Daily Tech Snippet: Wednesday, May 4

• Uber enables global e-hailing through Alipay to fend against Lyft/Didi alliance: Starting today, Uber riders from China won’t have to worry about language barriers or currency when traveling outside of the country. Now, riders will be able to pay for and hail a ride in the Alipay app in the more than 400 cities in which Uber operates. It’s an extension of Uber’s existing partnership with the company, which initially only allowed passengers in China to pay for their rides using Alipay. The move comes just a few weeks after Lyft and China’s Didi launched a similar integration that allows Didi riders to hail a Lyft in the U.S. using the Didi Chuxing (formerly Didi Kuaidi) app, and vice versa. That partnership is part of a larger global ride-hail alliance that also includes South East Asia’s Grab and India’s Ola. The clear winner in this entire situation is Alipay’s affiliate company, Alibaba. That’s because the Chinese e-commerce company is playing both sides of the fence — Alibaba is an investor in both Didi and Lyft, and Ant Financial, which operates Alipay, has had this partnership with Uber since 2014. It’s certainly true that Alibaba has a higher stake in Lyft and Didi beating out Uber, but the transportation industry isn’t a zero-sum game. Since there’s room for both sides to coexist, Alibaba can afford to put bets on Didi and Lyft, and Uber too. But Alipay may be playing favorites. According to company SVP of business Emil Michael, Uber will be the primary featured transportation app on Alipay’s platform outside of the U.S. Alipay is essentially promoting Uber to its 450 million users.

• Instagram is selling a new type of video ad: Instagram has been pushing users to create more video content. Now it’s pushing advertisers to create more video ads. Instagram announced Tuesday that it will soon roll out video carousel ads, a move that will let advertisers share up to five separate videos with one single ad purchase. Each video can be up to 60 seconds long. Instagram already sells carousel ads, the kinds of ads that let users swipe between different pages (often called cards). But video functionality wasn’t available until now. The change aligns with Instagram’s conscious push into video more broadly, a strategy reminiscent of Facebook’s video push a few years back. Instagram is adding video featuresand making video more prominent in search in hopes users will watch more of it. It’s essentially feeding people what it wants them to consume — and video can be good business. If users expect to see videos when they open Instagram, then video ads, which are typically more lucrative than static ads, won’t feel out of place. These new video ads are now in beta and will roll out to all advertisers in the “coming weeks,” according to a company spokesperson.

• Amazon, Web Giants Shift to Report Real Cost of Equity Pay: For more than a decade, technology companies doled out heaps of stock to recruit top talent -- then pretended this wasn’t a normal part of doing business by reporting profit numbers that subtracted the cost. That’s changing as the industry grows up and responds to pressure from regulators and investors. Amazon.com Inc. started breaking out stock-based compensation in the results of its different businesses in the first quarter. This is “the way we now evaluate our business performance and manage our operations,” Chief Financial Officer Brian Olsavsky told analysts after the earnings report last week. Facebook Inc. Chief Financial Officer David Wehner had a similar message. From now on, he said he’ll talk about the social network’s results and other metrics based on U.S. standards known as Generally Accepted Accounting Principles, or GAAP, which include equity-based pay costs, instead of a mix of GAAP and non-GAAP numbers. “We view it as a real expense,” he said. Some technology companies, such as Netflix Inc. and Intel Corp., already take this approach, but many don’t. If the shift to focusing on the real bottom line catches on more broadly, it could slice billions of dollars off the reported profits and official forecasts that underpin the technology sector’s lofty market valuations. Facebook stock trades at about 35 times estimated earnings over the next 12 months. Add in equity compensation expense and that price-to-earnings ratio jumps to 50, according to a Sanford C. Bernstein & Co. analysis. Amazon would trade at 122 times projected profit, rather than a multiple of 63. Using GAAP numbers, Alphabet Inc. would trade at 26 times forecast profit, versus 21 times, Bernstein estimates. The change also highlights the struggles of smaller Internet companies like Twitter Inc. and LinkedIn Corp. to generate GAAP earnings. Facebook, Amazon and Alphabet may have high stock valuations, but they are also very profitable by GAAP and non-GAAP measures. Twitter shares trade at about 36 times estimated profit, but including stock-based compensation analysts expect it to have a loss over the next 12 months, Bernstein research shows. “Some companies have been egregious with stock compensation,” Fish said, citing LinkedIn, which has relatively high equity-based pay compared to its revenue and earnings. LinkedIn shares have declined 44 percent this year, while rival social network Facebook is up 13 percent.

• Google, Fiat Chrysler to partner on self-driving minivans: Alphabet Inc's Google unit and Fiat Chrysler Automobiles NV have agreed to work together to build a fleet of 100 self-driving minivans in the most advanced collaboration to date between Silicon Valley and a traditional carmaker, the companies said Tuesday. The deal marks the first time that Google has worked directly with an automaker "to integrate its self-driving system, including its sensors and software, into a passenger vehicle," the companies said in a statement on Tuesday. Google and Fiat Chrysler engineers will work together to fit Google's autonomous driving technology into the Pacifica minivan. Some engineers for both companies will work together at a facility in Southeast Michigan, where Fiat Chrysler has its major North American engineering center, the companies said. Google said it is not sharing proprietary self-driving vehicle technology with Fiat Chrysler, however, and the vehicles will not be offered for sale to the public. The agreement between Google and Fiat Chrysler comes as rival technology and auto companies are accelerating efforts to master the complex hardware and artificial intelligence systems required to allow vehicles to pilot themselves.

• Match Group revenue beats as Tinder attracts more paid users: Dating website operator Match Group Inc reported better-than-expected quarterly revenue on Tuesday, as its popular dating app Tinder attracted more paying users. The company's shares rose 7.3 percent to $11.98 in after-hours trading. Match Group, which also owns Match.com and OkCupid, gets bulk of its revenue from membership fees and paid features. The company said its average paid-member count jumped 36 percent to 5.1 million in the first quarter ended March 31, also helped by the acquisition of PlentyOfFish. Match Group, majority owned by media mogul Barry Diller's IAC/InterActiveCorp, agreed to buy Vancouver-based PlentyOfFish for $575 million in July last year. Tinder surpassed 1 million paid members during the quarter. The Dallas-based company's dating business, its biggest, which includes apps such as Tinder, recorded a 24 percent rise in revenue to $260.4 million. Total revenue rose 21.4 percent to $285.3 million. Revenue from the company's non-dating business, which includes educational websites Princeton Review and Tutor.com, was flat at $24.9 million. Up to Tuesday's close of $11.16, Match Group's shares had fallen 7 percent since the company went public in November.

