Home- Tweets
- Pics
- Facebooks
- Places I go
- Google+
- Blog
- Career
- Rocky
- The Next Web
- TechCrunch
- Contact
that drew
drew olanoff is a geek. he beat cancer...by blaming it. also brained up "Social Good", Gmail4Troops, BlogAbroad, and other stuffs.
-
Tweets
- I'm at The Cookie Crisp (San Mateo, CA) http://t.co/cbv4P595J8
- I'm at Bel Mateo Bowl (San Mateo, CA) http://t.co/DcqY6uB2Uo
- @garyvee *you're
- I'm at Santa Ramen w/ @brett http://t.co/jdGKlmwrn3
- RT @big_ben_clock: BONG
- RT @WendySLea: Steve Jobs’s Widow Debuts on Philanthropic Stage - Yahoo! Finance http://t.co/JNShSpg3b2 via @YahooFinance
- Regenerating.
- RT @JoshConstine: Google slowed by excessive traffic, haha. Our friend commandeered one of their buses to take us to her east bay Bday http…
- I'm at Starbucks (San Mateo, CA) http://t.co/1wdyByscFQ
- I'm at Antone's Cocktail Lounge (San Mateo, CA) http://t.co/FhwBCFigtk
- RT @Horse_ebooks: I enjoyed eatingMay 17, 13 from web Reply, Retweet, Favorite
- ,
- RT @big_ben_clock: BONG
- @mdjperez not me. Overheard is OH
- @garrytan you're on a roll, man. keep going! #grumpycat
- RT @ryanlawler: According to a recent CBS/New York Times poll, 82% of respondents said sponsored content is the absolute fucking best http:…May 17, 13 from web Reply, Retweet, Favorite
- OH "I hate the physical world"May 17, 13 from web Reply, Retweet, Favorite
-
Photos
-
Status
- how would you "fix" email?
-
Checkins
- Bel Mateo Bowl4330 Olympic Ave
- Santa Ramen1944 S El Camino Real
- Starbucks3790 S El Camino Real
- Antone's Cocktail Lounge32 37th Ave
- AOL TechCrunch HQ410 Townsend St
- Moscone West800 Howard St
- AOL TechCrunch HQ410 Townsend St
- Peet's Coffee & Tea370 4th St
- Moscone West800 Howard St
- Moscone West800 Howard St
- Fernando's Mexican Restaurant63 37th Ave
- AOL TechCrunch HQ410 Townsend St
- Moscone West800 Howard St
- Starbucks3790 S El Camino Real
- Starbucks3790 S El Camino Real
- Google San Francisco345 Spear St
- Googleplex - 19001900 Charleston Rd
-
Google+
- Drew on Google+
-
Posts
New Tumblr is nice on android.
- 0 plays
- Good gravy.
(No streaming audio available)0 plays - 0 plays
- 0 plays
- 0 plays
- 0 plays
- 0 plays
- 0 plays
- 0 plays
- 0 plays
- 0 plays
- 0 plays
- 0 plays
- 0 plays
- 0 plays
- 0 plays
- 0 plays
- 0 plays
- 0 plays
- 0 plays
-
Info
- Summary
My name is Drew Olanoff, and I have over 10 years of marketing, PR, customer service and support, relationship building and management, product management, and technical support experience in multiple verticals. Online, including mobile.
I coined the phrase "Social Good" for online charitable movements, and invented the online "donation by action" charity model. I founded #BlameDrewsCancer
I pride myself on being a connector. Connecting people, stories, information. I have worked under some amazingly talented and gifted PR pros while working for startups as a "Director of Community", "Community Manager" and "Technology Evangelist". I have the knack of working stories both mainstream as well as online. Bridging that gap is my passion.
I am a leader AND a team player, and strive for nothing short of success. My life motto is "failure is not an option".
Specialties: podcasting, videoblogging ,blogging, community management, social networking, technology evangelist, tech, technology, marketing, pr, outreach, customer service, social media, product development, UI, UX, mobile, user acquisition, technology trendsExperience- Sept 2012 - PresentCommunity Director / TechCrunch
- May 2009 - PresentFounder / BlameDrewsCancer.com
During my personal fight with Hodgkins Lymphoma, I created a website that leveraged tweets to raise money for charity. During my treatment, I was able to:
- Participated in official LIVESTRONG events as a Global Envoy
- Appeared on both national and local news (CNN, Fox Philadelphia) to talk about our mission
- Held a 24 hour livestreamed marathon to raise money for LIVESTRONG
- Worked with Drew Carey to raise money by auctioning off the Twitter handle @drew
Additional Information-
Websites:
-
Interests:travel, music, creativity, technology, gadgets, games, management, training, mentoring, leading, new media
-
Tweets
- Moneyball got robbed. So gonna kick that artsy fartsy dog's ass.
