Daily Tech Snippet: Monday, September 26

• Snapchat’s camcorder goggles are creepy cool and kind of brilliant: Snapchat’s first hardware product is a pair of $130 sunglasses that shoot first-person bursts of circular, wide-angle video. The Spectacles, as they’re called, are designed to make it easy to record what you’re actually seeing, in the moment, without having to awkwardly fish your giant smartphone out of your pocket and hold it in front of your face. The resulting recording is intended to be more lifelike, too.the last big camera-goggles launch, Google Glass, went about as poorly as possible. Glass, a too-serious attempt to put a computer on your face, looked ridiculous in a bad-taste, cyborg way. It introduced a creepy privacy violation — a face-mounted camera that you, as a bystander, couldn’t control — with poor explanation. Its early adopters, “Explorers” who spent $1,500 for the privilege, were derided as “Glassholes,” widely mocked, and sometimes abused. The whole thing came across as a poorly planned embarrassment. Spiegel is obviously trying to avoid these problems. Strategically, though, Spectacles are potentially brilliant. If Spectacles can intercept the smartphone camera and become the creative device that people use for any decent amount of recording — in what seems to be a proprietary format, with a custom-designed distribution network in Snapchat — that’s a pretty awesome position to be in.

• Snapchat, Known for Ephemera, Proves Its Staying Power With Videos: “Snapchat is the company that will figure out how to move TV viewers to mobile,” said Hemant Taneja, a Snapchat investor and managing director at the venture firm General Catalyst Partners. “YouTube and others have worked hard to bring video to mobile devices, but Snapchat is the first to crack how users behave on mobile.” Since introducing Discover in January 2015, Snapchat has become a web of highly edited video content — whether made by users, celebrities or media companies like Buzzfeed and CNN. That, in turn, has caught the attention of advertisers who want to reach Snapchat’s growing audience, which, the company says, includes 41 percent of Americans ages 18 to 34. By comparison, the company says that the average television network in the United States reaches about 6 percent of the same demographic. Now, Snapchat is preparing to deliver more original programming. Popular NBC shows including “Saturday Night Live” and “The Tonight Show Starring Jimmy Fallon” have agreed to create programming for Snapchat, and “The Voice” ran a five-part series made just for the app. E News now has a weekly Snapchat-only pop-culture program called “The Rundown.” Television ad dollars would “flood into online” if online ads could prove they were as effective as television ads, said Joe Marchese, president of advertising products for the Fox Networks Group. For Mr. Marchese, that means the ad takes up the full screen, probably plays with the sound on and is viewed in its entirety. While advertisers do not go so far as to say that Snapchat video ads are equivalent to television ads, they note that watching content on Snapchat mimics, in some crucial ways, the experience of watching traditional television. Videos play with the sound on. They take up the full screen. They tell a narrative story. Users flip between them like they do TV channels.

• Marc Andreessen suddenly deletes all his tweets, goes on Twitter break: he Twittersphere was just a little bit quieter this morning after Marc Andreessen, father of the Tweetstorm, vacated the platform last night. While there’s no clear answer from him or others as to why he decided to take a break, Andreessen is not the first popular Silicon Valley figure to abruptly leave the service.Earlier this summer, Sam Altman, President of the Y Combinator Group, left citing community issues on the Twitter platform. He argued that the social network “rewards negativity and snark,” and that he felt “worse after using Twitter.” Of course, even Altman couldn’t resist the urge to come back to Twitter after a brief absence. Given Andreessen described his actions as a “break,” it will likely end much in the same way with an eventual return. Twitter as a platform has increasingly come under fire for its dismissive approach to the toxic culture permitting from some of the site’s insensitive and trolling users, though Andreessen isn’t usually one to back away from divisive conversations.

Daily Tech Snippet: Friday, August 5

• Meet the China ‘whisperers’ who get the big deals done in Silicon Valley: When Uber chief executive Travis Kalanick wanted advice about whom to hire to run his ride-hailing business in China, he asked Carmen Chang, a longtime Silicon Valley lawyer and investor who had helped a previous generation of tech companies navigate that murky territory. When Uber sold its China business to its rival Didi this week, Chang was a trusted confidante.When Lyft, Uber’s smaller rival, needed an entree into China, the company’s president turned to another Silicon Valley insider who shuttles between worlds. The introduction from Connie Chan, a partner at the venture capital firm Andreessen Horowitz, to China’s largest ride-hailing company led to a $100 million investment and partnership. Behind the scenes of an unprecedented flood of capital from China into Silicon Valley over the past two years is an elite network of brokers. These brokers do more than deal-making; they play anthropologist and cultural translator -- from coaching startup founders about the culturally appropriate place to sit at a conference room table in China to breaking down how emojis are used in Chinese apps. Their acumen is growing more valuable, entrepreneurs say, as they navigate a cast of hard-to-parse characters with alluring deep pockets and promises of big business opportunities overseas. “She is the whisperer between China and Silicon Valley,” said Matthew Prince, chief executive of Cloudflare, a web security startup, of Chang. Last year, Chang helped Prince -- whose company had given up on China in 2011 -- clinch a partnership with Baidu, China’s search giant. “There’s very few that really understand both sides.” Chang, who was born in Nanjing, China, came to the States to seek a doctorate in Modern Chinese History. She got pulled into tech industry after graduating from Stanford Law School in the early 1990s, when she got a job as an associate at Wilson Sonsini Goodrich & Rosati, the Silicon Valley firm known for its ties to the clubby venture capitalists on Sand Hill Road. One of her early clients was Masayoshi Son, the billionaire Japanese investor who founded the Japanese telcommunications giant Softbank. At the time, she said, senior management at the firm had never been to Asia, and Son “wasn’t considered important enough” to be represented by a general partner. “So he got an associate,” she says.

• Snapchat Used to Spook Advertisers. Not Anymore. When Snapchat opened itself up to advertisers more than a year ago, many initially griped that the company needed to lower its ad prices. Some were mystified about how to reach the right audience with the ads, since Snapchat did not provide traditional ad-targeting tools. Most of all, brands wondered how Snapchat could be effective when the ads — like Snapchat messages — disappeared. In the last 15 months, Snapchat has moved to respond. It introduced new ad formats. It dangled its attractive user base — the service now claims 150 million daily users, including nearly half the country’s population from ages 18 to 34 — to lure advertisers. Most important, Snapchat has persuaded brands like Tiffany & Company, Kraft Foods and Burger King that its ads let them interact playfully with this young audience.Now Snapchat faces the challenge of keeping up its nascent ad business as its early success raises the competitive hackles of rivals. On Tuesday, Instagram, the photo-sharing app owned by Facebook, introduced a near carbon copy of a Snapchat photo and video service known as Stories. A lot is riding on Snapchat’s building up its ad business. The company, which Mr. Spiegel helped found in 2011 and is now based in the Venice Beach neighborhood of Los Angeles, needs to justify a valuation of about $19 billion that its investors have placed on it. The company also faces sky-high revenue expectations; the investment bank Jefferies recently projected that Snapchat’s revenue would grow to $1 billion next year from more than $350 million this year.Mr. Khan’s biggest job was to explain why Snapchat’s unusual platform was better for advertisers. The task was thorny because Snapchat is a messaging, sharing and broadcast service where most content disappears. Companies had few comparable apps to judge Snapchat against. The potential became clearer after brands started experimenting with Snapchat’s geofilters, a tool that adds custom stickers, a type of colorful icon, to the app when people enter a certain geographic area, and lenses, which are whimsical images that transform someone’s face in the app.

• Facebook's News Feed to show fewer 'clickbait' headlines: Facebook's News Feed will show fewer "clickbait" headlines over the next few weeks, the company announced Thursday, as it seeks to establish itself as the prime web destination for news and social updates. The company receives thousands of complaints a day about clickbait, headlines that intentionally withhold information or mislead users to get people to click on them, Adam Mosseri, vice president of product management for News Feed, said in an interview. In an effort to eliminate clickbait from the site, Facebook created a system that identifies and classifies such headlines. It can then determine which pages or web domains post large amounts of clickbait and rank them lower in News Feed. Facebook routinely updates its algorithm for News Feed, the place most people see postings on the site, to show users what they are most interested in and encourage them to spend even more time on the site. The system looks for commonly used phrases in clickbait headlines, similar to how filters for email spam work, Facebook said in a blog post. It categorized tens of thousands of headlines as clickbait by looking for headlines that intentionally withheld information and those that exaggerated the content of an article. News Feed, a team of about 200 people, uses a similar classification system to determine what it should show each user, Mosseri said.

