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Tools For Treason
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Devin Coldewey
| 2,013
| 7
| 6
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Our rights are extended and limited by the tools we use. The Internet has magnified our capability for free speech, but has pared down the reasonable expectation of privacy. And we, of course, have volunteered our data unreservedly at every turn. Even when we got burned, we kept coming back to give more. I suppose we did it because we trusted those to whom we were giving it, though they have almost without exception lost that trust now. And any trust they do regain must always be provisional, apparently, so why bother with it at all? It seems that if we are to start over again, the founding principle of our tools for communication cannot be the establishment of trust, but the impossibility of trust. It’s a cynical place to start, but clearly a necessary one. If it is possible at any point for trust to enter the equation, that trust can and likely will be taken advantage of. If there exists, anywhere from your end to the other in the long chain of servers, switches, cables, interpreters, loggers, drivers, protocols, interfaces, and displays, any single place where you are not one hundred percent in control of your data, your data is compromised and the system fails. The trick is to treat every communication as a potential act of terrorism. After all, isn’t that how the NSA does it? For them, it’s an excuse; For us, it should be a method. Start there, and you can build a system that works. Start there, and you will be told that you are building tools for treason. You are. Great. If it isn’t illegal, it isn’t strong enough. If the government doesn’t denounce it, it isn’t good enough. Tools for treason are the tools that will suffice for our protection from now on. But let’s be clear: They be used for evil, both petty and monstrous: for trading child pornography, for selling meth, for planning assassinations, for mass murder. You will be told you are arming the enemy. You are. But your tools are neither necessary nor sufficient for such atrocities. Every kitchen knife is sharp enough to cut your fellow man; every hammer is hard enough to split skulls; every car is fast enough to mow down pedestrians. They have to be to fulfill their purposes, and it’s the same here. And remember, we’re not just talking about Facebook chats and Google searches. What seems like overkill for protecting personal email may be totally insufficient for a guerrilla fighter coordinating across borders. Many people may not care about their privacy when it comes to a spare email address leaked by Facebook or the metadata from their Gmail account. They may come around later or not, but someone’s got to make sure that if they do come around, privacy is even an option. If your algorithm doesn’t allow a pedophile to irreversibly scramble his drive and avoid prosecution, it can’t be used by freethinkers under ideological oppression to hide state-banned books. If your messaging app won’t let someone safely plan bombing the Super Bowl, it can’t be used by an activist to reveal human rights abuses. If your map doesn’t let poachers stalk rhinos without alerting rangers, it can’t be used by ethnic minorities to escape purges. The strength of the tool enables all of these things, and it is an old, old test we have taken many times before to see which we use it for. The answer, as always, will be “both.” And how will we make these magical tools? There are really only two major requirements, if we assume (wrongly for the most part, at least at first) that users can operate them properly. They must ignore the law. There is no reason to respect it — even the government doesn’t. Police requests for data, subpoenas, and anything else must be completely powerless, at least without the consent of the user. But it is not enough to disdain the law, unless one is immune to it. Therefore, they must not be centralized. Web platforms as a service are fine, and will remain fine, for editing photos and sharing restaurant recommendations, but not for personal communications or any kind of confidential data. Nearly every cloud service places compliance with the law above the needs of its users (SpiderOak is an exception to this, and I wrote mistakenly here that they are able to decrypt on command; They are not, as a commenter points out, although the metadata they can disclose could also be critical). Self-hosting, whether on your own or on rented or virtualized hardware, is the only way to be remotely sure that your data is safe. Put network attached storage and a pop-up web server in every home and watch existing monolithic structures be eroded. With personal gigabit connections, terabytes of our own to serve from, end-to-end encryption, and peer-to-peer implemented at a fundamental level, our communications will cease to be reliant on anything except critical infrastructure — and even that, in time, will be obsoleted. It’ll take time to nail down the right protocols, plug gaps, and expand compatibility, but the important thing is to get it out there. Like Bittorrent, the cat won’t be put back in the bag. It’s taken ten years for torrents to become a household word, but at the rate services and agencies are accidental tipping their cards, it may not be as long a road to get people in touch with their inner cryptographer. Make it as easy to install as BonziBuddy and you’ll start something that won’t be easily stopped. The simple fact is that the government and powers in whom we’ve confided have shown themselves to be unworthy and unreliable (if not totally reprehensible). Respecting their interests should no longer be a matter of course, and furthering the naturally decentralized nature of the Internet is the logical next step. Creating something that serves the interests of the private (or oppressed) individual instead of, ultimately, those who wish to impose on him or her should be a major imperative for the next decade of software and platform development. They won’t like it, because freedom is the freedom to do wrong as well as right, and they as arbiters are terrified that they will no longer be able to tell which you’re doing. Well, we’re tired of them knowing — tired of them trying to find out. We have the technology. We can declare our independence. We’ve done it before.
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Why Do We Endlessly Retweet Tragedy?
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Josh Constine
| 2,013
| 7
| 6
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With the utmost respect for victims and survivors, may I question why we feel so compelled to personally spread bad news? Why with each bombing or disaster we all race to tell everyone we know what happened? We’ve realized the power of social media for distributing real-time news. It lets us express empathy, but can also spread fear and misinformation. It’s time to ask if and when we’re helping. Spreading accurate information to those that need it is important. But how many of the retweets of a smoking fuselage or broken city street actually accomplish that? If you’re on the scene, say what you saw. Tell friends that you’re safe and assist fact-checking news organizations to piece the real story together. If there is still danger, those who are in danger must be informed. If a factory fire is pumping noxious fumes into the surrounding community, if a hurricane suddenly changes directions, if an armed suspect is on the loose. For those who have lots of followers in harm’s way, tweeting could get them out of it. And everyone is entitled to their opinion to what they think is news and important to share. But we need mindfulness. Our brains are not wired for the modern age and the incredibly powerful tools we’ve built to transmit information. A few thousand years ago, literal word of mouth was all we had. If you heard something bad was happening, it probably directly affected you. “There’s a sabretooth tiger coming! Run!” “Don’t drink the water, it’s poisoned.” We likely developed instincts to trumpet this information as far, wide, and fast as we could because it benefited our tribe. But without tools, that message rarely projected farther than it needed to go. Now things are very different. The threats we face haven’t scaled as quickly as our technology. Danger to a few dozen, hundred, or thousand people instantly reaches millions. The barrier to passing along news has dropped to a single click. We may be so inclined to retweet tragedy because it’s our nature to care, feel sympathy, and wish we could help. But amplifying sad news too far too fast itself poses a risk. Most objectively, being too quick to retweet can spread inaccurate information. Just today with with the Asiana plane crash at San Francisco airport, an said she thought the plane rolled, which would likely have made injuries much more severe. No one can confirm that it rolled, though, and the wings remain attached, yet that info had already been retweeted hundreds or thousands of times. In Newtown, a gathered around Ryan Lanza when he was mistakenly accused of being the school shooter when the culprit was his brother. And in Boston, , from erroneous stories of people killed to a fake campaign tricking people into thinking a dollar would go to victims for each of their retweets. Then there are the negative effects of fear. Commercial plane travel is actually . Deaths are rare, and it’s almost infinitely safer than cars, where there are 1.27 fatalities per 100 million vehicle miles traveled in the U.S. But each of today’s plane crash photo retweets sends a different message — that flying is dangerous. Not only could implied misinformation hurt the economy, but it could put more people on the road where they’re more likely to get hurt. For terrorists, one of the main goals is to get attention, and . Endlessly retweeting the destruction and heartbreak they cause may actually make their attacks more effective. And on a more abstract level, we risk distracting each other from the present. From each other’s lives, contributions, and even ability to aid those impacted by the tragedies we talk about. When we can use social media for good, we should. Campaign for to reputable relief funds and pass along information about volunteering. Make people aware of real danger when necessary. If using a one-to-many medium will spread that info too far, use private messaging. There’s no need to shove fear in everyone’s faces. Right now, we are rubbernecking on a global level. Good news goes unheard as we fall into an eager chorus of shock and sorrow. Each of us has a choice of whether to simply parrot the problems our world inevitably faces or use our voice to try to solve them. Let’s think before we tweet.
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Plane On Popular Tech Route From Seoul-To-SF Crash Lands at SFO
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Kim-Mai Cutler
| 2,013
| 7
| 6
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I just crash landed at SFO. Tail ripped off. Most everyone seems fine. I’m ok. Surreal… (at ) [pic] — — David Eun (@Eunner) An Asiana Airlines flight that follows a popular route in the tech industry between Shanghai, Seoul and San Francisco crash-landed at San Francisco International Airport this morning, killing two people. A Samsung executive who was aboard the flight, David Eun, reported that , , was also on the flight and tweeted this photo earlier. He posted earlier but Waiting for CT scan & diagnosis. Thx for all the following. My thought are with fellow passenger and their families. — Ben Levy (@BenLevy74) Facebook COO Sheryl Sandberg was almost on the flight, but switched to a United flight in order to use frequent flyer miles for her family. We do not know if anyone else from our community was on board that plane, but Seoul-to-San Francisco is a pretty highly trafficked route for tech workers who work for or do business with Samsung or any number of the larger gaming companies there. The flight originated in Shanghai, China, and landed in Seoul before arriving at San Francisco at approximately 11:30 a.m. today. In a press conference held this evening, San Francisco mayor Ed Lee said that responders had finally accounted for all 307 passengers aboard, after not being able to account for 60 people earlier this afternoon. The city confirmed two fatalities with about 181 people transported to local hospitals from the scene. The two dead were found outside of the plane, as the tail had ripped off upon landing. Of the 181 people who were injured, 49 are in serious condition. One hundred thirty two of those 181 people were transported to hospitals later on after being triaged for minor injuries. They said it was not necessary for another 123 passengers to require hospitalization. Asiana Airlines that there were 291 passengers aboard with 19 in business class, 272 in economy and 16 crew members. The airline says it is still investigating the cause of the crash. Asiana said that there were 77 Korean, 141 Chinese, 61 American and 1 Japanese citizens on the flight. Eun, who runs Samsung’s Open Innovation Center, said he and many other passengers cleared customs earlier this afternoon, despite many leaving their baggage and presumably their passports back on the plane. He said in a : “Just went through customs. Adrenaline rush is subsiding. Just trying to process all this. Really glad that most everyone I saw seemed ok, with just a few minor injuries. Thinking a lot about family and friends right now…” Sandberg said she nearly took the flight, which was run by Asiana Airlines and took off from Seoul at 4:35 p.m. local time, with her family. But she changed airlines in order to use United frequent flyer miles for her family. She had been in South Korea, : “Taking a minute to be thankful and explain what happened. My family, colleagues Debbie Frost, Charlton Gholson and Kelly Hoffman and I were originally going to take the Asiana flight that just crash-landed. We switched to United so we could use miles for my family’s tickets. Our flight was scheduled to come in at the same time, but we were early and landed about 20 minutes before the crash. Our friend David Eun was on the Asiana flight and he is fine. Thank you to everyone who is reaching out – and sorry if we worried anyone. Serious moment to give thanks.” It’s not clear why or how the plane crash-landed, but the tail apparently ripped off after the plane touched down too early on the runway. . SFO earlier today for a few hours, with some apparently being diverted to Oakland and Las Vegas.
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Top Apps For The 1%
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Ryan Lawler
| 2,013
| 7
| 6
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There’s been an interesting phenomenon occurring lately, thanks to the increasing ability of companies to reach and serve ultra-niche audiences — the rise of the app for the 1 percent. Now more than ever, you can download apps that you can’t actually afford to use. The democratization of the app store, of course, has meant services that used to only be available for the ultra-rich are now within reach of ordinary users. Think Uber, for example. Once upon a time, it would have been unheard of for most people to call a black car, and yet Uber makes such a service a somewhat affordable, if still luxury, option. A once-in-a-while thing. But then there’s that whole other side of the spectrum, in which a whole new breed of apps and startups have emerged over the last few years that aren’t for the 99 percentile of users at all. These are apps developed specifically to appeal to a select group of individuals who want the finer things in life. It used to be that mobile apps for the extremely wealthy were largely a joke. The famed , launched first on iOS and later and , was one example of a mobile application targeted solely at those who could afford to waste money on it. Now they’re becoming commonplace, and that’s offering regular users a view into just what they can’t have. With that in mind, here’s a list of the best apps and services you probably can’t afford to use. Happy window shopping!
It doesn’t get much more 1 percent than an on-demand private jet service. And, well, that’s what is. Ostensibly, the company hopes to bring the cost of private air travel down by making it more efficient. That might be true, but with a $2,500 membership fee and one-way flights that run thousands of dollars a piece, BlackJet is still priced out of range for most of us used to flying coach. But if you’re used to flying private jets, it’s supposed to be, like, a really good deal.
Even before American Express in luxury destination travel site , it was positioned to be out of reach for the hoi polloi. Even just the name — Inspirato — sounds like it was translated from some foreign language to mean “you can’t afford this.” Anyway, this is a company that specializes in offers on exclusive vacation homes and resorts. But what do you care? You’re never going to use it.
is a site for people who are so rich that they’re like, “Fuck it, I don’t want to stay in a hotel. I want to stay in another rich person’s house.” It’s like some bizarro Airbnb, where you actually pay to sleep in someone else’s bed and raid their fridge. That said, you know the sheets are clean — they bring in their own linens — and you get a free iPhone during your stay. How baller is that?
You know what’s more personal than a car? . Seriously, if I ever had a boat (and here’s betting that’ll never happen, because boats are expensive), the last thing I’d do is borrow the damn thing. And yet, there are people in the world who would do just that. I don’t understand how they can live with themselves.
Yes, an app for perusing all the fine art stuffs that you can buy at auction. makes me wonder why I’ve even bothered to continue writing this list.
(See also: )
At first glance, just looks like the next version of the “I Am Rich” app. You pay $1,000 and then what? Discounts, I guess. Only for those who have $1,000 just lying around to find out.
Would any list like this be complete without Dave Morin’s “ ” to communicate and collaborate with his assistant?
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Flash Sales Site Ideeli Raises $12M More
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Leena Rao
| 2,013
| 7
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It appears that flash sales site has raised another $12 million in funding, according to an from Friday. It’s unclear who the investors are in this round, but this raise would bring Ideeli’s total funding to $112 million. Past investors include Credit Suisse, Next World Capital, Cue Ball Capital, StarVest Partners, Constellation Growth Capital and Kodiak Venture Partners. Ideeli confirmed the new raise of $12 million. Ideeli, which launched in 2007, is part of the original crop of flash sales sites, which include Gilt Groupe, Rue La La, HauteLook (acquired by Norsdtrom) and others. At last count, the site had over 5 million members. For background, Ideeli offers 50 to 70 percent discounts on clothing and accessories over a several-day period. Products include clothing for men, women and children, as well as jewelry, handbags and home accessories. Last year, Ideeli announced in new funding to expand beyond the flash-sales model. In 2011, Ideeli says it brought in $77.7 million in revenue. It’s unclear if the site and its sales are continuing to grow at a fast clip. The flash sales model has faltered–Fab has moved on from flash sales, and even Gilt is beyond the model. We’ve contacted the company and will update when we hear back.
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College Humor’s First Feature-Length Film Coming To iTunes And Other Digital Media Stores July 9
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Darrell Etherington
| 2,013
| 7
| 6
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[youtube http://www.youtube.com/watch?v=oBBmo_bTj1s?feature=player_embedded]
College Humor is putting out a feature film July 9 (via ), and it stars a bunch of people you might recognize, including Glenn Howerton (Dennis from It’s Always Sunny In Philadelphia), Adrianne Palciki (from Friday Night Lights), Ben Schwartz (Parks and Recreation), Steve Little (Eastbound and Down) and Josh Groban (yeah, the pop opera singer). It’s called , and it’s about a coffee shop aspiring to become a fancy bistro. The film is something of an experiment, from its direct-to-digital release to its marketing campaign, which will be managed strictly through College Humor’s social media channels. The idea is to prove what it can accomplish by targeting its core demographic, the younger, digital native audiences that Hollywood would like to court so badly. College Humor is famous for its skits and short videos, not for longer films. And while the movie will be screened in select theatres before an official premiere at the Just for Laughs festival in Montreal at the end of this month, it’s the experiment in leveraging social media and College Humor’s existing mass fan base that’s exciting here. Others have shown that eschewing traditional distribution models can result in big success, in comedy especially. Comedian Louis C.K. distributed his comedy special via his website by direct download for $5 per copy, with no DRM or strings attached. The special , so it’s safe to say that experiment panned out. Coffee Town isn’t revolutionary in terms of its premise, as it sounds like a standard “guys get up to hijinks” affair, with the affable Groban starring as the buffoonish villain of the piece. It’s probably not going to win any academy awards. But it could be a proving ground for feature movies made outside the Hollywood system – and that’s reason enough to watch.
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Low-Cost iPhone’s Plastic Case Shows Up In Alleged Video And Photo Leak
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Darrell Etherington
| 2,013
| 7
| 6
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[vimeo 69703577 w=640 h=360] Apple is said to be preparing a lower cost iPhone for later this year, with a plastic shell instead of its typical recipe of metal and glass to lower component costs. Now a , which creates Android knock-off handsets of higher-end devices, is claiming to have obtained the new phone’s plastic casing and front-screen assembly. The supposed early manufacturing prototype leak shows a smooth plastic shell in white that Techdy says feels much higher-quality than the plastic casings used in phones by other manufacturers like Samsung. The front resembles the screen of the iPhone we all know and love and has a black design that will reportedly be common to a variety of different color options for the back plastic half. The slightly contoured edges on the rear of this supposed budget iPhone are very much reminiscent of the current-generation iPod touch – essentially, this looks like a slightly thicker version, which makes sense given the additional room required for cellular antennas, ambient light sensors and other components. Apple brought expanded color options to the iPod touch with this generation, so that could have been in preparation for launching a line of lower cost iPhones with similar design themes. Comparison shots taken of the iPhone 5 with the leaked plastic iPhone case shows a design that’s only just slightly thicker than the current existing Apple smartphone. The screen size is the same, and among the only other significant outward differences is the use of just one speaker grill on the bottom edge of the device instead of two. Techdy is marketing an Android-powered clone of the device already, so definitely take this with a grain of salt. But it is in keeping with what we’ve heard about a supposed low-cost iPhone in the past, and that right there is definitely an attractive device. If Apple can manage to release a plastic iPhone for cheaper than its flagship that feels and looks better than the top-end designs of its rivals, we could see a very different smartphone game come later this year. There is lots more to see in the massive gallery Techdy put together depicting the supposed iPhone from every possible angle, so be sure to check it out.
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Google Plus Is Like Frankenstein’s Monster
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Jon Evans
| 2,013
| 7
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Your humble correspondent begs your indulgence for this flu-fuelled stream-of-consciousness post, but deadlines wait for no virus, so needs must I expel the contents of my febrile mind onto this screen and thence to yours. To wit: Google Plus is a total mess. You probably knew that already. But you may not have realized that of late it has become an mess…like Frankenstein’s monster. These days there’s a lot of disingenuous chatter about how G+ is just a “social layer on top of Google,” and was never intended as a direct competitor for Facebook; which is, of course, revisionist nonsense. Two years ago it seemed pretty obvious to just about everyone that G+ was intended, or at least hoped for, as a Facebook killer. Which obviously never happened, not least because Google shot themselves in the foot as they came out of the gate: the tech community of early adopters that could conceivably have become a critical-mass beachhead were the same group who reacted most strongly and negatively to G+’s controversial, divisive, and real-names policy. It wasn’t until it became painfully apparent that Facebook had nothing to worry about that G+ pivoted to Plan B, its current status: a thin social veneer atop all of Google’s products. Which has been moderately successful. Google Plus is awfully quiet, true, but it’s not the ghost town that’s often claimed. Some numbers from my pet project , which tracks news articles are shared online: So. G+ failed as a Facebook killer, and while it may have attracted enough of a STEM-loving audience to serve as Google’s social layer, it isn’t exactly setting the rest of the world on fire. What it do, however, which Facebook mostly doesn’t, is serve as a means for aggregating and filtering stories. G+ “Circles” can be coerced into news feeds for a particular type of story; for instance, shared a “Futurists” circle with me which is a really interesting aggregated source of cutting-edge science/tech news. But even that doesn’t quite work right. You can share Circles with other people individually, but there doesn’t seem to be any way for me to, for instance, post a link to that “Futurists” circle here so that anyone could subscribe. (Please correct me if I’m wrong; this seems like such an obvious feature that I suspect my flu-ridden state is the reason for my inability to find such a link.) Moreover, I’m using that Circle as a news aggregator, but the posts there are still social — i.e. they’re built around people, with smiling-face icons and commentary and so forth — when actually I really just want to use it asocially. I mostly don’t know or care about the people who are posting to it; I’m just interested in the links they’re aggregating. The rest is distracting noise. , for all its ugliness, gets this right. G+ does not. Circles are still really useful for all kinds of things, from small-group conversations to project-oriented discussions to news aggregators that nothing else can quite match–but at the same time, they suffer from G+’s attempt to be all things to all people. Admirable ambition, but unless your UX design is superb, you wind up seeming like a bundle of individually good ideas bolted together awkwardly into a shambling mess. Like Frankenstein. But that’s not actually the criticism it may seem. People tend to think of Boris Karloff’s portrayal of a brute monster: but Mary Shelley’s original novel had the subtitle , and its creation was eloquent, educated, and intelligent, but unfairly rejected by most of the world because of his physical deformities and inability to fit in. Alas, I fear the same may be true of Google Plus.
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Google And Others Reportedly Pay Adblock Plus To Show You Ads Anyway
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Darrell Etherington
| 2,013
| 7
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If you work for a company that depends on advertising revenue, you won’t hear people talk that often about using Adblock Plus, but it’s something that millions of consumers probably can’t imagine their Internet browsing without at this point. It manages to block out most ads on websites, providing a relatively clean experience that’s sometimes night and day from the standard web. The thing is, some ads do get through, and Google at least appears to be paying to make that happen, according to a new report that’s . Adblock Plus has an “acceptable ads” filter that allows certain content by default, and the company makes no secret that it charges big companies for whitelisting services – it mentions it right in its FAQ. AdblockPlus says this fee is about helping it to maintain its filter list, which also whitelists some small websites and blogs for free, in addition to charging those larger companies like Google that participate. But it’s easy to see Google and others buying the right to put ads in front of web-browsing users, with Adblock Plus essentially acting as a gatekeeper meting out access to that sizeable chunk of consumers. Which gives Adblock a lot of power, and companies like Google that can pay a sizeable advantage over mid-sized competitors who can’t. On Hacker News, this has spun into a discussion of the merits of online advertising in general, and it’s a very interesting read, even if you’re not that concerned about who can and can’t afford to buy a whitelist from Adblock Plus (which still also offers the ability to turn off even “non-intrusive advertising” entirely via the extension’s settings). Like it or not, display ads are still by and large the currency of the web, even for Adblock Plus, a company that’s built around reducing the user experience impact of ads online.
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Yahoo’s Recently Acquired Task Tracking Service Astrid Will Go Dark On August 5
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Chris Velazco
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Yahoo has been snapping up companies left and right lately, and the revitalized company’s hunger means that some well-received apps and services have gone (or will soon go) offline. Earlier today, another company threw its name into that particular pile: task management service Astrid will officially go dark on August 5, just over three months after co-founder/CEO Jon Paris on the team’s official blog. At the time, Paris noted that Astrid would only exist in its current state for about another 90 days and seemed content to leave the service’s future punctuated with a (potentially hopeful) question mark. Users hoping for some sort of clemency on Yahoo’s part probably won’t take the news very well, but, as promised, Astrid’s team has made a available and pointed to former competitors Wrike, Wunderlist, Sandglaz, and Any.do as potential replacements. Of course, that’s little consolation for the users that Astrid is leaving behind — the company’s (which likely isn’t long for this world anyway) is peppered with comments lamenting Astrid’s death… not to mention Yahoo’s role in the matter. At this point it’s still unclear what the Astrid folks are working on over at Yahoo now that the task management service is getting shuttered — Yahoo’s acquisition statement lauded the team’s “background in personalized mobile experiences,” but remained frustratingly vague about what they would actually contribute to the company’s pronounced mobile push. Meanwhile, other mobile-centric companies that Yahoo snapped up have been allowed to keep working on their wares — it recently picked up Disrupt SF alum Qwiki for a cool $50 million, and has said that it won’t kill off the brand (for now, anyway).
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The NSA’s Massive Utah Data Center Won’t Store Anything Close To Yottabytes Of Data
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Alex Wilhelm
| 2,013
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A today detailed that the NSA’s rapidly completing data center in Utah will not hold as much data as was originally suspected. If you are at all worried about the power of the NSA, this is good news for you. The gist of the Forbes report is that, given the allotted space for digital storage equipment, the center’s four main buildings simply cannot store as much information as has been discussed in the popular media. Here’s describing what the facility and its potential brethren will be capable of holding: [T]he Pentagon is attempting to expand its worldwide communications network, known as the Global Information Grid, to handle (10 bytes) of data. (A yottabyte is a septillion bytes—so large that no one has yet coined a term for the next higher magnitude.) Wired is referring to the fact that a yottabyte is the largest storage term we have, not that septillion is the , if you were confused. But what about that yottabyte claim? Is the NSA really building that level of capacity? Not at the Utah data center alone, that is unless the government has managed to create new storage technology on a size efficiency scale that Internet giants would salivate over. Using more market-based analysis given the 100,000 square feet of space in the Utah collection of data centers, estimates as collected by Forbes from various experts range from 3 to 12 exabytes. This pales painfully next to the former claim of a yottabyte, and stands in frank contrast to that the center could store 5 zettabytes of information. How far off were the estimates that we were fed before? Taking an unkind view of the yottabyte idea, let’s presume that it was the implication that the center could hold the lowest number of yottabytes possible to be plural: 2. The smaller, and likely most reasonable, claim of 3 exabytes of storage at the center is directly comparable. Now, let’s dig into the math a bit and see just how far off early estimates were. Stacked side by side, it would take to equal 2 yottabytes. That’s because a yottabyte is 1,000 zettabytes, each of which contain 1,000 exabytes. So, a yottabyte is 1 million exabytes. The ratio of 2:3 in our example of yottabytes and exabytes is applied, and we wrap with a 666,666:1 ratio. I highlight that fact, as the idea that the Utah data center might hold yottabytes has been bandied about as if it was logical. It’s not, given the space available for servers and the like. The practical implication of this fact is that the NSA, and larger U.S. government, doesn’t have the ability to store data on the scale that many previously feared. This means that information collected either via PRISM-like programs or through direct tapping of fiber cables cannot be stored as long as previously thought and that there are material restrictions on what the government can intercept. This is not to say that the NSA doesn’t want to collect and store more. It does. The Utah data center is proof of that fact. That in mind, technology doesn’t appear to have reached a scale of miniaturization to allow for the scale of data storage that unsettled many in a single installation. However, as with all things technology, the cure is up and to the right. What the NSA can’t do now, it will certainly be able to do in a half decade. Repeat this to yourself: You .
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Wool And The Gang Raises $2.8M Seed Round To Rethink Fashion Production Via Knitting
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Eliza Brooke
| 2,013
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The U.K.-based knitwear brand is hoping to shift fashion production away from factories by developing a global network of individual knitters. Although a knit sweater may be the ultimate in low tech, Wool and the Gang has raised a seed round of $2.8 million from Index Ventures, Wellington Partners, and MMC Ventures in order to build its online production network and capacity as an e-commerce company. Since its founding in late 2008, Wool and the Gang has created designs in the U.K. and outsourced production to independent knitters in Peru. Kits including patterns and wool are also available for sale to go-getters who want to create their own Wool and the Gang clothing. With this funding round Wool and the Gang is converting that latter pool of knitters into a network of producers for the e-commerce site. People can purchase materials from Wool and the Gang and sell the finished product back to the site, which will then mark it up to retail price. The project, called the “Gang Collection,” will launch with 10 individuals and only a few designs, Wool and the Gang CEO Lisa Rodwell said. The plan is to start small in order to get the system right, but it can easily scale, she said. The number of Wool and the Gang consumers who buy knitting kits for their own use is already in the thousands. “There are 55 million knitters in North America and Europe. As far as being able to scale, we don’t see that at all as one of [our] issues,” Rodwell said. Could these knitters make Wool and the Gang a full-time job? Maybe. Most pieces should only take an hour or two to produce, so it could certainly be an easy source of cash for subway commuters. There is of course the concern of brand dilution if production quality varies — something akin to a poorly stitched knockoff in comparison to the real thing — which is in part why the Gang Collection is starting small. Rodwell said that the core team will maintain relationships with the makers, using Skype to run sessions with them and giving tutorials when new designs are released. And every finished garment is shipped through the company’s warehouse, giving Wool and the Gang the final say on any piece. And as Wool and the Gang ramps up these new production capabilities, it is building its brand. Like TOMS shoes, the ethos behind the goods defines the label. And like Etsy, which also carries knitwear, it appeals to those sensitive shoppers who like being able to turn a sweater inside out and see who made it and where. Both in personality and production, Wool and the Gang might be considered a new approach to fast fashion. Because a pair of needles can move seamlessly from one design to the next, the medium is flexible enough that new designs can be added every other week. True, knitwear occupies a unique space and isn’t always competing directly with other brands, but that kind of fluidity benefits any label. Moving forward, Rodwell said the company will focus more on e-commerce than it has in the past. Although Wool and the Gang used to sell more widely through offline retailers and will continue to sell more high-end, ready-to-wear pieces through them, online is a big opportunity. As production becomes increasingly global and makers evangelize to their local communities, it only makes sense that commerce also serves a worldwide audience. Knitting is in a unique position to make this production system work because it requires so few components and only one pair of hands. Could it translate over into other kinds of garments? Unlikely. Unless 3D-printed fabrics get really good.