- Happy anniversary @thatdrew and @Melbellie. I promise I won't tell anyone who my favorite is. If it makes you feel any better, it's close.
- Running for president.
- I'm thankful for whipped cream from @starbucks. Oh and for @Melbellie @thatdrew too. And @adrianbellie I guess.
- @Alyssa_Milano right back atcha! <3
- I'm dog tired. Long flight. But I got some bacon!
- Why does @Melbellie and @thatdrew get to pick pumpkins? I like pumpkins. Jerks.
- Sorry @thatdrew. I'm so damn cute, I make everyone want to talk to you. If it helps any, they're dumb.
- I get to fly and see @Melbellie tomorrow. Not a happy visit though :(
- Both of my parents work from home. This sucks. Can't even lick my junk in privacy anymore. I need a break. #rufflife
- Fan of @bifnaked's music even though I don't understand the words. Well, I don't understand ANY persons words really.
- I want to move to Ohio.
- Where the frig am I. What is this Ohio????
- you should feel how soft I am right now.
- sometimesmytweetsdonthavespacescuzigotnothumbs.
- oh and don't forget to do number one AND number two, even if the ground is wet. #hurricaneirene #wooftip
- to all of my furry friends out there on the right coast, please stay safe and take care of your people #hurricaneirene #woof
- come home @adrianbellie :(
-
Posts
- May 19, 13
Yahoo has been plagued by leadership changes among its C-level positions for years. Many of its CEOs have been struggling to find ways to either cut down on cost or innovate on products, but none appear to have been able to turn the company’s performance and reputation around. The hiring of Marissa Mayer as its CEO has helped to change the company’s momentum, leading it towards a better position, at least where investors are concerned.
300 days ago
Mayer and her company have certainly been in the news quite a bit over the past few months and if you look at the company’s quarterly earnings, there seems to be some sort of revival happening there. While the title of this post mentions “turnaround”, it by no means that Yahoo is in an era of prosperity. However, Mayer appears to have succeeded where her predecessors have failed.
The former Google executive joined Yahoo just a little more than 300 days ago. She currently has the second-longest tenure as CEO following founder Jerry Yang’s departure from the role. If you look at the stock price of Yahoo, in just the first 300 days, Mayer’s leadership has helped the company right its finances, bringing it up to levels not seen in years.
Below is a look at Yahoo’s stock activity from 2006 to May 17, 2013. In the post-Yang era, investors appeared to lack confidence in where Yahoo was headed and it greatly affected its stock. As we approach 2012, the number makes an upward direction to close at $26.52 as of last Friday.
Through the rest of this post, we will explore the Yahoo’s current direction and the moves Mayer has made in the first 300 days.
Yahoo’s Previous CEOs following Jerry Yang
As mentioned earlier, Yahoo has been a revolving door for CEOs. In the past four years, only Carol Bartz has been CEO longer, for a total of 966 days. To be fair, two subsequent leaders held the role on an interim basis, but it’s safe to say that the company has been in desperate need for someone to right the ship lest it continue to sink any further.
- Ross Levinsohn: May 13, 2012 – July 16, 2012 (64 days)
- Scott Thompson: January 4, 2012 – May 13, 2012 (130 days)
- Tim Morse: September 6, 2011 – January 4, 2012 (120 days)
- Carol Bartz: January 13, 2009 – September 6, 2011 (966 days)
Formerly CEO of software design and service company Autodesk, Bartz announced to the world on January 13, 2009 saying that she came to Yahoo to “kick some butt”.
However, her brash style (remember the “fuck off” incident with TechCrunch’s Michael Arrington?) and the impact her attempts to streamline things didn’t make her any friends. During her tenure, Yahoo cut 4 percent of its global workforce, or about 600 jobs, a move that was billed as being a “part of our ongoing strategy to best position Yahoo for revenue growth.”
In a struggling company, its not surprising that CEOs would find different ways to address huge operating costs or continuing dismal financial performance, but during Bartz’s reign, the impact didn’t seem to be as positive as she expected.
Investors seemed to have a mixed reaction to her leadership with the stock price jumping around rather erratically. What’s noteworthy is Bartz’s leadership is stained with poor quarterly earnings. One of the lowest stock price drops in the past five years since November 21, 2008, when Yahoo was trading at $9.39 a share also happened on her watch.