Daily Tech Snippet: Friday, November 20

• Successful Tech IPO#1: Shares of Square Soar by 45% After Public Offering: Square began trading as a public company on the New York Stock Exchange on Thursday, at one point surging more than 64 percent above its initial public offering price of $9. It ended the day up 45 percent, closing at $13.07. The first-day pop followed a turbulent I.P.O. process for the six-year-old company, one that was marred by questions over pricing and valuation and that arrived in the face of a precarious public market for technology offerings. On Wednesday, when Square had priced its shares at $9, that was lower than the $11 to $13 range it had set, putting its valuation at $2.9 billion, well below the $6 billion price tag that private investors had valued the company at last year. As recently as Wednesday, advisers laid out options for Square including pulling the deal, three people briefed on the discussions said, who spoke on the condition of anonymity, but for Square, that was not a consideration.  “We have a great beginning,” said Jack Dorsey, Square’s chief, striking an upbeat note in an interview on Thursday, which was his 39th birthday. “I don’t see negativity as necessarily something that detracts from our work.” The I.P.O. ordeal illustrates the difficulties — some might say guesswork — of accurately valuing companies, both when they are private and when they go public. And Square, which closed its first day trading with a market capitalization of $4.4 billion, now faces the challenge of moving on from the fund-raising event, solidifying its business and building itself up. “I want to get back to a steady state and back to business,” Mr. Dorsey said. He added that Square’s strategy now was “to continue to save people trips to the bank. We’re not going out there to say we’re getting rid of the banks or card networks. We’ve just put a much cleaner face on that infrastructure.”

• Sucessful Tech IPO#2: Investors 'swipe right' in Tinder-owner Match's debut: Shares of media mogul Barry Diller's Match Group, the owner of popular dating site Match.com and mobile app Tinder, jumped as much as 24 percent in their market debut on Thursday, valuing the company at $3.57 billion. Match Group, which touts itself as the world's No. 1 dating company, is seen as the crown jewel of Diller's media properties and has driven parent IAC/InterActiveCorp's (IACI.O) profit and revenue in recent quarters. The U.S. online romance market, worth more than $2 billion a year, has thrived as instant messaging, photo-sharing and geolocation services grow in popularity. One of Match Group's most popular offerings is Tinder, a mobile app on which people "swipe right" or "swipe left" to signal their willingness – or not – to meet prospective partners.

• Facebook Makes It Easier to Move On After a Breakup: Breaking up is now a little easier to do, at least on Facebook, thanks to a new feature that lets people untangle themselves from a relationship without cutting ties altogether. The operator of the world's biggest social network introduced a tool on Thursday for users to "take a break" after changing the status of a relationship with another person, letting them see less of an ex's posts without blocking or unfriending them. People can also tell Facebook to show an ex less information. While the feature might seem intrusive, it's become more necessary as Facebook has worked to highlight a user's most important relationships. The company is using its data to make better suggestions, such as who should be invited to events or whose birthdays are more important to celebrate. For example, Facebook has been serving up flashback memories of older posts, which, after a breakup, could bring back bad memories. And Facebook doesn't want to drive away any of its 1.55 billion users. The tools are more subtle than unfriending or unfollowing someone—the ex won't see any changes. Twitter, which lets users know if they were blocked, came up with a similar option last year, adding a "mute" button that would keep users from seeing someone's posts without letting them know. Facebook's new breakup feature is also reversible—just in case.

• Patron of Indian start-ups Tiger Global to tone down current aggressive style; to come up with two-track approach in giving money to companies: Tiger Global Management, the most prolific backer of startups in India, has decided to tone down its current aggressive style here, several people aware of the thinking at the US firm said, in a reflection of the limits of its strategy so far as well as the changing investor mood. Tiger, which is based in New York with private investments led by Lee Fixel, is coming up with a twotrack approach when it comes to giving money to companies in its portfolio, conversations with founders and investors reveal. The ones that are in leadership positions in the market can expect Fixel to keep his purse strings open, but not the laggards which have been told to fend for themselves. They must obtain validation from investors other than Tiger to lead new rounds and get unit economics right with positive operating margins. One of the founders who met Fixel recounted the conversation thus: "I will be leading very few investments in the next six to eight months, but if you use your cash and survive this cycle, then the pressure will ease out." Tiger, which is the main backer of India's most valuable startup Flipkart and owns significant stakes in the country's largest cab aggregator Ola, has invested around $2 billion (Rs 13,000 crore) in over 35 Indian companies. This year it has been even more active than in the past, but that has changed along with the onset of a more cautious mood about throwing large sums of money at consumer internet ventures. 

• Trailing in the Cloud, Google Taps VMware Founder to Chase Amazon: With its cloud business, Google finds itself in a rare position: Behind. The search giant has toyed with different enterprise products for years, with limited success, and now faces fierce competition from Microsoft and Amazon. But Google is signaling that it is serious about building an enterprise business. And here is its biggest sign: Alphabet has tapped Diane Greene, a founder and former CEO of the software company VMware, to run it. Sundar Pichai, Google’s CEO, announced the move in a blog post. Therein he said Greene, who has been a Google board member since 2012, will take over “all our cloud businesses, including Google for Work, Cloud Platform and Google Apps.” The move includes an acquisition of Greene’s new company, Bebop. Pichai describes it as a “new development platform that makes it easy to build and maintain enterprise applications.” Google isn’t sharing a price on the deal. Greene is joining at a moment when Google’s cloud efforts, both on the application and the infrastructure side, seem to be spinning. Three years ago, the narrative about Google Apps was how it was so often displacing Microsoft Office with its word processing and spreadsheet apps that run in a browser. Now that Microsoft Office has gotten the cloud religion with Office 365, which runs both as an on-premise version and in the cloud, the narrative around Google Apps has shifted in the last year or so: It’s now described generally as “doing well with small businesses,” even though Google itself still touts the fact that 60 percent of the Fortune 500 use it. Still, the cloud world has just gotten a lot more competitive. On Tuesday, Microsoft announced Office Graph, a set of unified APIs that will let third-party developers build add-ons and apps that enhance how Microsoft Office works. This hiring seems a partial response to that.

Daily Tech Snippet: Thursday, November 19

• Square prices shares at 52% discount to last valuation in disappointing turn to long-awaited IPO: sources: Mobile payments company Square Inc priced shares at $9 late on Wednesday, according to people familiar with the matter, further discounting the company's valuation before it begins trading Thursday morning. Square has raised $243.5 million in its Wall Street debut, about $80 million less than expected. The price set on Wednesday puts Square's market capitalization at $2.9 billion, a 52 percent drop from the $6 billion valuation it had earned at its last private funding round. San Francisco-based Square, led by CEO Jack Dorsey, earlier this month set a price range of $11 to $13, well below the $15.46 per-share price of its most recent private financing. The steeper discount to $9 - a 42 percent drop from what investors were willing to pay a year ago - suggests widespread uncertainty about the profitability of the payments industry and the future of Square itself, which has seen slowing revenue growth. "The way that Square was valued as a private company is they were just going to disrupt everything and change payments," said Andrew Chanin, CEO of PureFunds, an exchange-traded fund for mobile payments companies. "And the reality is not that." Compounding concerns is Dorsey's dual role running Twitter Inc., a social media company struggling for a turnaround. Founded in 2009, the company started as a way for small businesses to accept credit card payments through mobile devices. It has evolved to a suite of small business services, relying on partnerships with companies such as Apple and Visa. The valuation cut triggered a ratchet, or protection investors wrote into previous funding rounds, that requires Square to sell several million additional shares. Square will begin trading Thursday on the New York Stock Exchange under the symbol "SQ". Square is one of the most prominent "unicorns," or private companies valued at $1 billion or more, to plan a public debut this year. Many have held up Square as an example of how fleeting - and at times nonsensical - private market valuations can be. There are more than 140 "unicorns" globally.

