- After 10 Years, Amazon’s Cloud Service Is a $10 Billion Business: Amazon’s cloud computing business is bigger after 10 years of operation than Amazon itself at the same milestone, and is on its way to being a $10 billion annual business this year, CEO Jeff Bezos wrote in a letter to shareholders today. Amazon Web Services “is bigger than Amazon.com was at 10 years old, growing at a faster rate, and — most noteworthy in my view — the pace of innovation continues to accelerate,” Bezos wrote, adding that the unit added 722 new features in 2015, which amounted to a 40 percent increase over the prior year. Last month AWS observed its 10th year of operations, and was the bright spot in an otherwise disappointing fourth-quarter report in January. The unit clocked $7.9 billion in revenue in 2015, amounting to more than 7 percent of Amazon’s overall sales, with an operating margin of 24 percent. “Many characterized AWS as a bold — and unusual — bet when we started,” Bezos wrote. “We could have stuck to the knitting. I’m glad we didn’t.”
- Yahoo Paints Grim Financial Picture as Deadline for Bids Nears: As Yahoo asks potential bidders to submit first-round offers for its core business next week, it is also warning them about a troubling decline in revenue and profit while obscuring the costs and cash flow of various business units. Yahoo is projecting revenue of $4.4 billion this year, down from $5 billion last year, according to two people close to the bidding who have seen the confidential data the company has shared with potential bidders. That figure is on the low end of the revenue estimate the company shared publicly with investors in February. Even that revenue is coming at a cost, with Yahoo expecting to pay other sites about $1 billion this year for sending traffic to its advertising services. The company’s cash flow is also declining. Yahoo has reaffirmed to bidders its February projection that adjusted earnings before interest, taxes, depreciation and amortization would be about $750 million this year, down from $952 million in 2015. Initial bids are due at the end of next week, but that deadline might be pushed back. Starboard Value, an activist hedge fund that is seeking to replace Yahoo’s entire board of directors at the next shareholders’ meeting this summer, has repeatedly accused the company of running a halfhearted sales process. That sentiment has been echoed by some potential bidders. For example, Yahoo has told private equity firms and other financial players considering a bid that it considers them to be second-tier bidders, compared with so-called strategic bidders like Verizon and AT&T that would integrate Yahoo into their existing businesses.
- Twitter is basically a cable company now: Twitter is basically becoming a cable company. The social network's paid deal with the NFL to show Thursday night football games gives Twitter exclusive rights to stream the matches over the Internet. What this means for sports fans is access to another channel to watch the most popular professional sport in the country, presumably so long as they're willing to see a slew of promoted tweets on Twitter's website. It's akin to what the television industry has done for decades: Provide live events in hopes of growing an audience while making tons of money in advertising doing it. Twitter isn't about to stop there. It's considering expanding from live sports coverage into political news and other types of video content, the company's chief financial officer, Anthony Noto, told Bloomberg News. If that happens, Twitter will have built a bundle that isn't much different in style from what you get from Comcast, Verizon or many of the heavyweight TV distributors that currently dominate America's entertainment ecosystem. It might be a skinnier one, but it's a bundle nonetheless.
- The surprising thing that got the biggest share of online shopping dollars in 2015: In a new report from the online metrics firm ComScore, researchers aimed to capture the ways our online shopping habits did (and did not) change in 2015, and the results contain some surprises. ComScore analyzed which shopping categories drew the biggest online sales in 2015. Computer hardware — a category that includes personal computers and tablets — has been the leader for at least a decade. But last year, for the first time, spending on apparel and accessories took the e-commerce crown. In three of out of four quarters in 2015, apparel and accessories pulled down the most dollars. For the year, clothing generated $51.5 billion in online sales, slightly edging out $51.1 billion spent on personal computers and tablets. In some ways, this might seem logical: Tablets sales growth has slowed overall as shoppers instead opt for smartphones with bigger screens. But recall, too, that 2015 wasn’t exactly a banner year for the apparel industry: Retailers from Macy’s to Gap reported gloomy sales results as shoppers chose to spend their money on things like travel and dining out. So the fact that online clothing sales surpassed computer hardware sales is likely telling us something bigger about customers’ online shopping patterns. For starters, it probably reflects retailers’ efforts to make it feel less risky to shop for clothes online. In other words, people are getting more used to the idea that if a pair of jeans doesn’t fit them quite as expected, or a sweater is not quite the same color blue it looked to be on a website, it can be returned with little hassle and often at no cost. Apparel also is among the categories that is seeing particular benefit from the explosive growth in shopping on smartphones. Lipsman said that many of the categories that registered particularly strong increases in online spending last year were ones in which the purchases are not “highly considered,” meaning that customers don’t spend much time researching before buying. These purchases are especially conducive to being made on a small screen, and so with the lion’s share of online shopping growth coming from mobile devices, they are getting a particular tailwind from this change in shopping habits.
