Daily Tech Snippet: Thursday, October 1

• Daily Report: The Buy Button Heads to YouTube and Twitter: On Tuesday, YouTube said it would make it easier for advertisers to pair their ads with videos highlighting a particular product. The new feature, available in the coming months, will allow viewers to get directly to a retailer’s site with a single click. No searching required. The new feature seems to be particularly appealing on the many videos of product reviews and tutorials, a type of video that has been growing in popularity on YouTube. It also, as Hiroko Tabuchi writes, brings “a shopping element to yet another corner of the Internet, as highly trafficked websites and social networking services increasingly fashion themselves into shopping hubs.” If there was any doubt about that trend, Twitter put it to rest on Wednesday. As Vindu Goel reports, the company is making it possible to put a buy button in a tweet. “A Twitter user,” he wrote, “can then purchase the product in as few as two taps — one tap on the buy button and a second to confirm the purchase.” It has been a big week for new online ad tools and features, several of which have been announced at Advertising Week in New York. As Sydney Ember wrote on Monday, Madison Avenue might still be the heart of the advertising industry, but much of the money — and influence — is coming from Silicon Valley.

• More on the Twitter Buy Button: Twitter Makes ‘Buy’ Button Widely Available: After two years of testing, Twitter is finally making it easy for millions of merchants to sell products through a tweet. The social network announced Wednesday that its “buy now” button will be available to any merchant in the United States that uses one of three major e-commerce platforms to run its online shopping operations. A store that is a customer of Demandware, Bigcommerce, or Shopify can use the software to tweet out a link to a product that will show up with a buy button. A Twitter user can then purchase the product in as few as two taps — one tap on the buy button and a second to confirm the purchase. (The first time people buy something through Twitter, they will also have to go through a screen to provide payment and address information.) Twitter’s expansion of its buy button, which builds on a partnership with the e-commerce platform Stripe announced earlier this month, comes as competing platforms are also beginning to offer e-commerce directly from their services. On Tuesday, Google’s YouTube service announced that advertisers can now place buy buttons in other people’s videos — allowing, say, Apple to offer a way to buy an iPhone from inside a fan’s video showing the unboxing of a new iPhone (yes, there are lot of videos like that). Pinterest, Facebook and Instagram, a photo-sharing service owned by Facebook, are also testing buy buttons. Facebook isn’t so sure about Buy Buttons. Sheryl Sandberg, the company’s chief operating officer, said that Facebook studied the behavior of its 1.5 billion users and concluded that buy buttons should not be a high priority right now.

• More on the YouTube Buy Button: YouTube to Expand Shopping Links to More Videos: YouTube announced on Tuesday that it would introduce shopping ads on its videos that let viewers jump directly to retailers’ websites and buy the products featured in the clips. The video-sharing site, owned by Google, already lets advertisers show links to products within their own videos. But the new service would place product ads on any video on the site, like product reviews uploaded by amateur reviewers, provided the clip’s owner opts in. YouTube’s new ads bring a shopping element to yet another corner of the Internet, as highly trafficked websites and social networking services increasingly fashion themselves into shopping hubs. Sites like Pinterest and Instagram have introduced “buy button” functions that let users purchase the products that appear in the millions of posts and photos shared on their platforms each day. Google itself has pushed to become a shopping destination in an increasingly direct challenge to Amazon, currently the web’s de facto shopping search engine. YouTube’s ads seek to tap into the fast growth in product reviews and tutorials posted by users. Susan Wojcicki, the company’s chief executive, announced the change at an advertising industry event in New York. In the last year alone, viewership for product-related clips on YouTube has jumped 40 percent, she said. YouTube users have already uploaded tens of thousands of reviews of a battery-powered self-balancing skateboardlike device that retailers expect to be a hot holiday gift this year. Once the service is available in the coming months, videos from users who opt into the program, and which contain products that match YouTube ads, will display an icon in the top-right corner. Users can click on the icon to view a list of images and prices of the products featured in the video, and to jump to retailers’ websites for more reviews, information and an option to buy. YouTube matches videos with ads based on the video’s content and audience. Similar to YouTube’s AdWords service, advertisers pay only when a user clicks on a shopping ad. The site will test the ads this fall, and will offer the service to AdWords clients in the coming months, it said. For users who upload YouTube videos, the shopping ads could mean a new revenue stream, the sites said. And for viewers, YouTube promises an unobtrusive way to shop as they surf videos.

• What it’s like to ride in a Google self-driving car: Google’s cars have been trained to be extremely conservative in unusual situations. “They understand their own limitations,” said Dmitri Dolgov, principle engineer on Google’s self-driving car project, at a briefing later. “They understand that there’s something really crazy going on and they might not be able to make really good, confident predictions about the future. So they take a very conservative approach.” A few blocks away from Google I got another glimpse of the SUV’s cautious nature. A car, also with a stop sign, arrived at the intersection just after us. The Google car inched forward in two spurts. After a pause we drove through the intersection. We got through it fine, but slower than I expect most drivers would have. Soon we pull back in front of GoogleX’s building, a 14-minute ride in the books. “Manual,” calls out the female voice as our driver took control again, and turned the car off. If I was grading the SUV on our brief trek I would give it a B+. It wasn’t perfect driving, but safe and effective. Of course, our route wasn’t especially difficult. The real challenges come when pedestrians, inclement weather, construction sites and cyclists arrive.

• Microsoft, Google stand down in patent battles: Microsoft and Google have agreed to bury all patent infringement litigation against each other, the companies announced on Wednesday, settling 18 cases in the United States and Germany. In another sign of the winding down of the global smartphone wars, the companies said the deal puts an end to court fights involving a variety of technologies, including mobile phones, wifi, and patents used in Microsoft's Xbox game consoles and other Windows products. The agreement also drops all litigation involving Motorola Mobility, which Google sold to Lenovo last year while keeping its patents. However, as Microsoft and Google continue to make products that compete directly with each other, including search engines and mobile computing devices, the agreement notably does not preclude any future infringement lawsuits, a Microsoft spokeswoman confirmed.

