Big Changes at Google: Major Restructuring and a New Holding Company Named 'Alphabet'; Shares Rise 6%: Google is listening to Wall Street, while also trying to keep its innovation going. The Silicon Valley behemoth is reorganizing under a new name — Alphabet — and separating its moneymaking businesses from the moonshot ones. Under the new structure, Mr. Page is to run Alphabet along with Sergey Brin, who co-founded the web search business with him in 1998. Alphabet would be the parent entity, housing several companies, with the biggest among them Google. In addition, the portfolio would include Nest, the smart thermostat maker, and Calico, a company focused on longevity, among other things. Sundar Pichai, who had been senior vice president in charge of products, will be chief executive of Google, which will encompass Internet such products as search, maps, YouTube and applications like Gmail. Mr. Pichai will add YouTube to his list of products. The YouTube chief executive, Susan Wojcicki, will now report to him, whereas she previously reported to Mr. Page. In addition, Mr. Pichai will oversee the business operations for Google. Google’s current business chief, Omid Kordestani, will end that role and become an adviser to Alphabet and Google. Ruth Porat, chief financial officer of Google, will remain in that position and will also be chief financial officer for Alphabet. Other entities under Alphabet will include Google Fiber, a provider of ultrafast Internet service. There will also be two financial businesses, Google Ventures, the venture capital arm, and Capital, which does private-equity-like deals. Google X, which includes projects like self-driving cars, a drone delivery service and an attempt to make Internet-connected balloons, will be managed separately and run by Mr. Brin.A holding company structure also gives Mr. Page and Mr. Brin, who became multibillionaires when Google went public in 2004, room to make big new bets to add to Alphabet’s portfolio — without annoying Wall Street. Over the last few years, investors have expressed concern that Google has become distracted from its core web search, instead pursuing projects fancied by its founders, like self-driving cars or a pill to detect cancer. The holding-company structure is set to provide more financial transparency. Starting in the fourth quarter of this year, Alphabet will break out financial results for Google Inc., as well as for the overall company. While investors will not be able to see individual results for other companies, the system will make it easier to get a sense of how Google’s core business is doing.
After Surprise drop in Exports, China Unexpectedly Weakens Yuan Reference Rate by Record 1.9% Amid Slowdown: China weakened the yuan’s daily reference rate by a record 1.9 percent, allowing depreciation to combat a slump in exports. The currency dropped an unprecedented 1.2 percent to 6.2848 per dollar as of 9:43 a.m. in Shanghai, and slid a similar amount in Hong Kong’s offshore trading. The onshore spot rate was 0.9 percent weaker than the reference rate of 6.2298, within the 2 percent limit allowed by the People’s Bank of China. Monday’s reference rate increase was a one-time adjustment, the PBOC said in a statement, adding that it will strengthen the market’s role in the fixing and promote the convergence of the onshore and offshore rates. It said also that it will keep the yuan stable at a reasonable level. The yuan’s effective exchange rate is stronger than that of other currencies, which is a deviation from market expectations, the central bank said. The comments come after the PBOC said earlier Tuesday that a strong yuan puts pressure on exports. China’s overseas shipments fell 8.3 percent from a year earlier in dollar terms in July, well below the estimate for a 1.5 percent decline in a Bloomberg survey.
Facebook Launches Autofill Forms, Improved Customer Service and Enhanced Video Analytics: Autofill Forms: Overview: Facebook’s latest ads automatically populate contact information that people have previously given Facebook, like email addresses, phone numbers, address, company name, job title, etc. Details: Facebook has dubbed its new ad type as “lead ads” and hopes that their existence will make the mobile signup process easier. Lead ads take the friction out of the clunky experience associated with responding to mobile ads and filling out forms. Instead of leaving one app to start a form in another app and then entering all the information again from scratch, lead ads allow users to stay within their news feed. Retailer Opportunities: Removing clicks and manual data entry can greatly boost conversion rates for those brands advertising on Facebook. What You Should Know: Lead ads aren’t currently available to everyone. Facebook is testing them with a small group of businesses around the world to gain feedback before rolling them out to the wider public. Improved Customer Service. Overview: Facebook’s latest step toward enhancing customer service for pages is “saved replies” — a feature allowing page admins to write, save and reuse canned messages when they receive an inquiry via Facebook Messenger. Details: When responding to a message, saved replies appear in a list to the left. Simply click on your desired response from the list and it will automatically display in the message body and auto-populate with personalization features, such as the respondent’s name, admin’s name and company website. Retailer Opportunities: Customer service via social media is increasingly becoming more common. Why would consumers want to spend an extended amount of time waiting on the phone when they can quickly shoot the brand a message? This new feature will save businesses time when handling incoming customer service inquiries. Enhanced Video Analytics. Overview: Video metrics have been added to page insights. Details: On the new dedicated video tab, page admins can track total views, 30-second views, top videos and metrics for videos shared by other pages. In addition to customizing the date ranges, you can slice the data into various segments, such as organic versus paid, auto-played versus click-to-play and unique versus repeat.
Xiaomi Plans to Have India Smartphone Lineup Produced Locally (By FoxConn): Foxconn has begun assembling Xiaomi’s first made-in-India smartphone from a new plant in the country’s south, helping the Chinese company shorten delivery times and prop up margins. Xiaomi, the world’s fourth-largest phone vendor, will source “100 percent” of Redmi 2 Prime devices sold in India from Foxconn’s new factory in Sri City, Hugo Barra, vice president of global operations, said by phone on Sunday. The Redmi 2 Prime went on sale online Monday, at $110 for a 2GB model. “We are starting small; but our eventual aim is to make most of our devices if not all of our devices that are sold in India, manufacture them here,” said Manu Jain, Xiaomi’s India head. “The entire ecosystem needs to exist before we start manufacturing the phone from scratch. This will probably take some time,” he said. Foxconn had begun production of smartphones at the Sri City factory, a person familiar with the matter said in July. The Taiwanese company, a contract manufacturer for the world’s largest electronics brands including Apple Inc., is looking to expand in the South Asian country amid Prime Minister Narendra Modi’s Make in India campaign aimed at creating jobs and accelerating economic growth. Assembling locally will help Xiaomi shore up margins and take advantage of tax breaks in its largest market outside of China. As low-end smartphone sales slow in its home country, Xiaomi is depending on other emerging markets for growth.
