Daily Tech Snippet: Tuesday, July 19

• Netflix Disappoints Wall Street as Subscriber Growth Slows: Netflix isn’t looking so invincible anymore. On Monday, the company disappointed Wall Street with the news that subscriber growth for its streaming video service had slowed significantly during the second quarter. Also disconcerting was that Netflix added far fewer subscribers over all during the period than expected, which the company blamed on news media coverage of its plans for price increases. Netflix added just 1.7 million new streaming members in the three months that ended June 30, about half the 3.3 million net additions from the same period the previous year. That anemic growth — for both United States and international subscribers — came in well below its forecast of 2.5 million new members. The development sent Netflix shares down as much as 16 percent in after-hours trading on Monday, representing the second earnings report in a row that has sparked a double-digit plunge in the company’s stock price. Mr. Hastings finds himself in a starkly different position from just six months ago, when he stood onstage at the big consumer electronics show in Las Vegas and declared that Netflix would conquer the global market for streaming television, adding more than 130 countries to its world service map. At the time, the company’s share had been soaring, surging 135 percent in 2015 as the top performer on the Standard & Poor’s 500-stock index. So far this year, Netflix’s share price has declined about 14 percent. Still, some analysts pointed to the company’s financials as proof that it would continue to deliver on its plans in the long term. Net income for the quarter was $41 million, up 58 percent from $26 million during the same period last year. Total revenue was $2.1 billion, up 27 percent from $1.6 billion in the same period last year.

• Yahoo Revenue Falls 15 Percent and Profit Drops 64 Percent: As Yahoo accepted the final bids for its core business on Monday, the internet company revealed just how badly that business was deteriorating. Yahoo said that its revenue in the second quarter fell 15 percent, after excluding accounting adjustments, and its operating profit fell 64 percent. Yahoo also acknowledged that Tumblr — its biggest acquisition under its current chief executive, Marissa Mayer — was now worth only one-third of the $1.1 billion that Yahoo paid for it in 2013. But investors were not focused on the quarterly numbers or Yahoo’s vast overpayment for Tumblr. They were far more interested in whether Yahoo’s web, email, news and other businesses will finally be sold — and at what price.Yahoo has been conducting a prolonged auction for those assets since February, and final bids were due on Monday. Yahoo’s board is expected to evaluate the offers over the next week or two and decide whether to proceed with a transaction that would end Yahoo’s 20-year run as an independent, publicly traded company.Analysts expect the final bids to come in at $3.5 billion to $6 billion, including Yahoo’s land and patents.The write-off of most of the value of the Tumblr blogging network is emblematic of the failure of Ms. Mayer’s strategy to expand Yahoo by luring the mobile young users who drive the business of its chief rivals, Google and Facebook.In the second quarter, Yahoo’s revenue was $1.31 billion, up from $1.24 billion in the same quarter a year ago. But the most recent quarter’s revenue rose only because of a change in how Yahoo accounts for revenue from its search partnership with Microsoft. Excluding those changes, revenue fell 15 percent, and both search ads and display ads posted significant drops. The company reported a net loss of $440 million, or 46 cents a share, for the quarter, compared with a loss $22 million, or 2 cents a share, in the same quarter a year ago. Excluding the Tumblr write-off and other adjustments, the company’s operating profit fell 64 percent. Shares of Yahoo were down slightly in after-hours trading Monday evening.

• IBM Rises After Sales Beat Estimates on Software Unit Gains: IBM second-quarter revenue beat analysts’ estimates, boosted by the unit that includes its Watson artificial intelligence platform, in an early indication that the company’s transition to cloud-based software and services is beginning to pay off. Sales were $20.2 billion, compared with the average analyst estimate of $20.1 billion, according to data compiled by Bloomberg. Revenue in cognitive solutions, which includes Watson, increased 3.5 percent to $4.7 billion. This is the first time since IBM reorganized its segments that the cognitive solutions portion has registered growth, after declining the previous five quarters in a row. Adjusted earnings, excluding some items, was $2.95 a share, beating the $2.89 average estimate of 19 analysts. The shares rose 3.2 percent in late trading to $165. They are up 16 percent this year through the end of Monday, compared with a 6 percent gain on the Standard & Poor’s 500 Index.

• What is ARM and why is SoftBank spending $32 billion on it? SoftBank’s $32 billion deal to buy chip designer ARM had many people scratching their heads Monday. It’s not that ARM isn’t important in tech. Indeed, its processor designs are used by nearly every chipmaker and, by extension, find a place inside nearly every piece of tech from cellphones to hard drives to networking gear. Rather, it is the fact that the chipmaker is so far removed from SoftBank’s other businesses. The Japanese conglomerate has a wide range of tech holdings, including a controlling interest in Sprint, its own mobile carrier business in Japan and investments in Alibaba, OlaCabs and Snapdeal. “SoftBank would have been one of the least likely I thought to buy ARM,” said longtime chip analyst Kevin Krewell of Tirias Research. “They are not in the semiconductor business in any significant way.” Krewell says he suspects that SoftBank looked hard at buying other companies in the chip business and decided that ARM was the strongest play, especially for the very long term.It’s worth taking a second to understand how ARM’s business works and what it does. ARM doesn’t make any products. Not only does it not manufacture chips, it doesn’t even design the ones that are eventually sold. Rather, it designs the core engines that get built into others’ chips — chips from companies like Qualcomm and Nvidia as well as processors like Apple’s A9 and Samsung’s Exynos. For its efforts, ARM gets a small license fee from every chip that uses its design. Because it is in so many products, that small license fee adds up to a pretty healthy business. Its 2015 revenue was nearly one billion British pounds. And its sphere of influence is growing, both in terms of the number of chips using its design as well as the kinds of products. Last year nearly 15 billion chips using its designs were sold, up from about six billion in 2010. Cars, servers and internet-of-things devices are all seen as big expansion areas for ARM chips.

Daily Tech Snippet: Friday, May 6th

• Alibaba's revenue soars, but new ventures hit profit: Alibaba Group Holding Ltd, China's biggest e-commerce company, said fourth-quarter sales rose 39 percent after its core online shopping business grew, but profit fell for the first time as it spent on ventures like food delivery. Net income excluding extraordinary items, Alibaba's preferred measure for earnings, shrank 1.4 percent to 7.6 billion yuan from the previous year, as the company continued to invest heavily in new but shakier businesses. Investors welcomed the higher-than-expected revenue, sending the firm's American Depository shares up 3.7 percent. But, not all of Alibaba's businesses looked rosy. Its online finance affiliate Ant Financial Services Group, one of founder Jack Ma's crown jewels in his e-commerce empire, recorded a net loss in the quarter. That business has spent heavily on its intense competition with WeChat Payment, one of the world's largest payments systems and owned by Alibaba arch-rival Tencent Holdings. Ant, which houses the massive Alipay online payment platform, is now valued at $60 billion and is gearing up for an IPO, despite the fact it is now losing money. Alibaba did not disclose how much Ant lost. Alibaba's revenues rose to 24.2 billion yuan ($3.7 billion) in the quarter ended March 31 from 17.4 billion yuan a year earlier. Gross merchandise volume (GMV), or the total value of goods transacted on its platforms on China retail marketplaces, rose 24 percent to 742 billion yuan. The previous quarter it had risen 22.5 percent - the slowest pace on record.

• Dorsey's Square posts bigger-than-expected loss as costs surge: Square Inc, the mobile payments company run by Twitter Inc Chief Executive Jack Dorsey, reported a bigger-than-expected quarterly loss on Thursday as costs surged, sending its shares sharply lower in after-hours trading. Slowing growth at formerly fast-growing Square Capital, which lends to small merchants, also aroused concerns. The company said Square Capital lent $153 million in the first quarter, up just 4 percent from the preceding quarter, largely due to "more challenging credit market conditions." The business acts as a middleman to offer funds to customers who can't otherwise borrow easily. Most funds are arranged by Square through third parties, who commit to buy the future receivables. "Lenders are no longer wanting to finance alternative lending," said Gil Luria, an analyst at Wedbush Securities. Square loses $2 for every $1 of hardware sales, Luria said. "The growth is coming from the wrong places." Square, which went public in November, facilitates payments between businesses and customers with a credit card reader that turns any mobile phone into a payment terminal. The company also makes point-of-sale registers and chip-enabled card readers. Square's shares were down 12.3 percent at $11.44 in after-hours trading despite several bright spots in the results. The company's net revenue jumped 51.4 percent and gross payment volume - the total dollar amount of all card payments processed by sellers - jumped 45 percent to $10.3 billion. Square also raised its annual adjusted revenue projection to $615 million-$635 million from $600 million-$620 million. But its net loss attributable to common stockholders widened to $96.8 million from $48 million in the same period a year ago as operating expenses jumped 72 percent to $207 million.