Bartz was fired rather unceremoniously in September 2011 by Yahoo’s Chairman of the Board over the phone:
To all,
I am very sad to tell you that I’ve just been fired over the phone by Yahoo’s Chairman of the Board. It has been my pleasure to work with all of you and I wish you only the best going forward.
Carol
Sent from my iPadTim Morse, Yahoo’s Chief Financial Officer, was tapped to replace Bartz at the helm on an interim basis, but any efforts he made had little effect. Granted, he was only CEO for a total of 120 calendar days. Eventually, Scott Thompson, former President of PayPal, was selected to be its new chief.
Aside from that thing about his resume, Thompson was believed to be the leader Yahoo hoped would help it turn it around. However, instead of a 180-degree turn, Thompson hit the accelerator to continue aggressive ways to cut costs. In his 130 days as head Yahoo, he oversaw the termination of around 2,000 people, or 14 percent of the company’s workforce — more than Bartz did in her tenure, by 1,400 more jobs.
For all his efforts, Thompson did little to improve Yahoo’s stock price as it remained constrained between $14 to $16 per share.
Remember that resume issue we mentioned earlier? Yahoo fired Thompson because of that.
Next up to bat was Fox Interactive President Ross Levinsohn who was the man responsible for purchasing MySpace for $500 million. But in an interim role, he was unable to do much, mostly because of shareholder in-fighting from Third Point founder Dan Loeb, who apparently grew impatient at the decay of his stock’s value and sought to shake up Yahoo’s management.
Happy days are here again (or at least they’re getting better)
Yahoo is starting to see some hope for itself with Mayer at the helm. It’s not where it wants to be, but it’s getting there. Case in point, if you look at the stock price since Mayer became CEO, the company has seen its share price rise to a high of $28, something not seen in years.
Yahoo’s quarterly earnings shows some signs that things seem to be improving. In Mayer’s first quarterly earnings report, Yahoo reported revenues of $1.09 billion and an no-GAAP EPS of $0.35, beating Wall Street’s expectations. It followed it up with a successful Q4 2012 report of $1.22 billion in revenue.
The starting quarter of fiscal year 2013 wasn’t that great, but it wasn’t bad either. To say the least, Yahoo still managed to post impressive numbers. Investors appeared happy with the company’s performance and it has definitely impacted how they view the stock price. In addition, no massive layoffs have occurred at the company over the past 11 months.
In one of her first acts as CEO, Mayer sold Yahoo’s stake in Alibaba. It was believed that she would take the $7.6 billion in proceeds and invest it in potentially acquiring one of the large Internet properties like Foursquare. However, Mayer has been setting her sights on smaller companies, snatching up 22 entrepreneurs from companies like Stamped, OntheAir, Snip.it, Alike, Jybe, Summly, Astrid, GoPollGo, Milewise, and Loki Studios.
We recently added 22 entrepreneurs to our growing mobile team. Welcome to Yahoo! @astrid @gopollgo @milewise @lokistudios!
— Yahoo! Inc.(@YahooInc) May 10, 2013
All of these companies are aimed at bolstering Yahoo’s mobile efforts, which Mayer has said Yahoo has fallen behind on. The work looks to be paying off as last January, she said there were 200 million active mobile users. In April, the company had 300 million active mobile users — an increase of 100 million.
In order to further capitalize on mobile usage, Yahoo is hoping that the enormous amount of content that the company produces can be transferred to smartphones and tablets in a user-friendly manner. Mobile-first is her game plan.
The photo-sharing social network Flickr is another example of Yahoo’s turnaround. Long a stagnant property in the views of past company CEOs, it finally received some updates under Mayer’s reign. Photographers have been clamoring for a better photo service, with occasional chatter of people severing ties with Flickr and instead switching over to Google+, 500px, or other services that they saw as being more social and understanding of their needs. Under Mayer’s reign, Flickr released a redesign of its iOS app, which saw an increased usage of the app by 25 percent.
People are beginning to take notice of the improvements, and not just users. Yahoo has been plagued by layoffs and numerous employees leaving the company for various reasons. Under Mayer’s leadership, they’re coming back. Last quarter, she said that Yahoo’s workplace standing and employee belief in the company had improved.
Mayer says that there are more job applicants now (more than triple the number during the quarter) and 14 percent of its new hires are “boomerangs”, or former Yahoo’ers who have returned to the company. She has also enacted employee-focused initiatives designed to bolster morale and give employees an opportunity to test new products.
