Daily Tech Snippet: Friday, July 22

• Startup Deal Activity Keeps Falling Worldwide: According to a new report from KPMG International and CB Insights, global deal activity for venture capital-backed startups continued a decline in the second quarter after hitting record levels one year ago. In fact, at the current rate, deal activity will just barely top 2013’s numbers. "Many of the high-profile tech [initial public offerings] from 2015 continue to trade well below their initial offering price, putting pressure on private company valuations," said Brian Hughes of KPMG. "This, combined with economic concerns in China and Europe, has continued to put a damper on VC investment." "It's a challenging time for VC investors," he concluded.The reason funding moved higher while deal activity dropped is that some larger startups such as those of Snapchat Inc., Didi Chuxing, and Uber Technologies Inc. all saw huge rounds, accounting for much of the funding. In fact, in North America, Uber and Snapchat accounted for more than $4.5 billion of the $17.1 billion in total investment.And while there might have been more billion dollar companies minted in the second quarter than in the first, there were yet again more "down events"—companies raising new money or being acquired at a lower valuation—than there were unicorns created. According to the report, seven startups reached the unicorn club in the past four months, but CB Insights’ downround tracker shows that 17 failed to live up to expectations and experienced down events over that time. Unicorn creation saw its most recent peak in the third quarter of last year, when 25 were birthed.

• Roger Ailes created another big problem for Fox News — the average age of its audience is 68: Roger Ailes, the closest thing in modern U.S. politics to a kingmaker, today stepped down as head of Fox News, the network he founded 20 years ago and turned into a potent political force. James Murdoch and his brother Lachlan, both named by father Rupert to run parent company 21st Century Fox last year, pushed Ailes out on the heels of a sexual harassment suit that led to more allegations of sexual misconduct from female anchors. The brothers saw the situation as a way to remove a longstanding obstacle to their power within the company. A lot of the news reports — most of the key details were first broken by New York Magazine’s Gabriel Sherman — centered on how the 76-year-old, a lifelong Republican, clashed with the two brothers politically, personally and as an executive. Ailes is known as a venal operator, specializing in deals with questionable reciprocity. His style was completely at odds with James, a data-driven technocrat, and Lachlan, the earnest Murdoch member. Mostly true. A lesser-known but perhaps more important reason had to do with more practical issues — namely, the business of Fox News itself, according to sources. The average age of Fox News viewers in primetime, the hours that draw the highest ad rates and so are the ones that matter, is 68 — a group that advertisers don’t pay to reach. In the world of cable news, marketers really only pay for viewers in the 25-54 age range. That means a good chunk of Fox News’ audience is worth little to nothing. Fox News still mints money — it accounts for as much as 24 percent of the parent company’s yearly profit, or more than $1.5 billion — but a lot of that comes from licensing fees paid by distributors to carry the network, which are only negotiated every few years. Fox News still leads in total viewership and in primetime, but it can’t capitalize on a lot of that audience since advertisers don’t pay for a lot of these viewers. That weighed on the future value of the network, as James saw it, according to one person familiar with the matter, and as much as Ailes’s style and politics were issues for both brothers, the more pressing concern was managing for the future of the network, this source said.

• Reddit is still in turmoil: Its been one year since Reddit revolted When the company cracked down on revenge porn and subreddits containing offensive content last summer, the backlash was swift and ultimately led to the ouster of interim CEO Ellen Pao. Although Pao was seen as the driving force behind efforts to make Reddit respectable enough to appeal to advertisers, the company continued its clean-up after her departure, making diverse hires and keeping up with the anti-harassment policy instituted during Pao’s tenure. But Reddit, led by CEO Steve Huffman, seems to be struggling with its reform. Over the past six months, over a dozen senior Reddit employees — most of them women and people of color — have left the company. Reddit’s efforts to expand its media empire have also faltered. Reddit let go of at least two key members of its team earlier this week, several sources with knowledge of Reddit confirmed to TechCrunch. Among those who lost their jobs are Reddit’s vice president of marketing, Celestine Maddy and Reddit’s editorial director, Vickie Chang. Also this week, Reddit HR generalist Nicole-Jasmin Clark left the company, according to our sources and confirmed by her LinkedIn, as well as a handful of people from the marketing team. The layoffs follow departures from the network’s video team last month, and the slow trickle of employees exiting the company over the past several months. Back in May, Reddit lost its head of community, Kristine Fasnacht, after being in the role for just nine months. In short, female and POC employees have been quietly leaving the company — by way of layoffs and resignations — from many departments, including engineering, marketing, operations and product. Reddit’s associate creative director Stephen Greenwood also left the company in June. sources say Reddit’s internal turmoil can be traced back to the company’s ongoing struggle to leave its antagonistic culture behind. Several employees fended off uncomfortable comments from users and management alike, sources claimed. “Management is terrible, a complete reflection of what the site is like,” one source said. Another source, a former Reddit employee who asked to remain anonymous described a management team with good intentions but poor execution.One individual speculated that the reemergence of the company’s drinking culture was to blame for the uncomfortable environment. Under Pao’s reign, Reddit tried to eradicate the bro-like amount of alcohol consumption at the office, but that went right out the window following Pao’s departure in July 2015.

• Visa and PayPal have finally settled a long-standing feud: Two months ago, Visa’s CEO issued a thinly veiled threat to PayPal: Stop driving business away from us or risk increased competition like you’ve never seen. He got his wish. The two payment companies just announced a wide-ranging partnership that includes a promise from PayPal to stop steering Visa cardholders away from using their Visa cards for PayPal transactions. The new accord will also enable PayPal’s mobile app to work as a payment option in brick-and-mortar stores whose equipment accepts tap-and-pay Visa payments. The partnership appears to bring to a close tension between one of the world’s biggest credit companies and the biggest alternative online payment option in the U.S. PayPal has been viewed warily by the credit card companies that don’t appreciate PayPal pushing their customers to pay with a bank account hookup — known as ACH — rather than a payment card. PayPal historically makes more money on a transaction when a user funds his or her PayPal wallet with a direct bank account hookup, since that method carries lower transaction fees than payment cards do.“The agreement affords PayPal certain economic incentives, including Visa incentives for increased volume, and greater long-term Visa fee certainty,” according to the press release. Translation: Visa is paying PayPal for increasing the amount of PayPal transactions that flow through Visa pipes. It appears PayPal is also getting a promise that Visa will not raise the fees it charges PayPal when a PayPal customer uses a Visa card to make a PayPal purchase. But it still appears likely that the deal will eat into PayPal’s profits as more Visa customers choose to pay with cards through PayPal instead of bank accounts, according to Craig Maurer, an analyst with Autonomous Research. “Yes, PayPal will get some form of incentives from Visa, but we believe the off-set will be minimal while this drag will be material,” he wrote in research note to clients.

Daily Tech Snippet: Thursday, April 28

• Facebook revenue smashes expectations as mobile ad sales surge: Facebook Inc's (FB.O) quarterly revenue rose more than 50 percent, handily beating Wall Street expectations as its wildly popular mobile app and a push into live video lured new advertisers and encouraged existing ones to boost spending. The company's shares rose 9.5 percent in after-hours trading on Wednesday to $118.39, setting it on track to open at a new high on Thursday, at nearly triple its initial public offering four years ago. Facebook also announced it will create a new class of non-voting shares in a move aimed at letting Chief Executive Officer Mark Zuckerberg give away his wealth without relinquishing control of the social media juggernaut he founded. Some 1.65 billion people used Facebook monthly as of March 31, up from 1.44 billion a year earlier. Zuckerberg said users were spending more than 50 minutes per day on Facebook, Instagram and Messenger, a huge amount of time given the millions of apps available to users. "The company consistently 'warns' about higher spending, but they consistently manage their spending to deliver earnings upside. They're an impressive company, and they leave very little room for criticism," said Wedbush Securities analyst Michael Pachter, who called the operating margin a good surprise. Facebook did not offer details on sales of its Oculus Rift virtual reality headset, but emphasized that it was early days and said that sales would not significantly impact 2016 revenue.  The company's net income attributable to common shareholders nearly tripled to $1.51 billion, or 52 cents per share, in the first quarter from $509 million, or 18 cents per share, a year earlier. Excluding items, the company earned 77 cents per share, beating Wall Street's 62-cent consensus. Total revenue rose to $5.38 billion from $3.54 billion, with ad revenue increasing 56.8 percent to $5.20 billion. Mobile ad revenue accounted for about 82 percent of total ad revenue, compared with about 73 percent a year earlier.