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Baidu Shares Jump 14% After Hours On Upbeat 3Q Outlook Thanks To Mobile Advertising Momentum
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Catherine Shu
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efforts to strengthen its mobile advertising business appear to finally be bearing fruit. Investors were reassured by the Chinese search giant’s 3Q outlook, sending its stock price . The company forecasts 3Q revenue between $1.422 billion (8.7 billion RMB) and $1.46 billion (8.96 billion RMB), representing a 39.7% to 43.3% year-over-year increase. Baidu reported that its 2Q2013 net income decreased 4.5% to $450.8 million (2.644 billion). Total revenue rose 38.6% to $1.232 billion (7.561 billion RMB). Online marketing revenue grew 38.3% to $1.22 billion (7.5 billion RMB), while Baidu’s active online marketing customers rose 33 percent from a year earlier to 468,000. Revenue per online marketing customer was about $2,623 (16,100 RMB), a 3.9% increase from a year ago and an 11% increase from 1Q2013. “We made solid progress in the second quarter, adding a record 58,000 online active customers,” said Baidu CEO Robin Li in a statement. “The adoption of our mobile platform gained momentum and mobile monetization improved. Mobile revenues for the first time accounted for over 10% of our total revenues this quarter.” Baidu has made several high-profile acquisitions to strengthen its mobile play as it copes with increasing competition in the search market from competitors like Qihoo 360 and Sogou.com, which recently announced that they are in for a merger. Last week, Baidu announced , one of the China’s biggest app distribution platforms. Li has said that the company “prefers buy to build because it will save us time.” In the first quarter of this year, Baidu . It has also made several high-profile investments in the past year to ramp up advertising sales growth and bolster its mobile business, including a stake in online video site iQiyi last November and the as it prepares to do battle with Youku-Tudou, China’s equivalent to YouTube. “Our recent investments have further strengthened Baidu’s position in key strategic areas such as search, LBS, app distribution and online video. Our market-leading technology, innovative new products and unrivaled customer value proposition will keep us at the heart of the Internet in China,” said Li.
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Natasha Lomas
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A List Of Congressmen Who Voted For & Against The Amendment To Stop NSA Spying
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Gregory Ferenstein
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Congress narrowly defeated a law to to the National Security Agency’s dragnet spying program. We have a lot of readers who are furious that their representatives didn’t stand up for their 4th Amendment rights, so here’s a list of everyone who voted for and against Representative Justin Amash’s amendment to the Defense Appropriations bill, which would have denied the NSA the ability to use funds for broad spying of Americans. Below, we’ve embedded a Scribd document of all the members’ votes. If it doesn’t work for you, you can also check out the vote on the . For those of you who don’t know your representative, and type in your ZIP code. [scribd id=155815805 key=key-tr8o1hfyk7apdza4bz7 mode=scroll]
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Rep. Amash’s Amendment To Defund The NSA’s Domestic Phone Metadata Program Fails 205-217
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Alex Wilhelm
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Today Rep. Amash’s amendment to the 2014 Defense Appropriations Bill failed in the House on a vote of 205 in favor to 217 opposed. When it became known that the amendment would in fact come up for a vote, the powers of the status quo came together to decry its tenets as ham-fisted and irresponsible. The White House a “blunt approach” that is not “the product of an informed, open, or deliberative process.” Naturally, the irony of that specific complaint resonates: The intelligence programs in question were not enacted with any of those forms of debate. To ask that their rescinding be held to a higher standard then their enaction is hubris of a real sort. Underlining how seriously those who are in favor of maintaining the phone record collection program took the amendment’s threat to yank its funding, General Alexander himself — the good general heads the NSA — gave briefings on the Hill to House Democrats and Republicans, albeit in different sessions. A formal statement from the White House and face time with the head of the NSA are some of the larger guns available for this sort of court press. The NSA has come under heavy scrutiny for its collection of both Internet data and telephonic records by privacy advocates, certain members of Congress, and what is sometimes referred to as the netroots — efforts that include broad surveillance of U.S. citizens and the retention of information relating to their actions. Those in favor claim that it doesn’t violate the Fourth Amendment and is a key tool in the fight to protect American interests and national security. Opponents directly proclaim that the various NSA data-collection efforts are beyond unconscionable and should instead be viewed as nothing less than utterly un-American given its diametric opposition to hallowed Constitutional rights. This isn’t a small argument, and it goes beyond our current simplistic ideological dialogue in which there are only two perspectives: left and right. Instead, we’re seeing a number of supposedly small government members of Congress stand behind action that gives the Federal government chronic authority to end the right to privacy. At the same time, the argument that national security can at times take primacy over privacy has been upheld in the past by American courts. Before the vote, House members opposed to the amendment circulated a letter that included the following text: While many Members have legitimate questions about the NSA metadata program, including whether there are sufficient protections for Americans’ civil liberties, eliminating this program altogether without careful deliberation would not reflect our duty, under Article I of the Constitution, to provide for the common defense. Furthermore, the Amash amendment would have unintended consequences for the intelligence and law enforcement communities beyond the metadata program. Rep. Rogers was among those signed to the above. From the other end, a , including Rep. Lofgren, who released a letter that said: In short, this amendment would not prohibit the government from spying on terrorists under Section 215, or from collecting information in bulk about American’s under other legal provisions. However, the amendment would prevent the bulk collection of sensitive information on innocent Americans under Section 215 – and important improvement. The vote was surprisingly close, with broad bipartisan support in favor of the amendment, and equally strong support opposed; this is a vote that split parties. The final tally was 94 Republicans and 111 Democrats in favor, and 134 Republicans and 83 Democrats opposed. That the vote was so close all but guarantees that as an issue, the NSA’s domestic surveillance programs will be challenged again, and perhaps successfully.
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Meet Helpouts, Google’s Secret Project That Turns Hangouts Into A Commerce Platform
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Rip Empson
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While its roots lie in search, today, Google wears many hats. From self-driving cars and wearable technology to social networking and mobile operating systems, there are few industries where the search and advertising giant has yet to make its presence felt. Lately, however, Google’s expansion has taken a noticeable tack in a more singular direction: e-commerce. With the outsized success Amazon and eBay have had building online marketplaces that seek to remove the barriers around buying and selling on the web, it was only a matter of time before Google decided to pull its chair up to the e-commerce table. Today, TechCrunch has learned via a tipster that Google has quietly been pursuing its marketplace ambitions under the auspices of a new platform that leverages its increasingly powerful cloud services to power live, real-time commerce. The product, which has reportedly been named “Helpouts” and is currently being tested internally in Mountain View, will take shape as a marketplace that enables individuals and small and large businesses to buy and sell services via live video. With the capacity to connect merchants and consumers on both an immediate and scheduled basis, according to our tipster, the platform will allow sellers to create their own profiles and take advantage of reputation management, scheduling and payment features, while offering robust search and discovery tools for consumers. As its live video infrastructure is increasingly becoming the unifying backend for its expanding roster of real-time products, Google’s new marketplace will leverage Hangouts to deliver services via live video. To that end, the platform will also come integrated with what could end up being a handful of Google products, particularly its young virtual wallet and payment service, Google Wallet. From what we’ve heard, Google began internal testing of the product in late June, but may be at least a month away from a public release. In the meantime, from what we can gather from leaked mockups of Helpouts, the platform seems reminiscent of eBay’s recent efforts to expand , its concierge-style platform that allows merchants to offer a range of services directly to consumers — from business mentoring to beauty tips. Part of the reason Amazon has sprinted out to such a commanding lead in the e-commerce market is its growing network of fulfillment centers and distribution warehouses, which allow it to produce that magic, online retail bullet of low prices, convenience and speedy delivery. Without a fulfillment network, Google’s own local shopping ambitions seem to be taking a different shape. With Helpouts, Google, like eBay appears to be leaning into the territory of collaborative consumption marketplaces like, say, Zaarly, TaskRabbit and Live Ninja. According to our source, Helpouts, like these startups before it, will cover a range of categories, including computers, education, food, health, hobbies and repair. One can then imagine services on Helpouts ranging from health consultations and fitness classes to appliance repair support and cooking lessons. Google has also apparently partnered with a number of brands during internal testing, including One Medical Group, Sears, Weight Watchers and Alliance Frances, for example. At launch, the platform will also reportedly include an array of individual merchants and instructors as well, from yoga gurus to fitness teachers — all of whom will be able to offer both free and paid services to consumers via Helpouts. According to our sources, with Helpouts, Google is looking to remove some of the barriers that have traditionally stood in the way of the seamless delivery of live services. For example, using Helpouts, a Spanish tutor from Argentina could offer language training to students in Japan, while a Yoga instructor in New York would be able to provide classes to a stay-at-home mom in Wyoming and an appliance repair shop could walk a customer through fixing a broken fan in their laptop — with an Internet connection being the only requirement. Under the new, “One Google” Era, the company has begun to prioritize a greater collaboration or interrelationship between its products. With Helpouts, one could also imagine how the platform can act as a logical extension of Google’s core search and ads business. For example, customers could connect to retailers and manufacturers to get recommendations and advice on product purchases — or receive guidance on how to set up their products. This could work to shore up a nagging gap for Google: When it comes to product searches, people no longer turn to Google. It’s all about Amazon. It also wouldn’t be a stretch to imagine Helpouts connecting to YouTube to offer video or lesson playback or integrating with Google’s nerd glasses. Of course, as with any Google product launch, life could be getting a little bit tougher for its smaller (and startup-y) competitors. There is a long list of businesses that either parallel or would directly compete with some part of Helpouts, whether it be , (which is, believe it or not, founded by a former Googler), Live Moka, InstaEdu, Shmoop and, perhaps less directly, platforms like Angie’s List, Udemy, Skillshare, TaskRabbit, CreativeLive and Curious. Though, admittedly, some of these overlap more than others. When it comes to big data or resources that can be thrown into curating a service offering like this, startups are bringing a knife to a gun fight. Firstly, there’s plenty of room for a more polished, higher-quality product in this space and, secondly, Google has video tech that’s already been widely adopted by individuals and businesses. Not to mention, most startups can’t hold a candle to Google’s marketing machine. Furthermore, according to our sources, Google has been building Helpouts in complete secrecy — well, until now — and few employees at the company were initially aware of the product, which has been developed by a team of two dozen engineers over the past year. Other than that, details are hazy. Perhaps Sergey and his secretive Google X unit are responsible. Only time will tell. In the meantime, some may be wondering, if Helpouts is destined for YouTube (or at least HangOuts)-level adoption, or whether this is more of an experiment and it will just end up suffering the same fate as Reader or the geek-adored Wave. It’s not totally clear just how much marketing spend Google is going to dish out or whether it intends for this to have mass-appeal, but based on what we’re seeing, I would lean towards the affirmative. Furthermore, while the type and date of the product’s rollout remain unclear, we’ve heard from sources that Helpouts was recently the subject of a company-wide meeting, which suggests that at least a few Googlers are taking this seriously. Stay tuned for more.
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Meet Stat, The Startup That Wants To Be Uber For Medical Transport
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Chris Velazco
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I’m getting sick of all the “[new startup name] is the [more prominent startup name] of [random industry]” descriptions that people like to throw around these days, but it’s hard to avoid that with a new startup called . The three-person team demoed earlier today at ‘ Health Demo Day in Philadelphia, and long story short, they’ve created something that’s pretty much an Uber for medical transport. When Stat co-founder and CEO Jason Ervin hit me with his pitch before presenting onstage at the World Cafe, it sounded too good to be true. On-demand ambulances? Why would anyone call 911 again? It turned out that in my haste to bypass centralized emergency services, I had missed something crucial — the big difference between Stat and Uber is that Stat isn’t for people like you and me to use. Stat wants to furnish its iOS and Android apps to ambulance companies, medical transport fleets, hospitals, nursing homes — pretty much any organization that needs to shuttle patients back and forth on a regular basis. Let’s say you’re nurse and you need to discharge a patient and get him home. That’s no problem if they’ve got a ride from a friend or family set up in advance, but if it happens to fall through, you can’t just stick them in a cab and call it day. Instead, you fire up the Stat app, tie it to a corporate credit card, select the sort of transport you need, and select the pickup point and destination. Once the request is out there, the closest idle, Stat-enabled ambulance will get the alert and can accept the job — then the person who put in the request can track the ambulance while it’s en route. The process works for organizations that need to send people to hospitals, too — nursing homes for instance often need to shuttle residents to medical facilities and not all of them can afford to maintain a fleet of vehicles just for that. Enter Stat: after a few touches, the nearest idle ambulance will be en route to make the pickup and drop those people off as needed. It’s a win-win: idle ambulances (and the companies that own them) get more work, and people who otherwise would’ve been stuck at a facility or turned away outright can get their procedures done and get home safely. As it happens, the service may get a lot more Uber-like in the months to come. There’s no consumer-facing version of the app just yet, but that could change once Stat starts expanding beyond Philadelphia. “We just can’t wait to get to an emergency,” Ervin said. It’s hardly a surprise — the four-month old company is already generating revenue based off its operations in Philadelphia, and expanding to consumer emergency calls means more transactions to take a cut of. Here’s the thing about Philadelphia, though: if you’re involved in an accident and need immediate emergency attention, you can’t directly call an ambulance company. It’s 911 or nothing. Naturally, that means the prospect of an Uberesque ambulance service won’t fly in the City of Brotherly Love, but that sort of regulation doesn’t exist everywhere. Currently, Stat has linked up with one prominent Philadelphia ambulance company and is working to rack up a few more partnerships in the area, but one of the team’s big goals is to tap into their native Texas. Cities like Austin and Houston lack that particular restriction, so it would be easy enough to rejigger the app for regular folks to use, too. As downright useful as Stat could be for streamlining hospital operations, bringing quick and timely medical transport to the masses is something really worth keeping an eye out for.
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Zuckerberg Says Teens Still Steadily Engaged With Facebook
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Josh Constine
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Critics claim Facebook is losing its cool among kids and expect teens to start tuning out in favor of hip apps like Snapchat, but CEO Mark Zuckerberg says “b ased on our data, that just isn’t true.” Zuckerberg said on call that “we believe we have close to fully penetrated the US teen demographic for a while,” and that teens remained steadily engaged with Facebook this year. Zuckerberg admitted that it’s hard to pinpoint metrics on teens because some people lie about their age. Specifically, kids under 13 aren’t allowed to join Facebook, but there’s no strict verification process of the age users enter when they sign up. Some 10 or 11 year olds may say that they’re 15 so they can join. That means that some people listed as 21 could actually be teenagers. But whatever their age, people are still spending a ton of time on Facebook. . That’s 17.39 minutes per day per user, or 8.3 hours per user per month. And that time isn’t just coming in binges. People are consistently addicted to Facebook. Zuckerberg started the earnings call by saying he expected fewer of its total users to return each day as it grows, but he’s been pleasantly surprised to find that “the opposite is true.” More than 70 percent of monthly users in the United States and Canada come back every day and that “stickiness” percentage has kept increasing both domestically and across the globe over the last few quarters. Many predicted mobile would be the downfall for Facebook. It was originally built as a web service after all, and when it did finally adapt to mobile, its apps were sluggish. Meanwhile, mobile-focused social networks and communication apps like Twitter, Snapchat and Path threatened to take up users’ time on the small screen. And they have taken a slice. But mobile has also drastically increased the size of the pie. People are spending more time with technology overall, and Zuckerberg noted that studies by comScore and Nielsen say Facebook’s share of people’s time is increasing, especially if you count Instagram as part of Facebook. Plus Facebook has found ways to monetize these mobile users, , or $655 million. Worries about the flight of teens and its inability to squeeze dollars out of mobile have held down Facebook’s share price since its rocky IPO. With these fears quelled, $FB is up 17.13 percent in after-hours trading to $31.05 as it seems investors are seeing Facebook for what is, rather than what it might not be. It is 1.15 billion people who have chosen Facebook as the digital representation of their lives and friendships, the place they get their news and gossip, and where they make their voices heard.
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Facebook’s Q2: Monthly Users Up 21% YOY To 1.15B, Dailies Up 27% To 699M, Mobile Monthlies Up 51% To 819M
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Josh Constine
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In , Facebook grew to 1.15 billion monthly active users up from 1.11 billion at the end of Q1, 669 million daily active users from 665 million, and to 819 million mobile monthly active users from 751M. These totals don’t tell the whole story, though, as much of Facebook’s growth is coming from Asia and developing markets where it doesn’t earn as much money per user. Mobile daily active users hit 469 million on average for June 2013. Facebook’s mobile-only user count grew from 189 in Q1 to 219 million at the end of June. In June, Facebook saw 20 billion minutes of usage per day, or 17.39 minutes per day per user, or 8.3 hours per user per month. On the earnings call, CEO Mark Zuckerberg said that , that Facebook has close to full penetration amongst teens in the United States, and that teens remain steadily engaged with the service. As for the dollars brought in by the social network, Facebook hit $1.81B in revenue, up 53%, and mobile hit 41% of ad revenue. You can see Facebook’s full financial earnings numbers . Other highlights from Facebook’s growth include that Instagram saw 5 million video uploads in the first 24 hours after the feature’s release, and recently hit 130 million users. Facebook for Every Phone recently surpassed 100 million monthly active users just two years after the rich, feature phone version of Facebook launched. Facebook’s acquisition Parse announced last month that 100,000 apps have been built on its mobile backend-as-a-service, up from 60,000 when Facebook bought it. Breaking down its user growth by geography, we see that Facebook grew 2.15% from 139 million in Q1 to 142 million daily active users (DAU) in Q2 the United States and Canada, and 1.53% from 195 million to 198 million monthly active users (MAU). Europe grew even slower, up just 1.67% in DAU, and 1.11% in MAU. But in Asia and the rest of the world, Facebook is still adding users at a quick pace. In the “rest of world”, Facebook expanded DAUs 8.33% this quarter from 180 million to 195 million, and MAUs 5.81% from 327 million to 346 million. And in its strongest growth market this quarter, Asia saw an 8.38% DAU increase from 167 million to 181 million, and a 6.26% MAU increase from 319 million to 339 million. It’s important to understand that aggregate growth numbers don’t necessarily explain what’s happening to Facebook’s business. Much of Facebook’s growth right now is coming from developing markets where it doesn’t earn as high of an average revenue per user (ARPU). Worldwide Facebook earned $1.60 per user, but only $0.63 per user in the “rest of world” geography which is propping up its growth. Unfortunately, Facebook still isn’t breaking out its mobile user growth by geography. This allows it to obscure whether its mobile growth is predominantly coming from the developing world. Overall, it was another relatively steady quarter of user growth for Facebook. While it may be running out of users to add in the first-world, it still managed to grow by about 8.3% this quarter in Asia and the rest of the world. Despite naysayers claiming Facebook is bound to lose its cool and hit a wall, it keeps getting bigger and is further solidifying its status as a critical communication utility.
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Perk’s Reward-Centric Mobile Browser Now Blocks Unwanted Ads
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Kim-Mai Cutler
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Austin-based incubator is putting even more of its weight that blocks out ads when used on tablets. Perk, which originally started out as a way to give consumers coupons, discounts or airline miles while browsing the web, is now blocking ads. While with more than 200 million downloads, Perk co-founder Julian Frachtman says that there’s a window of opportunity to do the same thing on tablets, especially as they cannibalize PC usage. The company partners with affiliate networks to give Perk users deals at about 2,000 online stores. Those stores include big brands like Amazon, Target, Best Buy and Starbucks. There are also deals for frequent-flier miles at airlines like Delta, US Airways and Alaska Airlines and charitable donations to non-profits like the American Cancer Society. Users can explicitly opt-in to these rewards, and there’s a shopping icon in the app’s top bar that lets users scroll through different rewards available to them based on points they’ve earned by browsing the web. “When people shop online or when they do research online or take other actions like watch videos and fill out surveys, they can redeem these actions for cash or frequent flier miles,” Frachtman said. He says one advantage of blocking ads is that the browser will load pages faster. The app is still quite small at this point with 5,000 monthly actives, but Frachtman said that once they figure out the lifetime value of a typical Perk user, they can use performance marketing techniques to grow the base. For now, Perk is only available for iOS, but the company plans to bring it to Android in a month-and-a-half. Jutera has raised about $1 million in funding and the company’s employee base is split between Austin, Texas and Bangalore, India. [vimeo http://www.vimeo.com/48459441 w=400&h=300]
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Live From The 500 Startups Accelerator’s Sixth Demo Day
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Ryan Lawler
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The sixth group of startups from the 500 Startup Accelerator program will be making its debut today in Mountain View, Calif. — and then going on to do demo days in San Francisco and New York City as well. Can’t make it yourself, or can’t wait until 500 Startups comes to your town? You can check out the live stream above, which will be going for the next few hours. While we’ve gotten some idea of what these startups do, today is their time to shine, as they pitch their products and services to investors at the Demo Day. We’ll be live from the scene, writing up the most interesting companies we see here. In the meantime, tune in to the stream yourself if you want to see what they’ve been up to. And here are the startups:
This startup is seeking to boost the amount of money that can be made by African-American hair stylists by helping them to take advantage of the incredibly lucrative hair extension business. That demographic spends $6 billion on hair extensions, outspending every other demo by 3-1. Mayvenn gives every stylist their own e-commerce-enabled website and connects them with supplies that otherwise would be sold at a beauty supply store, helping stylists to make more money.
POPAPP is the “quickest, easiest way to prototype your mobile app,” enabling users to convert a pen and paper sketch of an idea into an interactive prototype. Since POPAPP launched in November, they say they’ve had 70,000 users. The company makes money on a subscription basis, offering two free trials and then monthly fees for individuals and businesses.
The company is an influencer marketplace to “make online word of mouth marketing viable.” The secret sauce is a deep database of influencers and a platform to match businesses and PR firms with them. Also tools to pay influencers and track campaigns. The influencers have a cumulative reach of a billion page views, and the startup has more than 350 businesses and PR firms using the platform already.
Floqq aims to change online education in Latin America. You can watch instructional videos on any skill from cooking to finance. “None of them know shit about how to sell in Latin America, because we are different!” one of the founders exclaimed about Floqq’s online video competitors, explaining that Floqq uses different payment methods by country based on residents’ preferences.
This startup wants to help online retailers in China to sell directly to U.S. customers. There are 2 million Chinese sellers in the market, selling to more than 100 million U.S. consumers, but shipping is typically slow and returns are close to impossible. That means that even at low prices, sellers aren’t making very much money. BOXC helps speed up shipping to 3-5 days without having to keep inventory in the U.S.
Koemei makes educational videos searchable and collaborative. The company uses its technology to convert learning videos into text and makes them searchable. Students can have access to the automatically generated text of lectures after classes, and can take notes, share thoughts with classmates, link videos together, and organize their content in one place. Koemei has three major contracts, including from the City University of New York, and so far has six-figure revenues.
The company helps app developers acquire customers through peer referrals, which work best for mobile app conversion. You can use the product with just one line of code, optimize code through A/B testing and increase click-through rates. It operates on a freemium model, with free metrics and customers only paying when they take action and use A/B testing or other premium features.
TR Data is the “Bloomberg for emerging markets.” The company has more than 100 companies using them already to make informed trading decisions, as it claims poor coverage of data in emerging markets is costing companies billions in trades.
Credii is trying to help businesses make smart decisions about the products and services they use. It asks them a series of smart questions about what they need and makes instant recommendations of products and services that fit those needs. It can help them pick and customize products to save them money. It makes money through premium support to customers and highly qualified leads for vendors.
This company is based on the idea that less than 1 percent of online content in app stores is accessible to Arabic users, even though Arabic is the 4th largest language in the world. Tamatem takes popular game app in the U.S. market and converts them into Arabic equivalents that its audience can understand. In one month, Tamatem’s first game saw 650,000 downloads.
Flyer is disrupting the way commercial real estate is marketed. It lets brokers drag and drop information into the browser right on their website to build a flyer. Once that’s done they can export to print and PDF, and push everything to social media with one click. It also brings analytics to the market.
Schooladmissions was started to simplify the school application process in India. Students can manage the entire process online by using a school-matching engine, admission alerts, networking with other parents and multiple submissions in one click. The website charges schools and parents for membership and listings, as well as for the schools their students are admitted to.
This company is creating a peer-to-peer marketplace for geeks to provide tech support direct to users, rather than through storefronts like Best Buy. That means it’s cheaper for the customer, and they don’t have to give up their computers. Geekatoo has 3,000 geeks around the country who are certified to provide support. It takes a 35 percent cut of the transaction for connecting customers with tech support providers.
InstaGIS is a global real-time data platform designed to provide insights and data for marketing campaigns. With a monthly subscription, marketing managers can see where certain demographics are concentrated and discover new insights about different locations. InstaGIS provides this information through government data, social networks and private sources.
This hardware hopes to provide the next generation of wheelchair mobility, with a new chair designed to look good and be ultra-functional. One big selling point is a front wheel made up of 24 different wheels to provide full mobility. Really has to be seen to be believed.
Binpress is trying to be the “marketplace for commercial open source,” providing monetization tools for those working on open-source projects. It’s a marketplace, connecting developers with potential customers. As such, it takes a 30 percent commission on all sales that happen on its platform.
This startup provides up-to-date real estate data through a transaction management platform for customers and agents. According to Reesio, information from publicly traded companies such as Zillow and Trulia can range from two days to two weeks old. Reesio will show transactions from users as they happen, including offers, contract signing, sharing information and more.
Dakwak is a translation and globalization platform for websites. Today, only 27 percent of the Internet population understands English, which means you can reach an additional 1.5 billion customers translating and localizing your website content. Dakwak allows you to control the translation, whether it’s low-priced machine translation or high-quality human translation. The website translation industry is a $3.3 billion business and growing, and Dakwak wants to be a big part of it.
This compact device will help pet owners keep track of pets with GPS and monitor their physical activities. The U.S. and Brazil are the largest pet markets in the world, with over 200 billion pets combined. Pinmypet attaches to your pet and gives a real-time location, as well as a record of sleeping and exercising habits.
Seat 14A seeks to simplify men’s fashion by sending customers one email a week. In that email they’ll find one complete outfit, and if they like it they can buy it. All clothes are made to order, so the startup holds no inventory. And since they control the entire supply chain, they can provide options that are cheaper and higher quality. That also means that they’re profitable on every sale, with 50 percent margins on a $150 sale.
Dropifi helps small businesses convert online visitors to customers with a SaaS platform. The application lets businesses see a client’s information and feedback through a profile, as well as collaborate in real-time with the client. After nine months, Dropifi has 7,100 businesses signed up for its service.
This company is a marketplace for real-world leisure activities, currently operating in India. It’s looking to connect 300 million Indians with local things going on nearby, not just attractions for tourists. It also allows users to book activities on the platform, and share them with friends.
NativeAD is a new method reaching audiences meant to replace display advertising, since 99.9 percent of audiences don’t click on online ads. The company manages branded content for publishers including Yahoo, MSN, The Huffington Post and Terra.
Tastespace is helping restaurants in Latin America make sales and take orders online. It provides manages restaurant websites, mobile apps, and presence on Facebook through a single platform. Already it’s generated $2 million in sales, and has an order placed on its platform every three minutes. It’s in three of the top five countries in Latin America, and expects to reach 15,000 restaurants in half the time it took GrubHub to reach that number.
PriceBaba is a platform for mobile phone shopping in India. Most retailers don’t have a point-of-sale system, so PriceBaba compiles prices and inventory to allow customers to see what is available near them, and for what price. The platform also provides mobile phone sellers with relevant and measurable leads with its data.
This startup wants to provide an alternative to today’s text messages, with video, because “life is bigger than texting.” You can instantly send quick video messages to anyone in your contact list, and when done can start sending another. All videos are stored in the cloud, so they’re always available to users. The company is pushing 1,000 video messages per day already, off of 12,000 downloads.
GreenGar created Whiteboard, a collaborative drawing app with more than 8 million downloads. About to hit $1 million in revenue, Whiteboard connects mobile devices globally through a freemium model. You can synchronize presentations and communicate visually with other users.
This company is going after the children’s book industry, helping to take it digital. It has a software platform for transforming books into digital titles, and distributing them across multiple formats and multiple storefronts, and is using its own brand and links to cross-promote titles.
Feast provides a simple platform for beginners learning how to cook. Users receive daily emails with basic lessons on cooking and can collaborate with other students online. More than 40 percent of Feast’s users are opening an online lesson every single day.
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Facebook Q2 Earnings Beat Expectations With $1.81B In Revenue, Up 53%, Mobile Hits 41% Of Ad Revenue
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Alex Wilhelm
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Today Facebook reported its second-quarter financial performance, including revenue of $1.81 billion. Analysts Facebook to earn $0.14 per share on a top line of $1.62 billion. The company’s revenue figure released today is an all time quarterly high for the firm. Facebook’s second-quarter revenue is up 53 percent on a year-over-year basis. Analysts had expected a 37 percent increase. In the quarter, Facebook had a net income of $333 million. In its , the first of 2013, Facebook’s revenue totaled $1.46 billion, and it earned $0.12 per share. Mobile income as a percentage of ad revenue totaled 41 percent, up 11 percent from the preceding quarter, when it totaled 30 percent. In the final quarter of 2012, mobile ad income was but 24 percent of the total advertising top line. Facebook has proven that it can monetize its growing mobile usage in a big way. Investors will be satiated in that concern. Facebook later noted that mobile revenue will soon outstrip desktop incomes. The company also reaffirmed that Instagram will monetize in the future, largely through advertisements. Frankly, in my view the 41% figure is quite impressive, and unexpectedly strong. However, we should not take as indicative that all desktop Internet giants will be able to monetize at similar levels in mobile settings. Facebook data on its users is nearly without compare, and likely provides it with a key competitive advantage in how it can deliver targeted ads to users on the go. The majority of Facebook’s revenue comes from advertising-related income. However, its payments and fee revenue totaled $214 million during the quarter, up 11 percent on a year-over-year basis. On the usage front, Facebook demonstrated strong growth, with its daily active user tally rising 27 percent on a yearly basis to 699 million. Monthly active users now total 1.15 billion for Facebook, up 21 percent when compared to the second quarter of 2012. Finally, mobile monthly active users were up 51 percent compared to 2012, to 819 million. For more on Facebook’s usage metrics, TechCrunch’s Josh Constine has . Facebook’s capital expenses were down in the quarter, but it continues to suffer from margin pressure. In the second quarter, Facebook’s operating margin was 31 percent. During the company’s earnings call, Facebook’s CEO Mark Zuckerberg on the social service. According to the company, engagement among teens in the United States, penetration is all but complete, and engagement remains strong. That is against the narrative that teens are increasingly bored with Facebook, in favor of other services. Facebook ended the quarter with $10.3 billion in cash and short-term investments, leaving it very well capitalized. In regular trading Facebook was up around 1 percent. In after-hours trading, Facebook is massively up.