• Match Prices Its IPO at Bottom of Proposed Range as Tinder CEO Breaks Quiet Period Rule with a Bizarre Interview ("Models Beg Me For Sex") Match has priced its IPO at $12 per share, raising $400 million . The company will begin trading on the Nasdaq tomorrow, under the ticker symbol ‘MTCH.’ The $12 per share is at the bottom of the anticipated $12 to $14 proposed price range and gives the company a market cap of roughly $2.9 billion. Square, which is also going public tomorrow, just priced its IPO at $9, below the $11 to $13 price range. Match owns a group of dating companies, including OkCupid and the infamous Tinder. That particular subsidiary came under fire today after its leader gave a bizarre interview that may have broken SEC-mandated “quiet period” rules. Tinder CEO Sean Rad: Models Beg Me for Sex:, Dick Pics Aren’t Cool: Tinder’s parent company, the IAC-owned Match Group, is going public tomorrow. As the most attractive and valuable part of the company, it makes sense that Tinder’s CEO, Sean Rad, is talking to media outlets to drum up excitement for the IPO. This morning, a fresh Tinder PR disaster dropped in the form of an interview with journalist Charlotte Edwardes in the London Evening Standard. In it, Rad talks about the number of women he’s slept with (“Is 20 low?”), confuses the word sapiosexual for sodomy and condemns fame-hungry journalists. It makes sense that Rad would say some really, really stupid things in an interview. Rad was the dude who mishandled a sexual misconduct scandal (and the resulting lawsuit) that led to the exit of co-founder and CMO Justin Mateen last year. Rad stepped down as CEO last November, but got a second chance at the top job after his successor, former Microsoft exec Chris Payne, was canned in the wake of a memorable Twitter meltdown. The interview is very long and there are many different great parts. Below is perhaps the best selection from it (here’s another one: “I do not condone penis pictures — that is just not who I am”). I’m sure it will inspire a lot of confidence in investors looking to buy Match Group stock tomorrow: He’s desperate to impress on me how gallant he is, citing the fact that a “supermodel, someone really, really famous” has been “begging” him for sex “and I’ve been like, no.” She’s “taunted” him, he says, and “called me a prude.” “She’s one of the most beautiful women I’ve ever seen but it doesn’t mean that I want to rip her clothes off and have sex with her. Attraction is nuanced. I’ve been attracted to women who are …” he pauses “… well, who my friends might think are ugly. I don’t care if someone is a model. Really. It sounds clichéd and almost totally unbelievable for a guy to say this, but it’s true. I need an intellectual challenge.” He continues: “Apparently there’s a term for someone who gets turned on by intellectual stuff. You know, just talking. What’s the word?” His face creases with the effort of trying to remember. “I want to say ‘sodomy’?”

• How Amazon’s Long Game Yielded a Retail Juggernaut: Shares of Jeff Bezos’s company have doubled in value so far in 2015, pushing Amazon into the world’s 10 largest companies by stock market value, where it jockeys for position with General Electric and is far ahead of Walmart. There is a simple explanation for Amazon’s rise, and also a second, more complicated one. The simple story involves Amazon Web Services, the company’s cloud-computing business, which rents out vast amounts of server space to other companies. Amazon began disclosing A.W.S.’s financial performance in April, and the numbers showed that selling server space was a much bigger business than anyone had realized. Deutsche Bank estimates that A.W.S., which is less than a decade old, could soon be worth $160 billion as a stand-alone company. That’s more valuable than Intel. Yet the disclosure of A.W.S.’s size has obscured a deeper change at Amazon. For years, observers have wondered if Amazon’s shopping business — you know, its main business — could ever really work. Investors gave Mr. Bezos enormous leeway to spend billions building out a distribution-center infrastructure, but it remained a semi-open question if the scale and pace of investments would ever pay off. Could this company ever make a whole lot of money selling so much for so little? As we embark upon another holiday shopping season, the answer is becoming clear: Yes, Amazon can make money selling stuff. In the flood of rapturous reviews from stock analysts over the company’s earnings report last month, several noted that Amazon’s retail operations had reached a “critical scale” or an “inflection point.” They meant that Amazon’s enormous investments in infrastructure and logistics have begun to pay off. The company keeps capturing a larger slice of American and even international purchases. It keeps attracting more users to its Prime fast-shipping subscription program, and, albeit slowly, it is beginning to scratch out higher profits from shoppers.

• Goldman Says to Buy Apple Because It's Becoming a Services Company: It's time to stop thinking of Apple as a hardware company and start thinking of it as a service company. At least, that's what Goldman Analyst Simona Jankowski and her team are telling clients as they add the stock to their "conviction buy" list and call for a price of $163 in the next 12 months.  "We expect that over the next year, the focus will shift from unit growth (which is slowing given a maturing smartphone market) to installed base monetization and recurring revenues (“Apple-as-a-Service”). Apple’s model has already tilted that way with its new iPhone 6s installment plans, and we see the upcoming TV service as a powerful next step." Due to Apple's large and loyal customer base, the team argues that there is a "significant multi-year opportunity" for the tech giant to boost monetization. Jankowski's team estimates that over 90 percent of those purchasing iPhones are repeat customers, which will make it much easier for Apple to become a service-like company, especially as it launches a TV service. The timing might prove perfect for a foray into the TV space as well, with Goldman pointing towards acceleration in cord cutting as millennials are more apt to use what it refers to as "over-the-top media consumption," and the skinny bundles such as Sling TV and Vue become more common. "Theoretically, Apple could transition other products to installment plans as well, and charge customers a monthly bill that also includes its other services such as Apple TV and Music. We think a potential live TV service from Apple would be a key enabler of this transition to an “Apple-as-a-Service” business model." The shift to a service model could prove to dramatically increase Apple's average revenue per user (ARPU). Jankowski estimates that Apple's current ARPU would be $42 operating with a service business model.

• As Lyft Seeks $500M in New Funding, Leaked Lyft Financials Show the Struggles of Being No. 2 Behind Uber: In the first half of the year, the ride-sharing company generated less revenue, lost more money, and added fewer customers than projected in February. Ride-sharing pioneer Lyft is heading back to the fundraising till, but its numbers may not look that rosy to investors. The company lost $127 million in the first half of 2015 on $46.7 million in revenue, according to private fundraising documents obtained by Bloomberg. Lyft, the second-biggest U.S. ride-hailing service, is raising roughly $500 million as the company burns through tens of millions of dollars a month, according to a fundraising presentation compiled by Credit Suisse. It highlights tepid financial performance at Lyft and reveals that the company has repeatedly underperformed its own expectations. In the first half of the year, Lyft generated less revenue, lost more money, and added fewer customers than projected in February. The numbers suggest Lyft has had to burn through cash as it chases growth in a competitive industry. The willingness to spend big on growth is a costly strategy that’s becoming increasingly common in Silicon Valley. Public market investors have expressed concern about the high valuations of private technology companies recently. Fidelity Investments, BlackRock, and others wrote down their stakes in some startups this year.In the first half of 2015, Lyft spent $96.1 million on marketing. That’s more than twice Lyft’s net revenue during the same period. In one document, Lyft promotes its ability to attract new drivers and riders, even as it does so at a sizable loss. Customer discounts represent a big portion of Lyft’s marketing costs. This year, Lyft has also purchased billboards in New York’s Times Square and on Market Street in San Francisco, in addition to paying drivers big bonuses.