However, while there might be reason to celebrate, Mayer cautions that any revitalization of the brand will happen in the long-term. She equates it to a “series of sprints” to help bring back the company’s success and has told investors she is seeing “continued stability” for Yahoo in the future.
Not quite practically perfect in every way
While Mayer has been making purchases of smaller companies and moving towards rapidly improving Yahoo’s mobile-first strategy, what about search? There hasn’t been any major news on how it will seek to rival Google or even Bing, although Yahoo did sign a deal for a twelve month search partnership with Microsoft.
Last month, Yahoo also killed off a slew of services as a means to “sharpen its focus”. The company shut down several services, many people probably didn’t really know existed: Upcoming, Yahoo Deals, Yahoo SMS Alerts, Yahoo Kits, Yahoo Mail and Messenger feature phone apps, and older versions of Yahoo Mail. One of those products, Upcoming, made the news cycle when its founder Andy Baio penned a post calling for a way to archive it before Yahoo shut it down.
What’s more, some of her acquisitions have not followed through. In March 2013, the Wall Street Journal reported that the company was in talks to acquire the majority share of the video social network Dailymotion for $300 million. The move would enable Yahoo to grow its video presence internationally while Dailymotion would establish a foothold in the United States. A month later, the French government put a stop to the purchase saying that that Dailymotion was too important for the country and wanted it to remain owned by a French company.
There may also be some who feel that getting acquired by Yahoo is just a way to exit, and that the purchased company will ultimately be shuttered. If you look at many of the companies Mayer purchased during her tenure, most have quickly announced that it would be closing as the team joins Yahoo. And so while Mayer seeks to implement a startup attitude, those companies targeted by Yahoo could be weary of selling to Mayer because of potential neglect to the product they slaved away on for years.
Mayer’s Instagram moment
Today, Yahoo stands on the cusp of a potential achievement. Mayer and the company’s board agreed on a $1.1 billion price for microblogging platform Tumblr. Whether the company accepts the deal remains a mystery, although with Yahoo holding a press conference tomorrow, signs point to the deal happening. TNW’s Alex Wilhelm breaks the deal down like this:
Tumblr is a very valuable property, given its reach, demographic, and momentum; however, as a financial entity, it’s a goat rodeo and a half. The company burned through $85 million in two years, and now has two options: raise a new round, or sell.
The astonishing $1.1 billion offer would be akin to Facebook CEO Mark Zuckerberg’s $1 billion offer to Instagram on the eve of the social networking company’s IPO. In this instance, Yahoo’s deal is reportedly for not a mix of cash and company stock.
If the deal does go through, it will be a defining point in Mayer’s career and may help solidify her career as someone who successfully turned Yahoo around. However, before that happens, she needs to find a way to make sure these acquisitions and her decisions benefit the company and aren’t just talent-stealing deals.
Investors and Yahoo appear to be happy with Mayer’s performance so far, and she has certainly taken some risks. Will these pay off big time? If they do, it will be have a huge impact on Mayer’s first at-bat as CEO and have a beneficial impact on a company many long-thought was dead.
Top image credit: Chip Somodevilla/Getty Images
Photo credits: Carol Bartz via Justin Sullivan/Getty Images, Scott Thompson via Reuters, Yahoo building via Justin Sullivan/Getty Images, Yahoo/Tumblr via KAREN BLEIER/AFP/Getty Images
All stock graphs via Google Finance
- May 19, 13
TNW recently met with three companies from Microsoft’s Azure-focused accelerator in Israel in San Francisco. For an inside look at the program, we went there last year and took pictures. Innovation is not partial to Silicon Valley, and Israel is a rising star in the technology world.
Before we get to the companies themselves, a few notes on the accelerator are in order. Started in 2012, a total of 100 companies applied for entrance; 11 were accepted. That class wrapped in September. For the second round, 300 companies applied; 13 were accepted.
Microsoft stressed that one key factor that they use to admit firms is that their leadership be coachable; that they are open to hearing, and perhaps taking advice.
From the first group of firms, 9 out of the 11 companies were funded, 5 before graduation, and four more within the first five following months. The average funding amount totaled $900,000. For the second round of companies, 10 of the 13 firms had picked up funding before graduation.
For the second round, the average funding amount is lower, at $500,000.
Taken together, Microsoft has moved 24 companies through its accelerator and launched 19 into the world with fresh funding. That’s a good track record. Now, to our three firms that jetted across the world to show off their work.
