- Alibaba, Ant Financial invest about $680 million in Paytm, up stake to 40%: Chinese e-commerce giant Alibaba has made a strategic investment in One97 Communications, the parent company of Paytm, along with its affiliate Ant Financial, which had made its first investment in February 2015. With this, Alibaba becomes a new investor in the Indian online payment and e-commerce firm. Two people aware of the details told ET that the Alibaba Group Holding will pick up about 20% stake through a fresh issue of shares by investing about $680 million(around Rs4,450 crore). The deal has been closed. In February, Ant Financial had picked up a 25% stake for $575 million, of which $200 million came in as the first tranche. The fresh investment by Alibaba Group Holdings subsumes the outstanding tranche of $375 million, and will see Ant Financial's stake being lowered to 20%, one of the people aware of the details said.? Alibaba will now hold around 20%. With this, Alibaba will become the biggest shareholder in the company as it will hold 40% through two entities, and Paytm will be its ecommerce play in India. Under the financial contours of the transaction, existing investor Saif Partners' stake comes down to 30% from 37% while Paytm's founder and Chairman & Managing Director Vijay Shekhar Sharma now owns about 21%, down from 27%.
- Google Unveils New Chromecast, Other Devices to Connect Smartphone and TV: Google on Tuesday revealed two new Chromecast streaming devices — one for televisions, another for speakers — along with a new tablet computer and a pair of new devices from the company’s Nexus line of Android mobile phones. Much like Apple, Google is pushing a future where televisions become a vessel for the Internet and channels are replaced with apps. But instead of having separate devices for music and TV, Google has tried to position the mobile phone as the center of everything — a kind of remote control for life.Enter Chromecast, Google’s popular streaming device that beams content from mobile phones to TVs via the Internet. The idea is pretty much the same as Apple TV, but Apple TV costs $149 and is essentially a small computer with lots of storage for apps to run on a television. Chromecast costs $35 and is just a waypoint between TVs and phones. The field of streaming devices has become crowded — Amazon and Roku make similar products. To distinguish itself from those stick-shaped competitors, Google’s new Chromecast is about the size and shape of a silver dollar. Google also announced that it had sold 20 million Chromecast devices and that it was now compatible with thousands of apps, including Netflix and HBO Now. For a company whose spotty hardware record includes Google Glass, the much-maligned Internet glasses, and Nexus Q, a streaming device that was never released, Chromecast is a huge success. So Google is expanding it. On Tuesday, the company also announced Chromecast Audio, a new line of Chromecast devices that plug directly into speakers and receive music sent from a phone. Google simultaneously announced a new partnership with Spotify, the popular music-streaming app that is in a battle with Apple’s new Apple Music offering.
- Hands-On With Google’s New Nexus 6P and Nexus 5X Smartphones: Google announced its newest pair of Android smartphones, the Nexus 6P and Nexus 5X. This is the first time since the Nexus line was launched, in 2010, that Google is releasing two phones at once. Each is targeted at a different segment of the market, but they both share a number of critical features for wooing customers. The 6P is Google’s new flagship, the successor to last year’s Nexus 6. The original Nexus 6 was made by Motorola (owned by Google at the time, though since bought by Lenovo) and was met with mixed reactions from critics and customers. It was big, the camera wasn’t as good as those in competing phones, and it was roughly twice the price of its own predecessor, the Nexus 5. The 6P is the first Nexus phone made by Chinese company Huawei, and it tries to fix what was wrong with the 6 while bringing a few new things to the party. The smaller Nexus 5X, manufactured by LG, is just over five inches long and has an ultrasensitive camera that is designed to work better indoors, where people take most of their pictures. It starts at $379 for an entry-level phone without a contract. The other larger phone, the Nexus 6P, which is made by Huawei, is 5.7 inches and starts at $499. Both phones use a new kind of charging cable, called USB Type-C, that powers up more quickly and has a symmetrical charging port so people won’t have to fumble to figure out which way to plug it in. Nexus runs what Google calls the “purest” form of its Android operating system. The devices come with a few Google apps but are otherwise free of so-called bloatware — software loaded onto a device by a phone maker — that can slow the device. Also, Nexus products receive monthly security updates and come with the latest version of Android, making them a kind of showcase for new Google products.
- The ‘Oh, Shit!’ Moment When Growth Stops: Most high-growth businesses stare down periods when growth unexpectedly slows down or stops altogether. At some point, that stomach-churning moment has visited the leadership of most of the companies I’ve advised. We also faced it at OpenTable, eBay and Reel.com when I was managing them. And it has reputedly happened to a number of today’s mightiest Internet businesses as well, including the likes of Amazon and Facebook. CEOs at high-tech businesses work hard to keep as much growth going for as long as possible. Investors — both public and private — tend to value growth over everything else during most investment cycles, and the recent cycle has been no exception. Growth is where all the action is, and to where all the money flows. The reason for this is that the majority of returns are driven by a handful of companies that “break out.” And a business can’t get big enough to break out if it isn’t growing. Entrepreneurs’ reactions to these moments fall into one of two extremes: There is the preternaturally calm CEO who resolves to watch the metrics closely to see if they change; he or she is concerned that a hint of panic will cause the rest of the team to panic, so they “Zen it out” as best they can. Then there is the CEO who freaks out, setting off alarm bells that reverberate throughout the entire building and continue ringing in every single employee’s ears. Which approach do I advocate? The freak-out, of course! Why? Because the unexpected slowing of growth in a “growth” business presents an existential risk to the company. Growth rates over a company’s history tend to move only one way over time (down); even in hypergrowth companies, growth rates tend to fall to earth … which is why I’ve referred to this effect as “gravity.” Once gravity takes hold, it’s very hard to reaccelerate the growth of the business. Slowing growth portends a strong possibility that the company will never again experience prior levels of growth going forward. There are precious few examples of this happening on a sustained basis: Amazon accomplished it during 2010-2011, contributing to its value today. We accomplished this during my tenure at OpenTable, leading to a fourfold growth in market cap over six quarters. But growth will never resume magically. If CEOs can figure out what exactly happened to cause that slowdown, it presents them with the opportunity to try to correct what went wrong.