Daily Tech Snippet: Thursday, August 12

Alibaba Skids as Revenue Growth Slowest in Three Years; $4 Billion Stock Buyback Is Planned as Stock Plunges 5% to New Low: Alibaba Group Holding Ltd's shares fell to a record low after China's biggest e-commerce company posted its slowest revenue growth in over three years as its strategy to shift more services to mobile devices hurt advertising sales. The company's shares declined as much as 8 percent to $71.03 - just shy of their IPO price of $68 - wiping off nearly $16 billion from its market value on Wednesday. The stock has lost declined nearly 30 percent this year, up to Wednesday's close. Alibaba also announced a $4 billion share repurchase program over two years, aimed at offsetting the impact of its share-based compensation programs. The company's results come at a time when China's economy is expected to grow at its slowest pace in a quarter of a century. Adding to investor concerns, China devalued the yuan on Tuesday, guiding the currency to its lowest point in almost three years. mobile was still less profitable than business via personal computers, where profitability also decreased. Revenue for the three months through June rose 28 percent to $3.27 billion, well below forecast. Gross merchandise volume (GMV) -- the total value of goods transacted across Alibaba's platforms -- rose 34 percent to 673 billion yuan ($105 billion), also the slowest growth in more than three years.

Online grocer BigBasket raises $50M from Bessemer, others: Online grocery retailer BigBasket.com, has raised $50 million in a fresh round of funding led by existing investor Bessemer Venture Partners. The Times of India, which first reported the development citing BigBasket CEO Hari Menon, said BigBasket has also mandated Citigroup to raise $150 million (Rs 950 crore) from new investors. The new round of funding, which values BigBasket at $1 billion, will power the company’s plans to enter 50 more Tier-II cities, the report said. BigBasket.com is an online grocery store with operations in Bangalore, Hyderabad, Mumbai, Pune, Chennai, Delhi-NCR and Mysore. It was founded by a team of five in 2011. The team has both offline and online retail experience, as it had earlier set up India’s first e-commerce site FabMart.com in 1999, and then established the Fabmall-Trinethra chain of more than 200 grocery supermarket stores in southern India. Trinethra was sold to Aditya Birla Group in 2006 and currently operates under the brand name ‘More’. The startup has investments from Bessemer Venture Partners, Helion Venture Partners and Zodius Capital. It was valued at Rs 1,400 crore when it last raised funds in January. The company is understood to have closed fiscal 2015 with a top-line of Rs 250 crore and a run-rate of 6,000 orders a day with average billing of Rs 1,500 per customer.

Strong U.S. sales help Cisco beat estimates: Network equipment maker Cisco Systems Inc reported higher-than-expected quarterly revenue and profit as strong demand for its products in the United States more than offset weakness elsewhere. Shares of Cisco, considered a bellwether for the performance of the broader network gear industry, rose nearly 4 percent in extended trading on Wednesday. The company is the market leader in selling network equipment to businesses, controlling about half of the $38 billion global market and overshadowing rivals Hewlett-Packard and China's Huawei, according to market research firm Gartner. For the fourth quarter, the company earned 59 cents per share on an adjusted basis, while revenue rose nearly 4 percent to $12.84 billion. Cisco's latest results also underscore an ongoing recovery in sales of the company's switches and routers, which were hit by a slowdown in spending by telecom carriers, its traditional customers, in the second half of 2014. The company has also been investing in new products and services such as data analytics software, security and cloud-management tools. Cisco said in June it would buy cloud-based security firm OpenDNS for $635 million. The company also said revenue from telecom providers rose 2 percent in the quarter but added that it did not expect an increase in capital spending by its traditional customers.

Lenovo quarterly revenue misses expectations, announces 10% cuts: Lenovo missed quarterly revenue expectations on Thursday and said it plans to lay off about 10 percent of its global non-manufacturing workforce, after posting a steep sales decline in its mobile division. The world's No. 1 PC maker said it plans to cut about 3,200 non-manufacturing positions to save $650 million in the second half of 2015 and about $1.35 billion on an annual basis, reflecting intense competition among global smartphone makers. Chief executive Yuanqing Yang said Lenovo would also restructure its lagging smartphone business at a one-time cost of $600 million, and was facing its "toughest market environment in recent years". Lenovo, which last year spent $2.91 billion to buy handset brand Motorola from Google in a bid to solidify its position in smartphones, pointed to "intensifying competition and long product development lifecycles" in the business.

Tinder Invokes North Korea in Strange Response to Vanity Fair Article, then Backtracks: Like a person scorned after a bad date, the tech company Tinder went a little bit crazy on social media on Tuesday after Vanity Fair published an article blaming technology for the death of dating. The article, “Tinder and the Dawn of the ‘Dating Apocalypse,’ ” was not just about Tinder — there is a wider Internet at work, the writer Nancy Jo Sales suggested. But the app, which lets users quickly swipe left to signal rejection or right to signal interest, was used to illustrate the problems young daters face when technology fuses short attention spans with too many options. On its official Twitter account, Tinder took issue with the report’s suggestion that its dating app was fueling a culture of casual sex. Tinder’s defense continued for more than 30 posts. The outrage was not lost on Twitter users, who relished the opportunity to point out that Tinder was being awfully thin-skinned. One post came under particular scorn. Tinder said it helped people find friends and make connections in places where Internet use is restricted. The claim that Tinder had “many users” in North Korea prompted a few creative memes featuring that country’s leader, Kim Jong-un, and many derisive questions about the extent of Tinder’s user base in China and North Korea. Both countries maintain strict controls on the Internet, and information in general. On Wednesday, Tinder issued a statement acknowledging its outburst. “Our intention was to highlight the many statistics and amazing stories that are sometimes left unpublished, and, in doing so, we overreacted,” the company said

WeChat’s Growth Shows Why Messaging Apps Attract Big Valuations: For an idea of why messaging applications are attracting valuations in the tens of billions of dollars, look no further than WeChat, a 600 million-user messaging application that’s part of Tencent. WeChat, a smartphone instant-messenger, digital wallet and car-booking service rolled up into one, is probably worth $83.6 billion1, or about half of TenCent's value, according to HSBC. As people spend more and more time sending short messages to each other—instead of, say, browsing websites or shopping online—such services have become some of the hottest technology businesses around. WeChat's user count jumped by 37 percent in the latest quarter, according to Tencent's results—and it isn't even the Internet company’s biggest messaging product. That honor goes to QQ, which has 843 million users. Facebook’s own Messenger has 700 million users. Skype, the Internet calling service operated by Microsoft Corp., also lets people exchange messages and boasts 300 million users. By comparison, Twitter Inc., which is projected to generate $2.24 billion in revenue this year, only has 316 million users. When it comes to innovation, however, WeChat may be far ahead of the pack in terms of money-making opportunities. It already includes shopping and in-app games, features that other services are rushing to replicate, according to Adley Bowden, senior director of analysis at Pitchbook Inc. "WeChat's success is a little bit of a game-changer in the take on messaging as a platform," Bowden said. Line, a messaging app popular in Japan, may soon offer a better picture of how investors are valuing messaging apps. The company, controlled by South Korean search portal Naver Corp., is preparing for a dual listing in Tokyo and New York next month, people with knowledge of the matter said in May. Line, which makes money by selling teddy bear icons and games to its 211 million users, had $223.9 million in revenue in the latest quarter. Competition for users remains fierce. Viber, a popular messaging app, has 249 million users. Kik, a Canadian messaging service, has more than 200 million, while South Korea’s KakaoTalk has 48 million people exchanging messages and photos. Eventually, within three to five years, there will be a few winners that survive, said Gartner's Blau. That will probably involve more acquisitions by the biggest messaging service providers, with the main question being how much further valuations can go.