• SAP announces new partnership with Apple to expand iOS in the enterprise:  SAP announced a broad partnership with Apple today to bring iOS to SAP’s enterprise customer base. The announcement comes almost two years after Apple made a similar deal with IBM. Steve Lucas, president for SAP’s Digital Enterprise Platform says while it’s natural to see similarities between the two deals — two large enterprise companies making a deal with Apple — he says there are major differences. For starters, he says SAP is firmly an enterprise software company and it has built a cloud platform to access all of the software it has developed, whether its core ERP product, SuccessFactors or Concur. He says having that core certainly is a differentiating factor in his view. Still there are similarities too. As with IBM, SAP has been working closely with Apple to bring its profound design sense to this endeavor. The objective of this partnership is no less than to revolutionize work on the iPad and iPhone, Lucas says. It’s no secret that Apple wants a bigger piece of the enterprise market and these kinds of agreements help solidify their enterprise position and drive Apple hardware sales inside companies that were traditionally PC shops — and hence more often considered Microsoft territory. Finally, much like IBM it wouldn’t be a deal without an educational component to round it out, so SAP is also offering SAP Academy for iOS as a training ground for SAP programmers to learn to use the HANA iOS SDK. Lucas says the company is absolutely committed to this educational effort and it’s not something they will announce and go away in a few months, but a program that he sees lasting well into the future. While you might not see a natural fit between SAP and Apple, when the IBM partnership was launched in 2014, it certainly raised some eyebrows too, but by the end of last year the partnership had created 100 apps — and that number has surely increased since then. In fact, SAP is also planning on building 100 apps. The apps and the SDK are not yet available, but they say they should start to trickle out in Beta later this year. Many of the apps are in progress, according to Lucas, but they are not ready to ship yet. Apple also signed a partnership with Cisco last summer.

• Tesla Falls on Cash Concerns, Doubt About Manufacturing Goals: Tesla Motors Inc. fell Thursday after the company, aiming to dramatically boost production, withdrew its projection to generate more cash than it uses this year and said it will probably need to raise capital. Shares in the electric-car maker fell 4.9 percent to $211.71 at 1:28 p.m. New York time. The shares had surged late Wednesday and early Thursday after Tesla moved ahead by two years its target date for reaching annual production of 500,000 vehicles before sinking on skepticism about the ambitious assembly goals and concerns about cash. Tesla said in a letter to shareholders Wednesday that to meet the new production target, capital expenditures this year will probably be about $750 million more than the $1.5 billion originally planned. A capital raise of about $2 billion would dilute current owners by about 7 percent, UBS analyst Colin Langan wrote in a note.

• Netflix reveals what images hook viewers on new shows: Netflix has found that its viewers spend only 1.8 seconds considering whether to watch a show or movie that is presented to them. With so little time to make a successful pitch to potential viewers, the company has become obsessed with making it easy for members to make a quick decision about whether a show is interesting. For Netflix that means perfecting the promotional artwork — imagery that runs alongside an explanation of the show. Members spend 82 percent of their time focusing on artwork while browsing Netflix, according to the company. This week Netflix released new findings about the power of the images its presents to viewers while introducing them to shows, and what traits in an image can encourage a viewer to watch a show. Netflix finds that images with expressive facial emotion that convey the tone of the show do well. Artwork featuring recognizable or polarizing characters also succeed. Even if a show has an ensemble cast, when it comes to promotional purposes — someone needs to hog the spotlight. “While ensemble casts are fantastic for a huge billboard on the side of a highway, they are too complex at small sizes and ultimately not as effective at helping our members decide if the title is right for them on smaller screens,” explained Netflix’s Nick Nelson in the blog post. While the Netflix show “Orange Is the New Black” featured eight cast members in its Season 1 image, Netflix scaled back to a single character for seasons 2 and 3. Netflix reached these conclusions through what’s called A/B testing, in which audiences are split into groups and shown different images. Analysts then gauge how audiences respond to the different options.

Daily Tech Snippet: Friday, April 23

• Apple Services Shut Down in China in Startling About-Face: For years, there has been a limit to the success of American technology companies in China. Capture too much market share or wield too much influence, and Beijing will push back. Apple has largely been an exception to that trend. Yet the Silicon Valley company is now facing a regulatory push against its services in China that could signal its good relations in the country may be turning. Last week, Apple’s iBooks Store and iTunes Movies were shut down in China, just six months after they were started there. Initially, Apple apparently had the government’s approval to introduce the services. But then a regulator, the State Administration of Press, Publication, Radio, Film and Television, asserted its authority and demanded the closings, according to two people who spoke on the condition of anonymity.The about-face is startling, given Apple’s record in China. Unlike many other American tech companies, Apple has succeeded in introducing several new products — like its mobile payments system Apple Pay — in China recently. New resistance from the Chinese government to that expansion could potentially hurt the Cupertino, Calif., company. To a degree more than many tech companies, Apple relies on the smooth operation of its software — including its App Store and services like iTunes, which are tightly integrated with the iPhone and iPad — to keep customers coming back to its devices. Apple, which is facing a slowdown in sales of its iPhones, is also reliant on China for growth, so further moves by Beijing to curtail services could crimp sales. The company counts China as its second-largest market after the United States. Its China numbers will be dissected on Tuesday, when it reports quarterly earnings. China’s pushback against Apple shows that the company may finally be vulnerable to the heightened scrutiny that other American tech companies have faced in recent years. That scrutiny was spurred by revelations from the former United States National Security Agency contractor Edward J. Snowden in 2013 of the use of American companies to conduct cyberespionage for Washington. China has sweeping goals in its move against Apple, said Daniel H. Rosen, founding partner of Rhodium Group, a New-York based advisory firm specializing in the Chinese economy. “They are interested in protecting the content that the Chinese people see, policing its national security and favoring indigenous giants such as Huawei, Alibaba and Tencent,” Mr. Rosen said. In this new era, he added, China “is strongly disinclined to accept the dominance of foreign players on the Internet, not least those from the United States.” Sales in China for those companies, including Cisco, IBM, Microsoft and Qualcomm, have slid as government oversight has increased. Some have grappled with raids, investigations and fines. Some have also been pressured to sell off holdings, hand over technology and work with local partners to expand their China businesses. Though Apple is one of the eight, it has had a much easier time - so far.

• Dell’s SecureWorks stumbles in first tech IPO of the year: It has been a dry year for tech IPOs. Up until today’s SecureWorks offering, there had been zero in the U.S. in 2016. Zero. This compares to seven in the same period last year and 24 in that timeframe the year before. So tech investors and late-stage private companies were watching SecureWorks closely, to see if the tech IPO window would reopen. It is one of the few indications we have right now to assess public investor appetite for tech IPOs. Unfortunately, SecureWorks faltered.The unicorn-sized security company split from Dell, although the computer manufacturer remains its majority owner. SecureWorks raised $112 million in the offering, after pricing its IPO at $14 per share. But the company was expecting the initial price to be between $15.50-$17.50. SecureWorks closed the day at $13.88, beneath the $14 IPO price. The offering certainly did not assuage concerns about the current environment for tech IPOs.

• Women’s coding school Hackbright Academy acquired for $18 million: Hackbright Academy, the San Francisco-based coding school for women, has been acquired by Capella Education for $18 million as the publicly traded education company looks to expand its efforts to train more women in technical careers.Hackbright, which was started in 2012, has graduated 364 women from its 12-week full-time fellowship programs. Another 279 women have graduated from its part-time program. Capella, meanwhile, is based in Minneapolis and specializes in degree programs for working adults, three quarters of whom are women. The deal closed Friday, the companies said, with all of Hackbright’s 25 employees joining Capella. Hackbright CEO Sharon Wienbar will continue to lead the team, reporting to Gilligan. Hackbright will continue to focus its efforts on in-person trainings exclusively for women, Wienbar said.

• In Asia, Netflix trips on regulation, content, and competition: Months after its global rollout, Netflix Inc (NFLX.O) is facing problems in several major Asian markets as it struggles to provide enough strong content to attract consumers amid tough local competition, and also faces many regulatory hurdles, underlining concerns about disappointing subscriber numbers reported this week. From complaints that programming libraries offered in many countries are far smaller than in the United States to delays in offering its signature "House of Cards" series in some markets due to rights issues, the U.S. video streaming giant's January launch into 130 new markets worldwide, including a slew in Asia, has been bumpy. When it launched in Indonesia in January, for example, Netflix ran afoul of the film censorship board for carrying content deemed inappropriately violent or sexual. The communications ministry also demanded that Netflix set up a local office and pay Indonesian taxes.Netflix is still available in Indonesia via wifi connections and other carriers.In South Korea, where local content is popular and consumers have numerous streaming options, the Netflix site offers fewer than 20 local TV shows or movies."Korean Netflix's library in terms of content is pretty thin," said Jung Dong-yoon, a 29-year-old Seoul office worker and subscriber since January.Netflix had an explosive start in Australia, counting nearly 3 million Australians as viewers, OUT OF A population of 24 million, within nine months of its March 2015 launch. But growth has slowed just as dramatically, from a 55 percent leap between April and May to a rise of 4 percent between September and October, according to Roy Morgan research.

