Daily Tech Snippet: Monday, March 23

• Fidelity, T. Rowe Price, BlackRock, all giant US money managers, are adding Uber, Airbnb, Pinterest and other private tech investments to mainstream portfolios: Tech Money Sends Funds on the Hunt for Unicorns: The retirement accounts of millions of Americans have long contained shares of stalwart companies like General Electric, Ford and Coca-Cola. Today, they are likely to include riskier private stocks from Silicon Valley start-ups like Uber, Airbnb and Pinterest. Big money managers including Fidelity Investments, T. Rowe Price and BlackRock have all struck deals worth billions of dollars to acquire shares of these private companies that are then pooled into mutual funds that go into the 401(k)’s and individual retirement accounts of many Americans. With private tech companies growing faster than companies on the stock market, the money managers are aiming to get a piece of the action. Fidelity’s Contrafund includes $204 million in Pinterest shares, $162 million in Uber shares, and $24 million in Airbnb shares. Over all, there were 29 deals last year in which a mutual fund bought into a private company, and they were worth a collective $4.7 billion, according to CB Insights. That was up from six such deals, worth a combined $296 million, in 2012. T. Rowe Price was the most active big investor, making 17 investments in private tech companies. Because these tech companies are not required to issue financial reports and are not traded on traditional exchanges, they are the sort of speculative investments not normally found in retirement accounts. Increasingly, however, investors are betting that these companies will be bought or go public at prices that exceed their latest funding rounds, a prospect that is anything but guaranteed. “I think it goes beyond what mutual funds were set up to do,” said Leonard Rosenthal, a professor of finance at Bentley University in Waltham, Mass. “It’s great for the portfolio manager, but it’s not necessarily in the interest of the shareholders of the fund. If investors are looking for a portfolio of risky securities, there are plenty of stocks to trade in the public market.” The dilemma for big fund managers is that fast-growing technology companies are so reluctant to sell private stock to the public that there is now a term — “unicorns,” reflecting just how wonderful and magical they are considered to be — for the dozens of private firms worth $1 billion or more. Several, including the ride-hailing company Uber, the room rental site Airbnb and the digital scrapbook Pinterest are worth more than $10 billion. Those lofty valuations, combined with the eagerness investors show in bidding them up, have created a shadowy market for private stock issued to tech companies’ early investors and employees. For the last few years, mutual funds have sat on the sidelines. Now, they are racing to get in. “More and more, the big lopsided growth is happening away from the public markets,” said Andrew Boyd, head of global capital equity markets at Fidelity. Take Uber, which was valued around $40 billion in its latest round of financing, up from $3.5 billion in mid-2013. That is more than 1,000 percent growth, compared with 28 percent for the Standard & Poor’s 500-stock index over the same time period.

• China’s Internet Boom seems to fade: Half of the 14 Chinese dot-coms that debuted in the U.S. last year are now trading below their initial sale prices. Even Alibaba Group Holding Ltd., one of those still up in price, has dropped 28 percent from its record high in November. On average, the 14 Chinese shares are down 3.1 percent this year, compared with a 6.1 percent advance in the Nasdaq. Investor confidence, so high when Alibaba brought its record $25 billion initial public offering to market last September, is being undermined now by a wave of poor earnings at Chinese technology companies. Those that went public last year including Weibo Corp., the microblogging service, and mobile dating app developer Momo Inc. have failed to deliver the revenue investors were expecting. Sixteen of 28 Internet and technology firms in Bloomberg’s China benchmark reported fourth-quarter earnings below analysts’ forecasts, including search engine Baidu Inc. and video website Youku Tudou Inc. The percentage of stocks that slid below their IPO levels this year was the highest since 2011, when a series of corporate scandals eroded investor confidence, data compiled by Bloomberg show.

• Shoppers on Lazada last year spent $350 million as ecommerce booms in Southeast Asia: Rocket Internet’s Amazon-esque Lazada saw more than US$350 million in consumer purchases in 2014, group CEO Maximillian Bittner tells Tech in Asia. US$70 million of that spending (termed gross merchandise volume, or GMV) happened in December alone, due to Christmas and special promotions like the 12/12 sales day. The 2014 spending tally represents strong growth for Lazada from US$89 million in 2013. Lazada is this week celebrating its third anniversary. It operates in Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam. Lazada started out doing only direct sales to consumers from its own warehouses, but that changed in the fall of 2013 as the company launched a marketplace for third-party merchants. Those merchants now take in 70 to 75 percent of the consumer spending on the estore, Bittner reveals. They’re a “core driver of growth” on Lazada, he adds. There are now 15,000 merchants using the site as an online storefront. “It’s not a target to be a 100 percent marketplace,” Bittner emphasizes. “It depends on the best price for consumers” and other factors such as whether Lazada itself or third-party merchants have better purchasing power. Indonesia is Southeast Asia’s largest single market, and Bittner says the archipelago is the top market for Lazada. Indonesia’s shoppers made up over 30 percent of Lazada’s 2014 spending tally. While Indonesia has an array of homegrown rivals to Lazada – from well-funded Tokopedia to the new Matahari Mall – Bittner says the nation is not necessarily a tougher market than the other Southeast Asian countries. “There’s a growing dynamic of excitement” about Indonesia’s ecommerce scene right now, adds Bittner. He adds that exclusive online gadget sales for brands like Xiaomi and Motorola have helped Lazada greatly in Indonesia. Xiaomi uses Lazada as its sole sales channel in both Indonesia and the Philippines.

• Touted by some as the next Facebook, Meerkat is living the dream of every app creator. Three weeks after launching, it is enjoying viral growth. It’s been the talk of SXSW. Presidential candidates and celebrities are using it. It’s been called the new technology that will affect the 2016 presidential election. Prominent investors want to help fund it. 1. Its numbers are multiplying. Meerkat told me Thursday that its user base is growing 30 to 40 percent a day since SXSW started March 13. It signed up 120,000 users in its first two weeks, so should be closing in on the one million user mark. (Thirty-five percent daily growth compounded over a week would put it just short of one million) 2. Its founder is a genuinely likable guy. In a recent interview with Re/code, chief executive Ben Rubin corrected an interviewer who credited him as “the man behind the app Meerkat,” saying “We’re the team behind the app Meerkat.” 3. Meerkat is obsessed with making its user comfortable. If you talk with anyone on the Meerkat team, they’ll almost certainly use the word “comfortable.” It’s a value that’s guided their decisions, including embracing the trend toward vertical video on smartphones. “We wanted to lower the barrier to entry and make the behavior as comfortable and as familiar as possible given that the medium is still pretty unfamiliar to a lot of people within the context of social media,” community director Ryan Cooley told me at SXSW. Rubin made a really interesting parallel between smartphone live-streaming and the first photographs, during a recent interview with host Ryan Hoover on Product Hunt Radio. “When the first cameras arrived, people weren’t smiling. It was weird to smile in a picture. People don’t have that habit of taking a picture or being in a picture. It evolved,” Rubin said. “With live video, we don’t have this habit. My mother didn’t live stream, I didn’t live stream when I was a kid.” The challenge for Meerkat is to make everyone — especially people who aren’t early adopters– comfortable with live streaming. Because Meerkat videos aren’t stored and can’t be rewatched later, it’s a less intimidating experience. You don’t have to worry about slipping up, and having that mistake be re-lived forever. You simply hit a button on your phone, and suddenly people are digitally right there with you.

• Google launches Retail Search Ad with local inventory offering: Early success as Sears Hometown store visits jumped 122 percent: Sears Hometown and Outlet Stores, a retailer fighting for every sale, has evidently found a weapon in Google's Local Inventory Ads that it says works to drive consumers to its stores. The digital marketing product is still fairly new from the search giant, launched last year, and holds the promise of finally helping brick-and-mortar brands take advantage of the online world rather than always getting beaten by it. With that in mind, the Sears spinoff company has been running Google's shopping ads that target by location and reveal whether a product is actually in a location. As part of a Google report today, the retail company claimed that such information has worked to generate 122 percent more visits to its 1,240 shops under the Sears Hometown and Outlet Stores brand. The Hoffman Estates, Ill.-based chain's click-through rate was 16 percent higher on inventory ads when compared to other ad products. "The ad unit is terrific for a mobile experience," said David Buckley, CMO of Sears Hometown and Outlet Stores. "It's highly relevant to where you are, and it's served with an image, price attributes, and how far you're standing from that product. It's the ultimate search ad product for mobile. You can't ask for more than that."