Daily Tech Snippet: Wednesday, June 10

• Here is an audio (MP3) version of this snippet

• Asia is driving Facebook's growth - Facebook now earns 51 percent of ad revenue overseas - Asia revenue growing 57% Y/Y; by contrast Europe lags the US. For the first time, Facebook has detailed ad sales outside the United States and Canada as a percent of worldwide sales. Overseas markets bring in more advertising revenue than the United States for Facebook, amounting to 51 percent of global ad sales in the first quarter. Growth in Asia was the fastest at 57 percent. While Europe is growing slower than the United States, the Asia Pacific region is ahead and a focus for Facebook. By comparison, Google said that 57 percent of its revenue was from international markets in the first quarter, although it did not break out ad revenue specifically. Mobile advertising represents more than 70 percent of Facebook's total ad revenue, and mobile is particularly strong and attractive to advertisers in emerging markets. Facebook is benefiting from exporters in China trying to reach people outside its country and from an influx of venture capital funding into India, giving start-ups funds for advertising. Total advertising revenue for the quarter increased 46 percent to $3.3 billion, the vast majority of Facebook's $3.5 billion in quarterly revenue. International advertising revenue rose 36 percent from a year earlier, Facebook said.

• Google Talent Departs for Unicorn Herd: Cloudera taps Google VP as Engineering Head, DropBox poaches Neal Mohan for top job: Cloud analytics software company Cloudera said today it has named Daniel Sturman as its VP of engineering. Sturman previously spent eight years at Google, where as VP of engineering he was in charge of keeping its computing infrastructure for services like Google Compute Engine and Google App Engine. Neal Mohan, Google’s VP for display and video advertising, is leaving for the top product job at Dropbox. He is part of a wave of execs departing the search engine in recent months for fast-growing, pre-IPO startups. More recently, Uber claimed Tom Fallows, who had led Google’s same-day delivery service, in November, followed by communication and policy chief Rachel Whetstone. Jawbone nabbed Fallows’s boss, Sameer Samat. Indian e-commerce unicorn Flipkart snatched two Googlers: The VP of product at Motorola and the person who ran the low-cost handset Android One project. On the smaller startup side, the ads product head at YouTube recently headed to Luxe, an on-demand parking startup. There’s more, but you get the idea. Google downplays exits, citing them as regular industry churn. But they come as Google’s core business faces rising threats and fears that it has grown too large and too uninspired to retain ambitious top tech talent. Apparently, the Google bench is not as rewarding for some as the thrill of a unicorn ride.

• Tinder Goes Through A Small Round Of Layoffs; spring-cleaning, not restructuring, company says. Tinder — one of the most popular dating apps currently available across the globe — laid off around 10 percent of its staff last week. TechCrunch has learned and confirmed that the company laid off six members of the 60-65 member team, including three marketing employees and three engineers. TechCrunch was told this wasn’t part of a re-structuring, or even a result of leadership changes with new CEO Chris Payne and VP of Engineering Hugh Williams, but rather a spring-cleaning of sorts. Tinder has gone through much larger transitions before, including a lawsuit waged by former VP of Marketing Whitney Wolfe, the resignation of CMO Justin Mateen, and the transition of Sean Rad from CEO to President. Since then, Chris Payne has joined the team as CEO and Hugh Williams has taken over the engineering squad. The first year of monetization can be tricky for any social startup, and with the complexities of Tinder Plus — ads, premium features, oddball pricing, etc. — it would make sense to double-check that the team is as lean as possible.
• Tesla CFO retires; Firm Will Start Delivering Model X SUV in 3 to 4 Months, Says Elon Musk; Tesla Motors will begin deliveries of the Model X sport utility vehicle in three to four months, keeping close to the timeline the electric-car maker laid out earlier this year, Chief Executive Officer Elon Musk said. “The Model X will be a better SUV than the Model S is a sedan,” Musk, 43, said Tuesday at Tesla’s annual shareholders meeting, held at the Computer History Museum in Mountain View, California. Musk said he’s been driving the latest prototype of the Model X, which Tesla first unveiled as a concept in February 2012 and previously sought to have ready by the end of 2014. More recently, Tesla told investors that initial deliveries to customers, several of whom have been waiting for more than three years, would begin late in the third quarter. Car-based SUVs are popular among female drivers, and in a January interview with Bloomberg, Musk said that the Model X is drawing more than half its orders from women. This is a contrast from the predominantly male customer base for its Model S sedan and the Roadster, which the Palo Alto, California-based company no longer sells. Tesla is also working on the Model 3, to be released in 2017 with a starting price of roughly $35,000. In addition, the company is readying another software upgrade for the Model S, including so-called autopilot driver-assist technology, and “may be able to get it out to early-access customers by the end of this month,” Musk said. Musk has said the company probably won’t turn net income positive until annual sales reach 500,000. “I expect we’ll achieve profitability in 2020,” he said. Musk is by far Tesla’s largest shareholder with 22 percent. He said in February that at the rate it’s growing, if all goes right, Tesla in a decade could be worth as much as Apple Inc., the world’s largest company by market valuation, is now. Musk also said CFO Deepak Ahuja will retire at the end of this year. Ahuja has been Tesla’s CFO since 2008, coming from Ford Motor and seeing Tesla through its June 2010 initial public offering. He said he’s retiring to pursue other life goals.
• Geek shortage stymies Israel's Tech Boom as Soviet emigre engineers retire, fewer youth study advanced science. Israel's technology miracle is threatened by a dearth of people in the very professions that made it happen: engineers and computer scientists. Companies say finding qualified workers is one of their biggest problems. And the shortage may worsen as fewer students sign up for the most advanced math classes, the building block for tech careers. This in an economy whose health depends on exports—about one-third of them from technology companies. One explanation for the shortage: Engineers who emigrated from the former Soviet Union in the 1990s are retiring. "We don't truly appreciate that immigration,'' says Adam Fisher, a partner at Bessemer Venture Partners. "Without that I'm not sure we would be 'Start-Up Nation'.Meanwhile, fewer of Israel's youth are choosing to study advanced math, and there's no increase in those studying advanced science, in part put off by the level of difficulty that could bring down overall grades. The number of high school students matriculating in advanced math dropped by a quarter from 2006, to 9,350 in 2014, according to the Trump Foundation, dedicated to improving education in Israel. Almost a year ago, a ministerial committee drew up a program to increase skilled manpower for the industry. Its plan includes recruiting more Israeli Arabs into the industry, training ultra-Orthodox men and women, luring Israeli engineers abroad to return home, and making it easier for non-Israelis to get work visas. It must be approved by the new cabinet and could be passed later this year. Some parts are in place: About 300 academics were persuaded to return to Israel last year out of 4,300 who registered as willing to do so.
• IBM plans Data Analytics push - bets on Spark, open-source software project that aims to be Hadoop successor.IBM has created a Technology Center in San Francisco to focus on a free open-source software project called Spark, according to IBM executive Rob Thomas. IBM hired 20 people within the last month, Thomas said in a video posted online June 3. “We’re going to be scaling this up to hundreds of people that are just focused on Spark open source and how we evolve that for the enterprise,” Thomas said. Spark is a framework developed originally at the University of California at Berkeley that helps companies process large amounts of data rapidly, by storing information within the fast memory of computers. It is seen by many in Silicon Valley as a potential successor to Hadoop, which has spawned a variety of companies including Cloudera, MapR Technologies and Hortonworks. “This is a much more significant bet than even what we have done on Hadoop to be frank,” Thomas said. “We think Spark is going to be enormous and change the face of enterprise IT.”
• Microsoft drops the price of the Xbox One and introduces a 1TB console; will sell $25 adapter that allows streaming games from console to PC. Microsoft announced Tuesday that it's dropping the price of the 500 gigabite Xbox One to $349, which had previously been advertised as a "promotional" price drop from $399. Now, Microsoft will offer a new 1 terabyte model -- that's double the storage of the old standard model -- for $399 instead, the company said in a blog post. The Xbox is still locked in a battle with Sony's PlayStation to control the console world, and this is a clear play to appeal to hardcore gamers. As gaming guide Kotaku and others have reported, Sony is, in fact, expected to release a 1 TB version of the PlayStation soon. Microsoft also had some more news on its growing efforts to mix Xbox and PC gaming; a major feature of its upcoming operating system is that users can stream games from their console to their computer. To that end, Microsoft also announced it will sell a $25 adapter that will allow players to use their wireless controllers with their current computers. The company has redesigned the controller to allow players to plug their gaming headsets into the controller, which gives them the option to control settings such as the volume of their microphone or the game's audio while they play. Microsoft has also improved the quality of the sound that comes through the controller. The new controller doesn't mean, however, that you have to buy all new headsets or other accessories. "All existing controller accessories will work with the updated controller," the company said.
• China's big biotech bet starting to pay off as country's patent portfolio burgeons. Years of pouring money into its laboratories, wooing scientists home from overseas and urging researchers to publish and patent is starting to give China a competitive edge in biotechnology, a strategic field it sees as ripe for "indigenous innovation." The vast resources China can throw at research and development - overall funding more than quadrupled to $191 billion in 2005-13 and the Thousand Talents Program has repatriated scientists - allow China to jump quickly on promising new technologies, often first developed elsewhere. These efforts were illustrated vividly in April - not without controversy - when scientists at Sun Yat-sen University in Guangzhou published results of a ground-breaking experiment to alter the DNA of human embryos using new gene editing technology. Data compiled by Thomson Innovation, a Thomson Reuters unit, shows China is a growing force in gene editing, with a burgeoning patent portfolio. More than 50 Chinese institutions are patenting in the field, led by the Chinese Academy of Sciences, universities, the Anhui Academy of Agricultural Sciences and Beijing Jifulin Biotech. Nearly a fifth of the 518 families of gene editing patents analyzed since 2004 were associated with Chinese entities. For top-tier institutions, "the level of available resources is incredible in terms of the freedom, the flexibility that gives key leading Chinese scientists to move very, very fast on a given research track if a new opportunity arises".