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Walmart Labs Scoops Up Site-Speed Optimizer, Torbit, To Help It Keep Pace With Amazon
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Rip Empson
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Josh Fraser and Jon Fox founded in 2010 after becoming fed up with the amount of time they and other engineers dedicated to the tedious process of managing website performance optimization — by hand. In 2012, the Sunnyvale-based startup , in an effort to make the tools they’d spent years developing internally available to the public — without requiring a degree in computer science or 15 developers to understand them. By allowing any online business to track that critical correlation between the time it takes for a website to load and their core business metrics, Insight attracted the attention of both enterprise players as well as startups like Wayfair, Storenvy, and the Cheezburger Network. By February of this year, Torbit was processing over 6 billion performance metrics a day for its customers. With each second a website takes to load potentially results in the loss of critical business, something to which big e-commerce properties, like Walmart, are increasingly susceptible. Rather than building these tools themselves, that it is buying Torbit’s help. While the terms of the deal were not disclosed, , Torbit said it will be joining Walmart Labs as part of the e-commerce giant’s move to bring some speed and performance optimization to Walmart’s online properties. Specifically, Fox says, Walmart will look to leverage Torbit’s dynamic content optimization technology to enhance the performance and shopping experience for Walmart customers — behind the larger, and perhaps more pressing goal, of helping it keep pace with Amazon. Following the acquisition, Torbit will continue to keep its site running for 30 days, but will be shutting down for good on August 23. The company will be offering an export process to its customers to prevent them from losing their critical performance data, which readers . In an effort to meet the expectations of an increasingly digitally savvy consumer, Walmart Labs has been on a mission to develop new commerce solutions to stay ahead of encroaching competitors (and chase e-tail leaders like the ubiquitous Amazon), while enhancing the shopping experience of its millions of shoppers. To do that, the company has been following the of late, making a handful of acquisitions to bring startup talent in-house. Today’s addition of Torbit to its startup roster follows Walmart Labs’ recent acquisitions of companies like Inkiru, OneOps and Tasty Labs, which are all part of an effort to help its parent company become an actual technology company (and not just another e-tailer) and beef up Walmart.com. Buying Inkiru, for example, gave the company access to a mobile-centric point-of-sale solution, while last year’s acquisition of Grabble provided a critical Big Data component, allowing it to improve fraud detection and prevention and in-store recommendations. With these acquisitions, Walmart.com is now able to tap into and offer key features, like improved semantic search, Facebook integration and better mobile support — which are essential as the company adapts to its increasingly digital user base. With the acquisition of Torbit’s front-end optimizer, Walmart said that it will be able to add much-needed device and platform-agnostic performance optimization tools and minimize customer attrition thanks to slow loading digital storefronts. The startup’s technology, Walmart Labs’ Jeremy King said in a blog post today, can “dynamically minimize and compress the files the browser downloads to best fit the browser’s characteristics … and by rewriting the page to best exploit the performance behavior of the Web browser requesting the page, Site Optimization can help each browser fetch and render each page as efficiently as possible.” With a growing share of its revenues emanating from its e-commerce portals, this kind of image loading is critical to allowing shoppers to find what they need in real time, without the traditional invective directed at their browser. With the acquisition, Walmart said today that four of Torbit’s engineers will be joining its team, including co-founder Jon Fox. Torbit’s announcement copied below: Today we’re excited to announce that Torbit has been acquired by @WalmartLabs. We’ll be joining the team and bringing our Insight / Atlas technology to the Walmart online properties. In addition, we’ll be using our cutting edge Dynamic Content Optimization technology to enhance the performance and shopping experience for all of Walmart.com’s many online shoppers. We’re exited to help make the Walmart online experience even better by optimizing for your device and improving the performance of all of their existing and future sites. Torbit has been a wild ride and we’ve been truly blessed to work with many great customers. We couldn’t have built any of our performance products without all of your feedback, testing, and patience. I am truly grateful to have worked with all of you. As part of this acquisition, we’ll continue to keep everything running for 30 days, until Friday, August 23, 2013, after which time we’ll have to wind down. We do offer an export process so you can keep all of your performance data. You can see an estimate of your export size here and if you’re interested in exporting your data please email us at support@torbit.com with a list of sites you’d like to export and we’ll send you instructions from there. There has been a long list of great people who have helped Torbit along the way and I want to thank each and every one of you. From our investors, advisors, and employees to our customers, beta testers, and friends – we couldn’t have done it without you!
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Mediaspectrum Raises $35.8M From Insight Venture Partners To Support Big Media Publishers
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Kim-Mai Cutler
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Boston-based , a company that has a subscription software service catering to big media publishers like Gannett, The Wall Street Journal, The Washington Post, The New York Post and more, led by Insight Venture Partners. The roughly 100-person company helps these publishers manage their advertising and content across many platforms on the web and mobile devices. Insight’s managing director Peter Sobiloff and a principal Cian Cotter will join the company’s board. The company has built a content management system so that publishers can push out stories, content and video simultaneously to the web, tablets, mobile phones and broadcast channels. The product has story development folders where editors and writers can collaborate on different story series and angles. It also has support for SEO, rights management and micro-payments. On the advertising side, Mediaspectrum has other products that support sales campaigns and different ad formats. They say the ad side of the product can handle billing, booking, ad production and performance tracking so that everyone inside a media company’s sales staff can work together in one environment. The company’s CEO and co-founder Scott Killoh previously started Openpages, which went on to raise $54 million in venture capital and was later sold to IBM. That company also catered to big print media organizations like Gannett and Knight-Ridder, so he has nearly two decades of experience working in this market.
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Michael Dell Ups His Offer To Take Dell Private By A Comically Low $0.10 Per Share
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Alex Wilhelm
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Michael Dell and Silver Lake have offered improved terms for their to take venerable computer OEM Dell private. Their former offer was , who offered an almost that involved removing nearly all Dell shares from the market, but not taking the company fully private. Michael Dell and his partner Silver Lake were adamant that they were not willing to raise the price of their bid, even in the face of Icahn’s offer, which would have seen some shares purchased at a slight premium to their own proposed price. They now have budged, but at the same time have given all but no ground. Their newly proposed terms contain a per-share purchase price increase of $0.10, a sum so miserly that it can only be construed as a middle finger to the Dell Special Committee of the Board. You ? Here you go, bastards. Here are the formal new terms, according to : 1. increase the merger consideration to $13.75 in cash per share of Company common stock, representing an increase in the consideration to be paid to unaffiliated stockholders of approximately $150 million; and 2. modify the “Unaffiliated Stockholder Approval” requirement in the merger agreement to provide that the voting requirement is the approval of a majority of the outstanding shares held by the unaffiliated stockholders that are present in person or by proxy and voting for or against approval of the merger agreement at the stockholder meeting. The formerly offered price of $13.65 per share is giggling in a corner somewhere. Dell and Silver Lake call the above their “best and final proposal,” stating that they are “not willing to discuss” any improvement of the listed terms. How can Michael Dell and his partner think that they can get away with such a pathetic sweetening of their former offer? Because what Icahn has in mind for Dell is complex and not in the best interest of the corporation. The firm needs time as a private entity so that it can rebuild its OEM business and focus on expanding its business services arm. It cannot do that with sufficient flexibility if it is chained to quarterly earnings reports. The Special Committee has moved the vote to August 2, and states that it is “evaluating” the upgraded offer. This saga is almost over. It’s been a surprisingly interesting journey, with competing bids cropping up even as Dell slowly sinks; the declining PC market in the face of rising competition from mobile devices has been a constant drag on Dell’s performance in recent quarters. However, following Dell’s first-quarter earnings report, . The company is down around a half percent in normal trading, at $12.82. That Dell is currently trading nearly $1 per share under the proposed offer price is indicative of a lack of investor confidence that the plan will succeed. And, given that the Icahn deal is priced higher per share than what Michael Dell currently proposes, investors aren’t viewing that plan optimistically, either. It doesn’t seem likely that Icahn will further better his offer, or Michael Dell. Therefore, unless a new player appears — and that is exceptionally improbable — we have the final competing plans in hand. It’s up to the Special Committee and the company’s investors to choose a side.
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Developer Training Platform Pluralsight Acquires PeepCode To Expand Into Open-Source Content
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Sarah Perez
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, the online training resource targeting professional developers that announced its raise of earlier this year, is now putting that funding to use. The company, whose corporate users include Microsoft, Salesforce, Twitter, Facebook, Dell, HP, Intel, Disney, EMC and others, is acquiring , a similar resource providing video tutorials on a range of technologies, such as Ruby, Node.js, JavaScript, Unix, Git, CSS, RSpec, databases and more. Terms of the all-cash deal are undisclosed, but the move will add around 100 new courses to PluralSight’s online library, and will bring a significant amount of open source content to its service. [Update: originally, we said this was the time, but Pluralsight has some OS content previously.] This is an important addition, given that many pro developers are interested in familiarizing themselves with open source technology and tools. “PeepCode is one of the most respected names in open-source development, with clients such as GitHub, AT&T and Yammer,” says Pluralsight CEO Aaron Skonnard. “Up until now, Pluralsight’s customer base has mostly revolved around Microsoft-oriented enterprises. This acquisition gives Pluralsight the content – and the brains behind it – that has become the go-to learning resource for serious open-source programmers,” he adds. For those unfamiliar with Pluralsight, the company was founded back in 2004 and began its life as a classroom training outfit before shifting its business online three years later. Today, it hosts hundreds of courses with plans priced for individuals, mobile users, businesses and enterprise. The service has been historically strong in Microsoft technologies, but also offered some material for Salesforce developers, Java, Android and iOS. , Skonnard said the company would use its funding to increase its catalog on social (Twitter, Facebook) technologies, Java, Android, Ruby, PHP, and Python, as well as cloud platforms like Amazon’s AWS, Google App Engine, Windows Azure and others. PeepCode offers some of that needed content, plus thousands of users of its own who had for screencast bundles (five for $55, 10 for $99 or unlimited for $199), which they could then watch online, offline or on , via an iOS app. These customers will now be merged into Pluralsight’s user base, which is now 300,000 across 150 countries. In addition, PeepCode had several dozen independent authors who made the video training courses for teaching fees and royalties, similar to Pluralsight. Dozens of these instructors will make the transition as well, joining Pluralsight’s 150 authors. Also joining is PeepCode founder Geoffrey Grosenbach, who will now become a VP and head up all future open-source development. “We’ll be working on the integration of the PeepCode content into the Pluralsight library over the next few months,” says Skonnard. “Soon users of both sites will get access to the combined libraries of Pluralsight and PeepCode, which now totals more than 650 courses.” However, because PeepCode’s subscription model is a bit different from the one Pluralsight offers, there will be an exchange system involved. For example, a five-tutorial package may convert into a certain length of time on Pluralsight. Both sites will operate as is during the next few months, then eventually PeepCode.com will redirect to Pluralsight.com. Following this addition, Skonnard says that Pluralsight is now on track to reach triple-digit revenue growth again this year.
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Google Launches Google Cast SDK For iOS, Android and Chrome, Lets Developers Stream Their Apps To Chromecast
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Frederic Lardinois
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Google launched its today that allows users to stream their Chrome tabs and videos to their TVs from virtually every popular platform. In addition, Google is also launching the for developers on iOS, Android and Chrome, which will allow them to enable their apps to stream right to their users TVs. The new SDK, which is officially in beta (or “preview,” as Google calls it), will be available later today. The SDK, Google says, will enable interactions between devices and TV. Developers don’t have to build new apps for this platform, the company stressed, but will be able to build on their existing mobile and web apps. “Our goal is to create an ecosystem of apps and devices,” Google’s Mario Queiroz said in his announcement today. “While the Chromecast device is the first instantiation of Google Cast, we expect the technology to be embedded in a range of hardware from our partners in the future,” Google in its announcement today. Over time Google hopes that the technology will be embedded in a number of devices and that developers will support it the way they did Apple’s AirPlay. Unlike Apple’s solution, though, Google is opening this service up across platforms. At $35, I would assume that many developers will pick one of these devices up and start experimenting with them.
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Apple’s Growth Rocket Has Hit A Wall. What Will Get It Started Again?
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Dan Frommer
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Apple’s stunning growth over the past decade has been one of the biggest stories in all of tech. Even as the company released new product after new product, and grew larger and larger, its growth rate continued to , its competitors. For the past ten years, Apple has posted year-over-year revenue growth every quarter, almost always more than 25% and frequently more than 50%. In that span, it’s gone from a company with less than $2 billion in quarterly sales to one with (once) more than $50 billion. For two quarters in a row in 2011, as the iPad and iPhone both picked up steam, Apple posted growth rates each quarter representing more than $10 billion in new sales from the year prior. That’s just crazy for a company that big. But now, that unbelievable growth rocket has come back to earth. Apple’s most recent quarter, , showed just 1% growth over last year. And it’s not a fluke: Growth has sloped down for more than a year. After a great winter in 2011-2012, when Apple’s sales grew 73%, then 59%, it’s been 23%, 27%, 18%, 11%, and now 1%. For its next quarter, Apple expects growth ranging from 3% to a 5% year-over-year decline. What happened? Some of it’s just funny timing: A product launch early one year then late the next. Inventory adjustments as products mature and markets settle — this played a role in this past quarter’s , for example. This year, in particular, Apple has been quiet on the new-gadget front, as design boss Jony Ive rehauls its iOS operating system, presumably for new iPhones, iPods, and iPads in time for Christmas. This is where arbitrary quarterly marking periods can sometimes cloud the lens. But there’s also been a bigger-picture trend that Apple can’t just replicate: The vast shift towards smartphones and tablets — the “post-PC” revolution. Apple has captured this movement brilliantly, dominating the industry’s despite selling relatively fewer, mostly high-end devices. And it may continue to do so. But that first-time adoption cycle isn’t going to happen again. At least not in the markets where Apple is strongest — and where carrier subsidies allow for such high profit margins — like the United States. So what can Apple do next, assuming it wants to continue to grow? (A safe assumption.) One obvious answer is to move downmarket in its existing product lines. This is always a tricky proposition with Apple, because the company swears it would never release a low-quality product that it isn’t proud of. (And it shouldn’t.) So far, this has meant selling old iPhones at reduced prices, which has been pretty successful. But if the growth is happening in even further-downmarket segments, Apple might have to even figure out something cheaper. Where will it draw the line, design- and quality-wise, to compete? We may find out this year if are real. Another possibility, of course, is to blaze into new markets. There’s been speculation for years that Apple will start to sell television sets. The latest chatter is about wearable computers — Apple gadgets for the wrist, à la Nike’s Fuelband. The nice thing about wearables is that like smartphones — and unlike, say, desktop PCs — they’re the kind of device where everyone in the house will need their own, meaning a larger potential market, people-wise. But unlike mobile phones, there isn’t an established precedent for subsidies, carrier distribution, or even pricing, really. Can Apple design the kind of thing you’d want to wear on your body all day? We’ll see. Will that create the same level of demand, favorable pricing, and high margins that the rise of smartphones did? Probably not. Still, if it’s a hit, it could certainly fuel significant growth for Apple. So that’s the big question going forward: Can anything propel Apple’s growth the way the iPhone and iPad did over the past 6 years, and the iPod and Mac before them? Longtime Apple analyst Gene Munster asked a version of that question on today’s earnings call: “Are there product categories out there that are big enough to move the needle for Apple?” Apple CEO Tim Cook’s response: “We’ll see, Gene. We’re working up some stuff that we’re really proud of, and we’ll see how it does.” And, in typical Apple fashion, “We’ll announce things when we’re ready.”
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John Doerr On Zynga Investment: “We Own 60M Shares, So I Want That Stock Back Above $10 … Where God Intended It”
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Rip Empson
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Investors tend not to be cool, sexy or “famous” in the traditional sense. After all, anyone can invest in one great company, but reproducing those victories habitually over decades is nearly impossible. Thus, while investors may never become celebrities, a handful have managed to achieve a kind of renown by defying the odds and continuing to pick next year’s winner. While his record is far from flawless, is one of those investors, because — as Google CEO — he “sees the future first.” A Kleiner Perkins partner since 1980, Doerr has backed companies like Symantec, Netscape, Sun Microsystems, Intuit, Amazon, Google and Twitter. Doerr has also gone on to become a big supporter, spokesman and evangelist for reform (and innovation) in education, health and greentech (among others). And, as he showed today at in Aspen, the dude is eminently quotable no matter the subject — success or failure. While Doerr currently sits on the boards of fast-growing startups like social news mag, Flipboard, and MOOC pioneer, Coursera, and is a long-time Google board member, on the boards of one of his portfolio companies, which is turning out to be somewhat of a dog: Zynga. In spite of amassing a legendary portfolio over the years, some of his high-profile and seemingly promising investments haven’t performed as well as Doerr (and many others) expected, Zynga and chief among them. When asked why, Doerr said that, at least in the case of Fisker, “execution was a key” reason for its comparative lack of success. “We invested in Fisker because we believed in the electrification of transportation,” Doerr said, but Fisker is now on the edge of bankruptcy because “Tesla out-executed them brilliantly,” turning itself into a $14 billion company in the process. So, while Fisker itself hasn’t turned out to be a massive success, Doerr chose to look on the bright side, saying that even so, the firm’s investment thesis (in the evolution and rise of electric vehicles in transportation) “has been proven out.” However, the Zynga story is different, Doerr continued, mostly because the investor still believes in the company’s viability and market position. Assuming a cheerleading role for his portfolio company, Doerr offered a view that will likely find at least a handful of detractors among tech pundits: “[Zynga is] right at the take-off point with respect to mobile gaming.” Doerr then cited Zynga’s new CEO, Don Mattrick, as another source of optimism the company going forward. , where he was the President of Interactive Entertainment, to help fix the beleaguered social gaming company. Mattrick was recruited by co-founder and former CEO Mark Pincus — a move which Doerr said was “one of the smartest moves that Mark Pincus could have made for Zynga,” as the former Microsoft president is a seasoned entrepreneur and turnaround executive. “When Mattrick joined Microsoft,” he explained, “Xbox Live was losing large amounts of money and when he left, it was making tons of money.” Dan Primack of Fortune then asked Doerr to elaborate on Zynga’s CEO transition and why, as a VC, he would decide to put a second person on the board and what role he played in that move. Doerr responded by saying that “Mark Pincus led the whole board in making this change,” and because Mattrick has such a good track record, he was “supportive of Mark and the rest of the board when making that change.” As to why he joined Zynga’s board in March, Doerr said that he joined because he thinks “[Zynga] has a monster market opportunity in front of it.” Fortune’s Andy Serwer then tamped down the self-interested cheerleading by reminding the audience that Kleiner Perkins happens to be a significant stakeholder in Zynga. To illustrate just how significant KPCB’s stake in Zynga is, Doerr admitted that the firm owns “60 million shares” in Zynga, before joking that he is indeed self-interested and wants “to get that stock price back above $10/share … where god intended it to be,” he quipped, while nearly giggling. Doerr’s quip on god’s wishes for Zynga’s floundering stock later spurred Primack to tweet in response — and mock reverence: [tweet 359813133960888320 align=’center’] “Don’t you think there ought to be a safe, trusted place you can go to connect with your friends to play games?” Doerr continued. He then elaborated on his stance saying, “we think Zynga ought to be” the one to do it and that this is the core belief and motivation behind Kleiner’s investment and Doerr’s continuing optimism. The company “missed a beat moving from Facebook to mobile,” Doerr admitted, before concluding on a positive note: “But the team is on it.” On a final, self-interested promotional note, to elaborate on what’s in store for the tech industry and tell us more about his visions of the future. Doerr’s interview with Fortune’s Andy Serwer at Brainstorm Tech is embedded below:
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Who Honestly Wants Bill Gates To Come Back And Run Microsoft?
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Alex Wilhelm
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Bill Gates is not coming back to Microsoft as its CEO. He’s not. He’s said so again and again. And yet, today, some began to circulate that the man was coming back to manage the company he helped found. It’s not happening. That should go without saying, but at this point I’ve surrendered to reading the same bullshit at least twice a year. Not only has Gates himself been deliberately plain that he has no intention of returning to run Microsoft, his exit from the company is indicative of how his attention drifted from the firm following the forming of the Bill & Melinda Gates Foundation in 2000, the same year he gave up the CEO reins. Following his formal surrendering of the boss role to Ballmer, Gates held onto board chairmanship, and an amorphous role created for him called Chief Software Architect. Around a half decade later, Gates , leaving full-time duties to others. At that point, the foundation became his main activity. Then in 2008, Gates . He has retained his board presence, but that’s it. Gates has been clear about what he wants to do, and it is not running Microsoft. So, why the endless rumor cycles? I can’t summon a reason better than that some desperately hope for his return to the software giant. This raises a better question: Who the hell wants that? Gates left daily time at Microsoft around the eras of Vista and Internet Explorer 7, two products that were stilted and led to a general decline in Microsoft’s hegemony in the computing business. This isn’t to cast aspersions on Gates, but more to point out that even then his lingering influence didn’t stop Microsoft from releasing mediocre products. The Microsoft of today is a far superior firm than the Microsoft of 2008 — disregarding financial metrics. And that is the Microsoft that Gates is steeped in, not the device and service, recently re-org’d one that has a different business model and operational structure. Now, Microsoft is embracing web standards, supporting open source code on its Azure cloud computing service, and has a mobile platform — Windows Phone — that is the most compelling in its history. And, perhaps most importantly, much of the company’s former arrogance has dissipated. Mostly because the firm got spanked by Apple’s iPhone, Google’s Chrome and a host of other products and services that bested its own efforts for years. Who might argue that Gates’ leadership style would be a good fit for such a company? It could be, but it’s at best a hypothetical. Ballmer, on the other hand, has enacted the above changes, so he is at least sufficiently in tune to lead day to day. Mary Jo Foley has a , of course: Yes, I know there are many who equate the heady years of Microsoft growth with Gates. And I know there are many inside and outside the company — including some current and many former employees, along with quite a few Wall Street analysts — who think a Gate-full Microsoft would trump a Ballmer-led one. I think many of those people are looking at Microsoft history with Fortaleza (instead of Google) glasses. Gates founded Microsoft. But Microsoft is a very different company than when Gates retired from his day-to-day duties there in 2008. When Ballmer eventually goes, it’s time for new management, not a return to the past. Gates is a massive figure in technology and now a global force for good. However, Microsoft as a company has outgrown its original methods, products, and business gist. To bring back Gates – and he wouldn’t come to boot – would be to retread old, lost ground. So whenever someone tries to lie to you about Gates coming back, out of his own form of retirement, to install himself atop Microsoft Tower, blink twice and spit on the messenger. They are full of it. My friend Matthew Panzarino put together a that show how much Apple has grown under the primacy of its current leader Tim Cook. The charts are up and to the right. It was a jokish reminder that those clamoring for the firing of one executive or the next are often a bit short-sighted. And, of course, calling for Gates to take the CEO role at Microsoft is the same as calling for Ballmer’s canning from it. Well, we can at a minimum run stats on Ballmer. The following graph ( ) shows Microsoft’s revenue growth since 2005. Not the full Ballmer tenure, but a decent shot of how the company has performed: The above performance is hardly a fireable offense. The middling of Microsoft’s stock price could be, but that’s a value call that doesn’t really implicate the Gates question. So, we can simply state that Microsoft’s key metric performance under Ballmer isn’t as desperate as many think; the market has simply allowed its stock to sit flat and fire out dividends as its income grew and its price-earnings ratio fell. What this kicks down to is simple: Gates, no. So let’s never talk about this again. We’re done.
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Video Platform OpenWatch Aims To Support Global Citizen Journalism
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Eliza Brooke
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, which presented at media startup accelerator ‘s , wants to become a video platform for citizen journalism worldwide. Founded in November last year, the company is at the start of its fundraising process, with the hope of closing a fast seed round to get things off the ground. The purpose of OpenWatch is to create a global network of video reporters and investigators who can expose important issues around the world, co-founder and CEO Rich Jones tells us. The appeal of OpenWatch is especially apparent overseas in countries where the press isn’t free. “We still have a semblance of a free press [in the U.S.],” Jones said. “This project has serious international implications. I really do believe that mobile tech and network tech has a huge opportunity for creating a public free press for countries that didn’t have that opportunity before.” He added that although Android adoption overseas is taking off, those without smartphones can call an OpenWatch line and use the phone as a voice recorder. Since the new version of OpenWatch launched one month ago, Jones said thousands have been using the network — NSA PRISM protests generated videos from Atlanta, Boston, and Chicago, for instance. Multifaceted storytelling provides perspectives that might go untold in a news report written by one person. At the same time, open source journalism means that the facts might be unintentionally skewed, or worse, hijacked as propaganda. For that, OpenWatch includes full primary sources with all videos so that if a viewer is dissatisfied with the story, he can fact-check it himself. Everything, including phone calls and emails, should be posted and considered on the record. The OpenWatch platform is also meant as a resource for official news organizations. “Maybe the New York Times can send someone [abroad], but the Village Voice can’t,” Jones said. “This really lowers the cost of doing that kind of international reporting.” OpenWatch existed as an open source project for a number of years before the company was officially founded. During that time, the founders also created an application called , which gave people a platform to secretly film their interactions with police officers and upload those videos. Those were built into a global map of police encounters that spoke to regional trends in police enforcement and civil rights abuses, Jones said. “I don’t like seeing the current role of media as public relations or propagandist,” Jones said. “There’s not that much that does what journalism is supposed to do, to keep authorities accountable.”
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Groupon Updates Its Breadcrumb Payments App With Deal Redemptions, Offline Mode And More Customization Beyond Restaurants
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Ingrid Lunden
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In May of this year, to raise its game against the likes of Square and PayPal, its — originally conceived as a payments app for restaurants — as a free payments app for all local merchants. Today, the daily deals company is embarking on stage two of that strategy by adding a number of new features in an update to make the app, part of the company’s wider suite of payment services and apps, significantly more usable (but still free). They include the ability to take payments when you’re offline, redeem Groupon deals, and customize the app to fit specific business categories, like beauty salons or cafes. The moves, Groupon hopes, will not only drive more transactions through Breadcrumb, but give Groupon one more way of upselling those merchants to other services — like Groupons themselves. Jyri Engestrom, the head of product overseeing Breadcrumb, says that part of the reason Groupon has updated the app is to speak to some of the most vocal feedback it has had so far. It sounds like it’s been a steep learning curve for Groupon, having collected feedback post the app launch in May from hundreds of thousands of users. “We noticed that it was taking a long time to get started if you’ve never used a point-of-sale app before,” he said. “When you landed in the app, you were dropped into an empty canvas, and it was really hard for merchants to know what to do next.” To that end, users are now asked to identify what kind of business they are, and that in turn offers them a select of pre-set menus tailored to that vertical. Users then have the option to customize those settings more — say with different coffee options and prices if you are a cafe, or treatments if you are a spa. (The full list of pre-set verticals: hair and nail salons, spas, studios, wine bars, cafes and retail establishments.) For now, Engestrom says the app will remain “horizontal” and that time will tell if each vertical will eventually get its own, more powerful app. The company is not revealing any specific download or usage numbers, but I suspect launching further apps will depend on how popular this one ends up being. While all that sounds practical, Engestrom describes the addition of an offline mode — which means merchants can make payments even when they do not have an Internet connection — as “mission critical”. He describes a sea change underway among merchants. “Just like Nokia was wiped out by the smartphone revolution, I think something similar is happening in local businesses with iPads and Android tablets,” he says. But the promise of technology becomes a bit hollow — and at least less reliable — if the merchant has to stop taking payments when the broadband goes on the fritz. Those charges for payments work like this: Groupon charges merchants 1.8 percent on Visa, MasterCard and Discover swiped transactions, 2.3 percent when keyed in, plus $0.15 for each transaction. American Express pricing is more complicated, as it is “determined by American Express based on your industry category.” The rates range from 2.3 percent-3.5 percent (swiped) and $0.00 to $0.15 per transaction, says Groupon. For non-Groupon Merchants, the fees are higher: 2.2 percent when MasterCard, Visa and Discover are swiped, plus $0.15 per transaction. As a point of comparison, Square has two options: a flat 2.75 percent fee per swipe, or $275 per month with no fees per swipe — with the latter aimed at higher-volume users, or those who like to gamble that they might be. Engestrom’s background, prior to Groupon, was as the founder of Ditto, a mobile recommendation app that . Prior to his Ditto days, Engestrom worked at Google, where he ended up after his Twitter-style microblogging service Jaiku was acquired but eventually shut down by the search giant. He told me today that the Ditto acquisition was “a technology acquisition and an acqui-hire” in that some of the work he created at Ditto is making its way to Groupon’s mobile products — specifically around the consumer-facing Groupon app. But he also adds that what he’s doing here with Breadcrumb is equally, if not more, important, because of how it closes the loop on his previous work. “If you want to build an innovative business, as I was doing with Ditto, you have to have a terminal on the merchant side, because that’s the only way you can really see what people are buying.” A company like Foursquare can let you check into a merchant, but you don’t really know what is getting bought in connection with that.” This links back also to the third big feature getting added today: integrating Groupon deals with the payment app. Now, Groupon can offer its users deals nearby or recommended, and when a user goes into the business to use their Groupon, the merchant, if he uses the app, can link that up directly to complete the sale. That saves time, but also then leaves an analytics trail that the merchant can use. “We charge a processing fee and that is a real business for us, but ultimately I frankly think Ditto was acquired because of this area. Where companies like Groupon and Square compete is basically ultimately a game of who can drive consumer demand for these merchants,” he says. “We are building all these robust features, but this is a game ultimately of who can leverage this data and who can elevate that interaction between the consumer and merchant at the point of sale,” he adds. With the tens of millions of customers that Groupon already has with its app downloaded, and the many thousands of merchants who push deals through the platform, the trick will be whether Engestrom and his team can sell merchants on the promise of closing the loop, as well as getting more users engaging in the deals, simply because now it will be quicker to act on them. For now, Groupon has yet to roll out this solution to its 500,000 merchants internationally who sell goods and services through its platform — although in Square-like mobile payments provider SumUp in Germany, certainly does point to the company figuring out ways that it could do this soon.