• Sources: Jack Dorsey Expected to Be Named Permanent Twitter CEO: Jack is apparently back — for good this time. Twitter co-founder Jack Dorsey, who has been serving as interim CEO for the past three months, is expected be named the company’s new permanent CEO as early as tomorrow, although that timeframe may change, according to sources. Dorsey will apparently continue to run Square, the payments company he founded where he’s also CEO. [UPDATE: Sources said that it’s not clear if the board has officially voted on Dorsey’s appointment, because it was still settling the status of other key execs this week, most specifically revenue chief Adam Bain and CFO Anthony Noto. Bain is widely expected to become COO, although Noto may also report directly to Dorsey. Both have indicated to the board, said multiple sources, that they want Dorsey in the top job. The Twitter board also has what one source called a “Plan B” of a single serious outside candidate, although every single person I have contacted who has been considered and also contacted by the company’s recruiting firm, Spencer Stuart, said that discussions did not progress very far.] Sources added that there is likely to be some shake-up of the board too, most immediately the departure of Costolo as a director.

• Google Is Acquiring Rich Messaging Startup Jibe Mobile: Google said on Wednesday that it has acquired Jibe Mobile, a messaging startup that specialized in helping carriers build support for native video messaging into their services. The effort, designed to make video chat as ubiquitous and interoperable as text messages, is known as Rich Communications Services, or RCS. Google said it is making the purchase as part of a commitment to supporting RCS as part of its messaging strategy. “SMS carrier messaging is used by billions of people every day and enables people to reach anyone around the world, regardless of their device, carrier, app or location,” Android engineer and “minister of messaging” Mike Dodd said in a blog post. “However, the features available in SMS haven’t kept up with modern messaging apps. Rich Communications Services (RCS) is a new standard for carrier messaging and brings many of the features that people now expect from mobile messaging, such as group chats, high res photos and more.” Financial terms were not disclosed.

Daily Tech Snippet: Tuesday, May 26

• Audio version of this post on SoundCloud (experimental)

• Smartphone ‘Cold War’ Seen in Asian Moves on Patent Licensing: South Korea and China are adopting antitrust policies that may require companies such as Apple and Qualcomm to license inventions to rivals more easily and cheaply, potentially giving Asian companies a leg up against foreign competitors. Brazil and India are considering similar paths. The clampdown on patents has the potential to alter the balance of power in the global mobile-phone industry, which generated $412 billion last year, according to IDC. These new rules may weaken the ability of Apple, Microsoft Corp. and Qualcomm -- typically among the top 15 U.S. patent recipients each year -- to compete in China, the world’s largest mobile-phone market, and other countries that follow. “We’re going back to the Cold War and the domino theory,” said Bradley Lui, an antitrust lawyer with Morrison & Foerster in Washington. “The authorities in China see the potential use of patents that might affect companies in China, including state-owned enterprises. It might be an impetus for drawing rules more broadly than we would in the U.S.” Asian regulators were spurred by the smartphone wars, in which tech giants battled over billions of dollars on four continents for more than four years. Foreign governments including Korea and China have been looking more closely at their patent policies, emboldened by debates in Washington over whether patents hinder rather than spur innovation. Qualcomm, which got 63 percent of profit from patents last year, has been investigated on three continents for its licensing practices. It struck a deal with China in February that gives domestic Chinese manufacturers a discount on the royalty charges while fining the company $975 million. Microsoft’s purchase of Nokia Oyj’s handset business has been approved by every country except Korea, which is looking for concessions on some of Nokia patents. In China, Microsoft had to accept lower royalties for patents that read on Google's Android operating system, which runs most of the world’s phones including those made by Chinese manufacturer ZTE. The Redmond, Washington-based company simply excluded Korean assets -- where it didn’t have many sales anyway -- from the Nokia deal.

• Snapdeal buys mobile commerce platform MartMobi: In a bid to strengthen its mobility platform for merchants, Snapdeal has acquired Hyderabad-based technology startup MartMobi for an undisclosed amount. The MartMobi platform enables e-commerce businesses, brands and retailers to have an instant mobile presence without writing a single line of code. A self-service platform, MartMobi can be used to create custom applications for retailers across all major mobile platforms, thus ensuring a new source of revenue for online ventures. MartMobi was founded in December 2012 by Satya Krishna Ganni (CEO) and Pramod Nair (CTO) – both serial entrepreneurs, who had earlier co-founded LearnSocial, aP2P learning platform that brings together people who want to teach something they are passionate about. Snapdeal has been on an acquisition spree as it seeks to compete with players such as Flipkart and Amazon for a slice of the $3 billion Indian e-commerce industry. In the recent past, Snapdeal has acquired payments and mobile recharge startup FreeCharge in a cash-and-stock deal while picking up stakes in digital financial services platform RupeePower and logistics venture GoJavas.

• Apple Names Jony Ive ‘Chief Design Officer’: Apple’s Jony Ive, the design genius often credited for Apple’s innovative and unique industrial design language over the past couple of decades, has taken on a new role at the company: Chief Design Officer. The new role elevates him above his previous SVP status, and also installs Richard Howarth as the new head of Industrial Design, and Alan Dye as head of User Interface. Ive’s new role should actually give him more time to actually design, the newly minted C-level executive told the Telegraph. He’s shedding some administrative and management duties to his two new lieutenants, he told the newspaper, and will instead be in charge of both UI and ID, as well as take direct control over retail store design around the world. In a book detailing Ive’s life and work at Apple, Leander Kahney has noted that the British designer has sometimes been uncomfortable with the administrative side of business, and instead prefers to focus on the craft of the actual design process. Ive also notably remains off-stage during Apple’s signature press events, and instead often narrates passionate paeans the company offers during the show in the form of video on the process of designing the products announced by other execs at the events.

• Baihe, a Chinese dating site where users flaunt their financial standing, bags $241M: Chinese dating site Baihe has announced it recently raised RMB 1.5 billion (US$241 million) in series D funding, according to Sina Tech. The investors have not been disclosed. Baihe approaches dating from an empirical and practical – some might say materialistic – perspective, with the end goal being marriage. Users are required to use their real names and are encouraged to share information like their property status and education. In other words, does this person own a home and have a good degree? Posting videos is also encouraged as they are more difficult to manipulate than photos. Members can verify their marital status to prove they aren’t seeking affairs. Recently, the site added a feature wherein users can post their credit score, as rated by a third-party private agency, to show they are in good financial standing. A member can only see information on other people’s profiles that they have shared themselves.