Alibaba to invest $4.6 billion in China electronics retailer Suning; JD.com falls 6% on news: JD.com, a Chinese online retailer, sank to a four-month low after Alibaba Group Holding Ltd.’s purchase of a stake in the country’s biggest electronics chain threatened to increase competition. The American depositary receipts plunged 6.3 percent to $30.06 in New York on Monday. Trading volume of 21.2 million ADRs was more than double the daily average of the past three months. JD.com, which gets more than half of its revenue from electronics and appliances, declined as most stocks on the Bloomberg China-U.S. Equity Index rose. JD.com slid after Alibaba, China’s biggest online retailer, said it will spend $4.6 billion to become Suning Commerce Group Ltd.’s second-largest shareholder with about a 20 percent stake. The ADRs extended their drop to 21 percent from this year’s high in June as concern mounted that stiffer competition will further slow sales growth in an industry already beset by the country’s slowest economic expansion in 25 years.
Twitter Shares Climb 8% on NFL Deal, Executive Stock Purchases: Twitter’s stock rose 8.2 percent on Monday after it unveiled a content deal with the National Football League and executives said they’re buying shares in the company. On Friday, the stock had closed at its lowest level since its November 2013 initial public offering, a slump that began in July when Jack Dorsey, co-founder and interim chief executive officer, warned that it will take a while before Twitter is able to reverse a slowdown in user growth. Today, Dorsey promoted his purchase of about $875,000 in shares with a tweet saying, “Investing in @twitter’s future.” Chief Financial Officer Anthony Noto and board member Peter Fenton also bought Twitter shares last week, according to regulatory filings. It’s not the first time Twitter’s executives have coordinated their actions when confidence was low. Before reporting disappointing first-quarter sales, Twitter’s insiders halted all their sales for a few weeks.
Rackspace Pops 5% After Reporting Lackluster Q2 Results Buttressed By The Promise Of Share Buybacks: Following the bell today, Rackspace reported its second-quarter financial performance. The company mostly missed street expectations, with lower-than-expected revenue, and earnings-per-share that just met expectations. Shares in the hosting company are up just under 6 percent in after-hours trading. Rackspace reported profit of $0.20 per share on revenue of $489 million in the three-month period. Investors had expected the company to report a $0.20 per-share profit on revenue of $490.54 million. The company grew its revenue 11 percent compared to the year-ago quarter; the company was quick to note that using a constant-currency basis for measurement, it grew 13.7 percent. If Rackspace missed on its top-line projections, and barely met its profit requirements as set by the street, why are its shares up? Because the firm is signalling a stock repurchase, of $500M in the next 6-9 months; Rackspace intends to borrow money to buy its own shares to reward shareholders with presents it can only slightly afford.
Taiwan's Foxconn plans $5 billion investment over five years in Indian facility: Taiwan's Foxconn, the world's largest contract electronics manufacturer and a key supplier to Apple, on Saturday signed a pact with India's Maharashtra state to invest $5 billion over five years on a new electronics manufacturing facility. The announcement was made by Foxconn founder Terry Gou and Maharashtra Chief Minister Devendra Fadnavis after the signing of an accord in the state capital Mumbai. The Foxconn announcement will bolster Indian Prime Minister Narendra Modi's "Make in India" campaign, which aims to turn Asia's third-largest economy into a manufacturing powerhouse. Gou said Foxconn, the trade name for Hon Hai Precision Industry Co Ltd which also counts Blackberry, Xiaomi and Amazon as clients, was looking for local partners for the facility in the western Indian state. He declined to say if the Taiwan-based company would make mobile phones at the facility. On Tuesday, Gou said in New Delhi that he was looking at setting up manufacturing units in various Indian states and possible partnerships in the world's fastest growing smartphone market. He had said in May that Foxconn was aiming to develop 10-12 facilities in India, including factories and data centers, by 2020.
Insight: Tesla burns cash, loses more than $4,000 on every car sold: The Silicon Valley automaker is losing more than $4,000 on every Model S electric sedan it sells, using its reckoning of operating losses, and it burned $359 million in cash last quarter in a bull market for luxury vehicles. The company on Wednesday cut its production targets for this year and next. Chief Executive Elon Musk said he's considering options to raise more capital, and didn't rule out selling more stock. Musk has taken investors on a thrill ride since taking Tesla public in 2010. Now he's given himself a deadline, promising that by the first quarter of 2016 Tesla will be making enough money to fund a jump from making one expensive, low volume car to mass producing multiple models, and expanding a venture to manufacture electric power storage systems. Tesla's shares fell almost 9 percent on Thursday and slipped another 2 percent on Friday as investors and analysts weighed the risks of Musk's ambitious plans for expanding Tesla's auto and energy storage businesses. Tesla had just $1.15 billion on hand as of June 30, down from $2.67 billion a year earlier. Barclays analyst Brian Johnson disagreed with the company's estimates, and said he expects Tesla's capital spending will go up in 2016 and 2017 as the company ramps up its battery factory and Model 3 development. "Their small scale means the cash generation is not as great as they might have hoped for," he said. Musk said this week Tesla expects to have $1 billion in cash over the next year, and told analysts "there may be some value" in raising capital "as a risk reduction measure." Tesla's stock is still about 70 percent higher than it was two years ago, and 8 percent ahead of its level on Jan 1. With a market capitalization of $31 billion, Tesla is worth more than Fiat Chrysler Automobiles NV, the much larger maker of Ram pickups and Jeep Grand Cherokees. "A capital raise, given the way they're burning cash today, given the fact that they have future investment needs, seems very likely at some point," said UBS Securities analyst Colin Langan, who has a sell rating on the stock.
China's JD.com quarterly revenue tops estimates, third-quarter growth seen slowing: JD.com Inc, China's second-largest e-commerce site by sales, reported a 61 percent year-on-year rise in quarterly revenue, topping expectations, powered by a jump in the number of shoppers and goods bought on its platform. But the company's growth rate is expected to slow in the third quarter. JD.com said it sees third-quarter revenue of between 43.2 and 44.7 billion yuan, which would be up 49 to 54 percent from the previous year. JD.com, a distant rival to Alibaba, is investing heavily in its offline operations to complement its internet platform, taking activities like warehousing and deliveries into its own hands. This business model, similar in style to Amazon.com's, takes its toll and the company made a net loss of 510.4 million yuan, shrinking only slightly from the previous year's 583 million despite the leap in revenue. The catalyst for that jump was the 118 million annual active customer accounts on JD.com in the 12 months ended June 30, up 72 percent from the same period a year earlier. Those customers drove an 82 percent jump in the total value of products sold on the company's platforms in the quarter, to a total of 114.5 billion yuan. Shares in JD.com have risen 41.79 percent since the beginning of the year.