• Ola diversifies to add a mobile-only food ordering option: Online cab booking service Ola (formerly Olacabs), run by Mumbai-based ANI Technologies Pvt Ltd, has expanded its business area by adding a location-based online food delivery option under Ola Cafe. Unlike its core business, where one can book a cab ride through the web or through the mobile app, the food ordering option is restricted to its app, making it a mobile-only feature. The new feature is available on the latest update of the Ola app. The firm said this is currently in beta stage. The company plans to go pan-India but, to begin with, it has started the service in four cities — Mumbai, Delhi, Hyderabad and Bangalore. Moreover this is not for ordering from restaurants across the city but only from those located near to the user and in some identified areas. The service can be availed from 12 pm to 11 pm. The company did not disclose the number of restaurants it has tied up so far. It did not say if it proposes to use cabs in the vicinity, which do no have a passenger on board yet, to make the deliveries. Users can pay by either Ola money (it’s closed online wallet) or cash on delivery. The delivery person will call customers to confirm the address, just the way a driver of cab or auto currently calls to confirm addresses for pick-ups. Users can also track the person handling the food delivery via the app, like one can do a cab approaching the user.

• Hackers Attack GreatFire.org, a Workaround for Websites Censored in China: For years, a group of anonymous activists known as GreatFire.org has monitored online censorship in China, provided access to blocked websites and collected messages deleted by censors. This week, unidentified hackers have tried to put an end to those activists’ efforts with an unprecedented attack. In a post to its blog Thursday, GreatFire.org said it has experienced a massive so-called denial of service attack. The method is one that hackers frequently use to foil websites by flooding them with multiple requests — so many that they go offline and viewers see a blank page. GreatFire.org creates encrypted versions of 12 websites that are blocked in China. These are known as mirrored websites and grant users within China access to the content. On Thursday, GreatFire.org said it was receiving 2.6 billion requests an hour for its mirrored websites. On Friday, access to the mirrored websites was inconsistent in China. GreatFire.org’s name is inspired by the Great Firewall, the term often used to describe China’s Internet censorship. About two million people in China access GreatFire’s websites each month, a co-founder of the group who uses the pseudonym Charlie Smith, wrote in an email exchange. It was unclear who was responsible for the attack, which began Tuesday from inside and outside China, Mr. Smith wrote. GreatFire.org noted in its blog post that its tactics were the recent subject of a report in The Wall Street Journal, which appeared online Monday. The timing for the attack was a mystery. “Maybe that WSJ story,” Mr. Smith wrote. “Maybe because there have been some excellent Chinese-language news pieces and perhaps somebody who supports the authorities took issue with them. In the past there has rarely been rhyme or reason on the timing of such attacks.” GreatFire.org’s mirroring services provide unrestricted access within China to a range of websites, including itself and the Chinese language version of The New York Times, which has been regularly blocked in China. Some of the others are Deutsche Welle, BBC News, China Digital Times, Google.com, and Boxun, a Chinese-language news website. GreatFire.org says it does not mirror The Wall Street Journal. GreatFire.org works directly with some, but not all, of the websites it mirrors. GreatFire.org is partly funded by Open Technology Fund, a United States government-financed initiative under Radio Free Asia. Last year it provided $114,000 in funding, according to its website. Mr. Smith declined to comment on any financial backing. The Chinese government has in the last year ramped up efforts to prevent its citizens from accessing critical news coverage from abroad and from communicating on social media platforms that the government cannot directly censor. China has long disrupted many of Google’s services. Facebook, Twitter and YouTube remain blocked. LinkedIn agreed to censor its content to operate in the Chinese market last year. GreatFire’s mirroring websites circumvent the Great Firewall by channeling Internet traffic through cloud services, such as one available from Amazon. The difficulty for the Chinese government is that it can’t just shut off Amazon’s service, because it is used broadly by many major Chinese corporations. Emails to the Chinese Foreign Ministry and the Chinese embassy in Washington went unanswered as of Friday evening.

• Web-hosting giant GoDaddy files for $481M IPO, seeking $2.87B valuation: US-based GoDaddy.Inc, an internet domain registrar and web hosting solutions provider, has fixed the price band for its initial public offer (IPO) which may raise $480.7 million, including the portion allocated to the underwriters. It proposes to list on the New York Stock Exchange (NYSE), as per a disclosure this week. The firm is offering shares at $17-19 a unit which would value the company as much as $2.87 billion. GoDaddy first attempted to go public in 2006 but ultimately withdrew. It had refiled for an IPO in June 2014. The IPO proceeds will primarily be used for repaying some of the debt the company. took on as part of a 2011 buyout by private-equity firms Silver Lake, KKR & Co. and TCV Investments. GoDaddy currently manages 57 million domains which accounts for around 21 per cent of the world’s registered domains. Since its buyout, it has acquired other services, including Mad Mimi, which helps small businesses promote themselves by email, and Locu, which makes software that manages business-contact information across sites like Yelp and OpenTable. Services made up 8 per cent of its revenue in 2014. The company’s revenue last year was $1.4 billion, up from $1.1 billion in 2013. Its 2014 net loss, which included $85 million in interest costs to service debt, narrowed to $143 million from $200 million a year earlier. As of December 31, 2014, it had approximately 12.7 million customers, and in 2014, it added more than 1.1 million customers. In 2014, the firm generated $1.7 billion in total bookings up from $939 million in 2010, representing a compound annual growth rate, or CAGR, of 16 per cent.

Daily Tech Snippet: Friday, March 20

• Amazon scores US regulators’ nod to test fly its autonomous drones:  The Federal Aviation Administration on Thursday gave Amazon permission to conduct test flights of its drones outdoors, as long as the company obeys a host of rules like flying below 400 feet and only during daylight hours.  Amazon has envisioned its drone-delivery service, which it calls Amazon Prime Air, to be autonomous.  While the F.A.A. has announced plans to allow more commercial uses of manned drones in American skies, it has not said when it will permit the use of autonomous drones by companies like Amazon. The company’s drones for now will have to be operated by a pilot with a certificate to fly a private manned aircraft. The agency’s main concern is making sure that drones, which everyone from farmers to cinematographers have shown interest in using for business purposes, can be operated safely. Still, even getting permission to test drones outdoors with a pilot counts as progress for Amazon, which has been lobbying the F.A.A. for approval to do so for months. The company has previously been forced to test drones indoors near its headquarters in Seattle. It has also started outdoor tests outside the United States and has warned federal regulators that jobs and investment dollars will leave the country if they do not relax their current drone restrictions.

• Taking on Apple Inc, Google and Intel to Team Up with TAG Heuer on a Luxury Smartwatch: On Thursday, TAG Heuer, the Swiss watch company, announced that it was building a new smartwatch — a wrist computer, in essence — as part of a collaboration with Intel and Google. The companies made a joint announcement at Baselworld, an annual show in Basel, Switzerland, for high-priced watches and jewelry. The watch will be released later this year, but aside from that the announcement was light on specifics. No exact release date. Nothing about what it will do. No price. The forthcoming TAG Heuer watch will be designed and manufactured by the Swiss watchmaker. The technology bits will come from Intel’s chip technology and Google’s Android software.

• Smartstraps may be the solution to wearables: Pebble seeds $1M to encourage smartstrap startups: Pebble is announcing a $1 million fund to support the development of smartstraps, the add-on accessories that are open to hardware makers and that will add functionality to Pebble Time via add-on sensors, batteries and more. Pebble says it’ll be combing crowdfunding platforms to find out about smartstrap projects, and will back those it deems worthy. The company is also soliciting pitches via Twitter and email for anyone  who might be planning a smartstrap, and isn’t pinning itself down with specifics on the terms of how it will actually allocate cash just yet. It’s also promising promotion to worthwhile projects, to raise awareness among the Pebble community. Pebble points to some ideas that have already sprung from the community regarding prototypes  Seeed Studio: include a modular strap with individual links that contain separate features or sensors, like an NFC link, a heart rate sensor link a GPS link and so on. Spark Electron is hardware design that would offer independent cellular connectivity via a smartstrap featuring its Electron SIM-enabled dev kit, letting you use the wearable independently of a connected smartphone.spark-smartstrap-concept.

• Facebook turning Messenger into a Platform : Inspired By Asia’s Monolithic Chat Apps: Next week at its F8 developer conference, Facebook will announce new ways for third parties to offer experiences through its Messenger app, according to multiple sources. Facebook hopes to make Messenger more useful, after seeing Asia’s chat apps WeChat and Line succeed as platforms that go beyond just texting with friends. At first, Facebook will focus on how third parties can build ways for content and information to flow through Messenger. Depending on the success of the early experiments, Facebook may then mull bringing more utilities to Messenger. For Messenger’s platform, Facebook is said to have eyed Line and WeChat. They were pioneers in using their frequently used instant messaging apps as the centers of mobile interfaces that act as monolithic portals. Snapchat is another messaging app that’s recently explored a platform approach. 