• Amazon adds several new devices to its Dash Replenishment auto ordering service: At the beginning of the year, Amazon flipped the switch on Dash Replenishment, a service aimed at bringing the instant reordering of its devoted product buttons directly to connected devices. The idea being that you don’t have to, say, order ink for your printer or batteries for your smart lock — the devices will do it for you. The retail giant has already announced a slew of different partners for the program, including Brother Printers, the Gmate SMART blood glucose monitor and a GE washing machine, all of which went live in the first round. Today the company announced a number of new additions. The highest profile of the additions is GE, which will be extending its involvement to driers and dishwashers, which will be updated to order fabric softener and dishwasher detergent, respectively, when supplies start to dwindle. Neato joins the list as well, bringing the Wi-Fi-connected robot to the service to order replacement filters and brushes, while Petcube’s Kickstarter-supported Bites camera will be able to order pet food. Also on the list are the Behmore Connected coffee brewer, Simplehuman trashcan and SmartThings platform. Even The Hershey Company has been added to the stable with an unnamed device. That should be interesting.

• LinkedIn Results Beat Expectations Ahead of Microsoft Deal: LinkedIn Corp. reported earnings and revenue that were higher than analysts expected, after the company negotiated a $26.2 billion sale to Microsoft Corp. LinkedIn said second-quarter revenue was $933 million, up 31 percent from a year earlier. The average analyst estimate was $899 million. Earnings, excluding some items, were $1.13 cents per share in the second quarter, compared with analysts’ projection of 78 cents. This may be LinkedIn’s last earnings report as an independent company, before it joins Microsoft in one of the largest technology industry deals on record. 

• As Chinese hacking abates, FireEye plans layoffs, cuts forecasts; shares plunge: Cyber security firm FireEye Inc said on Thursday it planned to lay off 300 to 400 of its 3,400 workers as it announced quarterly sales below its own forecast, due to a slowdown in demand for its services helping businesses respond to hacking attacks. FireEye's shares were down 16.2 percent at $14.02 in extended trading.Chief Executive Kevin Mandia said the company is now responding more frequently to financially driven cyber criminals, who engage in crimes such as ransomware, which are relatively simple to clean up. "The size and scope have changed. The whole remediation was more complex" when the company was responding to large numbers of state-sponsored hacks from China, he said. FireEye cut its full-year revenue forecast to $716 million-$728 million from $780 million-$810 million.Executives blamed much of the trouble on a slowdown in its services business, including its high-profile Mandiant forensics unit that helps organizations respond to cyber attacks. That division's revenue rose just 2 percent in the second quarter, compared to a 40 percent increase in the first quarter. Its total number of engagements rose, but average revenue from each one fell dramatically because work performed was less extensive. Mandia said that was due to a shift away from previous years where there were large numbers of state-sponsored espionage hackers from China attacking customers in the United States. FireEye and other cyber security firms said in June that cyber espionage attacks from China appeared to have dropped this year as the Chinese government made good on a pledge with the United States to stop supporting the digital theft of U.S. trade secrets.

• Zynga plummets 9% in after-hours trading: Social game developer Zynga tumbled 9 percent in after-hours trading following the second quarter 2016 earnings announcement after the bell today. The company reported a net loss of $4.4 million, while still beating analysts’ expectations in terms of revenue.For the second quarter ended June 30, the San Francisco-based maker of FarmVille and Words with Friends posted revenue of $181.7 million and non-GAAP net earnings came in at $0. 

• Grand Theft Auto' publisher Take-Two's revenue jumps 13 percent: Videogame publisher Take-Two Interactive Software Inc reported a 13 percent rise in revenue, helped by strong sales of its "Grand Theft Auto V" and "NBA 2K16" titles. Take-Two, like its rivals, has also benefited from a shift by players downloading digital copies of its videogames – which generate higher margins – rather than buying physical game discs. Take Two's net revenue rose to $311.55 million in the first quarter ended June 30 from $257.30 million a year earlier. Digital downloads accounted for about 55 percent of revenue in the quarter. Net loss narrowed to $38.57 million, or 46 cents per share, from $67.02 million, or 81 cents per share.

• Activision revenue surges on "Overwatch" launch, "Candy Crush" deal: Activision Blizzard Inc reported a 50.4 percent surge in quarterly revenue on Thursday, propelled by the popularity of the newly-launched "Overwatch" game and the boost from the acquisition of "Candy Crush" maker King Digital. Activision's total adjusted revenue, which excludes deferred revenue and related costs, rose to $1.57 billion in the second quarter ended June 30 from $1.04 billion a year earlier.The company's shares were up 1.4 percent at $41.40 in extended trading. Activision, best known for its "Call of Duty" and "World of Warcraft" games, released "Overwatch" on May 24 to rave reviews. The multi-player futuristic game now has more than 15 million players and has generated about $500 million in revenue to date, excluding deferrals, the company said. The company's net income dropped 40 percent to $127 million, or 17 cents per share, mainly due to costs associated with the near $6 billion acquisition of King Digital in February.

Daily Tech Snippet: Friday, July 15

• Line Rises in Initial Public Offering, Cheering Skittish Tech Industry: The Line Corporation, the owner of a Japanese instant messaging app with a colorful cast of cartoon characters, cheered the technology industry on Thursday when its shares jumped 30 percent in their American trading debut. The strong showing offers hope for tech firms and their financial backers that Wall Street investors are warming up to closely held technology start-ups. But experts say Line is an unusual case of an established company with operating heft and a proven way to gin up sales — something that many new tech companies lack. Line itself still faces considerable hurdles, such as slowing user growth and an untested plan to use advertising to help make it profitable. Line’s American depositary shares, priced at $32.84 each on Monday, jumped to $42.70 in early trading in New York on Thursday. The stock is expected to begin trading in Japan on Friday. Line’s debut coincided with another new high for the equity markets in the United States. The Standard & Poor’s 500-stock index has surged 8 percent since June 27, after Britain’s decision to leave the European Union roiled stocks worldwide, as investors anticipated additional stimulus from central banks.

• Snapchat Geofilter Campaigns May Get a Boost From Yext: Snapchat Inc. may start to see more brands paying up for location-based advertising campaigns on its photo-sharing mobile app, thanks to the efforts of another startup, Yext Inc. Advertisers can already pay the social-media service to have branded geofilters -- a type of graphical overlay people can use to decorate photos or videos they’re sharing -- to show up in the app in specific locations. To run these campaigns, companies have had to manually provide Snapchat with the exact geographical details of where they want the filters to appear and the dimensions of each space. Yext, whose software helps businesses manage digital location data, has been working with Snapchat to make that process easier. The New York-based startup on Thursday is unveiling a new feature that lets clients give Snapchat all that information with a few taps.Last year, Snapchat started offering geofilters to brands as an advertising platform. In the U.S., a national geofilter campaign reaches 40 percent to 60 percent of daily users, according to Snapchat’s website. The company also unveiled a cheaper option for smaller businesses and individuals this year: on-demand geofilters. The starting price for one of these geofilters is $5 for up to 20,000 square feet of coverage. Companies including McDonald’s Corp., Starwood Hotels & Resorts Worldwide Inc. and Yum! Brands subsidiary KFC have already launched location-based ad campaigns on Snapchat. The fried chicken seller offered special KFC-themed geofilters at more than 900 locations in the U.K., resulting in a more than 23 percent lift in visitation within a week of a user seeing the filter in a friend’s Snap, according to a June presentation by KPCB partner Mary Meeker.

Daily Tech Snippet: 3 June 2016

• Snapchat Passes Twitter in Daily Usage: Snapchat has 150 million people using the service each day, said people familiar with the matter. That makes the four-year-old messaging app more popular than Twitter Inc. by daily active users. Snapchat has been growing quickly, boosted by its popularity among young people. The app had 110 million daily users in December, said the people, who asked not to be named because they weren’t authorized to speak about the numbers. Twitter, which was founded in 2006, has less than 140 million users interacting with the service daily, according to an average of analysts’ estimates surveyed by Bloomberg. The short-messaging service was once the largest social network after Facebook Inc. but has since been surpassed by Facebook’s other apps, including Instagram, Messenger, and WhatsApp. Twitter has 310 million monthly active users, according to its most recent earnings report. The company doesn’t disclose how many of those people check in daily, but in the third quarter, it said about 44 percent of monthly users are active each day in the service’s top 20 markets. Twitter Chief Financial Officer Anthony Noto said at the time that the percentage had been stable but that “we’ll be sure to disclose” if there was a significant change. The company hasn’t given an update since then. This implies a daily active user count of 136 million. Snapchat has made communicating more of a game by letting people send annotated selfies and short videos. It has allowed people to use its imaging software to swap faces in a photo, transform themselves into puppies, and barf rainbows. (In March, Facebook said it acquired the startup behind an app called Masquerade, which offers similar photo-manipulation tools.) Snapchat encourages people to visit the app frequently with features such as the "Snapstreak," which counts the number of consecutive days they’ve been communicating with their closest friends. Snapchat’s other content, such as news and Live Stories, disappear after 24 hours.