Raising Money Is Like Buying Dinner, Spending Money Is Like Getting Fat: How A Big Round Can Hurt Your Startup: When you’re a struggling team eating away at your meager savings and trying to get your startup profitable, venture capital funding seems like the holy grail. Raising money from investors gives you the resources to grow your team, buys you time to do things properly and gives you no small amount of credibility in the eyes of other entrepreneurs, prospective hires and even some clients — not to mention mom and dad thinking you’re now successful. While all of this is true, there’s a pervasive belief in the industry that entrepreneurs should aim to raise as much money as possible, as often as possible. It might be true in some circumstances, but here are three reasons why raising as much money as possible is often not in the best interest of the entrepreneur or the company. Raising Money Is Like Buying Dinner, Spending Money Is Like Getting Fat, and Raising Big Rounds Is Like Stunt Driving. In the end, it’s most important as an entrepreneur that you focus on the right decisions for your company. Don’t raise funds to get a big splash in the tech press. Don’t push for the biggest valuation to please preferred stockholders. And don’t optimize for the fanciest publications or the most street cred. All of those things are fleeting sugar highs of entrepreneurship. Plan for the long-term success of your company by knowing how much you actually need and stopping once you hit that number.
HTC Trading Near Cash Leaves a Smartphone Brand - Once the leader in the US - With No Value: A 56 percent plunge in HTC’s stock this year has brought its market value near to cash on hand. That means investors are effectively saying th smartphone maker’s brand, factories and buildings are almost worthless. At NT$52.2 billion ($1.6 billion), HTC’s market price is barely above the NT$47.2 billion cash it had at the end of June. A further 9.5 percent drop in its stock from the NT$63 close on Friday would bring the two figures into alignment, signaling investors put no value on the rest of the company. HTC’s fall from a market capitalization of more than NT$900 billion in 2011 charts the perils of a product and marketing strategy that’s failed in the face of stiffer competition from Samsung Electronics and Huawei Technologies. Once the best-selling brand in the U.S., the failure of its One, Butterfly and Desire smartphones to drive sales has pushed HTC outside a global top-10 now dominated by Chinese brands. Its forecast for third-quarter sales of as much as 48 percent below analyst estimates follows a 35 percent cut to projected revenue in the preceding period and indicates that the Taoyuan, Taiwan-based company has little chance of regaining market share in the short-term. “HTC’s cash is the only asset of value to shareholders,” said Calvin Huang, who has a NT$46.50 price target on the stock at Sinopac Financial Holdings Co. in Taipei. “Most of the other assets shouldn’t be considered in their valuation because there’s more write-offs to come and the brand has no value.”
As private and public multiples diverge sharply, some investors bet on public companies : Airbnb’s valuation has ballooned over the last few years as large financial firms like Fidelity Investments and T. Rowe Price have rushed to invest in the start-up. But a small San Francisco-based hedge fund called Pier 88 Investment Partners has decided that the fervor for Airbnb shares creates a different kind of opportunity. While other investors paid dearly to buy a piece of Airbnb — the start-up’s latest funding round valued it at $24 billion — Pier 88 did not invest directly in the privately held online home-rental company. Instead, Pier 88 put money into HomeAway, a publicly traded Internet company that competes with Airbnb, but has a market capitalization of just $2.95 billion. Frank Timons and LeAnne Schweitzer, the co-founders of Pier 88, believe there is money to be made on this big gap between public and private company valuations. In their view, the public companies are such relative bargains that they will make great acquisitions for purchasers that want to better compete with upstarts like Airbnb. Then, when those publicly traded companies are snapped up — often for a premium of more than 50 percent — Pier 88 can profit from the bet. Some elite start-ups are now vastly more expensive than their publicly traded cousins. Apart from Airbnb being pegged at eight times the value of HomeAway, the ride-hailing start-up Uber was recently valued at around $51 billion, compared with $7.3 billion for the rental-car company Hertz. The storage start-up Dropbox has a valuation of around $10 billion, while its publicly traded rival Box has a $1.9 billion market capitalization. It’s not perfectly accurate to directly compare market capitalization and private company valuations, since private companies keep their true financial pictures hidden. Still, “the easy private financing environment has created an interesting trade opportunity,” said Kenneth J. Heinz, the president of Hedge Fund Research, which tracks hedge funds and their performance. “With such a disparity between public and private multiples, it’s a reasonable fundamental approach to believe that in this environment, the public company valuation will come up or the company will be acquired.”
InMobi ties up with Amazon and Paytm for India launch of discovery-led mobile commerce platform: SoftBank-backed mobile ad technology company InMobi Pte Ltd has joined hands with Amazon India, mobile wallet Paytm and others for the India launch of Miip, its new platform for discovery-led mobile commerce. Miip, which has an animated green monkey as mascot, engages users by suggesting products to buy across apps. It was launched in the US three weeks ago. InMobi, which competes with Facebook and Google for a pie of burgeoning mobile advertising market, will launch Miip in China on August 18. Naveen Tewari, founder and CEO of InMobi said Miip will aid “serendipitous discovery” of products across thousands of mobile apps. “Today merchants have tough time getting users to discover and explore their products. Miip will create personalised shopping experiences to enable discovery of products from more merchants,” he said. The company has forged a partnership with Amazon.in to initiate a pilot on the Miip platform. Kishore Thotta, head of digital marketing, Amazon India said platforms such as InMobi’s Miip will facilitate cross-app shopping experiences. Miip will facilitate seamless payment and checkouts within the discovery sessions through the “Buy with Paytm” button. Miip will soon be launched in beta version with several partners across e-commerce and app developers such as Magzter, Moneyview, Nestaway, Shopclues, Swiggy, Urban Ladder, Vozpop, Wooplr and Zimmber.
Practo raises $90M from China’s Tencent, Sofina, Google Capital, Yuri Milner, others: Practo, a web-based clinic management software developer and medicare listings provider, has raised $90 million in Series C funding led by Chinese media and technology conglomerate Tencent Holdings. Marquee institutional investors such as Sofina, Sequoia India, Google Capital, Altimeter Capital, Matrix Partners, Sequoia Capital Global Equities and Russian investor Yuri Milner also put money in this round, as per a press statement. Practo will use the money to expand product lines, acquire more startups and enhance headcount. “We are hard at work building a single health app that helps people live healthier by making better healthcare decisions for themselves and their loved ones. We are excited to partner with some of the best investors on the planet. Our global partners will give us the edge to continue building global healthcare products that our users love,” said Shashank ND, founder and CEO of Practo. A few months ago, Practo had raised $30 million in Series B round from Sequoia India and Matrix Partners. Three years ago, it had raised $4.6 million from Sequoia Capital in Series A funding. Recently, Practo acquired product outsourcing firm Genii Technologies Pvt Ltd for its capabilities in building bespoke e-commerce portals and Software-as-a-Service (SaaS) platforms. Practo offers services like helping patients find relevant doctors online, compare them and schedule appointments. It also sells PractoRay under a SaaS model for primary clinics, which enables doctors to schedule and manage patient records. Practo already lists over 8,000 hospitals on its platform and will expand this to over 20,000 by end of this year. Recently, it launched a new feature that allows users to find diagnostic labs in their vicinity. It competes with the likes of Lybrate, HelpingDoc, Praxify and AllizHealth.