• Tipping Is Coming to Uber, and It’s Going to Be Awkward: Uber's mega settlement of as much as $100 million helps it solve a major legal liability around workforce classification, but another piece of the agreement could make for some uncomfortable situations in the near future. As part of the settlement with drivers in California and Massachusetts, Uber has agreed to notify customers more clearly that tips are not included in fares and give tacit approval for optional gratuity. Drivers can now solicit cash tips by asking passengers or posting signs in their vehicles. Shannon Liss-Riordan, a lawyer representing the drivers, said riders should start seeing gratuities as a major part of an Uber driver's income. In other words, more like a cabbie. “I believe that, with this information, many riders will begin tipping their drivers, which will increase drivers’ pay substantially,” she said in a statement to the court. In the past, Uber tried to discourage tipping. During the company’s early days, its website said in 2011 that tips were included. Drivers complained that Uber was making its fares seem lower than they really were by rolling in a tip. In any case, they argued that Uber shouldn’t take a cut of the portion of the fare that was classified as a tip. The company eventually changed the way it described the cost of the ride. It currently says there’s no need to tip.

Daily Tech Snippet: Tuesday, April 19

• Netflix’s Forecast for Growth Disappoints Wall Street: On Monday, Netflix announced that it expected to add just two million members outside the United States in the second quarter this year — less than the 3.5 million analysts had expected. The figure also represents a decrease from the 2.4 million members the streaming service added internationally in the same period the previous year. That cloudy forecast sent shares down more than 10 percent in after-hours trading, as Netflix has tied its future to its bold global push. The company has been pouring resources into its expanding its international footprint, telling investors that it would run at break-even profitability until the end of 2016 as it continued to roll out the service abroad and increased its investment in content. That uncertainty over the competitive landscape, as well as fears about growth prospects both inside and outside the United States, overshadowed the generally positive first-quarter financial results that Netflix announced on Monday. The company beat expectations for profit and revenue growth during the first quarter. Profits totaled $28 million, up 16 percent from the same period last year, and total revenues increased 24 percent to nearly $2 billion. Netflix added a record 6.7 million total streaming members during the first quarter, bringing its total to 81.5 million, with about 42 percent outside the United States. Netflix had forecast that it would reach nearly 80.9 million total paid members in the quarter. In the United States, Netflix surpassed its forecasts for subscriber growth during a period in which price increases went into effect for some customers. The company added 2.23 million subscribers in America during the quarter, bringing its paid membership in the country to 45.7 million. Outside the United States, Netflix also beat its expectations for growth, adding 4.5 million international streaming subscribers. The company said it was planning to spend more than $6 billion on programming in 2017, up from $5 billion this year.

• IBM reports worst revenue in 14 years, shares slide: IBM on Monday reported a 21 percent decline in net profit from continuing operations, to $2.3 billion in the first quarter that ended March 31. Its operating earnings per share fell 19 percent, to $2.35 a share, though that was above the average estimate of Wall Street analysts of $2.09 a share, as complied by Thomson Reuters. The company’s first-quarter revenue declined 5 percent, to $18.7 billion. But that was ahead of analysts’ consensus forecast of $18.29 billion. After adjusting for the impact of currency translation, revenue was down 2 percent. IBM shares fell about 5 percent in after-hours trading, a retreat from a recent uptrend for the stock. In the first three months of this year, IBM’s stock price had increased 17 percent. IBM delivered a quarterly performance that shows the steady headway it is making in new businesses led by cloud computing and data-analysis software, like its Watson artificial intelligence technology. But the company’s transformation remains very much a work in progress. The erosion of some of its hardware and software products continues to be a drag on growth and profits, overshadowing the gains in the new fields.

• LinkedIn built a new app for college kids - from which Lynda is missing: In an effort to lure more young people to its professional network, LinkedIn built a standalone app specifically for college students. The app helps students quickly create a profile (if they don’t already have one), find career paths and job postings that relate to their major, and connect with alumni who studied the same topic. The app is appropriately named “LinkedIn Students.” LinkedIn’s challenge is that its product is most useful once you already have a job. Or at least know a bunch of other people who do. Oftentimes, college students have neither, which makes the idea of creating a profile seem overwhelming, said Ada Yu, a product manager at LinkedIn. So LinkedIn is trying to appeal to young people with an app that’s less cumbersome than its flagship app. LinkedIn users can already do most of what the college app offers in LinkedIn’s main app; it’s just more simplified now. Two things worth noting: Lynda.com, the online library of classes LinkedIn bought for $1.5 billion last year, is noticeably missing from the app. It seems likely that LinkedIn will add online classes to the app at some point. LinkedIn can make money from this app. Once students scroll past the daily job and alumni recommendations, they get to an “extra credit” section which will include some branded content. LinkedIn will launch with branded content from J.P. Morgan. What LinkedIn will not do, however, is recommend career paths or job openings in exchange for cash. All suggested jobs will be based on LinkedIn’s algorithm, Yu said.

• China's Crowded Smartphone Market Heads for an Epic Shakeout: Smartphone sales in China exploded earlier this decade as incomes rose, prices for chips and displays plummeted, and carriers offered arrays of discounts. Shelves were flooded with hundreds of brands—from national heavyweights Huawei, Lenovo and Xiaomi to the smaller Dakele, Tecno Mobile and Gionee. Shipments more than doubled in each of the three years ending 2012, according to researcher Canalys. Xiaomi's valuation rocketed to $45 billion, and the phone maker started selling devices in India, the world’s fastest-growing major economy. Lenovo Group Ltd. spent $2.91 billion to acquire Motorola Mobility to help make it "a global player." In 2011, only four of the top 10 vendors in China were domestic. Last year, there were eight.  Now that wave has crested. Smartphones no longer are novelties in China, and most domestic brands target the mid- and low-price ranges, where buyers don't upgrade as frequently as those for high-end Apple and Samsung phones. China's herd of 300 phone makers may be halved in 12 months by competition, a sales plateau and economic growth that's the slowest in a quarter-century, according to executives and analysts. "The mobile-phone industry changed more quickly and brutally than expected," Dakele Chief Executive Officer Ding Xiuhong said on his Weibo messaging account. "As a startup, we couldn’t find more strategies and methods to break through."

• Don’t want your startup to fail? Arianna Huffington tells founders to go to bed: Sleep deprivation is the undoing of startup founders, according to Arianna Huffington. “There is this kind of founder myth that if you are a founder you can’t afford to get enough sleep,” she told me over the phone while catching a plane back to New York. “The truth is three-quarters of startups fail and if founders got more sleep they’d have a better chance of succeeding.” Wanting to get more sleep isn’t the problem for most of us. It’s fitting in the recommended seven to 9 hours of sleep with work, eating, exercise, relationships and a social life – and on top of that founders need to spend a lot of time growing their fledgling company. The advice is obvious – no caffeine after 2 pm and keep your bedroom dark and quiet – but like exercise and eating right, a lot of us probably don’t do it anyway. And sacrifices will be made – no tech in the bedroom and you might not get through all of those critically acclaimed Netflix dramas – Arianna tells me she’s only seen one episode of House of Cards because sleep is the priority. But then, maybe you’ll think clearly and your startup won’t fail.

• Media Websites Battle Faltering Ad Revenue and Traffic:  This month, Mashable, a site that had just raised $15 million, laid off 30 people. Salon, a web publishing pioneer, announced a new round of budget cuts and layoffs. And BuzzFeed, which has been held up as a success story, was forced to bat back questions about its revenue — but not before founders at other start-up media companies received calls from anxious investors. “It is a very dangerous time,” said Om Malik, an investor at True Ventures whose tech news site, Gigaom, collapsed suddenly in 2015, portending the flurry of contractions. The trouble, the publishers say, is twofold. The web advertising business, always unpredictable, became more treacherous. And website traffic plateaued at many large sites, in some cases falling — a new and troubling experience after a decade of exuberant growth. Online publishers have faced numerous financial challenges in recent years, including automated advertising and ad-blocking tools. But now, there is a realization that something more profound has happened: The transition from an Internet of websites to an Internet of mobile apps and social platforms, and Facebook in particular, is no longer coming — it is here. It is a systemic change that is leaving many publishers unsure of how they will make money. “With each turn of the screw, people began to realize, viscerally, that this is what it feels like to not be in control of your destiny,” said Scott Rosenberg, a co-founder of Salon who left the company in 2007. Audiences drove the change, preferring to refresh their social feeds and apps instead of visiting website home pages. As social networks grew, visits to websites in some ways became unnecessary detours, leading to the weakened traffic numbers for news sites. Sales staffs at media companies struggled to explain to clients why they should buy ads for a fragmented audience rather than go to robust social networks instead.