• PayPal beats the street on Q1 sales of $2.54B and EPS of $0.37: Payments giant PayPal posted strong Q1 earnings today, counter balancing some of the weaker showings from other tech stocks yesterday and outstripping the overall growth rate of e-commerce, in its own words. Following in the footsteps of its former parent, which alsoposted strong results for Q1, PayPal posted revenues of $2.544 billion with non-GAAP earnings per share of $0.37, rising 19% and 28% respectively on a year ago and both beating analysts’ projections of $2.5 billion and $0.35 EPS. The company says it has 184 million customers now, up by 4.5 million, with 1.4 billion transactions in the quarter up 26% on a year ago. Services like Venmo and the company’s expansion into credit and other services has given the company a life on average transactions per customer, which were up 12% to 28 payments per user, and $81 billion in total payment volume. That $81 billion in TPV, it said, “was faster than the growth rate of e-commerce.” On the merchant side, there are now 14 million active accounts. When it comes to new-wave revenues, PayPal is showing some of its legacy: the company only completes 26% of transactions on mobile devices today, versus 22% a year ago.

• A Silicon Valley VC says investors from China are joining Series A deals, and they’re playing “hardball”: On valuations: The average thing coming out of Y Combinator is probably a half to three-quarters of what it was [in terms of valuation in recent years]. The average seed-stage deal is half. On hardball tactics: Docs are taking longer because there are new investors coming in, and they want more stuff in their terms. These are newer investors, often foreign investors, who are basically saying: “I want senior preference to [a company’s earlier] investors,” and that’s adding two or three weeks as they usually ask right as the docs are closing. They’re almost all from China, and they want all of their preferences to be senior to everyone else’s. What’s happening is, since they know the capital’s financials, they just wait it out. By that point, we’ve already signed a term sheet and turned off a lot of other people who wanted to invest. These things never come up in the term sheet phase but later in the docs. They’ll say, “We did our diligence, and we need XYZ to invest.” It’s not a great way to start a relationship. People in the ecosystem around here are playing for the long term; they realize that sooner or later, they’ll be on the other side of the table and don’t want this stuff applied to them. This is mostly coming from Asia, where they play much harder hardball than here. And [these investors] do it with a happy face. That’s just the environment [to which they’re accustomed]. On the slowdown in tech valuations:  I don’t expect it to pick up any time soon, which is a function of retail and institutional investors looking for high-growth stories with profit associated with them. They want profit and growth. Meanwhile, a lot of companies that have strong revenue can’t show that growth, and vice versa. There just aren’t a lot of companies that could sustain being public right now.

• Amazon is liable for billing you for your kid’s wild in-app purchases, a judge says:  A federal judge ruled on Tuesday that Amazon is liable for billing parents for unauthorized in-app purchases made by their children. With the ruling, U.S. District Court Judge John Coughenour sided with the Federal Trade Commission in its lawsuit against Amazon for failing to get consent from parents for in-app purchases made by kids. “Many of Amazon’s arguments improperly assume a familiarity with in-app purchases on the part of consumers,” the judge said in the ruling. “For example, Amazon cites to a case determining that a ‘reasonable Amazon customer is accustomed to online shopping,’ but online shopping and spending real currency while obtaining virtual items in a game are completely different user activities.” The court has not yet ruled on how much Amazon will have to pay out to customers affected by the practice. The FTC previously settled with Apple and Google in similar cases, resulting in more than $50 million being returned to consumers.

• Chinese phone makers Oppo and Vivo pass Xiaomi in global phone sales: Being the “it” smartphone sure doesn’t last long. New data from IDC finds that Xiaomi now trails several of its less well known Chinese rivals when it comes to global market share. Overall, there were 334.9 million smartphones worldwide in the first quarter of 2016, IDC said, up very slightly from the 334.3 million units a year ago. That marks the smallest year-over-year growth on record. Oppo and Vivo, two names unfamiliar to most Americans, are now the No. 4 and No. 5 phone sellers behind Samsung, Apple and Huawei, another big Chinese hardware maker. Huawei is also on the rise, still far short of its goal of supplanting Apple and Samsung, but at least closing the gap on the two leaders. Oppo and Vivo are mostly known in the Chinese market, though Oppo now gets about 20 percent of its sales from outside its home turf.

• It feels like every tech company is offering cash advances. Shopify is the latest: Following in the footsteps of PayPal and Square, e-commerce software company Shopify said on Wednesday that it would start offering cash advances to business owners who use its software. The program, called Shopify Capital, will let eligible Shopify merchants obtain a lump-sum cash advance in exchange for a fixed percentage of their daily sales. Cash advances are popular with small businesses that don’t have the time or business history to secure a loan from a bank. The Shopify announcement comes more than two years after payments companies PayPal and Square began offering similar programs. Right now, companies that serve small businesses are seeing this market as a way to create a new revenue stream that can be sold to existing customers — and, they hope, help retain them. They are joining an increasingly crowded space, as the online alternative lending space has heated up in recent years. Merchant cash advances have had a mixed reputation in the past, due to hidden fees and the risk of a business getting addicted to them. But internet companies like Shopify are trying to remove the stigma around them by promising to disclose up front how a business will pay back the advance. Square recently moved from offering cash advances to actual loans.

Daily Tech Snippet: Thursday, January 28

• Facebook shares soar as mobile drives big jump in ad sales: Facebook smashed investors' expectations with a 52-percent jump in quarterly revenue as it sold more ads targeted at a fast-growing number of mobile users, sending its shares sharply higher after hours. Facebook shares rose almost 12 percent in after-hours trading to $105.32. The company said sales in the fourth quarter rose 52 percent from a year ago, to $5.84 billion, while profit increased to $1.56 billion, more than doubling from $701 million a year ago. For the full year, the company reported $3.69 billion in profit on $17.93 billion in revenue, an increase of 44 percent from 2014. The company has also begun monetizing some of its other units, such as photo-sharing app Instagram, which surpassed 400 million users last year and began selling ads in September. Facebook said mobile ads accounted for 80 percent of total ad revenue in the quarter, compared with about 78 percent in the third quarter and 69 percent a year earlier.The results offer a bright spot in a tumultuous climate for many American technology stocks. Shares of Twitter, Facebook’s most visible social networking competitor in the United States, have tumbled more than 55 percent during the last year. Yelp, the local-review service, is down about 60 percent. LinkedIn, the professional social networking service, is off more than 15 percent. Facebook is a much larger company than many of its peers, yet it is able to keep its growth rate high. The company has notched double-digit jumps in ad revenue and in the expansion of its user base. Facebook now has 1.59 billion monthly visitors, up 14 percent from a year ago. About 1.44 billion of those people visit the site on a mobile device; 1.04 billion visit Facebook every day. 