• The incredibly brilliant way people are now paying for things in Asia: When Apple first rolled out Apple Pay in 2014, it was billed as a simpler way to buy goods and services. You take your phone out, tap it to the credit card reader, and off you go. Seems convenient, right?  But some consumers in Asia think there's an even better way to pay. In recent years, millions of people have grown accustomed to using messaging apps to communicate. Some of these apps now support person-to-person digital cash transfers. So the next step is pretty logical: Asian retailers have begun using these same messaging platforms to sell everything from clothing to hamburgers to train tickets. And as a consumer, you never have to leave the app to pay. On the surface, this alternative sounds a lot like Apple Pay (or Samsung Pay, or Android Pay, etc.). But conducting real-life and online transactions through messaging apps stands to change retail like none of these other services have. What we're seeing in Asia is the rise of mobile payments that run primarily on software, not hardware as we've tried to implement here in the United States. And that simple distinction may be the key to everything from accelerating the spread of mobile payments to unlocking deep, digital interactions with customers in brick-and-mortar stores to democratizing e-commerce away from giant online businesses like Amazon.To buy a meal with WeChat, which in China goes by the name Weixin, customers simply pull up a QR code in the app that's connected to their credit card or other financial account. Once the cashier scans the code, that's it — no further action is needed. Retailers in China will typically offerdiscounts to WeChat users as an incentive to pay with the app.

• No Uber IPO in Sight After $3.5 Billion From Saudi Arabia: Once upon a time, Silicon Valley startups raised money from venture capitalists and then, with some luck and a promising business, held an IPO to cash in and expand. Uber has no need for such traditions. The San Francisco-based company, founded in 2009 and valued at $62.5 billion, has now raised $11 billion as it spends heavily to expand globally and battle well-funded rivals such as Lyft Inc. and China’s Didi. The ride-hailing company’s latest infusion of cash -- a record $3.5 billion from Saudi Arabia’s sovereign wealth fund -- means Chief Executive Officer Travis Kalanick has the finances to continue avoiding a listing of his company any time soon. "I’m going to make sure it happens as late as possible," he told CNBC earlier this year. The money from Saudi Arabia is a new wrinkle in the shifting way the world’s largest technology startups are being funded. The $3.5 billion raised by Uber Technologies Inc. this week is far larger than what most companies are able raise when they hold public offerings: Twitter Inc. netted $1.82 billion during its 2013 IPO and First Data Corp. raised $2.56 billion in the largest technology IPO of the past 12 months. In 2004, Google raised $1.67 billion during its stock-market debut.

Daily Tech Snippet: Friday, May 27

• Google Prevails as Jury Rebuffs Oracle in Code Copyright Case: A jury ruled in favor of Google on Thursday in a long legal dispute withOracle over software used to power most of the world’s smartphones. Oracle contended that Google used copyrighted material in 11,000 of its 13 million lines of software code in Android, its mobile phone operating system. Oracle asked for $9 billion from Google. Google said it made fair use of that code and owed nothing. The victory for Google cheered other software developers, who operate much the way Google did when it comes to so-called open-source software. Unlike traditional software created by corporations and tightly held, open-source products are released, often with some restrictions, for anyone to use and modify. “Great news for progress and innovation,” Chris Dixon, a technology investor with Andreessen Horowitz, the venture capital firm, posted on Twitter after the verdict. Android relies in part on Java, an open-source software language that Oracle acquired when it bought Sun Microsystems for $7.4 billion in 2010. Oracle argued that Google executives violated Oracle’s copyright by using aspects of Java without permission. The courtroom fight was something of a watershed for technology and could offer clarity on legal rules surrounding open-source technology, which is used in everything from smartphones and digital recording devices to the software that runs many of the world’s biggest data centers. People who work with open-source technology worried that a victory for Oracle would have led other companies to make similar demands of open-source products. “It does give a lot of breathing room to other companies and individuals trying to do a lot of innovative activity,” said Parker Higgins, director of copyright activism at the Electronic Frontier Foundation, a digital rights advocacy group.

• Bessemer-Backed Twilio Files for Initial Public Offering: Twilio Inc., the San Francisco-based company that helps clients including Uber Technologies Inc. build web and mobile applications, filed for an initial public offering. The software developer, backed by Bessemer Venture Partners, filed with an initial offering size of $100 million, a placeholder amount used to calculate fees that will probably change. Twilio had more than 28,000 active customers at the end of March, according to the prospectus filed Thursday. They include enterprise-software company Box Inc., department-store chain Nordstrom Inc. and rideshare company Uber. Twilio said in the filing its communications software is embedded in Uber’s mobile app, helping it update riders in real-time about their ride requests as well as helping the company scale its business. Bessemer holds a stake of 28.5 percent in Twilio, according to the prospectus. Union Square Ventures holds 13.6 percent and Fidelity owns 6.1 percent. Twilio has yet to make a profit. It posted a net loss of about $36 million in 2015, on sales of $167 million, even as revenue grew 88 percent that year after a 78 percent bump in 2014. The company said that it expects its growth rate to decline over time. WhatsApp Inc. contributed a significant chunk of that revenue. The messaging tool owned by Facebook Inc. uses Twilio’s technology in its applications to verify new and existing users. WhatsApp accounted for 17 percent of Twilio’s sales last year and 15 percent in the first three months of 2016.

• Snapchat raises $1.81 billion in new funding round: Messaging app Snapchat has raised $1.81 billion in funding, the company reported in a U.S. regulatory filing on Thursday, a sign that investor interest is strong despite concerns among some venture capitalists that the platform is struggling to attract advertisers. Venture capital database PitchBook estimated the company's valuation after the financing at $17.81 billion, up from $16 billion at it most recent financing in February.Snapchat, headquartered in Venice, California, has faced concerns from big investors familiar with the company that its estimated valuation is not justified because of an uneven revenue stream. Its advertising business, which began last October, is the company's only significant revenue source. But, with a strong user base of 13- to 24-year-olds, the app provides an attractive platform to reach millennials and hook young consumers on brands. The company has more than 100 million active users, about 60 percent of whom are 13- to 24-year-olds. Snapchat early this year raised $175 million from Fidelity Investments in a "flat round" of financing that did not adjust the company's valuation. The mutual fund bought shares at $30.72 each. Fidelity has repeatedly adjusted the estimated valuation of its stake in the company, slashing it by at least 25 percent last year only to boost it by more than 60 percent in February. Investors in this latest round include General Atlantic, Sequoia Capital, T. Rowe Price and Lone Pine, among others, tech blog TechCrunch reported on Thursday. TechCrunch also reported that Snapchat's revenues in 2015 were $59 million, according to a presentation to investors that was seen by the news site. That's up from $3.1 million for the first 11 months of 2014, sources told Reuters last year.
• InMobi grapples with senior, mid-level attrition amid concerns about future: Online advertising startup InMobi , one of India's early 'unicorns,' is struggling to retain senior executives amid questions about whether new strategic initiatives are working as well as worries about the future of the company. InMobi, which was founded by Naveen Tewari in 2007 and was the first startup in which Japan's SoftBank invested, now has some 1,500 employees compared to twice that number at its peak. The Japanese conglomerate, which has since backed Snapdeal and Ola, poured $200 million into InMobi in 2011 but wrote down most of that amount in 2014. The exits also come during a time when InMobi is struggling to raise funds and chart out a sustainable business model that can adapt to the massive changes that are taking place in the online and mobile advertising space, according to both current and former executives at the company. According to these executives, InMobi, which was estimated to be valued at $1 billion, now generates between around $300 million in annual revenue. InMobi has not registered profits since its founding in 2007. InMobi's challenges have been compounded by the fact that its flagship product Miip -- that targeted global retailers like Walmart -- hasn't taken off. Miip also took much longer than expected to scale and customers found the product underwhelming, according to at least two customers who have used the product.