Tesla Plunges 9% as Musk Grapples With SUV’s Second-Row Seats: Elon Musk can’t make an SUV without seats. Tesla’s chief executive officer dialed back his forecast for 2015 vehicle deliveries, saying that getting the new sport utility vehicle’s middle-row seats just right is proving thornier than expected. The added threat of not having enough of other interior parts puts the original sales plan at risk, he said. “Our biggest challenges are with the second-row seat,” Musk said Wednesday during a conference call with analysts. “It’s an amazing seat, a sculptural work of art, but a very tricky thing to get right.” He added that some interior trim components could become roadblocks, but the so-called falcon-wing doors weren’t going to be a problem. Assembly snags on the Model X, Tesla Motors Inc.’s first SUV, could also slow output of the Model S sedan, Musk said. So now the company may deliver 50,000 to 55,000 autos in 2015, down from an initial target of 55,000. Tesla shares fell 8.9 percent to $246.13 at the close Thursday after plunging as much as 13 percent for the biggest intraday decline in 21 months. While lowering the bar for this year and next, Musk said he remains “confident” that Tesla will produce about half a million cars in 2020. He’s said that’s when investors should be able to expect the company to become profitable. Musk pointed out Tesla made 600 cars annually five years ago. “Now we can produce 600 cars in three days,” he said. As production of the SUV increases, the company will become free cash-flow positive, probably near the end of this year and “certainly” for the first quarter of 2016, Chief Financial Officer Deepak Ahuja said. Tesla has drawn down $50 million of a $750 million credit line, and left open the possibility of going to Wall Street for additional money.
Apple Music attracts more than 11 million trial members: Apple said on Thursday its new music streaming service has attracted more than 11 million members during its free trial period, a response that music industry experts called respectable but not overwhelming. Apple Music rolled out with a three-month free trial period on June 30. Nearly 2 million people opted for the free trial family plan, which will cost $14.99 a month for up to six family members, the company said. The service costs $9.99 a month for individuals. Apple’s iTunes Store helped revitalize the music industry a decade ago, but digital downloads have slumped in recent years amid a shift toward streaming. Unlike popular streaming services from rivals such as Spotify, Apple’s offering does not include a free on-demand tier, a decision praised by some in the music industry. Apple shares were down 4 cents at $114.84 in early afternoon. Based on typical conversion rates in the industry, it would be impressive if Apple convinced 20 percent of the trial members to become paying subscribers after the free trial ends, he added. Spotify has more than 20 million paid subscribers worldwide, the company has told Reuters.
HTC Plummets to Decade Low on Loss Forecast Five Times Estimates: HTC Corp. plunged by the daily limit after its forecast for a quarterly loss five times greater than estimates spurred analysts to slash their valuations of the stock. Shares dropped 10 percent to NT$63 in Taipei on Friday, heading for their lowest price in more than a decade. The smartphone maker’s third-quarter loss will be NT$5.51 to NT$5.85 per share, compared with expectations for a loss of NT$1.17 per share. Its sales forecast given Thursday is as much as 48 percent below estimates. HTC plans to cut staff, reduce spending and slim down its product catalog as cheaper phones from Huawei Technologies Co. and competition from Samsung Electronics Co. further erode its market share. Founder, Chairwoman and Chief Executive Officer Cher Wang has stated she won’t consider mergers, even as the company fell off the global list of top 10 phonemakers. Sales this quarter will be NT$19 billion ($600 million) to NT$22 billion, the company said, compared with estimates for NT$36.8 billion. Revenue at the bottom end of that range would be the lowest in a decade when figures were reported at the parent level. HTC will change its product strategy to produce fewer models over longer time intervals while focusing on a greater share of industry profits instead of shipments, Chief Financial Officer Chang Chialin said Thursday. Cost reductions will start this quarter, with the result of those cuts being shown in the first quarter, he said.
Nvidia's gaming, auto chips drive surprise rise in revenue; Shares rise 10%: Nvidia reported a surprise rise in second-quarter revenue and gave a better-than-expected revenue forecast for the current quarter, helped by strong demand for its graphic chips used in gaming and cars. The company's shares rose nearly 10 percent in extended trading on Thursday. Nvidia's revenue increased 4.5 percent in the quarter ended July 26 to $1.15 billion , while analysts on average were expecting revenue to decrease about 8 percent. Nvidia gets a majority of its revenue from its graphic chips made for personal computers, and there were fears that the fall in PC sales would hurt Nvidia just like it has Intel and Advanced Micro Devices. But, Nvidia said gaming revenue rose 59 percent, helped by strong sales of its popular GeForce series of gaming chips. Nvidia has also been increasing its focus on making chips that allows people to play graphics-heavy games over the internet and chips used in a car's dashboard display and in self-driving cars. Automotive revenue rose 76 percent in the quarter and accounted for only 6.2 percent of total revenue. The company said 8 million cars on the road were using its chips and that it was working with more than 50 companies for its DRIVE chip for self-driving cars. However, revenue in Nvidia's enterprise business fell 14 percent. The business, which makes chips used for software such as AutoCAD, accounted for 16.2 percent of total revenue.
Facebook launches feature to allow businesses to privately message users: Facebook rolled out features Wednesday that enable businesses to privately communicate with customers through messages as part of the social networking company's push to make its Messenger app a stand-alone platform. Businesses can now include a "send message" button in ads that appear in Newsfeed that allow Facebook users to click a button and send messages, which are private. If users post a comment on a business' Facebook page, then the business can privately message that person The features are part of Facebook's efforts to convince more small and medium-sized businesses - especially those in emerging markets, such as India, Brazil and Indonesia - to advertise on its platform. By giving them direct access to customers, the world's largest social network hopes to show that advertising on Facebook directly leads to increased sales. To encourage quick responses, Facebook will award "very responsive to messages" badges on business pages that respond to 90 percent of messages and respond on average within five minutes. People will, however, still be able to block private messages from businesses. The features will be especially valuable in southeast Asia, Facebook wrote in a blog post. About twice as many Thai and Singaporean users use Facebook messages to communicate with businesses each month and most Southeast Asia users follow some company pages.