• EBay's disappointing forecast fuels stock decline: EBay forecast weaker-than-expected revenue and profit for the current quarter and full year, as the e-commerce company struggles against a strong dollar while trying to revamp its core marketplace business. Shares of the retailer fell more than 12 percent to $23.51 in extended trading on Wednesday. The online retailer, which faces intense competition from e-commerce giant Amazon.com, has also been hit by brick-and-mortar rivals like Wal-Mart Stores that are aggressively boosting their online presence. The company said its gross merchandise value, or the total value of all goods sold on its site, rose 5 percent after accounting for foreign exchange impact. In its second quarter without PayPal, eBay's revenue was $2.32 billion in the fourth quarter ended Dec. 31, flat with a year earlier during the crucial holiday shopping season and in line with analysts' average expectations. EBay began testing a paid shipping membership program in Germany last year, responding to shoppers' increased demand for faster delivery. Wenig on Wednesday said there were "no plans for now" to expand the program. EBay derives nearly 60 percent of its revenue from overseas and faces headwinds from a strong dollar.

• PayPal's revenue beats Street view on higher transactions, customers: Revenue rose about 17 percent to $2.56 billion.  Payment processor PayPal Holdings Inc on Wednesday reported better-than-expected quarterly revenue, as new customer additions and payment processing volumes surged, and it announced a buyback of $2 billion of its stock. PayPal said it expects 2016 full-year earnings of $1.09 to $1.14 per share, and revenue growth of 16-19 percent on a currency neutral basis. It expects currency fluctuations to impact net revenue by 3 percentage points during the year. The company's share buyback program was a reminder of the strength of its free cash flow. PayPal ended the year with $5.7 billion in cash reserves. PayPal's net income rose to $367 million, or 30 cents per share, from $286 million, or 23 cents per share. Shares of PayPal, which completed its spin-off from eBay Inc in July, rose 6.4 percent to $33.66 in extended trade.

• Samsung Electronics warns of difficult 2016 as smartphone market peaks:  Tech giant Samsung on Thursday warned of possible weaker earnings this year compared with 2015 due to softer sales of gadgets such as smartphones, a trend that is also hurting rival Apple and major chipmakers. The South Korean firm's warning came a day after Apple shares fell more than 6.5 percent, the biggest percentage drop in two years, as the iPhone maker forecast its first quarterly sales drop in 13 years.

• Qualcomm forecasts weak profit as demand slows for mobile chips:  Qualcomm forecast current-quarter profit below analysts' expectations as demand weakens for its chips used in mobile devices in a slowing market. Revenue fell 18.7 percent to $5.78 billion. The company, whose customers include Apple, said it expected its mobile chip shipments to fall by 16-25 percent in the second quarter from a year earlier. Qualcomm also expects 3G and 4G device shipments to decline by 4-14 percent, hurting its licensing revenue. The chipmaker's weak outlook comes a day after Apple forecast its first quarterly revenue drop in 13 years and reported the slowest-ever rise in iPhone shipments as the critical Chinese market shows signs of weakness. Qualcomm shares fell 3 percent in extended trading on Wednesday.

• Google ships five million Cardboard virtual reality devices: Alphabet's Google said it had shipped 5 million units of the Google Cardboard viewer, a wearable device that allows users to experience virtual reality through mobile apps. Oculus, the virtual reality company Facebook Inc (FB.O) bought in 2014, started accepting pre-orders this month for its much-awaited headset, Rift, which will ship in first quarter. Google said in November that its video-sharing site, YouTube, supported virtual reality videos. Viewers can watch virtual reality videos using a mobile device and the Google Cardboard viewer. Google said more than 350,000 hours of YouTube videos had been watched in virtual reality.

• Theranos Lab Poses ‘Immediate Jeopardy to Patient Health,’ Says U.S. Agency:  The Centers for Medicare and Medicaid Services has decided that Theranos’ Newark, Calif., facility poses “immediate jeopardy to patient health and safety.” A letter sent to the company on January 25th says that the lab has been given 10 days to provide “acceptable evidence of correction.” Specifically, the document cites problems with the laboratory director, the technical supervisor, hematology and the lab’s analytic systems. CMS has not released the laboratory inspection report that led to this letter, so the details of these infractions remain unclear. But the level assigned to these determinations — “Condition-level deficiencies” — are among the most serious that CMS can make. They mean that Theranos’ Newark lab was found to be in violation of accepted professional standards. CMS declined to comment on the letter.

Daily Tech Snippet: Thursday, October 29

• Flipboard's Fanfare Fades as Executives Exit, Sale Talks Stall: Flipboard Inc. debuted in 2010 with the kind of fanfare any startup would envy. The news-reading app piggybacked perfectly on the debut of Apple’s iPad tablet and Steve Jobs’s promise of a new era for digital media. Critics loved Flipboard’s magazine-like layout, created by one of the first software designers of the iPhone, and investors poured money into the company. Almost five years later, Flipboard is struggling to live up to the praise. Several senior executives have departed, including co-founder Evan Doll, and talks to sell the company haven’t reached the finish line, according to people familiar with the plans, who asked not be named discussing private matters. Flipboard’s woes are indicative of a larger malaise gripping startups across the technology landscape as questions emerge about the sustainability of the tech-investment boom. Flipboard is performing well enough -- and, after raising more capital earlier this year, is at no risk of going out of business -- but is no longer a breakaway hit. People are finding media through their Facebook or Twitter feeds, limiting the need for a stand-alone application like Flipboard. Meanwhile, advertising rates -- the company’s main revenue stream-- have been in decline. While Flipboard’s reading app was a showpiece for the iPad five years ago, the company is now working to adjust to a changing digital-news market and live up to its $800 million valuation. Other companies facing similar questions about whether they can make good on early investor expectations -- and lofty private-market valuations -- include online storage service Dropbox Inc., note-taking company Evernote Corp., music-streaming service Deezer SA and blood-testing company Theranos Inc., said Anand Sanwal, chief executive officer of CB Insights, a firm that tracks startup investing. The companies face a challenge in that they could be too expensive for another company to buy, yet may not have the business fundamentals to justify their valuations to public investors through an initial public offering, he said.

• Samsung Deploys Cash Pile With $10 Billion Buyback, Capex Boost, As Phones Fail To Revive Growth: Samsung Electronics is tapping its $50 billion cash pile to buy back shares and invest in its components business after struggles in the smartphone division battered investors. Shares surged. The company will buy back and cancel 11.3 trillion won ($10 billion) of shares and boost capital spending by 14 percent this year, Samsung said Thursday. The announcements came after the company posted profit that trailed analyst estimates. Capital expenditure will rise to 27 trillion won this year as the company invests in chips and display plants.  Samsung is struggling for an answer to Apple Inc. in high-end smartphones, trying price cuts, a $120 rebate program and new models to tempt consumers from buying iPhones. That has prompted a renewed focus on making components for earnings growth, with new semiconductor and display plants to get its parts into other vendors devices. Samsung said it will increase capital spending after posting profit that missed analysts’ estimates as price cuts on new Galaxy S6 smartphones failed to sway consumers from buying iPhones. Capital expenditure will rise 14 percent to 27 trillion won ($24 billion) this year, the company said Thursday. Net income, excluding minority interests, was 5.31 trillion won ($4.7 billion) in the third quarter with profit to fall in the current period, Samsung said. Increased marketing spending, including a $120 rebate program, hasn’t sparked sales of the premium devices that generate fatter profit margins. Samsung is investing in computer chip plants as it tries to revive Galaxy smartphone demand through a new mobile payment service and by releasing larger devices at least a month before the new iPhones to recapture market share from Apple Inc. Shares of Samsung rose 4.9 percent in Seoul, the highest since May. The rally erased their decline for the year.