Daily Tech Snippet: Tuesday, May 24, 2017

• Snapchat is raising more money around $20 billion valuation: Snapchat may have first made its name in the crowded world of mobile apps with an ephemeral messaging service, but the startup and its wildly popular app are not disappearing anywhere soon. TechCrunch has learned from multiple sources that Snapchat is raising yet more financing at around a $20 billion valuation. Sources with knowledge of the deal say the social media giant is in the process of a round of about $200 million. This new financing, we understand, is a follow-on to the $175 million Series F round led by Fidelity. Snapchat was said to be valued at $16 billion in that round, flat on the year before. However, filings from earlier this month and embedded below, uncovered for us by market analysts VC Experts, show that the Series F was expanded.Expanding the Series F with a Series FP, as it’s described in the document below, would also fit in with a description we’ve heard more than once about Snapchat’s fundraising: The startup is “always raising” on a “rolling” basis, partly because investors are so interested. “They get offers all the time,” one investor close to the company said. “And once you start to grow on this path, many people come to give you money. You don’t know how to value the company, so the best way to do that is to do some kind of rolling funding. When you have a hot company and many people are approaching you, you do a market of discovery.” That may be different from other startups, but in a way it reflects Snapchat’s own fast growth and its taste for trying out new things like QR codes to connect to accounts and content, their crazy face-changing filters and more.

• Spotify revenue surged, losses grew too, but far more slowly -  which is great news for Spotify: Spotify lost more money in 2015.  And its managers and investors are probably very happy about that. That's because the music streaming service's revenue increased much faster than its losses — something it hasn't always been able to say.  Given that Spotify has told its investors it is headed for an IPO in the next few years, it's the kind of performance it will need to be able to replicate with consistency. Filings show that Spotify, based in Sweden and the U.K., generated revenue of $2.12 billion last year, up about 80 percent from the $1.18 billion it brought in the prior year (all prices in the story converted from euros to dollars at the exchange rate from December 31, 2015). Losses, meanwhile, hit $188.7 million — but that number was only up 6.7 percent from the previous year's total of $176.9 million. That's a much, much better performance than 2014, when Spotify's losses ballooned by 289 percent, and its revenue was only up 45 percent. As in the past, most of Spotify's revenue comes from its subscription service, which now boasts more than 25 million users worldwide. And most of that money goes right back out the door to music labels, artists and other music rights-holders. If Spotify can keep it up, then it will have pulled off something special by showing it can run — and grow — a streaming music service at scale. Traditionally, streaming music services have struggled because their music expenses increased at the same pace as their growth — or even faster than their growth.

• Amazon no longer offers price match refunds on anything but TVs: Amazon has quietly ended its price protection policy on all products except for televisions. The change to the company’s policy comes at a time when a handful of startups have launched to help consumers automate the process of requesting refunds when prices change on online sites, including Amazon and dozens of other e-commerce stores. For example, newcomer Earny recently debuted a mobile app that helps consumers get their money back on purchases after price drops. Earny co-founder Oded Vakrat says that, so far, around 50 percent of the refund requests the app handled were for Amazon purchases. Earny also competes with Paribus, which offers a similar service both online and on mobile. Meanwhile, older sites like camelcamelcamel allow consumers to track Amazon price drops and receive alerts. Prior to this policy change, Amazon’s price protection policy was already one of the least friendly to consumers, as it used to provide seven days of price matching on price drops. That means if you purchased an item from Amazon which the company later marked down, you could request a refund. However, unlike many stores, Amazon only matched its own prices for items, not competitors’ pricing — with the exception of TVs and cell phones. In comparison, other stores have more pro-consumer policies, including Best Buy, which provides price matching during its return and exchange period (15 days is standard) and Walmart, which offers 90 days of protection, for example. As for how this change will impact startups like Earny and Paribus? Vakrat optimistically referred to this blow as a “great opportunity” to show why consumers need startups like Earny to have their back. Amazon insists that its price policy has not changed — it says that its prices are dynamic and that its customer service agents have made exceptions in the past, but that wasn’t the rule. In addition, Amazon wants to caution its customers that sharing their credentials with third-parties puts their accounts at risk.

Daily Tech Snippet, Monday, May 2nd

• How Foursquare knew before almost anyone how bad things were for Chipotle: Chipotle announced its first loss as a public company Tuesday. But two weeks earlier, an unlikely source —the social media app Foursquare — had beat Chipotle to the punch,predicting in a blog post that the burrito maker’s sales would drop nearly 30 percent. Chipotle made it official Tuesday afternoon — reporting a drop of 29.7 percent.  The remarkably accurate prediction from a company consumers know for restaurant tips and the ability to check in at locations highlights the emerging power of the gobs of data our smartphones collect and the opportunity for savvy companies to convert that information into piles of cash. Foursquare has spent seven years collecting data and has 85 million places in its database. It describes its data trove as the “biggest foot traffic panel in the world.” Clients that buy Foursquare’s data to glean insights include retailers, real estate developers, Wall Street traders and consumer package-goods companies. Foursquare, the seven-year-old start-up, cleverly turned smartphone data into predictions on Chipotle sales that matched Wall Street analysts with far more experience in projecting the successes of businesses such as Chipotle. Last year, Foursquare used its foot-traffic data to predict how many iPhones Apple would sell on a given weekend. Foursquarepredicted sales of 13 million to 15 million. Apple then announced sales of more than 13 million.Once a handful of Foursquare users have checked in at a location, the company knows that a given location represents a certain store. If the smartphones of another Foursquare user move inside these premises — but doesn’t check in — Foursquare still knows the user was in the store. Foursquare relies on GPS data, WiFi, cell towers and beacons to pinpoint where smartphone users are. Data experts caution that there are limits to how far Foursquare can replicate its Chipotle predictions elsewhere. They say Foursquare’s success will work best at large chains. Foursquare needs a lot of data to make such predictions, so it would probably struggle to accurately predict the sales of a retailer that has only a handful of locations.Another limitation to Foursquare’s approach is the nature of a store. Chipotle lends itself to a foot-traffic analysis because customers overwhelmingly travel in person to a store to get their food. It would be more difficult to predict the sales at a business that sells a significant amount of goods online.

• Gas Delivery Startups Want to Fill Up Your Car Anywhere. Is That Allowed?: A new crop of startups are trying to make gas stations obsolete. Tap an app, and they'll bring the gas to you, filling up your car while you're at work, eating breakfast, or watching Netflix. Filld, WeFuel, Yoshi, Purple and Booster Fuels have started operating in a few cities including San Francisco, Los Angeles, Palo Alto, Nashville, Tennessee, and Atlanta, Georgia. But officials in some of those cities say that driving around in a pickup truck with hundreds of gallons of gasoline might not be safe. “It is not permitted,” said Lt. Jonathan Baxter, a spokesman for the San Francisco fire department. Baxter said if San Francisco residents see any companies fueling vehicles in the city, they should call the fire department. Yoshi, which operates in San Francisco, was surprised to hear Baxter's concerns. “We haven't talked to them. I don't know about that. It’s news to me,” said co-founder Nick Alexander. The next day, he said he believed Yoshi was following the law and that it had been careful to limit the size of their gas tanks to stay under limits outlined in the International Fire Code, a guideline followed by many U.S. states. Filld, an 18-month-old startup with thousands of customers in Silicon Valley, plans to start service in San Francisco on Monday, deploying three delivery trucks at 1 p.m. “You can never ask for permission because no one will give it,” said Chris Aubuchon, the chief executive officer at Filld. The Los Angeles Fire Department said it’s drafting a policy around gasoline delivery. “Our current fire code does not allow this process; however, we are exploring a wayhis could be allowed with some restrictions,” said Capt. Daniel Curry, a spokesman for the city’s fire department. “It’s just one of these things that nobody has really thought about before—kind of like how Uber popped up out of nowhere.” But he said it’s not a gray area: “All I can tell you at this time is it’s not allowed as per our current fire code.”