Askem
With the subtitle ‘question everything,’ it isn’t hard to ascertain what Askem is. Launching onto the iOS App Store in the past few weeks, the application is a service by which individuals can ask questions to their friends and online associates. However, Askem flips that standard offering by allowing users to segment their accrued responses by gender.
Want to know if guys like your shirt, or girls your hat? Askem can help with that. The service also allows users to sort answers from people that they know personally, for a more intimate polling.
The service is simple: Take a picture, annotate it with notes that are options, and then collect input, which consists of likes and comments.
I asked if often the two sexes disagree, and somewhat humorously the answer was yes. However, according to the question, it does depend on the question. A question regarding a roller coaster ended with men saying that they would ride it, and a majority of women demurring the theoretical option.
You can answer a question on Facebook itself, meaning that for Askem users to accept input, their inputers do not have to have the application. The firm claims its platform allows for a new level of relationship between celebrities and their fans; what sort of socks will Bieber wear? Weigh in, and help decide! Askem, in its view is more than polling, it is self-expression.
Fresh out of closed beta, Askem has raised a total of $500,000 from angel investors.
Traction is limited given its youth, but the company stated that early users logged an average of 1.8 sessions per day, spending around 3 minutes per visit to the application.
The Askem question is simple: It’s a neat application, and one that is simple to use. However, will iOS users – and later, Windows Phone and Android – take to it? For now that is the half million dollar question.
W.S.C. Sports Technologies
Deriving more revenue from extant content is akin to making free money; you already have the goods, how can you extract more cash?
W.S.C Sports Technology (WSC) intends to help sports content owners better drive revenue from their content, which is no small task, but an important effort given that networks and other parties pay huge sums to broadcast the various leagues; they have a large deficit to recoup, and as the world slowly leaves television, new incomes are key.
WSC operates a video database that allows for games to be broken down, time stamped and cut up; every touchdown, every block, every sack, can be quickly cataloged across a large number of games. You can, using its technology, create a video of every sack a quarter back you hate received in the past season.
WSC is essentially an internal YouTube for licensed content.
In practice, given a short time hands-on with the service, it’s vaguely magical. You can add voice overs, and music to the clips.
Naturally, you can share video content that you create; so once you put together an amazing highlight reel for the Colts you can share it with your friends. This drives eyeballs and thus dollars to the content owner with little input required on their end.
A test of the service with a league led to a doubling of video views. The average time on site per user is north of 10 minutes.
Networks have ad relationships in place, they merely want more places to sell them. WSC’s goal is to help those groups better use their content, in a legal fashion, boosting engagement and incomes.
The first test for the firm, having built their product, is locking down a relationship with a major sporting series. They are speaking to one in the United States. Others, I am sure, will follow. To be frank, their technology is compelling, and their value proposition real. It’s now a question of execution.
The company has raised $1 million.
Kitchenbug
Getting married and having kids is terrible for your diet, according to the Kitchenbug team. Claiming a past youth of slimness and strength, the team of founder-friends found themselves slipping later in life. A simply massive number of people in the developed world are overweight, and a troubling minority are technically obese; we’re killing ourselves with food.
We’re not helpless as a species however, as we want to be better, which is something at least. Recipe searches – healthier an option than takeout, I can vouch – are the second largest search category, account for around 1 to 2 percent of all searches, according to Kitchenbug.
The company wants to help you lose that paunch that has slowly been growing about your midsection, and do it in a hopefully tasty manner.
Its service analyzes online recipes, quickly breaking down their component nutrient ingredients and the like. It’s like having a back-of-the-can food label for every online dish, only more exacting and specific.
Kitchenbug will tell you if a dish is a good source of protein, or, in the future, if it is vegan. If you care about what you eat, the service is neat way to eat better, and know more.
While its core product is useful, the neatest part of Kitchenbug is that it allows you to scale a recipe up or down, depending on how many people you are serving; live alone and don’t want to make enough for a party of six? Kitchenbug has you covered.
You can store a list of your favorite recipes inside the service. You cannot, however, yet input your own recipes and have them scored. That is likely coming however.
Starting as a WordPress plugin for bloggers, the firm racked up 40 million views of its product in 100 days. Its web service for all is just a few days old, so traction remains nascent, likely. Kitchenbug is a neat tool that I intend on using. We could all eat better.
The firm has raised $650,000 from Israeli angels.
Top Image Credit: zeevveez
- May 19, 13
It’s a pity that ‘drone’ isn’t ‘Dorne,’ but I digress.