Daily Tech Snippet: Wednesday, January 20

• Why an Ex-Google Coder Makes Twice as Much Freelancing: With a talent war raging, companies from Airbnb to Pfizer are paying top dollar for the services of independent programmers. James Knight recently made an unorthodox career move for a 27-year-old coder: quitting a well-paid gig writing software for Google to go freelance. No more catered lunches, gold-plated benefits or million-dollar views from the search giant’s Manhattan office. Knight is willing to sacrifice those perks because as an independent he’s pulling down about twice as much as he did at Google. Plus, he has more freedom. In March, Knight and his wife plan to travel to Spain and hopscotch across Europe—all the while writing code for a dating app and a self-portrait app, among others. "I’d rather control my own destiny and take on the risk and forgo the benefits of nap pods and food," Knight says. Amid an accelerating war for tech talent, big companies and startups alike are paying top dollar—as much as $1,000 a hour, according to a person who gets coders gigs—for freelancers with the right combination of skills. While companies still recruit many of the best minds, they're turning to independent software developers to get a stalled project moving or to gain a competitive edge. In some cases, the right person can be the difference between a failed and successful product. Last spring, Aaron Rubin hired a freelance coder through recruiter Toptal for about four weeks to help get ShipHero, his cloud-based logistics startup, off the ground.  "To find someone that talented in New York in three days was never going to happen," Rubin says. "Every talented engineer I know has a job.

• Netflix global push grabs more customers than expected; shares jump 7%. Netflix said revenue rose 22.8 percent to $1.82 billion in the December quarter.Netflix's aggressive push into international markets won more customers than the video streaming service and its investors expected last quarter, sending its shares surging 7 percent. The dominant online video company said on Tuesday it had 74.8 million subscribers at the end of December and forecast 6.1 million more through March, fueled by its expansion this month into virtually every country except China, where it is exploring ways to launch its service. Shares of Netflix rose 7 percent to $115.42 in after-hours trading.New customers overseas are countering slowing growth for Netflix in the United States, the company's biggest market. It added 1.56 million U.S. subscribers in the fourth quarter, below the 1.65 million it forecast, and less than 1.9 million a year earlier. 

• IBM forecasts weak earnings for 2016; shares slide:  Revenue fell 8.5% to $22.06 billion. International Business Machines Corp forecast weak earnings for this year after reporting an 8.5 percent fall in fourth-quarter revenue as a strong dollar and tepid IT spending weigh on Big Blue's results. Shares of the company, which receives more than half its revenue from markets outside the United States, fell 3 percent in extended trading on Tuesday. IBM has been shifting away from hardware by selling low-margin businesses such as low-end servers and semiconductors to focus on high-growth areas such as security software and data analytics, besides cloud-based services. Yet the new businesses have so far failed to make up for revenue lost to divestitures. IBM's fourth-quarter revenue fell to $22.06 billion in the quarter ended Dec. Revenue from "strategic imperatives", which include cloud and mobile computing, data analytics, social and security software, rose about 10 percent in the fourth quarter. Net income fell to $4.46 billion, or $4.59 per share, from $5.48 billion, or $5.51 per share, a year earlier. Up to Tuesday's close, IBM's shares had fallen 18.5 percent in the past 12 months.

• AMD revenue forecast misses market estimates:  Revenue fell 22.7 percent to $958 million. Advanced Micro Devices forecast first-quarter revenue below analysts' estimates, due to lower demand for its graphic chips used in consoles and an economic slowdown in China. Shares of the company, which is in the process of selling some of its assets to cut costs, fell 7.7 percent to $1.80 in extended trading. AMD has been shifting to gaming consoles and low-power servers, but progress has lagged Wall Street expectations due to intense competition from Intel Corp and Nvidia Corp. China accounted for 42.2 percent of AMD's revenue in 2014. Revenue fell 22.7 percent to $958 million but still came above analysts' expectation of $954.7 million. Up to Tuesday's close, AMD's shares had fallen 13 percent in the past 12 months. The company's net loss narrowed to $102 million, or 13 cents per share, in the fourth quarter ended Dec. 26, from $364 million, or 47 cents per share, a year earlier.

• Twitter Stock Hits New Low Amid Struggles to Keep Website Up: Twitter Inc. shares slumped to a new all-time low after the company’s website suffered disruptions, shutting out millions of users and underscoring concerns about the company’s efforts to boost its audience and sales. Services including search and the news stream were unavailable for more than five hours after the company’s software engineers made changes to the service that lets people post and share 140-character status updates. The stock fell 7 percent to $16.69 at the close on Tuesday, well below the price of $26 at its November 2013 initial public offering. Users of Twitter’s mobile applications and website experienced a string of outages since Friday, as the company tweaks its features and services to improve the user experience and address a slowdown in growth. The glitches come at an inconvenient time for the company, which has to prove its value to any new users and keep existing ones from leaving in frustration. “The issue was related to an internal code change,” Twitter said on its website. “We reverted the change, which fixed the issue.” Services including search and the news stream were disrupted, according to the company’s performance status website. The top trending hashtag for about the past two hours was #twitterdown. Prior to the latest round of issues, Twitter’s last outage was about two months ago. Twitter’s stock has tumbled more than 28 percent in January, following a 35 percent decline in 2015.

Daily Tech Snippet: Thursday, January 14

• Parallels Between Netflix and Amazon: Netflix has grown substantially over the last few years, now claiming more than 70 million subscribers who pay about $8 to $10 a month for access to a large library of movies and TV shows. Last year the streaming service’s stock was the best performing of the Standard & Poor’s 500-stock index, rising 140 percent. And its prospects keep looking brighter: Last week, Reed Hastings, Netflix’s goateed chief executive, announced he would make his movies and TV shows instantly available to almost every country in the world (the big exception, for now, is China). The move nearly doubled Netflix’s potential market — the service is now accessible to more than 540 million households worldwide with broadband Internet access. On paper, Mr. Hastings’s plan to take on the traditional TV industry has long sounded slightly nutty, as delusional as Jeff Bezos’s strategy at Amazon to overrun retailing once seemed. Netflix’s plan is certainly high risk — it is spending billions to create and license content, it is fighting determined media incumbents across the globe, and it owns none of the pipes leading into people’s homes. (Among Netflix’s many competitors is Amazon itself, which has its own growing and well-regarded original-content division) A capacity for surprise is the first and most obvious similarity between Netflix and Amazon. There are lots of others.  Like Amazon, Netflix is amassing a cache of intelligence on what customers want, and it’s using that data to create content that appeals to a wide range of demographics globally. And finally, Netflix, like Amazon, is a flywheel that keeps spinning faster: As it gets more subscribers, it gets more data and more money to fund more content, which in turn helps it bring in more customers, and on and on, ever faster. Netflix barely ekes out a profit now, but the bulls say that as the flywheel spins, it will eventually begin earning enormous sums.

• GoPro Issues Weak Q4 Revenue Estimates, Plans to Cut 7 Percent of Workforce - Stock down 20%: GoPro had a hard time selling cameras in the fourth quarter last year, and there are major layoffs planned at the camera maker and action sports media company. Wall Street did not take the news well. After a brief suspension in trading, the company’s stock is down more than 20 percent in after-hours trading. A release from the company says it anticipated $435 million in Q4 revenue and $1.6 billion in revenue for the 2015 calendar year, coming in way below what was expected. As a result, the company plans to cut 7 percent of its workforce. Additionally, the company’s top media exec, Zander Lurie, is leaving his job and moving onto the GoPro board. In email obtained by Re/code that CEO Nick Woodman sent to GoPro employees, Woodman places the blame for the layoffs on the “launch and pricing” of GoPro’s $399 Hero 4 Session camera last year: "Today’s announcement reflects the issues we faced in 2015, largely related to our launch and pricing of HERO4 Session. While we clearly made a mistake pricing Session at $399 (more specifically I made the mistake, it was my decision), I’m proud of how we responded. We recognized the problem, price adjusted to $299 … recognized that wasn’t enough and price adjusted again to $199 which positioned Session as the best entry-level product we’ve ever made." GoPro’s stock has dropped precipitously over the last year as it has struggled to sell more cameras and develop its media business.

