- After Square and DropBox, possible decline in Snapchat valuation signals trouble for unicorns: The worth of hot technology start-ups seemed for years to go in only one direction: straight up. Now there are signs of growing unease over the dizzying valuations of some of the most richly priced private companies. The latest sign has emerged with one such favorite, Snapchat, being discounted 25 percent by one of its more recent investors, Fidelity, the mutual fund giant. Another start-up, Dropbox, the widely used file storage service, was devalued by the giant asset manager BlackRock this year. The funds’ markdowns may tap the brakes on a fast-growing market. Investors, in the hopes of getting a piece of the next Facebook or Google, have been pouring billions of dollars into young private companies. Yet the public stock market has cooled for new technology companies: witness the current effort by Square, a mobile payments company, to go public at a valuation lower than what its last private investment gave it. The moves by Fidelity and BlackRock reflect how mutual funds can create challenges for technology’s favored start-ups, just as they helped inflate valuations in the first place. Over the last few years, mutual funds fought to buy pieces of appealing venture-backed companies like Snapchat and Dropbox. The idea was that public investors wanted to own these start-ups because their value was growing faster than that of many publicly traded companies. By owning the private shares, the large mutual funds would also get to know the start-ups and be well positioned to buy their shares when they went public. As mutual fund and venture capital investors jockeyed with hedge funds and sovereign wealth funds to invest, their abundant capital pushed prices for private shares into the stratosphere. Snapchat, for example, is valued at more than $16 billion and Dropbox at around $10 billion. The biggest prize of them all, Uber, is now seeking a round of investment that would value the company at $60 billion to $70 billion. Uber’s success with that round would be a further test of investors’ appetite. The competition among investors also helped create a herd of dozens of “unicorns,” a term for private companies valued above $1 billion, coined when such a phenomenon was still considered rare. Yet unlike venture capital firms, mutual funds are legally obligated to value each of their portfolio holdings every day, including hard-to-value assets like shares in private companies, and they must report these values at least every half year. A spokesman for the Investment Company Institute, one of the largest mutual fund associations, said that the process was a “good faith determination” of what an owner could get in a sale of the asset.
- Hands-On With Facebook Notify, A Push Notification News App And Twitter Alternative: Facebook released Notify, an app for reading customizable breaking news, info, and entertainment push notifications right on your lock screen. Notify lets you select from over 70 publishers and customize your alerts to only send you news about specific companies, cities, sports teams, music genres and more. Each is sent as a push notification and shown in the Notify app’s feed for 24 hours, and can be clicked through to read an associated link. Today Notify becomes available on iOS in the US. It doesn’t offer the real-time discussion and independent voices of Twitter, but could provide an alternative for Twitter lurkers who just wanted real-time information and aren’t interested in building another audience to broadcast to. Though Notify won’t feature any ads for now, there are certainly opportunities to offer sponsored suggestions for accounts to follow. As long as Facebook can get enough of its 1.55 billion users on Notify to justify the work publishers are putting in to produce content there, it could create the real-time, urgent, high-signal information channel the News Feed could never be. I spent some time with the Notify team and played with the app myself, and here are my hands-on thoughts. What’s really special about Notify is the granularity of alerts you can get. While general Twitter accounts feature a broad range of content that might not all be interesting to you, Notify lets you subscribe only to the very specific sub-topics that are relevant. Facebook has worked with 70 launch partners to create Notify stations, including The New York Times, CNN, Huffington Post, Vanity Fair, Techmeme, Fox Sports, Epicurious, Comedy Central, Fandango, BandsInTown and The Weather Channel. Many offer both general news stations and ones with options to follow specific sub-topics. Tapping a station lets you preview its content by showing the last 20 notifications it sent. Publishers use a special interface to write notification text, select a link, and then publish or schedule their alerts. There’s also an API for programmatic distribution of weather forecasts, sports scores and other structured data. Working out these partnerships is what led to the leaks about Notify this summer from The Awl and Financial Times.