• Ebay Exceeds Expectations While Paypal Flops: PayPal CEO Dan Schulman defended his strategy of inking deals with big merchants and smartphone applications and offering free peer-to-peer payments as investors sent shares down on concerns the efforts are hurting the company’s quarterly profit. PayPal, in its first quarter as a stand-alone company separate from EBay Inc., said it added 4 million accounts to reach 173 million users. Its total payments volume gained 20 percent to $69.7 billion from a year earlier. But investors reacted to the company’s declining take rate, a measure of how much money PayPal keeps from each payment made on its platform. That metric fell to 3.24 percent in the third quarter from 3.39 percent a year earlier, the company reported Wednesday in a statement, and shares dropped as much as 7.8 percent in extended trading. The goal of the July split with EBay was to make sure that each company could focus on their main businesses. EBay last week reported quarterly profit and sales that topped analysts’ estimates and raised its outlook, sending shares up the most in 10 years. PayPal’s strategy is to attract more customers and merchants and offer them expanded services as competition in the payments industry intensifies with startups Square Inc. and Stripe Inc. as well has Apple Inc. and Google Inc. who are trying to create digital wallets. Even JPMorgan Chase & Co., entered the digital payments race Monday. PayPal is processing more payments in stores like Macy’s and on popular smartphone applications like Uber and Airbnb. But PayPal keeps less money from each transaction because the clients that bring bigger volume to the payments company also have the leverage to negotiate lower rates. The downside of that strategy was on display when Square disclosed its money-losing relationship with Starbucks Corp. The challenge for Schulman is to differentiate PayPal as competition intensifies. Among the additional services the company offers is a merchant cash advance program called PayPal Working Capital, which gives preapproved loans to businesses that process payments through PayPal. PayPal also is getting into the international money-transfer business by purchasing Xoom Corp. for $890 million in a deal announced in July.

• Yelp - struggling so far this year - beats Street expectations on revenue sending shares up 7%: Yelp reported a bigger-than-expected 40 percent jump in quarterly revenue as more local businesses advertised on Yelp.com, its consumer review website. Shares of the company, whose website and app allow users to rate restaurants and a variety of other businesses, rose about 7 percent after the bell on Wednesday. To Wednesday's close of $22.07, Yelp's stock had fallen nearly 60 percent this year. San Francisco-based Yelp, which gets about four-fifths of its revenue from local advertisers, said the number of local advertising accounts rose about 37 percent to 104,200 in the third quarter. Yelp has been investing to grow its website beyond user reviews by investing in services such as restaurant reservations, food ordering and delivery. The company reported a net loss attributable to common stockholders of $8.1 million, or 11 cents per share, for the quarter ended Sept. 30, compared with a profit of $3.6 million, or 5 cents per share, a year earlier. Revenue rose to $143.6 million from $102.5 million.

• Verizon says Internet of Things revenue at $500 million year-to-date. Aimed at connecting to the Internet everything from household devices to industrial machines, the business is growing at a "double-digit" rate, Mike Lanman, senior vice president of enterprise products at Verizon said at an event in San Francisco. "A large portion of our revenue comes through connectivity but a significant part of it comes from the application layer already," he said in a phone interview after introducing a platform to help customers develop applications in healthcare, agriculture, utilities and connected cars. Last year, Verizon's annual revenue from the business totaled $585 million. The global Internet of Things market is expected to grow to $1.7 trillion in 2020 from $656 billion in 2014, according to market research firm IDC. Examples include Verizon's fleet management tracking application and a partnership with Intel Corp (INTC.O) to provide water management sensors in vineyards, Lanman said. At the event, Verizon also unveiled a chip that Lanman said halves the cost of connecting low data usage devices like dog trackers to high-speed networks. AT&T has also been working on growing its "Internet of Things" business and previously launched initiatives such as a cloud-based data-analytics platform for companies and a global SIM card for connected cars. AT&T said last week it added 1.6 million connected devices including 1 million connected cars in the third quarter of 2015.

• Alphabet, Indonesian companies to expand Web access via balloons: Alphabet, the new holding company for Google, has teamed up with three Indonesian telecommunications companies to expand Internet access in that country using solar-powered balloons. Alphabet officials, including co-founder Sergey Brin, and representatives from Indonesian companies Telkomsel, XL Axiata Tbk PT (EXCL.JK) and Indosat Tbk PT (ISAT.JK) signed an agreement Wednesday to bring so-called Project Loon to the nation of 250 million people. The project sends solar-powered balloons 16,000 feet (5,000 meters) into the air to deliver Internet access through radio frequency signals to antennae connected to buildings on the ground. The balloons use algorithms to find the best winds to carry them along their charted course. Project Loon is part of Alphabet's secretive X division, where the company experiments with far-off technologies dubbed "moonshots" such as its self-driving car technology. Alphabet and its partners will deploy hundreds of balloons in 2016 over the country of more than 17,000 islands in an effort to determine where gaps in service lie as part of the tests before full-scale service is launched. The U.S. tech company has already tested the project in Brazil, New Zealand and Australia but with only a single carrier. Project Loon Vice President Mike Cassidy said the Indonesian partnership marks the first time it will send signals from multiple telecommunications companies through a single balloon, and that it will be the service's largest deployment to date and could eventually reach 100 million users. Cassidy said the effort is also a model for how Alphabet will move the product into the commercial market. He said the telecommunications companies will use the trial period to determine pricing and billing while Google works out technical issues.

• GoPro Plunges 15% After-Hours Following Q3 Earnings Miss: GoPro took a dive Wednesday after releasing Q3 financials that disappointed street expectations. At the market’s close, GoPro reported a miss on its Q3 earnings, posting an adjusted $0.25 per share on $400.3 million non-GAAP revenue during the period. Those figures compared to street expectations of a $0.29 per-share profit, and revenue of $433.6 million. The action camera maker’s $400.3 revenues represented a 43% year-over-year increase from $280.0 in Q3 2015, with EPS also up significantly from $0.12 in the corresponding quarter last year. The company shipped 1.6 million camera devices in Q3, up 46% from Q3 2014, but still less than the street had expected. Interestingly, GoPro emphasized how important foreign markets, specifically China, had been to the company’s growth. Sales outside of the U.S. reportedly made up more than 50% of the company’s revenue. The company said China was “the fastest growing market in GoPro’s history.”

Daily Tech Snippet: Wednesday, October 28

• Apple Profit Is Up 31%, Revenue Up 22% as iPhones Sell Briskly, but Its Forecast Is Muted: Apple on Tuesday turned in another quarter of enviable revenue and profit growth, fueled by sales of the iPhone. But the results raised a perennial question for the world’s most valuable company: How can it keep its growth streak alive? The issue was stoked by Apple’s muted forecast for its all-important holiday quarter, as well as the unwillingness of Timothy D. Cook, the company’s chief executive, to go into detail in an earnings conference call about how Apple plans to rev up sales next year. Over all, Apple posted a profit of $11.1 billion for its fiscal fourth quarter, up 31 percent from a year ago. Revenue was $51.5 billion, up 22 percent from last year. The results exceeded Wall Street estimates. Yet while the performance was bolstered by sales of the iPhone — Apple said that it sold 48 million iPhones in the quarter, up from 39 million in the same period last year — the company was more cautious about sales for the key holiday sales period. Apple projected revenue of $75.5 billion to $77.5 billion for the end-of-year quarter. While the sheer numbers are huge, the low end of the forecast fell below Wall Street estimates and would amount to anemic growth of less than 4 percent from a year ago. The last time Apple’s quarterly sales fell below 4 percent was in mid-2013. New Products: Apple is going into 2016 with a full slate of refreshed products. In late September, the company introduced its newest iPhone models, the 6s and 6s Plus. It also announced a larger iPad, the iPad Pro, and will begin shipping a new Apple TV this week. IPad Struggles: While the iPhone continues to grow, the iPad has been facing declines. For the fiscal fourth quarter, Apple said iPad sales dropped 20 percent from a year ago, making it the seventh consecutive quarter that sales of the tablet have slipped. The company is increasingly positioning the iPad as a business device. Apple Watch: The company did not break out sales of the Apple Watch, which debuted in April. But the category called “other products” — which includes the watch — posted $3 billion in revenue in the quarter, up from $2.6 billion in the previous quarter, which was the first quarter that included sales of the device. Ben Bajarin, an analyst at Creative Strategies, said that the numbers for the “other” category were in line with his expectations, and implied somewhere between 3.5 million and four million watches were sold over the quarter. China: One of Apple’s fastest-growing markets — China — continued to grow. Sales in the region that Apple calls Greater China jumped 99 percent in the quarter to $12.5 billion. The region remained the company’s second-largest market after the Americas, accounting for 24 percent of sales in the quarter, compared with 13.7 percent a year ago. Investors have been scrutinizing the China business given that the country has been cutting interest rates to shore up a slowing economy. Apple Pay: Apple said it has partnered with American Express to bring its Apple Pay mobile payments service to global markets. Chief Executive Tim Cook said the credit card company will bring the service to customers in Australia and Canada, then expand to Spain, Hong Kong and Singapore in 2016.