• Tesla to have Autopilot on its cars by summer:  Elon Musk, chief executive of Tesla, took a big step when he announced that the maker of high-end electric cars would introduce autonomous technology by this summer. The technology would allow drivers to have their cars take control on what he called “major roads” like highways. Mr. Musk said that a software update — not a repair performed by a mechanic — would give Tesla’s Model S sedans the ability to start driving themselves, at least part of the time, in a hands-free mode that the company refers to as autopilot. Also to be added are tools to help drivers monitor the status of charging stations and plot routes to ensure the ability to complete a trip without running out of battery power. The move is intended to help reduce so-called range anxiety, the fear drivers have that their battery will run out, prompting them to constantly calculate distances and worry about being stranded.

• GoDaddy's IPO to value web-hosting company at up to $2.87 billion: Web-hosting company GoDaddy Inc's initial public offering is expected to value the company at up to $2.87 billion, and comes at a time when there has been a steep fall in the number of companies going public in the United States. Including debt, the company could be valued at $4 billion. The IPO market has had a slow start this year compared with 2014 when U.S. IPOs raised about $93 billion, the highest since 2000. Only two technology companies have gone public this year including online data storage provider Box Inc, whose shares have dropped about 27 percent since the company's market debut in January. GoDaddy was acquired in 2011  by a private equity consortium led by KKR & Co LP and Silver Lake Partners LP for $2.25 billion, including debt. It has since expanded from its roots in Internet domains to provide services to small and medium-sized businesses such as website building and web hosting. The company, which serves 12.7 million customers, is led by Blake Irving, who was Yahoo Inc's chief product officer from 2010 to 2012. GoDaddy's revenue rose 22.7 percent to $1.4 billion in the year ended Dec. 31 from a year earlier. Net loss narrowed to $143.3 million from $200 million.

Daily Tech Snippet: Thursday, March 19

• As Microsoft comes to terms with the slow death of its OS business model...: The days of charging customers for an operating system are slowly coming to an end, piece by piece. Microsoft dismantled another piece of its old way of doing business on Wednesday. As part of a broader announcement of partnerships in China, the company said it would allow existing users of Windows personal computers in the country to upgrade free to Windows 10, its coming operating system. The offer is good not only for people who have paid for legitimate copies of Windows on their machines, but those that have pirated copies of the software. The near term effect on Microsoft’s sales is likely to be minimal. The overwhelming majority of Windows software in China is pirated. Only 1 out of every 10 copies of Microsoft’s software in the the country is legitimately purchased, the company’s former chief executive, Steve Ballmer, once said. Microsoft has little Windows licensing revenue in China to jeopardize by giving away free upgrades. But the move echoes a shift at Microsoft and the software industry’s around the world. This happened first in mobile, a market in which Microsoft has pitifully small market share and, in a variation of its situation in China, not a lot of revenue to lose. Last year it eliminated its licensing fee on Windows for manufacturers creating devices with screens smaller than 9 inches. Then in January, Microsoft said it would let people running the latest versions of Windows on their computers upgrade free to Windows 10. The company’s executives have downplayed the impact that these changes will have on its business model, and for the time being they are right. Most of Microsoft’s Windows revenue comes from sale of the software to PC manufacturers who put the software on their new machines, not to consumers who pay for Windows upgrades to existing machines. Corporate customers will stay need to pay Microsoft for long term agreements that keep their software up to date. How long can these remaining honeypots of Windows revenue last? Windows PCs are under growing pressure at the low end of the consumer PC market from Chromebooks, cheap laptops running a Google operating system, and tablets. To combat their growth, Microsoft last year was forced to cut its Windows licensing fees for laptops that sell for less than $250, which hurt its financial results. For its most recent fiscal year, which ended last June 30, Microsoft’s revenue from Windows for PCs was $16.9 billion, down from $17.6 billion the prior year. Al Hilwa, an analyst at IDC, the technology research firm, predicts that corporate customers will continue to pay Microsoft for long-term software agreements that include Windows. Still, he said, “there’s a slippery slope aspect” to the pricing changes happening to Windows in the consumer market. “Sooner or later, enterprises will say, ‘We don’t want to pay for it,'” he said. To make up for lost Windows licensing fees, Mr. Hilwa believes Microsoft will increasingly rely on revenue sources. In a nod to Apple, it will emphasize hardware devices that come coupled with software, like its Surface tablets. And in a nod to Google, it will seek to make money from advertising and other services on its devices.

• ...A big name tech investor makes big bets on startup-to-startup APIs: The best way to do business isn’t to build it all in-house. Top companies are increasingly piecing together a composite of APIs from specialized startups. That lets them concentrate on their unique value-add rather than reinventing the wheel. Now those building blocks are turning into big businesses of their own with unique challenges. How do they get traction for their APIs? What does it take to support a developer ecosystem? How much should they charge? Accel Partners thinks it can help. It’s learned from investments in Braintree, Segment.io, Slack, and Checkr. But Accel also knows it missed the boat on Twilio and Heroku. So to attract more API businesses and share its insights, Accel is announcing a new investment focus in what it calls “APX,” the API-ification of business. Developers are constantly posed with the question of whether to buy or build. You either pay for a specialized API or you spend the resources trying to replicate them. But as the cogs get more complex, and the talent wars rage on, in-house development keeps looking slower and more expensive. “You don’t need to go out and source the talent to build these functions,” Natarjan tells me. “You can outsource entire swatches of your company to very reliable APIs. It’s a bit of a talent arbitrage game.” Wong followed up, asking “Why would you go start your own payments capabilities, your own payment analytics, your own map capabilities when they’re so easily accessible from these other companies and are arguably better?” Take background checks, for example. On-demand and sharing economy startups like Instacart or Homejoy need to know the contractors they send to customers’ houses aren’t going to rob them. Normally, these companies would have to hire a team to compare potential hires’ identities against watch lists and criminal records. But their businesses are about grocery delivery and home cleaning, not background checks, so building a team or system to handle them would be a distraction. “With Checkr, that whole function has been reduced to an API,” Natarjan says. Instead of recreating something done better elsewhere, “You can dedicate 100% of your efforts to the 1% that is going to differentiate a product.” “APX is the current picks and shovels,” Accel Partner Rich Wong tells me, alluding to the success of merchants who sold mining tools during the gold rush.

• India Startup Action: Capillary Technologies in talks with Temasek to raise $80M: Capillary Technologies Pvt Ltd, a SaaS-based CRM solutions provider, is in talks to raise $80 million (Rs 501 crore) from Singapore’s state-owned investment firm Temasek, and a few other investors, sources privy to the development told Techcircle.in. Capillary was set up in August 2008 by IIT Kharagpur alumni Reddy, Krishna Mehra and Ajay Modani. It is into cloud-based software solutions that help retailers engage with customers through mobile, social and in-store channels. The firm claims that its integrated marketing platform helps retailers easily manage their customer data, gain insights and personalise engagement across multiple channels. The company caters primarily to the clients in the retail market, and as of July last year, 40 per cent of its revenues came from apparel, fashion and shoes; 30 per cent from food retail; 20 per cent from white goods and electronics and remaining 10 per cent from pharmacies and hypermarkets. During the same time, it claimed its platform was powering more than 150 brands across 10,000 retail locations. Its clients include Pizza Hut, Benetton, KFC, Puma, Marks & Spencer and Lacoste. In July 2014, Capillary had raised $14 million in its Series B round of funding led by existing investors Sequoia Capital and Norwest Venture Partners (NVP). This round came barely five months after the firm netted $4.5 million in funding from American Express Ventures. This was preceded by a $17 million in its Series A round of funding from Sequoia, NVP and Qualcomm Ventures in 2012.