- Samsung Beats Estimates as Early Debut of S7 Boosts Sales: Samsung Electronics Co. posted a better-than expected first-quarter profit after the early release of Galaxy S7 smartphones gave it a head-start on Apple Inc. and Chinese rivals and helped counter an industry downturn. Operating income rose to 6.6 trillion won ($5.7 billion) in the three months ended March, the world’s largest maker of phones and memory chips said in preliminary results released Thursday. That compares with the 5.53 trillion-won average of analysts’ estimates compiled by Bloomberg.Samsung debuted its high-end smartphones in March, about a month earlier than last year’s, with sales of the S7 line-up estimated to have hit 9 million units during their first month -- triple those of the S6 in the same time-frame. Production of curved displays for its Edge version also went more smoothly this time, avoiding the hiccups that plagued last year’s wraparound-screen line. “The biggest reason for the sharply improved profitability is largely due to much lower marketing spending for the mobile business,” said Yoo Eui Hyung, an analyst at Dongbu Securities Co. in Seoul. “The big disparity between the earlier profit estimates and the latest revisions stems entirely from the mobile business. The faster release surely helped but it’s dubious whether the S7 can continue to surprise the market in the longer run.”
- Daimler confirms HERE in talks with Amazon, Microsoft: Amazon.com and Microsoft are in talks about taking a minority stake in HERE, a digital mapping business controlled by Germany's luxury carmakers to help develop self-driving cars, Daimler said on Wednesday. Germany's luxury carmakers including Daimler's Mercedes, Volkswagen's (VOWG_p.DE) Audi division and BMW bought HERE for 2.5 billion euros ($2.8 billion) from Nokia last year to create an alternative digital mapping business to Google.The consortium needs cloud computing providers to manage the mass of data collected from sensors on board thousands of Mercedes, BMW and Audi cars. The data about traffic and road conditions is then fed into digital maps. "We need a cloud provider to handle the huge amounts of data created by HERE and its users. We haven’t taken any decisions yet," Weber told the Wall Street Journal. Intelligent mapping systems supply information to control self-driving cars, which are equipped with street-scanning sensors to measure traffic and road conditions. This location data can in turn be shared with other map users.
- Yik Yak’s CTO drops out as the hyped anonymous app stagnates: Is Yik Yak a thing anymore? Not so much, according to download stats, traffic charts, surveys and a source that says the college app’s monthly user count has been declining. That source — with intimate knowledge of the company — also tipped me off that Yik Yak‘s original CTOTom Chernetsky has bailed, which the startup now confirms. He’s not the only one who thinks the supposed rocket ship won’t fly as high as some expected when Sequoia led a mammoth $62 million at $400 million valuation in November 2014. Since late last year, Yik Yak’s VP of Product, Director of Engineering, Lead Product Designer and other senior employees have departed. Months after Sequoia pumped a ton of cash into the Atlanta startup, download rates and traffic began to drop, according to App Annie and comScore charts dug up by GigaOm. Things have gotten worse since, as Google Play dropped it from its charts last March, likely due to hate speech in the app. These stats all mesh with what my source says, which is that Yik Yak has had zero significant growth in over a year, and consistently misses its growth targets. They cite 4 million monthly active users as the count in January, noting the number has declined since then, though I can’t confirm that exact number. The problem with anonymous apps is that over time they start to feel exhausting. The crude stories, played-out jokes stolen from Reddit and cringe-worthy bullying wear on people. While they might have a few juicy quips of their own to share, blowing off steam can eventually feel pointless. That’s why my Secret and Yik Yak usage dried up. Yik Yak’s product has continued to plod along, despite some colleges’ attempts to ban the app for facilitating cyberbullying. But nothing has made it feel fresh again.