• Dismal Twitter Forecast and Flat User Growth Send Its Stock Lower: On Tuesday, Twitter gave a dismal forecast for its fourth-quarter revenue and profits. Shares in Twitter, a social media company, plunged as much as 13 percent in after-hours trading as Mr. Dorsey and his lieutenants offered little explanation for the gloom in a conference call with investors. In a similar call three months ago, Mr. Dorsey’s pointed critique of Twitter’s product failings sent the stock down 11 percent. Twitter also reported revenue of $569 million for the quarter, up 58 percent from $361 million a year ago. Its net loss was $132 million, or 20 cents a share, compared to a loss of $175 million, or 29 cents a share, in the same quarter last year. For the fourth quarter, usually the strongest thanks to holiday advertising, Twitter warned that revenue would be $695 million to $710 million, well below the $740 million that Wall Street had been expecting. The new projections, delivered as the company exceeded analysts’ expectations for its third-quarter results, provided fresh evidence that Twitter is failing to win over advertisers, the source of most of its revenue, as it confronts stiffening competition from Facebook, Instagram and Google. “The company is finding real challenges gaining traction with advertisers,” said Mark Mahaney, an Internet analyst with RBC Capital Markets, citing the new forecasts and an advertiser survey his firm conducts twice a year. Mr. Mahaney, who has a neutral rating on Twitter’s stock, said he was struck by the contrast between the upbeat tone of Twitter’s executives on the call and the company’s deteriorating outlook. “Everything sounds so good, yet you reduced your forecast pretty materially. Why?” Mr. Dorsey didn’t answer that question, although Adam Bain, the company’s former ad chief and new chief operating officer, offered a clue: Ad prices plunged 39 percent in the third quarter, which he said was partly because of improved efficiency of video ads.

• Alibaba Revenue Up 32%, Sends Shares up 4%; Cloud Computing Revenue Doubles Y/Y; Overseas Sales at 8%; GMV growth sinks to lowest in 3 years: China's Alibaba is squeezing more money from online shopping than expected, beating analyst forecasts for revenue growth, as mobile shopping grows. The company wrung out higher-than-expected revenue growth of 32 percent year-on-year, even as gross merchandise volume (GMV), the total value of goods transacted across its platforms, sank to its slowest annual growth rate in more than three years. Alibaba's U.S.-listed shares closed about 4 percent higher on Tuesday, after rising as much as 8.4 percent during market hours. Alibaba is trying to replace decelerating volume growth in online shopping with new kinds of online buying, mirrored in its latest investments. For instance, Alibaba invested $4.6 billion in Suning during the quarter. It also offered $3.5 billion to become sole owner of Youku Tudou, known as China's YouTube. Online video users in the country are beginning to cough up money for high-quality online streaming services. But the majority of Alibaba's revenue still comes from China's online shoppers buying from domestic businesses, a business driven by growth in GMV. For the latest quarter, growth came mostly from Tmall, an Amazon-like website allowing businesses to sell to customers, where GMV rose 56 percent. Gains at Taobao, more akin to eBay and by far the company's biggest contributor to GMV, showed signs of slowing at just 15 percent. Alibaba's revenue rose to $3.49 billion in the three months ended Sept. 30. Net income attributable to shareholders reached $3.58 billion, or $1.40 per share. International Expansion: The proportion of revenue Alibaba gets from abroad reached 8 percent, compared with 9 percent in the previous quarter. Co-founder Jack Ma has said he wants half of the company’s sales to originate outside China. The company named Michael Evans, a former Goldman Sachs  partner, as president in August to spearhead a global expansion into regions such as Russia and Brazil. The company is also looking to make forays into Italy, France, Australia and New Zealand, Evans said in October. Cloud Business: Revenue from cloud computing more than doubled from a year earlier. The e-commerce giant is betting on Internet-based computing and big data to boost growth for the next decade thanks to demand for processing and storage from governments, finance and online gaming companies. AliCloud could account for more than $1 billion of Alibaba’s revenue by 2018

• IBM says SEC investigating company's books, shares fall: The U.S. Securities and Exchange Commission is investigating how the International Business Machines Corp (IBM.N) recognized revenue for certain deals in the United States, Britain and Ireland, IBM said on Tuesday, news that sent its shares down 4 percent. Shares of IBM fell as much as 4.4 percent to a five-year low of $137.33 and closed down 4 percent. News of the SEC probe came a week after the company posted lackluster quarterly results and cut its 2015 profit forecast. "It couldn't come at a worse possible time because now the stock is at another 52-week low as a result of this," said Belpointe analyst David Nelson. He said, however, that the probe "doesn't look like a massive smoking gun." "The investigation could be into warranty reserves, they could have recognized an item at the wrong time," Nelson said.

• PayPal says makes $1 billion in small-business loans in first two years: PayPal Holdings, the online payment processor, said on Tuesday its small-business lending program has processed $1 billion in loans in the first two years of its launch and more than doubled loan growth in that span. PayPal Working Capital is extending short-term loans totaling more than $100 million per month, or $3 million per day, to a mix of sellers on eBay and standalone small- to medium-sized merchants, the company said at a payments conference in Las Vegas. PayPal separated from eBay earlier this year, and Chief Executive Officer Dan Schulman has stated he is looking to use PayPal's size to offer affordable financial services widely.

• Even As Oracle and AWS Circle Each Other, Oracle Will Not Build a Giant Cloud System Like AWS: Counter to the expectations of many industry watchers, Oracle, the world’s largest maker of software for businesses, is not planning a global computing system to rival Amazon Web Services or Microsoft Azure, the other big global cloud companies. While it has built out a network of 20 data centers, largely filled with Oracle equipment, it now plans to go after customers by offering faster updates of its core products, new ways of customizing applications and a much younger, retooled sales force. “We’ve made our investments,” Mark Hurd, co-chief executive of Oracle, said in an interview. Compared with A.W.S., he said, “the place we like is one of higher profit margins.” Besides applications, Amazon sells raw computing and data storage, which are generally lower-margin businesses. Oracle is expected Tuesday to announce better security inside its cloud because of changes from its proprietary hardware, but won’t sell access to the machines on their own. Oracle’s better margins, Mr. Hurd said, will come from selling large-scale software that can be customized by its buyers to suit local markets and products. He hopes to lower his sales costs and bring in younger companies with salespeople recruited straight from college and given crash courses in selling Oracle cloud products. In the last four years, he said, the company has hired 1,000 graduates a year. “We train them in products, sales skills and processes,” said Mr. Hurd. “They’re selling within a year, with a much lower cost of sales.” Oracle’s sales force, some 30,000 people globally, is considered among the most aggressive and highly compensated in the tech business. Now, Mr. Hurd said, “we have to do some branding” to entice the kind of smaller companies and start-ups the new sales team is chasing. The ease of modification and the faster sales force illustrate how, while still far apart, Oracle and A.W.S. are becoming more like each other as cloud computing goes mainstream. For its part, a few weeks ago A.W.S. dropped all pretense and made a direct bid for Oracle’s customers. A.W.S. even put up a thinly disguised picture of Oracle founder and executive chairman Larry Ellison.