• Uber’s Car-Hailing Service Banned in Germany, Court Says. A German court ordered Uber Technologies Inc. to stop its ride-hailing service in the country for profit, dealing a blow to the startup’s expansion plans outside the U.S. It is anti-competitive that Uber routes requests for rides via its UberPop application to drivers “that have no legitimation according to the Passenger Transportation Act, and hence the company is instigating to break the law,” the Frankfurt regional court said in a statement Wednesday. The verdict will affect Uber’s services in Frankfurt and Munich. In Dusseldorf, Berlin and Hamburg, the company has already changed its business model, cutting the fare it charges to as little as 35 euro cents (37 U.S. cents) per kilometer -- effectively turning UberPop into one of Germany’s many non-profit share-a-ride services -- to evade an earlier ban issued by local authorities. “This is a setback, in particular, for all those who want more of a choice when it comes to their personal mobility,” San Francisco-based Uber said in a statement. “It is also a setback for society as a whole, because for the time being most individual transport services will remain expensive and thus not be affordable for everyone.” Uber said it would probably file an appeal. Today’s ruling doesn’t affect its UberBlack limousine service and uberTAXI offers. “We will not give up on the German market,” it said.

• Yahoo Is Said to Cut 300 Jobs as Part of China Office Close: Yahoo is reportedly laying off 200 to 300 employees in China, shutting down its Beijing research center and pulling out what few operations it has left in the country, according to the Wall Street Journal. The Beijing office was Yahoo’s only physical presence in the country, consisting mainly of engineers working on research and development. They make up about 2 percent of Yahoo’s global staff. A string of layoffs since October have led to as many as 900 people searching for new employment, mostly countries outside the US like Bangalore, India, and Canada. A photo circulating on Chinese social media reportedly shows a slide show presentation at Yahoo’s office in Beijing, explaining to the employees the forthcoming agenda as they prepare to leave their jobs. It seems some employees would have the option of relocating to the US, while others receive a severance package equal to four months base salary plus the number of years employed multiplied by their average monthly income. Within hours of the announcement recruiters and HR departments at other tech companies were, as one source told Tech in Asia, "feeding on the leftover talent." The following screenshot is of a WeChat group of 340 headhunters and HR managers from a wide array of both large and small internet companies. The name of the group, in English, is "Yahoo recruitment group." WSJ reports the layoffs were driven by financial motives, and not related to censorship or government pressure. Yahoo’s China web domain now redirects to its Singapore site.

• Uxin, Platform for China's Used-Car Market, Raises $170 Million: An online auction house for used cars in China has attracted $170 million from big name investors including the search engine company Baidu, the private equity group K.K.R. and Coatue Management, a New York investment firm. Uxin, which operates used-car auction websites in China that focus on dealers and businesses, said Wednesday that it would use the funds to expand a new website and mobile app aiming at individual consumers. The company also provides inspections, quality guarantees and financing for the vehicles sold on its platforms. “Uxin hopes to use the strengths of its Internet technologies and experience in the used-car market to improve the efficiency of transactions, and to help dealers identify potential buyers with greater accuracy,” Chris Dai, the chief executive of the Chinese company, said in a statement. China is the world’s biggest market for new car sales, but the market for used cars is still comparatively small. Many Chinese are first-time car buyers and see owning a new vehicle as a status symbol. The country’s used-car market has traditionally been highly fragmented and lacking information on the service and repair history of the vehicles being sold. But things appear to be changing rapidly. Transactions in China’s used-car market rose 26 percent in 2014 from a year earlier, to 368 billion renminbi, or about $60 billion. The number of used cars changing hands rose 16 percent to about six million vehicles in the same period, according to figures from the China Automobile Dealers Association cited by Uxin. Online sales and auctions of used cars accounted for a small segment of the market, but they have the advantage of connecting buyers and sellers in different cities or provinces. Uxin said it handled more than 150,000 online and offline car auction transactions a year. The terms of the shareholdings were not disclosed, but for Baidu, China’s biggest online search engine company, investing in Uxin gives it a new market where it can leverage its vast stores of data and large user base. For K.K.R., the deal is the latest by its China Growth Fund, which last summer invested about $400 million in a chicken breeder in Fujian Province in southeastern China.

Daily Tech Snippet: Wednesday, March 18

• Facebook continues edging into commerce - introduces free friend-to-friend payments through messages: (More here and here) Facebook‘s instant messaging service isn’t just for sending smiley faces and photos anymore. Now you can use it to send money instantly to your friends. Facebook, the social networking company, announced Tuesday that American users of its Messenger app would be able to link their debit cards to the service and use it to message money to one another just as easily as they send a snapshot or text. Given Facebook’s huge size and reach, the introduction of its payments feature — which has been highly anticipated by Wall Street — is likely to cause tremors in the nascent market for instantly sending money to individuals, known as peer-to-peer payments. And analysts said that if the payment system succeeded, Facebook would extend it to other types of purchases, such as consumers’ buying of products directly from advertisers. “Facebook could use this as a back door to get people’s debit cards to enable the buy button,” said Robert Peck, an Internet analyst with SunTrust Robinson Humphrey. WeChat, which is essentially the Facebook of China, and other Asia-based communications services like Alipay already allow their hundreds of millions of users to send money via instant message. But the technology is only beginning to appear in the United States, where email payment services like PayPal have long been more popular. As messaging has begun to eclipse email as the preferred form of electronic communication, especially among younger users, Facebook has sought to dominate that market much as it dominates social networking. The company’s Messenger app is one of the largest platforms in the world, with more than 500 million monthly users. And last year, Facebook spent nearly $22 billion to buy WhatsApp, a separate messaging platform that now counts more than 700 million active users globally. In the United States, a host of peer-to-peer money transfer services have emerged and are trying to capture the wallets of messaging enthusiasts.

• "Insights as a service" - IBM introduces twitter-fueled data services for business: IBM is betting a fair share of its future on exploiting large troves of data for its business customers, and Twitter is a big-data fire-hose with 6,000 tweets a second, more than half a billion each day. And Twitter’s data-licensing business, though still a small part of the company, is growing rapidly. IBM and Twitter are bringing out the first products on Tuesday, developer tools and cloud-based data analysis services that mine Twitter data. The data services run on IBM’s Watson artificial intelligence technology and on its flavor of Hadoop, the open-source software for processing big data across computer clusters, IBM BigInsights. The developer tools will allow people to write applications that pull in Twitter data. In recent months, IBM has trained more than 4,000 engineers and consultants on using Twitter data in business projects. Its goal is to have 10,000 IBM employees with Twitter data-handling skills. And IBM has worked with more than 100 corporate clients so far, in a range of industries and projects. “We thought the early interest would be in consumer products and marketing, but it has turned out to be much broader than that,” said Alistair Rennie, general manager of IBM’s analytics business. The early work, he said, included companies that want to tap the Twitter data to help guide product development and plan manufacturing schedules. IBM is not naming the companies that have tried out its Twitterized technology, but it did describe a few examples of what it calls “insight as a service.” It combined tweets with hyper-local weather data to help predict where disgruntled telephone or cable customers, whose service might be impaired by severe weather, were most likely to switch suppliers. Using the data-fueled predictive models, customer churn was reduced by 5 percent, IBM says. Another case involved an unnamed drink and food retailer with thousands of shops. IBM blended Twitter data with sales tracked on loyalty cards and smartphone apps, as well as employee data. It found that the company’s best customers were the ones most influenced by turnover in the chain’s sales associates. In short, the human touch matters most to your most loyal customers. IBM has plenty of competition in mining social media data for insights. Rivals include big companies like SAS Institute, Adobe, Oracle and Salesforce, and start-ups like Crimson Hexagon and DataSift. IBM’s deal with Twitter is not exclusive. But David Schubmehl, an analyst at IDC, said that more than its competitors, IBM was focused on applying the Twitter data to a wide range of uses, beyond marketing to tasks like churn analysis, talent management and product development. IBM, Mr. Schubmehl said, is ahead of most of its rivals in its knowledge of many industries. “And it’s the combination of internal corporate data and external data from sources like Twitter where the real payoff is going to come from,” he said.