• The big fund manager mistake of 2015? Being de-FANGed:  Missing out on the hot technology stocks known as the "FANG" group last year came back to bite some well-known mutual funds. Funds that avoided Facebook, Amazon.com, Netflix and Google - now Alphabet – dramatically underperformed peers that loaded up with the fast-rising tech stocks, according to a review by Thomson Reuters’ Lipper unit. In fact, despite a volatile year in which active managers faced shifting trends in many sectors, it seems that simply choosing to overweight the FANG group was the path to beating the market. Without them, the S&P 500 Index would have declined 2.7 percent last year; instead it fell 0.7 percent, according to Goldman Sachs Global Investment Research. For the year, among 228 funds reviewed by Lipper, those that had less than 5 percent exposure to the FANG group fell 1.3 percent on average; funds with more than 10 percent exposure rose 6.4 percent. Shares in Amazon and Netflix more than doubled last year as both added more content and subscribers to their competing video-on-demand-services. Facebook rose 34 percent as the social media giant continued to increase mobile ad revenue, while Alphabet also increased revenue and showed more cost discipline, boosting its shares 47 percent. Of the four, all but Amazon have outperformed the S&P 500 so far in 2016 through Tuesday, although it is far too soon to say if the group will repeat its performance for investors in 2016.

Daily Tech Snippet: Thursday, January 7

• Facebook’s Oculus Says It Will Charge $599 for the Rift: After months of teasing the introduction of its Oculus Rift virtual reality goggles, the company said on Wednesday that it had opened orders for the system, which includes a headset and controller devices, with a price of $599. That’s without a computer included — you’ll need a fast one that will probably cost around $1,000. The device begins shipping in March. Oculus also said that in February, it would open orders for a bundle, which includes the Rift headgear system and a computer that is certified to work with Oculus, for $1,500. Oculus is just one of many companies preparing to offer virtual reality devices this year. HTC, the Taiwanese manufacturer, worked with the software distribution company Valve to develop the virtual reality gadget Vive that will be released in April. Similar to Oculus, the Vive requires connecting to a powerful computer, meaning the pricing should be similarly high. The companies have not announced the price yet. And Samsung Electronics teamed with Oculus last year to offer an entry-level virtual reality system, the Gear VR. That device, at $100, requires inserting a Samsung Galaxy smartphone into the headgear because it relies on the smartphone’s screen for video and its computing brains for running apps and games.

• Apple’s App Store made $1.1 billion over the holidays: Apple said Wednesday that customers bought $1.1 billion worth of apps and in-app purchases in the two weeks between Dec. 20 and Jan. 3 alone. They also set a new single-day spending record, dropping $144 million on apps on New Year's Day. In a release, Apple said that this broke a record that had been set just a week before, on Christmas Day. Overall, Apple said that customers spent $20 billion on App Store purchases in 2015. Most popular apps included games such as Minecraft: Pocket Edition, Trivia Crack and Heads Up!, as well as messaging apps such as Facebook Messenger, WeChat and Snapchat. In terms of top-grossers, Apple also noted that gaming and subscription apps did the best this year, mentioning Clash of Clans, Monster Strike, Game of War - Fire Age and Fantasy Westward Journey as well as Netflix, Hulu and Match. The firm was also quick to note that the App Store has made developers about $40 billion over the lifetime of the App Store, with roughly one-third of that figure -- about $13 billion -- coming from 2015 alone. Last year, the company said that it had generated $10 billion in revenue for developers in 2014.

• Netflix Goes Live in 130 New Countries Including India - But China Skipped; Shares Advance: Netflix Inc. began selling its streaming service in India and more than 100 other countries, closing in on its goal of becoming the first global online television service. The stock logged its biggest gain since July, surging 9.3 percent. Netflix went live in 130 new countries, including Russia, Poland and Singapore, during his presentation. Adding India, most of the rest of Asia and other countries around the world marks a major step for Netflix. But China, the world’s most populous country, remains a gap. The company faces challenges in China, where a local partnership is essential given government controls over licensing for online content, and many potential allies already have competing businesses. Alibaba recently acquired full control of Youku Tudou, one of the largest video streaming services in the country, while Baidu and Tencent own popular video services.

• Netflix launches in India; basic monthly subscription at Rs 500:  Netflix is offering three packages for Indian consumers starting with a basic plan that would cost Rs 500 a month and allow users to access all content on any one device at a time with standard definition quality. The other two higher subscription plans allows users to watch content with HD or ultra HD quality and a choice of 2-4 devices at the same time. The topmost package is priced at Rs 800 a month. In contrast, domestic and international peers in India like Hungama Play, BoxTV of Times Group, HOOQ and Singapore-based Spuul charge Rs 200-300 a month. HOOQ, which was launched globally in a three-party JV by Sony Pictures, SingTel and Warner Brothers a year ago, also offers a bundled deal with Airtel’s Wynk Movies App. A cable TV service, on the other hand, costs around Rs 250-300 a month for a bouquet of a basic set of channels in the country. Where Netflix can differentiate is its huge catalogue, especially English language entertainment content. It is currently offering a one month free look period. However, this comes with a catch. Besides bandwidth issue and cost of watching entertainment content online another hurdle to wider adoption of Netflix to begin with could be its insistence on credit card details even if one chooses to opt for a one month tasting period.

Daily Tech Snippet: Friday, October 16

• Netflix falls 9% as weak subscriber additions at odds with lofty valuation: Investors questioned Netflix Inc's premium valuation after the video-streaming service reported U.S. subscriber additions below its own expectations, a sign that competition from the likes of Hulu is intensifying. Netflix shares fell more than 9 percent to $100.11 in early trading on Thursday. While Netflix blamed the disappointing numbers on the mandated transition to chip-based debit and credit cards, some analysts said the reason seemed unconvincing since these cards have been around for a while. "The Netflix excuse is laughable," said Michael Pachter, an analyst at Wedbush Securities, who is rated four stars on a scale of five on StarMine for the accuracy of earnings estimates of Netflix. "Credit cards expire all the time, and people know how to deal with it. Netflix is seeing declining demand, and churn is a part of that," he said. Netflix doesn't disclose churn or subscriber attrition numbers. The video-streaming service provider had forecast a net addition of 1.15 million subscribers in its home market in the quarter, but ended up with just 880,000. Netflix's stock has more than doubled this year. It trades at 356.6 times forward 12 month earnings, versus a peer median of 12.9.

• Tesla Adds High-Speed Autonomous Driving to Its Bag of Tricks: It is not every day you get to open a door and step into the future. But to pull the handle on a newly updated Tesla Model S this week and slide into the driver’s seat was to catch a glimpse of the auto industry’s plans to soon let cars drive us, rather than the other way around. The updated Tesla, an already high-tech electric car that starts at about $75,000, was equipped with what the company calls Autopilot — a semi-autonomous feature that allows hands-free, pedal-free driving on the highway under certain conditions. The car will even change lanes autonomously at the driver’s request (by hitting the turn signal) and uses sensors to scan the road in all directions and adjust the throttle, steering and brakes. It is the first time that a production vehicle available to consumers will have such advanced self-driving capabilities. Or more to the point, the first time they will be unleashed for driving 70 miles per hour along twisty, though clearly marked, highways for long stretches. (Other manufacturers like Volvo and Mercedes-Benz recently introduced their own semiautonomous features, but limit the functions to lower speeds or require the driver to constantly touch the wheel.) And it’s perfectly legal. Among the states, only New York has any law prohibiting hands-free driving.

• Yahoo Mail Eliminates Passwords as Part of a Major Redesign: Seven months after replacing traditional passwords with single-use SMS codes, Yahoo is taking the next step toward blowing up the password altogether. The company today announced Yahoo Account Key, which links your account to a mobile device and then asks you to approve new logins through push notifications. It’s part of a broad redesign of Yahoo Mail designed to make the service faster and easier to search, and also lets you use the app with accounts from Outlook, Hotmail and AOL for the first time. (No Gmail, though, at least not yet)

• Twitter Courts Direct-Response Advertisers With New Reporting Tools (Claims early tests show Promoted Tweets lift conversions) Twitter today unveiled an analytics feature called Conversion Lift that lets marketers regularly measure how Promoted Tweets perform in terms of conversions, which entail clicks, app installs or sign-ups for services. Interestingly, the feature also susses out if the ads persuaded someone to switch phone carriers, something T-Mobile's social team is likely particularly interested in. To determine how effective an ad is, Conversion Lift splits a marketer's target audience into two groups: people who saw a news feed-style ad and those who didn't. The reporting then compares the conversion rates of both groups, including whether the action took place on desktop or mobile. Twitter said the tests, utilizing Conversion Lift, revealed that people who see Promoted Tweets are 1.4 times more likely to interact with a brand than those who don't see an ad. What's more, it said people who visit a brand's website after seeing a Promoted Tweet are 3.2 times more likely to convert than those who visit the website without seeing one. Based on the data, Twitter then recommends ways for advertisers to more effectively target. For example, Twitter may advise an athletic brand that initially only zeroed in on sports enthusiasts to also target casual sports fans.  The Conversion Lift represents Twitter's latest step toward convincing direct-response advertisers that it's a good place to spend money. Late last month, Twitter rolled out its 'Buy' button to all retailers and added video to its conversion-driving app installs in July.