• Japan's Carmakers Proceed With Caution on Self-Driving Cars: At this week’s Tokyo Motor Show, Nissan Motor Co. will display a concept car with retractable steering wheel and message-flashing windshield, joining Honda Motor Co. and Toyota Motor Corp. in exhibiting vehicles with autonomous modes for changing lanes and avoiding collisions on highways. But while Tesla deployed its Autopilot system this month and Google aims to have fully self-driving cars on the road by 2020, Japan’s automakers see a wait for such vehicles, with introductions coming only after 2025. The unwillingness to take a software-testing approach -- with beta versions used for trial periods and ongoing updates -- and apply this to car-making divides traditional auto companies and tech-industry challengers, said Tatsuo Yoshida, an auto industry analyst with Barclays Plc. Whereas Tesla beamed Autopilot into Model S sedans with the promise the system would continually learn and improve itself, Japan’s automakers view such an approach as putting features on the road before they’re ready. They’re also wary of exposure to liability if they introduce safety features that fail. Each of Japan’s three biggest automakers have set targets to start deploying the technology around 2020. Tesla Chief Executive Officer Elon Musk told reporters this month the company can probably develop a completely self-driving car in about three years, while Google has forecast about a five-year time frame.

• Rackspace Launches Carina, A Hosted Environment For Running Docker Containers: Rackspace is getting deeper into the container game. The company today announced the beta launch of its Carina container service. Carina gives developers access to a fully managed container environment that offers bare-metal performance and still allows them to use the same native Docker tools they are used to from their local development environments. Right now, the service — which will remain available for free during what the team expects to be a long beta period — focuses on Docker’s tooling, but over time, the idea here is to use the flexibility of Magnum and OpenStack to give developers the ability to use other container orchestration engines like Kubernetes and Mesos, as well. The team believes that the combination of a multi-tenant environment and (near) bare-metal access will allow it to deliver the right mix of a high-performance system and low cost. Otto acknowledged a multi-tenant system may not be the right choice for workloads that are highly security sensitive, but the service also gives users the choice to also run containers on Rackspace’s private cloud service. The service provides users with a set of defaults based on the company’s experience, but users can then tweak these as necessary. Otto believes most users will opt to stay with Docker Swarm as the container orchestration engine, simply because it gives users more control (and in an imperative way) than Kubernetes, which is far more opinionated. Because of the way the company architected the service without using a traditional hypervisor (using libvirt/LXC instead), containers will start significantly faster than on a similar service that uses more traditional virtual machines. Because there are still some advantages to running containers on virtual machines — especially when it comes to security — Rackspace also plans to support virtual machines. It’s no secret that large public cloud vendors like Google, AWS and Microsoft now all offer their own container services. The Rackspace team believes that it has an advantage over them in terms of speed, but also because they don’t abstract away the containers from developers. In addition — and this is no surprise coming from Rackspace — the company believes it can offer a level of service that is significantly higher than its competitors. Rackspace already worked with a number of partners to test the service in a private beta. These include O’Reilly Media, which is using containers to power parts of its online learning tools, as well as the Drupal and WordPress hosting service Pantheon, which has long used containers at the core of its platform.

Daily Tech Snippet: Tuesday, August 25

• A Plunge in China Rattles Markets Across the Globe: Concerns about China’s ability to be a powerful engine of global economic growth have added to worries about the potential impact of higher interest rates in the United States, driving stocks sharply lower in Asia and Europe on Monday. When trading opened in New York, the major market measures went into what was essentially a free fall. While the steepest losses ended within minutes, share prices spent the rest of the day sharply rising and reversing course multiple times. When the day’s roller-coaster ride ended, the benchmark for stocks, the Standard & Poor’s 500-stock index, was down 3.9 percent. That left the index off 11 percent from its May high, in what in market parlance is called a “correction,” its first since 2011. On Monday, the Shanghai composite index closed down 8.7 percent. In Europe, benchmark indexes in Germany, Britain and France fell nearly 5 percent or more. A number of emerging markets were also lower, with leading indexes in Brazil and Indonesia both down around 4 percent. In the United States, the Dow Jones industrial average plummeted 1,000 points before regaining ground. Major US indices recovered some ground but still ended the day down over 3.5% each. The Treasury market was a beneficiary of the fear in stocks. The demand for bonds pushed the yield on the benchmark 10-year Treasury note to as low as 1.90 percent before it settled at 2.01 percent. The recent market tumult began two weeks ago when the Chinese government unexpectedly allowed the value of its currency to drop, partly in response to indications that the country’s economy is weakening. The Chinese moves played into the continuing drop in the price of oil, which has taken the price of a barrel of crude oil down 65 percent over the last year. On Monday, the price of oil, as measured by a benchmark New York contract, dropped below $40. The selling in China has accelerated despite extraordinary government intervention in the last two months aimed at propping up share prices. On Sunday, the Chinese government said that the country’s pension funds would be allowed to invest in stocks for the first time. But the slide on Monday highlighted that the new policy, and several similar recent moves, have not been successful. Many investors are now hoping that the central bank, the People’s Bank of China, will cut the ratio of deposits that banks are required to keep on reserve in a bid to encourage lending and spur economic growth.


• How the stock selloff could kill off some tech unicorns: With so much uncertainty and market volatility, Silicon Valley firms could postpone initial public offerings, cooling a white-hot market for venture funding that has fueled the most lucrative environment for startups in history. Already, executives at RainDance Technologies, a firm that makes genomic tools to detect cancer and other diseases, announced Monday they have pulled their plan to go public, according to Reuters. And the big question is what will happen to the hundreds of startups -- a record 131 are valued at more than $1 billion -- that are now all dressed up for IPOs but with no place to go. "Tech stocks have been getting crushed the past 6 weeks. Many names are down 25-50% from their highs. Today was very tough," Gurley wrote in a tweet last week. "One might reasonably assume that this would have an adverse impact on late stage private market liquidity and valuation. I certainly do. If so, we may be nearing the end of a cycle where growth is valued more than profitability. It could be at an inflection point." Known as "unicorns," the venture-funded firms with valuations of more than $1 billion have exploded in number to 131 companies valued at a total of $485 billion, according to venture capital research firm CB Insights. The sheer quantity of unicorns has for months caused concern of a startup-bubble, with investors racing to put money into bleeding edge innovators and their many imitators, when logically not all will thrive or even survive.


• Visa says its users more likely to complete online purchases than those using PayPal: Visa said on Monday online shoppers using its payment service are 17 percentage points more likely to complete their purchases than those using PayPal. Visa Checkout, which allows shoppers to store their payment information without having to re-enter it every time they make a purchase online, said 66 percent of its enrolled customers completed their transactions after putting items in their shopping cart compared to 49 percent of PayPal's Express Checkout customers. The data was collated for Visa by retail analytics firm ComScore. PayPal's online payment service offers a similar convenience by allowing customers to log into their accounts on a merchant's website. Paypal has not seen this report yet, said Anuj Nayar, senior director of platform, merchant and next gen commerce engagement. Nayar said in addition to PayPal Express Checkout the company has launched a new online payment service called PayPal One Touch, which makes using PayPal faster on any device with a single touch. "Initial reports indicate that One Touch radically improves checkout conversion for merchants and time to checkout for consumers beyond anything else available in the market today," he said. Retailers and payment industry experts have often blamed the high rates of unfinished online transactions, after shoppers add items to their shopping carts, on the tiring process of re-entering payment information every time one makes a purchase. "What has become more and more pronounced is as the size of the screen gets smaller, whether it's a tablet, mobile or a watch, the less likely it becomes a consumer will finish his purchase," Sam Shrauger, senior vice president of Visa's digital solutions, told Reuters.