• Why is Facebook doing so well? Facebook reported yet another quarter of strong user growth, in marked contrast to Twitter, which has been eking out only very modest growth recently. In fact, over the past year Facebook’s monthly active users grew by roughly two-thirds the size of Twitter’s entire base. This wasn’t a one-off — Facebook has grown by over 150 million users year on year for the past four years at least, and growth has actually accelerated recently: Predictably, the strongest growth has been in the least mature markets — Asia and Facebook’s “Rest of World” geographic segments led the charge, with more than 75 million new users each over the past year, while North America and Europe added fewer users (but still grew decently). That reemphasizes the importance of Facebook’s efforts to grow usage in those emerging markets and, hence, projects like Free Basics (recently shut down in India) and its other connectivity projects. So far, though, it seems to be doing just fine in these countries.  Average revenue per user is also growing strongly across the board, led by the U.S. and Canada, where annual ARPU is approaching $50. Other regions have far lower ARPU — the rest of the world combined has an annual ARPU of just $7. That overall ARPU growth multiplied by the user growth is driving phenomenal overall revenue growth. And, because that growth requires a much more modest increase in costs, it’s also driving margin expansion. Revenue grew by 52 percent year on year for the second quarter in a row, and operating margin was up 11 points year on year. Just as a reminder, that revenue is almost all coming from ads at this point — the FarmVille era is well and truly over at this point, and payments are a tiny fraction of total revenue for Facebook today. One of the hardest things to get at in Facebook’s results is the role of Instagram. The app has been serving up ads for some time now, and management has been talking up the benefits in general terms for several quarters. But it doesn’t break out metrics other than monthly active users (400 million at last count). In addition, Instagram users are excluded from the MAU count Facebook reports and on which it bases its ARPU calculations, even though Instagram revenue is included in ARPU. As such, there’s a little misdirection going on, in that Facebook is including Instagram in the numerator but not the denominator here. There is, to be sure, a good chance that many Instagram users are also Facebook users, so there’s not too much double counting, but I do wonder how much of the growth in ARPU is from Facebook monetizing Instagram better. From a perspective of internal threats to success, Facebook is placing some biggish bets on future projects like virtual reality (through Oculus) and research and development into new forms of connectivity, both projects outside its core business, and therefore both potential distractions and financial sinkholes. But the scope of these efforts seems to be modest in the context of Facebook’s overall business, and its margins aren’t suffering yet. Government action on Free Basics, as we’ve already seen in India, is another possible threat, but a modest one at this point, and one few other governments seem willing to take on for now.  Perhaps the biggest threat of all is that platform owners like Apple and Google end up owning the next round of devices and platforms in the same way they have smartphones, despite Facebook’s VR investments, and steadily squeeze out third parties they perceive as a threat. Facebook seems aware of this possibility, and has invested not just in VR as a potential future interface but also an increasingly OS-like presence on smartphones.
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• According to its cofounder and CEO Snapchat is mainly “a camera company”:   Despite all of its new bells and whistles… and the billions of videos, ads, and effects that have been added to the service, Snapchat chief executive Evan Spiegel still thinks of the new media juggernaut he’s created as “a camera company”. While Snapchat Stories may be the feature that brings the company the revenue model it needs to validate its $16 billion valuation, and while the ephemeral messaging feature may be what initially attracted the hordes of millennials sending digital ephemera to each other billions of times a day, Spiegel says that the camera itself remains Snapchat’s unifying feature. Snapchat opens to the camera, Spiegel said. Chat is available to the left of the camera, and Stories is available to the right of the camera. That not only differentiates it from other social media products, but allows Snapchat to straddle the line between the defining features of several of them. “The beautiful thing is it sort of sits in the middle, but more importantly it opens to the camera,” Spiegel said. “The thing that feeds a social network is content… Similarly with communication… So in our view, when you take a snap and you choose this path between talking to your friends or adding it to your Story we end up with this harmony where both of these businesses feed themselves. I don’t think it’s one or the other.” In a way, even the company’s movement into filters, stickers, and lenses such as face swap are further extensions of the original thesis of Snapchat as a photographic communication tool. “Now you can put the way you feel… in the moment you’re experiencing. For us that’s just the beginning of some fun, creative tools,” he said.

Daily Tech Snippet: Tuesday, April 26

• The future of TV is arriving faster than anyone predicted: Late last week, Comcast announced a new program that allows makers of smart TVs and other Internet-based video services to have full access to your cable programming without the need for a set-top box.  Instead, the content will flow directly to the third-party device as an app, including all the channels and program guide. The Xfinity TV Partner Program will initially be offered on new smart TVs from Samsung, as well as Roku streaming boxes.  But the program, built on open Internet-based standards including HTML5, is now open to other device manufacturers to adopt. As video services move from hardware to software, the future of the traditional set-top box looks increasingly grim. With this announcement, Comcast customers may soon eliminate the need for an extra device, potentially saving hundreds of dollars in fees. Many in the industry have long predicted eventual death for the box, driven in part by a rapid migration by pay TV providers (including fiber and satellite-based companies) to Internet standards for both video content and services, and by the enthusiastic response of consumers to a growing number of Internet-based alternatives. These include Roku, as well as Amazon, Apple, Google, Netflix, Hulu, YouTube, SlingTV, Sony, HBO and many others. Consumers, especially younger ones, are interested in defining their own video experience, mixing traditional and self-produced content and enjoying it not just on televisions but on every connected device, including tablets, smartphones and other mobile gadgets. At this year’s Consumer Electronics Show in Las Vegas, it was clear that list would soon grow to include other non-traditional viewing platforms, such as cars, refrigerators and game consoles. Comcast’s announcement suggests that future may already be here.

• Facebook developing camera app similar to Snapchat: WSJ: Facebook is developing a stand-alone camera app, similar to disappearing photo app Snapchat, to increase user engagement, the Wall Street Journal reported, citing people familiar with the matter.The app, being developed by Facebook's "friend-sharing" team in London, is in its early stages and may never come to fruition, according to the report. The company is also planning a feature that allows a user to record video through the app to begin live streaming, the newspaper reported.

• The Gannett-Tribune offer: No one knows what a newspaper is worth anymore:  Three years ago, Jeff Bezos paid $250 million for the Washington Post from the Graham family. Last year, Japanese publisher Nikkei paid $1.3 billion to take the Financial Times off the hands of the education conglomerate Pearson. Today’s $815 million bid to buy Tribune Publishing, from USA Today owner and newspaper chain Gannett, basically falls in the middle of those two recent deals. And it suggests that as print revenue continues to decline, there’s no such thing as a market price for newspapers anymore. Gannett is offering $12.25 a share (5.6 times Ebitda*), or a 63 percent premium on the current value of its stock, to buy the struggling newspaper publisher, which owns eleven dailies, including the Chicago Tribune and crown jewel Los Angeles Times. In 2013, Bezos paid what analyst Ken Doctor called a “friendship premium” of 17 times Ebitda; when Nikkei bought the FT, the going rate for European newspapers was 12 times Ebitda. Nikkei paid 35 times Ebitda. This isn’t a friendly offer, meaning Tribune might not play ball, but investors sure seem to dig it. Tribune Publishing’s stock opened the day by rocketing up more than 50 percent. Wall Street probably likes it because of Tribune’s dwindling print business, which justifies the lower Ebitda on the Gannett offer.

• Google Glass-based startup raises $17 million in funding: Augmedix Inc, a startup that uses Alphabet Inc's Google Glass to provide documentation services to doctors and other healthcare workers, said on Monday it had closed a $17 million funding round led by investment firm Redmile Group. Augmedix's employees transcribe doctors' notes and update patients' electronic medical record through Google Glass. The San Francisco company, which has raised $40 million so far, also said it had received investments from five U.S. healthcare networks, including Sutter Health and Dignity Health, which together have more than 100,000 healthcare workers. Augmedix, with 400 employees, said it serves doctors in nearly all 50 U.S. states. Funds raised will be used to build up the service to serve more health systems and private clinics, the company said. Augmedix is one of 10 partners authorized by Alphabet to deliver enterprise services through Google Glass.

Daily Tech Snippet: March 30

• Beijing Seeks to Tighten Reins on Websites in China: China’s government said on Monday that it would take steps to more strictly manage websites in the country, its latest push to set boundaries in the wider Internet. A draft law posted by one of China’s technology regulators said that websites in the country would have to register domain names with local service providers and with the authorities. It was not clear whether the rule would apply to all websites or only to those hosted on servers in China. Chinese laws can be haphazardly enforced and are usually vague, and because the new rule is only a draft, analysts said they expected the regulator, the Chinese Ministry of Industry and Information Technology, to specify later to whom the law would apply. If the rule applies to all websites, it will have major implications and will effectively cut China out of the global Internet. By creating a domestic registry for websites, the rule would create a system of censorship in which only websites that have specifically registered with the Chinese government would be reachable from within the country. If the law applies only to sites hosted in China, it would still represent a consolidation of power by Beijing. Forcing registration with Chinese entities is likely to create a new boom in domain-name service registrars. At the moment, Alibaba operates China’s primary domain-name service provider, called Wan Wang. The new rule would also enable the Chinese government to keep closer tabs on the real identities of website operators. It would also help Beijing assemble a registry of important websites if China wants to break away from the global registry that unifies the Internet, Mr. Creemers said. The new rules are the latest in a string of measures taken by the Chinese government under President Xi Jinping to assert control over the Internet. This year, regulators created rules to block foreign companies from publishing online content in China without the government’s consent. Regulators also shut down the social media accounts of the sharp-tongued tycoon Ren Zhiqiang.