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Latino Startup Accelerator Partners with Google For Entrepreneurs To Launch In Fall
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Stephanie Yang
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, a program to support Latinos involved in the startup community, has announced a partnership with Google For Entrepreneurs and will launch its first session for five to six startups in September. Based in San Jose, Manos Accelerator is meant to increase the number of Latino entrepreneurs and startups. Less than one percent of venture-backed startups were founded by Latinos, according to a report by . Through a three-month program, Latino startup teams will collaborate with other startups, develop their business plans, and meet with angel investors, mentors, corporate executives and venture capitalists. “I’m just trying to create a cog and insert it in this wheel that already exists. If this was something that didn’t have an existing ecosystem, it would be difficult to sustain it over time,” Co-founder and CEO Edward Avila tells me. The wheel, he elaborates, is the startup-laden Silicon Valley. Avila says Manos Accelerator’s partnership with Google will help get the accelerator off the ground through experienced advising and resources. Google For Entrepreneurs launched and has partnered with global startup initiatives including in Kenya, in France and in Korea. The program has also paired with several other accelerators for increasing minority representation in the industry, such as and . While NewMe Accelerator and similar program are providing resources and collaboration for minorities, Manos Accelerator is the first program specifically created for Latinos. Avila says Manos Accelerator is part of Google’s initiative to do more in Latin American startups. With about 30 business submissions so far, Manos Accelerator is a long way from TechStars or Y-Combinator, which the program will be modeled after. However, Avila says the numbers he has seen are encouraging. About 100 people have volunteered to be mentors for the program, and a third of submissions are from international startups. Applications close on July 31, and the first session begins Sept. 9. You can apply for Manos Accelerator .
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Inside MuckerLab, The Startup Accelerator That’s Amping Up L.A.’s Tech Ecosystem
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Colleen Taylor
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In the San Francisco Bay Area, there is no shortage of “accelerator” programs that promise to take fledgling technology companies to the next level by providing mentorship, funding, business introductions, and the like. And as the startup scene a few hundred miles south in Los Angeles continues to heat up, the appetite for accelerators is growing too. One of the leading new startup accelerators in L.A. is , so while TechCrunch TV was in Southern California recently we stopped by to take a look inside and find out about what makes the program tick. Check out the video embedded above to look at the MuckerLab space and hear co-founder talk about the MuckerLab vibe, what he and other MuckerLab mentors bring to the table when it comes to shaping new companies, what he’d like to see in the future to make the L.A. startup scene really shine, and more.
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Journalism May Be Collapsing, But With Pressfolios, At Least You Can Build A Nice Portfolio
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Anthony Ha
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If you’re a working journalist (or even an aspiring one), you’re probably getting tired of hearing that . Now, leaving aside the obnoxiousness of the phrase “personal brand,” I suspect we hear it so much because it’s kinda true. A startup called aims to make it easy for journalists to build that brand through an online portfolio. “Journalists probably best served by adopting the mindset of entrepreneur rather than a serial employee,” said co-founder Marc Samson. “If they can put their best foot forward, they’re going to be better served in their careers, and a big part of that is keeping track of your published work and developing a professional identity.” There are some obvious questions: Isn’t an online portfolio just a website? And aren’t there already tons of website-building tools? Well, yes, but there are some unique challenges for journalists, like the fact that old articles can be taken offline, and that you may be generating new content constantly but you don’t have time to add it to the portfolio. For example, there’s where I highlight some of my past work, but I haven’t updated it in a year, and one of the articles is no longer online. Samson told me there are “three core components working in symphony — our platform simultaneously serves as a personal repository, a cloud backup service, and a website builder, all wrapped into one.” So instead of just linking to the stories that you want to highlight, Pressfolios creates a backup version, as well. The profile is also specifically designed to highlight the kinds of things a journalist would want to highlight — the links to past content are pretty prominent, and there’s also a space for listing skills and a detailed biography. . The site is leaving private beta today and adding a $12 per month pro version. New features include the ability to include RSS integration (making it easy to add your latest stories to your portfolio, and to even do it in bulk if you want); custom domains (so your Pressfolio doesn’t have to be a Pressfolio.com URL); and private Pressfolios (which makes it less obvious to your bosses that you’re looking for a new job). What Pressfolios doesn’t offer is significant integration with social networks — you can link to your profiles, but that’s it. Samson acknowledged that a reporter with an active account and a significant following can attract a potential employer’s “curiosity,” but he argued that reporters probably aren’t going to “get hired based on their social media accounts.” I like the product and I plan to build out my profile even further (though check back in a few weeks). However, I did wonder whether there’s enough of a market to build a big company here — after all, journalism is neither a lucrative nor fast-growing profession. Samson countered that journalists sometimes sell themselves short, and while he doesn’t necessarily think Pressfolios will become a big, venture-backed company (which is why it’s self-funded), he does see a real opportunity here.
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Mixamo Is Building A Platform For Game Developers To Create And Animate 3D Characters
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Kim-Mai Cutler
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With app stores becoming ever more competitive, game makers have had to upgrade from building 2D games to creating 3D titles over the past two years. That has meant even more creative and intensive work for artists and producers, as the graphics processing power on smartphones has increased. But there are tools to help. is a 25-person startup that has existed very quietly for the past five years. Even though they haven’t really spoken to the press much before, they’ve raised about $11 million in total and have racked up customers like Microsoft, EA, Sony, Blizzard and Gameloft. They’re a web-based service that helps developers rig and animate 3D characters by making rigging and animation easier. A developer can upload the mesh for a character, place joint locators and locator rings to figure out how to make the character move, and then run Mixamo’s . For console titles, the company says they can animations by anywhere from 70 to 80 percent compared to standard techniques like keyframing and motion capture. An offshoot from some research out of Stanford’s BioMotion Lab, the company has built up a store where they sell existing characters and animations on top of a subscription-based service. (They’re one of the largest animations providers in the asset store for Unity, a hugely popular game development platform backed by Sequoia Capital). “We are an end-to-end 3D character art solution that allows developers and artists to easily and affordably create, rig and animate high-quality characters,” said , the CEO and co-founder of Mixamo. Naturally, Mixamo has a SaaS-based business model, where they sell subscriptions by the seat to gaming studios. Their All Access product gives studios one year of unlimited access to their 3D characters, Auto-Rigger and their library of thousands of animations for $1,500 per seat. They’re seeing developers handle about 800 or 900 characters per week and have a few thousand customers. The company has taken funding from Granite Ventures and Keynote Ventures. [youtube=http://www.youtube.com/watch?v=kH_LMyJIepw&w=560&h=315]
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Media Startup Accelerator Matter Comes To New York For Demo Day
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Eliza Brooke
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Matter, the San Francisco-based accelerator and early-stage venture capital firm, held a Demo Day in New York today for its first class after an initial Demo Day last month in SF. Matter formed last year and is backed by the and , a public media network, with support from the , PRX. Matter invests in media startups, giving them $50,000 and five months to work on their products. As CEO Corey Ford said, it’s an attempt to figure out what new media will look like. Here’s a look at the six members of the first class, a cohort the accelerator is calling “Matter One”: A video analytics platform that aims to help publishers and brands grow their audiences. The service, which focuses on YouTube videos but will expand to other video platforms, is meant to be a cleaner version of YouTube analytics, which packages reports in ZIP files of Excel sheets. The system also enables users to slice their own data. In its noun form, a Zeega is an embeddable combination of music, text, and GIFs. The audio plays continuously while viewers swipe through the GIFs; it’s essentially a music video creator that requires an artistic touch similar to that used on Vine. Some users are creating politicized stories, while others use it to make birthday cards for their friends. Zeega, which launched at Matter’s SF Demo Day, is also meant to serve publishers. The Atlantic and Mother Jones are already using Zeega, and today the team announced the launch of Zeega Publisher Pages. in May 2012, SpokenLayer provides a listening option for news articles. The team at SpokenLayer created a system in which they can send articles to their voice artists and have the voice artists send back the recordings. They have partnered with The New Republic (post redesign) and with Fast Company, and announced today that they will now be working with The Globe and Mail, TIME, Time Out, Tablet, M, Byliner, and Narratively. SpokenLayer is bootstrapped and has not announced a funding round yet; founder and CEO Will Mayo said that they have reached a revenue-generating point. Launched as a video platform for citizen journalism, OpenWatch is hoping to draw participants worldwide. In an era when so much “news” looks like press releases, OpenWatch is aiming for accountability by putting the news in people’s lives, particularly abroad. The app provides a map that shows who else is covering the event and what aspects of the story still need to be uncovered. Enables publications and individuals to create 24-hour TV stations, which exist on Mixation’s site and can also float on external sites. The idea is that the online video viewing experience is stilted, because it requires clicking and browsing. Mixation is hoping to work directly with publishers and is promising a jump in increased revenue (in the case of TechCrunch, $300,000 per month). Inkfold is built on the idea that people send a lot of article links via email, and most of those articles never get read. Because people are busy. The iOS app, which goes live today, finds these links in your email and pulls them into an Inkfold inbox, where they show up as a stream of complete articles, rather than URLs. The app also has a chat function in which users can respond to the person who sent them the article and carry on the conversation.
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Apple Q3 2013 Sees Revenue Plunge In China To $4.6B, Down 43% On Q2, Amid Weaker International Sales
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Ingrid Lunden
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With pressure from low-cost smartphone makers on Android and other platforms, today in Greater China, which includes Taiwan, Hong Kong and the world’s largest smartphone market, Mainland China. In that region, sales were $4.64 billion (and $4.9 billion including retail), down 14% over last year and a whopping 43% on last quarter. It’s a startling contrast to the $8.2 billion reported in Q2, a record for Apple in the region, according to , when it was the only region to grow sequentially. Overall, international sales outside of the Americas are now at just under 48%, compared to 56% last quarter and . It shows that while Flurry today noted that Apple is the among active smartphones and tablets in China at the moment, the earnings out today are a sign that the company may be challenged to hold on to that title in the months ahead. The rest of Apple’s non-Americas regional sales categories were down as well — the one exception being Japan, which remains one of the company’s stronger growth markets. Europe — still feeling the pressures of an economic recession on top of low-cost phone competition — was down to $7.6 billion, down 8% on last year and 22% on last quarter. The rest of Asia Pacific outside of China and Japan came in at $2.05 billion, down 18% on last year and 35% on last quarter. Meanwhile, Japan had revenues of $2.54 billion, up 27% on last year but down 19% on last quarter. On the conference call, Apple CFO Peter Oppenheimer noted that in Japan, iPhone sales grew 66%. One of the big questions for Apple internationally remains how it will continue to fare going forward in emerging markets, where the company will continue to feel price pressure from low-cost handset makers. Even without launching low-cost devices that could potentially impact the company’s margins — something many believe the company will do — the iPhone is already seeing its and that continues to have an impact on its margins. As it is, you can see in the graph below that after several quarters of growth in Greater China, the region is now firmly below Europe in terms of revenue rankings, after earlier looking like it might overtake Europe as the second-biggest region after the Americas. The latter includes Apple’s biggest and home market of the U.S. We’re listening to the earnings call now and will update this with any interesting color that the company gives on the international front. . CEO Cook was defensive on questions about how well international was doing. On Greater China, where he was asked about growth being down 43% on the previous quarter, he admitted “China was weaker in the quarter,” but also said that the “focus on revenue doesn’t tell the complete story…In the arc [of growth] I don’t get discouraged by a 90-day cycle that could have economic and other factors.” He noted that total sales for Greater China account for 14% of the company’s overall revenues, and $27 billion on a trailing basis. iPad sales in the quarter were strong, 50% up over last year. He also pointed more positive signs on the ecosystem front, with now over 500,000 developers there working on iOS apps. Cook also repeated the company’s commitment to double the number of retail stores in the last year. Other international markets that Cook mentioned were growing included India, which was up 400%, Poland up 60% and Turkey up 140%. Cook was also asked about Apple’s situation in Russia, where the three big carriers, MTS, Beeline and Megafon, . Cook played this down and seemed to dismiss it altogether: “If you look at the Russian market, over 80% of phones are sold in retail outside of carrier-owned stores,” he said. “Our activations in Russia set a record last quarter as the highest-ever quarter.” Of course, what this also obfuscates is how the iPhone performed relative to other devices. IDC (via ) notes that Apple’s share of the smartphone market declined to 8.3% in the last quarter from 9% a year ago.
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Up Close And Personal With Verizon’s New Trio Of Droids
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Chris Velazco
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As you may have heard, Verizon unwrapped three new Motorola Droid smartphones in New York earlier today, and to my surprise, they just may be the Droids you’re looking for. Well, some of them, anyway. Fair warning, friends: any of you expecting dramatic differences between the three of these things are going to disappointed, so we may as well start with what these new Droids have in common. Motorola’s on-site representatives said the three new Droids were “very similar” in terms of power, and that’s the impression I got after fiddling with them a bit. These days you would expect a flagship smartphone to feature a KICKIN’ RAD quad-core CPU like those seen in the Samsung Galaxy S4 and the HTC One, but that’s not the case here. Motorola may talk up its X8 computing platform (more on that later) and its eight cores, but much of the processing power comes from a pair of CPU cores. Even so, firing up apps, cruising around on the web, watching YouTube videos, and punching out faux text messages was very smooth, and there was hardly any discernible difference between them. Expect some more stringent tests once we get our review units in. Thankfully, these new Droids are running a version of Android 4.2.2 that’s awfully close to stock. Motorola’s been decluttering for years now — remember the hot mess that was MotoBlur? — and they’ve trimmed a lot of the fat that didn’t actually add much value. Of course, there are more than a few things here that stock Android devices can’t do, and it’s thanks to Motorola’s new X8 system. The multi-core X8 system lets the Droids do some neat new things — you can ask your phone to call people, pull up directions, and the like by issuing it an “OK Google Now” command. It works reasonably well, though considering how damned loud the room was, I wouldn’t be shocked to learn it’s actually more accurate than what I saw today. Curious aside: you’re not supposed to be able to activate those touchless controls unless you’re the person who configured them in the first place, but I was able to bring them up on a spokesperson’s device without any setup on my part. Maybe it’s because it was very loud in that crowded room, but a spokesperson didn’t seem too pleased. You’re also able to activate the camera by giving the phone two quick shakes, but it didn’t seem as straightforward to me as it could’ve been. Tentative flicks don’t seem to do the job, you really need to dial up the wrist action to get the motion to register since the phone tries to ignore movement when it’s in pockets or bags. I got shot down when I asked if the X8 system would appear in other Motorola devices (since it already seems to be in the Moto X), with a representative dryly noting that the company has invested a lot in the platform… and subtly implying that work would be a waste if it didn’t appear elsewhere. Frankly, considering the near one-to-one correlation between the features seen today and that leaked Canadian video from a last week, it’s near-impossible to think that the Moto X doesn’t have the same setup nestled inside it. But that’s enough about similarities — let’s talk design for a moment.
First up is the Droid Mini, the smallest of the bunch. I was a bit of a sucker for the RAZR M, Motorola’s original pint-sized Droid — the package was quite handsome with its nearly edge-to-edge display and its tiny frame, but was it was no top-tier device when it came to performance. Motorola thankfully didn’t repeat its earlier mistake, as the Mini seems awfully snappy. Colors on the 4.3-inch OLED display running at 720p were bright without being lurid, and it’s a nice, dense little thing to hold on to. It’s not perfect though — the glossy Kevlar finish that Motorola ran with feels a little off-putting and picks up fingerprints like crazy, a trait it sadly shares with its flagship brother.
Speaking of the flagship, Motorola apparently focused on making it very thin, and they succeeded — it’s a scant 7.11mm thick, and sports a 5-inch 720p OLED screen. Fortunately, the Ultra has some nice heft to it, which helps give the whole package a more premium feel compared to other top-tier smartphones (I’m looking at you Galaxy S4). To be quite honest, the Ultra is the hardest of the three to write about. Motorola seemed to make the Ultra the foundation that the other two Droids work off of — the Mini is the more pocketable Ultra, and the Maxx is the Ultra with a much better battery — and because of that the Ultra wound up being the least interesting of the three.
The most impressive device I mucked around with today was the DROID Maxx, for perhaps obvious reasons. Back in the day, the Maxx was always the chunky, more utilitarian version of whatever slim smartphone Motorola was touting at the time. Now it’s gotten to the point where it’s just not much larger than any other hot-selling smartphone out there. It’s great that the Ultra is so slim, but the Maxx is so much less of a lump than it used to be that it’s actually a little surprising. Let’s put that in perspective a bit — my iPhone 5 usually lives inside a very slim case (this one, if you care), and it fits in my pocket as well as you would expect. The Maxx, with its ridiculous 3,300mAh battery, is just about as thick as that iPhone. Yes, it may seem like a minor thing to get worked up over, but think about it. Companies like HTC and Samsung and Sony like to push the envelope in terms of raw computing power and graphical performance, and one could argue that they’re just trying to give some consumers what they want. But where’s the value in that for the companies who make the devices? It’s mostly in marketing. You get to crow about having the world’s [insert superlative here] phone for a few months until someone else one-ups you. But batteries are different — if smartphone companies started duking it out on battery life instead of screaming clock speeds all the time, we’d finally start getting phones that can keep up with all the seriously crazy things we ask of them.
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Apple’s Average Selling Price On iPhones In Q3 Suggest Promotions Are Moving Devices, Older Models Popular
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Darrell Etherington
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Apple’s , and the one thing that many of the financial big brains are paying attention to is the average selling price of the iPhone: It currently sits at around $580, compared to $613 last quarter, which is a big change sequentially. There’s a couple of reasons that could be happening, and they aren’t necessarily bad for Apple. AT&T introduced some considerably aggressive pricing promotions this past quarter, including giving away free iPhone 5 devices with iPhone 4S trade-ins. AT&T said on its earnings call that it sold more iPhones this quarter than in the year ago quarter, even though it isn’t revealing exactly how many it sold. That likely means it did very well, which means it may have given away a lot of free iPhones. Recall also that T-Mobile introduced the iPhone 5 this past quarter, and that it initially began selling the iPhone at a reduced price compared to its competitors (though it isn’t clear who was absorbing the loss). This could also be a strong indication that Apple is selling a lot of older devices, like the iPhone 4 and iPhone 4S, which are still available. Apple charges considerably less for these, and ASP on those are often lower, too. Walmart discounts on iPhone also began in late June, on iPhone 5 and iPhone 4S models, which would also result in lower ASP. So why would that be good for Apple? . Apple increases its market share by pushing ASP lower, which is a long-term boon for the platform and for its overall device sales, since the company finds a halo effect for iPhone owners who tend to buy other Apple kit. And lower ASP could mean it’s making bigger inroads into new and emerging markets, which is also a long-term benefit for the company. Should it introduce iPhone models that are lower cost and cheaper to produce in the fall, that market could open up further, too. Still, Apple said on its earnings call that “iPhone 5 remains by far the most popular iPhone,” but also noted that they “were also very happy with our sales of iPhone 4 and 4S.” So promotions, more than older devices, may have been a bigger part of the ASP change.
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Apple’s No-Growth Q3 2013 In Charts
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Dan Frommer
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Apple , and as expected, sales were pretty flat — up just 1% from last year to $35.3 billion. It’s been a while since Apple has released any major new products, and it shows. A few highlights: Here’s a visual look at Apple’s June quarter, in context with the last several. The big picture: After a rapid growth period when the iPad launched and the iPhone was getting into the swing of things, growth has slowed down. It’s time for something new, and we should start seeing more activity from Apple starting this fall.
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gregory Ferenstein
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iPad Sees First Ever Yearly Decline With 14.6M Units Sold In Q3, iPhone Remains Strong With 30M Units Sold & 20% YOY Growth
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Jordan Crook
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Apple today released its Q3 2013 earnings report, announcing 31 million iPhones sold in the three-month period ending June, along with 14.6 million iPad units sold. Both the iPhone and iPad sales are down from the previous quarter, but this marks the first time the iPad has seen a yearly decline in sales, a 14 percent decrease YOY. Analysts Apple to sell 27 million iPhones, 18 million iPads, 3.85 million Macs, and 4.9 million iPods this quarter. , Apple showed a slight drop in sales from the previous record-breaking quarter with 37.4 million iPhones and 19.5 million iPads sold. This quarter’s 31 million iPhones represent a quarterly loss of 21 percent, while still being up 20 from the same quarter last year. However, the iPad is down 25 percent sequentially and is down 14 percent from last year. Interestingly, the from $613 last quarter to around $580 this year, perhaps marking that cloud innovation has required users to purchase less capacity, but more likely pointing toward the near ubiquity of smartphones. When everyone owns a smartphone, as opposed to early adopters and tech fanatics, the lower-end model becomes a more attractive option in terms of pricing, especially with aggressive promotions from carriers. The drop in iPad and iPhone sales quarterly can be attributed to the fact that this is a historically slow time for Apple and all CE companies, and that both devices are expecting a refresh soon. The iPhone 5 was unveiled last fall, with the next-generation Apple smartphone expected in the fall alongside iOS 7. In terms of the iPad, the most recent refresh came in November with the availability of the iPad mini. Of course, that Christmas quarter was Apple’s strongest yet for iPhone and iPad sales, breaking previous records for both products. But things have not-so-surprisingly slowed down since the star products’ unveiling, with many now waiting for the newer models to go on sale. Meanwhile, Mac and iPod sales remain relatively flat from last quarter. Apple sold 3.75 million Macs in the quarter ending in June, down just barely from last quarter. This represents a 7 percent YOY loss, down 5 percent from the previous quarter. Obviously, the PC market is , so flat yearly and quarterly growth is actually quite impressive. Mac sales usually do best during the back-to-school season. In Q4 of 2012, which goes from July through September, Mac sales hit 4.9 million, which was actually a 1 percent increase from the year before. But during Christmas, the first full quarter of the 13-inch Retina MBP’s availability, Mac sales only reached 4.1 million units, representing a 16 percent quarterly decrease. Worse yet, it was a 21 percent fall from the same time last year. , Mac sales were essentially flat again with 3.95 million units sold, down just one percent from the quarter before and nearly flat with the 4 million they sold in the previous year during the same period. iPods continue to lose traction with a group of users who are increasingly interested in the iPhone and iPad, both of which offer similar, yet more robust technology. Third quarter sales totaled 4.5 million, down from 5.63 million last quarter and a YOY loss of 32 percent.
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Apple Beats In Q3 2013 With $35.3B In Revenue, $6.9B In Profit, $7.47 EPS, But Posts Another YOY Earnings Decline
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Romain Dillet
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Apple has just released its fiscal — it reported $35.3 billion in revenue (slightly up 0.9 percent from $35 billion in the ) along with $6.9 billion in quarterly net profit (down 21.6 percent from $8.8 billion in the year-ago quarter), representing earnings of $7.47 per share. Similarly to Q2 earnings, Apple posted a year-over-year quarterly earnings decline (down 19.8 percent from EPS of $9.32). Apple is still a money making machine, but the company’s growth has slowed. Recently, the Cupertino-based company has tweaked its release cycle a bit. Almost the entire product line was refreshed over the last three months of 2012, pumping sales for Q1 2013 and leaving a void for the rest of the year. The company seems to follow the same pattern this year, aside from the MacBook Air. As Zach Epstein on Twitter, Samsung is now the most profitable smartphone vendor in the world, edging Apple with its $8.9 billion in profit. Yet, Samsung recently released its flagship phone, the Galaxy S4, while the iPhone 5 was released ten months ago. According to , the consensus among analysts was for Apple to report earnings of $7.28 per share on $34.9 billion in revenue. expected nearly the same with $34.94 billion in revenue and earnings of $7.29 per share. The company’s cash on hand slightly increased from $145 billion to $146.6 billion. It remains one of Apple’s main asset. It allows the company to spend more time experimenting and preparing new products behind the curtains without having to worry about its resources. Apple beat all of those numbers, even if it means generating less profit. “We are especially proud of our record June quarter iPhone sales of over 31 million and the strong growth in revenue from iTunes, Software and Services,” wrote CEO Tim Cook in the earnings release. “We are really excited about the upcoming releases of iOS 7 and OS X Mavericks, and we are laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014,” he continued. Guidance from its last earnings release forecasted between $33.5 billion and $35.5 billion in revenue and gross margin between 36 percent and 37 percent. While the company used to be shy about its guidance, this time around it was spot on — it probably won’t scare shareholders away. Breaking out the numbers, devices sales were expectedly slow this quarter. It was the first time we’ve seen a yearly decrease in iPad sales, at 14.6 million, yet iPhone sales topped 31 million representing 20 percent growth year over year. Mac and iPod sales were slightly down both quarterly and yearly, which is something Apple seemed prepared for as its other iProducts begin to cannibalize the older series of products. Read more about this in our . Over the past few weeks, many analysts reported an industry-wide slowdown in smartphone sales. Apple keeps selling the iPhone 4 and the iPhone 4S at a lower price, and the company’s bottom line. Horace Dediu on Twitter that the average iPhone price is now about $580 compared to $613 last quarter. That’s one of the reasons why profit is down but revenue still up year over year.
For Q4 2013, Apple’s own guidance forecasts between $34 billion and $37 billion in revenue (compared to $36 billion in ) with a gross margin between 36 and 37 percent (a flat gross margin). During Q2, Apple didn’t release any product and expectations were pretty low for the company. This time around, the company unveiled a few products during the traditional and long-anticipated WWDC keynote. The MacBook Air was as well as the . But the former was released only a couple of weeks before the end of the fiscal quarter that ended on June 30, while the latter doesn’t even have a release date yet. And of course, the company hasn’t refresh the iPhone and the iPad since September and October 2012. In other words, Q3 was another quarter without any big new product. Cook hinted that it would be the case during the latest earnings call, saying that new products would come this fall. His quote in the earnings release confirms that. Apple unveiled a radically new . It gave commentators hope that exciting new products are right around the corner. When it comes to product innovation, Q4 2013 will be decisive with long anticipated releases. On the stock market side, Apple ( ) has experienced a pretty good month of July so far. After breaking under $400 a share at the end of June, shares have been trading over $420 for the last few days. Apple shares are currently trading up 4.16 percent in after-hours trading, showing that investors were satisfied with today’s earnings.
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Viber Attacked By Syrian Electronic Army
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Jordan Crook
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Viber has confirmed a situation earlier this morning in which Viber appeared to have been hacked by the (a pro-government group of computer hackers aligned with Syrian President Bashar al-Assad). originally reported on the hack that affected the , though it was unclear the extent to which hackers accessed Viber systems. has now clarified that the hack only allowed access to two minor systems, a customer support panel and a support administration system. According to the company’s official response, “no sensitive user data was exposed and Viber’s databases were not ‘hacked’.” The company did not confirm whether the attack came from the Syrian Electronic Army, though the hacker group does take responsibility for the hack. Viber did, however, claim that the hack was the product of a phishing attack that was carried out against one of their employees. Here’s the official statement: Today the Viber Support site was defaced after a Viber employee unfortunately fell victim to an email phishing attack. The phishing attack allowed access to two minor systems: a customer support panel and a support administration system. Information from one of these systems was posted on the defaced page. It is very important to emphasize that no sensitive user data was exposed and that Viber’s databases were not “hacked”. Sensitive, private user information is kept in a secure system that cannot be accessed through this type of attack and is not part of our support system. We take this incident very seriously and we are working right now to return the support site to full service for our users. Additionally, we want to assure all of our users that we are reviewing all of our policies to make sure that no such incident is repeated in the future. The hack took down the Viber support page, and replaced it with the following message and a screenshot of the hack. Dear All Viber Users, The Israeli-based “Viber” is spying and tracking you We weren’t able to hack all Viber systems, but most of it is designed for spying and tracking The above screenshot (within the screenshot) was meant to act as proof that the hackers did in fact access Viber’s databases. We also looked at their released files to confirm their claims (second screenshot). As you can see, the hackers were able to access information such as phone number, UDID (a Viber-specific UDID, not the one Apple provides — see the update below), country, IP address, device type, OS OS type, OS version, registration date, most recent update, and push token. Viber has again iterated that this screenshot is of an admin dashboard, not a database. Viber also took the opportunity to respond to accusations of spying: Viber, like many other companies such as Microsoft, Cisco, Google, and Intel maintains a development center in Israel. It seems like this caused some people to come up with some pretty bizarre conspiracy theories. It goes without saying, that these claims are completely without merit, and have no basis in reality whatsoever. is a free messaging and calling service based out of London, with development centers in Israel, with over 200 million users globally. The data is quite basic – we want to know when user registered, where from (country), device type (helps us understand who uses Viber, detect problems, etc), UDID is an internal ID (not the Apple UDID), push token is used to communicate with users (but cannot be used by a 3rd party), etc. While this is not the most sensitive data (message content, address book, etc), we are disappointed that hackers were able to gain access to these systems. We are working, as we speak, to make sure that this will not happen again. The system that was breached is our CSR (Customer Support). Supporters need access to this data to help users with various technical issues. Most app developers would provide their supporters with similar data.