• Google Express Loses Another Exec as Wildfire Co-Founders Exit: Victoria Ransom and Alain Chuard, the couple behind social ad startup Wildfire, are leaving Google three years and three months after the search engine scooped up their company. Talented people leave, join and stay at Google all the time. But Ransom’s departure is noteworthy because hers marks the third major exec exit from Google’s commerce arm in the past year. Ransom took over product duties at Google Shopping Express, its delivery service, after its director, Tom Fallows, decamped for Uber last November. Their boss, Sameer Samat, left for Jawbone in May. Then, in August, Google reshuffled the deck again, appointing its business development lead, Brian Elliott, as general manager for the entire Express operation, which has since expanded service across the Midwest as it aims to compete with Amazon and other delivery companies. The married couple arrived at Google in 2012 to some fanfare with the purchase of Wildfire, a startup that helped marketers manage spending on social platforms. It came amid Google’s feverish push to compete with Facebook on social. (The price tag was between $250 million and $350 million, depending on whom you asked.)

• Dropbox Announces Paper, A Google Docs Competitor: Dropbox is going head-to-head against a very popular web app, Google Docs. Dropbox Paper is a collaborative document editing platform in your browser. It lets you edit a document in real time with your Dropbox contacts. Here’s how it works. Paper users can create a document and type text right away. Compared to Google Docs or Quip, it has very few rich-text editing features. If you want to format your document, you’ll have to use another word-processing app. In some ways, this is reminiscent of Etherpad. What if you want to add images and videos? You can browse your Dropbox and add a Dropbox link directly in the document. Paper will automatically change these links into images and videos. It also does the same with other web content, such as YouTube videos, SoundCloud songs and more. You can write todo lists, @mention people in the document to notify them when you need someone else’s feedback and also leave comments next to a specific paragraph. I called Paper a Google Docs competitor, even though it seems quite different with the smart embeds and mostly plain text approach. It looks like a white board more than a document creation platform. But then again, many Google Docs users already use the service to quickly draft something. So it’s unclear whether Google Docs users will switch to Paper to do something they can already do with Google Docs without the nice embeds. Paper isn’t available just yet. You have to sign up to a waiting list first.

• Music-streaming site Deezer files for $345M Paris IPO: Deezer SA is seeking at least 300 million euros ($343 million) in a Paris share sale, valuing the music-streaming site at as much as 1.1 billion euros as it tackles Spotify Ltd.’s bigger and better-known service and Apple Inc.’s more recent products. The initial public offering would value the French company at 900 million euros to 1.1 billion euros. Started in 2007 by Marhely, who quit school at 16 to work as a developer for Internet startups, Deezer had 6.3 million subscribers at the end of June, according to the IPO filing. The company, whose largest shareholders also include Leonard Blavatnik’s Access Industries, is smaller than Swedish rival Spotify, which has more than 20 million paying subscribers and was said to be valued at $8.5 billion in its most recent financing round.  As the competition in music streaming intensifies, companies are branching out into events and merchandising to make their services more appealing to consumers and artists. Last week, Pandora Media Inc., the world’s leading online radio service, paid $450 million for Ticketfly, a ticketing service. Deezer said Thursday it will partner with BandPage Inc. to include concert listings in artist profiles and alert fans to upcoming offers.

Daily Tech Snippet: Friday, October 9

• Facebook to Test Emoji as Reaction Icons: Despite the billions of “likes” bestowed on Facebook posts every month, something has been missing: an option to express a different emotion. On Thursday, Facebook announced it will begin testing six new emotional reactions that you can convey with a simple emoji, similar to the thumbs-up “like” icon that the social networking service has made so famous. The six new emoji depict various expressions, from an open mouth to express surprise to a scowling red face for anger. The other four emotions are love, laughter, sadness and a supportive cheer. The new reaction icons will be available to most Facebook users in Spain and Ireland by the end of this week. Adam Mosseri, who oversees Facebook’s news feed, said the company would evaluate how people in those two countries use the new buttons and refine them, before expanding the rollout to the company’s 1.5 billion users worldwide later this year.

• Facing China Slowdown, Alibaba and JD Find Solace in Russia: Russia’s plunging currency hasn’t weened consumers off foreign goods. Instead, cash-strapped shoppers are turning to online retailers for imported smartphones, jewelry and clothes, giving an unexpected boost to Chinese e-commerce giants Alibaba Group Holding Ltd. and JD.com Inc. Alibaba’s AliExpress site posted a 40 percent increase in Russian visitors to 22 million in July compared with a year earlier, according to researcher TNS. JD.com, which gets more than half its sales from electronics and home appliances, started its first international site in June in Russia, exclusively offering devices such as Xiaomi Corp. smartphones for about $214. That’s less than half of what an IPhone or Samsung Electronics Co. model with similar technical specifications costs locally. Millions of Russians are sinking into poverty as the collapse in crude prices drags down the economy of the world’s biggest energy exporter, sends the ruble into a tailspin and cuts government revenue. In August, wages fell 9.8 percent in real terms and Russians now face significantly lower disposable income than a year ago. While the economy may be in recession, Russians are embracing deliveries from China. Some 80 million people go online in Russia, making it Europe’s largest Internet market by users, according to East-West Digital News. However, the number of Web shoppers is still about a third of that, compared with 70 percent to 90 percent in the U.S. and western Europe.

• Netflix is raising its prices again. Netflix announced Thursday that it will raise its prices again, this time by $1 to $9.99 a month, giving the streaming video service more money to develop original content. The price increase will take effect on Nov. 11 for new customers. Existing customers will continue to pay the current rate, $8.99 a month, until October 2016. Longtime customers who still pay $7.99 a month will hold onto that rate until at least May 2016. The change may reflect that it is getting more expensive for Netflix and other video distributors to secure deals for television and movie content. In August, Netflix announced it would not renew a deal with cable network Epix, costing U.S. subscribers access to some high-profile movies including "The Hunger Games: Catching Fire," "World War Z" and "Transformers: Age of Extinction." Rival Hulu quickly swooped in to make a deal of its own with Epix. The price hike will allow the company to offer more original content, said company spokeswoman Anne Marie Squeo. This year alone, Netflix introduced more than two dozen new series or films, including “Narcos,” a popular crime drama focusing on the life of Pablo Escobar and his Medellin drug cartel.

• Microsoft’s Mission to Reignite PC Sector May Be Taking Hold: Shipments of personal computers fell nearly 11 percent last quarter, to the shock of almost no one. Sales have been declining for so long — 14 consecutive quarters — that it is becoming harder to remember a time when PCs ruled the tech world. Yet despite all that movement — or maybe because of it — something curious has emerged in recent months: optimism. “Initiatives like Surface and Surface Book have helped the industry wake up and say, ‘We’ve got to make the industry cool and sexy again,’ ” said Frank Azor, executive director and general manager of Dell’s XPS line of PCs. The stated reason that Microsoft got into the PC hardware business three years ago, with the original Surface, was not to put PC companies out of business. The company said the goal was to better illustrate the capabilities of its software, providing devices that would inspire PC makers to be more innovative. Analysts and industry executives say the strategy may be starting to work. Dell, which still sells millions of PCs, announced on Thursday several new machines that run Windows 10, a new Microsoft operating system. One of them, the XPS 12, is similar to Microsoft’s Surface Book, a “two-in-one” device that combines the keyboard of a traditional laptop with a touch-sensing screen that can be detached for use as a tablet. The Microsoft event on Tuesday, where the Surface Book was introduced, generated the kind of buzz from the tech press that’s normally reserved for an Apple event. Apple itself generated discussion last month about whether it has begun to imitate Microsoft by announcing a new big-screen tablet with a stylus, the iPad Pro. The Surface has been available with a big screen and a stylus for some time.  It remains to be seen whether these efforts will result in more sales. Microsoft has seen terrific growth in its Surface business, which has jumped to $3.6 billion in annual sales from nothing three years ago. But most other big PC makers have not been able to get customers to spend on PCs as they once did. PC owners are holding on to their machines longer, making do with systems that are good enough for their needs. At the same time, they are relying on mobile devices for more of their computing tasks. On Thursday, IDC, the technology research firm, said that global PC shipments declined 10.8 percent in the third quarter from the same period a year ago, slightly worse than the research firm had expected. (Another research firm, Gartner, had pegged the decline at 7.7 percent.)