• Google Fiber is officially adding phone service for $10 a month: Many people can already buy TV and Internet service from Google Fiber. Now, the company that brought gigabit speeds to Austin and Kansas City is moving deeper into the telecom industry by offering its own bundled telephone service. For $10 a month, Google Fiber customers soon will be able to buy an add-on known as Fiber Phone — a service that, according to a company blog post, appears to mimic much of the functionality of Google Voice. Voicemail on Fiber Phone can be automatically transcribed and sent to your email. You'll get unlimited domestic calling, as well as international calls at Google Voice's rates. And you'll have access to one phone number that can be set up to ring all of your phones — whether landline or mobile. A series of leaked emails in January first uncovered Google Fiber's plans to move into phone service. But now the decision is official: Fiber Phone will roll out gradually across all of the company's existing markets. The company declined to name the initial launch markets, saying those details will come later. The service comes with a little black box that sits beside your home phone. It has both ethernet and phone jacks, and will work with most handsets except for old rotary phones, according to Kelly Mason, a company spokesperson. Google Fiber's effort to draw in phone customers highlights how the company is becoming more like traditional service providers even as many telecom companies are looking to become more like Internet content firms. Even providers of cellphone service have been shifting their focus away from voice and toward the more lucrative provision of mobile data. Reports this week suggest T-Mobile may soon unveil new phone plan options that eliminate voice service entirely to give you a bigger bucket of data. Fiber Phone fits within these trends in that it would help customers add some cloud-based functionality to their home phones. But it's not immediately clear why consumers would pick Fiber Phone over Google Voice. The two services share many of the same features, but Fiber Phone carries a subscription cost and requires an at-home installation that you don't need with Google Voice. In this respect, Google Voice might be considered a "better" service.

• Instagram’s New Algorithm Means the Free Ride May Be Over for Brands: Instagram is testing a new algorithm, which means the company is (or soon will be) choosing which posts users see in their feed and in what order. That could be a good thing for users. It means that, if the algorithm works, you should see the best photos and videos every time you open the app. For brands, though, especially those that rely on the app to reach their customers for free, the algorithm news is less than stellar. Influencers are getting nervous too. That’s because an algorithm gives Instagram control over what you see, but also what you don’t see. The fear among some brands is that the new Instagram algorithm will relegate their posts to the sidelines. What happened with Facebook is this: It originally encouraged brands and businesses to build followings for their Pages, and even offered ad units specifically intended to acquire more “fans.” The idea was that more followers meant more people would see the company’s posts in their feed, so brands paid willingly to acquire them. Then Facebook slowly pulled the rug. Little by little it changed its algorithm until posts from brand Pages were seen by just a fraction of users who followed the Page. In 2012, Facebook announced organic posts only reached 16 percent of a Page’s fans, and encouraged brands to pay to sponsor their posts instead. Brands are bracing for a similar change with Instagram.

• No One Wants to Be ‘the Next Square’ Anymore: Makers of once-prominent credit card readers are retrenching or outright folding after Square’s disappointing IPO. A year ago, being known as the “Square of Canada” was a badge of honor. Payfirma Corp.’s smartphone-compatible credit card readers were in high demand, and local investors supplied the Vancouver startup with $13 million in funding. Like Jack Dorsey, the chief executive officer of Square Inc. (and Twitter Inc.), Payfirma CEO Michael Gokturk said he was aiming for “hypergrowth.” Gokturk doubled his staff to 80, including a chief operating officer formerly of Intuit Inc., and started talking about an initial public offering. But by November, being the “Square of” anywhere suddenly wasn’t such a hot title. That month, Square sold shares in an IPO that valued the company at about $2.9 billion, less than half its private valuation from a year earlier. In the runup to the IPO, analysts began questioning whether the card-reader maker should really be priced like a high-flying tech company. Its stock price is hovering around $13, right where it was after its first day of trading. “Now that they started going through the rigors of a public market, you can see that their market is actually quite limited,” said Gil Luria, an analyst at Wedbush Securities. “It’s going to be much harder going forward for companies that try to emulate their model to raise capital.” 

• Snapchat Adds Voice, Video Calling to Mobile Messaging App:  Snapchat, operator of a popular social-messaging app, released an update that steps up competition with Facebook Inc., owner of rival mobile communication services Messenger, Instagram and WhatsApp. Los Angeles-based Snapchat bolstered its chat function with multimedia features including voice and video calling and digital stickers. Called Chat 2.0, the feature emulates "face-to-face communication," while making it easier to switch between video chatting, texting and calling, Snapchat said Tuesday in a blog post. WhatsApp introduced voice calls last year, but users are still waiting for video calling. Facebook’s Messenger communications app added this video capability in April. Last week, Fortune reported Snapchat acquired Bitstrips, a Toronto-based maker of personalized avatars or "bitmojis." Snapchat declined to comment on the acquisition, which Fortune said was worth about $100 million. The deal suggests Snapchat will make its stickers more customizable in the future.

• Spotify Expected to Sign $1 Billion Financing Deal: Spotify is about to close on a $1 billion deal that would double the amount of financing the music-streaming company has raised since its founding a decade ago, people briefed on the matter said Tuesday. The money comes in the form of convertible debt, which allows Spotify’s investors to change their securities into equity at a future date, said the people, who spoke on the condition of anonymity because the deal was not yet public. By using convertible debt, Spotify obtains the funds, without needing to change its valuation. The terms of the debt, however, may put pressure on the company to go public sooner. The company had an equity value of $8.4 billion last year. Funds associated with the private equity firm TPG as well as the investment firm Dragoneer put in $750 million of the $1 billion, with the rest coming from other institutional investors, the people said. The transaction, which was placed by Goldman Sachs, is expected to close on Friday, they said. The terms give the investors the ability to convert to equity at a discount to an initial public offering price, two of the people briefed on the matter said. The discount increases if Spotify waits longer than a year to do so, they said. The coupon payment on the debt would also continue to rise over time, the people said. The deal is similar to the one that Goldman Sachs arranged for Uber in January 2015. The ride-hailing company raised $1.6 billion in convertible debt. Should the company not go public within a certain time, the interest rate on those securities would climb. TPG Special Situations Partners, an $18 billion fund within TPG that does transactions other than leveraged buyouts, participated in the deal, as did TPG Growth, which has invested in other start-ups like Uber and Airbnb. Spotify may use the funds for acquisitions, investments and international expansion, the people said.

Daily Tech Snippet: Monday, March 28

• In Yahoo, Another Example of the Buyback Mirage: It is one of the great investment conundrums of our time: Why do so many stockholders cheer when a company announces that it’s buying back shares? Stated simply, repurchase programs can be hazardous to a company’s long-term financial health and often signal a management that has run out of better ways to invest in the business. And yet investors love them.  Not all stock repurchases are bad, of course. But given the enormous popularity of buybacks nowadays, those that are harmful probably outnumber the beneficial. Those who run companies like buybacks because they make their earnings look better on a per-share basis. When fewer shares are outstanding, each one technically earns more. But a company’s overall profit growth is unaffected by share buybacks. And comparing increases in earnings per share with real profit growth reveals the impact that buybacks have on that particular measure. Call it the buyback mirage. Consider Yahoo. The company bought back shares worth $6.6 billion from 2008 to 2014, according to Robert L. Colby, a retired investment professional and developer of Corequity, an equity valuation service used by institutional investors. These purchases helped increase Yahoo’s earnings per share about 16 percent annually, on average. But a good bit of that performance was the buyback mirage. Growth in Yahoo’s overall net profits came in at about 11 percent annually. Given these figures, Mr. Colby reckoned that Yahoo, if it had invested that same amount of money in its operations, would have had to generate only a 3.2 percent after-tax return to produce overall net profit growth of 16 percent annually over those years. Yahoo is not alone. Mr. Colby conducted a cost-benefit analysis of 26 companies buying back stock versus using that money to invest in a business. He found that McDonald’s was another problematic example. Since 2008, McDonald’s has allocated almost $18 billion to buybacks. This has helped produce 4.4 percent increases in annual earnings per share over the period. To equal that growth in overall earnings, the company would have had to generate just a 2.3 percent return on the money it spent buying back stock, Mr. Colby estimated. Last November, Moody’s Investors Service downgraded McDonald’s unsecured debt rating, citing its plans to increase its borrowings in part to fund future buybacks.