Twitter Will Offer ‘Buy’ Buttons to as Many as 100,000 Merchants With New Shopify Deal: The social network is in the process of integrating with Shopify and other e-commerce software companies to offer its Buy buttons to a much wider range of businesses, big and small, according to multiple sources. Shopify alone has somewhere around 100,000 merchants in the U.S. that use its software to run their online shops. With a Twitter deal, those businesses would be able to sell their wares within tweets using Shopify’s software. Twitter, Facebook and Pinterest have all been adding Buy buttons to their platforms over the last year, as they try to build new revenue streams from their giant audiences and take advantage of people’s interest in buying items through their platforms. But since those three giants don’t — or can’t — integrate directly with every business that wants to sell goods on their platforms, they are turning to companies like Shopify to help. Pinterest is working with Shopify as well as Demandware, which runs online shops for some bigger brands and retailers like Michael’s and Cole Haan. Facebook, too, is working exclusively with Shopify merchants in the beta tests for its own Buy button. When Twitter’s Buy button initiative first launched last year, the company was working with smaller e-commerce software providers like Fancy and Gumroad. So a deal with Shopify at this point has essentially become table stakes for these platforms. But it certainly does not guarantee success. It’s not proven that people want to shop on these social platforms, nor that all these merchants want to sell on social media platforms. And small merchants without strong followings on these networks may have to turn to advertisements to promote their products more broadly.
GoDaddy forecasts current-quarter revenue below estimates: Web-hosting company GoDaddy Inc forecast current-quarter revenue below Wall Street estimates after a comfortable beat, sending its shares down 5 percent in after-market trading. GoDaddy on Wednesday forecast revenue in the range of $405 million-$410 million for the third quarter ending September 30. The company, which manages about 60 million Internet domains, or about a fifth of the world's total, has been investing heavily to expand into new markets. GoDaddy's revenue rose 16.5 percent to $394.5 million, beating the average analyst estimate of $392.9 million. Total costs and operating expenses rose 20 percent to $428.1 million. General and administrative expenses included about $30 million in IPO-related costs, Wagner said. GoDaddy had a blockbuster debut on April 1, with investors snapping up its shares betting that the company can grow further by providing tools to small businesses. The net loss attributable to the company narrowed to $29.8 million from $37.6 million. GoDaddy's shares closed at $29.47 on the New York Stock Exchange on Wednesday. The shares had risen about 47 percent since the market debut.
Tesla Falls on Sales Target Cut to as Few as 50,000 Vehicles: Tesla Motors fell in extended trading after the electric-car maker backed off its full-year vehicle sales forecast. Tesla said it now aims to deliver 50,000 to 55,000 vehicles this year, compared with a previous target of 55,000. The company sees third-quarter production and deliveries of just more than 12,000 vehicles including just a few Model X sport utility vehicles. Reaching the initial target may be a stretch because some interior suppliers might not be able to increase the flow of high-quality parts fast enough to meet the Model X production plan, Chief Executive Officer Elon Musk said on a conference call with analysts. Because the SUV and the existing Model S share the same assembly line, a shortfall by one Model X supplier could slow output of both vehicles. Tesla stock fell 5.8 percent after tumbling as much as 9.3 percent following regular trading. Tesla had gained 21 percent this year through Wednesday’s close, outpacing the 2.4 percent increase by the Russell 1000 Index. Some analysts had been skeptical about Tesla’s plans to increase deliveries by 74 percent this year, especially with so much of the increase coming late in the year.
Fitbit Declines on Margin Concerns in First Post-IPO Report: Fitbit shares dropped as much as 16 percent in late trading after the company, which makes wearable fitness trackers, posted narrower margins in its first earnings report following an initial public offering. Second-quarter gross margin, a measure of profitability, narrowed to 47 percent in the second quarter from 51 percent a year earlier. Revenue more than tripled to $400.4 million, and profit before certain items was 21 cents a share, San Francisco-based Fitbit said Wednesday in a statement. The company, which dominates the market for fitness bands that monitor health data such as activity and sleep patterns, said it sold 4.5 million devices in the quarter. Costs to boost manufacturing capacity as well as slimmer profits on fast-selling newer products led to the gross margin decline, said Dougherty analyst Charles Anderson. Fitbit shares slipped as low as $43.25 following the report, after initially jumping as high as $56.48. They rose 3.9 percent to $51.64 at the close in New York. The company went public on June 17 at $20 a share. “This is a stock that had reached nosebleed levels,” he said. “But it’s hard to argue with a company that’s growing 250 percent.”
Apple Denies Planning to Sell Mobile Services Directly to Consumers: Apple, the world’s most profitable mobile phone maker, has denied a report that it is working on a plan to market communications services directly to consumers that would bypass telecom operators on which it now relies. Business Insider on Monday reported that the iPhone maker was testing a so-called mobile virtual network operator (MVNO) service in the United States, which would involve it renting capacity from one or more network operators to sign up its own customers. The mobile phone maker is also in talks with European operators about such an arrangement, the website reported. “We have not discussed nor do we have any plans to launch an MVNO,” said an Apple spokeswoman in a statement on Tuesday.
Facebook Mobile App Advertisers Won't Lose Their Device-Level Data After All As Social giant switches gears: Facebook said three months ago it planned to take away mobile app-install advertisers' ability to collect device-level data. But money talks, and ad-buying marketers evidently protested enough for the social media giant to reverse course. The Menlo Park, California-based company said in an email statement: "We advise our advertisers to apply people-based measurement solutions so they can determine when they're reaching multiple people, not just multiple devices. While we believe device-level reporting is not the most accurate way to properly determine advertising effectiveness, we want to provide advertisers with the choice to measure ads based on what is important to them. In order to provide that choice, we will continue giving advertisers the option to receive device-level reporting from our mobile measurement partners for mobile app ads." For nearly two years, Facebook has allowed app-install marketers to grab information that helped them determine—among other things—how their ads performed on devices such as iPhones, Samsung Galaxies and HTC Ones. Advertisers have to agree to keep that device-level data to themselves, as Facebook wants brands to focus on other metrics and is wary of privacy concerns. When Facebook revealed to marketers its plans to cut off such data while making them focus on campaign-based statistical results, they pushed back, according to a VentureBeat story last month.