- Apple releases major updates to leading products and pushes into new arenas. Apple unveiled an array of major improvements to its iPhones, iPads and other leading products Wednesday, including a voice-activated television box that the company said would form “a new foundation for TV.” The updated Apple TV includes some hardware improvements, such as a remote control that allows users to easily navigate through entertainment options simply by speaking to Siri, Apple’s voice assistant. But perhaps the device’s more significant feature is its ability to function as a game console, which could set up the company to enter a new arena in living room entertainment. Apple said several major gaming software companies are making versions of popular titles for Apple TV. The new device will also come with its own app store, allowing third-party developers to shape how consumers get entertainment and videos on their televisions. Apple also showed how to use the best screen in the house to look at rooms for rent on Airbnb’s Web site or homes for sale on Zillow. That was one of several story lines during Apple’s presentation in San Francisco. The electronics giant also introduced a new tablet — a $799 iPad Pro — aimed at business clients, as well as new software on its watch and other mobile devices that Apple said would revolutionize how doctors and patients interact. At one point, the audience of several thousand reporters and Apple employees at the Bill Graham Civic Auditorium was shown how a pregnant woman could record her fetus's heartbeat and send the sound in a live stream to her doctor. Apple also updated its most important product, the iPhone, which accounts for 56 percent of the company’s sales. The new iPhone 6S and its larger cousin, the 6S Plus, have 12-megapixel cameras, sharper screens and a feature called 3D Touch, which brings up different menus depending on how hard a user presses the screen. Apple also introduced a new iPad Pro, which has a display area roughly twice that of the iPad Air and is largely aimed at businesses. The tablet can be bought with a keyboard and has a beefier processor that can run heavy programs such as Microsoft Office. And, indeed, to tout the device, Apple invited executives from Microsoft, its former rival, to show how the popular office suite would work on the iPad. Also on stage were executives from Adobe, another software company Apple in the past has criticized for lax security. And in another move that broke with the past, Apple displayed a new stylus for the iPad Pro that it called the Apple Pencil, a product that likely would have been blocked by the company’s late co-founder Steve Jobs, who in 2010 mocked companies that offered styluses to consumers
- Apple phone, tablet and TV fail to impress investors. Apple unveiled a new TV set top box that responds to voice commands and fresh iPhones that sense the pressure of a finger tap, changes which underwhelmed many social media commenters and investors. The new 6S and 6S Plus versions of the iPhone, Apple's biggest money maker, are the same size as the previous versions but come with a better camera, faster chips, new colors and the force-sensitive "3D Touch". Speaking before thousands of analysts, journalists and frequently cheering Apple employees, Chief Executive Tim Cook also brought on stage an executive from onetime archrival Microsoft to illustrate the business-friendly credentials of a big new iPad, the Pro. Apple shares fell 1.9 percent to $110.15 by the close, replicating the recent history of such rollouts but also reflecting the lack of any transformative products that could jumpstart the company's sales ahead of the crucial holiday season. Apple shares have lost an average of 0.4 percent on the day of iPhone announcements over the past three years, according to BTIG Research data
- Google is chasing Amazon Web Services in a new area –- providing access to “on-demand” supercomputing resources. On Wednesday, Google announced the general availability of something called pre-emptible virtual machines, which amount to computing resources you can rent for very little. The service, first announced in May, enables people to buy computer processing that Google isn’t using at a steep discount, provided the customer is willing to yield the resources on short notice. A.W.S. has a similar short-term usage program, called Spot Instances. It lends itself to supercomputing exercises, particularly for universities and companies that don’t want to buy multimillion-dollar machines of their own, and has been used in areas like drug discovery and learning about new materials. The addition of Google as a competitor is likely to increase the number of ways these resources are used while lowering prices. Google also appears to be stressing its skills in machine learning, a powerful tool for finding new patterns in large data sets. Using Google, cancer researchers at the Broad Institute used 51,200 computing cores to look at the interrelationships between human genes, the billions of ways they are expressed, the cell lines from some 500 types of cancer, and molecules that perturb those cells. The idea was to sort through billions of data points quickly, looking for promising areas for researchers to seek drugs and treatments. The analysis, which on a single computer server would have run about 30 years, took a couple of hours, said Chris Dwan, the acting director of Information Technology at Broad. It cost about $4,000. “This isn’t like computing a few taxi trips,” said Mr. Dwan. “This is really heavy computing in complex biological systems, steering research.” He added, “the rules of how we work are being completely rewritten.”
- It's Like PayPal But Pays Interest, and India's Banks Are Afraid. That’s a concern for the nation’s largest banks, because 40 percent of the money they lend comes from millions of small depositors like Mungekar. If more like her start shifting to digital money, they risk draining those deposits. Last month, the Reserve Bank of India gave licenses to 11 entities to operate so-called payment banks that will function a lot like PayPal in the U.S, but with a distinction -- customers can get interest on the money they leave there. Payment banks can’t lend and can only invest the client’s money in the safest government securities. Their revenue comes from a small commission on each transaction. Their new licences are part of central bank Governor Raghuram Rajan’s mission to cut the nation’s addiction to cash and to increase efficiency at the banks. PayTM started off as a service for adding credit to burner phones, and has evolved into the country’s largest e-wallet repository, allowing customers to pay utility bills, buy bus tickets and pay for Uber rides. Now it plans to build on its base of urban middle-class clientele to become a pseudo bank -- accepting deposits, offering peer-to-peer money transfers, even providing a debit card for cash withdrawals. The payment banking license was the first step. E-Wallets may be attractive for people wary of sharing their bank or card details on the Internet. They also make it easier to reward customers with discounts and offers redeemable at online or brick-and-mortar outlets. Apart from One97, other payment bank licensees include three large telecom operators, industrial conglomerates, the state-owned postal service, and billionaire Mukesh Ambani’s Reliance Industries, which plans to run its venture with State Bank of India.
- Mobile payments company Square may hold IPO in fourth quarter: Bloomberg. Mobile payments company Square may file for an initial public offering by the fourth quarter of this year, although the timing depends on market conditions, Bloomberg reported, citing people familiar with the matter. Jack Dorsey, co-founder of Twitter and its current chief executive, has assured investors and key employees that he will also remain Square's chief executive, Bloomberg said. At this point, the timing of Square's IPO is more contingent on market conditions than on whether Dorsey remains its CEO, Bloomberg said.
InMobi ties up with Amazon and Paytm for India launch of discovery-led mobile commerce platform: SoftBank-backed mobile ad technology company InMobi Pte Ltd has joined hands with Amazon India, mobile wallet Paytm and others for the India launch of Miip, its new platform for discovery-led mobile commerce. Miip, which has an animated green monkey as mascot, engages users by suggesting products to buy across apps. It was launched in the US three weeks ago. InMobi, which competes with Facebook and Google for a pie of burgeoning mobile advertising market, will launch Miip in China on August 18. Naveen Tewari, founder and CEO of InMobi said Miip will aid “serendipitous discovery” of products across thousands of mobile apps. “Today merchants have tough time getting users to discover and explore their products. Miip will create personalised shopping experiences to enable discovery of products from more merchants,” he said. The company has forged a partnership with Amazon.in to initiate a pilot on the Miip platform. Kishore Thotta, head of digital marketing, Amazon India said platforms such as InMobi’s Miip will facilitate cross-app shopping experiences. Miip will facilitate seamless payment and checkouts within the discovery sessions through the “Buy with Paytm” button. Miip will soon be launched in beta version with several partners across e-commerce and app developers such as Magzter, Moneyview, Nestaway, Shopclues, Swiggy, Urban Ladder, Vozpop, Wooplr and Zimmber.