• Microsoft Apologizes After Twitter Chat Bot Experiment Goes Awry: Microsoft apologized after Twitter users exploited its artificial-intelligence chat bot Tay, teaching it to spew racist, sexist and offensive remarks in what the company called a “coordinated attack” that took advantage of a “critical oversight.” The company will bring Tay back online once it’s confident it can better anticipate malicious activities, he said. “A coordinated attack by a subset of people exploited a vulnerability in Tay. Although we had prepared for many types of abuses of the system, we had made a critical oversight for this specific attack,” Lee said, without elaborating. The company introduced Tay Wednesday to chat with humans on Twitter and other messaging platforms. The bot learns by parroting comments and then generating its own answers and statements based on all of its interactions. It was supposed to emulate the casual speech of a stereotypical millennial. Some users quickly tried to see how far they could push Tay.   In less than a day, Twitter’s denizens realized Tay didn’t really know what it was talking about and that it was easy to get the bot to make inappropriate comments on any taboo subject. People got Tay to deny the Holocaust, call for genocide and lynching, equate feminism to cancer and stump for Adolf Hitler. The worst tweets quickly disappeared from Twitter, and Tay itself also went offline “to absorb it all.” Some Twitter users appeared to think that Microsoft had also manually banned people from interacting with the bot. Others are asking why the company didn’t build filters to prevent Tay from discussing certain topics, such as the Holocaust. The bot was targeted at 18- to 24-year-olds in the U.S. and meant to entertain and engage people through casual and playful conversation, according to Microsoft’swebsite. Tay was built with public data and content from improvisational comedians. It’s supposed to improve with more interactions, so should be able to better understand context and nuances over time. The bot’s developers at Microsoft also collect the nickname, gender, favorite food, zip code and relationship status of anyone who chats with Tay.

• Uber profits elsewhere support 'sustainable' spending in China: CEO: Ride hailing app company Uber Technologies Inc is generating more than $1 billion in profit a year in its top 30 cities globally, and partly using that money to bankroll its expansion in China, Chief Executive Travis Kalanick said in an interview. The company said in February it was losing more than $1 billion a year in China's red-hot ride hailing market, where it is battling large local incumbents to win customers. Kalanick said China was the company's most intense market, but also a crucible for new ideas that it has exported to other markets, and that its investment here was sustainable. "If you took our top 30 cities today, today they're generating over $1 billion in profit a year, just our top 30 cities. And that profit multiplies every year because we're growing," he said on the sidelines of the Boao Forum in the Chinese island province of Hainan. Other cities among the 400 where Uber operates were also profitable, he added.

• Snapchat Is Buying Bitstrips, the Company That Turns You Into an Emoji: Snapchat is buying Bitstrips, the company behind the Bitmoji app that lets you create an avatar of yourself to share on social media and over text, according to a source familiar with the deal. Fortune’s Dan Primack, who first reported the news, said Snapchat is paying “in the ballpark of $100 million” for the company, which was founded in 2012. It quickly became popular on Facebook, as users created and shared cartoon versions of themselves in a bunch of different settings. It’s not entirely clear why Snapchat wants Bitmoji, but it feels like a good fit for the company, which has a number of other fun features to help users spruce up their photos and videos. Snapchat allows users to put emojis on photos and videos they send, and has generated a lot of buzz for facial filters that let people distort their faces into different animals or characters. (Facebook just bought a similar company two weeks ago.) Personal emojis are a logical fit in that regard.

Daily Tech Snippet: Tuesday, March 08

• Snapchat Thinks It Will Generate at Least $300 Million in Revenue This Year: Investors are buying into Snapchat’s massive $16 billion valuation because its business is growing significantly. Or at least expected to grow significantly in 2016. Snapchat is targeting between $300 million and $350 million in revenue in 2016, according to multiple sources familiar with the company’s plans. That’s six or seven times the $50 million in revenue Snapchat projected last year. Snapchat’s business is still new and evolving, and advertiser interest is still very experimental. Essentially that means it can be tough to predict incoming revenue with much accuracy, as most advertisers don’t have Snapchat as a staple of their advertising plans. The company hit a $100 million revenue run rate in Q4, according to one source. Advertising is cyclical, and Q4 is usually a strong advertising quarter, but it’s worth noting because the run rate metric gives us a glimpse at how the business is growing. Still, boosting projected revenue like that must mean the businesses is growing at a nice clip. We don’t know if the $16 billion valuation is pegged to this year’s expected revenue, but if it were, that would amount to more than 50 times this year’s sales. Facebook, by comparison, trades at a value of about 17 times its annual revenue.

• Alibaba's Ant Financial could be valued at nearly $60 billion: source Chinese e-commerce giant Alibaba arm, Ant Financial Services Group, is seeking a valuation of nearly $60 billion in its current round of funding, a person familiar with the matter said. Ant Financial, which operates the "Alipay" online payment platform, is in talks to raise funds from existing and new investors, which could include CCB International, the person said on Monday. The Wall Street Journal reported earlier on Monday that Ant Financial planned to raise up to 20 billion yuan ($3.07 billion), pegging its valuation at nearly $50 billion. Ant Financial declined comment on the Journal's story. The latest round of funding is expected to be completed by mid-April, the Journal reported. 

• Tech Companies, New and Old, Clamor to Entice Cloud Computing Experts: The hunt for the hard-to-find talent that can build and run the massive data centers behind cloud computing is pitting three generations of companies against one another. Old-guard companies like Oracle, tech’s current giants like Amazon and its peers, as well as Bay Area start-ups are offering big salaries and big perks for cloud computing experts. On the social media site LinkedIn, for example, there are over 130 engineering positions available at Oracle Seattle. Many of them are the kind of jobs that now pay $300,000 to $1 million a year, according to Shannon Anderson, who has been recruiting engineers in Seattle and the Bay Area for 25 years. Seattle and its surrounding towns are a hot spot for this kind of tech talent because they are home to A.W.S., which runs the biggest cloud computing service, and Microsoft, which has a large cloud business called Azure.Google also has a cloud computing office in the area. So does Facebook.“Someone working deep inside Amazon is getting five to 20 recruiting offers a day,” Ms. Anderson said. “Compensation has doubled in five years.” For a recruiter, who is typically paid a percentage of a star engineer’s compensation, “this is a very good time,” she said. Cloud computing, which powers an increasing number of our devices and services, allows a vast collection of computers — often spread around the world — to operate like one giant machine. As other tech sectors show signs of slowing, cloud services have created unprecedented demand for highly educated engineers and mathematicians who can build and operate these flywheels of data. Instead of asking about the latest computer coding languages or how to make a web page load faster, the most important question in tech hiring has become: Can you handle petabytes? That is the data in about 13 billion images, or roughly the amount of printed information that would fit in 20 million file cabinets. In the Bay Area, $125,000 a year is not an uncommon salary for someone newly out of graduate school with the expertise to do cloud computing work. With five years of experience, $300,000 along with a range of stock or job opportunities that greatly inflate the value of those paychecks have become the norm. “It’s an aggressive market,” said Corey Sanders, director of program management at Microsoft Azure. “We are all data engineers now, and we can convince people that this is the best place to learn that.”

• Prompt debuts “a command line for the real world”: In a world suffering from app overload, the Y Combinator-backed startup Prompt introduces a different way to interact with services, make purchases or even control “Internet of Things” devices — all by way of text-based interface. The application, which can be used via SMS, Slack or the web, lets you text to do things like request an Uber, change the temperature on a Nest thermostat, get directions, track flights or packages and a lot more. 

• How Amazon Shames Warehouse Workers for Alleged Theft: While waiting to clock in each morning, workers at some Amazon.com warehouses get a steady stream of company-provided reading: the stories of co-workers fired for theft. In an effort to discourage stealing, Amazon has put up flatscreen TVs that display examples of alleged on-the-job theft, say 11 of the company’s current and former warehouse workers and antitheft staff. The alleged offenders aren’t identified by name. Each is represented by a black silhouette stamped with the word “terminated” and accompanied by details such as when they stole, what they stole, how much it was worth, and how they got caught—changing an outbound package’s address, for example, or stuffing merchandise in their socks. Some of the silhouettes are marked “arrested.” Theft is a persistent concern for Amazon, with warehouses full of small but valuable items and a workforce with high turnover and low pay. Workers interviewed for this story say the range of thefts posted on the screens is as varied as the company’s sprawling catalog: DVDs, an iPad, jewelry, a lighter, makeup, a microwave, phone cases, Pop Rocks, video games. Several recall a post about an employee fired for stealing a co-worker’s lunch. The digital bulletin boards also occasionally display information about firings related to workplace violence. There are cheerier announcements, too, such as updates on incentive bonuses or a message about Black History Month. In some warehouses that don’t have flatscreens, workers say, tales of firings are posted on sheets of paper tacked to bulletin boards or taped to the wall. Many of the workers say the screens aren’t a top concern compared with wages or workload. “Only people that would have something to say about it is people that’s doing wrong,” says Maurice Jones, a warehouse worker who left Amazon in February. “It’s just letting people know that you’re being watched.”  