• As Facebook Sweeps Across Europe, Regulators Gird for Battle: Move over, Google. Facebook is the latest American tech giant that Europeans love to hate. For decades, European policy makers have taken aim at America’s giant tech businesses, trying to force them to play by European rules. In the past, Microsoft and Intel were found guilty of abusing their dominant positions to shut out rivals. Google has most recently been under the microscope, and it now faces accusations that it unfairly promoted some of its search products over those of competitors. In recent months, though, regulators’ gazes have turned to Facebook, raising questions about whether the social network has learned from the past mistakes of companies like Intel, Microsoft and Google when dealing with Europe’s policy makers and its legal system. And as Facebook runs into an increasing number of regulatory hurdles here, the scrutiny could potentially distract the company from its ambitions of becoming a one-stop shop for Internet messaging, online publishing and digital advertising. Facebook’s core business, its social networking service, is especially popular in Europe. The company has almost doubled its number of European users to the service, to around 260 million, since 2010. Facebook also has more users in Europe than in the United States, according to eMarketer, a research company. Regulators in Europe, however, are especially focused on how the company collects and handles those users’ data. The region has some of the world’s toughest data protection rules, and policy makers from France, Germany and Belgium are investigating whether Facebook broke Europe’s laws after the company announced a new privacy policy this year. If found to have breached the privacy rules, Facebook may face fines or demands that it change how the company handles people’s data, though the company says it complies with the region’s data protection laws. Taking a page from the playbooks of other American tech companies, Facebook has not stood idle as regulators steadily lined up against it. The company has hired a number of prominent former lawmakers and regulators, including Erika Mann, a former German member of the European Parliament. This month, the company also chose Kevin Martin, a former chairman of the Federal Communications Commission, to champion its cause in Washington, Brussels and beyond. Facebook increased spending on lobbying 25 percent, to roughly $570,000, in 2013 compared to the previous year, according the latest figures available from the European Union’s voluntary database of lobbying interests, which may not include all of Facebook’s activities in the region.

• Chinese E-Commerce Giant JD Leads $70M Round In Online Produce Retailer FruitDay: Chinese e-commerce site JD.com is putting its money into fresh fruit and vegetables after it led a $70 million Series C round in FruitDay, a company that sells fresh produce across China. The investment in six-year-old FruitDay, which claims to be China’s largest online produce firm, also included participation from previous backers Susquehanna International Group (SIG) and ClearVue. FruitDay imports over 80 percent of its produce from overseas, and it claimed to be on course to hit 10 million customers before the end of the year — up fourfold from last year. The company said in a statement that it will use the new capital to develop its infrastructure and logistics, hire new management and for general business development. It stands to benefit from more than just JD.com’s money through this alliance, however, since the duo have agreed to “a strategic cooperation” which will allow FruitDay to tap into JD.com’s own logistics and fulfilment network across China to help widen its service in the country. JD.com is commonly thought of as a lesser rival to Alibaba. That’s a pretty hard comparison to shake when you consider that Alibaba was responsible for the largest IPO in U.S. history last year — its current market cap exceeds $230 billion — but JD.com is different in key areas. The company, which is listed on the Nasdaq, and has attracted investment from Alibaba’s fierce rival Tencent, is building out an Amazon-like delivery model which includes its own warehouses — something that Alibaba does not — as this recent New York Times piece points out. Things start to get even more interesting if you pair JD.com’s infrastructure efforts with WeChat, the dominant messaging app in China which is owned by JD.com investor Tencent. JD.com already has a store on WeChat were customers can make purchases without leaving the app, and it could be an interesting medium for fresh fruit and vegetable orders — that’s something Line, another chat app, is pioneering in Southeast Asia right now.

Daily Tech Snippet: Friday, May 22

• HP sells $2.3 billion China unit stake to forge partnership with elite Chinese university-linked group: Hewlett-Packard Co (HPQ.N) will sell a controlling 51 percent stake in its China-based data-networking business to China's Tsinghua Unigroup for at least $2.3 billion, forming a partnership designed to create a Chinese technology powerhouse. State-backed Tsinghua Holdings' subsidiary Unisplendour Corp Ltd 000938.SZ will acquire 51 percent of HP's H3C Technologies for at least $2.3 billion, Unisplendour said in a statement to the Shenzhen stock exchange late on Thursday. The U.S. company also said in a statement on Thursday it will form a partnership with Tsinghua Holdings, affiliated with China's elite Tsinghua University, to create a group in China to house H3C's networking operation alongside its China-based server, data-storage and technology-services businesses.

• Report/Rumor: CommonFloor and Quikr in preliminary talks which may lead to a merger: After recent mergers in India’s e-commerce and taxi businesses, it appears that online real estate is set to see a winnowing of weaker players. Bengaluru-based Maxheap Technologies Pvt Ltd, which owns online real estate portal CommonFloor, is believed to be in preliminary conversations with classifieds company Quikr about teaming up, according to three people familiar with the developing situation.

• PayPal’s Instant Checkout “One Touch” Aims to Boost Conversion Rates on Mobile, No Longer Requires PayPal’s App: PayPal’s instant checkout service called OneTouch is now being extended to support all merchants using the e-commerce platform Bigcommerce, as well as on mobile devices – even in cases where the consumer doesn’t have the PayPal native application installed. The service, which allows customers to check out from an online merchant without having to enter their username and password, launched publicly last fall on mobile devices then expanded to the web in April. One Touch was originally designed to improve the conversion rates for online transactions. On mobile in particular, consumers tend to abandon purchases simply because of the challenges associated with entering in their personal information payment card details on mobile’s small screen. PayPal’s move to counter this trend was OneTouch for Mobile, which allows a customer’s information to be stored and shared between supported apps. That means that customers would only have to enter their PayPal credentials for their first mobile purchase, but subsequent purchases could be made with just one tap. The system is currently being used by a number of merchants including Jane.com, ParkWhiz, StubHub, Threadless, Airbnb, Lyft and Munchery, for example. In April, PayPal announced that it would offer similar functionality to web-based merchants as well, which meant the product now had the potential to reach PayPal’s 165 million customers. Despite being an older player in the ever-changing payments industry where newer contenders including Stripe, and now Apple Pay, are finding their ways into mobile apps and online stores, PayPal’s payments business is still growing. The company reported its net total payment volume rose 18 percent to $61 billion, it said in April, and it added 3.6 million new accounts in the quarter. The company says that today, online and mobile shopping accounts for $2.5 trillion in annual retail sales, and PayPal processes nearly 12.5 million payments for its customers daily. The move towards digital payments over physical payments is also a factor in PayPal’s growth. It notes that a couple of years ago, half of transactions involved checks or cash, but in a couple years’ time, they’ll account for only 25 percent of transactions.