• Apple, banks at odds over who is to blame for high fraud rates on Apple Pay: A raft of headlines over the last week about unusually high fraud rates from thieves using stolen credit numbers on Apple Pay has exposed what many of the banks privately acknowledge they have been trying to fix for months. An industry consultant, Cherian Abraham, put the fraud rate at 6 percent, compared with a traditional credit card fraud rate that is relatively minuscule, 10 cents for every $100 spent. Mr. Abraham wrote in a blog post, one of the first to spotlight the issue, that the Apple Pay fraud “is growing like a weed, and the bank is unable to tell friend from foe. No one is bold enough to call the emperor naked.” It is not clear, however, that Apple is the naked emperor. More likely it is at least as much the banks’ fault, if not more. Apple Pay itself should, in theory, cut down on fraud because it makes stealing credit card information almost impossible. Each time a transaction takes place, Apple generates the equivalent of a new credit card number so the merchant never actually sees a customer’s information. The vulnerability in Apple Pay is in the way that it — and card issuers — “onboard” new credit cards into the system. Because Apple wanted its system to have the simplicity for which it has become famous and wanted to make the sign-up process “frictionless,” the company required little beyond basic credit card information about a user. Nor did it provide much information to the banks, like full phone numbers and addresses, that might help them detect fraud early. The banks, desperate to become their customers’ default card on Apple Pay — most add only one to their iPhones — did little to build their own defenses or to push Apple to provide more detailed information about its customers. Some bank executives acknowledged that they were were so scared of Apple that they didn’t speak up. The banks didn’t press the company for fear that they would not be included among the initial issuers on Apple Pay. Within weeks of Apple Pay’s introduction, a second set of banks joined: Barclays, Navy Federal Credit Union, PNC Bank, USAA and U.S. Bank. It also appears that banks set up a flawed process to deal with the credit cards that it did flag. Affected users were directed to a customer care phone center, not a fraud prevention center. A customer care center’s mission is to help customers use their cards, leading more fraudulent cards to be approved for use on Apple Pay. Call centers are a poor approach for two reasons,” Mr. Abraham wrote. “One — fraudsters are better at social engineering than call center reps are at sniffing out fraud. In some cases, fraudsters are calling the call center themselves to ‘alert the bank about a trip out of town’ so that fraud rules looking for transaction anomalies (like a customer living in California and transacting in Miami) do not trip them up.” Some Apple supporters have sought to discredit Mr. Abraham based on his affiliation as an adviser to a company that is based on Apple’s main competitor, Android. While he may indeed be conflicted, he has rightfully raised an important security issue that all sides have acknowledged is a problem, though perhaps not to the extent he has contended. All of this has led to a thriving black market in which thieves enter stolen credit card numbers into iPhones, essentially turning the devices into physical credit cards, which they in turn take to stores and walk out with merchandise. Thieves have even used Apple Pay at Apple Stores. In a statement, Apple put the problem squarely on the shoulders of the banks: “During setup, Apple Pay requires banks to verify each and every card and the bank then determines and approves whether a card can be added to Apple Pay. Banks are always reviewing and improving their approval process, which varies by bank.” Apple has now begun providing additional information to the banks that should help deter some of the fraud. The banks, which are responsible for the costs of the frauds, have toughened standards to review customer sign-ups on Apple Pay. No bank executive would speak with me on the record for fear of upsetting their company’s relationship with Apple. If you’re asking yourself, “Why are criminals more inclined to use Apple Pay than just use stolen credit cards at an online retailer?” it’s a good question. It is apparently much easier for banks to catch thieves using stolen credit cards with online retailers because of the delay in shipping a product — it can often take days — as well as the extra information that every online retailer requires, like an address where the product is to be shipped.

• Oracle quarterly earnings: revenue $9.33B, 0% Y/Y. Shares up 1.7% on dividend hike, strong PaaS revenues: Oracle Corp. reported fiscal third-quarter sales that missed analysts’ estimates, hurt by a rise in the U.S. dollar and weak corporate demand for cloud software. Revenue in the period that ended Feb. 28 was little changed from a year earlier at $9.33 billion, and profit before certain costs was 68 cents a share, the Redwood City, California-based company said Tuesday in a statement. On average, analysts projected $9.47 billion in sales and profit of 68 cents, according to data compiled by Bloomberg. Without the effect of the stronger dollar, revenue would have gained 6 percent, Oracle said, sparking optimism that the company is making headway with its push into corporate cloud services and sending the shares up in extended trading. The software maker also boosted its dividend by 25 percent to 15 cents a share, up from the prior payout of 12 cents. The company last raised its dividend in 2013, according to data compiled by Bloomberg. Oracle shares rose 1.7 percent in late trading following the report and dividend increase. The stock fell 1.2 percent to $42.87 at the close in New York, leaving it down 4.7 percent this year. Third-quarter net income fell to $2.5 billion, or 56 cents a share, from $2.57 billion, or 56 cents, a year earlier. Combined sales in Oracle’s cloud software, platform-as-a-service -- known as PaaS -- and infrastructure businesses were $527 million, up 29 percent from $408 million a year earlier. The company started disclosing cloud revenue in June. In the long term, Oracle’s transition to the cloud should benefit the bottom line, Catz said on the conference call. “For every million dollars of license we sell, we expect to collect another million dollars of support over five years for a total of $2 million,” she said. “While for every million of PaaS we sell, we actually expect to collect $5 million over five years.”

• Adobe quarterly earnings: revenue $1.11B, shares slide 3.8% on weakness in cloud sales: Adobe shares fell late Tuesday after the company reported lower-than-expected subscription growth for its Creative Cloud service and forecast second-quarter earnings and revenue below analysts’ estimates. Adobe increased its Creative Cloud subscriptions 28 percent to 517,000 in the fiscal first quarter, missing the 575,000 average of two analysts’ estimates compiled by Bloomberg. The company projected second-quarter sales of $1.125 billion to $1.175 billion and profit, excluding some items, of 41 cents to 47 cents a share. Analysts expected $1.18 billion and 48 cents, according to the average of 19 estimates. Adobe has introduced cloud-based marketing and creative-design tools as part of its push to generate more sales from subscriptions instead of software installed on computers. Revenue and profit declined in 2013, the year after the transition began, but have recovered as customers are getting used to the new way of buying software. “People are realizing they don’t necessarily need the full suite,” said Norman Young, an analyst with Morningstar Inc., who has a hold rating on the stock. “Our worry is, how are they going to raise prices over time and get people to move over from the point solutions to the full suite?” To encourage people to buy more products, Adobe will add more services, such as stock photos from Fotolia, a company it acquired last quarter. The new offerings should lead to a boost in revenue per user “this year” from that integration, Chief Financial Officer Mark Garrett said in an interview. Adobe fell 3.8 percent to $76.66 in extended trading at 7:25 p.m. New York time. The San Jose, California-based company had gained 17 percent in the past 12 months through the close. Sales were $1.11 billion and profit, excluding some items, was 44 cents a share in the period ended Feb. 27, Adobe said Tuesday in a statement. Analysts had on average projected revenue of $1.09 billion and profit of 39 cents, according to data compiled by Bloomberg.

• Rumor negates rumor: Alibaba may not invest in Snapdeal: Alibaba may scrap plans to invest in Indian online marketplace Snapdeal, technology website Recode reported, citing a person who was familiar with the matter. Last week, a person informed about the deal had told Reuters that Alibaba was in talks with Snapdeal over a potential cash investment in what could have been the Chinese e-commerce giant's first direct investment in India. Alibaba has held discussions with Snapdeal about a possible investment, but the Chinese company is leaning away from investing in Snapdeal right now, Recode said. Snapdeal competes in India with bigger rivals Flipkart.com and Amazon.com, and media reports had said it was seeking $1 billion in its latest funding round to fuel growth. Alibaba and Snapdeal's talks, however, did not involve a deal close to the $1 billion number reported, Recode cited the source as saying.

• Pinterest valued at $11B on new round of fund-raising: Less than a year after being valued at $5 billion, Pinterest has joined the 11-digit valuation start-up club. Pinterest, an online scrapbooking service, disclosed on Monday that it raised about $367 million in a new round of financing from new and existing investors. It valued the company at $11 billion, putting the start-up in roughly the same range as the Silicon Valley darling Dropbox and the data analysis company Palantir Technologies. In a regulatory filing, Pinterest disclosed that it could raise as much as $211 million in additional financing, bringing its potential haul to $578 million. That would be on top of the $764 million that the nearly five-year-old start-up has raised in previous rounds. Interest has been so ardent that the start-up has nearly tripled its valuation in just about a year and a half. Pinterest has shown strides in expanding and developing revenue, especially with so-called promoted pins that advertisers can buy. Advertising will continue to be a main focus this year, company executives have said.

Daily Tech Snippet: Tuesday, March 17

• Alibaba founder demos facial recognition payments: Alibaba is working on a new technology called “Smile To Pay” that will allow users to make mobile payments by simply scanning their face. It would basically work the same way as Apple Pay does with fingerprints, where users can approve mobile payments with a single tap on the home button — only, Alibaba wants to replace fingerprints with the user’s face. At Cebit in Hanover, Alibaba founder Jack Ma, after noting how online payments can sometimes be troublesome, the founder took out his smartphone and paid for a set of stamps on Alibaba using face-recognition technology. Alibaba has been open about its plans to release face recognition-enabled payments for Alipay, its third-party payment service, at least since October of last year.

