, according to L2. While an estimated 3 million U.S. teens abandoned Facebook between 2011 and 2014, the same demographic now cites Instagram as "the most important" social network, the report says. UPDATE: The survey focused on 250 of the world's top brands, and Facebook counts more than 2 million advertisers. Here's a look at what else L2 and Olapic, the social marketing technology firm, found: Brands post an average of 9.3 times a week to Instagram, up from 7.5 posts a year ago. Facebook posts decreased, meanwhile, from 11.1 to 8.8 per week. Brand fan bases rose an average of 26 percent over the past year. Photos perform better than videos. Users engage with photos 1.03 percent of the time and with videos 0.79 percent of the time. Instagram's Hyperlapse app, which speeds up video into fast-motion action, has fallen out of favor with just 2.4 percent of brands using it since its August launch.

• F.C.C. Sets Net Neutrality Rules: The Federal Communications Commission on Thursday released extensive details of how it would regulate broadband Internet providers as a public utility, producing official wording that almost certainly sets the stage for extended legal fights. The release of the rules had been eagerly anticipated by advocates and lawmakers, as well as broadband and technology companies, since the agency approved new rules for Internet service two weeks ago. The details came in a 313-page document that included the new rules and the legal justifications for them. The rules revealed how the strict laws would be modified for Internet providers, exempting the companies from the sort of price controls typically applied to utilities, for example. But the full text of the new order also raised uncertainties about broad and subjective regulation. One catchall provision, requiring “just and reasonable” conduct, allows the F.C.C. to decide what is acceptable on a case-by-case basis. Opponents of the rules, including many of the leading Internet providers, spent Thursday poring over the document. It was not known who would file the first legal challenges, or exactly what legal arguments would be made. Many experts, though, said the document included plenty of opportunity for different interpretations. The “just and reasonable” provision, said Roger Entner, the lead analyst at Recon Analytics in Boston, “can be stretched like chewing gum.” He suggested that it would inspire a flood of proactive, permission-seeking petitions from businesses large and small. He pointed to mobile-messaging companies like Snapchat or WhatsApp that may be transmitting voice or video and seeking money from investors who want legal assurances before signing checks. “Before acting, you need to know: Is this kosher with the F.C.C.?” The debate about how to preserve the open Internet has persisted for more than a decade, and the F.C.C.’s new rules are not its first attempt to protect it. But the issue picked up momentum in the last year, with President Obama taking the unusual action of publicly urging the independent agency to approve strong regulation. The agency’s order reclassifies high-speed Internet as a telecommunications service rather than an information one, subjecting providers to regulation under Title II of the Communications Act. Its aim is to protect the open Internet, advancing principles of so-called net neutrality by prohibiting broadband providers from elevating one kind of content over another. “Threats to Internet openness remain today,” the agency wrote in the document released on Thursday. “The record reflects that broadband providers hold all the tools necessary to deceive consumers, degrade content or disfavor the content that they don’t like.” Comcast and Verizon, two leading Internet service providers, declined to comment. Jim Cicconi, AT&T’s senior executive vice president for external and legislative affairs, called the order’s publication the beginning of “a period of uncertainty” that the company was confident would be resolved “by bipartisan action by Congress or a future F.C.C., or by the courts.”

• Educational toy maker LeapFrog, once unique, is battered by the app disruption: Battered by a growing variety of cheaper alternatives, LeapFrog, a dominant maker of educational toys and games, has watched its sales plummet. It has become the target of short-sellers, investors who bet on a company’s failures, and was most recently sued by shareholders who claimed it had drastically overestimated consumer demand for its products. “As each year passes by and more apps are for free and they’re lower priced, it becomes a tougher sell,” said Jim Silver, the editor in chief of TTPM, a toy review website. Slow to adapt, critics say, LeapFrog has become something of a modern-day fable for how quickly technology has unseated the toy industry’s titans. Mike Wood, a lawyer, created the company upon realizing how few educational products existed for his 3-year-old son, who was having trouble learning to read. He founded the company in 1995, and in 1999 introduced the first LeapPad, an electronic book with audio and pen that helped children learn to read. As technology evolved, LeapFrog seized the opportunity to create a tablet just for children: no web-browsing abilities and a limited set of games. It introduced the original LeapPad tablet in 2011 for $100 at a time when the average tablet in the United States sold for about $470, according to data from Euromonitor. Sales skyrocketed. Sean McGowan, an analyst with Needham and Company, estimates that the company sold 1.2 million tablets the first year, and more than doubled that in 2012, when the LeapPad 2 came out. The hardware, combined with its software and content, most likely made up more than half of the company’s revenue, Mr. McGowan said. “Back then, not every family had an adult tablet they were willing to give to their child,” said Gerrick Johnson, an analyst with BMO Capital Markets. Just a few years later, however, the idea of a tablet that appeals precisely because it can do a limited set of tasks seems almost quaint. Older generations of iPads have become hand-me-downs from parents to children, while tablets get cheaper every year. Parents can program their grown-up devices with educational games, instead of buying a separate specialized system. Sales of various LeapPads to retailers began to plateau in 2013, according to Mr. McGowan, who estimates that they dropped more than 40 percent in 2014. On a weekday afternoon, Flora Bojadziev, a chef from Harlem, browsed through a Toys “R” Us in Manhattan. She was looking for educational toys for her 2 ½-year-old son, who plays with her iPad. But she balked at the idea of spending $130 on LeapFrog’s LeapPad Ultra XDi, an educational tablet for children, on sale in the aisle a few steps away. “With that money, I’ll buy him so many apps,” said Ms. Bojadziev, who is 33. That is precisely the problem for LeapFrog, which built a multimillion-dollar company on children’s devices before babies learned to swipe the screens of iPads.

• Intel cuts revenue forecast as desktop demand weakens - shares down 5%: Intel Corp (INTC.O) slashed nearly $1 billion from its first-quarter revenue forecast as small businesses put off upgrading their personal computers, sending the chipmaker's shares down more than 5 percent. Fewer companies than Intel had expected replaced desktop PCs running on outdated Microsoft operating systems, leading to weak demand for its chips. Intel also cited "challenging" macroeconomic and currency conditions, particularly in Europe. "The macro environment is not robust enough for people to upgrade their PCs the way they normally would," Topeka Capital Markets analyst Suji De Silva said. Intel said on Thursday that it expected first-quarter revenue of $12.8 billion, plus or minus $300 million - about 7 percent lower than its earlier forecast of $13.7 billion, plus or minus $500 million. Though dominant in the market for chips used in PCs, Intel has been slower than rivals such as Qualcomm Inc (QCOM.O) to adjust in recent years to the growing popularity of smartphones. When Microsoft Corp (MSFT.O) wound down support for its Windows XP operating system last April, Intel had expected a bounce in demand from small- and medium-sized businesses. But this has not happened. Businesses and consumers are taking an "if it ain't broke, don't fix it" attitude to their old PCs, Summit Research analyst Srini Sundararajan said. According to BlueFin Research Partners, 75 million-76 million PCs will be shipped worldwide in the first quarter, a decline of 8-9 percent from the preceding quarter. Intel, whose historic "Wintel" alliance with Microsoft once delivered breathtakingly high profit margins, has been trying to offset the impact of slower PC upgrades by making chips for devices such as "2-in-1s", which function as both laptop and tablet. Intel said the mid-point of its gross margin range would remain at 60 percent, plus or minus a couple of percentage points. Intel's shares were down 4.8 percent at $30.76 in late afternoon trading on the Nasdaq.