• Jabong biggest loss-maker among top Rocket Internet ventures: Rocket Internet-incubated Indian fashion and lifestyle venture Jabong has become the top money losing initiative for the German emerging markets and Europe focused internet company. Jabong’s operating loss margin rose far ahead of Southeast Asian lifestyle e-commerce firm Lazada and Latin American e-commerce marketplace Linio in the first quarter of 2015, making it the most operating loss making property among Rocket Internet’s top ventures. Jabong had EBITDA loss margin of (-) 56 per cent last year, an improvement from 2013 when it posted (-) 68.5 per cent. This possibly signals how the firm is trying to push its sales faster with more discounting. This could also possibly reflect net revenues are failing to keep pace with operating expenses. Last year, in the same quarter Lazada sported the biggest EBITDA (earnings before interest tax and depreciation and amortisation) loss margin with Jabong and Linio being neck to neck, as per data shared by Rocket Internet. Also the average selling price of third-party vendors appears to be around 15 per cent higher than that of what Jabong direct e-tails to the customers. The average transaction value (including what it sells directly and products sold by other merchants) in Q1 stood at Rs 1,690 compared with a tad over Rs 1,500 in Q1 2014 and for full calendar year 2014. In the same period, average basket value of products sold directly by Jabong has risen marginally to around Rs 1,423. Third party vendors now represent around one in three transactions on Jabong every day. Meanwhile, Jabong was valued at around $480 million as of last December in its last funding round, according to Rocket Internet’s annual report. This means the firm was valued at around Rs 3,050 crore or 2.3 times its GMV for the year.

Daily Tech Snippet: Thursday, July 2

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• As More Tech Start-Ups Stay Private, So Does the Money: Something strange has happened in the last couple of years: The initial public offering of stock has become déclassé. For start-up entrepreneurs and their employees across Silicon Valley, an initial public offering is no longer a main goal. Instead, many founders talk about going public as a necessary evil to be postponed as long as possible because it comes with more problems than benefits. Silicon Valley’s sudden distaste for the IPO. — rooted in part in Wall Street’s skepticism of new tech stocks — may be the single most important psychological shift underlying the current tech boom. Staying private affords start-up executives the luxury of not worrying what outsiders think and helps them avoid the quarterly earnings treadmill. It also means Wall Street is doing what it failed to do in the last tech boom: using traditional metrics like growth and profitability to price companies. Investors have been tough on Twitter, for example, because its user growth has slowed. They have been tough on Box, the cloud-storage company that went public last year, because it remains unprofitable. And the e-commerce company Zulily, which went public last year, was likewise punished when it cut its guidance for future sales. During a recent presentation for Andreessen Horowitz’s limited partners — the institutions that give money to the venture firm — Marc Andreessen, the firm’s co-founder, told the journalist Dan Primack that he had never seen a sharper divergence in how investors treat public- and private-company chief executives. “They tell the public C.E.O., ‘Give us the money back this quarter,’ and they tell the private C.E.O., ‘No problem, go for 10 years,’ ” Mr. Andreessen said.

• PayPal to Acquire Xoom for $890 Million Ahead of EBay Split: PayPal agreed to purchase Xoom Corp, a service for sending international money transfers, in a deal valued at $890 million. PayPal will acquire Xoom for $25 per share in cash, a 21 percent premium to Wednesday’s closing price. The purchase is expected to slightly reduce PayPal’s earnings per share for fiscal 2016, the company said. The acquisition puts PayPal in the international money transfer market with Western Union, the dominant player in what PayPal President Dan Schulman estimated is a $600 billion market. “It’s an industry that’s ripe for disruption,” Schulman, who will become chief executive officer of the stand-alone PayPal, said in an interview. Xoom, based in San Francisco, enables U.S. customers to send as much as $3,000 in a single transaction to friends and family around the world using their mobile phones, tablets or computers. Its 1.3 million users transferred $7 billion to 37 countries, including Mexico, China and India, in the 12 months ended March 31, the company said. Xoom’s first-quarter revenue gained 24 percent to $44.4 million.

• India Now Uber’s Second Largest Market - By City Coverage - Following Expansion To 7 New Cities: Uber is continuing its focus on Asia after announcing that it will expand into seven new cities in India, taking it to a total of 18 locations in the country. With 18 cities served, India becomes the company’s biggest market based on city coverage, behind only the U.S..The U.S. firm recently claimed one million rides per day in China following rapid growth, and it is also sweet on India. It has hired a president to run its business in India and has seemingly invested significant sums to grow its visibility and presence in India, now it’s time to crank its plans up a gear. Uber said that this expansion — which will see it drive into Bhubaneswar, Coimbatore, Indore, Mysore, Nagpur, Surat and Visakhapatnam — is the “largest number of new international cities [it] has ever launched together.” A leaked letter to investors recently suggested that China will overtake the U.S. as Uber’s largest market based on rides handle per day. While the company isn’t spilling raw figures for its business in India, it did say that it is seeing “unprecedented” 40 percent month-on-month growth across the country.

• Facebook Will Start Sharing Ad Revenue With Video Creators: Facebook is offering video creators like the NBA, Fox Sports and Funny or Die a revenue split from ads sold alongside their videos beginning this fall. It’s the first time Facebook has done any kind of revenue share around video, and the pitch to content creators is pretty transparent: Share your content with us and we’ll share some of the money we make back with you. The move is a full-on attack against YouTube, which has dominated the digital video market for the better half of a decade. Facebook has been able to attract content creators because of its massive reach, but now it’s offering them the one thing YouTube has offered for years: Money. YouTube also uses a revenue split to entice content creators — the same revenue split, actually — with 55 percent going to the video creator and the remaining 45 percent staying with the platform. But Facebook’s argument is that it can get more eyeballs for your video. People don’t have to hunt to find your video — Facebook will show it to them. And those people don’t need to be following your Facebook Page, either. The revenue share on Facebook doesn’t apply to all videos in News Feed. Instead, the company is rolling out a new feature called Suggested Videos, a News Feed of sorts that’s exclusively video content. For example, if you click on a video in your News Feed about snowboarding, you’ll be taken to the Suggested Videos feed where you can watch that video, then scroll down to see others that are similar. There will be ads in this stream — standalone, autoplay ads like you might find in News Feed — and this is where the revenue share comes into play.

• Google Tests Price Comparison Within Product Listing Ads To Compete with Amazon, Jet: Google is testing a new Product Listing Ad format that informs shoppers of their percentage savings within a PLA. In the examples that our digital marketing experts uncovered, Google states about the product, “Price is X% lower than average online prices.” At first glance, it looks like this could be an extension of the “Value Alert” feature covered earlier this year in Search Engine Land. Where Google pulls the data to find the average online price has not yet been disclosed. However, based on some quick calculations for a “KitchenAid Mixer” (showing as 14% off in the image below), for the 47 listed on Google Shopping the price was 13.9% off inclusive of shipping but exclusive of tax. This makes sense because tax would vary based upon your location. This suggests that Google is using all of the models that are listed on Google Shopping, as opposed to just the subset featured in the Product Listing Ad. Channel Advisor, which first reported this, theorizes the experiment could have come about because larger marketplaces like Amazon, and potentially newcomer Jet.com, have the potential to continue to eat away at Google’s business. That is, instead of turning to Google’s search engine to locate products, consumers just go directly to Amazon’s website to find low-priced items.

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: Friday, May 15

• Amazon's smart speaker Echo now can be used to place orders: Amazon Echo Can Now Do Some Of Your Shopping For You, Prime Members: Amazon’s Echo speaker/intelligent tube/listening pal revealed a bit more of its true nature today: It can now field voice-powered buying requests, translating your spoken desire for more paper towels into more actual paper towels, for instance. The catch is that it’s restricted to Prime members, it only works with Prime-eligible goods, and you need both a U.S. billing address and a U.S.-based payment method. To command your smart cylinder to conduct commerce on your behalf, all you need do is use your Wake word, then tell it to reorder whatever item you’re after. This is designed to be an easy way to order again things you’re often already buying rep eats of anyway, so ostensibly Amazon is positioning it as a convenience feature, not a full-fledged shopping alternative.