Practo raises $90M from China’s Tencent, Sofina, Google Capital, Yuri Milner, others: Practo, a web-based clinic management software developer and medicare listings provider, has raised $90 million in Series C funding led by Chinese media and technology conglomerate Tencent Holdings. Marquee institutional investors such as Sofina, Sequoia India, Google Capital, Altimeter Capital, Matrix Partners, Sequoia Capital Global Equities and Russian investor Yuri Milner also put money in this round, as per a press statement. Practo will use the money to expand product lines, acquire more startups and enhance headcount. “We are hard at work building a single health app that helps people live healthier by making better healthcare decisions for themselves and their loved ones. We are excited to partner with some of the best investors on the planet. Our global partners will give us the edge to continue building global healthcare products that our users love,” said Shashank ND, founder and CEO of Practo. A few months ago, Practo had raised $30 million in Series B round from Sequoia India and Matrix Partners. Three years ago, it had raised $4.6 million from Sequoia Capital in Series A funding. Recently, Practo acquired product outsourcing firm Genii Technologies Pvt Ltd for its capabilities in building bespoke e-commerce portals and Software-as-a-Service (SaaS) platforms. Practo offers services like helping patients find relevant doctors online, compare them and schedule appointments. It also sells PractoRay under a SaaS model for primary clinics, which enables doctors to schedule and manage patient records. Practo already lists over 8,000 hospitals on its platform and will expand this to over 20,000 by end of this year. Recently, it launched a new feature that allows users to find diagnostic labs in their vicinity. It competes with the likes of Lybrate, HelpingDoc, Praxify and AllizHealth.
Tesla Plunges 9% as Musk Grapples With SUV’s Second-Row Seats: Elon Musk can’t make an SUV without seats. Tesla’s chief executive officer dialed back his forecast for 2015 vehicle deliveries, saying that getting the new sport utility vehicle’s middle-row seats just right is proving thornier than expected. The added threat of not having enough of other interior parts puts the original sales plan at risk, he said. “Our biggest challenges are with the second-row seat,” Musk said Wednesday during a conference call with analysts. “It’s an amazing seat, a sculptural work of art, but a very tricky thing to get right.” He added that some interior trim components could become roadblocks, but the so-called falcon-wing doors weren’t going to be a problem. Assembly snags on the Model X, Tesla Motors Inc.’s first SUV, could also slow output of the Model S sedan, Musk said. So now the company may deliver 50,000 to 55,000 autos in 2015, down from an initial target of 55,000. Tesla shares fell 8.9 percent to $246.13 at the close Thursday after plunging as much as 13 percent for the biggest intraday decline in 21 months. While lowering the bar for this year and next, Musk said he remains “confident” that Tesla will produce about half a million cars in 2020. He’s said that’s when investors should be able to expect the company to become profitable. Musk pointed out Tesla made 600 cars annually five years ago. “Now we can produce 600 cars in three days,” he said. As production of the SUV increases, the company will become free cash-flow positive, probably near the end of this year and “certainly” for the first quarter of 2016, Chief Financial Officer Deepak Ahuja said. Tesla has drawn down $50 million of a $750 million credit line, and left open the possibility of going to Wall Street for additional money.
Apple Music attracts more than 11 million trial members: Apple said on Thursday its new music streaming service has attracted more than 11 million members during its free trial period, a response that music industry experts called respectable but not overwhelming. Apple Music rolled out with a three-month free trial period on June 30. Nearly 2 million people opted for the free trial family plan, which will cost $14.99 a month for up to six family members, the company said. The service costs $9.99 a month for individuals. Apple’s iTunes Store helped revitalize the music industry a decade ago, but digital downloads have slumped in recent years amid a shift toward streaming. Unlike popular streaming services from rivals such as Spotify, Apple’s offering does not include a free on-demand tier, a decision praised by some in the music industry. Apple shares were down 4 cents at $114.84 in early afternoon. Based on typical conversion rates in the industry, it would be impressive if Apple convinced 20 percent of the trial members to become paying subscribers after the free trial ends, he added. Spotify has more than 20 million paid subscribers worldwide, the company has told Reuters.
HTC Plummets to Decade Low on Loss Forecast Five Times Estimates: HTC Corp. plunged by the daily limit after its forecast for a quarterly loss five times greater than estimates spurred analysts to slash their valuations of the stock. Shares dropped 10 percent to NT$63 in Taipei on Friday, heading for their lowest price in more than a decade. The smartphone maker’s third-quarter loss will be NT$5.51 to NT$5.85 per share, compared with expectations for a loss of NT$1.17 per share. Its sales forecast given Thursday is as much as 48 percent below estimates. HTC plans to cut staff, reduce spending and slim down its product catalog as cheaper phones from Huawei Technologies Co. and competition from Samsung Electronics Co. further erode its market share. Founder, Chairwoman and Chief Executive Officer Cher Wang has stated she won’t consider mergers, even as the company fell off the global list of top 10 phonemakers. Sales this quarter will be NT$19 billion ($600 million) to NT$22 billion, the company said, compared with estimates for NT$36.8 billion. Revenue at the bottom end of that range would be the lowest in a decade when figures were reported at the parent level. HTC will change its product strategy to produce fewer models over longer time intervals while focusing on a greater share of industry profits instead of shipments, Chief Financial Officer Chang Chialin said Thursday. Cost reductions will start this quarter, with the result of those cuts being shown in the first quarter, he said.
Nvidia's gaming, auto chips drive surprise rise in revenue; Shares rise 10%: Nvidia reported a surprise rise in second-quarter revenue and gave a better-than-expected revenue forecast for the current quarter, helped by strong demand for its graphic chips used in gaming and cars. The company's shares rose nearly 10 percent in extended trading on Thursday. Nvidia's revenue increased 4.5 percent in the quarter ended July 26 to $1.15 billion , while analysts on average were expecting revenue to decrease about 8 percent. Nvidia gets a majority of its revenue from its graphic chips made for personal computers, and there were fears that the fall in PC sales would hurt Nvidia just like it has Intel and Advanced Micro Devices. But, Nvidia said gaming revenue rose 59 percent, helped by strong sales of its popular GeForce series of gaming chips. Nvidia has also been increasing its focus on making chips that allows people to play graphics-heavy games over the internet and chips used in a car's dashboard display and in self-driving cars. Automotive revenue rose 76 percent in the quarter and accounted for only 6.2 percent of total revenue. The company said 8 million cars on the road were using its chips and that it was working with more than 50 companies for its DRIVE chip for self-driving cars. However, revenue in Nvidia's enterprise business fell 14 percent. The business, which makes chips used for software such as AutoCAD, accounted for 16.2 percent of total revenue.