Hackers Exploit ‘Flash’ Vulnerability in Yahoo Ads: For seven days, hackers used Yahoo’s ad network to send malicious bits of code to computers that visit Yahoo’s collection of heavily trafficked websites, the company said on Monday. The attack, which started on July 28, was the latest in a string that have exploited Internet advertising networks, which are designed to reach millions of people online. It also highlighted growing anxiety over a much-used graphics program called Adobe Flash, which has a history of security issues that have irked developers at Silicon Valley companies. “Right now, the bad guys are really enjoying this,” said Jérôme Segura, a security researcher at Malwarebytes, the security company that uncovered the attack. “Flash for them was a godsend.” The scheme, which Yahoo shut down on Monday, worked like this: A group of hackers bought ads across the Internet giant’s sports, news and finance sites. When a computer — in this case, one running Windows — visited a Yahoo site, it downloaded malware code. From there, the malware hunted for an out-of-date version of Adobe Flash, which it could use to commandeer the computer — either holding it for ransom until the hackers were paid off or discreetly directing its browser to websites that paid the hackers for traffic.
Crafts website operator Etsy's loss doubles; shares tumble: Crafts shopping website operator Etsy's quarterly loss doubled due to higher marketing expenses and the company said these costs would only increase in the current quarter. Etsy's shares fell more than 15 percent to $16.27 in after-hours trading on Tuesday. The company's marketing costs jumped 77 percent in the second quarter ended June 30 due in part due to higher spending on product listing ads. Total costs rose 49.3 percent. Etsy said it plans to spend more on marketing in absolute dollars in the third quarter than it did in the second quarter or the year-earlier quarter. It also said it expects to increase the pace of hiring in the current quarter compared with both the second quarter and the year-earlier quarter. The company said the strengthening dollar could hurt demand for dollar-denominated goods in the current quarter, which could slow the pace of growth of gross merchandise sales. Gross merchandise sales, a measure of total value of goods sold, rose 24.6 percent in the second quarter, driven by a 24.6 percent growth in active sellers and a 31.6 percent jump in active buyers on Etsy's website. Revenue rose 44.4 pct to $61.4 million in the quarter.
Apple's momentum 'meltdown' bites investors: Has the "curse of the Dow" finally caught up with Apple? Shares of the iPhone maker have been in a rut since posting disappointing quarterly results in late June, falling to a six-month low of $113.25 on Tuesday. The recent declines have wiped out nearly $100 billion of Apple's market value - about as much as fellow Dow components Boeing and McDonald's are worth in total. For CEO Tim Cook, it means his stake of more than 111 million shares is now worth about $12.76 billion, compared with nearly $15 billion at the peak in late April. The dropoff represents a notable bout of weakness for a stock basically impervious to pain for the better part of two years. Strategists pinned the sell-off on the steady run in the shares, as the stock has gained more than 137 percent since hitting a low in April of 2013. In addition, more than 5,700 different funds already own the shares, according to Morningstar data. With Tuesday's declines, the shares have dropped 13 percent over the last 11 trading days. "When you get a stock that is over-owned it’s difficult to find that incremental buyer," said Art Hogan, chief market strategist at Wunderlich Securities in New York. "It’s having its own momentum meltdown."
Apple Doing Own Cellular Service Doesn’t Make Sense, at Least Not Today: The appeal is tempting, of course. Apple would then fully own the relationship with the customer rather than leaving that job to one of the “orifices,” as Steve Jobs famously labeled the wireless providers. Google is in fact doing just this with its Google Fi effort, where it offers service starting at $20 per month using the networks of both Sprint and T-Mobile. But the service is fairly limited. It’s offered only on a single Nexus 6 phone and its designed to keep the service more of a test than a true national rival. It doesn’t make sense for Apple for a number of reasons. First it has a tough time doing things small — Apple currently represents a huge part of the carriers’ business, and some of the carriers’ most lucrative customers are its iPhone owners. So the carriers aren’t going to be eager to hand that over to Apple. Even if Apple could convince them to do so, it might not be in Apple’s long-term interest. First of all, consumers today are benefitting from four carriers heavily competing against one another, with a resurgent T-Mobile and an increasingly desperate Sprint both putting price pressure on AT&T and Verizon. Also, carriers spend a fortune to keep their networks strong enough to handle increasing demands and to swiftly upgrade to faster technologies. If they become truly a dumb pipe just selling gigabytes to Apple, the incentive to differentiate on customer service or speed is reduced, as would be the amount of capital they would have to invest. Over time, that could mean both Apple and consumers would lose. Plus, if it is Apple’s name attached to the service, it would have to take on the role of customer support and the perceived blame when the service doesn’t meet customer expectations. “That’s a lot to bite off, and I can’t see Apple wanting to do it,” said Jackdaw Research analyst Jan Dawson. Now, that doesn’t mean Apple isn’t interested in seeing more value come to it over time. With iMessage, for example, Apple took something that consumers value — their text messages — and made it a feature of their phone rather than something tied to their carrier and phone number. There are reports Apple would like to do the same thing with voicemail. Apple also introduced on the latest iPads a SIM card that works across different cellular networks so customers don’t have to choose a carrier when choosing a device. Apple could do something similar with the next iPhone. These moves make sense. Whether Apple has dreams of eventually offering cell service or not, it is to their advantage that consumers are more tied to their iPhone than they are to being a customer of AT & T or T-Mobile. Do such moves also open the door to Apple offering its own cell service some day? Sure. And it would be foolish for Apple not to constantly consider whether such a move makes sense. But, at least for now, the downsides likely outweigh the benefits.
As Employees Flee Twitter and Shares Continue to Slump; Drop to Lowest Since IPO May Lure Takeover Offers: Shares slumped 5.6 percent on Monday to $29.27, the lowest price since the company’s November 2013 initial public offering. The move pushed Twitter below $20 billion in market value, making it more attractive to potential acquirers like Google, investors said. Last week, Jack Dorsey, Twitter’s interim chief executive officer and co-founder, and Chief Financial Officer Anthony Noto warned that it will be a while before the social media company stems a slowdown in user growth. They also noted that demand from advertisers missed their expectations. Meanwhile, Twitter is conducting a search to replace former CEO Dick Costolo. “Their comments could be suppressing the stock price for a reason, because their strategy is to be acquired,” said Jeff Sica, president of Sica Wealth Management, who has clients who hold Twitter. “I’m advising anyone that owns Twitter to hold, because I do think at this point there’s going to be an acquisition.” Even at these levels, Twitter with a small premium would probably be the largest acquisition ever for Google or Facebook Inc. Facebook last year acquired WhatsApp Inc., a messaging application, for $22 billion. Twitter has been increasing its ties with Google, making a deal earlier this year to display tweets in search results and partnering with Google’s Doubleclick ad product. Twitter’s price would have to drop to $11.16 a share, according to data compiled by Bloomberg. For Facebook’s earnings to benefit, Twitter shares would only need to drop to $20.78. Competitors are looking at some of Twitter’s assets: its employees. Two product executives announced their departures on July 28, the same day the company reported earnings. Todd Jackson, who helped Twitter debut its Highlights product, left for Dropbox Inc., while Christian Oestlien, who helped drive growth, is going to Google’s YouTube. Trevor O’Brien, also in product leadership, announced his departure a few days later. Without a clear path to a leader who can help Twitter accelerate user growth, “the only strategy that will work for them is if they’re acquired”.