This Thursday the President of the United States will address the nation on its current drone program that targets enemies abroad for what are called ‘targeted’ killings. Naturally, however, when you are firing explosive-laden rockets, things tend to explode. Drones are a popular current tool of modern warfare as they put no usage-side lives at risk; the US doesn’t lose a soldier if a drone is shot down, just a good deal of money.
According to the Associated Press, the Obama administration will address other topics in the address including “counterterrorism practices.”
Why might TNW be bringing you dronish war news that feels like it has a political bent? It’s simple really, drone tech isn’t just an abroad affair; it’s coming home, and in some instances already has. Drones as a tool for surveillance are not merely a potentiality for the homeland; the technology is attractive enough that it will find cachet in your neighborhood.
This is now a regulatory question, not one that directly pertains to technology.
However, where tech policy and tech hardware meet, TNW is there. Here’s the rubbish nub: Drones are currently shrouded in defensive obscurity; the administration has been infamously tight when it comes to drone legality details. To their credit, it’s a senscial position; the less they say, the less those on the other end of Hellfire missiles know.
But as drones come home, we need to know. We must know. The legally daunting situations are already stacking. So, this Thursday, tune in. It’s not often that the government drives technology forward, after all.
Top Image Credit: Don McCullough
- May 19, 13
Today it became known, via the Wall Street Journal, that the Yahoo board has approved the $1.1 billion offer for Tumblr, a microblogging service and social destination.
It’s a good thing, too, as Tumblr is poor, and revenue-low. It’s even better for the firm as it cashes out all of its investors as a positive ROI, something that isn’t always the case with aqusitions. Frankly, the company wanted more. We all know that. But so long as the deal was all-cash, Yahoo’s hands were tied.
Tumblr’s most recent round valued the firm at roughly $800 million, in 2011. Given the $1.1 billion price, its most recent investors will see a return of 37% for the period. They wanted more. Tumblr employees wanted more. Tubmlr management, I’m sure, want more.
However: “An acquisition by some tech giant is likely in the cards for Tumblr, though, as sources say the company only has a few months of cash runway left.” They spent all the money. It’s gone. And: “Tumblr pulled in $13 million in 2012, but has accelerated its advertising offering in hopes of hitting $100 million in revenue this year. The money’s not coming in fast enough to support its expenses though.”
In short: Tumblr is a very valuable property, given its reach, demographic, and momentum; however, as a financial entity, it’s a goat rodeo and a half. The company burned through $85 million in two years, and now has two options: raise a new round, or sell.
Why not raise a few hundred million, you might ask. Well, as Foursquare recently learned, if your revenue ramp is all but flat, late into your life, after you have achieved the ‘scale’ you long chased in the youth of your company, valuing your enterprise is difficult; if growth doesn’t lead to revenue, is it worth a damn?
Tumblr doesn’t have much top line, and it has a bucket of red ink below it. Yahoo is, now approved, willing to make everyone’s investment more than whole. It’s a gift.
The kicker: why all cash. Yahoo’s short term investments and cash accounts tot to just over $3 billion. That isn’t much for a modern technology company, and it isn’t much if you are buying firms for north of $1 billion; if the deal had been a mix of stock and cash, it would have been a higher total figure.
The Instagram deal appears to loom; after Facebook offered it $1 billion, the value of the stock component of the deal fell, leading to a final effective price of $715 million. Cash holds what stock might lose.
Expect to see Tumblr join Yahoo tomorrow, unless hubris clouds its eyes.
Update: Howard Lindzon has interesting commentary on the all-cash aspect of the deal: “$yhoo offered cash because cash is actually cheaper than stock today. She could now go raise $2 billion at 2 percent. Simple market math.” This is very interesting, provided that Yahoo is more willing to take on debt than potentially dilute its shareholders.
Top Image Credit: Luz Bratcher
- May 19, 13
These days there are few things bigger than Facebook on the Internet, but Google-owned YouTube is one of them, and today the world’s top online video service marked its eight year anniversary by revealing that it is now seeing more than 100 hours of video uploaded every minute.
That’s right, every minute. That’s quite astonishing. It works out as more than four days of video uploaded each minute.
YouTube, like Facebook, is used by more than 1 billion people per month, and it has gone from strength to strength in recent times. Back in 2011, YouTube users were adding 48 hours of video per minute, while that figure jumped to 72 hours per week last year.