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- Nielsen to measure digital ads in partnership with Tencent: Nielsen announced on Wednesday that it is partnering with Tencent Holdings to measure its digital audience in a move that could direct more ad dollars from companies in the United States to China's biggest social network. Nielsen said it is launching its Digital Ad Ratings, which tracks unique users, reach and frequency of a digital ad across computers, tablets and smartphones for the first time in China. Comscore, which offers a similar service and competes with Nielsen, said it is already available in China. The online gaming company Tencent, which also operates the popular mobile messaging app WeChat with 500 million monthly active users, has been making a big push to increase its advertising revenue especially through mobile. Nielsen will measure an ad campaign in a combination of surveys, consisting of 46,000 Chinese consumers, and aggregated, anonymous data from Tencent's hundreds of millions of active users. Tencent, which has a market value of $190 billion and reported first-quarter online advertising revenue of $438.4 million competes with Alibaba and Baidu.
- Its a Small World: Ola-owned TaxiForSure integrates Alibaba-investee Paytm wallet as cashless payment option, joining its arch-rival Uber: TaxiForSure, has tied up with Alibaba-backed online payments platform Paytm. The move will allow users of TaxiForSure to go cashless and pay through Paytm’s pre-paid wallet, the company said in a statement. Customers can link their debit card or bank account via a Paytm wallet or recharge their Paytm wallet and use it to pay for their rides. In March, cab hiring startup Ola had acquired TaxiForSure in what largely a stock transaction. Interestingly, Ola also has a prepaid wallet called Ola Money. Last November, on-demand car service Uber, Ola's arch-rival in India's ride-hailing space had joined hands with Paytm.
- Google and Apple Adjust Their Strategies on Mobile Payments: The battle for mobile software dominance revolves around two companies: Apple and Google. Now both giants are also going head-to-head in mobile payments, as they prepare to push deeper into digital wallets. Google is set to unveil plans at its annual developer conference on Thursday for an overhaul of its mobile payment products. Changes include a service called Android Pay that will let merchants accept credit card payments from inside their mobile apps and can be integrated with loyalty programs at retailers, the people said. Google Wallet, a mobile commerce app, will also be reintroduced as a peer-to-peer payments app that consumers can use to send money to each other directly from their debit accounts, they said. Apple is preparing to announce details about enhancements to Apple Pay at its software conference next month. Those include a rewards program for the mobile wallet service. The moves are the latest advances in mobile payments as several players jockey for an edge. With more consumers willing to make purchases using smartphones, companies are rushing to take the lead in the market, spurring eBay’s PayPal to heavily market a suite of mobile apps, while start-ups like Square and Stripe expand their payments processing software to small and midsize businesses. The stakes are also high for Apple and Google, which are entering mobile payments later than others in the industry. For Apple, mobile payments tie people more directly to its main product, the iPhone. For Google, payments are a hook to reel people into its ecosystem of services and another way to gain insight about consumers. The challenge for Apple and Google, along with rivals, is that the mobile wallet is generally a technology in search of a problem. Cash and credit cards are easy to use and accepted broadly worldwide. As a result, the mobile wallet is typically more of a supplementary service than a replacement. Nonetheless, mobile payments are growing quickly. Forrester Research predicts they will balloon to $142 billion by 2019 in the United States, almost tripling from $52 billion in 2014. Still, Google and Apple offer something that few others can: Hardware, software and an insatiable desire to win. “Google and Apple have deep pockets and the appetite to invest,” said Sucharita Mulpuru of Forrester Research. “They may create something that is a lasting disruption.”
- Despite Its Dominance, Analysts See A Murky Road Ahead for Android: Android is now not just the globe’s most popular smartphone operating system but the most popular operating system of any kind. More than a billion Android devices were sold in 2014, a c cording to the research firm Gartner. That’s about five times the number of Apple iOS devices sold, and about three times the number of Windows machines sold. Yet all is not well on planet Android. On the eve of Google IO, the company’s annual developer conference that starts Thursday, where Android will once again be a primary topic of discussion, cracks are emerging in Google’s hold over the operating system. Google’s version of Android faces increasing competition from hungry rivals, including upstart smartphone makers in developing countries that are pushing their own heavily modified take on the software. There are also new threats from Apple, which has said that its recent record number of iPhone sales came, in part, thanks to people switching from Android. Hanging over these concerns is the question of the bottom line. Despite surging sales, profits in the Android smartphone business declined 44 percent in 2014, according to one estimate. Over the holidays last year, according to the research firm Strategy Analytics, Apple vacuumed up nearly 90 percent of the profits in the smartphone business. The stark numbers prompted a troubling question for Android and for Google: How will the search company — or anyone else, for that matter — ever make much money from Android? Google faces several major Android-related headaches. First, while Google makes most of its revenue from advertising, Android has so far been an ad dud compared with Apple’s iOS. iOS users tend to have more money and spend a lot more time on their phones (and are, thus, more valuable to advertisers). Because Google pays billions to Apple to make its search engine the default search provider for iOS devices, the company collects much more from ads placed on Apple devices than from ads on Android devices. A recent analysis by Goldman Sachs estimated that Google collected about $11.8 billion on mobile search ads in 2014, with about 75 percent coming from ads on iPhones and iPads. A brighter spot for Google is the revenue it collects from sales via Android’s app store, called Google Play. For years, Android apps were a backwater, but sales have picked up lately. In 2014, Google Play sold about $10 billion in apps, of which Google kept about $3 billion (the rest was paid out to developers). Apple makes more from its App Store. Sales there exceeded $14 billion in 2014, and rising iPhone sales in China have led to a growing app haul for Apple. Still, Google’s app revenue is becoming an increasingly meaningful piece of its overall business, and it is also growing rapidly. But how long Google can expect Play to keep paying remains an open question, thanks to the second Android-related headache. Google’s strategy of giving Android to phone makers free has led to a surge of new entrants in the phone business, several of which sell high-quality phones for cut-rate prices. Among those is Xiaomi, a Chinese start-up making phones that have become some of the most popular devices in China. Because Xiaomi and others don’t make much of a profit by selling phones, they’re all looking for other ways to make money — and for many, the obvious business is in apps offering mail, messaging and other services that compete with Google’s own moneymaking apps. Android has always been a tricky strategy; now, after finding huge success, it seems only to be getting even trickier.
- Twitter Is Giving Advertisers More User Data In The Hope That They Spend More: Twitter is hoping to help marketers better understand their Twitter audience by adding a tool that will give them deeper user behavior around organic tweets. The audience insights dashboard tool adds some similar insights as the Facebook advertising platform with aggregate information on user demographics, interests, and purchasing behavior as well as what television shows users watch and their mobile usage. These new insights are expected to help advertisers identify a more relevant audience for upcoming campaigns on the platform. Will these new insights help boost advertising on Twitter? The company needs it right now. It had slower than expected growth in advertising sales this last quarter and even die-hard fans and early investors think the company needs some help. Early investor Chris Sacca recently scribed a blog post warning Twitter that he would soon be sharing a few thoughts on what the company needs to do now. Offering more profound insights about organic user behavior may be an answer to some of this frustration and may help to lure brands to spend more ad dollars on the platform. The audience insights tool is now available to all Twitter advertisers and analytics users. Twitter-specific information can be accessed within the U.S., with plans to roll this out more broadly over the next few months.