- Alibaba Sites Sold More Than $14 Billion of Goods in a Single Day: Alibaba’s consumer shopping sites sold more than $14.3 billion of products on its biggest shopping day of the year, called Singles Day, marking around a 57 percent increase over last year’s total. The total for the last 24 hours, to be precise, was $14,341,847,366.00, according to a spokesman. To give you a sense of how big this sale is, the $14.3 billion figure is just 27 percent less than the $19.6 billion worth of goods that eBay sellers sold in July, August and September combined. The number also dwarfs the $2 billion Americans spent on Cyber Monday desktop shopping in 2014.
- Facebook Works With Google To Let Mobile Web Users Get Push Notifications Via Chrome: A big reason developers hate mobile websites is that they lack the push notifications which help re-engage people with native apps. That was a serious problem for Facebook. It sees a ton of users on its m.facebook.com site, especially in the developing world where data budgets are tight, but had trouble pulling them back in. So today Facebook announced that after working with Google on its new mobile web alerts standard, m.facebook.com mobile web users can now opt to receive push notifications via Chrome. Google first announced the development of its third-party push API through Chrome back in April and noted some partners like eBay and Vice News who had committed to implementing the standard. Now Facebook has rolled out the feature, so mobile Chrome users on m.facebook.com will be asked to turn on Chrome pushes. Facebook’s product manager on browser partnerships Jonathan McKay tells me that already, “We’ve seen an increase in visitation from launching push notifications.”
- Indian cab-hailing firm Ola is raising $500 million+, at a valuation that we’ve heard is around the $5 billion mark, with $225 million committed so far. The news comes as the company — which competes in its home market against the likes of Uber and Indian startup Meru — continues to expand into more cities, and more products. Today, Ola launched a new car leasing service for drivers on its network; last week it expanded to shuttle services for commuters. The raise is due to be finalised in the next week or two and announced officially then, sources tell TechCrunch. As it is still in progress, the final amount and final valuation may also change. This funding, a Series F, has been rumored for some time now, with the first reports surfacing just after Ola announced its last raise of $400 million in April of this year. That round, a Series E, valued the company at $2.5 billion.
- Russian Authorities Rule Google Broke Antitrust Regulations: Russian antitrust authorities ruled on Monday that Google broke the country’s competition rules, adding to the regulatory headaches the search giant is facing worldwide. Russian officials said that Google had abused its dominant market position with Android, its mobile operating system, by favoring the company’s own services over those of rivals, including Yandex, a Russian competitor. Earlier this year, Yandex had complained to the country’s competition authority that cellphone manufacturers were not able to include the company’s rival digital offerings in the Android operating system. After the complaint, the regulator began investigating whether Google unfairly bundled its own services, like digital maps, in its Android software. Unlike in other parts of the world, where Google has outmuscled domestic search rivals, Yandex still holds more than a 50 percent market share in Russian online search, according to industry statistics. The company’s share price rose more than 8 percent in early afternoon trading in New York after the regulatory decision was announced. “Russia is the first jurisdiction to have officially recognized these practices as anticompetitive,” Yandex said in a statement, in reference to Google’s favoring of its own services in Android over those of rivals. The company added that it believed the antitrust ruling would “serve to restore competition in the market.” European and other international antitrust watchdogs are taking an increasingly tough line against the company.
- The auto and tech worlds are fighting for the best minds in race for self-driving car: Google had all of Silicon Valley to choose from when deciding on a leader for its ambitious self-driving car division. Instead, the tech behemoth hired an auto-industry lifer: John Krafcik, a former head of Hyundai's American brand who got his start as an engineer working on the Ford Explorer. The announcement on Monday comes just a week after Toyota said it, too, had looked outside its industry for its next big name. Earlier this month, the carmaker said it had tapped the military’s chief robotics engineer, Gill Pratt, to lead a $50 million push into not just driverless cars but artificial intelligence, through investments into tech research labs. The high-profile hires spotlight the growing overlap between the global giants of autos and tech, and analysts say it could point to a growing tension between some of the industries' biggest, wealthiest names. Tech giants increasingly see ways to make money and save lives in the old-fashioned, hyper-profitable business of cars. But traditional automakers, who could lose heavily if self-driving cars go mainstream, aren't hesitating to grab onto some of tech's top minds, either, as a way to adapt in a world beyond cars.