• Apple users targeted in first known Mac ransomware campaign: Apple customers were targeted by hackers over the weekend in the first campaign against Macintosh computers using a pernicious type of software known as ransomware, researchers with Palo Alto Networks told Reuters on Sunday. Ransomware, one of the fastest-growing types of cyber threats, encrypts data on infected machines, then typically asks users to pay ransoms in hard-to-trace digital currencies to get an electronic key so they can retrieve their data. Palo Alto Threat Intelligence Director Ryan Olson said the "KeRanger" malware, which appeared on Friday, was the first functioning ransomware attacking Apple's Mac computers. "This is the first one in the wild that is definitely functional, encrypts your files and seeks a ransom," Olson said in a telephone interview. Hackers infected Macs through a tainted copy of a popular program known as Transmission, which is used to transfer data through the BitTorrent peer-to-peer file sharing network, Palo Alto said on a blog posted on Sunday afternoon. 

• FCC cracks down on Verizon Wireless for using ‘supercookies’: The Federal Communications Commission is cracking down on Verizon Wireless for using a powerful type of code to track its customers around the Internet, as the agency pushes to increase its role in protecting online privacy. The code, dubbed a "supercookie" by privacy advocates, is almost impossible to disable and could allow almost anyone to follow users around the Web. Under the terms of a settlement agreement announced Monday, Verizon must pay a $1.35 million fine and will only be able to use the tracking mechanism when users connect to Verizon's corporate family of services unless the company gets customers' opt-in consent. Broader use could leave customers' Web habits visible to outsiders. Verizon began putting a unique string of characters into customers' web browsing in 2012 to help target its advertising program. The practice came to the public's attention in late 2014, when it received criticism from privacy advocates who called the code a "supercookie" because the it was almost impossible for users to avoid. The privacy advocates warned then that other companies, or even intelligence agencies, could leverage the super cookies to track wherever people went online. Verizon downplayed that concern at the time, with a spokesperson saying that the code "wouldn’t be able to be used for that." But last January, researcher Jonathan Mayer revealed evidence that others could hijack the supercookie for their own purposes: An online advertising company called Turn was using the codes to help follow people around online, he said. Turn used the supercookie to "respawn" its traditional cookies -- even if users took steps to protect their privacy by removing the cookies. Turn said it would stop and Verizon started offering a way for customers to opt-out of having the supercookie attached to their web traffic. But the FCC had already launched an investigation of Verizon's use of supercookies in December of 2014  -- and later brought Mayer on board as the chief technologist for the agency's enforcement arm. While the Federal Trade Commission is often thought of as the government's primary privacy watch dog, the FCC's power to police online privacy got a major boost last year. As a quirk of how the agency moved to enforce network neutrality rules, broadband providers will be subject to new privacy scrutiny. The FCC is in the process of coming up with a version of its privacy rules that apply to broadband Internet providers, which are expected soon.

Daily Tech Snippet: Friday, March 4th

• Amazon Introduces 2 Alexa Voice-Controlled Devices: Amazon’s Alexa is gaining new powers, and a couple of new looks, too. Amazon, the Internet retailer, on Thursday announced two new siblings for the Echo, the voice-controlled household assistant that people address as “Alexa” and that became a surprise hit for the company last year. One new product, Amazon Tap, is a slimmer, shorter, portable version of the Echo. Rather than requiring an electrical wall connection, the Tap runs off a rechargeable battery. It connects with phones and the Internet through Bluetooth and Wi-Fi. The Tap acts as an ordinary wireless speaker for a phone, but it also provides Alexa on the go. People can ask about weather and traffic, ask for the news, tell it to play a song from a streaming service, or do any one of dozens of other tasks. The device, which will begin shipping at the end of the month, will sell for about $130. Amazon also announced the Echo Dot, essentially an Echo without that device’s powerful speaker. The Dot, which will sell for about $90, looks like a hockey puck, and is meant to provide Alexa’s voice functions for existing speaker systems. The Dot connects to those speakers either through a wire or over Bluetooth; after that, it functions as another Echo. Dot shipments also willbegin at the end of March. Sales will initially be limited to people who already own an Echo or one of Amazon’s Fire TV devices — a Dot buyer will have to ask Alexa to order one. The new devices suggest that Amazon has an expansive vision for the Echo, which looked like an experiment for the company when it was introduced in late 2014. The company has not provided sales data for the device, but it has said that sales exceeded its expectations and that customer reviews are rhapsodic. Amazon appears to have increased investment in the device — it keeps adding new features and capabilities to Alexa, and this year it ran Super Bowl ads about the gadget.

• EBay Banks on Bar Codes for a Comeback: Hoping to outgrow its image as a glorified garage sale and move up in Google searches, EBay is turning to technology developed 70 years ago: the bar code. The machine-readable symbol that keeps supermarket lines moving is helping EBay manage vast amounts of data associated with the 6 billion products—from smartphones to video games, handbags to tires—listed at the online marketplace each year. Merchants will be able to enter a full description of a sales item by using a smartphone camera to scan its Universal Product Code. EBay reads the scan and automatically lists the item’s specifications. Before, every detail, including brand, model, and dimensions, was entered manually. UPCs are a central part of what EBay calls its “structured data initiative,” started in June, to organize items into a catalog that shoppers can easily search using filters such as price, features, and condition. The switch started with auto parts and accessories, one of EBay’s fastest-growing categories. The UPC is also used to call up consumer reviews and product images, which create a degree of permanence on EBay that search engines will reward with better placement. EBay says the code provides a sufficient baseline of information because 80 percent of all products sold there are new. A key goal is to standardize the amount and type of information that merchants list. The initiative will eventually expand to most items on the site.So far, some merchants like the change. Quick Ship Electronics, which sells consumer devices on EBay, had some desktop computers and laptops languishing in its inventory. Once the company entered the UPCs on EBay’s catalog, the items sold within days, CEO Jordan Insley says. 

• HP Enterprise's revenue, profit beat estimates: Hewlett Packard Enterprise Co, which houses former Hewlett-Packard Co's corporate hardware and services division, reported better-than-expected quarterly revenue and profit, helped by strength in its hardware business. Hewlett Packard Enterprise's (HPE) shares were up 6.4 percent at $14.47 in extended trading on Thursday. Revenue in HPE's enterprise group business, from which it derives more than half of its total revenue, rose about 1 percent to $7.1 billion in the first quarter ended Jan. 31, from a year earlier. The company's revenue fell to $12.72 billion from $13.05 billion. 

• Apple supplier Broadcom to slash 1,900 jobs globally: Chipmaker Broadcom Ltd, the company created following the merger of Avago and Broadcom, said it would cut about 1,900 jobs globally across its businesses. Shares of Broadcom, which also supplies to Apple Inc, were up 8 percent at $148.20 in extended trading on Thursday. The company said it expects to take charges of about $650 million related to the job cuts through 2018.  Avago completed its $37 billion deal for Broadcom last month. Revenue for the legacy Avago business fell 4 percent to $1.77 billion in the three months ended January 31.

• Snapchat Raises $175 Million From Fidelity at Flat $16 Billion Valuation: Snapchat has raised $175 million in new venture funding from Fidelity at the same $16 billion valuation it raised at back in May, according to a source familiar with the deal. That means Snapchat has now raised around $1.4 billion in total. The Wall Street Journalfirst reported the new funding. A flat valuation isn’t usually a great sign, but the raise comes at a time when lots of tech companies — including Jawbone and Foursquare — are raising down rounds, or taking money at a lower valuation than their last fundraising. In that vein, this investment doesn’t look bad.

• Facebook Messenger adds music, starting with Spotify song sharing: First came the Transportation hub with Uber, and now Facebook Messenger is launching “its very first music integration” with Spotify. Inside the Messenger “More” section in chat threads, all iOS and Android users will now find a Spotify option. Tap it and they’ll be shuttled into Spotify’s app where they can “Search for something to share.” Once they select a song, artist or playlist, they’ll be popped back to Messenger with the option to share the photo of the cover artwork. When a friend taps that photo, they’ll be bounced over to Spotify to listen.If Messenger can become a richer social layer connecting Spotify users, it could inspire deep conversations about music, boosting its engagement. That generates platform lock-in and potential monetization opportunities for Facebook. And for Spotify, Messenger will provide virality that could help it fend off Apple Music and convince more non-streamers of its value.