Daily Tech Snippet: Tuesday, May 26

• Audio version of this post on SoundCloud (experimental)

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

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

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

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

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

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

Daily Tech Snippet: Monday, May 25

• Google adds a Buy Button to YouTube "TrueView" Pre-Roll Ads - Initial Results Very Positive: Google today announced that its YouTube TrueView ad product will now come with an optional "click to shop" button on pre-roll spots. The new button will often appear adjacent to the "Skip" button that YouTube fans know very well. A few brands have been testing the ads, which allow viewers to click through to e-commerce pages and add items to their shopping carts. Per Google, home goods merchant Wayfair has been getting three times the digital revenue compared to previous YouTube campaigns, while the cosmetics retailer Sephora saw more than an 80 percent jump in brand consideration and a 54 percent lift in ad recall. The move for Google is designed to shift YouTube's ad business into a higher gear as the site faces increased digital video competition—chiefly from Facebook, although Snapchat, Kik and other mobile startups also pose a threat. Jonathan Opdyke, CEO of HookLogic, predicted the feature would be a hit with merchant brands. Sridhar Ramaswamy, svp of ads and commerce at Google, revealed the new feature while speaking earlier this afternoon at the ad:tech conference in San Francisco.

• Amazon to Stop Funneling European Sales Through Low-Tax Haven: In a move that could put pressure on its rivals to follow suit, Amazon will start paying taxes in a number of European countries where it has large operations, instead of funneling nearly all its sales through Luxembourg, a low-tax haven that is the home base in the region for Amazon and many other large tech companies. Several European countries, including Germany and France, have criticized the tax strategies of some American tech companies, including Google, which use complicated structures that sharply reduce the amount of tax they pay in individual European countries. The European Commission, the executive arm of the European Union, is also investigating whether Apple and Amazon receive unfair state support through low-tax agreements in Ireland and Luxembourg, respectively, where the companies run their European operations. On May 1, Amazon said that it had started reporting revenue from its operations in Britain, Germany, Italy and Spain. By altering how it reports its revenue, the online retailer may become liable for larger tax charges in certain nations, though it may still be able to reduce its tax burden through other complex accounting practices.Amazon reported a 14 percent rise in European revenue, to 13.6 billion euros, or $15 billion, in 2013 (the latest full-year figures available), according to company filings.The changes to the company’s tax arrangements, however, are likely to put pressure on other tech companies in the United States that funnel the majority of their European revenue through low-tax countries like Ireland and the Netherlands. In Britain, George Osborne, the country’s finance minister, has championed a so-called Google Tax that imposes a 25 percent tax on the local profits of international companies that are perceived to route money unfairly overseas. The new policy came into effect last month. And in response to mounting criticism from other European countries, Ireland announced late last year that it would phase out a tax loophole called the “Double Irish” that would often be used by tech companies. The structure allows corporations with operations in Ireland to make royalty payments for intellectual property to a separate Irish-registered subsidiary. That subsidiary, though incorporated in Ireland, typically has its home in a country that has no corporate income tax. The Double Irish policy has allowed companies like Google to limit how much tax they pay on their international operations. The policy was phased out for new companies at the beginning of 2015, and will be stopped entirely by the end of the decade. Yet, despite the growing clampdown on tax structures used by American tech companies and others, analysts say that European countries are still vying to attract international companies through low-tax policies. Britain, Ireland and the Netherlands have already created new policies that allow companies to apply for a lower tax rate on profits that result from certain patents that are held locally. The European Commission, however, is currently reviewing the legality of these so-called patent boxes.

• Contest for Nokia's maps business heats up; German carmakers, Uber and Baidu, and Tencent are all in the fray: The contest for Nokia's maps business has become a three-way race between German carmakers, a consortium including Uber and Baidu, and a third group including China's Tencent and Navinfo, people familiar with the process said. Finland's Nokia has started an auction of its maps business HERE while it completes its 15.6 billion euros ($17.2 billion) takeover of network equipment maker Alcatel Lucent. German automakers Daimler , BMW and Volkswagen's premium brand Audi have teamed up with private equity firm General Atlantic to form what is being described as the "Industry consortium", two sources familiar with the matter told Reuters on Thursday. Nokia, Daimler, BMW and General Atlantic declined to comment. The automakers have agreed to contribute potentially more than 700 million euros, but below 1 billion euros, said one auto industry source, who declined to be named. The consortium could be widened to include more carmakers, the source added. Another group consists of Chinese media, mobile and Internet services firm Tencent Holdings, Chinese map maker Navinfo, and Swedish buyout firm EQT Partners, three sources who declined to be named said. Navinfo and Tencent were not immediately available for comment. EQT declined to comment. Private equity firm Apax has joined U.S.-based taxi service Uber and China's Baidu in a third consortium, a financial source who declined to be named said. Apax and Uber declined to comment. Baidu was not immediately available for comment. Analysts put the potential value of HERE at 2 billion euros to 4 billion euros.