• HP earnings: quarterly revenue $25.5B, down 7% Y/Y; earnings down too as company prepares for split; shares up 2.3% on asset sales: Hewlett-Packard, the computer and printer giant, reported continued declines in profit and sales on Thursday as it prepared to split into two companies later this year. HP, based in Palo Alto, Calif., said on Thursday that net income in the fiscal second quarter fell 21 percent to $1 billion, or 55 cents a share, from the same quarter a year earlier. Revenue fell 7 percent to $25.5 billion. Sales fell short of Wall Street analysts’ revenue expectations of $25.63 billion for the quarter, according to a survey by Thomson Reuters. Excluding some items, the company reported a profit of 87 cents a share, beating analyst estimates on that same basis of 86 cents. The results give investors a progress report on Ms. Whitman’s plan to split HP into two companies: One will focus on enterprise-computing technologies like servers, and the other will sell products like personal computers and printers. The separation is set to happen at the end of October. HP said the split remained on track and would initially incur operations costs of $400 million to $450 million. The two independent companies will each be large enough to enter the Fortune 500 and may be better able to react quickly to changing markets than within a large organization. Yet investors question whether the split will slow HP’s product creation and sales, as assets and roles are allocated, and whether competitors will exploit customer confusion to seize market share. Since announcing the plan to split, HP has reported declining profit. In March, the company sharply lowered its outlook for annual earnings. In anticipation of the separation, HP is shedding some assets. The company said on Thursday that it sold a 51 percent stake in its Chinese network business to Tsinghua University for about $2.3 billion. The move lets HP continue to sell equipment to businesses in China, which face government restrictions on use of foreign technologies. Shares were up 2.3%.

• Two IPOs: Shopify pops 69%, Alibaba-backed Baozun's shares gyrate after overly aggressive IPO pricing: Canadian software maker Shopify valued at $2 billion in U.S. debut: Canadian e-commerce software maker Shopify Inc's (SHOP.N) (SH.TO) shares rose as much as 69 percent in their U.S. debut, valuing the company at about $2.14 billion. Shopify, which also debuted on the Toronto Stock Exchange on Thursday, is the first Canadian company to be listed on a U.S. exchange this year. Alibaba-backed Baozun's shares seesaw in choppy debut: Shares of China's Baozun Inc, in which Alibaba holds a nearly 20 percent stake, traded erratically in their debut on Thursday, sending the e-commerce services company's valuation seesawing. The company's American Depository Shares (ADSs) touched a high of $11.28, valuing it at $548.3 million, before reversing course all the way down to $9.23 per ADS. The 11 million ADSs offered were priced at $10 each, well below the $12-$14 range initially set by the underwriters. "They priced it too aggressively," Francis Gaskins, president of IPO research firm IPOpremium.com said, adding that at the midpoint of the initial range, the shares would have been valued at 500 times annual earnings. Baozun provides website design, digital marketing and logistics services for retailers and brands hopping onto China's e-commerce bandwagon. It counts Haagen Dazs, Nike, Guess and Microsoft among its more than 100 clients that are competing fiercely in China's thriving online market, dominated by Alibaba Group Holding Ltd. Alibaba's investment arm is Baozun's top shareholder, with an 18.2 percent stake. The company, which raised $110 million from the IPO, falling well short of its initial $129 million target, said it intended to split the proceeds between improving existing operations and making acquisitions. The company reported a net loss attributable to ordinary shareholders of about $25.1 million and total net revenues of about $255.4 million last year.

• New patent lawsuits are down for the first time in five years on tighter patent processes. For months, Congress has moved steadily toward a bill that targets patent trolls — companies that own patents but don't make any products with them. The problem, critics say, is that the patent holders will sue innocent companies in hopes they'll simply settle for a bunch of cash. But even as firms like Etsy and Kickstarter hit Capitol Hill this week to press the case against abusive patent lawsuits, a new study shows that the pace of litigation has actually slipped — for the first time in five years. This is a big deal for a whole range of industries, not just the tech sector. It's happening at a time when the spotlight on frivolous patent lawsuits has never been brighter. And that makes it a surprising find. You can see that in 2014, there was a sharp drop in the number of new patent cases. There were about 5,700 filed last year, according to PwC. That might sound like a lot, but it's actually a 13 percent drop from the year before. We haven't seen anything like this since 2009 — which is about when many companies started getting hit with their first demand letters. The letters are often vague about which patents have allegedly been infringed, leading to confusion and fear among the victims about what they may have done wrong. They can fight the suit and go to court, but defending a case is costly and unaffordable for many companies. The congressional legislation being debated would try to address some of these issues. But here's what else could wind up curtailing patent litigation: The Supreme Court. According to PwC, the sharp decline in new patent lawsuits can be traced almost directly to the outcome of a major case last year known as Alice Corp. v. CLS Bank. Most analysts at the time said that Alice didn't matter much. The Court ruled that the software patent Alice Corp. used to sue CLS didn't pass the smell test. That much was obvious to many people watching the case; what they really wanted from the Court decision was a more concrete outline as to what kinds of software patent were patentable. But the fact that Alice put some limits on software patents at all appears to have put major pressure on those who are considering bringing a patent lawsuit, said PwC.Alice effectively "raised the bar for patentability and enforcement of software patents," PwC's report reads.