Alibaba Declines as Chinese ADRs Retreat on Economic Slowdown; Down 35% from Post-IPO High: Alibaba, China’s biggest online retailer, slid for an eighth day as fresh data highlighting China’s weakening economy stoked concern that the company’s sales growth is slowing. The American depositary receipts retreated 0.4 percent to $77.99 in New York on Monday, capping the longest slump since the company’s September debut. The drop pushed Alibaba’s decline from its high in November to 35 percent. Alibaba sold ADRs for $68 apiece in a record $25 billion initial public offering on Sept. 18. They had climbed as much as 75 percent in the following two months to a record high of $119.15 in November. The company will probably report a 34 percent increase in sales for the June quarter, down from 46 percent in the same period last year, according to the average estimate of 26 analysts surveyed by Bloomberg. LightInTheBox, a web-based retailer of China-made goods to overseas markets, tumbled 9.3 percent to $3.63, the lowest since its U.S. listing in June 2013. Jumei International, which sells beauty products online, sank 6.7 percent to $17.46, dropping the most in four weeks.
Apple Falls Below Its 200-Day Moving Average for First Time Since 2013: The bull market’s base just lost another brick. Amid a collapse in breadth and the threat of falling earnings, add a correction in Apple shares to the concerns facing investors. The iPhone maker slipped 2.4 percent to $118.44 today, extending its decline since February to 11 percent and dropping below another chart threshold, its 200-day moving average, for the first time since 2013. The iPhone maker’s shares had spent 471 sessions above the 200-day threshold, last falling below it in September 2013. It entered a correction territory today after coming within 40 cents of one on July 9 before rallying.
For Mobile Messaging, GIFs Prove to Be Worth at Least a Thousand Words: Just as smartphones drove the rise of emoji, mobile devices are propelling GIFs into a more widespread form of instant visual-messaging. Tumblr, the blogging site, said it had 23 million GIFs posted to its site every day. In March, Facebook began supporting GIFs, with more than five million of the animations sent daily through its messaging app. Slack, the workplace collaboration start-up, says it counts more than two million GIF integrations each month. In total, online searches for GIFs have risen by a factor of nine since mid-2012, according to Experian Marketing Services, an industry research firm. While the brief animations are not new — GIFs were created in 1987 by Steve Wilhite, a programmer at CompuServe, and have been omnipresent on desktops — major improvements in mobile technology and a surge of messaging applications are pushing GIFs to break out beyond the web forums of old. They have become a mainstream form of digital expression, a way to relay complex feelings and thoughts in ways beyond words and even photographs, making them hugely popular with young audiences who never leave home without their smartphones. The animated snippets are being spread on mobile devices by a new generation of GIF start-ups, which are backed by venture capital. Riffsy, which makes the GIF keyboard for smartphones, just raised $10 million. Giphy, which provides a search engine for a vast library of GIFs, has raised more than $23 million. And there are numerous other companies, like Imgur, PopKey and Kanvas, all eager to snip and remix video clips into short, ready-to-share packages. For now, few of these companies are profiting from GIFs as they focus on propagating the use of the clips. But the start-ups see potential for profit, especially as brands increasingly integrate the animations into advertising and other marketing. GIFs are marked by certain characteristics. They are typically a few seconds long, soundless and play in a loop. They are often culled from movie and TV clips and can include text on top of the animated image. Their use has seeped into professional venues, frequently replacing text. Google recently sent a reporter a GIF of a toddler throwing her hands up in response to a question. Digital publications like BuzzFeed regularly use GIFs as a storytelling method. And office workers like Jerrod Howlett, an employee at Google, regularly respond to email with GIFs. “I’m not that great with words,” Mr. Howlett said. “But if I find the perfect GIF, it nails it.”
German Carmakers Buy Nokia’s Here Mapping Unit for $3 Billion: Nokia said that it had sold its Here digital mapping unit to a consortium of German automakers for 2.8 billion euros, or about $3 billion. The announcement signals the latest chapter in Nokia’s transformation, as the company tries to rebound from the demise of its once world-leading mobile phone unit, which was sold to Microsoft last year for about $7.6 billion. As part of the changes, the Finnish company has pared its operations to focus almost entirely on its telecom network infrastructure business, which provides communications equipment to some of the world’s largest carriers. The members of the German consortium said that they would use Nokia’s digital mapping unit for their own autonomous driving plans, but that they would be willing to license the technology to other companies. The sale of Nokia’s mapping unit comes as the Finnish company is close to completing its $16.6 billion acquisition of the French-American telecom equipment maker Alcatel-Lucent. Nokia has received regulatory approval from United States and European antitrust authorities for that deal, but it is still waiting for the go-ahead from Chinese officials. By agreeing to a sale price of roughly $3 billion, the Finnish company is essentially writing off years of research and development, and a series of multibillion acquisitions that had turned Here into a global mapping champion. Those deals include the $8.1 billion purchase in 2007 of Navteq, the maker of digital mapping and navigational software based in Chicago, as Nokia tried to keep pace with other handset makers and mobile operating systems. As digital maps are becoming a crucial focal point of many emerging industries, a number of bidders had expressed interest in Here, including the ride-booking service Uber, which submitted a $3 billion bid for the business before dropping out last month. Other tech giants, including Amazon, the Chinese search engine Baidu and Facebook, also rely on Nokia’s geospatial data for their mapping services. These companies had turned to Here to reduce their reliance on Google — a company that they increasingly compete with for users, engineers and advertising revenue. It will now be up to the German automakers to convince these tech companies that they can continue to offer the same level of digital mapping services that had made Nokia’s unit the main global rival to Google Maps.