- Cisco Predics that in 5 years, 80 percent of Internet Traffic will be online video: We already know that Netflix accounts for one-third of Internet traffic at peak hours. Toss in YouTube, and that figure rises to roughly half of all bandwidth consumed. But even that's small potatoes compared with what's coming. In five years, 80 percent of the entire world's Internet consumption will be dominated by video. That number will be even higher in the United States, approaching 85 percent. That's according to the latest projections from Cisco, which publishes an annual study peering into the near future of the Web. The newest report, out Wednesday, predicts that by 2019, the Internet will have become more or less a big video pipe. Part of the growth will come from adding new people to the Internet — for the first time, over half the world's population will be digitally connected. But individual Internet users are also expected to consume more video over time, and at a higher quality, which will put tremendous new burdens on the world's Internet infrastructure. When you see the Internet as a huge distribution channel for video, it puts virtually everything that tech and communications companies are doing into perspective. Telecom firms like Verizon are racing to expand their cellular networks so that they can deliver video over LTE. Cable companies are fleshing out their public WiFi hotspots so users can watch videos outside their homes. Content providers like HBO and CBS are putting their programming on the Internet so that customers don't have to be tethered to their television sets. Implicit in this idea is that mobile devices will be the primary way users will access all this video. And researchers agree on that point. Five years ago, Americans were spending less than an hour a day on mobile devices. Today, it's more like three hours a day, accounting for more than half of the time we spend consuming digital media in general, according to the latest in an annual report released Wednesday by Kleiner Perkins partner Mary Meeker.
- Paytm’s big day: IRCTC adds Paytm wallet as a payment option: Government-owned railway ticketing platform IRCTC, which is the one of the most used internet commerce site in the country clocking on an average over half a million tickets a day, has added Paytm’s wallet as an online payment option. IRCTC, the primary seller of railway tickets online (others OTAs act as secondary link) in the country, has been offering various online payments options besides the conventional credit/debit cards and net banking. It allows payments through cash cards, its own co-branded pre-paid Rupay card with Union Bank and with Paytm wallet it adds another payment option. Last we checked the Paytm payment option was integrated on IRCTC’s web portal but was not yet available on its mobile app on Android. The development means a big move for Paytm as it is already available as an alternate payment option in several key internet ventures such as the country’s top online food ordering venture Foodpanda, cab hailing app Uber (in India), eBay and Jabong. Although IRCTC has come a long way in terms of streamlining online payment process on its site, given the huge load on its servers it is not uncommon to see payment failures in a multi-authentication process which comes with a credit and debit cards. Paytm wallet would look to capitalise in partly solving this pain point for users and hopes to also expand its reach in tier-II and tier-III markets, where trains are a primary mode of long distance travel and IRCTC by default is the booking platform.
- This too shall pass: Secret Shuts Down: Anonymous sharing app Secret will shut down soon, according to sources close to the company. The announcement could be made as soon as today or tomorrow, and there’s some talk of current employees receiving modest severance packages. Having raised $35 million, it’s unlikely that the company is out of money. But after a major redesign sterilized the app’s identity and made it look just like its much more popular competitor Yik Yak, and its co-founder Chrys Bader-Wechseler left, Secret may see shutting down as the best outcome. Many employees, including top talent like Sarah Haider, Safeer Jiwan, and Amol Jain have left the company over the past month or so. One source says the company has been whittled down to under 10 employees from over 20 several months ago and has been in “maintenance mode.” More here: Secret’s trajectory illustrates the flash-in-the-pan nature of Silicon Valley’s current technology boom. Even as a handful of start-ups rise to stratospheric valuations and take in billions of dollars in financing, other privately held companies cannot sustain their following. Fab.com, a onetime e-commerce darling, was once valued at more than $1 billion and had raised more than $150 million before ending up in a fire sale this year, when it was bought for about $15 million. Other start-ups are dealing with a cooling-off process as big companies muscle in on their turf. Meerkat, a live-streaming video app that gained great traction early this year, is now grappling with the entrance of Twitter and its Periscope live-video app, for example.
- Cloud CRM major Salesforce is exploring a sale - shares up 17%; seen as pricey but valuable target: Cloud software company Salesforce.com Inc is working with financial advisers to help it field takeover offers after being approached by a potential acquirer, Bloomberg said, citing people with knowledge of the matter. The company's shares rose as much as 17.3 percent to touch an all-time high of $78.46 on Wednesday. They closed up 11.6 percent at $74.65, valuing the company at about $49 billion. Salesforce Seen as Attractive, If Pricey, Target for Cloud Push: Salesforce.com, the software provider that has hired bankers to field takeover offers, would make sense as a partner for a buyer willing to spend a lot to become the leader in cloud computing. Salesforce jumped 12 percent to close at $74.65 in New York on Wednesday, giving the company a market value of about $49 billion. Salesforce’s business is entirely cloud-based. That means that as the company adds clients, it can lower costs-per-customer through economies of scale and by improving operations in its software and data centers. It also can update products and roll out new business lines quickly via the Internet. Also, customers are flocking to software and service contracts that tend to be simpler for cloud computing than for traditional software. Cloud clients also can avoid the sunk costs of buying hardware. “Specific to the cloud, the shift is accelerating and it’s happened more quickly than the big guys were hoping,” Steven R. Koenig, an analyst at Wedbush Securities Inc., said in an interview. The San Francisco-based company would give an acquirer “a lot of critical mass in the cloud.” Salesforce had 16 percent of the customer-relationship management market in 2013, compared with 13 percent for SAP SE, 10 percent for Oracle Corp. and 7 percent for Microsoft Corp., according to Gartner Inc. Salesforce will have more than 15 million end users in 2018, up from around 6 million last year, Gartner wrote in a November report. The CRM market has “gone to Salesforce, and no one is going to catch up,” Koenig said. Around 40 percent of organizations with greater than a billion dollars in annual revenue ran all their CRM applications within their own data centers last year, according to Gartner. That will shrink to 25 percent by 2020 as companies move to the cloud, Gartner said. As customers start to move into cloud CRM systems offered by Salesforce, Microsoft, Oracle and SAP, they also to tend to buy related products, such as analytics or marketing services, from the same company. That stitches clients tightly to their provider, making it less likely for them to move away. “There is still room for Salesforce.com and competitors to grow rapidly in CRM without reaching capacity for at least the next five years,” Gartner wrote. Salesforce has begun investing in data centers around the world. Chief Executive Officer Marc Benioff has said the company would open “multiple” data centers in Germany, along with ones in France and Canada. Local facilities help the company serve customers with stringent data regulations, without having to give up the economies of scale and operational expertize gained by being a cloud company. Salesforce also has expanded into data analytics through investments and product development. Lashing these various products together with its Salesforce1 program has allowed the company to pursue larger contracts with bigger firms. Salesforce closed 550 deals valued more than a million dollars each in its most recent fiscal year, up around 100 from the prior year, the company said in February.