• TripAdvisor reviews affect tourism of entire countries, hotel revenues: TripAdvisor is the biggest travel reviews website in the world. Today, TripAdvisor lists over 890,000 hotels, holds one of the largest collections of travel photos on the internet, and features accommodation in more than 45 countries. It makes nearly $1 billion in revenue a year and boasts more than 60 million members. Customers of hotels, restaurants, and other attractions add 115 comments to the site every minute, writes Tom Vanderbilt on Outside Online. The site is now so big that its reviews can shift the tourist economies of entire countries, Vanderbilt says. Social media and TripAdvisor have together forced hotel owners to do more than rely on nice photos and clever branding to entice customers, Vanderbilt writes. And that is changing the hotel economies of entire countries. Ireland:  The standout discovery is that as Irish hotel managers took action to garner good reviews on TripAdvisor, their hotels actually got better. And as they did, responses also improved — and visitors arrived more frequently. UK: User-generated content was “directly related to £1.7 billion of tourism spending in the UK,” Big Hospitality reports. In 2012, that figure made up around 2.2% of all tourist spending.  Studies found that reviews even Affect hotels’ “RevPAR,” or revenue per available room. Every positive percentage point a place rises up the tables in TripAdvisor, RevPAR at locations increases by 1.4%. Vanderbilt explains that as a result, hotels can raise prices by 11% to reflect their reputation on the site.

• Youtube retools annotations for mobile : Youtube is finally retooling a troublesome feature, making it more useful for content producers and hopefully a bit less frustrating for users. Annotations, YouTube's clickable pop-ups (which, to be clear, are still available for the moment) are being joined in the company's toolbox by a new feature called "cards," which, to every advertiser's delight (and most users' chagrin) will now work on mobile. The good news is that cards will take up a relatively minimal amount of video real estate when they first appear, showing teaser text that, if clicked, will pop up more information. At later points in the clip, a small "i" will indicate the presence of cards. 

• Lyft plans to be profitable by 2016, targests $2.7 B topline and reduced driver acquisition spends : Last week on-demand transportation service Lyft announced that it had raised $530 million in new funding as it seeks to steal market share away from arch-rival Uber and launch services in new markets in the U.S. and internationally. While it is clearly second to Uber in both markets it serves and financing it’s raised, Lyft’s financial projections at least show a path to profitability in the next 24 months. This year Lyft is targeting nearly $1.2 billion in gross revenues, of which its take will be around $300 million net. That assumes between 20 and 25 percent commission for the rides it books. In 2016, Lyft expects its revenues to more than double(targeting $2.7 billion). That revenue growth is driven by an increase in the number of rides and passengers that Lyft serves. The company is targeting nearly 90 million rides in total for 2015, which it expects to more than double to 205 million in the year following. While Lyft is generating a lot of cash, it also has a number of costs associated with running the business, including credit card processing fees, insurance, and taxes. After those costs, Lyft forecasts a $170 million gross profit in 2015, which it expects to grow to about $400 million in 2016. That said, its gross profit number doesn’t take into account Lyft’s customer and driver acquisition costs, which the company is using to prime the pump and grow both supply and demand. In 2015, Lyft expects to spend $150 million to acquire new users, while spending an additional $50 million on getting drivers on board to shuttle them around. Taking those numbers into account, there’s a delta of around $30 million between its gross profit and acquisition costs this year. In 2016, the financial picture gets a little better: While gross profit is expected to grow to around $400 million, its spend on driver and passenger acquisition is forecast to increase only slightly, to around $250 million.

• Snapdeal in talks to buy Jabong’s spun out logistics unit GoJavas for $32M:  Online marketplace major Snapdeal is in talks to acquire logistics firm GoJavas in a deal estimated to be about Rs 150-200 crore, as it looks to further strengthen its delivery operations in the country. GoJavas, which works with eCommerce firms like HealthKart, Jabong, Yepme and Lenskart, covers over 2,500 pincodes in the country. Currently, Snapdeal does not have a captive delivery arm and relies on third-party logistics.

• Another CFO retires (after Google, Apple, Amazon) : Uber CFO steps down: Brent Callinicos, the chief financial officer of Uber, plans to leave the ride-sharing company, in what will be one of the highest-level departures yet for the six-year-old start-up. Mr. Callinicos’s departure comes just two years after he joined Uber, according to an internal memo to employees obtained by The New York Times, where he helped the company expand from a young start-up to span more than 53 countries. The move comes on the heels of a spree of fund-raising activity for Uber. It also comes amid a spate of chief financial officer retirements at some of the largest companies in Silicon Valley over the past year. But perhaps most important, Mr. Callinicos’s departure comes shortly after Uber arranged a private sale of convertible debt, managed by Goldman Sachs. The terms of this offering, as described by people briefed on the matter, give Uber an incentive to go public within the next few years. The securities being offered to Goldman’s clients can be converted into stock — at a discount of roughly 20 to 30 percent of Uber’s valuation in an initial stock offering. 

• Non-compete agreements drive away talent, Silicon Valley thrives in their absence:  In Silicon Valley,  Not only are formal alliances commonplace among the local firms, it is also, arguably, one of the most dynamic labour markets in the world. Here, the culture is one of loyalty to the profession rather than to a firm. Equally, there is nowhere else on the globe that can compete with the number of start-ups which successfully launch and, more importantly, stay in business and go on to be global leaders in the industry.  But what drives this collaborative environment? Silicon Valley’s vibrancy can’t all be pinned down to one factor. However, one critical characteristic of Californian is that firms simply cannot enforce non-compete agreements on their employees – as the state doesn’t recognise them legally. There  is clear evidence that talented workers feel a pull towards states where they can change employers freely and take their creativity with them.  In today’s collaborative business environment, this raises some questions about whether non-competes really are the best tool for protecting intellectual property and recouping technological investments even from the perspective of the companies involved.  It is important to recognise that these are a double-edged sword.  Preventing employees from going to work for a competitor could not only hurt your competitor, but it could be hurting your own business too if one looks at the bigger picture.  Because finding the right match between an employee and employer is a little like the dating game — some are matches are made in heaven, some are not — and it is beneficial to be able to break the relationship as easily as possible, should the need arise. If, however, your own employees and your competitor’s employees are unable to find the right match for fear of breaking a contract, the only outcome is a zero-sum game.  In this situation, the degree of experimentation between employees and firms becomes that much harder, leading to an inefficient labour market. As well as being detrimental at firm level, the consequences are felt across the industry and region. 

Daily Tech Snippet: Monday, March 16

• Rumor of the day: Snapdeal in advanced talks to buy Freecharge for INR 2800 crores: Snapdeal is reportedly in advance talks to buy online recharge company Freecharge for Rs 2,800 crore. Freecharge, which allows users to recharge their pre-paid phones and get an equal value discount coupon, has emerged as a popular recharge option and a head-on competitor of PayTM, which recently attracted investment from Chinese e-commerce giant Alibaba. Freecharge has raised multiple rounds of funding. In February 2015, it raised $80 million from San Francisco-based hedge fund Valiant Capital Management and Hong Kong-based Tybourne Capital Management along with Sequoia Capital, RuNet and Sofina Capital. In September 2014, the company had mobilised $33 million from Sequoia Capital, Sofina and RuNet. It had also raised Rs 20 crore from Sequoia Capital in 2011. If the deal goes through, this will the largest acquisition in the Indian e-commerce space . It will even trump Flipkart's acquisition of fashion e-tailer Myntra last year for a whopping $370 million. If the acquisition comes through, there are several reasons it will make sense for Snapdeal, the leader in the marketplace business. Snapdeal will ride on Freecharge's growing popularity and its huge user base of over 20 million users. Freecharge works with upwards of 300-odd retailers, selling their discount coupons and processes recharges worth over Rs 100 crore per month. For most mobile recharge companies like Freecharge, PayTM, Mobikwik or Oxigen, mobile recharge is a very thin margin product but has worked well to grab a massive user base. Having scaled up to a few million, these companies have used their customer base as launch pads for a host of other services, including DTH recharges, utility bill payments, online shopping, bus ticket bookings, movie bookings and ordering from fast-food chains such as Dominos and Pizza Hut. For instance, Oxigen Services (India), launched in 2004 as a mobile recharge venture, now does Rs 600 crore worth of transactions per month - the biggest chunk of its business comprising money transfers (Rs 200 crore), followed by recharges (Rs 100 crore) and bill payments (Rs 30 crore) The deal will help Snapdeal diversify into a host of other online services, get more retailers onboard and provide it an edge over its emerging competitor in the marketplace model -- PayTM, now backed by Alibaba's might. Also, since mobile is the most important leg of growth, this acquisition will make the Snapdeal brand resonate better on mobile phones.