• Chinese Car-Hailing App, Backed by Both Alibaba and Tencent, Gives Away Free Rides to Fend Off Uber: Chinese car-hailing app operator Didi Kuaidi will give away 1 billion yuan ($161 million) worth of rides to commuters starting next week to promote its new chauffeur service. The company, backed by Alibaba Group Holding Ltd. and Tencent Holdings Ltd., is expanding into the market for ride-sharing and carpooling after winning an estimated 99 percent of the taxi-hailing market share. The giveaway is expected to hit Uber Technologies Inc. and Yidao Yongche, two other companies competing for the estimated $1 trillion-a-year market for transportation services in the world’s most populous country. China’s car-hailing industry is currently dominated by Didi and Kuaidi, which together account for a combined 78 percent of ride bookings, with Uber a distant third at 11 percent, according to Analysys International, an industry researcher. “Three years from now, our goal is to allow everyone to hail a taxi or get a ride within three minutes and to serve 30 million people per day,” Cheng Wei, chief executive officer of Didi Kuaidi, said in a statement. The company hopes to meet the demand by supplying more cars in a more flexible way, he said in the statement. Starting May 25, commuters in 12 Chinese cities will enjoy free rides for Didi Kuaidi’s chauffeur service every Monday for a month, according to the company. Didi Kuaidi aims to create the largest “one-stop transportation platform” in the world, the company said. The goal is to cover commuting needs from hailing taxis through mobile apps, to carpooling and booking premium cars with chauffeurs, it said. Formed out of an alliance of two competing apps, the two former rivals had engaged in intense competition, giving out subsidies to drivers and riders, before agreeing to work together in February. Alibaba and Tencent own 10 percent and 13 percent, respectively, in the merged company. Didi Kuaidi won a breakthrough this month after Shanghai said it will include the company in a new taxi-booking platform, the first official recognition of mobile-booking apps. The company is in talks with more local governments about cooperating on car-hailing services, Cheng said, declining to name the cities. By contrast, local media reported Uber’s offices in Guangzhou in southern China were raided by local authorities.

• EBay Plots European Growth With Click-and-Collect Expansion; Surplus Space at Supermarkets Adds to Opportunity: EBay Inc. plans to expand its click-and-collect service in the U.K. and across Europe, after buyers on its site collected 1.5 million parcels from British store chain Argos in the first 18 months of the service. Click and collect is becoming “the dominant way that consumers want their online purchases to be fulfilled” in the U.K., EBay’s senior vice president for Europe Paul Todd said in an interview at Bloomberg’s London headquarters. EBay, based in San Jose, California, is looking at all kinds of partnerships to boost its presence, Todd said. The Argos service, covering about 750 stores across Britain, is used by about 160,000 EBay merchants. Click-and-collect services are booming in Europe as more shoppers choose to fetch their purchase from a store rather than risk missing a home delivery. More than half of online orders placed with John Lewis department stores in the U.K. last Christmas were picked up from a store. France’s Darty Plc said Thursday that 20 percent of all Web sales in the fourth quarter were collected, up from about 10 percent a year ago. Surplus space in U.K. supermarkets may be one avenue that the company explores to boost its collection capabilities. J Sainsbury Plc said this month that about a quarter of its stores will have some under-utilized space in the next five years. The need for grocers to fill that space presents a “huge opportunity” for EBay, Todd said.

• Tinder Gets Into Music by Offering Zedd's New Album for $3.99: Tinder users who spot Zedd's fake profile and "swipe right"—which indicates interest in someone—receive a link to download his new True Colors album for $3.99 (compared to $7.99 on iTunes or Google Play). The profile is also tied to a contest to win an autographed CD. It may be the initial foray for Tinder in terms of selling music, but it's not the first time the red-hot dating app has linked up with music. Earlier this year, pop singer Jason Derulo created a profile to drive views of his YouTube music video. A Tinder rep confirmed to Adweek that the Zedd promo is not an actual ad—it's a partnership that the dating app has been testing with a number of marketers, such as Twentieth Century Fox, E!, and New York's Urban Mudder event on July 25. Bud Light was the first and only brand to run Tinder ads last month as part of its "Whatever, USA" campaign.

• Consolidation in China's online travel sector: Expedia gives up on China partner, sells off $671M majority stake in eLong: Ctrip, China’s top travel site, this afternoon announced it has taken a US$400 million stake in long-time arch-rival eLong. The deal, which closed today, was done by acquiring eLong shares from Expedia. Ctrip now has a 37.6 percent stake in its erstwhile rival. Expedia has sold off its entire 62.4 percent stake in eLong, worth US$671 million, by selling the remaining shares to three other buyers (Keystone Lodging Holdings, Plateno Group, and Luxuriant Holdings), the US-based company said today. As a result of this deal, Ctrip says that it and Expedia have agreed to cooperate with each other on “certain travel product offerings for specified geographic markets.” Expedia’s brief statement did not make clear why it’s exiting eLong. The huge Expedia sell-off marks a major sea-change in China’s highly competitive travel ecommerce sector. It seems to be a huge win for Ctrip, which has now tamed its closest competitor. That leaves Ctrip freer to focus on newer and fast-growing rivals such as Baidu-owned Qunar, Tuniu, and LY. Ctrip has US backing of its own in the form of Priceline, which owns about eight percent of the company.

Daily Tech Snippet: Monday, April 6

• Alibaba-backed ShopRunner, brand-focused US e-commerce site, gains momentum, eyes China: ShopRunner Inc, the e-commerce startup backed by Alibaba Group Holding Ltd that styles itself in some ways as the anti-Amazon, more than doubled its users over the past year and hopes to do so again in 2015, Shoprunner's chief executive said in an interview. The five-year old online retailer's gains may allow it to win over more customers who prize convenience and experience over cost savings, while taking advantage of its Alibaba relationship to help American retailers sell to China's still-growing middle class. ShopRunner borrows some of Amazon.com Inc's innovations: it charges $79 for two-day shipping to Amazon's $99. And it has an express checkout akin to its larger rival's one-click-buying feature. But CEO Scott Thompson says ShopRunner aims to be more like an online shopping mall that showcases brands than an Amazon or eBay marketplace where the focus is on lowest price. It also gives partners - ranging from Cole Haan and Under Armour to Neiman Marcus [NMRCUS.UL] - ownership of customer data and relationships. "These businesses spend a lot of money to do the right thing with their brands," Thompson told Reuters in an interview. "I want the segment of customer who says I want to pay a fair price, but I want the experience to be predictable." ShopRunner is one of a number of startups nibbling away at Amazon's dominance of the online arena.It remains to be seen whether any will make waves. The soon-to-be-launched Jet, for instance, is raising funds from investors at a rapid clip and hopes to carve out a niche in lowest-price shopping. ShopRunner membership is now at 2.4 million, though it is unclear how many of those users signed on through American Express Co, an investor in ShopRunner, which also offers its cardholders free membership. Beyond the numbers, Thompson says members are widening their spending - in much the same way shoppers patronize adjacent storefronts at the mall. Cross-shopping, when members who start out buying from one or two retailers evolve to shop from more and more, grew nearly 60 percent in 2014, from just under 20 percent previously. "It's that age-old tenant in the mall that draws customers in, and people around it benefit from the traffic," Thompson said. Over the longer term, Thompson hopes to take greater advantage of ties to Alibaba, the Chinese e-commerce titan that paid $202 million for 39 percent of the company in 2013. ShopRunner is one of several U.S. e-commerce companies working with Alibaba and affiliate Alipay to help U.S. retailers access China. Through Alipay's nascent "ePass" service, which aims to let Chinese customers buy and pay for goods from U.S. retailers hassle-free, ShopRunner helps Neiman Marcus and Cole Haan sell to consumers in China by marketing their brands to buyers there. As Alibaba's biggest single U.S. e-commerce investment, ShopRunner will play a key role in Alipay's effort, although it also has relationships with sites in which Alibaba has no equity holding. Thompson wouldn't give specifics but said ShopRunner's own four-month effort to sell through Alipay was going well and demonstrated the vast potential of a market in which retailers like Best Buy have made little headway despite years of effort. There's some evidence Alibaba's program is taking off. Gilt.com has seen a doubling in sales to China since it started working with Alibaba and Alipay.