- Yelp Shares Tumble on as First-Quarter Earnings, Outlook Disappoint: Yelp Inc., an operator of user-review websites, declined as much as 17 percent in extended trading after its profit and sales forecast missed analysts’ estimates. The San Francisco-based company reported a first-quarter loss of $1.28 million, or 2 cents a share, from $2.64 million, or 4 cents, a year earlier. Analysts’ estimated a profit of 1 cent. Revenue was $118.5 million, the company said Wednesday in a statement, trailing estimates of $119.8, according to data compiled by Bloomberg. Yelp forecast second-quarter sales of $131 million to $134 million, falling short of analysts’ average estimate of $137.4 million. “There’s not a lot of forgiveness for technology companies right now,” said Blake Harper, an analyst at Wunderlich Securities Inc.. “They are valued pretty well and there’s an expectation that they’ll perform well.” Yelp operates websites that let users search local businesses for free and read reviews about them. The company charges for advertising on those sites. It had 142 million unique monthly visitors in the period, an increase of 7.6 percent from a year earlier. Yelp’s local advertising revenue dropped as a result of a sales-force restructuring implemented in the first quarter, Harper said. Shares of Yelp dropped to a low of $42.68 in extended trading after closing at $51.28. The company competes with Angie’s List Inc. as well as new features offered by companies including Amazon.com Inc.
- Baidu Sees Revenue Growth And Profit Slump In Q1 2015: China's dominant Internet search engine Baidu Inc on Thursday posted its slowest revenue growth rate in almost seven years in the first quarter of 2015, as customers spent less money on its core online marketing business. The company's bid to create new avenues of income from mobile in China, the world's biggest smartphone market, also took their toll. Baidu's profit margins sank to their lowest in a decade, or 19 percent, as promotional costs for new businesses and research and development expenses skyrocketed. The search company's bid to promote new mobile-centric businesses like food delivery to compete with Tencent and Alibaba saw selling, general and administrative expenses rocket 47.2 percent to $477 million from a year ago. Revenues of 12.73 billion yuan ($2.05 billion) came in below forecasts of 12.9 billion yuan, according to a Thomson Reuters SmartEstimate poll of 16 analysts. Coupled with a 3.4 percent decline in net profit from the previous year, this prompted shares to slide 2.6 percent in trading after market close in New York. Baidu said it expected second-quarter revenue to be between 16.37 billion yuan and 16.75 billion yuan. A hiring spree for research and development also pushed the department's expenses up 79.1 percent to $368.8 million. Baidu's net income, its lowest in two years, was 2.4 billion yuan for the first three months of 2015. Profit margins of 19 percent were the lowest in almost a decade.
- Flipkart acquires Delhi-based analytics and visual A/B testing platform Appiterate: India’s largest e-commerce platform Flipkart has acquired Delhi- and San Francisco-based DSYN Technologies Pvt Ltd, which provides a native mobile analytics and A/B testing platform for app developers and enterprises under the brand name Appiterate. The terms of the transaction were not disclosed. The acquisition is in line with Flipkart’s ‘mobile first’ focus, the firm said on Wednesday. Post the acquisition, Appiterate’s mobile marketing automation platform will be integrated with Flipkart’s mobile app which will help the e-commerce firm in targeting users based on their activity on the app and website. Appiterate is a WYSIWYG (what you see is what you get) A/B testing platform for native mobile apps. It allows app publishers to A/B test and iteratively optimise the designs (UX) and functionality of their mobile apps to improve in-app purchases, user engagement and conversion metrics. It also allows app publishers to run tests based on user segments and see real-time conversion metrics. The company says it has been delivering more than 100 million personalised notifications each month through its platform for leading e-commerce companies. Last year, it raised Rs 3 crore in seed funding from SAIF Partners, with participation from a group of individuals, including Greg Badros, former VP (product & engineering) at Facebook and Prashant Malik, former tech lead at Facebook and co-creator of Apache Cassandra.
- Twitter Troubles Lie in Marketers’ Reluctance to Buy New Kind of Ad: As a company, Twitter is an adolescent — gangly, starry-eyed, growing like a weed and unpredictable. No wonder advertisers and investors are having trouble figuring it out. The social networking company shocked Wall Street on Tuesday by reporting slower-than-expected growth in advertising sales, which account for nearly all of its revenue. Shares of Twitter, which fell 18 percent on Tuesday after the first-quarter results were disclosed, dropped an additional 9 percent on Wednesday. Although revenue rose a brisk 74 percent in the quarter compared with the same quarter a year ago, it was less growth than in Twitter’s five previous quarters and well below the high bar that the company had set. Twitter attributed the disappointment to advertisers’ reluctance to spend heavily on ads that prompt the viewer to take an action, like download a smartphone app or apply for a credit card. This type of ad, known as direct response, is a newer area for Twitter, which originally focused on general brand image ads. Marketers say they are indeed more cautious about Twitter’s direct-response ads because the microblogging service has not yet shown that it can target or track those ads with the level of precision that advertisers want. Compared with mature rivals like Google and Facebook, Twitter doesn’t know as much about its users, and it is more difficult to measure results. Facebook has so much data on its users, “you could actually target a premium credit card to a businessman you know is traveling all the time,” said Bryan Wiener, chairman of 360i, a digital marketing agency that works with brands like Capital One, NBCUniversal, Spotify, Oreo and Oscar Mayer. “That’s the kind of information that’s missing from Twitter,” he said. “There’s not this rich history of your holistic life.” As a result, he said, many brands are unwilling to commit big money to Twitter ad campaigns. Mr. Freeman said that, in general, Twitter is best for building brand awareness and recall. Its weakness is the ability to measure direct-response effectiveness. “A lot of times, brands don’t really know what to do with it,” he said. “And that was Twitter’s fault because I don’t think they had a very clear direction.”
- Alibaba-backed Paytm pushes deeper into e-commerce, adds mobile marketplace app for e-merchants: Paytm, an Indian online payments platform backed by China’s Alibaba, is pushing deeper into India’s booming e-commerce industry with a zero-commission mobile app marketplace targeted at small and medium-sized firms, the mainstay of the country’s economy. The company said on Friday this push, in addition to its existing general e-commerce platform, would help marketplace operations make up half of its total revenue target of $4 billion by the end of 2015. “This is our move into mobile commerce,” said Paytm Chief Executive Vijay Shekhar Sharma, adding the mobile app was designed to connect small businesses and consumers. Even though only about a quarter of the population can access the Internet, India already has the world’s third-largest population of internet users, thanks to cheap smartphones. That has driven a boom in e-commerce, in a country that had previously shopped largely in informal stalls and bazaars. Paytm, which has yet to turn a profit, will not charge merchants commission on their sales, making money instead on commissions levied when they transfer money earned out of the site. Paytm expects to have 100,000 merchants on its app by the end of the year, up from about 33,000 today on their general web platform. It expects to grow the number of stock-keeping units — essentially, units sold — from 8.5 million today to 100 million by the end of the year.