• Not topical, but interesting: A well-known link on Top 12 Product Management Mistakes: 1. Confusing Customer Requirements with Product Requirements 2. Confusing Innovation with Value 3. Confusing Yourself with Your Customer 4. Confusing the Customer with the User 5. Confusing Features with Benefits 6. Confusing Building Right Product with Building Product Right 7. Confusing Good Product with Good Business Model 8. Confusing Inspiring Features with “Nice-to-Have” Features 9. Confusing Adding Features with Improving Product 10. Confusing Impressive Specifications with an Impressive Product 11. Confusing a Complete Product with a Sellable Product 12. Confusing Product Launch with Success

• YouTube embraces 360-degree videos, signaling the next trend in video: Friday YouTube announced it now supports 360-degree video uploads, marking a significant step toward the video format going mainstream. Currently these YouTube videos can only be viewed on Google Chrome and in YouTube’s Android app. YouTube says it’s working on compatibility for iOS devices and other Web browsers. The videos are a step toward virtual reality, offering an 2D-immersive experience in which a user can pan around a video with their mouse. It’s similar to the experience of Google Maps’ Street View function, except with video not photos. Viewers will no longer be locked to a fixed perspective. For now, uploaders of 360-degree videos will need to run a script on their video to add metadata so YouTube recognizes it as a 360-degree video. YouTube is working to automate this step. The viewing experience is especially neat for an Android user in the YouTube app. If you move your phone from side to side, the perspective will shift. Makers of 360-degree cameras expect these videos to soon be ubiquitous. “Similar to Flip driving the popularity of YouTube video and the idea of sharing, 360-degree cameras and technology take video as we know it to the next level,” said Paul Meyhoefer, vice president of marketing at JK Imaging Ltd, maker of the Kodak SP360. YouTube will support uploads from 360-cameras such as the Bublcam, IC Real Tech’s Allie, Kodak’s SP360 and the Ricoh Theta. The cameras are fairly expensive — ranging from about $300 to $700, but they should become cheaper in time.

• Lyft Raises $530M at $#2.5B valuation: Uber, the ride-hailing start-up, is a $40 billion juggernaut, but it is not without competition. Lyft, another ride-hailing start-up and Uber’s biggest competitor in the United States, announced on Thursday that it had raised $530 million in venture capital, valuing the start-up at $2.5 billion. The investment was led by Rakuten, the Japanese e-commerce giant, which contributed more than $300 million.

• China puts tech bill that concerns West on hold: U.S. official: China has put a hold on a draft counter-terrorism law that would require technology firms to hand over sensitive information to government officials, a senior U.S. official said in a good sign for Western businesses who saw the rule as a major impediment to working in the world's second largest economy. President Barack Obama said in an interview with Reuters on March 2 that he had raised concerns about the law directly with Chinese President Xi Jinping. "They have decided to suspend the third reading of that particular law, which has sort of put that on hiatus for the moment," White House Cybersecurity Coordinator Michael Daniel said on Thursday, according to a webcast of a discussion at the Information Technology and Innovation Foundation. "We did see that as something that was bad not just for U.S. business but for the global economy as a whole, and it was something we felt was very important to communicate very clearly to them," Daniel said. It was not clear whether the bill would proceed or not. China Central Television reported on March 9 that Wang Aili, a senior official with the Chinese National People's Congress Standing Committee's legislative affairs commission, said the bill was not on the schedule for the NPC's annual session, which began last week. A third reading and vote would be scheduled in "due time," he said. The law would require technology firms to hand over encryption keys, the passcodes that help protect data, and install security "backdoors" in their systems to give Chinese authorities surveillance access. One industry source, who requested anonymity, said the move gave companies "some breathing room, but not complete relief" because the bill could be picked up again at any point as only the standing committee — not the full parliament – was needed to pass a law. But another was optimistic that was the end of the matter. "The Chinese are not ready to kick out all foreign companies, and because they weren’t ready to take that step, they backed off," said a U.S. technology industry expert, who asked not to be identified to avoid complicating his employer's dealings in China. "You can bet that the next steps will be something that tightens up somewhere but doesn’t cause this level of pain." The initial draft, published by the NPC late last year, requires companies to also keep servers and user data within China, supply law enforcement authorities with communications records and censor terrorism-related Internet content.

Daily Tech Snippet: Friday, March 13

• Cash burns fast for Uber-like startups that grow city by city - "You have an operations team that is on a city-by-city basis, but you make sure your engineering team is not city-by-city" : The list of city-by-city startups includes mobile car-booking companies Uber Technologies and Lyft, food delivery startup Munchery, parking provider SpotHero, shopping service Instacart and laundry startup Washio. While they rely on technology to deliver new products and services, their business models are a departure from the low-cost ventures built by a few programmers working in a cramped office. Instead, they're setting up kitchens, renting warehouses and hiring local staff. Among the startups that raised a third financing round in 2013 or 2014, 14 are expanding from city to city and have attracted an average of $65 million in funding, more than double the amount raised by the rest, according to PitchBook Data, a financial information provider. Uber is leading the pack, with a presence in almost 300 cities in 55 countries. Valued at $40 billion, the mobile car-hailing startup is on a hiring spree for operations staff, with more than 200 job postings for staff outside of the company's headquarters in San Francisco, from Miami to Moscow. CEO Travis Kalanick's steady ramp-up has required Uber to raise an enormous amount of cash totaling more than $5 billion. In January, Bloomberg News reported the car-booking startup raised $1.6 billion in convertible debt, and that it was still on the lookout to collect more financing. Some investors warn that cash-intensive startups are at risk of flopping, pointing to previous attempts by delivery companies Kozmo.com and Webvan, which also sought to expand city to city in the late 1990s, only to crash when the dot-com bubble burst in the new millennium. Marc Andreessen, Silicon Valley investor and startup veteran, cautioned last year that enterprises rapidly burning cash may be unable to survive in an adverse environment.1 Apoorva Mehta, Instacart's CEO, is betting his delivery startup will be nimble enough to avert a crunch. The San Francisco-based company, which raised $220 million at a $2 billion valuation in January, initially sold groceries to customers with a markup. Now, Instacart is more focused on cutting deals with food stores to deliver produce and other goods for a fee. Instacart needs less cash to expand (compared with Amazon, which also delivers groceries in some urban areas) since it doesn't have to build warehouses or large stores. "You have an operations team that is on a city-by-city basis, but you make sure your engineering team is not city-by-city," Mehta said.

• Alibaba hiring in Amazon, Microsoft backyard as U.S. cloud unit expands: Alibaba has begun hunting staff in Seattle, home turf of Amazon.com Inc and Microsoft Corp, focusing on savvy cloud computing hires as it ramps up U.S. operations. Several recruiters in the region said they had registered the firm's hiring drive, suggesting Alibaba is eyeing staff at rival Amazon as well as Microsoft and Facebook Inc. According to LinkedIn's data, Alibaba has already hired staff away from Microsoft and Amazon. LinkedIn data list Microsoft as the top company from which former employees have joined Alibaba, not specifying the location of the hires, with 20 recruits for unspecified posts at the Chinese company having previously worked at the software giant. With the job openings Alibaba joins the increasingly fierce fight for cloud computing talent in Silicon Valley and Seattle, where it opened a research and development center in what is Microsoft and Amazon's backyard late last year. The Chinese company's arrival on the tech job market is - for now - unlikely to pose a concern to major industry incumbents, who in past years have resorted to increasingly imaginative tactics to recruit scant human resources. Alibaba's moves in the region are at an early stage, and the amount of hiring still comparatively low, said recruiters. The company has fewer than 300 employees in the United States. But Alibaba is looking at Amazon, Microsoft and Facebook in the Seattle area for new blood, particularly developers, said Jerry Taylor, president of Executive Recruiters Inc in Bellevue, Washington. "I'm sure they're going to be web-based as well as mobile-type folks," he said. "They're trying to get a footprint in the United States. What better place to go than their direct competitor in Amazon?" An Alibaba spokesman declined to give details of recruitment. Alibaba's talent hunt coincides with a broader push in the United States this year to win over U.S. business, offering American retailers new ways to sell to China's vast and growing middle class. On March 4 it launched a cloud computing hub in Silicon Valley, its first outside of China. Alibaba has hired at least 10 software engineers or computing experts from either Microsoft or Amazon since July 2014, all but one based in the greater Seattle area, according to their LinkedIn profiles. Li Xiaolong, one of the 10 and a senior staff engineer at Alibaba, openly advertises for like-minded talent on his profile: "We are actively hiring talents in machine learning, data mining and distributed computing, as well as hardcore software engineers to improve the world's biggest e-commerce platform. The location can be Seattle, Silicon Valley, Beijing or Hangzhou."