• Amazon launches platform to build apps for 'Internet of Things': Amazon.com's cloud business, Amazon Web Services, has launched a service to help customers build applications to connect devices through the cloud, the so-called "Internet of Things". The service, called "AWS IoT", will allow factory floors, vehicles, health care systems, household appliances among other "things" to connect through cloud services, the company said on Thursday. The beta version of the service is available from Thursday, Amazon's Chief Technology Officer Werner Vogels said at a company event in Las Vegas. The connection to the cloud will be fast and lightweight, making it a good fit for devices that have limited memory, processing power, or battery life, Amazon said.

• Twitter Opens Up Its Amplify Video Ad Program: Twitter just announced an expansion of its Amplify ad program that should make it accessible to more publishers and advertisers. Amplify is the company’s two-year-old program for video ads. Initially, it involved a direct and somewhat complicated relationship — the publisher would embed a short video clip in a tweet, then the advertiser would both include a short pre-roll ad in the tweet and pay to promote the tweet in Twitter. In the new, open version of Amplify, an advertiser no longer needs to work with a specific publisher. Instead, they choose a content category, then Twitter will automatically include their pre-roll ads in videos tweeted by relevant publishers. (Advertisers can also use Twitter’s other ad targeting capabilities at the same time.) This isn’t just about making the process easier for advertisers — it also gives publishers a monetary incentive to share their video clips on Twitter. We’ve heard that the revenue split is 70 percent for publishers and 30 percent for Twitter, and that publishers will be able to blacklist certain advertisers or categories if they feel like they’re not a good fit.

Daily Tech Snippet: Wednesday, September 9

• Facebook Equips Business Pages With Mobile Storefronts For Shopping And Services: Likes ≠ Dollars. Facebook wants Pages to actually earn money for the 45 million small businesses that use them. So today Facebook is upgrading Pages with a tabbed mobile layout that lets them display storefront “Sections” where users can “Shop” for products or view a list of “Services” the business offers. The company is also making calls to action on business Pages, such as “Call Now,” “Send Message” and “Contact Us,” bigger, more colorful and more prominent beneath the cover image. The “Shop” section will include Buy buttons powered by Facebook’s partnership with Shopify so users can check out without leaving the social network. Facebook is also testing Buy buttons that link out to a business’ traditional website. These changes are the biggest made to Pages since 2012. They build on Facebook’s recent announcement of new messaging capabilities for businesses and badges for companies that respond quickly. Today’s updates could make Facebook Pages a utility, not just a presence for businesses. Andrew Chau, the co-founder of the Boba Guys cafe, tells me he started the business’ online presence with a Facebook Page not a website because that’s where it could get “the most eyeballs”. He says he tells people to ‘Check us out on Facebook’ rather than ‘Download our app’ because “they aren’t going to do that”. People don’t necessarily want a whole app just for their local tea shop. The strategy is similar to WeChat’s platform for businesses in China. Rather than having to build an app, get people to download it, and then get them to use it, WeChat lets businesses create “official accounts” that users can easily follow and buy from. The average boutique owner or plumber shouldn’t have to learn how to build an app. Now they don’t.
• Yahoo may have to pay taxes on Alibaba spinoff: Yahoo is reconsidering its plan to spin off its $23 billion stake in Alibaba after federal tax authorities declined to rule in advance on whether the transaction would mean huge capital gains taxes for Yahoo or its shareholders. Yahoo disclosed in a securities filing on Tuesday that the Internal Revenue Service told the company on Sept. 2 that it would not provide any guidance about the tax liability related to the spinoff ahead of the deal. The Internet company said that its own tax advisers still believed the spinoff of its 15 percent stake in Alibaba, a leading Chinese e-commerce company, would be tax-free, in part because it would be bundling a small-business division with the Alibaba stock into a new company called Aabaco Holdings. However, Yahoo said its board was now considering its options in light of the I.R.S. decision. Analysts say Yahoo’s options could include restructuring the spinoff or selling all or part of its 15 percent stake in Alibaba. Yahoo shareholders have been eagerly awaiting the spinoff, which analysts say accounts for far more of Yahoo’s stock price than its core advertising business. The Alibaba spinoff was intended to be a reward to Yahoo’s long-suffering shareholders. “It’s a big setback for Mayer,” said Eric Jackson, founder of the investment fund Ironfire Capital, who has been agitating for Yahoo to do more to unlock the value of its assets. “This was going to be the one feather in her cap, and now it’s seemingly not going to happen.” If Yahoo proceeds without the I.R.S. opinion, it may ultimately have to defend its move in court. An I.R.S. auditor, reviewing the company’s books several years down the road, could declare that the spinoff was taxable. Yahoo would probably go to court to challenge the decision, and Mr. Willens said the company would most likely prevail. Analysts have estimated that the company would owe about $9 billion in taxes if the transaction were fully taxable. In structuring the spinoff, Yahoo proposed to transfer that liability to Aabaco. So in theory, Ms. Mayer could proceed with the spinoff and focus on running Yahoo, leaving Aabaco shareholders to bear the risk of an audit.

• Alibaba’s $141 Billion Slide Boosts Tencent to Biggest in Asia: Alibaba surrendered the title of Asia’s largest Internet company to Tencent Holdings Ltd., capping a 10-month slide for the e-commerce giant that wiped $140.7 billion from its market value. The shares of Alibaba fell 4.7 percent to $60.91 at the close in New York on Tuesday, making the online marketplace worth $153 billion. That’s below Tencent’s value for the first time since billionaire Jack Ma oversaw Alibaba’s record-breaking initial public offering in September 2014. Alibaba’s reliance on consumer spending in China, where it gets 83 percent of its revenue, leaves it vulnerable to the domestic slowdown. Tencent is adding pressure by buying Hollywood content for its video platform, investing in cloud computing and on-demand mobile services, while forging an e-commerce alliance with JD.com. China may have lent its shares a hand. Last month, the government cut rates for the fifth time since November and resumed intervening in equities, seeking to arrest a stock market rout that wiped out trillions of dollars in value. That’s helped prop up stocks in neighboring Hong Kong. Tencent posted record quarterly profit in August. By comparison, Alibaba trailed analysts’ revenue forecasts in two of the past four quarters, and its sales grew at the slowest pace in at least three years. Tencent is capitalizing on the more than 1 billion users of WeChat and QQ. Billionaire Chairman Ma Huateng is finding new ways to make money through advertising, payment services and health care through the apps. Tencent earns more than half its revenue from games, and in April invested $126 million in San Francisco-based Glu Mobile Inc. to add a portfolio of action and role-playing games for smartphones.

• Alibaba lowers second-quarter gross merchandise volume estimates. Alibaba said on Tuesday it expected second-quarter gross merchandise volume (GMV) to be lower than its initial estimates due to weaker consumer spending in China. The company's shares reversed course and slipped as much as 3.1 percent to $61.91 in late afternoon trading. They had earlier gained as much as 4.5 percent. Alibaba said it now expects GMV to be lower in mid-single digits on a percentage basis from its earlier estimates. Up to Friday's close, the company's shares had fallen about 39 percent this year.

• Restaurant of the Future? Service With an Impersonal Touch There’s a new quinoa restaurant in San Francisco — yes, quinoa restaurants are a thing in San Francisco, so that’s not what’s noteworthy. At this restaurant, customers order, pay and receive their food and never interact with a person. The restaurant, Eatsa, the first outlet in a company with national ambitions, is almost fully automated. There are no waiters or even an order taker behind a counter. There is no counter. There are unseen people helping to prepare the food, but there are plans to fully automate that process, too, if it can be done less expensively than employing people. For optimists, it’s a way to make restaurant-going more efficient and less expensive. For pessimists, it’s the latest example of how machines are stealing people’s jobs. Either way, it’s like heaven for misanthropes, or those who are in too much of a hurry to chat with a server. The quinoa — stir-fried, with arugula, parsnips and red curry — tasted quite good. Whether a restaurant that employs few people is good for the economy is another question. Restaurants, especially fast-food restaurants, have traditionally been a place where low-skilled workers can find employment. Most of the workers are not paid much, though in San Francisco employers of a certain size must pay health benefits and in 2018 a minimum wage of $15. Mr. Friedberg said that was not the reason his team automated so many roles. “Technology allows us to completely rethink how people get their food,” he said. Automation is transforming every industry. Business owners look to substitute machines for human labor. It happened to blue-collar workers in factories and white-collar workers in banks and even law firms. With self-driving vehicles, it may happen in the taxi and trucking industries. Robots and artificial intelligence machines are expected to transform health care. Automation, in rudimentary forms, is already part of many restaurants. Reservations are made online, orders arrive at the kitchen electronically, and bills are paid with a swipe on an iPad. Chains like Chili’s and airport restaurants use tablet computers for ordering and paying, to speed the process and cut personnel costs. It might be a harbinger of a future in which eating out no longer involves waiters. Restaurants with servers could become the novelty, reserved for occasions when you want more ambience and hands-on attention than Eatsa’s “food delivery system.”