- Twitter, InMobi Embrace New Stripe Mobile E-Commerce Tool: Stripe Inc., the online-payments processor, unveiled a tool to simplify mobile e-commerce for stores and software applications developers. Twitter Inc. said it’s adopting Stripe’s offering, called Relay, to make it easier to buy products from a link in a tweet. InMobi, a mobile-advertising company, and SAP SE’s e-commerce software unit Hybris also said they are integrating their services with the San Francisco-based startup’s product. Payments processing company Stripe Inc launched a new tool on Monday that will connect retailers and brands to sell on platforms like Twitter Inc and tap an increasing number of consumers shopping on mobile apps. Twitter's adoption of Stripe's new product, Relay, is expected to help the microblogging site further dabble in e-commerce and generate revenue through its "buy buttons," which lets shoppers buy a product and enter payment and shipping information without leaving Twitter's platform. Twitter has been struggling to increase its audience and in July said its number of monthly average users grew at its slowest pace since it went public in 2013. Stripe, which makes software that helps businesses accept various types of payments on websites and in apps, counts grocery-delivery startup Instacart, ride-sharing app Lyft and e-commerce platform Shopify among its clients. The payments company's new Relay product functions as a universal sell button for retailers, allowing companies like eyewear brand Warby Parker to list products in a single place and sell them directly on Twitter as well as other e-commerce platforms like ShopStyle.
- Alibaba Falls After Barron's Suggests Drop, Company Rebuts Alibaba shares fell Monday, the first day of trading since a Barron’s magazine article on Saturday suggested the Chinese Internet company may lose another 50 percent of its value. The company, in a statement posted Monday on its website, said the article was inaccurate and misleading. Barron’s based its conclusion that the Chinese company is overvalued, in part, by comparing Alibaba’s share price as a multiple of earnings estimates with EBay. Alibaba said the comparison is unfair because EBay’s online marketplace doesn’t do significant business in China. Alibaba Group Holding Ltd. shares fell Monday, the first day of trading since a Barron’s magazine article on Saturday suggested the Chinese Internet company may lose another 50 percent of its value. The company, in a statement posted Monday on its website, said the article was inaccurate and misleading. Barron’s based its conclusion that the Chinese company is overvalued, in part, by comparing Alibaba’s share price as a multiple of earnings estimates with EBay. Alibaba said the comparison is unfair because EBay’s online marketplace doesn’t do significant business in China.
- Zomato rolls out online ordering of food in updated app, to allow cash-less payments at restaurants: Zomato.com, has entered the online ordering space as a mobile-only offering. Its updated version of mobile app comes integrated with a meal ordering option. The service has gone live with 1,000 restaurants currently and users can look for those outlets offering the option within the ‘Nearby’ tab in the app. It then throws up those names which offer online ordering as a sub-set of the overall list of restaurants in the location. We have not checked the process throughout but it involves a mobile verification while placing the order. The users would have to make cash payments as restaurant delivery boys come with the package. The updated app also shows an option of cashless payments which is not active yet. Zomato spokesperson told Techcircle.in that this option is currently active only in Dubai and will soon be launched in India. This would allow users to pay after a meal at a partner restaurant through the Zomato app, instead of paying cash or using credit/debit cards to settle bills at the restaurants.