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Xiaomi Makes $2.16B In First Half Of 2013, Beating Its Entire 2012 Revenue
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Catherine Shu
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Android handset and OS maker Xiaomi sold 7.03 million handsets in the first half of 2013, the company announced today. Over that period, the Beijing-based startup made RMB 13.27 billion (about $2.16 billion) in revenue. Xiaomi’s latest figures mean it sold almost the same number of phones in the first half of 2013 as it did in all of 2012 and made more than double the amount of revenue in the first half of 2013 as the $957.46 million it netted in the corresponding period a year ago. The company did not reveal its profits, but investor Hans Tung, a partner at Qiming Venture Partners, has that Xiaomi makes about 10 percent profit on its handsets. Lei Jun, Xiaomi’s CEO, has said that the company expects to double sales to 15 million phones in 2013, bringing the company $4.5 billion in revenue, and it looks like the startup is on its way to meeting that target. Xiaomi was founded three years ago by Lei, an angel investor and serial entrepreneur who also founded companies like Amazon-acquired Joyo.cn and YY, which had . The company depends on a novel marketing model to boost sales. Xiaomi sold 72 percent of its phones directly through its online store last year, allowing it to bypass the costs of operating brick-and-mortar locations. Phones are made available in batches of 200,000 to 300,000 on Xiaomi’s Web site and sometimes sell out in less than an hour. (The company has been accused of deliberately underproducing in order to create hype for its phones, but Lei says that Xiaomi produces to demand in order to avoid wasting resources). Xiaomi is also able to keep its costs down by inviting customers to help design phones. Every week, the startup releases a new version of miUI, its customized Android skin, which is then scrutinized by a few hundred thousand hard-core fans. This enables Xiaomi to offer its handsets for relatively low prices: their two handsets sell for just 1999 RMB ($326) and 1499 RMB ($245). While Xiaomi’s sales figures are living up to the company’s hype from a consumer perspective, Kim-Mai Cutler that the startup has yet to deliver on high expectations. For example, Xiaomi still has to prove that it can monetize software services, an arena in which it has to compete against giants like Alibaba and Tencent. Xiamo is expected to revamp its two models, the Mi2S and Mi2A, this summer, and there is speculation that it will at its annual conference on August 16.
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Yahoo, Alibaba And Why Mayer Can Keep Buying Whatever She Wants
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Alex Wilhelm
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A quick glance at Yahoo’s might have you worried: Only $1.14 billion in cash and equivalents, and the company just dropped $1.1 billion on Tumblr? It seems profligate. But happily for Yahoo investors, the company is not low on funds in the slightest. In fact, given its current balance sheet and asset pool, Yahoo is incredibly wealthy. That fact is ironically overshadowed by the simple truth that other tech firms are even richer. But hey, your $10 billion is someone else’s $50 billion. This matters, as Yahoo is on a truly impressive acquisition spree, picking up 19 companies in the last year. Yahoo has been aggressively growing its internal cadre of mobile developers through aqui-hire, juicing its smartphone chops by agglomerating external teams to its own staff. Not all the purchases were large, but even modest acquisitions add up once you reach double digits. If Yahoo intends to continue its mobile-first strategy, it will likely need to continue buying smaller companies. And to do that it needs cash. Let’s take a look at how much money Yahoo has. During its video earnings call, Yahoo stated that it has $4.8 billion in cash and securities on hand. That essentially constitutes the money that it can use to acquire other firms. The $4.8 billion figure represents a decline of $600 million from the previous quarter in which Yahoo ended with $5.4 billion in cash and securities. However, as its earnings statement , that $600 million is a cushioned decline: [Cash] outflows were offset by $846 million in cash from Alibaba Group to redeem the Alibaba Group Preference Shares. $800 million of that was the redemption of shares, with the remaining $46 million a form of dividend. That inflow of cash matters, as it dramatically lowered the decrease in Yahoo’s bucket of cash and marketable securities. Without the incoming $846 million, Yahoo lowered its reserves not by $600 million, but $1.446 billion, or what would have been 27 percent of its former quarter’s final balance. That’s a much faster pace. According to its balance sheet, Yahoo now owns no more Alibaba Group Preference Shares, meaning that it won’t be able to generate another $800 million in the current quarter from the sort of sale that helped it greatly in the now most recent quarter. So, is that a problem for the company? No. When we discuss the long-term diminishment of Yahoo’s working funds, if it carries on as it did in the preceding quarter, we could forecast a material decline in its cash pool. The company, if it burned through its cash, could issue more shares, but that is the opposite of what Yahoo is currently working to do; the company is several billion dollars into a share repurchase program. You don’t spend billions buying shares off the public market only to issue more the next day. It’s a waste of time and money. Therefore, barring some sort of mega purchase, the chance of Yahoo issuing a noticeable amount of stock — not, say, to its employees as a form of compensation — is nil. Therefore, excluding positive cash flow from operations, that $4.8 billion is all Yahoo has. That sounds dismissive, but compared to the hoards of Google, Microsoft and Apple, Yahoo is a relative pauper. However, Yahoo retains another asset that doesn’t show up on its balance sheet the way you might expect, that is worth a multiple of its listed value, and will soon convert into a massive payout to Yahoo. Thanks to an accounting system called the “ ,” Yahoo doesn’t value its remaining 24 percent stake in Alibaba according to what its value would be in the market. Under the equity method, you can value certain stakes in other companies at non-market rates. Alibaba intends to go public, and its CEO has recently stated it . Also, a number of banks are raising their target valuation for Alibaba . This is where the math becomes interesting. Twenty-four percent of $120 billion is $28.8 billion. Yahoo is worth, at current tally, . Are investors therefore valuing Yahoo at essentially nothing more than its Alibaba stake? And if that stake is worth so much, how does that not affect Yahoo’s working funds? Yahoo as a firm has obvious worth, so investors aren’t valuing it at zero. Instead, Yahoo values its Alibaba stake at all but nothing, at least in comparison to what its value may be when the Asian technology giant goes public. For example, in its first 2013 quarterly report, Yahoo stated that the value of its Alibaba stake was $453 million. Here’s Yahoo itself on the valuation of its Alibaba equity: The investment in Alibaba Group is being accounted for using the equity method, and the total investment, including net tangible assets, identifiable intangible assets, and goodwill, is classified as part of the investments in equity interests balance on the Company’s condensed consolidated balance sheets. Therefore, for now at least, the real value of Alibaba is all but hidden from Yahoo’s books legally. Yet, Yahoo isn’t being tricky in this case; the equity method appears to be a very common form of accounting. Yahoo owns just under 24% of the company, and is obligated to sell at least half of that based on a deal struck with Alibaba founder Jack Ma last year. Therefore, assuming the $120 billion valuation for Alibaba, Yahoo will cash out $14.4 billion if it does sell the full half. Naturally, the taxes on that sale will be tectonic, but it will still shuttle billions into the firm in the form of cash. Therefore, Yahoo’s current cash reserves are somewhat irrelevant, as they are more than high enough for the coming few quarters — barring four Tumblr-sized purchases — and by then Alibaba will have gone public. So go crazy, Mayer. Your credit is good everywhere.
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Twitter’s One-Two Punch Now Lets All US Advertisers Target People Who Just Saw Their TV Commercials
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Josh Constine
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Hit ’em with a television commercial, then with a Twitter ad to really drive the message home. That’s the promise of Twitter’s to all US advertisers today after its beta launch . Twitter’s Nielsen studies say the combo deliver 95% stronger message association and 58% higher purchase intent than TV ads alone. Twitter’s also hooking up advertisers with an improved analytics dashboard that pulls in what users are saying about their ad campaigns. That could help businesses refine their ads for maximum impact and retweetability. Here’s how the Twitter TV Ad Targeting system works. Say Nike runs a TV commercial campaign for its new Air Jordans across several shows and networks. Twitter tracks exactly when the ads are shown and on what programs. It then looks for people tweeting about those shows by naming or mentioning the show, or using the right hashtag — people that are likely to have seen the Nike commercial. Twitter TV Ad Targeting lets advertisers target these people with Twitter Promoted Tweets ads that show up in their stream. Those could include pure text tweets reinforcing the commercial, a link they can follow to learn more or make a purchase, or even a Vine to give viewers a second dose of video marketing. The new ad tech is based on in February. BlueFin’s co-founder Michael Fleischman says that its video fingerprinting tech lets Twitter automatically detect when a TV commercials airs so brands don’t have to give Twitter a heads up. That means these ads can easily complement existing TV campaigns without a ton of work. Now Twitter isn’t the only place people are talking about TV. in partnership with Facebook saying that despite the widely held belief that Twitter rules real-time chatter, Facebook sees five times as much TV-related social activity as all other social networks combined, including Twitter. Trendrr was given special access to the data by Facebook, so it should be taken with some salt. The study also tallies Facebook Likes and comments as well as posts and shares, which don’t exactly match up to @ replies and favorites…if those Twitter feedback activities were even properly counted. It’s important to know whether Trendrr’s data treated Twitter fairly, so I’ll be talking to Trendrr shortly about methodology. [ : After speaking with Trendrr, the way it looked at Facebook and Twitter seems like more of a “apples to oranges” comparison. Trendrr tells me it was measuring Facebook Likes but not Twitter favorites, making this an unfair match-up. It’s also important to understand that how much social activity around TV each network generates is only a piece of the puzzle. How many people actually saw that actvitity is critical to an accurate comparison, and that’s difficult because Facebook uses a filtered feed that doesn’t show everything but keeps important posts visible for long periods of time, while Twitter’s unfiltered feed shows everything but all posts get washed away as more tweets flood into the stream.] Of course Facebook has five times as many users as Twitter, so it’s not necessarily doing TV chatter better, it’s just bigger. Also, if Facebook does have more chatter, it’s not taking as strong of advantage of it as Twitter is here. Facebook has been publicly focusing its advertising efforts around retargeting and matching offline purchase data to users. Meanwhile, Twitter seems to be making big advances in semantic recognition of what people are talking about and how that can target ads. This could let it appeal to brands with big TV ad budgets that might be apprehensive about Facebook’s new-fangled ad services. Tell me once, and I’ll forget. Tell me twice and I might keep your brand in mind the next time I’m shopping. If used creatively, Twitter’s targeting could let businesses create a marketing narrative that tells a deeper, more interactive story than a commercial locked inside your TV can. Twitter can’t be 100% positive you weren’t in the bathroom or making a sandwich while the TV commercial aired, but it’s sure enough to be able to sell the targeting and directly monetize its place as a home for discussion of real-time events.
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Baidu Agrees To Buy Chinese Android App Distributor 91 Wireless For $1.9B
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Kim-Mai Cutler
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Here’s a sign of how valuable China’s biggest alternative app stores have become. The country’s leading search engine, Baidu, from NetDragon. 91 Wireless runs through 91 Assistant and . An independent research firm iResearch put the company as the top third-party distribution platform in China by active users and accumulated downloads. Because Google Play isn’t available in China and the Android platform has quickly overtaken iOS there in the last two years, independent Android app stores like Qihoo 360’s app store and Wandoujia have flourished. 91 Wireless says 10 billion apps have been downloaded to date through its marketplaces. Baidu has its own app store as well, but this is a way for them to assume more market share. The 91 Wireless subsidiary, which started back in 2007, had grown so quickly that its owner, NetDragon, was considering spinning the unit off for an IPO on the Hong Kong Stock Exchange. If this deal goes through, that IPO will get cancelled. , given its 57 percent share. Baidu says it will buy the remaining shares from minority shareholders on similar terms.
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Airbnb Reorganizes International Team To Focus On Local Activations And Improve Customer Service
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Ryan Lawler
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Peer-to-peer housing marketplace has reorganized its international team in an effort to improve its customer support and boost the number of local options available to visitors traveling overseas. With the re-org, the company has shifted some of its regional operations team to work in customer support, while putting more effort on getting others into the field to get local activations. Reaching the community overseas is increasingly important for Airbnb, for which about 75 percent of its bookings have an international component. That includes U.S. guests booking accommodations overseas, as well as international travelers coming to the U.S. or visiting other countries around the world. For Airbnb, the new organization is designed to move it out of land-grab mode and toward a more sustainable long-term structure, a representative for the company has said. When it first started investing in its organizational structure in early-to-mid 2011, Airbnb was in a whole different spot. The company had just , and was ready to aggressively expand. It was also facing intense competition from , the latter of which had around the same time. At that point, Airbnb was all about getting local activations in international markets — that is, educating hosts and guests about the service and getting them to sign up and start using it. Now, however, the company feels that it has overcome those competitive challenges. And as a result, it’s moved to re-organize its overseas employees to work toward a new phase of its international presence. That’s mostly resulted in regional employees being asked to move into roles that were more about customer support than they had been previously. The company’s goal is to combine the existing customer service organization, which revolved just around solving immediate problems that hosts or guests had with stays that they had booked, with its efforts around local customer education. With that in mind, the local customer service representatives are being trained to answer all queries that might come their way, creating a flat infrastructure, rather than one in which different representatives can answer different questions. At the same time, Airbnb is also hoping to find ways to make its regional employees more entrepreneurial. As a result, it will be asking some of the folks to go out into the field more, rather than just working from whatever regional office they are in. To a certain extent, that would follow Airbnb’s early efforts to recruit users in different major markets like New York City (and Y Combinator founder Paul Graham’s advice to “ “). As part of the reorganization, Airbnb is also looking to create a regional hub in Europe. The company has offices in London, Paris, Berlin, Barcelona, Milan, and Copenhagen, but it could also open a single major office for that region. It’s not yet picked a spot for that office, according to sources within the company, but in other parts of the world, it has hubs in São Paolo, Singapore and Sydney. While making changes to its international structure, Airbnb has also been working with local regulators to get them on board with its peer-to-peer marketplace for short-term housing accommodations. That’s important, as the startup has faced scrutiny both here and abroad. The city of Hamburg, for instance, recently enacted a law to . The company is no doubt hoping to have other local governments and regulators follow suit.
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Court Will Reportedly Declassify Yahoo’s Fight Against PRISM
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Gregory Ferenstein
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Yahoo will be allowed to prove that it fought against the National Security Agency’s Internet spying program, PRISM. A secret court ruled on Monday that the government should investigate how it can declassify the legal battle. “The Government shall conduct a declassification review of this Court’s Memorandum Opinion of [Yahoo’s case] and the legal briefs submitted by the parties to this Court,” reads the ruling, to CNET. “After such review, the Court anticipates publishing that Memorandum Opinion in a form that redacts any properly classified information.” Yahoo, Google and other Internet to disclose more aspects of the secret dragnet program, which they say have been exaggerated by the media. All participating companies must adhere to a strict gag order that forbids them from talking specifics about the alleged spying operation. After it was first revealed that the government monitored emails, phone calls, and Internet browsing behavior of the top Internet firms, it was also revealed that Yahoo to prohibit the government from monitoring its users. Now, at the very least, Yahoo will get to prove it fought…and this is what seems so insane. The NSA’s program is so secretive that being allowed to talk about how an organization lost a court battle is now considered a victory. The court decision does nothing to inform users about how they’re being monitored, let alone puts us on the path to greater oversight over the NSA. While it’s a nice first step, and will hopefully snowball into more transparency, the public is no better off. It will just let companies confirm that we have, in fact, lost the fight to protect users against a still largely unknown spying program. Yahoo!
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Red Hot Dating App Tinder Officially Arrives On Android, Begins Hooking Up With Big Media
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Rip Empson
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The Digital Dating World has seen its fair share of companies come and go over the years, and few have been able to give the usual suspects, like eHarmony, Match.com and OkCupid, a run for their respective monies. However, since bursting onto the scene in October of last year, has been making a play to become the next digital dating giant by focusing on an area where few (if any) of its predecessors have excelled: Your phone. Drawing on the same addictive formula behind Hot or Not, Tinder allows those in search of a date (or a little casual flirting) to swipe through Facebook-powered profiles of prospective matches, accepting or rejecting based on visual appeal. Sure, it’s a bit superficial, but its game-ified approach to flirting is also more than a little addicting and has taken off among the SnapChat generation, . In fact, since launching in October, Tinder has spread like wildfire — a fact that, , has had investors and potential acquirers drooling. Today, Tinder co-founder and CEO Sean Rad tells us, users have rated over seven billion profiles, and the app has served over 100 million matches in all (and is currently adding 1.5 million matches/day and growing, he says.) Yet, for a mobile-first startup, Tinder has been missing a huge piece of the smartphone puzzle: To date, the app has only been available on the iPhone. Beginning today, however, , the popular mobile dating app is going multi-platform, opening its doors to users of the mobile operating system that . In the lead-up to the app’s arrival on Google Play, the Tinder founders decided to take a somewhat unusual approach to drumming up attention for its new app — another testament to how popular the app has become. Instead of simply launching the app on the app store as is normally the case, several weeks ago, the company created a landing page for the new app, saying that they would only make Tinder for Android available once they had received one million requests (via social media). They haven’t quite made it to one million requests, Rad says, but with over 800K already logged, the founders decided to pull the trigger anyway. In its port from iOS to Android, fans of the mobile dating network will be pleased to learn that there haven’t been many changes to the overall user experience, other than some requisite optimizations for its new operating system. It’s still the same model: Once a user signs in, they’re shown snapshots of local singles based on location and mutual interests. They can “like” or pass each match as it appears and can decide to chat or meet up only when both users show interest (i.e. “like” each other). It’s this simple model, which encourages people to make snap judgements of each other based on a few photos and some basic profile information on mutual preferences, interests and friends, that have led Tinder users to make over 7 billion profile ratings. For those looking for long-term, serious romance, the eHarmony and OKCupid approach is likely to have more appeal, but for younger users interested in a quick way to meet people and a casual way to flirt, Tinder has (thus far) been taking the cake. As we wrote earlier this summer, based on its surging popularity among young people, rumors had been circulating for months that the company has been in the process of raising a huge round of outside financing or was busy looking for a big-figure exit. Today, both of these remain untrue and, while the startup is still not sharing how much capital it has in its coffers, IAC is (and remains) its primary investor and stakeholder. For those unfamiliar, part of the reason Tinder has been able to do what it has over the last six months is that it’s been able to learn first-hand from the giants of Digital Dating. The startup was incubated at Hatch Labs, a new Los Angeles-based startup and accelerator backed by the aforementioned IAC — the same Barry Diller-led digital media giant that happens to own dating veterans Match.com and OKCupid. As a result, IAC maintains “first-dibs” rights to investing Tinder and has been the “sole investor in its seed and series A rounds,” which we’ve heard total in the millions (and likely more than a few “millions”), . With enough runway and plenty of interest, Tinder has also begun to focus on international markets, as the CEO told us at the time that over 15 percent of its users now hail from outside the U.S. Going forward, the startup has begun focusing its international efforts on the UK, Canada, Australia, Latin America (particularly Brazil and Mexico), Germany, France and Japan and is in the process of adding further language support, localization and is hiring local reps in each of these countries. Rad also told us in May that Asia remains a potentially big opportunity for Tinder, thanks to “the explosion of mobile adoption.” To be sure, whether it’s Asia as or in other target global markets, the launch of Tinder for Android will be a key to unlocking continued growth in these regions. As Ingrid recently wrote, Google’s global share of smartphone sales was 64 percent in March and, with Android’s “share rising in every market over the last few months,” it will be approaching 70 percent soon. Since the beginning, the Tinder founders have been hesitant to refer to their product as a “dating app,” as their long-term plans involve expanding the growing network beyond dating. With the stigmas that have traditionally come with “Internet dating,” this isn’t particularly surprising. No one is eager to be painted with the “superficial dating app” brush, even if in this case, the glove certainly fits. However, the company has been making its first steps toward expanding the Tinder experience beyond dating, launching a new feature called “Matchmaker,” which enables users to create matches between any two Facebook friends for any purpose — flirting or otherwise. As we wrote in May, the idea behind the new networking tool is to create a “casual, simple way to make an introduction, whether you want to set two friends up on a date or make a professional introduction or connection,” while maintaining the anonymity of the typical Tinder experience. But, as a decidedly free app, the Tinder team has been experimenting with ways to allow big brands to connect with its droves of young users — a coveted demographic for many advertisers — and with ways to monetize. While Rad tells us that its newest promotional deal does not in fact represent its current or future efforts to monetize, it does indicate potential roads the company could take to ramping up revenue generation. , the first brand (and TV network) to hook up with Tinder is USA, which launched a promo last night that’s targeted at younger generations ahead of the Season 3 premiere of its popular show, “Suits.” The Tinder CEO tells us that the company has had similar interest from a number of TV networks and brands, but they opted to go with USA and Suits because the network’s vision was the most closely aligned with their own — and because Rad himself is a fan of the show. On the flip side, dudes under the age of 35 have traditionally been difficult to advertise to, and USA thinks that its promo with Tinder could help introduce its show to an audience it — and many other networks — are always trying to reach. As to the promo itself, beginning last night, when Tinder users sign in to the app, they may find that one of the matches waiting for them is actually a character from “Suits.” When and if a user “likes” one of the characters, they’ll be given access to “exclusive content” from the show, which basically means sneak peeks, audio greetings and clips only available on the Tinder network. The characters from the show will also be choosing a few power users to “like” back to engage in a little live flirting over chat and, depending on how things go, maybe even live, in person. It remains to be seen whether or not this will appeal to Tinder users or just be a nuisance, but even though both parties were firm on the fact that no money exchanged hands as a result of the partnership, users can expect more of these types of promos within Tinder going forward. Rad says that he and the team are focused intently on keeping Tinder ad-free, so, while its partnership with USA may not currently be resulting in any revenue for the startup, one can imagine Tinder pursuing similar strategies when it does decide to flip the “revenue switch.” Sure, few Tinder users are probably champing at the bit to see their favorite mobile dating app begin to monetize, but, , the company would remiss not to take advantage of its 10 minutes. Especially before users discover that the hot date they’ve been falling in love . Tinder .
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Gowalla Co-Founder Josh Williams And Instagram Designer Tim Van Damme Will Leave Facebook In Unrelated Departures
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Gowalla co-founder Josh Williams , a year and a half after Gowalla . In a reportedly unrelated exit, Instagram designer Tim Van Damme will also leave Facebook. Van Damme was also a former Gowalla employee, but he before it was acquired by Facebook. While the Gowalla product was shut down, Williams went on to which hasn’t seen much love since it launched in December 2012. The Nearby feature was touted as a , but it has been languishing in the mobile sidebar without much improvement; while other, smaller features, like ‘Poke’ got their own standalone app, Nearby hasn’t even earned a more prominent place on the main mobile app. Williams was most recently a product manager for Pages, Location, and Events; he will stay in San Francisco and work on a new company, although he’s not divulging any further details. No word yet on Van Damme’s reason for leaving or his next plans. Williams penned a great Medium post, in February about his path with Gowalla, and battling for ground in the space with Foursquare and Burbn (which pivoted to become Instagram). He closed the piece urging others to blaze their own trails: “Today I’m at Facebook. It’s a special time to be at the company right now. We’re able to build unique products that few others can dream of. But those same challenges still present themselves: How do we choose our own path? Build to our own strengths? Avoid the gravity holes? These are the questions I chew on every morning.” Now, Williams and Van Damme have left the social network and set off on their own, separate paths. It’ll be interesting to see what they do next.
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White House, Google and Others Adopt Plan To Choke Off Ad Revenue From Pirate Sites
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Gregory Ferenstein
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The White House is in league with top Internet advertising companies to rain on everyone’s free-software parade: a new to remove ads from pirate websites in an attempt to choke off their revenue stream. The voluntary agreement says that companies will remove revenue sharing relationships with a website after users submit a complaint and an internal investigation confirms that the website, does, indeed, shower the world with the happiness that comes from–but is not limited to–pirated software, hollywood blockbusters, contraband, and illicit drugs. “The Administration strongly supports voluntary efforts by the private sector to reduce infringement and we welcome the initiative brought forward by the companies to establish industry-wide standards to combat online piracy and counterfeiting by reducing financial incentives associated with infringement,” Victoria Espinel, the U.S. intellectual property enforcement coordinator in the Office of Management and Budget, said in a statement Monday. The Internet’s beleaguered hall monitors/entertainment lobbies have been forced to try this voluntary standards route after global protests struck down the Stop Online Piracy Act. And, the most unproductive congress in history is unlikely to take up any anti-piracy legislation this year. Senator-turned-entertainment-lobbyist, Chris Dodd, thinks the standards don’t go far enough, it’s “an incremental step forward that addresses only a narrow subset of the problem and places a disproportionate amount of the burden on rights holders is not sufficient.” Right now, the participating ad networks are 24/7 Media, Adtegrity, AOL (TechCrunch’s parent company), Condé Nast, Google, Microsoft, SpotXchange and Yahoo, and has “the support of the Interactive Advertising Bureau,” according to Variety. I’m sure tagging websites in violation of the standards will be a fun project for the summer interns at participating entertainment lobbies. [ ]
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BloomReach Harnesses Big Data And Machine Learning To Personalize Any Mobile App
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Josh Constine
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The shift to mobile is sucking the money out of e-commerce, but thinks big data can save the day. Today it brings its big-data content optimization SaaS to the small screen to add smart product recommendations, predictive search, a trending section and cross-device personalization to the mobile presence of any business. BloomReach makes your app more relevant to boost sales with data science. It’s already working on the web. , click on, and share. It then uses the information to improve a business’s ads, point them to personalized landing pages for each visitor, and show potential customers the products they’re most likely to buy. After some prying, BloomReach CEO Raj De Datta admitted the company earns “in the several tens of millions of dollars of revenue per year.” That builds led by Bain Capital Ventures. Its clients include top e-commerce brands like Neiman Marcus, Pottery Barn, ModCloth and Shutterfly, as well as sites like Yahoo. De Datta (awesome big-data CEO name, by the way) tells me his clients were having trouble with mobile. Dollars on the web were turning into dimes on phones and tablets. “A bunch of customers said they were seeing rapid increases in mobile traffic, but it wasn’t monetizing the way the desktop does.” Design was at the center of the problem. “They were re-skinning the website for the mobile phone. Our perspective is that the mobile user is totally different. They don’t have the attention span, they don’t have the screen real-estate, they don’t type. They use a tap interface. A user on mobile shouldn’t see the same content.” So BloomReach built a subscription suite of four premium mobile APIs that businesses can hook into to bring the intelligence of big data to their mobile design. De Datta demos the product in this short interview: Here are the important features: adds a trending products section to a site or app. It looks at which product pages are getting the most referral traffic from sites like Facebook and Pinterest to offer real-time product recommendations. analyzes an app/site plus 150 million websites and 1 billion consumer interactions to predict what visitors will search for from just a character or two. It then lets them pick their query from a typeahead so they can type less while finding what they’re looking for. suggests “more products like this” so potential customers can discover items similar to what they’re looking at. BloomReach analyzes navigation patterns of other users and on-site signals to know which products to suggest. is a big step toward unified identity, allowing businesses to know if a web and mobile visitor are the same person even if they aren’t logged in. It analyzes every available signal, including browsing patterns and network locations, to match your devices and use what a site knows about you to personalize its mobile experience. Here’s what that all means. You open a shoe store’s mobile shopping app and see a What’s Hot section showing the most shared shoes on Facebook and Pinterest. You see one pair you like and click “more like this” to get an array of shoes in similar colors, styles and price ranges. You go to search for a specific make and as soon as you type in “D” it pre-fills the search box with “Nike Dunks.” And since someone from the same Wi-Fi network browsed Nike Dunks on sale at the same time yesterday on their desktop, the app knows you’re the same person, and shows you the shoes on sale at the top. All of this is powered by BloomReach. The big-data service can’t do everything, though. These are only APIs so businesses have to build their own branded design on top. If skinned poorly, the features could seem awkwardly shoe-horned in. BloomReach is not helping with driving new mobile traffic like it does on the web. It can unlock a brand’s latent potential on mobile, but it won’t turn a no-name brand into a hit. There’s also no way to opt out of its cross-device tracking, identification and retargeting. The data will make a mobile site or app more relevant, though in a way that might make some feel uncomfortable. We may need to get used to that. The identity disconnect between mobile and the web is costing companies too much money to remain unsolved. Startups like BloomReach are willing to push the frontier of tracking if it gets people buying on mobile.
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Kabam Eyes $300M In Revenue This Year As It Lets Employees Cash Out
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With the IPO door seemingly shut to gaming companies, some of the biggest privately held studios in the world have been looking for new ways to reward longtime employees. San Francisco midcore game developer Kabam, which makes Kingdoms of Camelot, becomes yet another one today. They arranged a secondary offering that let employees sell $38.5 million of their shares at a $700 million valuation. Everyone in the company who had vested shares had the choice to sell, so it wasn’t limited to just the management. Kabam isn’t saying who is funding this offering, except to say that both current investors as well as a few new investors are participating. Kabam’s most recently disclosed valuation in a May 2011 deal that involved Google Ventures, Intel Capital, Redpoint Ventures and Canaan Partners. But since Kabam has successfully transitioned onto mobile platforms and away from Facebook with three of the top 25 grossing iPhone titles in the U.S., it’s been able to bump that valuation up a little bit. The company now says it may make about $300 million this year in revenues, . While the company says it’s profitable, it’s still not clear profitable it is. Kabam said it has more than $50 million in cash in the bank today. But the company also , so a roughly $5 million to $10 million increase in cash on the balance sheet over six months is not that much. CEO Kevin Chou . But after Zynga’s disastrous debut with a 75 percent decline in its first year, very few gaming companies seem willing to test the IPO waters. Even though , the maker of Candy Crush Saga, had hired bankers to explore an IPO, sources close to the company have told me King has backed off this prospect for the time being. What that means is you have a host of companies that are throwing off cash that are tied in their ability to provide returns to early shareholders or reward employees. In this case, a secondary offering might make sense. Finland’s Supercell gave all of its employees the option to sell 16.7 percent of at a $770 million valuation earlier this year.