• Netflix May Be Setting Its Sights on Four More Asian Markets: Netflix will enter Hong Kong, Taiwan, Singapore and South Korea early next year, according to a press release that was posted in Chinese on its website and taken down. The online offering will include movies, TV shows and content suitable for children, according to the statement. Additional details on pricing and programs will be announced later, the statement said. The company didn’t respond to requests for comment. Netflix, based in Los Gatos, California, is racing to complete a global expansion by the end of next year. The company’s growth prospects have made the stock the top performer in the Standard & Poor’s 500 Index this year (The stock has risen 95 percent this year), with subscribers exceeding 65 million in 50 countries. Still, the shares have pulled back in recent weeks, in part due to concern over increased competition for viewer’s dollars. Time Warner’s HBO, Hulu and Amazon.com have all boosted their online offerings this year, while Apple is considering its own video streaming service. Netflix introduced service in Japan Sept. 2, starting at $5.40 a month.

• TiVo revenue beats estimates on subscriptions rise: Digital video recorder maker TiVo Inc reported a better-than-expected rise in quarterly revenue, helped by higher subscriptions. The company's total subscriptions rose about 26 percent to more than 6 million in the second quarter ended July 31. Net revenue rose to $119.5 million from $111.9 million. Revenue from Tivo's services and software and technology businesses rose about 14 percent to $99.1 million, while analysts had expected $96 million.  The stock was flat in extended trading on Tuesday. TiVo's set-top boxes are in high demand from cable users as they also allow access to online video services such as Netflix Inc, Hulu and Google Inc's YouTube. Tivo sells subscriptions directly to customers with its video recorders and also licenses its technology to cable TV operators that rent recorders to subscribers. The company, whose clients include DirecTV, is trying to partner with more cable TV operators to grow its business. Tivo sells its products through cable TV partners such as Virgin Media in the UK, ONO in Spain and Com Hem AB in Sweden. 

• How will autonomous cars deal with insurance liabilities? By shifting them toward manufacturers, says a study: Hacker attacks or faulty software could shift the burden of legal and regulatory liability toward makers of self-driving cars and away from customers, experts say, forcing regulators and insurers to develop new models. Autonomous cars have the potential to reduce the rate of traffic accidents as sensors and software give a car faster and better reflexes to prevent a collision. However, a greater level of automation increases the need for cyber security and sophisticated software, experts said. "Although accident rates will theoretically fall, new risks will come with autonomous vehicles," said Domenico Savarese, Group head of Proposition Development and Telematics at Zurich Insurance. "What should be done in the case of a faulty software algorithm? Should manufacturers be required to monitor vehicles post-sale in the case of a malfunction or a hacker attack?" Savarese asked. While established models for assigning liability - such as holding the owner responsible for what the car does - will still be relevant, the onus may shift toward manufacturers. Greater automation may also change consumer behavior and affect insurance costs if drivers become less vigilant and less practiced in their ability to avert an accident. "Could a manufacturer become liable if a distracted driver causes an accident while relying on autopilot? It's too early to tell," Savarese said, adding that increased liability would unlikely deter carmakers since customers were demanding more self-driving functions. Software and connected cars are creating new opportunities for insurance companies to customize policies to clients. "You could pay for how much you drive, or get a lower premium based on how well you drive," Savarese said, adding that these policies will only be made possible if the client allows the insurer to monitor them. Without driver consent, the insurer will have no right to spy on the driver, not even for exceeding the speed limit. If customers buy in to the idea of lower premiums in exchange for higher monitoring, they can opt to have some sort of black box device installed in their car or via their smartphone.

• Okta Is Now a Unicorn After $75 Million Funding Round. Okta, the startup that helps companies manage their sign-in information for hundreds of cloud services and business software applications, has landed a $75 million round of funding at an implied valuation of $1.2 billion. The investment is coming from existing investors, including the venture capital firms Andreessen Horowitz, Greylock Partners and Sequoia Capital. Total capital raised is now $230 million. It has been about 15 months since Okta last raised money. Last year it took a $75 million round led by Sequoia that valued the company at about $600 million. Sequoia is a significant investor, having also led Okta’s D round in 2013 and its C round in 2012. Okta is also notable for being Andreessen Horowitz’s first investment in the cloud software area back in 2010 when the firm led its A round. Since then the company has expanded into new lines of business, including helping companies manage their mobile devices.

Daily Tech Snippet: Thursday, July 16

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• Google Unveils Buy Button on Ads in Mobile-Commerce Push, Ties Up With Flipkart, Ebay on Deep Links: Google Inc. is testing a feature to let consumers purchase products by clicking through advertisements, seeking to expand options for mobile retail sales. The Internet-search company’s service, Purchases on Google, will let people using smartphones click on select search ads that take the users directly to a retailer-branded product page hosted by Google, according to an e-mail. The tools will work with a “limited number of retailers” for now, the company said. The company also announced an effort to alert smartphone users to information such as sales and loyalty programs at nearby stores, through its Google Now program. Google is expanding information on product ratings in ads and giving users more data on local inventory, as well. The Mountain View, California-based company will make it simpler for ads to drive consumers to shopping apps, rather than to retailer’s websites. EBay and Flipkart, an e-commerce site based in India, are among the early partners in the initiative, which uses a technology called deep links.


• Facebook Adds Buy Button Integration As It Continues To Reinvent Pages: It’s been over a year since Facebook started testing its buy button in ads on the newsfeed, and it appears that the company is now ready to take the service to its next logical progression with dedicated shops on Pages where users can browse for and purchase items. This is a pretty major step in Facebook’s marked plans to take over ecommerce and turn pages into destinations where users can go to grab the information they need and make quick orders. With Facebook’s recent efforts of adding business hours and OpenTable integrations, it’s clear that the shop feature is the next step towards making Pages a more visible part of the user experience. The newsfeed has dominated how users have absorbed information from businesses on Facebook for the past decade. Now, it seems the company is ready to revitalize Facebook Pages and transform them into commerce destinations where users can not only quickly grab business info, but as of today, also buy stuff. Today, Facebook made a pretty clear statement that Pages is shifting to become a major priority for them in terms of user traffic. BuzzFeed reported that the company had recently started testing shops with ‘buy buttons’ inside of Facebook Pages.


• More Fizzle Than Sizzle on Amazon’s Prime Day: Has Amazon Prime Day been everything it was advertised to be? The reaction online at the halfway mark has been less than effusive, with the Twitter hashtag #PrimeDayFail gaining traction Wednesday alongside complaints of lackluster merchandise, paltry discounts and all-around disappointment. The day seemed to start with excitement. But shoppers were quickly grumbling about a less-than-stellar lineup. Others were underwhelmed by the discounts. Clunky navigation on Amazon was an issue. When the deals were good, shoppers reported being put on endless wait lists. Some shoppers even said their Prime Day experience drove them to other shopping sites, including Walmart. An Amazon spokeswoman said the much-deplored, confusing “Join wait list” button simply meant that all available discounts had been placed in customers’ carts. But if those customers didn’t complete their purchases within 15 minutes, that discount was passed on to the next customer in line. The wait list, she said, often allowed Amazon to secure more inventory. After long wait lists for Bose headphones on Wednesday morning, Amazon added more units to the sale, she said.


• Netflix Posts Mixed Results, but New Memberships Surge - Shares up 10% on Earnings: These are heady times for Netflix. On Wednesday, investors even looked past a 63 percent drop in second-quarter profits to send shares in Netflix surging nearly 10 percent in after-hours trading, on news that it added a record 3.3 million global streaming members during the second quarter, eclipsing expectations. There are reasons for caution. The big falloff in net income Netflix reported on Wednesday underscored the huge level of investment required to execute its strategy of pressing deeper into original programming and aggressively moving overseas. Netflix has warned investors that it doesn’t expect to break even globally until the end of 2016. The company has said that it will deliver material global profits after that period of expansion. Total revenue was $1.6 billion in the second quarter, up 23 percent from the period last year.


• Intel Earnings Surpass Forecasts, Driven by Data Centers: Overall for the second quarter, Intel reported net income of $2.7 billion, or 55 cents a share. That was down $100 million from a year earlier, but was the same in per-share terms because Intel has bought back a lot of its stock. Net income was also lifted by a lower tax rate. Revenue fell 5 percent, to $13.2 billion. Intel has been working on making a new future for itself by investing more in chips for data centers and Internet-connected products for industry — and some of those investments are paying off. Sales of chips for data centers rose 10 percent from a year earlier. In total, data center, Internet of Things and high-level memory chip sales were 40 percent of revenue and 70 percent of profits. Intel reported on Wednesday that second-quarter revenue from chips for PCs fell 14 percent.