YouTube paid tribute to its users and incredible milestones in a blog post (via @hunterwalk) that includes the following comment:
Over the years, you’ve continued to surprise and delight us. And the past year was no exception. Who would have guessed that a tux-rocking K-pop star would shatter records left and right or that Sesame Street would go global with 1 billion views? That’s one of our favorite things about our global audience: you’re as unpredictable as you are creative and irreverent.
This year, Google is taking the service into new territory with the recent launch of paid-for channels that are aimed at rivalling streaming services like Hulu and Netflix.
This isn’t YouTube’s first foray into original content. It kicked off its Channels program in 2011, which provides selected content partners with an undisclosed sum of funding to create content for YouTube channels. The money is not a freebie but instead an up-front payment of future advertising earnings over the next year. That encourages them to invest in equipment and talent to produce compelling shows — that’s the aim, at least.
Channels began in the US, but has since been expanded to a range of new markets, including, the UK, France, Germany and Japan, with more expansions planned.
There was controversy this year as a number of partners were reported to have not been offered fresh terms. But, with YouTube’s subscription plans now public, Channels appears to have refocused on upcoming content makers, which might go towards explaining this.
Note: Thanks to those who picked up on the error in the initial headline. The amount is 100 hours of video per minute, not 100 million…just yet.
Cue Doctor Evil…via YouTube, of course.
Headline image via korosirego / Flickr
- May 19, 13
Editor’s note: Robert Scoble, Startup Liaison Officer at Rackspace, is working on a book with Shel Israel about the how sensors, wearable computers, and other technologies will change our future, titled “Age of Context.” That got them invited to visit SRI International, Silicon Valley’s most important lab. This is where tons of companies and technologies have been born, from Siri to Nuance to the Internet itself.
What is the future going to look like? One way is to get a tour of the best research lab in the world. Out of these buildings have come the Internet (it was one of the first two nodes on the Internet), the Mouse, Nuance, HDTV, and Apple’s Siri.
In other words, what they are working on here for mostly military or large companies will affect our future as they commercialize the technology developed here. The work at SRI isn’t about just technology, either, they have extensive research going on in life sciences and in one of the videos of this tour you see a new cancer detection system.
Anyway, let’s dive into the videos and see what we can learn:
This team found a way to identify cancer cells in a drop of blood. Could this technique have saved Steve Jobs’ life? It’s very possible. Hear more about this new discovery in the video, or visit the website to learn more about what SRI is doing.
How good can something like Google Glass become? Here is part of our tour of SRI, the famous Silicon Valley research lab that brought us the Internet, mouse, Nuance, HDTV, Siri, robotic surgeries, and much more. In this video you’ll see binoculars that can tag, track, buildings and people as well as play war games where we see virtual people on the ground, along with vehicles. Really amazing. Read more about it on the SRI website.
Here you see SRI is inventing a new way to work, called “Bright.” It watches you at every step of the way. Helps you work by watching how you work. Learn more on the work being done at SRI.
Here we see the latest in face detection and what it might be used for (better speaker training, for instance).
Here you see how CubeSat’s, or low-cost satellites, which are small and can fit into ballast spaces on rockets, are changing the types of science that can be done from space.
- May 18, 13
By 2015, six billion objects in the world will be connected to the internet. While it may seem tricky to grasp as a concept, the internet of things is nothing simpler, and more stunning, than objects being connected to the internet. At its most mind-blowing, these objects are learning and adapting to the behaviour of the user.
The internet has well and truly left the computer and is running amok in ‘things’, showing us how previously inanimate, everyday objects can be bought to life through being connected . The internet of things was first coined as a term in 1999 and it is now well and truly established ; no longer a vision of a future concept but an accessible reality. If you own a Nike fuelband, then you’re already enjoying the internet of things. The potential for the internet of things to challenge our concepts of what objects can do for us and how they can function in a connected network has been turned on its head.
We’ve seen prerequisite technology such as RFID tags, once used for fairly mundane tasks as tracking stock in a warehouse, be employed to enable the internet of things, and new technology emerge such as Arduino that takes this to the next level. But rather than just being a catchall term, how does the internet of things really operate?
Communicate with objects
The internet of things relies on information travelling from one point to another, and it’s easiest to see the potential for this when you consider the impact of information flowing from YOU to an object.