- Alibaba Expands Seller App - Wants Merchants to Ditch their PCs: The ecommerce titan has rolled out new tools into its Taobao mobile app (pictured above) that allow the marketplace’s 8.4 million annual active merchants to run their stores solely from their phones. The shift to mobile-only is optional for now, but an Alibaba representative tells Tech in Asia that two million merchants have already opted for the smartphone-only method in the two weeks since the new tools have been available in beta. “The growing adoption of smartphones and mobile shopping in China means that online merchants should shift their focus from PC to mobile,” said Zhang Kuo, director of Alibaba Group’s mobile business division, in a statement. That means an online seller will run their store and add new products to it just from their phone rather than using the desktop browser-based interface. To make that process easier on mobile, merchants can scan a new product’s barcode with their phone to add it to the store’s inventory using the Taobao app. “To complete product dispatch procedures, merchants can simply scan barcodes on shipping bills to enter package tracking numbers, without the need to manually input them,” added a spokesperson. Brand-new Taobao merchants can even start their store from scratch within the Taobao app without the need to fire up a laptop. Across Taobao and sister site Tmall (a marketplace aimed at larger merchants and major brands), Alibaba has 334 million shoppers. Of the total RMB 787 billion (US$126.4 billion) in consumer spending (GMV) on the two estores in Q4 2014, 42 percent of that tally was spent by people shopping on mobile devices.
- Amazon Targets Priceline, Expedia With New Hotel Booking Site: In its push to expand beyond an online store for books and merchandise, Amazon.com Inc. is entering the travel-reservations business. The e-commerce retailer Tuesday introduced Amazon Destinations, which provides maps, lodging deals and information about restaurants at popular weekend getaways near Los Angeles, New York City and Seattle. The new site is a travel-focused expansion of the Seattle-based company’s Amazon Local, which connects Amazon shoppers with deals close to them. The world’s biggest online retailer by revenue will be competing with Priceline Group Inc., Expedia Inc., startup Airbnb Inc. and others for a piece of the online hotel booking market. Tourism in the U.S. is a $960 billion industry, according to researcher IBISWorld.
- Yahoo Q1 Earnings: Revenue $1.23B, +9% Y/Y, Net Income: $21M, down from $312M Y/Y; Shares Fall, Then Rise on Hope of Alibaba Stake Sale: At Yahoo, the turnaround that investors are hoping for remains elusive. The Internet company reported first-quarter financial results that showed strong growth in newer areas like mobile advertising. But costs rose even faster, depressing profits. Yahoo posted net income of $21 million, or 2 cents a share, down sharply from the $312 million, or 29 cents a share, the Internet company reported a year ago. Excluding stock-based compensation and other items, Yahoo made a profit of 15 cents a share, falling short of the 18 cents a share that Wall Street had expected on that basis. Revenue for the first quarter was $1.23 billion, up slightly from the $1.13 billion that the company brought in during the same period last year, as search revenue and even old-fashioned display ads increased. After deducting payments to advertising partners, however, revenue was $1.04 billion, below the $1.07 billion predicted by analysts. Yahoo’s stock initially fell in after-hours trading following the release of its results. But it rose during Yahoo’s conference call with analysts, when Ms. Mayer said that Yahoo had hired advisers to explore how to maximize the value of the company’s 35.5 percent stake in Yahoo Japan, which is worth nearly $9 billion. Since Ms. Mayer joined the company in 2012, Yahoo’s stock has traded more on the value of its investments in Yahoo Japan and Alibaba, a leading Chinese e-commerce company, than on its core business. In January, she announced plans to spin off Yahoo’s 15.4 percent stake in Alibaba. In Yahoo’s operating businesses, Ms. Mayer is trying to refocus the company around mobile apps, native ads, video services and the Tumblr social network, while reducing staffing in the company’s other divisions, like its traditional web offerings. In the first quarter, Yahoo cut net employment by 1,100 jobs, Ms. Mayer said on the call. Since her arrival, she has reduced the number of full-time employees by 2,800 jobs, or 20 percent. Last week, Ms. Mayer renewed the company’s partnership with Microsoft on search results and advertising, which accounted for 35 percent of Yahoo’s revenue last year. Under that deal, the two companies will continue to work together for five more years, with Yahoo now getting the ability to serve up its own search results and ads for up to 49 percent of queries.