Microsoft Said to Invest Big Sum in Uber; Latest Round Values Firm at $51 Billion: Microsoft has agreed to invest in Uber, according to people with knowledge of the matter, as part of a funding round that values the ride-hailing company at around $51 billion. If the deal is finalized, Microsoft’s contribution would be a substantial amount of the financing, which totals about $1 billion, according to the people, who spoke on the condition of anonymity because the details of the fund-raising are not public. This new round cements Uber’s place as one of the most richly valued private companies ever, along with other start-ups like Xiaomi, the Chinese electronics company valued by investors at around $45 billion, and Airbnb, the short-term lodging service valued at more than $24 billion. It is also the latest fund-raising spree undertaken by Uber, which has added billions of dollars to its surging war chest. Uber has earmarked significant money for expansion into new markets like China, India and greater Southeast Asia. On Thursday, an Uber representative said the company had set aside $1 billion to spur growth specifically in India, where the company has faced stiff competition from local ride-hailing services. Uber has a history of bringing in important partners during funding rounds. In December, Baidu, the Chinese search giant, invested hundreds of millions in Uber. And in March, Times Internet, the digital venture of the Times of India Group media conglomerate, said it had agreed to a strategic investment in Uber.
Google, Amazon Show Investors Cost Control Is Key for Tech: Investors have started to reward Internet companies that can show both financial discipline and a path to long-term growth, making Amazon and Google the clear winners of the technology earnings season. Google kept costs in check in the second quarter, and shareholders cheered with a 16 percent stock gain after the search giant released better-than-expected results. Amazon also surged after posting a surprise profit, demonstrating that the Web retailer is capable of making money when it puts a brake on spending. By contrast, Facebook , which vowed to keep its brisk pace of investments to lure users and advertisers, fell as Chief Executive Officer Mark Zuckerberg was short on details about money-making plans for the company’s newer initiatives, like WhatsApp and Oculus. LinkedIn and Twitter slumped over concerns that user growth is slowing. Microsoft Corp. posted its largest-ever quarterly loss. And Apple failed to meet analysts’ predictions for iPhone sales and growth for the current quarter.
India’s Snapdeal, an Amazon Competitor, Raises $500 Million From Alibaba, Foxconn and SoftBank: Alibaba finally has its ally in India, perhaps the world’s hottest e-commerce market. The Chinese e-commerce giant has invested in Snapdeal, an India-based e-commerce startup, as part of a $500 million round, according to multiple sources. Foxconn, the Taiwanese company best known as a manufacturer of Apple’s iPhones, also invested, alongside existing Snapdeal investor SoftBank. Snapdeal had previously raised more than $1 billion from investors including SoftBank, eBay, BlackRock, Bessemer Ventures and Indian venture firms such as Kalaari Capital and Nexus Venture Partners. Alibaba and Foxconn were considering the investment earlier this year, which would value Snapdeal at $5 billion, the Wall Street Journal reported in June. The company has undergone several iterations since Kunal Bahl and Rohit Bansal founded it in 2010, including one as a Groupon clone. Today, it’s an online shopping marketplace that sells a wide range of products, from cameras to jeans to toys — pitting it against Flipkart, a homegrown competitor currently valued at around $15 billion, and Amazon, which is investing billions of dollars into its Indian business. In the past year, Snapdeal has started to develop an ecosystem of sites by acquiring companies focused on different areas of online commerce. It bought FreeCharge, a popular service in India that allows people to add money to prepaid phone plans and prepaid TV plans. It also acquired RupeePower, a comparison shopping site for credit cards and loans. The approach is not all that different from Alibaba’s, which runs a host of different marketplaces focused on different types of buyers and different regions. While Flipkart has more market share in India, Snapdeal CEO Bahl thinks that company and Amazon are thinking too narrowly by being focused mainly on the sale of physical products, he told Re/code during an interview at Snapdeal’s Indian headquarters in April. Snapdeal, on the other hand, is going after what Bahl believes will eventually be a $250 billion opportunity — bringing all kinds of other transactions online in addition to the sale of products. “What’s the delta between retail and consumption?” Bahl asked rhetorically, referring to the difference between the two. “It’s things like financial services, education, utilities, health care. But today, all everyone is doing is products.” “Others are building aircraft carriers,” he added. “We are building an army of speedboats.”
Why Some Start-Ups Are Called Tech Companies and Others Are Not: these days, every company is at least a little bit of a tech company. Some Wall Street banks employ more tech workers than all but the biggest Silicon Valley companies. And large manufacturers like General Electric are leading the way in efforts to put Internet-connected sensors on things as varied as streets and turbines. So why then are some start-ups called tech companies and others just … companies? “Tech means more than just producing hardware or software,” said Mark Zandi, the chief economist at Moody’s Analytics. “It is synonymous with innovation, research and development, long-term thinking.” The label is a signal that “you want to work for me. You want to buy things from me at a higher price. You want to give me capital at a lower cost,” Mr. Zandi said. It is difficult to say what the financial windfall of the tech label is to today’s start-ups since most of them are still private companies, though no doubt they benefit from being close to the tech industry’s deep-pocketed financiers. But toward the end of the dot-com boom at the turn of the century, Raghavendra Rau, now a professor of finance at the University of Cambridge Judge Business School, was the co-author of a study that documented the temporary surge in the stock prices of companies that added the dot-com suffix to their names. Those temporary dot-coms took advantage of an investor behavior called “categorization,” said Mr. Rau. Categorization helps us understand something if we’re not familiar with it. “We build up a story in our heads on what we think we are going to see,” he said. “Even if the firm has no cash flows or no profits, we think we know what the story is. And firms are good at seeing what is popular and trying to fit in with that mental map.” Today’s happy adopters of the tech label, however, should note the follow-up research by Mr. Rau and his co-authors after the dot-com bubble popped early last decade. He found that double-switchers — companies that added and later dropped their dot-com identity — saw their stock prices over one month move 38.5 percent ahead of companies that kept the dot-com name. In a few years, maybe being labeled a logistics company won’t be such a bad thing.
Yahoo to Acquire Polyvore in Shopping-Advertising Push: Yahoo is buying shopping-service Polyvore Inc., seeking to improve its online fashion content and boost shopping-related advertising. Polyvore, which combines social and e-commerce tools for apparel and accessories, will initially be integrated into Yahoo’s magazines that focus on beauty and style, according to Simon Khalaf, senior vice president at Yahoo. Terms of the deal, subject to customary closing conditions, weren’t disclosed in a statement Friday by the companies. Chief Executive Officer Marissa Mayer is pushing to add more news, entertainment and shopping information to the Web portal in order to draw a bigger audience and sell advertising. Polyvore lets users put together themed collections of items, like those seen in fashion magazines. People can browse through the collections and then buy the items. Polyvore will add more than 350 retailers to Yahoo’s advertising platform, the companies said.