Daily Tech Snippet: Thursday February 26

• Apple suffers shock loss in gaming patent infringement suit, ordered to pay $533M to small Texas firm; will appeal: (more coverage here and here)Apple Inc. was told to pay $532.9 million after a federal jury said the company’s iTunes software used a Texas company’s patented inventions without permission. Closely held Smartflash LLC, which claimed that Apple infringed three patents, was seeking $852 million in damages, while Apple said it was worth $4.5 million at most. A federal jury in Tyler, Texas, where Smartflash is based, on Tuesday rejected Apple’s arguments that it didn’t use the inventions and that the patents were invalid. The dispute is over digital rights management and inventions related to data storage and managing access through payment systems. Smartflash claimed that iTunes used the inventions in applications such as Game Circus LLC’s Coin Dozer and 4 Pics 1 Movie. Apple pledged to appeal. “Smartflash makes no products, has no employees, creates no jobs, has no U.S. presence, and is exploiting our patent system to seek royalties for technology Apple invented,” said Kristin Huguet, an Apple spokeswoman. “We refused to pay off this company for the ideas our employees spent years innovating and unfortunately we have been left with no choice but to take this fight up through the court system.” In asking for $852 million, Smartflash argued it was entitled to a percentage of sales of Apple’s devices, including the iPhone, iPad and Mac computers, that were used to access iTunes. It claimed that Apple had intentionally infringed the patents, in part because one of its executives had been given a briefing on the technology more than a decade ago. “Apple doesn’t respect Smartflash’s inventions,” the company’s lawyer, John Ward of Ward & Smith in Longview, Texas, told the jury. “Not a single witness could be bothered with reviewing the patent.”

• China's state procurement agency pushes to buy local; has dropped several global brands from approved lists - Cisco, McAfee and Citrix worst hit: China has dropped some of the world's leading technology brands from its approved state purchase lists, while approving thousands more locally made products, in what some say is a response to revelations of widespread Western cybersurveillance. Others put the shift down to a protectionist impulse to shield China's domestic technology industry from competition. Chief casualty is U.S. network equipment maker Cisco Systems Inc (CSCO.O), which in 2012 counted 60 products on the Central Government Procurement Center's (CGPC) list, but by late 2014 had none, a Reuters analysis of official data shows. Smartphone and PC maker Apple Inc (AAPL.O) has also been dropped over the period, along with Intel Corp's (INTC.O) security software firm McAfee and network and server software firm Citrix Systems (CTXS.O). The number of products on the list, which covers regular spending by central ministries, jumped by more than 2,000 in two years to just under 5,000, but the increase is almost entirely due to local makers. The number of approved foreign tech brands fell by a third, while less than half of those with security-related products survived the cull. An official at the procurement agency said there were many reasons why local makers might be preferred, including sheer weight of numbers and the fact that domestic security technology firms offered more product guarantees than overseas rivals.

• Salesforce stock up 12%, at all-time high after strong earnings: 2014 revenue $5.3B, +32% Y/Y: Salesforce.com Inc. raised its revenue forecast for fiscal 2016, thanks to Chief Executive Officer Marc Benioff’s push into new businesses and bigger deals with long-standing customers. Sales will be $6.48 billion to $6.52 billion, the company said in a statement Wednesday, up from its prior prediction for $6.45 billion to $6.5 billion. Analysts had projected $6.5 billion, according to the average of estimates compiled by Bloomberg. Billings rose 32 percent to $2.54 billion in the fiscal fourth quarter, which ended Jan. 31, exceeding analysts’ average projection for 25 percent. Salesforce’s expansion into data analytics, corporate social networks and marketing services is starting to deliver results, with sales in the company’s Marketing and Salesforce1 Platform divisions up from prior quarters. President Keith Block, who joined the company in mid-2013, has been leading the push to generate new revenue from large companies, building on Salesforce’s position as the largest maker of customer-management software. The shares of Salesforce rose as much as 12 percent in extended trading. The stock advanced 1.6 percent to $62.90 at the close in New York, leaving it up 6.1 percent this year, compared with a 2.7 percent gain for the Standard & Poor’s 500 Index. Salesforce’s fourth-quarter net loss narrowed to $65.8 million, or 10 cents a share, from a loss of $116.6 million, or 19 cents, a year earlier. Profit excluding some costs was 14 cents and sales for the period rose 26 percent to $1.44 billion, with both results matching analysts’ predictions. For the just-ended fiscal year, revenue rose 32 percent to $5.37 billion, the third straight period of slowing growth as the business matures.Today after the bell, Salesforce reported $1.44 billion in fourth quarter revenue, and adjusted earnings per share of $0.14. Both were dead in-line with market expectations. The company’s shares are up more than 6 percent in after-hours trading. The company is currently trading at an all-time high. Tomorrow morning should be a watershed moment for the SaaS firm. Is strong guidance pushing Salesforce higher? To a certain extent. The company raised its guidance, but only to levels that match market demands. Salesforce expects $1.48 billion to $1.50 billion in current-quarter revenue. The market expects the company to post $1.5 billion, so, both teams are mostly in agreement. It’s the same story when it comes to the company’s fiscal 2016 (current calendar year), with the company anticipating $6.47 billion to $6.52 billion in top line. The market? $6.5 billion.

• Buggy Bluetooth and unreliable voice recognition systems are now top drivers of car-buyer dissatisfaction, JD Power survey reveals: As communications systems proliferate in cars, they are becoming the biggest source of aggravation for owners, according to a study by the market research firm J.D. Power. From buggy Bluetooth systems to voice recognition systems that do not recognize voices, the problems with in-car computer systems have surpassed excessive wind noise as the most-cited issue. Of owners who had problems with their Bluetooth systems, 55 percent said their vehicle would not recognize their phone and 31 percent said the phone would not automatically connect when they entered the vehicle. The No. 2 problem was voice recognition systems misinterpreting commands. Effective voice recognition is seen as a critical function in cars if consumers are to be discouraged from distracted driving. Google and Apple are poised to enter the market widely, with new dashboard computer systems that will allow consumers to use their smartphones. The study also showed that technology was playing an increasingly important role in buying decisions. Fifteen percent of new-car buyers said they avoided a model because it lacked certain technological features, up from 4 percent in last year’s study. The study covered 177 specific problems grouped into eight major vehicle systems like exterior, seats, steering, suspension, braking and engine and transmission. J.D. Power then ranked brands by the number of problems reported per 100 vehicles; the lower the number of problems, the higher the ranking.