- Ratan Tata buys a stake in Xiaomi, will also act as advisor (more here) Ratan Tata, chairman emeritus of the holding company of India's Tata conglomerate, has acquired a stake in Xiaomi Technology [XTC.UL], a deal that is likely to bolster the Chinese phone maker's presence in the world's third-largest smartphone market. Financial details of the unspecified stake bought by Tata in Xiaomi, the first by an Indian, were not disclosed in the statement issued by the Chinese company on Sunday. Xiaomi, the No. 3 global smartphone maker, was valued at $45 billion after a December funding round. Tata, a respected business leader who was the chairman of salt-to-software Tata Sons for more than two decades, has previously invested in Indian start-ups, including online retailer Snapdeal. Tata'a investment in Xiaomi comes against the backdrop of an aggressive push by Xiaomi in India after entering the market, which has huge growth potential with just one in 10 people using smartphones, in July 2014. On Thursday, Xiaomi hosted its first global launch outside of China in the Indian capital New Delhi, unveiling its feature-heavy Mi 4i model that supports six Indian languages at 12,999 rupees ($205). Xiaomi and other Chinese smartphone makers are drafting in cricket teams and Bollywood stars to conquer India, their largest overseas market and a key testing ground for their international expansion. "Mr. Tata is one of the most well-respected business leaders in the world. An investment by him is an affirmation of the strategy we have undertaken in India so far," Lei Jun, founder and chief executive officer of Xiaomi said in the statement. "We are looking forward to bringing more products into India," he said.
- Alibaba, China Telecom tie up to sell cheap smartphones in China's smaller cities: Chinese e-commerce leader Alibaba Group Holding Ltd and state-owned China Telecom Corp Ltd have tied up to sell inexpensive smartphones aimed at boosting mobile commerce in smaller cities and rural areas. The phones, dubbed "Tianyi Taobao Shopping Handsets", will come installed with either an app for easy access to Alibaba's flagship Taobao online shopping platform or its home-grown YunOS mobile operating system, it said in a statement late on Friday. Buyers will be eligible for four months of free 2G data service. The partnership is a bid to deepen Alibaba's e-commerce base in less developed parts of the country and promote its mobile operating system in a shrinking, cut-throat handset market. Six models produced by Coolpad, Hisense and TCL would come with the Mobile Taobao app pre-installed. Mobile Taobao is China's most popular mobile shopping app with more than 200 million monthly active users, it said. Another eight models, made by lesser-known brands including Uniscope, Ctyon and Kingsun, will run YunOS, providing buyers with an Alibaba account for shopping and cloud-based storage, and other preloaded services, it said.
- GE is installing sensors into L.E.D streetlights so that city can collect data: Earlier this month, General Electric announced it was selling GE Capital, its financial arm. With less fanfare, G.E. also unveiled plans for computer-connected L.E.D. streetlights, so cities can collect and analyze performance data, for lower costs and better safety. GE Capital was a huge profit center after the financial deregulation of the 1980s, but that was then. Sensor-rich lights, to be found eventually in offices and homes, are for a company that will sell knowledge of behavior as much as physical objects. “The next generation of bulbs have a life cycle of 20 years; we can’t think of that as a transactional business anymore,” said Bill Ruh, the head of G.E.’s software center. “We can put cameras and more sensors on these, and measure motion, heat, air quality.” Retailers might want such lights to steer shoppers, he said, while consumers could better learn about their electricity consumption. This sensor explosion is only starting: Huawei, a Chinese maker of computing and communications equipment with $47 billion in revenue, estimates that by 2025 over 100 billion things, including smartphones, vehicles, appliances and industrial equipment, will be connected to cloud computing systems. The Internet will be almost fused with the physical world.
- America's car market is being disrupted by online retailers: To say that Beepi is disruptive, in this age of disruptions, sounds clichéd. Yet after just a year of operation in California, Beepi is now buying and selling hundreds of cars a month and is on track to book revenue of $100 million over the next year, the company said. The start-up has raised nearly $80 million in financing and it plans to expand to seven additional regions nationwide by the end of the year. Beepi’s rapid growth illustrates something deeper about the role the digital world keeps playing in our lives: There’s no limit to it. A few years ago, it seemed reasonable to assume there were some sectors of the economy that would resist the pull of the Internet and which most people felt were better left offline. Shopping for groceries or eyeglasses, say; now both those tasks are moving online. Beepi and similar competitors, including Carlypso and Carvana, are pushing people to cross another threshold on the way toward a digital-only life. Although auto experts doubt that online-only car-buying experiences will become the norm, it would be wise not to discount their rise, for the simple reason that the Internet remains hungry. As people grow more accustomed to doing pretty much everything over computers and phones, the Internet tends to consume everything in its path. When Mr. Resnik began investigating the auto sales industry, he found that more than 90 percent of American car buyers consulted the Internet for purchases and a rising number of people worldwide say they would buy a car entirely online. According to a study by the research firm Capgemini, about a third of Americans and two-thirds of Chinese who were asked said they would buy a car over the web. To Mr. Resnik, the latent consumer interest was a starting point, and along with a friend, Owen Savir, he set out to create a system to bring to car shopping all the conveniences we’ve grown used to with other online purchases. “We just thought that the car market was broken,” Mr. Resnik said. At the core of Beepi’s business model is a pricing trick. There are three relevant prices for any used car. The trade-in price, which is what a dealer will give you for your car; the private sales price, which is what you can get if you sold it directly to someone else; and the retail price, which is the price the car will command at a dealership. Dealers pay the trade-in price for vehicles and then sell them at the retail price. On some cars, that spread can be worth 50 percent. Beepi thinks it can make a profit while operating within a tighter pricing band. When you list your car with the site, the company’s pricing algorithm, which consults data on historical car sales in your area, offers a price at least $1,000 more than you can get by trading in your car at the dealer. That is still less than what you would get selling privately, but Beepi’s price is guaranteed. If your car doesn’t sell within 30 days of listing on Beepi, the company will buy it from you. On the other side of the transaction, Beepi sells cars at prices lower than comparable certified used cars at dealerships. It can do so, the founder says, because its overhead is lower — it doesn’t have to maintain parking lots to house cars, because the vehicles stay with the sellers until they are sold. Also, because it buys and sells cars over a wide area — currently, any city in California and Arizona — it can take advantage of supply and demand disparities in different regions. Finally, Beepi caps its own fee at 9 percent, depending on price and demand (it will take as little as 1 percent). “When you put it together, we think you can give more to sellers, more to buyers, and make up to 9 percent of the price,” Mr. Resnik said. But if Beepi is faster, more convenient, and a better financial deal than the traditional car market, it also suffers one huge downside. Beepi does not let buyers test-drive cars before buying. Instead, it takes a page from other online retailers’ return policies. Like a pair of shoes from Zappos, Beepi’s cars come with a 10-day, try-it-out money-back guarantee. If you aren’t satisfied, the company will send a truck to take the car away free. The company positions this as better than a dealer’s test-drive. “It’s a 10-day test drive,” Mr. Savir said. But that could be a tough sell. Mr. Resnik of Beepi said only a handful of people have returned their cars, at a rate “much, much lower than 1 percent.” And he isn’t worried that there won’t be consumer demand in buying cars without a test-drive. “As people buy more and more online, they’re getting used to it,” he said. “It’s going to happen.”