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Choose Your Own Adventure At Disrupt SF Startup Alley
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Matt Burns
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Startup Alley is part wild west, part farmer’s market. But it’s all about startups. You’ll love it. It’s a three-day exhibition. The first two days will see web companies take over The Concourse at San Francisco Design Center. Then, on the last day, September 11, hardware-oriented companies get their turn in the spotlight, creating a very unique science fair vibe. Like in years past, there will also be sections dedicated to startups from around the world. In the past we’ve had country pavilions populated by startups from Argentina, Chile, Brazil, Israel, Italy, Korea, and Mexico. This all happens while and startups take the stage at the other end of the Concourse. Not interested in hearing Marc Benioff talking about killing software? Peruse the hundreds of startups in the Alley and come back for Marissa Mayer’s talk about rebuilding Yahoo. Startup Alley companies also get the chance to present on the Disrupt stage in front of our esteemed judges. On Monday and Tuesday, attendees can vote for their favorite Startup Alley company, which will then have the chance to take the stage as part of that day’s Battlefield contestants. If chosen, that company will be eligible to compete in the Battlefield Finals for the $50,000 grand prize and the privilege of taking home the Disrupt Cup. for Startup Alley and Hardware Alley. Exhibitors get a cocktail table along with power and Internet access, but there are some criteria to keep in mind before applying — startups wanting to participate in Startup Alley must be less than 2 years old and must have raised less than $2.5 million in funding. More info is . Needless to say, we’re pretty proud of the startups showing their wares in Startup and Hardware Alley. While some amazing startups , a bevy of interesting startups will vie for attention elsewhere in the building. Sound like fun? It really is, and you, dear reader, have the option of or .
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Mobile Incubator Tandem Unveils Its Three Latest Startups — And Oh Yeah, It’s Raising A $100M Fund
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is announcing the three latest startups that have joined the Silicon Valley-based mobile incubator. It’s also confirming some news that was revealed earlier this year in with the Securities and Exchange Commission — that it’s raising a big, new fund. Tandem co-founder that the firm was planning to expand significantly. The first step in that expansion was hiring two new partners (Rohit Bhagat, formerly chairman of Asia-Pacific for investment firm BlackRock, and John Ellis, co-founder and executive vice president of product and technology at ad tech company Turn), but Renert acknowledged that raising more funding was also part of the plan. According to the filing, the fund (which is Tandem’s third) will total $100 million, several times larger than fund that Tandem raised last year. It’s not clear whether the fund has closed or Tandem will be able to raise the full amount — a spokesperson confirmed that the firm is raising a new fund but declined to offer any details. Renert has said in the past that his goal is to invest about $200,000 in three startups each quarter that have built a product but don’t yet have traction. Tandem offers those startups mentorship and office space, then it makes follow-on investments in the ones that are successful. Renert has also said that he’s particularly interested in opportunities in emerging markets. By the way, you may have noticed that the SEC filing dates all the way back to February. Why didn’t I spot it back in April, when Tandem announced its new partners? That’s … a good question. Uh, did I mention that the firm is also announcing some new startups? Here they are, with descriptions provided by Tandem: Tandem said this is the first group of startups that it’s backing through the new fund.
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After Expanding To Fashion, Gojee Launches A Shop For NYC Designers
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Eliza Brooke
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, the site that in July 2011 and expanded to high-end clothing last December, has made its first move toward serious money making. The company is launching a new app today with a shopping platform, Gojee NY, which sells clothing exclusively from up-and-coming New York designers. The shop is Gojee’s first foray into owning the sale. The food vertical, which provides recipe suggestions based on what a user has in his or her pantry, is free. The existing Pinterest-like fashion vertical links through to global luxury brands and takes a cut of each purchase, but given the high price tag of most items, it was clearly never meant to drive sales. The new version of the app, called Gojee Fashion, still has food and luxury verticals in the “Discovery” section, but the emphasis has shifted to the local marketplace. Gojee CEO Michael Lavalle told us that Gojee NY solves two problems: one, people want to discover rising fashion stars but don’t know where to find them, and two, there are no stores that sell based on geography, although each city has its own distinct aesthetic. The shop could be compared to a quality controlled Etsy, although Gojee is hoping to cast it as a cooler, higher-end version of the site. Gojee NY is launching with clothing and home wares from over 50 designers, discovered at local award shows, trade shows, and by referral from other designers. Prices range from $80-500. Gojee also seems set on becoming an advocate for young local designers, who have a failure rate not unlike tech start-ups. In late June, the company held a fashion show for 15 up-and-coming New York designers in its office space, and has plans to host another in a larger venue before fashion week in September. This makes Gojee a good candidate for support from the city of New York. Indeed, Lavalle said that Gojee has plans in the coming months to reach out to groups like Made in New York, the mayor’s office, borough governments, and the Council of Fashion Designers of America, all of which have an interest in sponsoring the local design scene. With the introduction of the shop, Gojee will also begin more aggressive marketing campaigns, having relied on word-of-mouth thus far. The company has moved slowly across verticals, staying in food for a full year before expanding, and Lavalle said that they plan to work on fashion and home decor for 1.5 years. There are dedicated food and fashion apps in the works, but it wouldn’t be surprising to see Gojee’s local shops expand to other cities, or to other industries within New York. The company raised a last July and is currently not raising.
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BuzzFeed Chairman Ken Lerer Backs New Animal-Themed Site The Dodo Led By Daughter Isabel, Former Salon EIC Kerry Lauerman
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Ken Lerer, a co-founder of Huffington Post, Chairman of BuzzFeed and Betaworks, and founder of Lerer Ventures, is starting another new media business, a website called The Dodo, launching this fall. The site, a combination of “content and commerce” exploring the topic of humans’ relationship with animals, is being jointly run by Kerry Lauerman, former editor-in-chief of Salon.com, and Lerer’s daughter , who’s currently wrapping up her doctoral studies on the subject. Prior to taking the role of CEO at soon-to-launch The Dodo, Lauerman had spent over a decade at Salon.com, one of the pioneers of Internet journalism, where for the last two and half years he served as editor-in-chief. Though the name of the site may make you laugh, its mix of content will not always be as light and fluffy as the YouTube videos of cats and lists of cute puppies which may help it get clicks and go viral through social channels. Entertainment will be part of the site’s mission, but its larger focus is hinted at by the name: a bird whose extinction helped the world recognize how humans can impact our ecosystem, sometimes to devastating consequences. In addition to lighter fare, The Dodo will also feature stories related to humans’ involvement with animals, including advice for the nearly 70 percent of households that include a pet, tips on healthy and sustainable eating, news on endangered species, as well as stories about animal rights and exploitation, like that which is found in puppy mills and circuses, for example. According to Lerer, whose firm is backing the new media startup and providing it with office space, there’s a huge movement toward this subject matter today. “Our thinking is that the topic of animals, animal rights and the relationship between animal and people is an issue that’s on the cusp of exploding,” he says. “Look at the front of The New York Times — they have a significant animal story on the front page every week. It’s our plan to launch a site to try to own that topic.” Though The Dodo is not in any way “inspired” by the hugely viral BuzzFeed, Lerer did admit that BuzzFeed served as proof that people are obsessed with animals online. In addition, he believes that the model BuzzFeed uses — the combination of lighter content that helps fund the more in-depth reporting — is something that can make sense for sites like The Dodo, which plans to also work off of that same 75/25 split between the lighter, faster content and the deeper stories. “When I started The Huffington Post seven years ago now, that really was the model, and it’s certainly the model of BuzzFeed,” Lerer says. “I believe that’s the necessary model within certain parameters. I think a site should be informative, engaging, entertaining, and fun — all that at the same time.” He says some sites that haven’t broken through a certain ceiling is because they’re too heavy and don’t appeal to the general population. “I’d like the content sites that we do to have a broader appeal,” he adds. And what could be broader than animals? After, all the web is filled with them – from sites like BuzzFeed itself, to CuteOverload, I Can Haz Cheezeburger, and more. But with the latter in that list amid , there’s a question about whether being purely entertainment-driven can lead to continued success. Today, our obsession on the subject of animals is often surfaced through clickable, shareable “ like posts, but that’s only scratching the surface of the potential in this space, The Dodo’s creators believe. It’s a symptom of humans’ desire to understand and think about our relationships with animals, and therefore, the world at large. That deeper interest in all things animal is also the passion of Lerer’s daughter Isabel, who, though never having been a “tech person,” her father says, will be joining The Dodo’s founding team in roughly nine months, after earning her PhD. This mix of investment, work and family is something the Lerers are already familiar with, of course — Ken’s son Ben’s startup Thrillist is . The Dodo is still very much an early-stage project at this point — the startup won’t raise its seed round until later this year. There’s no editorial team outside of Lauerman yet. Nor is there a logo, landing page or solidified design. Even the “commerce” side of The Dodo’s business model is still being worked out. But what the site’s backers can say today is that, in addition to ads, The Dodo will feature products that carry The Dodo’s “stamp of approval,” something that will allow for a different revenue stream, which is exciting, Lauerman says. (Notably, Salon despite the quality of its reporting.) Outside of Kerry and Isabel, The Dodo’s other confirmed team member is designer , who previously led art direction at another Lerer portfolio company, NowThisNews. Says Lauerman, who will serve as CEO, Weinberg isn’t being constrained to any form or prototype for the website, whose technical underpinnings include and (yes, yet another Lerer investment) . For Lauerman, joining The Dodo after all those years with Salon was sparked by a personal interest in the space. And though some of the subject matter could lend itself to slightly more liberal leanings, he insists that the site won’t have a political mission. “As a culture, we’re moving much closer to concern on these issues, so I’m thinking of it as capturing a movement that’s happening already, rather than pushing some sort of agenda,” he explains. Kerry Lauerman “Our interest in animals goes much deeper. We’re fascinated, compelled to care about the animals in our lives and the animals that are out there — in some cases, surviving precariously because of us,” Lauerman adds. Lerer and Lauerman aren’t just professionally interested in the business potential of such a site, or a general interest in the topics. Their own lives are also influenced by the nature of their thoughts on the subject of humans’ relationship with animals, too. Both describe themselves as “mostly” vegetarian eaters, though neither have made radical commitments. Jokes Lerer, “when people don’t look, I might sneak a pastrami sandwich,” and Lauerman admits he’ll never be able to fully escape his midwest-influenced diet. But their approach here, one of being thoughtful, but not militant on this subject, speaks well to what The Dodo could become — a place to be entertained, learn and maybe even shop, without a polarizing agenda that could alienate readers.
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Boston-Based Local Marketing Startup Privy Raises $1.7 Million Seed Round From 500 Startups, Atlas, And Others
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Sarah Perez
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, a Boston-based local marketing startup that was also one of the this past February, has raised $1.7 million in seed funding from Atlas Ventures, 500 Startups, and others for its end-to-end solution for small businesses. Also participating in the round were John Dais (VP Finance at Wildfire), Mike Volpe (CMO of Hubspot), Justin Kitch (founder of Homestead), Ralph James (former COO of First Marblehead), Jere Doyle (founder of Eversave) and other angel investors. Founder Benjamin Jabbawy explains that building a startup in the local marketing space was a natural fit, as the child of small business owners himself. “Having been technical my whole life, I was the son that both of my parents would say, ‘hey, I need a website for my business. I need Facebook, Google Ads, etc.,” he explains with a laugh. Privy was started in 2011, originally with the focus of serving the small, independent small business owner/operator, as well. But after participating in the 500 Startups program, the company shifted more of its resources toward another sector within the small business market: the multi-unit regional and national chains which already have a marketing manager or team in place. Jabbawy notes that it was important that Privy had begun small, because it helped inform the design and feature set of the product, which aims to be simple to understand and easy to use. Today, interested businesses can now get started using the service in about 20 minutes or less. A marketing manager, upon first login, uploads the information about the business, including the names of the managers at each location and the addresses. They then authenticate with all the different channels where they have assets, including Facebook, Twitter, email (Constant Contact, Mailchimp, e.g.) and more, as well as at their website and mobile site. Afterwards, they can then use Privy by entering their “chalkboard specials” — the limited-time offers they run for a specific time frame, plus a photo and description of each. Marketing teams can do this as the offers come up, or they can load them up to a year in advance if they’re better organized and prepared. Privy then automates the distribution of those campaigns to the various services and sites the company uses. From an online dashboard, businesses can see at a glance which sites are driving customers, and drill down into customer info, data on redemptions, reviews, claims, and more. Customer data can also be both imported and exported to Mailchimp and Constant Contact and CSV, to allow for more personalized targeting of the audience segments. With the additional funding, the company is planning to over the next few months and further develop the product. On the latter front, more integrations are in the works, including for services like Yelp, Foursquare, and Open Table, as well as within the “offline world.” Though Jabbawy couldn’t get into specifics on this, he did say the plan includes point-of-sale system integrations, in order to track conversions from online to off. “In addition to proving ROI,” he says, “it’s really about one of the big challenges we have: the segmentation and the re-marketing. We focus all of our distribution efforts on behalf of our merchants on finding really high-intent customers,” he explains. Jabbawy says it’s not about using huge discounts to convert customers, it’s about getting the right people at the right time. “Seventy-eight percent of consumers turn to the web before deciding on buying locally,” he says. “Yet, local businesses struggle to capture this interest, the moment of a consumer’s highest intent, and convert it into real, in-store customers.” That’s where Privy aims to help. Currently the pricing for Privy’s system is custom (on demand). Jabbawy declined to provide the customer count, saying only the company had “enough to make it interesting.”
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Uber Becomes Even More Affordable With Fare Splitting For Multi-Passenger Rides
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On-demand transportation Uber unveiled another new feature this morning that will make its rides even more affordable: With its latest software update, users will have the ability to . That could not only lower the cost of riding with friends, but it could also increase its potential user base over time. After requesting a ride, customers with the updated app will be able to access the “fare split” feature. They can then invite other friends from their contact list or enter the person’s mobile phone number manually. The app will then send a text to the other passenger, with a link that will either open the app (if they have it installed) or prompt them to download it and enter their payment information. For Uber, the new fare-splitting feature will make its rides more affordable in a marketplace that is becoming increasingly commoditized based on price. For its few years, Uber competed mainly against taxi street hails and car service dispatchers, offering rides that were fast and guaranteed to show up. But it charged a premium for that convenience and reliability. Now, Uber is seeing increasing competition from low-cost options from ride-sharing startups like Lyft and SideCar. In response, Uber previously had in San Francisco dramatically. Now fare-splitting will make riding with Uber even more affordable for multi-passenger rides. A side benefit is that it could get the app installed on the smartphones of passengers who have yet to pay for their first Uber ride. And that could mean more potential passengers down the line. Since being founded in 2009, Uber has raised a total of $57 million from investors that include Menlo Ventures, Benchmark Capital, Goldman Sachs, Jeff Bezos, CrunchFund, First Round Capital, Lowercase Capital, Founder Collective, and a whole bunch of angels. CrunchFund, Arrington, TechCrunch. You know the drill.
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Tim Stevens Out At Engadget, Marc Perton To Take Over
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Alexia Tsotsis
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Once hailed as the , Engadget’s is no longer Editor In Chief, with gdgt’s Marc Perton taking over as Engadget head while a new EIC is found to round out the management structure. Perton will be taking on the Engadget Executive Editor role permanently, we’re hearing. It’s not clear whether Stevens resigned or was terminated, according to different accounts from sources, with Aol (our parent company) asserting the former. Aol’s boilerplate confirmation: “Tim’s leadership enabled Engadget to become the leading voice in the consumer electronics media. We are extremely grateful for Tim’s stewardship and wish him well. Marc Perton will become Executive Editor of Engadget and we will launch an immediate search for an editor-in-chief to ensure Engadget continues to deliver the high quality and respected content our fans expect.” Perton has donned many hats in his tech news career, from Senior Editor at Engadget to Executive Editor for Consumer Reports, and then Director of Content for gdgt. Engadget will begin searching for a new EIC (to whom Perton will report) immediately. Aol seems to have a hard time keeping its tech blog EICs at the top , with Stevens joining a long line of high-profile Editor outs, including , and .
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Elon Musk Will Reveal His High-Speed Hyperloop Transport Design By August 12
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Chris Velazco
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Startup renaissance man Elon Musk has spent the past year or so not-so-subtly dropping hints about yet another ambitious transport project of his, and it seems he’s getting ready to describe it in more detail. Amid plenty of speculation, Musk revealed earlier today that he plans to publish his tentative designs for the Hyperloop system by August 12. But let’s back up for a minute first — what is he even talking about? Musk first started talking up the Hyperloop project at a held almost one year ago to the day, where he elaborated on the vision of a of personal transport inspired by California’s troubled bullet system that will “never crash, is immune to weather,” and can travel “twice as fast as what an average aircraft can do.” Until the 12th rolls around, we’re left with a somewhat vague (if totally awesome-sounding) description of how the Hyperloop system will work — Musk has referred to it at AllThingsD’s D11 conference as a sort of “cross between a Concorde and a railgun and an air hockey table”. That snippet has prompted more than a few pundits on how the system will actually work, with the favored interpretation being that Hyperloop will consist of vacuum sealed tubes (to negate the impact of wind resistance) through which magnetically-propelled capsules are hurled at high speeds. If we’re being honest that’s hardly a new concept — it’s been fodder for science fiction since for and at least is already working on something similar — but we’ll soon see how (or if) Musk’s vision diverges from the pages of an Asimov story. On some level, one has to wonder just how much energy Musk be able to devote to all of his pet projects, but he seems open to the notion of letting others run with his Hyperloop vision. He noted at last year’s Pando event that he was considering making the concept available to anyone who could feasibly make it happen, and he tweeted again earlier today to confirm that he will “publish Hyperloop as open source” since he’s “averse to the notion of patenting things unless they’re downright critical to a company’s survival.”
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Automattic Acqui-Hires Lean Domain Search To Improve Its Domain Registration Service
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Frederic Lardinois
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Matt Mazur’s launched on in January 2012. Today, Mazur that the tool, which makes it easy to find available domain names based on a keyword, was acquired by WordPress.com parent company . At Automattic, Mazur will help the WordPress.com team to make it “even easier for WordPress.com users to find and register great domain names for their websites and blogs.” Lean Domain Search will continue to run and, as Mazur writes, “it’s also now completely free to use.” Previously, Lean Domain Search also offered paid accounts ($79 for two months or $199 for yearly access). The service already offers the option to register a domain name directly through WordPress.com. WordPress.com always offered a as part of its premium features. For $13 per year, users can register a .com, .net., .org or .me address. Until now, however, the service didn’t offer any additional tools for finding good domain names. Given WordPress.com’s push into more as it looks for more business users to see it as a tool to host full-blown websites – and not “just” blogs – we will likely see it add more premium features like Mazur’s tools over time. One of the latest features Mazur to his service was a section that helped startups to find business names with available domains, something that looks to be a perfect fit for WordPress.com’s target audience. :
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Pew: Teachers Believe Digital Tools Encourage Sharing and Collaboration In Classrooms
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Stephanie Yang
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released a study today that determined specific pros and cons of using digital technology in classrooms. According to its survey, the majority of middle and high school teachers believe digital tools increase student collaboration with apps like GoogleDocs, and help them share their work through social media. Pew surveyed 1,750 Advanced Placement high school teachers and 712 National Writing Project teachers, half of whom say today’s digital technologies make teaching writing easier. Thirty-one percent believe it has no impact, and 18 percent say technology actually makes it harder. Pew reports that 52 percent of classrooms use interactive whiteboards, 40 percent share work on wikis, websites or blogs, and 36 percent edit or revise their own work with web-based tools. Fifty-six percent of participants say these strategies make students better writers, because they can quickly and easily revise their work. While most of surveyed teachers agree that students can now share their work with a wider audience, increase peer collaboration and encourage creativity and expression, it isn’t all good news. When asked to rate students’ writing skills on a scale of “excellent” to “poor,” teachers rarely gave out “excellent” ratings. In fact, the majority of ratings ranged from “good” to “poor.” Sixty-eight percent of teachers said digital tools allowed students to put less effort into their work. Educators also voiced concerns about an increase in informal writing, as well as ignorance of or disregard for fair use and copyright laws. The majority of these findings comply with common sense: of course student attention span is going to decrease, as well as their experiences with formal writing. These are trends we see nationwide, not just as a result of digital tools in classrooms. What is useful is the numerical measurement of just how well students are writing despite these hinderances. “These results challenge in many ways the notion that students’ writing skills are being undermined by their increasing engagement with digital tools and platforms,” says Kristen Purcell, associate director for research at the Pew Internet Project. Teachers are continuing to place high value on the ability to write formally, with 92 percent considering it an essential skill. About 94 percent of participants encourage students to do some writing by hand, and 77 percent have assigned at least one research paper in the previous year. Co-author Judy Buchanan says most educators use digital tools to enhance writing skills in new, creative ways. “Teachers, writing teachers especially, do not view good writing and the use of digital tools as being at war with each other,” Buchanan says. “They gave countless examples of the creative ways they use emerging digital tools to impart writing skills to today’s students.” The study was conducted by the Pew Research Center’s Internet & American Life Project in conjunction with the College Board and the National Writing Project. You can read the full report .
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Z Vector Takes Live Kinect Feeds To Create Stunning Video Art
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Kim-Mai Cutler
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This is a bit of a niche product, but it’s still interesting nonetheless. Artist Julius Tuomisto believes that VJs are the next DJs. Just in the same way that a DJ shepherds music lovers through a thoughtful selection of tracks, video artists can guide audiences through live visualizations that respond to music. He and his Helsinki-based firm Delicode have created a new software platform, called Z Vector, that can take data from a Kinect or the PrimeSense Carmine to create live video feeds and visualizations that rotate around 3D forms and people captured by the camera. It’s a tool for live performances, not for programming. You can see how it works in this music video he created with the band, Phantom. [youtube=http://www.youtube.com/watch?v=HFpou6izBQg&w=560&h=315] Z Vector takes the raw 3D data from the Kinect and puts effects or filters on it like different geometric textures and lines (like in the Phantom video). Or it also can put in distortion fields like in the video below (or particle trails and gradients, too). They’ve used it during live dance performances to broadcast visualizations behind troupes of modern dancers who have recently demoed it at the Venice Biennale, Mobile World Congress in Barcelona and SXSW. [youtube=http://www.youtube.com/watch?v=Nnomz7tTRko&w=560&h=315] The beta is free, but it’s a possibility that Tuomisto might charge down the line. The feed from Z Vector can also be broadcast into other devices, even ones like the Oculus Rift, the virtual reality headset that has hardcore gamers salivating and that in a round led by Spark Capital.
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In The Cloud OS Debate, OpenStack’s Success Inspires Backlash
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Randy Bias
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In God we trust. All others bring data. This quote, widely attributed to total quality management pioneer W. Edwards Deming, came to mind this morning as I read an anonymous Tumblr post (which has since been taken down) challenging my “ ” presentation. Specifically, the author took issue with my analysis concluding that has won the open source cloud wars. There are several problems with the author’s write-up, but I’ll let you read the post and draw your own conclusions. While I generally believe that arguments not supported by data and not signed by the author are not worthy of a reply, the today led me to write a (on which this post is based). First, the author misunderstands commoditization. Commoditization describes when an atomic capability becomes tradable/sellable. : “A raw material or primary agricultural product that can be bought and sold, such as copper or coffee.” Oil, copper, coffee and coal all are differentiated. There is light sweet crude, Brent, West Texas and others. Copper from different mines has different properties and quality. Coffee is highly variable. Yet all are commodities. The base unit doesn’t have to be exactly the same, it just has to be measurable in terms of value so that you can compare one against the other. This assertion has been corroborated in recent debates I had with an ex-commodities broker who was very clear that the commodities he bought and sold were quite frequently differentiated and variable. (For those who care, that was , co-founder and CEO of , who was previously Global Head of Commodities for Morgan Stanley.) The author’s argument is essentially that if OpenStack is the winner, then everyone else loses. This is not a zero-sum game, so there can be multiple winners. But, as with Linux, it’s likely that there will be a very small number of winners who will mostly dominate, and then there will be a very long tail. Linux’s success (as you can see in my , slide 13) meant that UNIX and other early x86 UNIX derivatives (e.g. SCO UNIX, 386BSD, FreeBSD, OpenBSD, NetBSD) essentially “lost.” But Linux “winning” meant that we have a relatively standardized server operating system running globally, which actually increases competitiveness, allows for people to focus their learning and knowledge on higher-value work further up the stack, and makes everyone’s life better. The conclusion that the author leaps to isn’t supported by evidence. It’s simply asserted. I say this as a long-time BSD guy. I wasn’t happy that Linux won, but I am happy that we have a relatively standard server operating system. To imagine that things will play out differently in the cloud operating system wars than it did in server and device operating systems is nonsensical. Clearly there will be one or two major winners and the data support the conclusion that OpenStack is currently positioned to be the primary winner. I welcome your feedback. Signed or otherwise.
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Crowdsourcing Startup CrowdFlower Says Its Contributors Have Completed 1 Billion ‘Judgments’
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Anthony Ha
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, which helps businesses manage crowdsourced tasks, that contributors have completed 1 billion “judgments,” which is the basic unit of work on the platform. The company says those judgments are “the crux of microtasking,” with businesses asking CrowdFlower contributors to do things like judge whether an image is appropriate or whether an address record in a marketing database is complete. The billionth judgment was made by someone in Cariacica, Brazil, who was verifying database details about an Australian small business for a U.S. company. (Biewald is the company’s CEO, as well as a former college roommate of mine) and launched at the TechCrunch50 conference in 2009. The company also says it now has more than 5 million contributors. Recently announced features include the ability , so that CrowdFlower can identify “higher value crowds” among its contributors.
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Health Scanner Scanadu Scout Breaks Indiegogo’s Crowdfunding Record
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Eliza Brooke
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Today the Indiegogo campaign for became the highest funded in the site’s five year history. At over $1,378,545 and counting, Scanadu has broken the $1,370,461 record set by Let’s Build A Goddamn Tesla Museum. The Scanadu is a small, round scanner that takes a person’s vital signs and sends them wirelessly to his or her smartphone. It seems to have hit on an unserved consumer need for medical empowerment. Right out of the gate, the campaign met its initial goal of $100,000 in less than two hours and doubled it in five. With eight days left and 7,000 funders from 100 countries already invested, it’s hard to say how much higher that number will climb. In the time it took me to write this article, it raised another $4,000 or so. Scanadu Scout and the Tesla Museum are two of four Indiegogo projects to exceed $1 million. They are also two of a handful that have extended their campaigns past the original deadline. Danae Ringelman, the co-founder and Chief Customer Officer of Indiegogo, said the site places fewer restrictions on campaigns in order to allow them to fully test their market and lower their risk of failure when they enter the market. Owners can add perks to see what features might sell, adjust pricing, and see if their project has the critical consumer mass to work in the real world. Indiegogo does not feature any campaigns on the homepage in an effort to keep the market meritocratic. Still, it’s not clear why Scanadu Scout, which had almost certainly validated its market before its extension date, took the extra time. In Indiegogo’s meritocracy, all campaigns can extend once, and it wouldn’t be surprising if more and more chose that option. For campaigns that have already seen a great deal of interest, this would function as an incubator for fine-tuning the product, interacting with consumers, raising still more money, and advertising. For those that haven’t taken off, an extension might simply be a waste of time. It’s not clear that this is a particularly good or bad thing, but it does change the nature of what crowdsourcing means, at least on Indiegogo. Scanadu creator Walter De Brouwer told us that the scanner had been developed almost entirely in a vacuum without consumer testing and that he initially had reservations about crowdsourcing the project. But it was ultimately the best way to gauge consumer interest. The next phase of Scanadu Scout’s production is to develop the educational component of the device. In order for people to take a more active role in their health, they need to not only have the data, but know what the data means and how to act on it. De Brouwer calls this a consumer, rather than clinical, pathway to medicine.
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Trademark Dispute Brewing Between Flipboard And Flowboard
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Anthony Ha
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Looks like is unhappy with , the new “interactive storytelling” app from — specifically with the app’s name. In response to Flipboard’s complaints that the Flowboard name could be confusing and infringe its trademark, Treemo filed a complaint asking for a “declaratory judgment of non-infringement of trademark rights” — i.e. it wants a court to say that no trademark infringement is taking place. “We tried to resolve it amicably, but they continued to threaten us with legal action, so we had no choice but to defend ourselves,” said Treemo founder and CEO Brent Brookler. When I asked Flipboard about the situation, a spokesperson sent me the following statement: Flipboard has communicated to Treemo, Inc. concerns about the F logo and the Flowboard name recently adopted by Treemo with the intention to resolve the matter amicably. Treemo has responded by filing a lawsuit against Flipboard. We are concerned about the likelihood of confusion and are committed to protecting our trademark. Treemo’s complaint argues that Flipboard and Flowboard are “distinct in sound, appearance, and connotation as applied to their respective goods,” and that ending a product name with “-board” is just using a word “which has become generically used in association with tablet computing devices.” (For those of you who need a refresher: Flipboard is a social news aggregator, with , while .) The complaint also notes that Treemo applied to trademark the Flowboard term, and that the application was approved without opposition on April 23 of this year. [ ] by
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Ask A VC: NEA’s Jon Sakoda On Why The Venture Firm Makes Seed Investments And More
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Leena Rao
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In this week’s episode of Ask A VC, NEA’s Jon Sakoda joined us in the studio to discuss his views on big data, seed investing and more. For background, Sakoda joined NEA in 2006 and focuses on investments in SaaS, infrastructure software, and big data applications. His investments include Blue Jeans Network, Desire2Learn, Hearsay Social, OPOWER, ScienceLogic, Suniva, and WibiData. Sakoda also co-manages NEA’s seed investment program. Sakoda talked about why NEA’s makes seed investments, and how the firm approaches these investments in founders. Sakoda also gave us his thoughts on where the next wave of innovation will take place with large-scale data processing. Tune in above for more!