• Uber is offering UberX free in Seoul in a bid to defuse regulatory pressure; also faces potential of IP blockage in India: Global online car hire service major Uber’s IP address may get blocked in India if it does not obtain a radio taxi licence to ply its cabs in the national capital, according to a The Economic Times report citing unnamed Delhi Transport Department official. This will effectively shut down the company’s operations across all 11 cities in India. U.S. taxi service provider Uber Technologies Inc on Wednesday said it will make its low-cost uberX ride-sharing service available free of charge in Seoul, in its second bid this month to operate legally in South Korea. Uber started charging a fee last year for the taxi-like service, which matches passengers via a smartphone app with private drivers who do not hold commercial transport licenses. Prosecutors subsequently indicted Uber's chief executive, Travis Kalanick, as well as its South Korean unit for violating a law prohibiting individuals or firms without proper commercial licenses from providing or facilitating transportation services. "We want to actively work towards a consensus, and the first step to that process is switching off the fare," Uber's head of north Asia Allen Penn said in a statement. Uber proposed a new registration system for its drivers in South Korea earlier this month in a bid to operate legally. But the transport ministry rejected the proposal and said it would stop the company offering its services. Uber has been the subject of similar regulatory ire in countries around the world, even as it expanded into more than 290 cities. In January, the city of Seoul declared Uber's services illegal and started offering rewards of up to 1 million won ($911) for people who reported private drivers providing transport through the company.

Daily Tech Snippet: Tuesday February 10

• Blast-from-the-past: A famous old post on Amazon's move to a Service Oriented Architecture: One day Jeff Bezos issued a mandate. He’s doing that all the time, of course, and people scramble like ants being pounded with a rubber mallet whenever it happens. But on one occasion — back around 2002 I think, plus or minus a year — he issued a mandate that was so out there, so huge and eye-bulgingly ponderous, that it made all of his other mandates look like unsolicited peer bonuses. His Big Mandate went something along these lines: 1) All teams will henceforth expose their data and functionality through service interfaces. 2) Teams must communicate with each other through these interfaces. 3) There will be no other form of interprocess communication allowed: no direct linking, no direct reads of another team’s data store, no shared-memory model, no back-doors whatsoever. The only communication allowed is via service interface calls over the network. 4) It doesn’t matter what technology they use. HTTP, Corba, Pubsub, custom protocols — doesn’t matter. Bezos doesn’t care. 5) All service interfaces, without exception, must be designed from the ground up to be externalizable. That is to say, the team must plan and design to be able to expose the interface to developers in the outside world. No exceptions. 6) Anyone who doesn’t do this will be fired. 7) Thank you; have a nice day! Ha, ha! You 150-odd ex-Amazon folks here will of course realize immediately that #7 was a little joke I threw in, because Bezos most definitely does not give a shit about your day. Over the next couple of years, Amazon transformed internally into a service-oriented architecture. They learned a tremendous amount while effecting this transformation. There was lots of existing documentation and lore about SOAs, but at Amazon’s vast scale it was about as useful as telling Indiana Jones to look both ways before crossing the street. Amazon’s dev staff made a lot of discoveries along the way. A teeny tiny sampling of these discoveries included: – pager escalation gets way harder, because a ticket might bounce through 20 service calls before the real owner is identified. If each bounce goes through a team with a 15-minute response time, it can be hours before the right team finally finds out, unless you build a lot of scaffolding and metrics and reporting. – every single one of your peer teams suddenly becomes a potential DOS attacker. Nobody can make any real forward progress until very serious quotas and throttling are put in place in every single service. – monitoring and QA are the same thing. You’d never think so until you try doing a big SOA. But when your service says “oh yes, I’m fine”, it may well be the case that the only thing still functioning in the server is the little component that knows how to say “I’m fine, roger roger, over and out” in a cheery droid voice. In order to tell whether the service is actually responding, you have to make individual calls. The problem continues recursively until your monitoring is doing comprehensive semantics checking of your entire range of services and data, at which point it’s indistinguishable from automated QA. So they’re a continuum. – if you have hundreds of services, and your code MUST communicate with other groups’ code via these services, then you won’t be able to find any of them without a service-discovery mechanism. And you can’t have that without a service registration mechanism, which itself is another service. So Amazon has a universal service registry where you can find out reflectively (programmatically) about every service, what its APIs are, and also whether it is currently up, and where. – debugging problems with someone else’s code gets a LOT harder, and is basically impossible unless there is a universal standard way to run every service in a debuggable sandbox. That’s just a very small sample. There are dozens, maybe hundreds of individual learnings like these that Amazon had to discover organically. There were a lot of wacky ones around externalizing services, but not as many as you might think. Organizing into services taught teams not to trust each other in most of the same ways they’re not supposed to trust external developers.

• Winner-takes-all: Apple Grabs 93% of the Handset Industry’s Profit; Apple + Samsung > 100% of Industry Profits Report Says: Apple’s record-breaking holiday quarter, which brought in $18 billion in earnings, allowed the company to capture 93 percent of the profit in the handset industry, according to a new report from Canaccord Genuity, an investment firm. Samsung took the rest, but its share is shrinking, the report said. Canaccord Genuity’s report on industry profits a year ago estimated that Apple took 87.4 percent of phone earnings in the fourth quarter of 2013, while Samsung took in 32.2 percent of industry profits. (The numbers add up to more than 100 percent because Apple and Samsung combined made more money than other competitors lost.) The report acknowledges that it may be overstating Apple’s profit because it does not include estimates for some Chinese vendors like Xiaomi, which is one of the biggest smartphone makers in China, the largest smartphone market in the world. The report notes that no estimate could be drawn because Xiaomi, a private company, does not disclose its profit numbers. However, Xiaomi’s profit model does not primarily rely on smartphone sales. The company sells its phones for nearly the same amount it costs to buy and assemble the materials. To make money, Xiaomi focuses on selling apps, games, and special Android operating system themes and Internet services. The upshot of the report is that Samsung is losing ground in its fight with Apple for smartphone dominance. Samsung still sells more cellphones than any other company. But its profit is eroding because Apple is eating into its sales of high-end smartphones, a trend that is likely to continue after the enormous success of the iPhone 6 and iPhone 6 Plus. Both iPhones, which include bigger screens, gave Apple a huge boost in China, an important market for Samsung.