• Alibaba to invest more abroad as globalization top priority: CEO Zhang Alibaba Group Holding Ltd will invest heavily in existing and new ventures abroad, making its push beyond the China market a top priority, the Chinese e-commerce leader's new CEO, Daniel Zhang, said. Zhang's comments come at a time when Alibaba aims to maintain its rapid growth even as the prospect of e-commerce saturation at home looms over the company. "We must absolutely globalize," Zhang said in his first speech since taking up his new post this week, according to a report on Thursday on Alibaba's news and commentary website, Alizila. The vast bulk of Alibaba's revenue comes from its dominant domestic online marketplaces, but the company has been investing in a range of sectors abroad. Just this week it announced it would set up a cloud computing base in Dubai, and boosted its stake in U.S. e-retailer Zulily Inc. Zhang said if Alibaba does not globalize it won't be able to last 100 years - a goal set out by Executive Chairman Jack Ma. In the three months ended March, Alibaba's revenue from China commerce grew 39 percent to $2.2 billion. International commerce grew 27 percent to $264 million and only accounted for 9 percent of revenue, compared to 11 percent in the same period a year earlier. Alibaba says some of its larger overseas markets include Brazil and Russia. The company and its affiliates are also making overtures in India, where it is in talks with phone maker Micromax Informatics to buy a $1.2 billion stake, according to several people with direct knowledge of the matter.

• PayPal to Trade Under Old Symbol PYPL After Split From EBay: PayPal, the payments division that’s separating from EBay Inc., will trade on the Nasdaq Stock Market as PYPL, its original ticker symbol before being acquired by the online marketplace in 2002. EBay announced the split last year after activist investor Carl Icahn said PayPal was being held back by its parent company’s slower-growing Web marketplace business. All of EBay Inc.’s 15 board members will remain with the company or become new board members of PayPal when it spins off from EBay in the third quarter. EBay Chairman Pierre Omidyar, who founded the online marketplace in 1995, will be a director for both companies, EBay said Thursday in a statement.

• Deal Talks for 'Here' Mapping Service Brings Spotlight to the Lucrative B2B Location Data Market: When people look up a company’s Facebook page on their smartphones, the address is overlaid on a digital map provided by Here, Nokia’s mapping unit, which is for sale. The same goes for the mapping services offered by Amazon and Yahoo. The tech giants are just three of the many companies, including SAP, Verizon Wireless and Baidu, the Chinese search engine,​ that rely heavily on Nokia’s geospatial data. Companies are grappling to stay relevant in a world where smartphones — and people’s geographical information — are at the heart of nearly every tech leader’s plans. That is why companies like Uber, the ride-booking service, and an alliance of German automakers have submitted rival bids of up to $3 billion to acquire the Nokia division. A deal is widely expected by the end of the month. If one happens, there is likely to be a lot of angst to go around in the tech industry. Nokia’s mapping service is the main global competitor to Google Maps. But if a new owner decides to restrict access to Here’s vast, 30-year-old trove of mapping data, some of the largest tech companies could find themselves relying on Google’s mapping services once more. That could put companies like Amazon and Yahoo in a difficult position, potentially requiring them to share valuable location and routing data with one of their most powerful rivals in Silicon Valley. “There are too many businesses out there that want an independent service,” ​said Harold ​Goddijn, chief executive of TomTom, the Dutch digital mapping company that licenses data to Apple for its mapping service. ​“They don​’​t want to share customer data with ​Googl​e. ​They want users to stay within their domain.” As part of the German automakers’ bid, the companies, which include BMW, Audi and Mercedes-Benz, want to give access to Nokia’s mapping service, under licensing agreements, so others can still use its global geospatial data, according to a person who spoke on the condition of anonymity. It remains unclear whether Uber would follow suit if it acquired the unit. “Mapping is an extremely hard thing to do and takes years to replicate,” said Shyam Kumar, a senior analyst whose firm, TT Focus Fund, is an investor in both TomTom and Nokia. “If you cannot get access to another independent map, you might end up having to license from one of your major competitors. There’s obviously an inherent tension here.” The sudden interest in Here belies its often overlooked position in the technology world. While Google Maps is used in more than one billion smartphones worldwide, the Nokia unit, which until recently was somewhat hampered by the Finnish company’s close relationship with Microsoft, has instead focused primarily on offering mapping services to other companies, instead of directly to consumers. FedEx, for example, has used Here’s mapping data to manage its fleet of delivery trucks worldwide. Deutsche Telekom, the German carrier that owns T-Mobile, has built smartphone apps with Nokia’s services that allows people to share their locations with friends and family through their cellphones. But it’s the automotive industry, where Here holds up to an 80 percent global market share for built-in car navigation systems, that has become a main focus. The mapping service has becoming a crucial component for the automakers pursuing driverless car projects. In 2013, for instance, Mercedes-Benz teamed up with Here to test an autonomous car around 60 miles of German roads. The trial included instant 3-D modeling of nearby cars and constant corrections from the car’s computer. So far, many automakers have preferred to use Nokia’s services over those provided by Google because of the search giant’s own ambitions in the nascent driverless car industry. Yet Nokia’s mapping technology may become unavailable if a new owner of the mapping unit decides to limit what other companies can do with the data.

• Uber Lures Top Google Executive and Shifts David Plouffe’s Duties: Continuing its quest for top Silicon Valley talent, Uber said on Wednesday that it had hired Rachel Whetstone, Google’s longtime head of communications, to be its senior vice president for policy and communications. While Ms. Whetstone’s appointment is a prominent talent grab for Uber, the ride-hailing start-up, it also shuffles the highest ranks of the company. She will take over the role of David Plouffe, the political strategist and former campaign manager for President Obama. Uber simultaneously confirmed that Mr. Plouffe will move to a position as chief adviser to the company and to Travis Kalanick, Uber’s chief executive, as well as take a seat on Uber’s board. It is an abrupt change to the six-year-old start-up’s communications team, as Mr. Plouffe was hired less than a year ago to run the company’s communications strategy. At the time of his appointment, the company described his role as similar to that of running a political campaign, with Uber as “the candidate.” His abilities were even praised by executives outside Uber. “David is uniquely suited to scale and lead the same kind of insurgent campaign he did in 2008 for a Silicon Valley tech company, bridging the worlds of business and politics,” Eric E. Schmidt, Google’s executive chairman, said at the time. Since Mr. Plouffe joined Uber, the company has been more aggressive about polishing its image, engaging in fewer public skirmishes and offering a gentler public tone. Uber has tried mending fences with European regulators who are wary of the service, and has undertaken numerous charitable efforts, including pickups for clothing donations and food-drive charity efforts. Over time, it has reduced the number of headlines about its pugnacious tendency to play rough with competitors. Ms. Whetstone, who will join Uber in June, has been at Google 10 years, helping lead it through antitrust battles across two continents and investigations by the Federal Trade Commission, as well as numerous consumer privacy inquiries. Her move to Uber was first reported by the tech news site Recode. She is another in a string of Google communications employees who have left the company to join hot start-ups. Last fall, Jill Hazelbaker left for Snapchat, while others have left for companies like Square, Pinterest and Tesla. But Ms. Whetstone’s departure is different. Uber and Google have long been partners in certain areas — Uber relies on Google’s mapping technology and has taken hundreds of millions from Google’s venture capital arm — but both companies have started to distance themselves from one another. Uber has made a bid for Nokia’s mapping unit, Here, which could lessen the company’s reliance on Google.