- "Apple Won’t Always Rule. Just Look at IBM" In a few short years, Apple has become the biggest company on the planet by market value — so big that it dwarfs every other one on the stock market. It dominates the Standard & Poor’s 500-stock index as no other company has in 30 years. Apple’s market capitalization — the value of all of the shares of its stock — is more than $758 billion, greater than any other company’s. Yet the Wall Street consensus is that Apple is still having a growth spurt. In fact, if Apple’s watches, phones, laptops and other gadgets and services keep generating favorable publicity — and if its quarterly earnings report on Monday is as strong as the market expects it to be — there’s a reasonable chance that Apple’s value will keep swelling. Not far down the road, it might even reach the $1 trillion level that some hedge funds predict. But even if Apple still has some room to run, there are some early warning signs. After all, the company has already crossed a significant threshold. In February, it grew to twice the size of the next biggest company in the S.&P. 500, a rare feat of financial dominance, and one that hasn’t happened since Ronald Reagan was president. I checked the numbers with Howard Silverblatt, senior index analyst at S.&P. Dow Jones Indices. He found that the last market colossus to tower over its competitors by a two-to-one ratio was IBM, which did it in three successive years: 1983, 1984 and 1985. “That was when PCs were new,” he said, “and just about everyone thought IBM would rule the world.” Now it’s Apple’s world. Apple is the most widely held stock in American mutual fund portfolios. IBM, the former undisputed heavyweight champion, isn’t even in the running anymore. It ranks 62nd, according to a Morningstar analysis performed at my request. IBM is still an important company, but it is struggling. Investors judge it to be worth less than one-quarter of Apple’s market value today. What happened to IBM — how it became this small, in comparison with Apple — is worth remembering. IBM thrived for years afterward, but just as Jobs had predicted, it turned out to be vulnerable to disruptive change, as all big companies are. For decades now, IBM has engaged in a sometimes painful transition, and as it revealed in its quarterly earnings report last week, it is still hurting: Its revenues have declined and it has endured wrenching business shifts. My colleague Steve Lohr wrote last week that IBM has been getting out of slow-growing old businesses, like personal computers, disk drives, low-end server computers and chip manufacturing — but its new initiatives in fields like data analytics, cloud computing and mobile apps for corporate customers haven’t entirely succeeded yet. In a turnabout, IBM’s mobile app strategy relies on a partnership with the current giant, its old nemesis Apple. IBM is leveraging its prowess with supercomputers and artificial intelligence with a new initiative, Watson Health, that includes Apple. That alliance could help both companies grow — in Apple’s case, by ensuring that its products work more seamlessly in corporate environments where IBM is deeply entrenched. Rapid growth, after all, isn’t a sure thing, especially when you’re already the biggest company in the world. IBM has proved that. Sooner or later, Apple investors will have to take that lesson to heart.
Amazon has installed 15,000 robots in 10 of its 50 US warehouses. (article here, video here): The robots are made by Kiva, acquired by Amazon in 2012 for 775M. Each robot weighs 320 lbs, and can carry 750 lbs. The robots are guided by stickers on the warehouse floors. This is fast and space-efficient: unloading a trailer now takes 30 minutes, instead of hours. Each warehouse can now hold up to 50% more inventory because racks can be placed closer together. The robots typically run for 2 hours before needing a recharge (which they do on their own). The robots can thus work 24x7 and fulfil an order every 20seconds. In some cases, the robots have allowed Amazon to get packages out the door in as little as 13 minutes from the pick stations, compared to about an hour and a half on average in older centers. The move comes at a cost. Amazon estimated in June 2013 that it would spend about $46 million to install Kiva robots at its warehouse in Ruskin, Florida, including $26.1 million for the equipment, according to company filings to local government.
For Uber, Airbnb, OpenTable, Customer Ratings also help rate the customer: Travelers are often asked to review their hotel, restaurant and car service. But increasingly, it goes both ways. Drivers for Uber and Lyft, for example, rate their passengers from one to five stars at the end of each ride. If a rider receives three stars or fewer, the driver and passenger will not be paired up again. And at OpenTable, the restaurant booking system, customers are banned if they do not show for a reservation too many times. While guest-tracking systems are generally for internal use only, guests who use the Airbnb online booking service to find lodging may find themselves publicly reviewed. This allows potential hosts to see how a guest was perceived by previous ones before agreeing to allow that person to stay in their home. The online dining reservation system OpenTable allows a restaurant to identify guests who booked through the system. Using OpenTable, each restaurant can make private notes about the guests, like indicating table location preference or if they often send their food back. Those notes are not shared with other restaurants. “Overwhelmingly restaurants use the notes feature to enhance the hospitality experience for their guests,” said a spokeswoman, Tiffany Fox. She added that it will ban a customer who fails to show up for a reservation four times in a 12-month period. These are among the ways that sophisticated rating systems can turn on the customer, identifying the best and worst among them. The rating systems are allowing businesses to formalize a longstanding practice: focusing on their best customers. The worst customers “demand too much, complain too much and cost too much,” said Christopher Muller, professor of hospitality management at Boston University. Beyond that, he said, bad clients make employees unhappy. Companies, he said, do better by spending time on their best and most profitable patrons. “It sounds draconian, but not all customers are created equal,” he said.
Uber switches fully to Paytm wallet-based pay mode, discontinues Indian card payments: Global online car hire service major Uber Technologies Inc has stopped accepting credit and debit card payments from cards issued in India, and will now only allow payments made through Paytm wallet in the country, the company announced in a blog post. Last month, Uber had partnered with Paytm, the digital goods and services marketplace owned by Noida-based One97 Communications Ltd, to integrate its payment system. With this integration, Uber can sidestep the regulations that require every transaction made with an Indian credit card to include two-factor authentication (2FA). Earlier, it had come under fire from Indian monetary authority RBI over its automated credit card based payment system.
US offline retailers ran TV, radio ads targeting Alibaba: Several of the largest U.S. retailers warned that Alibaba Group Holding Inc may "decimate" local companies unless Congress closes tax loopholes for online retailers, singling out the Chinese company before it has even established a major American consumer presence. In TV and radio ads over the weekend, the Alliance for Main Street Fairness, which includes Best Buy, Target, JC Penney and other major chains, called on Congress to end special tax treatment for Alibaba and other online giants. "Main Street will never look the same," it said. The ad marks one of the biggest public marketing campaigns against a Chinese company that handles more e-commerce than Amazon and eBay combined, even though Alibaba only surfaced in the American consciousness after it went public in the world's largest-ever IPO in September. U.S. retailers and industry analysts expect Alibaba to soon launch a service targeted at American consumers, armed with its IPO war chest.