• The package delivery start-up space is getting increasingly crowded in the US: Sidecar, a Ride-Hailing Start-Up, Pushes Into Package Delivery Start-ups like Uber and Lyft are making it acceptable to carpool with total strangers. In the future, you may start carpooling with their lunch. That is exactly what Sidecar, a ride-hailing start-up in competition with the likes of Uber and Lyft, aims to make happen. The company announced on Monday it plans to use its fleet of cars to introduce a package delivery service, delivering items like food and groceries for partner companies. That service will be powered by Sidecar drivers who are also picking up and dropping off passengers, a move the company says cuts pricing and delivery times dramatically. The new service, which is now available in all of the American cities in which Sidecar operates, is essentially an open call to restaurants, grocers and stores which do not otherwise offer a delivery service. Sidecar, which is based in San Francisco, will face numerous competitors. GrubHub, the big online food-ordering service, recently acquired DiningIn and Restaurants on the Run, two companies that will allow GrubHub to start offering delivery for the restaurants it serves. Postmates, another start-up, owns a fleet of messengers who order and pick up food from thousands of restaurants. Sidecar will rub up against Uber, too, in its ultimate ambitions of becoming a way to delivery anything — from groceries to gourmet food — anytime, anywhere to anyone. And to some degree, Sidecar’s move into deliver will also pit it against a couple of the tech titans, Amazon and Google, which have both dabbled in same-day delivery projects.

• Patent story #1 of the day: Qualcomm Inc. was fined $975 million by Chinese antitrust regulators, who set new terms for smartphone makers to license the chipmaker’s technology, ending an inquiry that threatened the U.S. company’s growth in the biggest mobile market. China’s National Development and Reform Commission issued a decision that Qualcomm violated its anti-monopoly law, the San Diego-based company said Monday in a statement. Qualcomm won’t challenge the decision, which includes a fine of 6.088 billion yuan ($975 million) and imposes conditions on royalties charged on phones sold in China. The accord puts to rest an investigation that lasted more than a year and hurt Qualcomm’s ability to collect licensing revenue in China, where some handset makers have delayed royalty payments or paid less than they owe. Qualcomm, whose chips run most of the world’s phones that can access the Internet, gets the majority of its profit from patent-licensing fees related to its ownership of technology fundamental to cellular-phone systems. “It’s a net positive when it’s all shook out,” said Mike Walkley, an analyst at Canaccord Genuity, who recommends buying Qualcomm stock. “It makes more sense if China wants to protect the Chinese consumer.” Qualcomm shares rose 3.1 percent in extended trading following the announcement. They gained 1.2 percent to $67.11 at the close in New York. The stock was little changed last year as the company grappled with the impact of the investigation on its business. As a concession to Chinese authorities, Qualcomm will offer licenses to 3G and 4G essential patents and will no longer require the bundling of those rights with other patents in its portfolio, the company said. For handsets sold in China, Qualcomm will charge a licensing rate that’s similar to the royalty rates it charges elsewhere in the world, countering concerns that it would be forced to offer a discount to settle the investigation. While the percentage being charged is similar, the value of the handsets -- used as the basis for the calculation -- will be assessed at 65 percent of the device’s total price for phones sold in China, Qualcomm said. “We end up better-positioned as a company in China as a result,” Chief Executive Officer Steve Mollenkopf said in a telephone interview. “It removes the uncertainty.” The company had $31.6 billion of cash and marketable securities at the end of its most recent quarter. While chip sales provided 74 percent of revenue in that period, licensing fees contributed 58 percent of pretax profit. The company has collected more than $30 billion in royalties in the past five years. The chipmaker said it now projects revenue for the year that ends in September will be $26.3 billion to $28 billion, compared with a Jan. 28 forecast that revenue would be as low as $26 billion. Annual profit excluding certain costs will be $4.85 to $5.05 a share, Qualcomm said, up from an earlier estimate of $4.75 to $5.05

• Patent story #2 of the day: Microsoft and Samsung have settled a contract dispute over patent royalties, though terms of the settlement are confidential, Microsoft said in a statement on Monday. Microsoft sued Samsung last year in a federal court in New York, accusing Samsung of breaching a collaboration agreement by initially refusing to make royalty payments after the U.S. company announced its intention to acquire Nokia's handset business in September 2013. The lawsuit claimed Samsung still owed $6.9 million in interest on more than $1 billion in patent royalties it delayed paying. Samsung has countered that the Nokia acquisition violated its 2011 collaboration deal with Microsoft. In 2011 a technology analyst at Citigroup estimated that Microsoft was getting $5 per Android handset sold by phone maker HTC under a patent agreement, and that Microsoft was looking for up to $12.50 per phone from other handset makers it had yet to come to an agreement with. Microsoft has never confirmed those figures, but neither has it said publicly that the estimates were out of line. To apply the $5 price to Samsung, the Korean company could be paying Microsoft about $1.6 billion per year, based on Samsung's sales of 318 million smartphones in 2014, according to IDC shipment numbers. Samsung said it had agreed in 2011 to pay Microsoft royalties in exchange for a patent license covering phones that ran Google Inc's Android operating system. Samsung also agreed to develop Windows phones and share confidential business information with Microsoft, according to court filings. Once Microsoft acquired Nokia, it became a direct hardware competitor with Samsung, the filings said, and Samsung refused to share some sensitive information because of antitrust concerns.

• Patent story #3 of the day: IBM filed a lawsuit against Priceline on Monday, accusing it of infringing four IBM patents in running its travel and dining websites. International Business Machines Corp asked the U.S. District Court for the District of Delaware to bar Priceline from using the patents, to award IBM royalties and to order Priceline to pay IBM's costs and attorney's fees. IBM also said that the infringement was willful, and asked for all damages to be trebled. IBM said it had approached Priceline about the alleged infringement. "Despite IBM’s repeated demands, Priceline refuses to negotiate a license. This lawsuit seeks to stop Priceline from continuing to use IBM’s intellectual property without authorization," IBM said in its complaint. Two of the IBM patents are from the late 1990s, one which tracks prior conversations with a user and another which speeds Internet transmissions. The third patent is from 2006 and is a method of showing Internet advertising; a fourth from 2009 improves on a single sign-on. Priceline also used the patented technology on its websites kayak.com and opentable.com, IBM alleged.