- Shyp, an On-Demand Mailing Service, Raises $50 Million: Shyp, a company that lets customers summon workers to quickly pick up, pack and ship parcels, said on Tuesday that it has raised $50 million in venture capital, the largest funding round in the start-up’s history. The new round values Shyp at just above $250 million, according to two people with knowledge of the financial terms, who requested anonymity because the deal talks were private. A Shyp spokesman declined to comment on the company’s valuation. The funding is another significant bet on the future of on-demand start-ups by Kleiner Perkins Caufield & Byers, the storied venture capital firm that led Shyp’s new financing round and that recently won a case against a former partner who alleged gender bias at the firm. With the round, which also includes participation by previous investors Homebrew and SherpaVentures, John Doerr, a Kleiner executive, will join the board of directors at Shyp. Kleiner has also put money in to other on-demand companies like Uber and DoorDash. Uber, the on-demand ride-hailing service, has also dabbled in the business of moving goods from one place to another, signaling its ambitions to become a way to transport anything and everything to different places around the world. Shyp, on the other hand, piggybacks on existing transportation networks like UPS, FedEx and the United States Postal Service. Instead of doing all of the shipping itself, Shyp hires contract workers to pick up items from customers, and pack and ship them, eliminating the hassle of standing in line at the post office or finding the proper packaging supplies to send the items. “We asked ourselves, what is the ideal way to ship something?” said Kevin Gibbon, chief executive of Shyp. “Can we scale this business to happen in multiple cities? Can we improve operations and logistics to make it cheaper and faster?” Mr. Gibbon said his service was complementary to the shipping networks already in place, as Shyp’s local logistics networks gather many packages together to hand them off to the actual companies doing the transportation, a task that he said would cost companies like DHL and FedEx much more in time, labor and resources to offer. Shyp makes a $5 service fee on each package it delivers. Shyp also announced it is opening up a pilot version of its service in Los Angeles; it currently operates in San Francisco, New York City and Miami.
- "Notifications Are The Next Platform" TC Columnist Opines Push Notifications Replacing Search as Primary Engagement Point: Search (largely Google) has long been the access and discovery point for web services. This model was pull-driven (i.e. we proactively find information on websites as we need), and worked pretty well as large category killers (Facebook, Amazon) owned the lion’s share of traffic (and revenue). Google was happily profitable owning the distribution channel. The mobile world started out as a pull-driven model — discovery and access was/is largely driven by a combination of the app store and the “grid of apps.” This model, however, is starting to break, as some significant trends are driving it to failure. Primary among these is the volume of information that’s now available and regularly accessed; we have hundreds of apps on our phone (though we only actively engage with a handful), and without any real category killers, consumers are swapping new apps in and out at a regular pace. Most importantly, our engagement is now defined by push-driven notifications rather than the traditional pull-driven experience. We’re “hunting and pecking” through our app grid a lot less; the apps that notify us (without over-notifying to the point of uninstall) are rewarded with our engagement (and our dollars). Based on this data, our fundamental belief is that notifications represent the future access and discovery point for mobile services — that notifications will be the starting point (or “front door”) for all of the interactions on your phone. Snowball data shows that over 60 percent of notifications are social messages (almost 40 per day). Will Facebook Messenger subsume the notification panel? Our data shows some interesting trends. As noted above, 60 percent of all notifications are social messages. However, our data also shows that users on average interact with 5.5 messaging apps weekly (does not count email)*. Though users regularly use over 5 social messaging apps, Facebook + WhatsApp represents an astounding 79 percent of all messaging by volume. This is incredibly high. Notifications represent the future app interface, and Facebook is making a bold play to own them. Whatever party is successful will have to be thoughtful about social messages, as they represent the bulk of notifications by volume. What we’re seeing today is the first step toward monetization of the OS and the emergence of a new important distribution channel, and apps and platforms would be wise to think critically about it.