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AddThis Launches Smart Layers, Giving Websites Social And Personalization Tools That Adapt To Mobile
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Anthony Ha
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has released a new platform called Smart Layers, which it says can improve traffic and engagement by just adding a single line of code. President and CEO Ramsey McGrory told me that Smart Layers both improves on and introduces some new ones. In terms of new features, Smart Layers introduces a “toaster” at the bottom of a page that recommends content based on a user’s past activity. It also allows publishers to follow-up with users after they’ve engaged on the site. On the existing side, Smart Layers takes the AddThis sharing buttons that publishers could already include on their sites and it gives them an adaptive design, so that their appearance will be optimized for whatever device they’re viewed on, whether it’s a desktop, smartphone or tablet. The company says it can also optimize the social options that are presented to each visitor. And all of these tools are now offered together in a package that should be easier for smaller publishers to integrate. As the name implies, they’re presented as a layer that doesn’t change any of the content on the site itself. McGrory said the platform is built on top of the data that AddThis has already been collecting, so it can deliver a personalized experience even if someone is visiting an AddThis publisher for the first time. “The great example is, Zappos knows a tremendous amount about people that have been to the site, but the very first time, they have no idea who those users are,” McGrory said. “It’s called the cold start problem” — and AddThis is supposed to solve that problem. The Social Layers are already being used by dating site . When you look at this post about “ ” you not only see sharing buttons on the side, but also a section at the end called “Recommended For You.” AddThis says that publishers who pilot tested the system saw more than a 60 percent increase in on-site content engagement, a doubling of follows across all devices, 70+ lift in mobile shares, and 50+ percent lift in desktop shares. Moving forward, McGrory said that Social Layers will probably become the main toolset for smaller AddThis publishers (as well as the vendors that sell to smaller publishers — GoDaddy will be including this as one of its Site Builder products). Some larger publishers, on the other hand, will probably continue using AddThis data to personalize their own custom tools. You can read more about how to set up Smart Layers .
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AT&T To Acquire Leap Wireless (Cricket) For Around $1.2B
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Greg Kumparak
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Hey, Cricket customers! You’re about to become AT&T customers. AT&T has just announced that they’ve agreed to acquire Leap Wireless, the parent company behind Cricket Wireless. As part of the deal, AT&T will be acquiring all of Leap’s towers, stores, and all 5.3 million of their subscribers. For the time being, it sounds like AT&T will keep Cricket running as its own brand. Cricket stores will continue to be Cricket stores — the two carriers will just share spectrum, which increase network quality for everyone. So, why would AT&T make this purchase? It’s all about the spectrum. While AT&T was spending the last few years trying to snatch up access to more wireless frequencies to be able to handle more users and more voice/data traffic, Leap CEO Doug Hutcheson was saying that huge chunks ( ) of their own spectrum was going unused. At the time, he valued their chunk of the spectrum alone at around $3 billion. If the deal goes through, this will bump AT&T from 107 million subscribers to 112 — still behind Verizon in the battle for the biggest US carrier. AT&T says that they plan to pay $15 dollars per share. With 79 million Leap shares outstanding, this works out to just short of $1.2B. It’s not quite the massive T-Mobile merger they were hoping for (before the plan went south in late 2011), but it’s something.
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This Week On The TC Gadgets Podcast: Nokia’s Not-So-Secret Lumia 1020 And A Brand New Microsoft
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Jordan Crook
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Nokia has apparently reinvented zoom with the newest addition to the Lumia family, the , with a 41-megapixel PureView camera. It lets you zoom after the fact and still see ultra high resolution detail and sharpness. Meanwhile, Microsoft moving most of the company’s high-ranking leadership into new positions. Is the Lumia 1020 ? Are we excited Microsoft is streamlining its leadership and services? We discuss all this and more on this week’s TechCrunch Gadgets Podcast, featuring John Biggs, Jordan Crook, Chris Velazco, and Natasha Lomas. Enjoy!
We invite you to enjoy our every Friday at 3pm Eastern and noon Pacific.
You can subscribe to the .
Intro Music by .
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Market For Spy-Proof Messaging Heats Up
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Gregory Ferenstein
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Now that the 4th Amendment is no longer a guarantee against broad government spying, the floodgates have opened for tech companies to give users their privacy back. Pirate Bay co-founder Peter Sunde’s text-messaging app Heml.is already reached its funding goal, while the Skype-like Unsene platform launched its own Indiegogo campaign today. Just in case the Pirate Bay hadn’t ticked off enough people in government, Sunde as an alternative to text-messaging or Apple’s iMessage, which are reportedly monitored by intelligence agencies. (“hemlis” is Swedish for “secret”), uses a security protocol known as , meaning that only the user and sender have the keys to descramble messages as they are sent over the Internet. “We’ve decided to build a messaging platform where no one can spy on you — not even us,” Sunde explains in the video. [youtube=http://www.youtube.com/watch?v=oPeujbY3feM&w=560&h=315] Sunde has decided not to sell advertising on the service, so he’s soliciting $100K in startup funds from users. Apple also claims that its iMessaging service is NSA-proof, thanks to end-to-end encryption, but the good folks over at found a few exemptions that would allow a government agency to spy on text messages. Apple can both backup iMessages and enable apps to interact with them, allowing a hacker to gain access. Sunde also warns users that their app is not 100 percent spy-proof, but will hopefully be less susceptible to spying. As of this writing, Heml.is is already $54,000 in to its funding goal. Back in the good old U.S. of A, another secure communications platform called has launched an Indiegogo funding campaign to raise $30,000. Unsene currently offers encrypted web messaging, video calls, and file sharing — essentially, an alternative to Skype. Once the Indiegogo campaign ends and the service opens to the public in mid-August, the plan is to expand to provide individual firewalls and a messaging system that could be used in place of email. Chris Kitze, the CEO and co-founder of Unsene, tells us that the problem with Skype and email services is that messages go through a central server, rather than moving peer to peer. Google or Yahoo will hand over your emails if the government asks. Much like Heml.is, Unsene puts the keys to encrypted messages in individuals’ hands instead. Unsene does not protect an existing Skype or Gmail account, so two people must both have the system in order to communicate. Fortunately, Unsene’s standard messaging package is free, so that shouldn’t be a huge deterrent to potential users. The questions are if Unsene will be able to pull users away from Skype and Gmail, if people will use the two systems for different purposes, and if they . Kitze tells TechCrunch that it’s difficult to understand the scope of Internet spying, but that the goal is to put privacy back in the hands of individuals. How intensely they want to protect their information is up to them, so Unsene is monetizing on a higher-grade premium package for those who want more security. Kitze said Unsene has received interest from people in Turkey, China and the Middle East. Wall Street, political organizations and attorneys have also expressed interest. Eventually, the aim is to enable app developers to integrate their products into Usene’s API, such as payment systems. Kitze recognizes that Internet security is a fallible system, though. “I don’t think anyone can make the marketing claim that their lock is unbreakable, but it’s going to be a cat and mouse game. We’ll put bigger locks on and people will find ways in.” [ ]
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Lyft Sells Legacy Zimride Assets To Enterprise Holdings As It Focuses On Local Ride Sharing
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Ryan Lawler
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is announcing this morning that it has sold off its legacy ride-matching business Zimride to rental car giant . The sale will allow Lyft to focus on its fast-growing, on-demand ride-sharing business, while also adding to its war chest as the company expands into new markets and competes against the likes of Uber and SideCar. Terms of the deal were not disclosed — we’ve asked and will update this post if we find out elsewhere — but disruptive car companies exiting to large, hulking incumbents looking to get more innovative can be big business. As a point of comparison, earlier this year . Founded in 2007, Zimride was all about connecting users for long-haul rides and carpooling for universities and businesses. The service made the vast majority of its money from SaaS-based ride-matching software that was run privately through individual schools and companies. The company had more than 130 university and corporate campuses signed up to offer ride-sharing and carpooling through Zimride. For Enterprise, the Zimride assets will fit nicely with certain pieces of its business. While it’s best known for owning rental car agencies such as Alamo, Enterprise, and National, it has a couple of products in the car-sharing and carpooling space. One is called , and is geared toward car-sharing, while another is called , and provides carpooling and vanpooling for commuters. The acquisition of Zimride will give it the technical infrastructure to complement the physical infrastructure — i.e. cars and vans that it already owns — and grow that part of its business. For Lyft, the decision to sell its Zimride assets was made after it shifted focus to a faster-growing portion of its business. While Zimride had steady revenues, it didn’t show anywhere near the growth trajectory of Lyft’s on-demand ride-sharing business, which was . Built to connect users for short rides around major metropolitan areas, Lyft grew to provide more than 30,000 rides a week after operating for just a year. With that in mind, the startup began putting all of its efforts into developing the new product and growing that business, to help get people around cities like San Francisco, , Seattle, Chicago, Boston, and . In May, the company solidified the move by and re-incorporating as Lyft, Inc. The sale to Enterprise will allow Lyft to focus just on its local on-demand service, especially as it looks to aggressively expand into new markets over the next nine to 12 months. “We’re a startup, and it’s hard for us to be running two businesses,” Lyft president John Zimmer told me by phone this morning. There’s another side benefit to Lyft selling the Zimride assets: While terms of the deal weren’t disclosed, the sale will no doubt add to Lyft’s large — and growing — war chest as it looks to expand and compete against Uber in the on-demand transportation space. Since the start of the year, Lyft has raised $75 million through two new rounds of funding. The first was for in the early part of the year. Then in May it announced an , with general partner Scott Weiss joining the board. Now live in six cities, Lyft is looking to enter new markets. The company has 80 employees, most of which are operating out of San Francisco, and it plans to rapidly expand into many other cities over the next few months.
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Why Immigration Reform May Fail, In 4 Charts
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Gregory Ferenstein
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We reported yesterday that . Despite a comprehensive immigration bill being passed in the Senate, top Republicans in the House of Representatives say the Senate version is a “Pipe Dream” and they plan to aggressively pursue their own (right or wrong). Here’s why Republicans and Democrats could continue their unproductive, uncompromising ways, in four graphs. Congress passes one-third the number of laws it did in the 20th century and is nearly twice as partisan, as measured by the ideological slant of each member’s voting record (data compiled from Norm Ornstein’s Vital Statistics at the Brookings Institute). Sixty-eight percent of Republicans a representative that “sticks to his or her principles” than one who “compromises to get things done” Republicans fear that voting for a bill with weak border security and a relatively easy path to citizenship will spell political suicide. “It would hurt Republicans, and I don’t think you can make an argument otherwise,” said Representative Steve King ( : C). BuzzFeed has a fun piece on , especially of the most anti-immigration-reform Republicans. Here’s the demographic layout of Representative Steve King’s district in Iowa: , despite the chaos:
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Houzz Founder Adi Tatarko To Join Us At Disrupt SF
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Leena Rao
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Home remodeling and inspiration platform Houzz is one of those secret gems of Silicon Valley that has avoided the hype cycle in favor of quietly building an innovative, compelling company. And the brains behind the idea and operation originate from co-founder Adi Tatarko, who started Houzz with her husband Alon Cohen, because of the design challenges they both faced renovating their own home. And we’re excited to have Tatarko join us on stage at TechCrunch Disrupt SF to tell us about how she is disrupting the $300 billion home remodeling market. Tickets are , with our extra early-bird discount going until July 15. Houzz provides homeowners with an inspiration platform for their projects and connects them with the designers, architects and contractors who can turn their ideas into reality. The startup just raised $35 million in new funding from all-star investors such as New Enterprise Associates, GGV Capital, Sequoia Capital, Comcast Ventures, Kleiner Perkins Caufield & Byers and Yammer founder David Sacks. Tatarko will be joining a top list of industry leaders at Disrupt. We’ve already announced Yahoo CEO Marissa Mayer, Salesforce CEO Marc Benioff, LinkedIn CEO Jeff Weiner and distinguished investor Doug Leone. And we have lots more to come. The conference starts September 7 and runs until the 11 at our favorite location, the San Francisco Design Concourse. Stay tuned for more speaker announcements and a few surprises to be announced soon. is the CEO and co-founder of Houzz, a platform for home remodeling, bringing together both professionals and homeowners via mobile, local and social tools. Adi and her husband and cofounder, Alon Cohen, started Houzz out of challenges that they faced during their own remodeling process. Tired of cutting pages out of magazines for their inspiration file and limited by word of mouth recommendations for professionals to help them with the renovation process, they decided to create an online photo database and gathering place for people in the process of building, remodeling and decorating. Today, millions of homeowners and more than 250,000 architects, designers, contractors and other remodeling professionals are connecting through Houzz.com and its mobile apps every month, sharing their photos, advice and product recommendations. Earlier in her career, Tatarko founded a software company which developed products and services for the high tech industry. She worked in NYC before moving to Palo Alto, where she worked in an investment firm. Adi lives with her husband and two boys. In her spare time, she still enjoys looking at inspiring home design and renovating the rest of her own house one room at a time.
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Hulu’s Owners Say They’re Not Selling, Will Invest Another $750M
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Anthony Ha
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21st Century Fox, NBCUniversal, and The Walt Disney Company just that they’re not selling online video site after all. They also said they’re making “a commitment to recapitalize Hulu with $750 million in new funding for future growth.” The final bidders for Hulu DirecTV, a partnership between AT&T and Chernin Group, and private equity firm KKR. It seems, however, that none of them made a bid that satisfied the current owners, who In the press release, Fox President and Chief Operating Officer Chase Carey says: We believe the best path forward for Hulu is a meaningful recapitalization that will further accelerate its growth under the current ownership structure. We had meaningful conversations with a number of potential partners and buyers, each with impressive plans and offers to match, but with 21st Century Fox and Disney fully aligned in our collective vision and goals for the business, we decided to continue to empower the Hulu team, in this fashion, to continue the incredible momentum they’ve built over the last few years. The press release also states that Hulu has 30 million unique monthly visitors and brought in $690 million in revenue last year.
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We Want You (And Your Hardware) For Hardware Alley At Disrupt SF
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John Biggs
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Every year I’m given the best job a guy could ever want: planning hardware alley, a one day extravaganza of some of the best hardware I’ve ever seen. This event, which happens on the last day of Disrupt, is a crowd favorite and I’d love to feature your gear. What is Hardware Alley? It’s a celebration of hardware startups (and other cool gear makers) that features everything from robotic drones to 3D printers. We try to bring in an eclectic mix of amazing exhibitors and I think you’ll agree that our previous We’d like you to register as a Hardware Alley exhibitor. You’ll get to exhibit on the last day of Disrupt SF, Sept 11, to show off your goods and get access to some of the most interesting people (and most interesting VCs) in the world. We’d love to have you. All you need to demo is a laptop. TechCrunch provides you with: 30″ round cocktail table, linens, table top sign, inclusion in program agenda and website, exhibitor WiFi, and press list. To find out more please .
You can reserve your spot by purchasing a . If you can’t attend Disrupt but would like to demo on the final day use promo code: H@rdwareSF13-1day. If you are Kickstarting your project now or bootstrapping, please contact me at john@beta.techcrunch.com with the subject line “HARDWARE ALLEY.” I will do my best to accommodate you. Hope to see you in SF!
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SoundBrush, An App That Lets You Draw Music, Turns The Untrained Into Musicians
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Eliza Brooke
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An iPad app called is out to make music composition accessible, even those who don’t play an instrument. After releasing a MVP in April 2012 to test out the concept of drawing music on a tablet, SoundBrush released a more sophisticated second version last month along with a sharing and collaboration platform, Discover. Think of it as finger painting with music. Users draw lines across the app’s grid, with time and notes mapped onto x and y axes, respectively. Recorded instruments form the sound of each note; piano, ocarina, and harmonica come free with the app, and users can pay a few dollars to upgrade to different instrument packages. Co-founder Basil Al-Dajane told us that SoundBrush is looking to differentiate itself from competitors like GarageBand by offering a wider range of notes and by making it easy to move and copy groups of lines. They’ve also eschewed looped samples, which Al-Dajane said limits the range of songs a person can create. Most importantly, drawing on a touch screen is simple and intuitive for users. After the release of the original version, Al-Dajane said that he and co-founder Jayson Rhynas found that it was being used largely by people who didn’t play an instrument. Professional musicians of course have their own music-making means, so SoundBrush will win by keeping things uncomplicated enough for the consumer music market while still offering advanced composition options for those who get really into it. As it stands, the app has been out for less than a month and is drawing about 2,300 users weekly. Soundbrush is based out of the , the incubator that has worked with , BufferBox, and Couple. It’s entirely bootstrapped at the moment, but Al-Dajane said they would be looking to begin raising an initial round in October or November. Check out SoundBrush in action below: [vimeo http://www.vimeo.com/68300539 w=400&h=300]
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CrunchBase And AngelList Have A Partnership
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Eric Eldon
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It used to be that you had to pay a bunch of money to get basic information about private tech companies, like how much they’ve raised and who they’ve acquired. made that free. And it used to be that you had to spend lots of time and money trying to network your way into some angel investor money. made that free. Now, the two have a deal. Here are the basics. If you have a company on AngelList, you can choose to sync it with CrunchBase — once a day, any public information you provide will automatically be exported over to your CrunchBase company profile. This will save you time entering the data in both places and help CrunchBase offer a more comprehensive data set for the public. The setup here is similar to the , where more than 240 investment outfits provide public updates about their portfolios in exchange for better access to the CrunchBase API and team. This feature has been in testing for a week, and more than 300 AngelList companies have already opted in, so the teams working on the feature expect it’ll be pretty popular. Meanwhile, CrunchBase is linking back to AngelList for every company that has an entry in both places (example ). One link will go to their main AngelList page, which could be particularly useful for companies that are actively fundraising, and the other link will direct CrunchBase users to the company’s AngelList job listings page. While the teams aren’t disclosing a revenue-sharing agreement around the job listings part, I’ve learned that there is one. “We’re putting up the scaffoldings of the marketplace,” AngelList cofounder tells me. “The startup ecosystem is getting mature enough that it’s able to interconnect with APIs — like how stock markets, financial data service providers and analyst firms work for public companies.” He cites and as two startups using all this publicly accessible data on startups to help companies and investors find the right partners. “Hiding your data makes no sense when investors are using services like AngelList to find companies,” adds CrunchBase president . “We intend for CrunchBase to be the common data platform here, because we think greater transparency will help everybody make better decisions.” Expect lots more to come from both organizations. Ravikant has been busy angling AngelList to take advantage of the among other initiatives. Meanwhile, CrunchBase is working on a major new version of the site, which the team says you’ll be hearing more about in the coming months.
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eBay Is Latest To Join 3D Printing Craze With New App For Customizable Goods, eBay Exact
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Sarah Perez
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Ebay is hopping on the 3D printing bandwagon. This morning, the company the debut of a new iPhone application called which allows users to browse and buy customizable print-on-demand merchandise from three top 3D printing companies: MakerBot, Sculpteo, and Hot Pop Factory. The app features roughly 20 categories at launch, mainly jewelry and tech accessories like iPhone cases. The items, which start at around $9 for an iPhone case and go up as high as $350 for a metal ring, can be configured then ordered directly in the mobile application. Ebay’s partners will then ship the products directly to consumers within 7 to 14 days. 3D printing technology is now gaining mainstream interest and awareness. A wide range of – – using 3D printers and software, then selling their wares everywhere from offline shops and museums to online storefronts and personal websites. Ebay’s move to promote 3D printed goods comes at a time when other major retailers are also buying into the trend. it would begin selling 3D printers, for example, and . But in order to buy the output of the devices, non-geeky consumers are often still shopping sites like like or Etsy, or maker marketplaces like , , or , for example. Shapeways, which raised this April, has been especially instrumental in making 3D printed goods accessible to more of a mainstream user base. Even if you’re not interested in the still somewhat complicated process of designing original products, the site lets users shop a variety of print-on-demand goods, or even turn their own ideas into products using . Meanwhile, though eBay sellers a variety of 3D printed items for purchase on the site, there wasn’t an easy way to browse those items or figure out which ones could be further customized. The new eBay Exact app changes that, though eBay’s choice to launch it as a standalone application may limit its exposure. The app also serves as another potential revenue stream for the company, which could grow the more popular 3D printing becomes. Though eBay didn’t disclose the terms of its deals with its 3D printing partners, it’s likely that it’s seeing a portion of those sales it facilitates. In addition, eBay-owned PayPal is integrated for easy checkout. “Shoppers today not only want to buy items anytime, anywhere through mobile devices, but they also want to be able to personalize their purchases, said Steve Yankovich, Vice President of Innovation and New Ventures for eBay, in a prepared . This is the common belief among those hyping the 3D printing trend, of course. But even if consumers are more aware of the possibilities, the market is young. To what extent consumers will demand, seek out and purchase 3D printed, or otherwise customizable, goods still remains to be seen.
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Romain Dillet
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The Djoclate II Is A Portable Music Mixer That Lets You DJ Tunes From Friends’ Devices
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Natasha Lomas
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Here’s a neat hardware project seeking funding on . The Djoclate II — NB: Djoclate is pronounced ‘chocolate’ with a Dutch accent — is a portable, near pocket-sized music mixer. The idea is to enable the would-be DJ who brings it to a house party to pull tunes into the mix from any music storage device in the room, whether that’s a laptop, phone, MP3 player or tablet. Every partygoer’s music collection can potentially become part of the audio pool. So no more ‘it’s not in my record box/on my playlist/on Spotify’ excuses. To act as a virtual record box the Djoclate II has two inputs, where music storage devices that have a 3.5mm jack can be plugged in (it will ship with two 70cm 3.5mm jack cables to connect music players, and also a mini-USB cable to charge the Djoclate itself, with no other power source required). There’s also a third input where headphones can be plugged in so the DJ can pre-listen to the next track before dropping it in. Tracks can be then faded in and out via the two faders on the device. There’s also bass kill on both channels. The Djoclate II is, as its name suggests, the second iteration of the gadget. New features include the pre-listening feature and also Bluetooth connectivity so it can also integrate with a wireless speaker or sound system. When not being used as a mixer it can double as a Bluetooth sender to get tracks from your portable onto your sound system. The wireless connectivity option is only for outputting audio; inputs devices have to be plugged in via the cables provided. Djoclate’s creators, , are seeking $30,000 on Kickstarter to ship the sequel. With 23 days to go on their crowdfunding campaign they’ve raised more than a third of that. The device is expected to retail for $89 but a few early backers can still secure one for $55 or more. The startup told TechCrunch it has sold around 2,000 of the first Djoclate model since December in The Netherlands, but has now also expanded its availability to Germany and Italy.
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Rovio To Launch “Angry Birds Star Wars” Sequel (Or Prequel?) On Monday
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Sarah Perez
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Rovio this morning the launch of its next gaming title due to arrive on Monday – a game that appears to be a sequel to the current Angry Birds Star Wars. An image accompanying the announcement features a bird dressed like young Anakin Skywalker, wearing racing gear, as in the 1999 prequel It’s not too hard to then draw the conclusion that this is the direction Rovio is headed, especially after announcing , which will ship new toys and games based on the Angry Birds Star Wars lineup and a racing game called later this year. The move to launch yet another version of Angry Birds into an already saturated lineup of similarly themed games — which over the past year have also included the arrivals of Angry Birds Space and Bad Piggies, in addition to the original Angry Birds Star Wars — is not surprising. “Angry Birds” is nearly synonymous with Rovio’s brand, even as the company has been struggling to define itself as something broader. So far, those efforts have seen limited success. Rovio’s , a physics-based game released in July 2012, was its first non-Angry Birds title in nearly three years. Initially, , even ranking No. 1, leading some to declare that Rovio’s days of being a “one hit wonder” were over. But Alex has not quite sustained the momentum of the Angry Birds line. For example, the paid version dropped to the 73rd most popular game and 42nd most popular app in the U.S. , and today it the top 250th most popular paid game in the U.S., according to AppData, or the top 205th . It no longer ranks in the top 400 paid apps in the U.S., and the free version is also not currently ranked in any leaderboard, AppData also . This March, Rovio followed up with another non-Angry Birds title with the ” in conjunction with Dreamworks. That game is not featured in the top 400 free or paid games on iOS in the U.S., also per Distimo. AppData, however, it’s No. 369 in the Top Grossing iPad games in the U.S. Finally, this May, Rovio a new angle on its desire to move beyond Angry Birds: it would begin to publish and market third-party titles through a new program called “Rovio Stars.” The company hopes that transforming itself into a third-party publisher will help it shift its image from being a little too “one note” into that of a fully fledged gaming and entertainment company. Though over the years, Rovio’s non-gaming revenues have to grow (up from 30 percent last year to 45 percent this April), games still account for over half (55 percent) of Rovio’s business. And in order to have more new toys, games or heck – even – to sell, Rovio will have to keep the hits coming, or at least sustain those it has today…even if that means yet another Angry Birds title.
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Why Behavior Change Apps Fail To Change Behavior
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Nir Eyal
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Imagine walking into a busy mall when someone approaches you with an open hand. “Would you have some coins to take the bus, please?” he asks. But in this case, the person is not a panhandler. The beggar is a PhD. As part of a French study, researchers wanted to know if they could change how much money people gave to a total stranger using just a few specially encoded words. They discovered a technique so simple and effective it doubled how much people gave. The turn of phrase has been shown to not only increase how much bus fare people give, but was also effective in boosting charitable donations and participation in voluntary surveys. In fact, a recent of 42 studies involving over 22,000 participants concluded that these few words, placed at the end of a request, are a highly effective way to gain compliance, doubling the likelihood of people saying “yes.” What were the magic words the researchers discovered? The phrase, “but you are free to accept or refuse.” The “but you are free” technique demonstrates how we are more likely to be persuaded when our ability to choose is reaffirmed. The effect was observed not only during face-to-face interactions, but also over email. Though the research did not directly look at how products and services might use the technique, the study provides several practical insights for how companies can influence customer behavior. , of Carnegie Mellon’s Entertainment Technology Center, studies the psychology behind why people play. In addition to being CEO of his own gaming studio, Schell has poured over decades of research to try to explain why people spend countless hours entranced playing Angry Birds or World of Warcraft while at the same time dreading doing other things, like their day jobs or filing taxes. At this year’s D.I.C.E Summit, the difference comes down to whether the behavior is a “wanna” versus a “hafta.” The difference between things we want to do and things you have to do is, according to Schell, is “the difference between work and play … slavery and freedom … efficiency and pleasure.” Furthermore, Schell believes maintaining a sense of autonomy is critical to enjoying an experience. Schell points to the work or Edward Deci and Richard Ryan, whose identifies a belief in one’s own freedom to choose as a key requirement for sustained motivation. Unfortunately, too many well-intentioned products fail because they feel like “haftas,” things people are obligated to do, as opposed to things they “wanna” do. Schell points to neuroscience research showing “there are different channels in the brain for seeking positive consequences and avoiding negative consequences.” When faced with “haftas,” our brains register them as punishments so we take shortcuts, cheat, skip-out, or in the case of many apps or websites, uninstall them or click away in order to escape the discomfort of feeling controlled. So why does reminding people of their freedom to choose, as demonstrated in the French bus fare study, prove so effective? The researchers believe the phrase “but you are free” disarms our instinctive rejection of being told what to do. If you have ever grumbled at your mother telling you to put on a coat or felt your blood pressure rise when your boss micro-manages you, you have experienced what psychologists call “ ,” the hair-trigger response to threats to your autonomy. However, when a request is coupled with an affirmation of the right to choose, reactance is kept at bay. It appears emancipating people from seeing a behavior as a “hafta,” opens them to viewing it as a “wanna.” But can the principles of autonomy and reactance carry-over into the way products change behavior and form new habits? Here are two examples to make the case that they do, but of course, to make up your mind for yourself. Take for example establishing the habit of better nutrition. Searching in the Apple App Store for the word “diet” returns 3,235 apps, all promising to help users shed extra pounds. The first app in the long list is , whose iOS app is rated by over 350,000 people. When I decided I needed to lose a few pounds about a year ago, I installed the app and gave it a try. MyFitnessPal is simple enough to use. The app asks dieters to log what they eat and presents them with a calories score based on their weight loss goal. For a few days, I stuck with the program and diligently input information about everything I ate. Had I been a person who logs food with pen and paper, MyFitnessPal would have been a welcomed improvement. However, I was not a calorie tracker prior to using MyFitnessPal and though using the app was novel at first, it soon became a drag. Keeping a food diary was not part of my daily routine and was not something I came to the app wanting to do. I wanted to lose weight, and the app was telling me how to do it with its strict method of tracking calories in and calories out. Unfortunately, I soon found that forgetting to enter a meal made it impossible to get back on the program – the rest of my day was a nutritional wash. Soon, I began to feel obligated to confess my mealtime transgressions to my phone. MyFitnessPal became MyFitnessPain. Yes, I had chosen to install the app at first, but despite my best intentions, my motivation faded, and using the app became a chore. Adopting a weird new behavior, calorie tracking in my case, felt like a “hafta” and my only choice was to either comply with what the app wanted me to do, or quit. So I quit. On the other hand, another health app called approaches behavior change very differently. The goal of the app is similar to its competitors: to help people establish better diet and exercise routines. However, the app leverages familiar “wanna” behaviors instead of “haftas” to keep people on track. At first, the Fitocracy experience is similar to other health apps, encouraging new members to track their food consumption and exercise. But where Fitocracy differentiates itself is in its recognition that most users will quickly fall off the wagon, just as I had with MyFitnessPal, unless the app taps into an existing behavior. Before my reactance alarm went off, I started receiving kudos from other members of the site after entering-in my very first run. Curious to know who was sending the virtual encouragement, I logged-in. There, I immediately saw a question from “mrosplock5,” a woman looking for advice on what to do about knee pain from running. Having experienced similar trouble several years back, I left a quick reply. “Running barefoot (or with minimalist shoes) eliminated my knee pains. Strange but true!” I haven’t used Fitocracy for long, but it’s easy to see how someone could . Fitocracy is first and foremost an online community. The app roped me in by closely mimicking real-world gym jabber among friends. The ritual of connecting with like-minded people Fitocracy, and the company leverages this behavior by making sharing words of encouragement, exchanging advice, and receiving praise, easier and more rewarding. In fact, in the Netherlands found social factors were the most important reasons people used the service and recommended it to others. Social acceptance is something we all crave and Fitocracy leverages the universal need for connection as an on-ramp to fitness, making new tools and features available to users as they develop new habits. The choice for the Fitocracy user is therefore between the old way of doing an existing behavior and the company’s tailored solution. To be fair, MyFitnessPal does have social features intended to keep members engaged. However, as opposed to Fitocracy, the benefits of interacting with the community come much later, if ever. Clearly, it is too early to tell who among the multitudes of health and wellness companies will emerge victorious, but the fact remains that the most successful consumer technology companies of our age, those which have altered the daily behaviors of hundreds of millions of people, are the ones nobody makes us use. Perhaps part of the appeal of sneaking in a few minutes on Facebook or checking scores on ESPN.com is access to a moment of pure autonomy – an escape from being told what to do by bosses and coworkers. Unfortunately, too many companies build their products betting users will do what they should or have to do, instead of what they want to do. They fail to change behaviors because they neglect to make their services enjoyable for its own sake, often asking users to learn new, unfamiliar actions instead of making old routines easier. Instead, products that successfully change behavior present users with an implicit choice between their old way of doing things and the new, more convenient solution to existing needs. By maintaining the user’s freedom to choose, products can facilitate the adoption of new habits and change behavior for good. – When our autonomy is threatened, we feel constrained by our lack of choices and often rebel against doing the new behavior. Psychologists call this “reactance.” – To change behavior, products must ensure the user feels in control. People must use the service, not feel they . – Attempting to create entirely new behaviors is difficult because these actions often feel like “haftas.” For example, unless someone already has a habit of counting calories, a diet tracking app can feel alienating, telling the user what to do and neglect to provide opportunities to get back on track if they slip-up. – However, by making an existing behavior easier to do, a product can imply a choice more likely to be accepted. By making the existing behavior simpler and more rewarding, products give users the choice between their old way of doing things or porting their habits to the better, new solution instead. – By catering to existing routines, products stand a better chance of changing user behavior as they move people to increasingly complex actions and new habits over time.