Daily Tech Snippet: Monday January 5

• Xiaomi 2014 revenue ~$12B (+135% Y/Y), smartphone shipments up 227% Y/Y; Huawei 2014 revenue $46B (+15% Y/Y), smartphone shipments up 40% Y/Y Xiaomi booked 74.3 billion yuan ($11.97 billion) in pre-tax sales last year, up 135 percent from 2013, the firm's chief executive Lei Jun said on his official microblog account on Sunday. Xiaomi sold a total of just over 61 million phones in 2014, up 227 percent from a year earlier, Lei added in a post on his Sina Weibo microblog account. The post did not give a related profit figure, although a filing last month showed that the firm was grappling with razor thin margins as it rapidly expands. A part of the business made around 347.5 million yuan net profit last year on revenue of 26.6 billion yuan and an operating margin of just 1.8 percent. Huawei: China's Huawei says 2014 sales revenue to rise 15 percent to $46 billion. Huawei's smartphone shipments rose by more than 40 percent last year, according to an internal memo seen by Reuters, failing to match its own target and the performance of faster-growing rivals such as Xiaomi.

• Separately, Xiaomi announces the Redmi 2, an improved version of its sub-$150 smartphone: The company’s flagship Mi devices may attract all the attention, but the sub-$150 Redmi family is its biggest seller. Back in July of last year, Xiaomi revealed it had sold 18 million Redmi (/Hongmi as it is known in China) phones and 3.56 million Redmi Note phablets. The Redmi alone accounted for one-third of total sales at the time. The Redmi 2 keeps much of the original model’s ingredients. It has the same 4.7-inch, 1280 x 720 display, but under the hood there’s an upgraded 64-bit Qualcomm 410 quad-core processor. The device sports an 8-megapixel rear camera, improved 2-megapixel front camera, 1GB RAM and 8GB on-device storage. There is now dual 4G SIM support too. The Redmi 2 — which runs Xiaomi’s own MIUI version of Android — also gives a few more options for color-loving customers. ‘Lime green’ and ‘powder yellow’ are the new additions to the palette. The phone will cost 699 CNY, which is around $112, when it goes on sale on January 9. There’s no word on when it will be released outside of China, but you can be sure that the Redmi 2 will make its way to India, Indonesia and Xiaomi’s other overseas markets soon.

• IBM's stock is in a funk, and analysts call for the firm to invest in R&D rather than do share buy-backs: IBM requires an atypical activist fix. The company’s strategy of cost cuts and debt-fueled buybacks is no longer working – even though the company keeps trying. A tarnished balance sheet, lean staffing and a history of disposals rule out typical activist wheezes. Encouraging Virginia M. Rometty, the chairwoman and chief executive, to invest in IBM’s core businesses could pay off. IBM has run the same playbook for two decades. It sells low-margin businesses, cuts expenses, buys some profitable software companies and returns a lot of cash to investors. Over the last four quarters, the $152 billion company has spent more than $23 billion on dividends and buybacks. The problem is that IBM is investing too little. It has spent only about $11 billion over the last four quarters in total on research and development, capital expenditure and acquisitions. That’s a problem in technology, where old products soon become obsolete. Google spends about 16 percent of its sales on R.&D., but IBM spends 6 percent. The effect is becoming clear on the top line. Revenue has shrunk for 10 consecutive quarters. Costs have been cut to the bone, sending customers fleeing to better service providers. In a good year for stocks, IBM’s shares have fallen more than 15 percent. That means IBM has overpaid on its last three years of buybacks.

• Big data firms are starting to focus on 'unstructured data' that resides in presentations, memos and reports: data analysis is great if your information is in formats that are easy for computers to read, such as spreadsheets with numbers, or responses on a scale from one to five. But a lot of information isn't organized like that. Instead, it's in presentations, memos, reports, comments or just plain e-mail. Analysis of that kind of information -- often called "unstructured" or "dark" data -- is really tough to do by computer, and companies including Intel, SAP and HP are looking for a more reliable way to do it. Another firm, uReveal, thinks that it's cracked the code. Charles "Bucky" Clarkson, uReveal's chairman and CEO, said that software such as his makes it easier to to parse all those government reports and organize the data so that analysts can get more out of it, and more quickly. He also claims that the software is so simple to use that (gasp!) even liberal arts majors can use it.

• Tech patents are increasingly in the news: Story #1: Priceline.com's founder attempts a marketplace for tech patents, and China announces plans to triple the number of patents filed by 2020: In 1997, Jay Walker founded Priceline.com — the Web site many people use to get cheaper airfare by "naming your own price." Patenting the solution, and allowing others to use the patents for a fee, helped drive Walker's success. But, Walker argues in an interview, many patents remain underused. Now, the man who smoothed transactions for buyers and sellers of airplane tickets wants to do something similar for a key part of the nation's information economy. Walker is developing something called the United States Patent Utility. "We're going to form a utility, which works as a neutral party for both inventors of technology and users of technology. So you would be listing your patents as available for use. Then the next thing we're going to do is, we're going to say to people who are small to medium sized companies, get on the phone with us and talk to us for about 10 or 15, 20 minutes and tell us about your products and services. Send us PDFs of your sales manuals, your technical literature we can ingest, and we'll build a model of the technologies and products you use. If you're a shoe manufacturer, we can take all your specifications, all your sales materials, and we can read it all into the system. And then what we do is use a set of Big Data algorithms to take your specifications of all your products and services and run it up against the entire U.S. database of patents, which is about 2-plus million active patents. We run it against all the inactive patents, all the expired patents. Think of it as a natural-language kind of way. You don't need to be a programmer any more for it to run up against the entire database.

• Tech patents are increasingly in the news: Story #2: China announces plans to triple the number of patents filed by 2020: China is aiming to triple the number of patents it files by 2020 as Beijing looks to boost the country's high-tech economy in areas from agriculture to pharmaceuticals, according to a notice from the central government on Sunday. China is targeting 14 invention patents per 10,000 habitants by 2020 compared to four in 2013. It published 629,612 patents in 2013, over 200,000 more than the United States, according to a Thomson Reuters study in December. Beijing is also looking to reduce the length of the review process for patent and trademark applications. Patent reviews will decline to 20.2 months in 2020 from 22.3 months in 2013, while trademark reviews will fall to 9 months from 10 months. "Intellectual property (IP) is increasingly becoming a vital component of China's strategic resources and competitive ability," the statement posted on the Central People's Government website said.