• Brands Are Now Posting More to Instagram Than Facebook Photo app is marketers' new fave: Instagram is luring brands away from Facebook, according to a new report from research firm L2, which found that brands now post more content on the photo-sharing app. The reason? Brands know everything they post on the platform will appear in fans' feeds, the study says. But on Facebook, if brands don't pay to promote their posts, much of their content doesn't appear in followers' News Feeds. That trend is turning Instagram, which is owned by Facebook, into a growing marketing force. The report outlines how brands have been building their followings on the app, which recently topped 300 million monthly users. Facebook does not comment on Instagram's growth outside of official announcements. However, considering the Instagram audience was 100 million two years ago, that tripling of users approaches Facebook's biggest leaps. Facebook went from 100 million to 300 million in an even shorter time span. Another reason Instagram is a marketing darling at the moment is it's attracting younger users than Facebook, according to L2. While an estimated 3 million U.S. teens abandoned Facebook between 2011 and 2014, the same demographic now cites Instagram as "the most important" social network, the report says. UPDATE: The survey focused on 250 of the world's top brands, and Facebook counts more than 2 million advertisers. Here's a look at what else L2 and Olapic, the social marketing technology firm, found: Brands post an average of 9.3 times a week to Instagram, up from 7.5 posts a year ago. Facebook posts decreased, meanwhile, from 11.1 to 8.8 per week. Brand fan bases rose an average of 26 percent over the past year. Photos perform better than videos. Users engage with photos 1.03 percent of the time and with videos 0.79 percent of the time. Instagram's Hyperlapse app, which speeds up video into fast-motion action, has fallen out of favor with just 2.4 percent of brands using it since its August launch.

• F.C.C. Sets Net Neutrality Rules: The Federal Communications Commission on Thursday released extensive details of how it would regulate broadband Internet providers as a public utility, producing official wording that almost certainly sets the stage for extended legal fights. The release of the rules had been eagerly anticipated by advocates and lawmakers, as well as broadband and technology companies, since the agency approved new rules for Internet service two weeks ago. The details came in a 313-page document that included the new rules and the legal justifications for them. The rules revealed how the strict laws would be modified for Internet providers, exempting the companies from the sort of price controls typically applied to utilities, for example. But the full text of the new order also raised uncertainties about broad and subjective regulation. One catchall provision, requiring “just and reasonable” conduct, allows the F.C.C. to decide what is acceptable on a case-by-case basis. Opponents of the rules, including many of the leading Internet providers, spent Thursday poring over the document. It was not known who would file the first legal challenges, or exactly what legal arguments would be made. Many experts, though, said the document included plenty of opportunity for different interpretations. The “just and reasonable” provision, said Roger Entner, the lead analyst at Recon Analytics in Boston, “can be stretched like chewing gum.” He suggested that it would inspire a flood of proactive, permission-seeking petitions from businesses large and small. He pointed to mobile-messaging companies like Snapchat or WhatsApp that may be transmitting voice or video and seeking money from investors who want legal assurances before signing checks. “Before acting, you need to know: Is this kosher with the F.C.C.?” The debate about how to preserve the open Internet has persisted for more than a decade, and the F.C.C.’s new rules are not its first attempt to protect it. But the issue picked up momentum in the last year, with President Obama taking the unusual action of publicly urging the independent agency to approve strong regulation. The agency’s order reclassifies high-speed Internet as a telecommunications service rather than an information one, subjecting providers to regulation under Title II of the Communications Act. Its aim is to protect the open Internet, advancing principles of so-called net neutrality by prohibiting broadband providers from elevating one kind of content over another. “Threats to Internet openness remain today,” the agency wrote in the document released on Thursday. “The record reflects that broadband providers hold all the tools necessary to deceive consumers, degrade content or disfavor the content that they don’t like.” Comcast and Verizon, two leading Internet service providers, declined to comment. Jim Cicconi, AT&T’s senior executive vice president for external and legislative affairs, called the order’s publication the beginning of “a period of uncertainty” that the company was confident would be resolved “by bipartisan action by Congress or a future F.C.C., or by the courts.”

• Educational toy maker LeapFrog, once unique, is battered by the app disruption: Battered by a growing variety of cheaper alternatives, LeapFrog, a dominant maker of educational toys and games, has watched its sales plummet. It has become the target of short-sellers, investors who bet on a company’s failures, and was most recently sued by shareholders who claimed it had drastically overestimated consumer demand for its products. “As each year passes by and more apps are for free and they’re lower priced, it becomes a tougher sell,” said Jim Silver, the editor in chief of TTPM, a toy review website. Slow to adapt, critics say, LeapFrog has become something of a modern-day fable for how quickly technology has unseated the toy industry’s titans. Mike Wood, a lawyer, created the company upon realizing how few educational products existed for his 3-year-old son, who was having trouble learning to read. He founded the company in 1995, and in 1999 introduced the first LeapPad, an electronic book with audio and pen that helped children learn to read. As technology evolved, LeapFrog seized the opportunity to create a tablet just for children: no web-browsing abilities and a limited set of games. It introduced the original LeapPad tablet in 2011 for $100 at a time when the average tablet in the United States sold for about $470, according to data from Euromonitor. Sales skyrocketed. Sean McGowan, an analyst with Needham and Company, estimates that the company sold 1.2 million tablets the first year, and more than doubled that in 2012, when the LeapPad 2 came out. The hardware, combined with its software and content, most likely made up more than half of the company’s revenue, Mr. McGowan said. “Back then, not every family had an adult tablet they were willing to give to their child,” said Gerrick Johnson, an analyst with BMO Capital Markets. Just a few years later, however, the idea of a tablet that appeals precisely because it can do a limited set of tasks seems almost quaint. Older generations of iPads have become hand-me-downs from parents to children, while tablets get cheaper every year. Parents can program their grown-up devices with educational games, instead of buying a separate specialized system. Sales of various LeapPads to retailers began to plateau in 2013, according to Mr. McGowan, who estimates that they dropped more than 40 percent in 2014. On a weekday afternoon, Flora Bojadziev, a chef from Harlem, browsed through a Toys “R” Us in Manhattan. She was looking for educational toys for her 2 ½-year-old son, who plays with her iPad. But she balked at the idea of spending $130 on LeapFrog’s LeapPad Ultra XDi, an educational tablet for children, on sale in the aisle a few steps away. “With that money, I’ll buy him so many apps,” said Ms. Bojadziev, who is 33. That is precisely the problem for LeapFrog, which built a multimillion-dollar company on children’s devices before babies learned to swipe the screens of iPads.

• Intel cuts revenue forecast as desktop demand weakens - shares down 5%: Intel Corp (INTC.O) slashed nearly $1 billion from its first-quarter revenue forecast as small businesses put off upgrading their personal computers, sending the chipmaker's shares down more than 5 percent. Fewer companies than Intel had expected replaced desktop PCs running on outdated Microsoft operating systems, leading to weak demand for its chips. Intel also cited "challenging" macroeconomic and currency conditions, particularly in Europe. "The macro environment is not robust enough for people to upgrade their PCs the way they normally would," Topeka Capital Markets analyst Suji De Silva said. Intel said on Thursday that it expected first-quarter revenue of $12.8 billion, plus or minus $300 million - about 7 percent lower than its earlier forecast of $13.7 billion, plus or minus $500 million. Though dominant in the market for chips used in PCs, Intel has been slower than rivals such as Qualcomm Inc (QCOM.O) to adjust in recent years to the growing popularity of smartphones. When Microsoft Corp (MSFT.O) wound down support for its Windows XP operating system last April, Intel had expected a bounce in demand from small- and medium-sized businesses. But this has not happened. Businesses and consumers are taking an "if it ain't broke, don't fix it" attitude to their old PCs, Summit Research analyst Srini Sundararajan said. According to BlueFin Research Partners, 75 million-76 million PCs will be shipped worldwide in the first quarter, a decline of 8-9 percent from the preceding quarter. Intel, whose historic "Wintel" alliance with Microsoft once delivered breathtakingly high profit margins, has been trying to offset the impact of slower PC upgrades by making chips for devices such as "2-in-1s", which function as both laptop and tablet. Intel said the mid-point of its gross margin range would remain at 60 percent, plus or minus a couple of percentage points. Intel's shares were down 4.8 percent at $30.76 in late afternoon trading on the Nasdaq.