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CrunchWeek: Nokia’s Lumia 1020, Dropbox’s Developer Conference, Hulu’s Non-Sale
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Anthony Ha
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After a week off, is back. Regulars and were out of the office, but Greg Kumparak, Billy Gallagher, and I still got together to talk about the big tech stories from the past seven days. We start our discussion with an overview of the new phone that Nokia announced this week, , which attracted attention for its 41-megapixel camera — something that prompted TechCrunch’s John Biggs to . Greg takes us through the announcement, then we move on to Dropbox’s developer conference, where the company and allowing developers to store and sync user data from apps. Lastly, we look at the streaming video site (at least for now), and we talk about where Hulu goes from here.
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Sweat Equity: From Co-Founders To Co-Investors, Freestyle.VC Invests More Than Just Cash
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Leena Rao
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When co-founder and investor Josh Felser walked into the TechCrunch office a few weeks ago, you could tell something was on his mind. He was in the midst of sorting through a hiccup one of his portfolio startups was having with the Apple App Store. As we sat down, he excused himself for a few minutes to reach out to his contacts to figure out what could be done. I don’t usually find investors this consumed with tactical issues, particularly when it’s for seed-stage startups. But that’s what makes Felser and his partner in crime, Dave Samuel, distinct in the ever-growing sea of angel and seed investors. Felser and Samuel are part of an elite group of co-founders who have not only started multiple companies together but have also seen successful exits for these companies. Together, the duo started Spinner (acquired by Aol for $320 million), and Grouper (acquired by Sony for $65 million). While Samuel and Felser had been making angel investments for some time, they announced a formal fund in 2011, Freestyle Capital, which makes investments in early-stage startups. What makes Samuel and Felser so intriguing is that they are truly entrepreneurs at heart. They are open about the fact that if they had the bandwidth, they would start another company together. But with family commitments and such, digging into a startup is difficult. So the next best thing, they say, is to help other entrepreneurs, especially at the beginning stages of building a product and business. Felser first met Samuel at a conference in 1996. At the time, Samuel, who is an MIT grad and engineer at heart, wanted to reimagine personalized radio online through Spinner. As Samuel explains, he needed to have someone on the team with more business and sales experience, and he immediately connected with Felser. Not soon after Felser joined Samuel in 1997, their relationship was tested. An unnamed investor came between them and attempted to oust Felser from the company. As they tell the story, this investor would tell Samuel that Felser wasn’t performing, but would say the opposite to Felser himself. But as bad as the investor’s experience was in pitting Samuel and Felser against each other, they were able to move forward and keep the company’s leadership as is. Despite this hardship, this was a turning point for Samuel and Felser’s personal and professional relationships, and they emerged from the experience with an element of trust that cannot be created by hiring. Two years later, Aol bought Spinner for several hundred million dollars. Despite the relationship Felser and Samuel had through the startup, both weren’t sure they would be business partners again. The dot-com bubble was just on the brink of bursting, and both were interested in leaving Aol once their stock was vested. It wasn’t until after they both left Aol (2001, and 2002) until they actually started seeing each other socially. After Aol, Samuel and Felser both felt like the opportunity for web-based tech startups had dried up. Samuel started a high-tech toilet seat business, and Felser wanted to buy movie theaters across the country to screen independent films. But in between these two ventures, the duo would meet for drinks and dinner and talk about what’s next. In 2003, Felser and Samuel attended the week-long art event and community festival Burning Man (pictured below) together and began to think about their next idea. Felser noticed that there was no way for him to share the video he shot at Burning Man. This was the inspiration for Felser and Samuel’s next startup, Grouper, which was a P2P network for sharing video and other media. The roles were similar at Grouper as at Spinner; Felser was CEO (and had more equity because it was his idea) and Samuel was president. But the pair soon found Grouper to be a more stressful experience as founders. Both had wives and small children. YouTube was at the top of the online video space, but there were a dozen others vying for second place. Felser and Samuel said they just couldn’t figure out the soul of the company, which was a challenge they didn’t face at Spinner. In early 2006, they started thinking that it was time to start looking into acquisition possibilities, and Sony picked up Grouper months later for . According to Felser, one of the things that makes the duo work as founders is that they are able to be cheerleaders for each other despite the highs and lows. Part of this is having different personalities, they explain. Samuel is more analytical and even-keeled. Felser is more gregarious and emotional, and he knows sales, marketing and business development inside and out. They don’t fight often, because Samuel generally doesn’t disagree much with Felser. But Felser says that when Samuel does push back on something, he knows that his partner is probably right. For Felser and Samuel, being entrepreneurial was now in their DNA after multiple startups under their belts. Starting a new company wasn’t necessarily as appealing to them, as they were both at a stage in their lives where they craved flexibility, especially when it came to spending time with their families. Both thought the next best thing than being an entrepreneur is to actually help them. But becoming a VC at a traditional firm didn’t feel right. They started doing a few angel investments together after they sold Grouper to Sony and left the company. Some of the first investments included CoTweet ( newly public email marketing firm ExactTarget), customer service startup Get Satisfaction, and CrowdFlower. The pair continued to invest for the next few years and formalized Freestyle in 2011 with a As I mentioned above, part of what makes Freestyle unique is that they are focused primarily on seed, and prefers to lead in these rounds (the firm leads in 80 percent of the rounds they participate in). Investments range from $500,000 to $800,000. Felser and Samuel are both open in saying that they will be the most active investor a startup will have in the beginning stages of its inception. Freestyle will sometimes follow-on in startup rounds for Series A, but won’t lead. The firm now counts 43 investments that include About.me, Byliner, Chartbeat, AdStage.io, and others. “We imagine what it would be like if we were starting that company, and what would keep us up at night. Our operator focus starts from the minute we meet the company, and we’re really hands-on,” Felser says. Sahil Jain, CEO and founder of Freestyle-backed advertising startup AdStage, explains “They actually take an interest in your business, and we have a call with Dave every week. They by far are our most active investor and we know they are there for you anytime.” He says that he never feels that Samuel and Felser are in this just for the money, because they take a tactical approach to actually helping him build his company. The firm, which makes about 12 investments a year, intentionally keeps the portfolio small so they can have this laser focus on startups and founders. Jain adds that when Felser and Samuel gave he and his co-founder Jason Wu a term sheet, the valuation of the company was lower and other investors were giving him a higher cap on the convertible note. He said that while the valuation was lower, he chose Freestyle because he knew they would be so hands on. Ranvir Gujral, founder of the firm’s portfolio company GetChute, recalls a similar situation. “We took a discount on our valuation to work with Freestyle, but it was well worth it for their guidance and expertise,” he says. Similar to Jain, Gujral has a standing weekly meeting with Felser to discuss any outstanding issues. And he adds that Freestyle is also his most active investor. Samuel explains that they would probably make more money if they focused on late stage, but they like doing early stage investments because it is so hands on. As entrepreneurs, this is what they both truly enjoy doing and are passionate about–building companies from the ground up. It’s not about the money, he adds. Another unique characteristic about Freestyle is that the only way to pitch Felser and Samuel is through an introduction from someone in their network. As written on the firm’s site: We know you slaved for months over that ravishing pitch. Save the pomp and circumstance for the other guys, and just get in touch the old-fashioned way. Get to know someone in our network or community, and ask for an introduction. More difficult? Yup. Worth it? Absolutely. Case in point, Gujral met the firm through an introduction from Klout CEO Joe Fernandez. Jain was introduced through the Launch conference. Felser explains that he and Samuel couldn’t handle the dealflow coming in then they had their emails on the site, so they had to figure out a way to manage the incoming traffic and filter. Samuel and Felser not only are part-time company builders to their portfolio, but they also serve as the business development, M&A, and finance consultants. They help their startups raise their next rounds and reach additional investors; they also are active in the acquisition process when it comes to both seeking out and managing relationships with potentially acquisitive companies. Gujral says that Felser was instrumental in helping the startup raises its Series A round, and made the introduction to Foundry Group, who led the round in the startup in May. “We strive to behave the same way we would if we were starting and running the company in a way that respects that we are not. That style permeates our whole approach, and most angels don’t come from that world,” Felser explains. After several years of investing under Freestyle, Samuel and Felser are focusing on expansion. The firm is in the process of closing a new, larger fund. They are also planning to hire at the principal level, and will expand support staff. In a world where startups now have the option of being picky with their seed and angel investors, VCs are working overtime to prove that they can provide value to entrepreneurs that goes beyond just cash. But Felser and Samuel went into the investment world not to make money, but to actually create value for founders. Their own entrepreneurial journey had a successful outcome, but also gave them the battle scars needed to advise from experience. As for the App Store hiccup with his portfolio company, Felser proudly reported back to me that the issue has been resolved. Apparently another portfolio company had a workaround, and Felser cross-pollinated the knowledge. Without digging in deep as an investor (and sweating a little in one of our interviews), that knowledge would never have been shared.
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Your App Is Slow Because Our World Is Ending
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Jon Evans
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The meatiest article I ran across on the Internet this week was also–maybe–a harbinger of doom for life as we know it. I mean Drew Crawford’s . It’s long, and somewhat dense, but definitely worth reading if you’re technical enough to follow along. Its upshot: HTML5 apps will be vastly inferior to native apps not just for the next year or two, but for the next 5-10 years, because of fundamental technical limitations inherent to mobile platforms. I do have a quibble or two with some of his arguments, but he has convinced me that I wrote two years ago, in which I call for iOS garbage collection and claim that HTML5 will rule over all in a few years, may need to be reconsidered in light of new evidence. All right, OK, fine, I’ll say it: they were just plain wrong. To be fair, my call for garbage collection puts me in good company, including programming god — Good article: I tend to think that garbage collection in some contexts even for games is justified on big platforms. — John Carmack (@ID_AA_Carmack) — but I’m now pretty convinced that HTML5 is not a short- or even medium-term solution for any kind of genuinely nontrivial iOS app, and I’m pretty dubious about other platforms too. When you start thinking about the root causes, though, it gets even more interesting and/or downright apocalyptic. Crawford writes early on: The solution is obviously just to make ARM 10x faster, so it is competitive with x86, and then we can get desktop JS performance without doing any work! Whether or not this works out kind of hinges on your faith in in the face of trying to power a chip on a 3-ounce battery. –which caught my eye, because of late I’ve noticed a of other warning that “we’ve been falling behind Moore’s Law ever since Intel hit the power wall back in 2005,” to Linley Gwenapp. It is no exaggeration to say that has been the single most important and powerful force in our world for fifty years now. It is the reason that “technology, , is the dominant economic and cultural force of our time.” So this is kind of a big deal. But ask ; ask ; a considerable amount of evidence seems to indicate that over the last few years, at least on a bang-per-buck basis, the breakneck exponential growth in computing power that has propelled the technology industry as we know it, and transformed the entire world and the lives of every single human being…is finally slowing down. Granted, people have been predicting its end for , and somehow it has just kept trucking along–which is nothing short of astonishing–but now we seem to now be trapped between the of heat and power dissipation on one side and the of fundamental quantum limitations on the other. While various new breakthroughs have been mooted, and some of them may actually pan out, let’s not forget that Moore’s original formulation of the law referred to “the number of components per integrated circuit for minimum cost.” It seems reasonable to be skeptical that these new approaches will give us anything like the value-for-money that we’ve come to expect. What we have grown to think of as normal — that every couple of years, technology gets an order of magnitude faster and/or smaller and/or cheaper — is actually, when you stop and think about it, incredibly freakish and crazy. Unchecked exponential growth has to end , by definition, and this is how it would happen; not with a bang, but with a whimper. We won’t hit a wall, we’ll just…start…to…slow…down. And we’ll see it happen first on the most hardware-constrained devices, which is to say, for most people, on our phones. When the history of humanity is written, I expect the past fifty years will be known as the Mooreic Era. And now we may finally be witnessing the beginning of its end. This doesn’t mean progress will stop; even in the worst case, the shockwave from fifty years of skyrocketing technnical growth will echo through all of humanity and everything we do for some decades yet. And it’s entirely possible that Ray Kurzweil and the Singularitarians are right, and that Moore’s Law will be prolonged or replaced by something even more insane. But it’s also possible that we are finally coming to the end of the fastest-changing era in the history of humanity. If so, then generations to come will look back on the time period from 1963 to, well, today-ish, and sigh wistfully “That must have been the most exciting time in all of history to have been alive.” Joke’s on them, maybe. But just on the off chance that this ride is coming to an end, let’s all try to enjoy it while we can. Doomsday clock, Marca Pasos, . in the sense of “HTML5 markup, CSS3, and Javascript” One of his key points is that “when garbage collection has five times as much memory as required, its runtime performance matches or slightly exceeds that of explicit memory management” but “in a memory constrained environment garbage collection performance degrades exponentially.” The obvious solution, then, is to throw memory at the problem, no? Android has garbage collection, iOS does not: that’s probably why a $299 Nexus 4 has twice the RAM of a $649 iPhone 5, and Android phones with 4GB of RAM may well become available . Still, his larger point stands; JavaScript is fundamentally incompatible with memory-critical apps.
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Gillmor Gang: Batteries Not Included
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Steve Gillmor
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The Gillmor Gang — Robert Scoble, Dan Farber, Keith Teare, and Steve Gillmor — talked Microsoft reorg and the chance it might make a difference. No one is underestimating the power of the Windows giant, but rearranging the deck chairs may not move the needle enough to matter. With Office subsumed in one group and Windows in another, Steve Ballmer has traded one fiefdom for a more amorphous one in which to launder the move to the cloud. Is @scobleizer right that a change at the top is in order, or am I right that Microsoft’s real problem is a loss of trust in Redmond’s ability to convince us that the imperative is providing innovation for customers? Remember the old slogan: What do you want to do today? Today, the answer is increasingly found in the realtime world of Apple, Google, Twitter, Netflix, and only maybe Microsoft. @stevegillmor, @dbfarber, @scobleizer, @kteare Produced and directed by Tina Chase Gillmor @tinagillmor
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iPad App Color Band Lets Children Paint Pictures With Sounds Using Motion Sensing Technology
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Catherine Shu
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Freemium app uses the iPad’s front camera as a motion sensor to create a magical experience for children learning about music and color. With a few strokes of their fingers on the iPad’s touchscreen, kids can draw their own instruments. To play them, they just have to wave their hands in the air. Color Band was created by , a Taipei-based studio staffed by programmer David Liu, artist and animator Yi-Ning Wang and 18-year gaming industry veteran Louis Lu, who was once lead character artist on the series but now focuses on making non-violent games as an indie developer. [youtube=http://www.youtube.com/watch?v=fR2pUdB5ixE&w=560&h=315] Color Band is similar to apps like (which we ), but it also includes coloring canvases and pages that combine art practice with basic music theory. For example, children can draw seven shapes on their iPad’s screen–and then tap out the major scale (or “do-re-mi-fa-sol-la-ti”) on them by gesturing in front of the camera. Sounds can also be recorded–sketch a bunch of flowers, record a voice, tap on individual blooms to make them “sing” and then use auto playback to turn the garden into a miniature choir. Another nifty feature is the ability to use real-life objects as instruments, as demonstrated by this video. [youtube=http://www.youtube.com/watch?v=24wSVp2U-jI&w=560&h=315] Programmer Liu conceptualized Color Band after watching his girlfriend, a teacher, show small children how to play simple musical instruments. “We wanted to create an interactive app that would teach kids about music and art, but also be intuitive and fun to use,” says Liu. LND Games packed Color Band with features in order to keep children (and adults) engaged. Users can “paint a picture with sounds” using more than 80 interactive colors that each have a unique instrument or sound effect assigned to them, including cymbals, bongos and animal noises. Some colors contain multiple sound effects, while others have scales or chords, allowing kids to learn more about pitch and harmony. Interactive coloring pages and canvases, more of which are available as in-app purchases, feature drawings of instruments such as pianos and guitars that can be played like their real-life counterparts. After kids finish working on a drawing, they can interact with it using the iPad’s cameras, touchscreen and automatic playback, or invite Color Band’s animated mascot, an pink bunny called Lalabee, to dance along to the rhythms and sounds they created. LND Games was founded by Liu after he became intrigued by the gaming possibilities of the motion sensors on the iPad’s front camera. The studio’s first title, , was released last fall. A fun, simple game that Liu created to test the iPad camera’s ability to detect motion, Slap That Zombie allows players to pummel undead characters (and test their reflexes) without touching their iPad screens. Liu says the LND Games team will continue to push out new features for Color Band, while their next motion sensor-based app will focus on fitness for people of all ages.
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Microsoft’s Chief Evangelist Steven Guggenheimer On Touch, The Desktop And The Future Of Imagine Cup
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Frederic Lardinois
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The desktop’s future isn’t bright, but it isn’t likely to go away anytime soon, Microsoft’s Chief Evangelist Steven Guggenheimer told me last week during a brief interview in St. Petersburg, Russia on the sidelines of Microsoft’s finals there. “Over time, it’s likely to go away,” Guggenheimer first said, but then he quickly qualified that statement, saying that he doesn’t know “if it’ll ever go away completely.” With Microsoft 8.1, my personal feeling is that Microsoft continues to , but Guggenheimer actually argues the opposite. In his view, Microsoft de-emphasized the desktop a bit too much when it first started talking about Windows 8. “We tried to dial it up again a bit at Build,” he said. Today, 700,000 apps run in the Windows desktop mode and “some of the fidelity of mouse and keyboard will never go away.” Excel spreadsheets, AutoCAD and similar tools still need these old-school input methods, after all. In Guggenheimer’s view, there is “this weird balance between [the desktop] ending up being less critical over time, but it probably never goes away completely. Or if it does, it’s hard to predict when.” Microsoft, he believes, “tries to play that balance well.” The company wants new apps to take advantage of the new generation of PC hardware that now often includes touchscreens. “There is a natural transition to apps that talk more to each other and take more advantage of the hardware, which is a change from the desktop,” Guggenheimer believes. Over the course of the conversation, we also touched upon Microsoft’s outreach to students and the Imagine Cup, Microsoft’s global software development competition for students. Guggenheimer noted that there are some aspects to the program that “are phenomenal,” but “some aspects don’t scale as well as we’d like.” Over the course of the last few years, Microsoft has tried to increase the number of Imagine Cup entries that become full-blown startups, though the overall number of real success stories there remains relatively low. With 25,000 students participating, the question for Guggenheimer becomes how to scale Imagine Cup so that all of these students – and not just the finalists – get a better chance at turning their ideas into businesses. Specifically, he noted that all the resources Microsoft pours into organizing the Imagine Cup finals in a different country every year represent a “trade-off” and “the money you spent on that is the money you don’t spend elsewhere.” After taking the finals to Australia and Russia in the last two years, next year’s edition will be held on Microsoft’s campus in Redmond. Given Guggenheimer’s comments, it’ll be interesting to see what Microsoft has planned for future editions of its flagship software development competition.
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The Art And Science Of YouTube Networks
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Ryan Lawler
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Over the last several years, we’ve seen a growing proliferation of multichannel networks (MCNs) pop up on YouTube, all of which are seeking to aggregate channels and audience in an effort to boost viewership and better monetize the videos that creators make. While the end goal — more viewers, more money — is the same for each of them, how they get to that place can differ significantly. I spent the last week meeting with many of these networks in L.A., touring the offices of companies like Big Frame, Fullscreen, Machinima, Maker Studios, Tastemade, and ZEFR to get a taste for how they differentiate themselves, and what each brings to the table for creators that become a part of their networks. For many YouTubers, collaboration can be the first step toward growing one’s audience. The idea is to get two popular creators in a room (or a video) together, and to share the collaboration with their respective audiences. Viewers who aren’t already aware of and subscribed to the channels of those creators are much more likely to do so, if they like a collaboration that they’ve just watched on a channel that they already know and love. Networks like Big Frame and Maker Studios have benefitted greatly from videos of high-profile creators in their network working together to build collaborative content together. It often means greater visibility and more subscribers for everyone involved, and in the end, that translates to more video views. It’s not just the MCNs that are preaching creative collaboration. YouTube itself is working to bring creators closer together with the opening of its YouTube Space LA — a vast production facility that enables creators to use studio space and shooting and post-production equipment to improve the quality of their videos. But the space is also being used as a sort of community center, bringing various creators together through social events and training workshops throughout the year. It wouldn’t be Hollywood without Hollywood-style ambitions for original content. More than just providing tools for collaborating and giving creators a playlist of best practices, MCNs are realizing the value of creating high-value original content for viewers. Whereas the strategy on YouTube used to be to keep videos short, due to the expected short attention spans of viewers tuning in, many networks are finding their audiences watching more videos for longer periods of time per session. With that in mind, many are increasing the length of the videos that appear and investing ever more in long-form productions. Machinima might be the most ambitious in that regard. It’s put money into productions like (now up for a second season) and that are testing the limits of YouTube production and audience attention spans. And what it’s finding is that viewers are becoming increasingly more engaged with its network as a result. While maybe not producing the same type of episodic, story-driven content that Machinima is pushing, companies like Maker and Tastemade are putting a lot of effort into improving the production of the videos their creators make. Both have dedicated studio space for creators, where they can host their own shows. For Maker, its creators can build and re-use sets in its studios, while Tastemade has built out a series of traditional cooking sets that can be used by those on its network. Increasingly, businesses are being built around specific niches or verticals that attract a certain audience or demographic. Machinima pioneered this strategy, going after the so-called “fanboy” demographic — mostly young, mostly male viewers who really like video games. But we’re seeing more networks go this way over recent years. Take Tastemade, for instance. One of the newest MCNs, it was formed to go after an audience of “food lovers” in the highly monetizable lifestyle vertical. But it’s not the only one: Another example is , which is a network going after dance aficionados. Even networks that don’t have a singular audience they’re going after are thinking about vertical strategies. Big Frame has rolled up a lot of its content into verticals focused on , , , and the . There’s a lot creators and content owners can do to improve their videos, from a production standpoint. But there’s even more they can do to maximize the amount of views and revenues they can get through managing their channels with technology. That’s where companies like Fullscreen and ZEFR come in. Both companies have built dashboards for better understanding the way that viewers are finding their content and increase viewership and monetization. On Fullscreen’s side, its recently released Creator Platform was built to give users within its network tools to bulk manage their video channels. While it started out with analytics and revenue dashboards, the company also has built new ways for creators to improve their channels. As for ZEFR, its technology is all about quickly identifying and monetizing videos whose copyrights are owned by major media but might have been uploaded by typical YouTube users. Once upon a time, those videos might have been taken down, but now the content owners can make money off of content that has been put up by their fans. ZEFR is now extending those tools for brands, to help identify videos spoofs and those posted in response to the brands’ and advertisers’ own messages. In both cases, Fullscreen and ZEFR aren’t necessarily producing their own content, just getting the most out of the content of their partners and people in their networks. We’re at an inflection point in the future of video, in which the next generation of big media companies are being born on YouTube. Through a combination of technology and good old fashioned video production, we’ll likely see those companies emerge as competitors and partners for some of today’s major media conglomerates. But how they get there will be some mix of art, science, production, content strategy, and a little bit of luck. Photo Credit: via
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Jordan Crook
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With Cinematique’s ‘Touch-Enabled’, Shoppable Videos, Product Placement Might Not Be So Bad
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Anthony Ha
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In time, we’re all going to want to interact and shop from our favorite online — at least, that’s what
Randy Ross, co-founder and CEO of startup called , argues, and he’s hoping to enable those interactions with Cinematique’s new MTEVideo platform. When you watch content enriched by Cinematique, small dots appear on the screen, signaling items that you can click on with your mouse or just tap with your finger (depending on the device). The screen will be overlaid with some basic information about whatever you tapped, and when you’re done with the video, you can tap on the Cinematique icon below the video and bring up more details about everything you selected. You can also share the listing with friends or buy the product in question. There’s obvious e-commerce potential here, similar to , which tags products in images and make images shoppable. In some ways, Cinematique is just bringing that idea to video. (Ross said that Cinematique videos can be embedded on other sites, so this is an obvious way to monetize videos that go viral.) And even if a company isn’t trying to drive an immediate purchase, Cinematique can provide unique, detailed data about who’s interested in your products and how they interacted with your content. At the same time, the technology doesn’t to be used for commercial purposes. Ross said that it’s entirely up to the filmmaker (or whoever owns the video) to determine which items to tag, and that the tags can also be used in many different ways to provide more information. For example, in the video currently featured on , you can tap on the name of the video (“Sleepwalking in the Rift”) when it comes on-screen and you’ll get a basic description of why the video was made (it was commissioned by fashion brand Maiyet). Or you can tap on the actor’s face to learn about his career. Ross said that Cinematique’s content can be updated over time, so the documentary filmmaker, for example, could use the annotations to keep the audience up-to-date about the subject matter. This might all sound obtrusive or annoying, but Ross said it was important to protect the video watching experience, particularly he and his co-founders Kyle Heller and Chayse Irvin have all worked in filmmaking. So the dots are relatively subtle, and the more in-depth content is saved for after the video. Plus, if you really don’t like them, you can hide the dots or the overlays entirely. In fact, if I have a criticism, it’s that the experience can be a bit too subtle, at least with videos that weren’t specifically designed for the Cinematique experience. Tappable items might only flash across the screen for a few seconds — so by the time I decided to tap on something, it had often disappeared from the screen. (Maybe I’ll get better at it.) So there’s still room for improvement, but I’m impressed by what Cinematique has achieved so far. Ross also noted that there’s a real technical achievement here, because under-the-hood, the platform is able to recognize an object throughout a video — so that the user doesn’t have to tag it in frame after frame. Ultimately, Ross predicted that with the proliferation of touch interfaces, “It will become commonplace. People will just expect that they can touch things in a video, whether it’s a video with models showing off dresses or a car video or an architecture video or a real estate video where the furniture and the building are touchable.”
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Fly Or Die: Ploom ModelTwo E-Cig Vaporizer
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Jordan Crook
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It’s been a couple weeks since I , but we thought it fair to have someone else weigh in on the tobacco vaporizer as well. That said, Engadget’s Brian Heater steps up this week (to fill in for John Biggs) and shares his thoughts on the ModelTwo. Ploom has been focused on revolutionizing vaporizers for a while, notably with the and now with the ModelTwo. What makes the ModelTwo different from other vaporizers is that it’s not using a synthetic tobacco substitute, but rather heats up small pods of tobacco into vapor. This offers the same rich taste as a real cigarette without all the danger. It also means that you enjoy your smoke break the same way you would for a cigarette, as the tobacco pods aren’t meant to be toked a few times and then revisited later. Each pod takes about ten minutes to finish. All in all, we think the $39 device is a solid option if you’re in the market for a vaporizer. Brian took some convincing, but at the end of the day: Two flies.
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