Amazon is expanding its local services offerings - plumbers, electricians and handymen: Amazon wants to connect users with handymen like plumbers and electricians through the expansion of its Amazon Local Services division in New York, Los Angeles, and Seattle, The Wall Street Journal reports, citing a document viewed as well as person briefed on the plan. Amazon shoppers in those cities will reportedly see installation or handyman offers after purchasing goods like ceiling fans, air conditioners, and the like. The company will offer a money-back guarantee on its services and will do background checks on any service provider that it lists on the site. Every handyman or woman will have to liability insurance.
Amazon is using kiosks on the NY Metro as scan-and-shop physical pop-up stores: Earlier this year, design firm Control Group partnered with New York's Metropolitan Transportation Authority to roll out large digital kiosks underground that display maps of the city's transit systems. Today, Amazon is the first advertiser to use those kiosks as digital pop-up stores to drive sales of holiday gifts. Amazon's promos are running on 100 digital 47-inch screens in 12 major hubs in New York, including Grand Central Station, Union Square and Brooklyn's Barclays Center. Collectively, the kiosks target 1.2 million riders per day. Half of the screens are placed on subway platforms and the other half are near entrances and high-volume areas. Creative content on Amazon's ads differs between the two areas: Ads in the mezzanine area focus on branding while promos near trains drive sales. The digital screens are swipe-able and let consumers browse through a curated list of electronic holiday gifts from brands like Bose, Samsung, Sony and Belkin. Each item can be tapped on for more information, which also pulls in real-time pricing. After finding a product they want, riders can scan a QR code or send a text message or email and receive an Amazon.com link, where they can buy the gift from a smartphone once they're above ground. Amazon's campaign runs through Dec. 23—the last day consumers can buy something online and have it delivered by Christmas.
Production and delivery bottlenecks are crimping Xiaomi's growth - but its India focus has only intensified - will make locally, and launch Redmi Note in offline stores as well: Instead of expanding into 10 new markets this year, Xiaomi will enter just five. That means consumers in Brazil, Russia, Thailand, Mexico and Turkey will have to wait a bit longer. The problem? Production and delivery bottlenecks are slowing the no. 3 smartphone maker's pursuit of Samsung Electronics and Apple. In the past two months, Beijing-based Xiaomi has had to charter special flights four times to make scheduled deliveries into India. While Xiaomi usually relies on commercial cargo flights for deliveries, the company can't always get the space it needs to meet demand, Manu Jain, head of operations in India, told reporters in the New Delhi suburb of Gurgaon yesterday. Hence the charters. The solution for Xiaomi is to produce its smartphones in the countries where it wants to grow. Production in India will likely begin in one to two years, and Brazil may start sooner, he said. While Xiaomi has pushed back the expansion plans for some markets, India will be a "focus" for years to come, said Barra. The company has sold more than half a million of its low-cost phones in the country since expanding there in July. Xiaomi is on track to cross one million smartphone shipments in India this quarter and could break into the nation's top-five smartphone vendor rankings, he said. "Like Chinese consumers, Indian consumers are quickly warming up to bigger screens on their devices," Shah said. "Redmi Note will provide that power boost for Xiaomi to quickly move up the rankings capturing market share away from the incumbents.".
Despite concerns over its content, anonymous messaging app Yik Yak secured $62M in funding led by Sequoia Capital, a Silicon Valley venture capital firm, according to a person close to the deal. Yik Yak differentiates itself by focusing on local communication; users chat anonymously with one another based on their location. And the company says it is highly popular within schools and universities. The app is mostly popular with college students “but has been troublesome for middle and high schools across the country because of bullying,” reports Re/Code. Yik Yak allows anyone within a mile of the person posting the message to read it, which means it works well in school and campus settings, depending on your definition of “working well.” The Wall Street Journal’s Dennis Berman points out that when you log into Yik Yak, these are the “top messages” you see — the ones with the most upvotes by users (using a similar system as Reddit does; being able to vote on posts to get them in front of more eyes.) The messages are pretty gross.