• How does Facebook know who your friends are? It’s a mystery that has nagged users since at least 2011, when the Irish Data Protection Commissioner conducted a full-scale investigation into the issue. But four years later, there’s still a lot of confusion and misinformation about what Facebook’s doing when it “finds” your friends. Did it scrape your phone for names and numbers? Run a reverse-image search of your picture? Compile a “shadow” or “ghost” profile on you over a period of years, just waiting for you to log on and “confirm” its guesses? Alas, Facebook’s actual process isn’t actually that sneaky or malicious. In fact, it involves this pretty complex academic field called, dun dun … network science. In a nutshell, whenever you sign up for a Facebook account, Facebook asks permission to look at your e-mail contacts if you’re on a computer, or your phone contacts if you’re on a smartphone. When you grant the site permission, it searches your contacts for users already on the network, and it searches other users’ uploaded contacts for you. That gives it a very primitive outline of your social circles: who you know, but not how you know them or how well. To refine that map, Facebook asks you more questions about yourself: where you went to school, when you were born, what city you live in. Each field in your Facebook profile and each interaction you make through that profile actually double as a source of data for Facebook’s mapping algorithms. What they’re trying to do is determine the structure of the network: where the cliques are, which people bridge them, who knows who. Once Facebook knows the structure of your social network, it can analyze it to predict (with startling accuracy!) not only the people you’re most likely to know now, but the people you’re most likely to know in the future. This isn’t magic: It’s actually closer to statistics. In the network, there are a set number of “nodes,” i.e., people, and a set number of “edges,” i.e., friendships. Given that, each nonexistent connection between two nodes is a statistical possibility. But not all nodes are created equal, so not all connections are equally likely. (I don’t anticipate befriending many 40-year-old guys in Siberia, say.) To estimate which connections are most likely, Facebook can run analyses against the structure of the network, using a long and entirely above-our-pay-grade list of coefficients and indices. Those coefficients account for a huge number of things: How many unusual commonalities do two people share, for instance? How many friends do they have in common? Which people in the network serve as rallying points, the people who know everyone? How many “degrees of separation” exist between them, how many friends of friends? In the end, Facebook’s friend-recommendation system isn’t magic or malice — just really good math. And guessing your future friends isn’t telling the future; it’s modeling the evolution of Facebook’s social graph.

• Advertising comes to Tinder: This week, Tinder unveiled its first ad in the form of a video promoting Budweiser’s next #Whatever, USA campaign. The video ad will show up for Tinder users the next time they open the app, but much like Instagram’s foray into advertising, Tinder ensures that rolling out advertising on the platform will go slow. Within a few swipes, users will land on Bud Light’s profile with a special auto-playing video, asking users to enter into the next #UpForWhatever contest. #WhateverUSA is a campaign that has already worked once for Bud Light, where the brand builds a random party town for a week of ‘spontaneous fun’ with contest winners and celebrities in attendance. With the new Bud Light ad on Tinder, Users can swipe out of the video immediately, with the same animations for left-swipes (Pass) and right-swipes (Like), which will be recorded by Tinder for the brand. “If you think about the way Tinder works, with ‘like’ and ‘pass’, we have a really amazing signal for advertisers,” said Brian Norgard, VP of Advertising at Tinder. “We’re being careful to respect our core experience for our users, which ensures that we can give that data back to our brands in a really valuable way. The response so far has been off the charts. You won’t believe how many people will swipe right if the content is high quality.” Tinder is using this first advertising campaign as a way to test the waters, using a number of different video lengths across the course of the campaign. “The product is very early, and we’re just starting to learn how our users are reacting to this format,” said Sean Rad, cofounder and president at Tinder. “Based on that we’ll make decisions on where we want to take the product or if we even want to proceed. Like everything else we do, we care a lot about the user experience and will protect a good balance between enjoying that uninterrupted Tinder experience with asking you to hear something from a sponsor or advertiser.” Rad and Norgard were both very clear about the fact that things will go slow at first, with Rad telling AdWeek that “it’s going to be a long time until [advertisements are] a consistent part of your experience.” They also told me that the engagement has been overwhelming and surprising. “We’re investing heavily in relevance, whether it’s leveraging the data we have with these signals our users give us, or using that data to do a better job of matching our users,” added Norgard.

• Wary of attack by activist hedge funds, IBM hires advisers to deal with restless investors: International Business Machines Corp (IBM.N) is concerned about a possible attack by prominent activist hedge funds, and is working with two investment banks to formulate a defense plan, according to the people, who declined to be identified. When asked for comment, IBM said: "IBM is continuing to execute on our strategy - making investments in growth areas such as analytics and cloud, reinventing our core franchises, and returning capital to shareholders. We are managing the company for the long term." The storied American technology giant, worth $157 billion today, has struggled to transform itself from a low-margin hardware maker into a cloud-based software and services company. When Virginia Rometty took over as chief executive at the start of 2012, Wall Street was hopeful that she would be able to kickstart growth. Analysts praised the former systems engineer for her strategic thinking in guiding IBM's acquisition of PricewaterhouseCoopers Coopers Consulting in 2002. As revenues continued to decline year on year, however, some IBM investors began to lose confidence management, according to people familiar with the matter. Last year, IBM withdrew its long-term operating earnings target for 2015, and shares of Big Blue are now down about 25 percent from a March 2013 high. Some IBM shareholders are trying to persuade prominent activists to build positions in the company and come up with ways to boost value, people familiar with the matter said. Pershing Square and ValueAct Capital both looked at IBM in recent months, but passed on making a move, the people said. A spokesman for Pershing Square declined to comment. ValueAct did not immediately respond to a request for comment. Part of the activist funds' concern was that IBM, whose stock is trading at around $159, is too expensive and the company's structural problems could not be fixed easily, according to several sources. Another reason, the sources said, is that some investors feel Rometty is doing a good job coping with a tough situation, so she does not fit the role of an underperforming CEO that many activists look for when they make a move.