Nest is a great example of this. A thermostat that you can actually communicate with, saving money and energy on heating in the home. Instead of just setting your thermostat at the start of winter and probably never touching it again, now you can text your thermostat with Nest, for example telling it if you’re going to be out for the evening unexpectedly, so there’s no need to turn the heating on. By being connected, Nest learns from you and gives you a better product experience :
Objects are also being developed that will respond to automated actions, so they can learn all the time without you actually having to do anything. Twitter recently developed a ‘tweet controlled’ alarm clock that responded to tweets to animate wooden characters. Meet Flock:
Now while this is clearly a bit of fun from Twitter, the use-cases here are wide reaching. It’s not too much of a stretch to imagine a similar object that responds to tweets, to dispense medication, for example being controlled by someone via private message to remind an elderly relative when it’s time to take their tablet.
Objects communicating with each other
What we’re starting to see emerge is that instead of one object connected to an owner, or a single trigger, objects are connecting with each other to allow a new type of communication. An innovative product on the market in this area is the Good Night Lamp. A network of objects consists of a ‘master’ lamp connected to mini lamps, so that when the master lamp turned on, all or some of the other lamps light up. For a hard-working parent who often misses bedtime, being able to say goodnight by turning off your kids’ bedside lamp is a pretty heartwarming concept:
In the Cloud
Where once you would need to have a physical connection to many objects to interact with them, the internet of things ‘in the cloud’ has changed all that. And traditional manufacturers are adapting to this fast. Bosch has developed an IP-enabled security camera for use by business and in the home, that will allow you to connect with your security system when you’re not there. When the system is installed, it’s as simple as accessing the Bosch iPhone app to access a real-time view wherever you are :
Bosch isn’t the only manufacturer innovating in the internet of things here. Belkin recently released Echo Water and Echo Electricity:
Echo water can be installed by anyone and is a simple device you attach underneath the kitchen sink. The device will then measure vibrations to analyse every water source in your home (think shower, toilet etc.) to let you know how efficient you’re being with your water consumption. It does this through the cloud, using algorithms to measure the data collected and transmit messages back to you, to notify you of your water efficiency. Echo Electricity does a similar thing by tracking voltage through pipes.
Internet of Things in the body
As well as seeing advances in the internet of things around us, we’re seeing connected objects move onto us and even into us. Nike is one of the most high-profile brands experimenting with the internet of things, seen first with their launch of the Fuelband, which tracks you as you go without you having to do anything. Simply slip it on your wrist and access a whole load of information based on your movements. And now they’re about to launch Fuelband 2, which will integrate Bluetooth 4.0. This will enable the Fuelband to improve their API, to allow apps and games to access data and use accordingly. It will also feature a heart rate monitor, because why not??
This is where the internet of things perhaps gets its most exciting. Your body is now an API and you can gather and transmit data that can be used for fun in the form of exercise, but also to help improve our health. The internet of things in the body enables data to be transmitted to other services. And with any development in wearable technology we need to look beyond the immediate, basic use – i.e. a bracelet that tells you how many steps you took that day, and into what we can do with that data that’s being gathered. So why not have a heart monitor that could automatically put a call through to emergency services if your heart rate reaches critical levels.
And if you’re just getting used to the internet of things on the body, then get ready for the next phase : the internet of things in the body. Freescale Semiconductor has just released the world’s smallest ARM chip, measuring 1.9x2mm. Freescale claim it’s small enough to feature in swallowable computers.
Welcome to the future of the internet. Inside you.
-
Posts
- May 19, 13
An upcoming update will bring a web browser, email and update store app to Barnes & Noble’s super affordable Nook Simple Touch line of eReaders, which will begin rolling out June 1 according to a source close to the matter who wishes to remain anonymous. The 1.5.0 update was created in response to the positive critical and customer response to the recent Nook tablet update that brought Google Play to B&N’s Android-powered devices.
The Nook Simple Touch and Simple Touch with Glowlight will be receiving the over-the-air update starting next month, and this marks the first time that Nook’s entry-level readers get official access to web browsing capabilities. Amazon’s competing Kindle devices have shipped with an “experimental” web browser since the Kindle 2, but have not offered an email client on anything except for the Kindle Fire tablets.
Making Nook hardware a little more flexible for users is a good way for Barnes & Noble to help counter flagging sales of dedicated Nook hardware, which were shown to be weak in recent quarterly results. Nook weakness probably ended up prompting the bookseller to offer promotional giveaways with on-hand inventory.
When B&N announced that Google Play would be coming to Nook tablets, I praised the decision as a key step in helping the company position them as affordable, fully-featured Android tablets, as opposed to just glorified eReaders that could do a bit more than most. The Nook Simple Touch is still pretty focused on eBooks, but as an email triage device and basic browser, especially for text heavy content, it probably becomes a lot more attractive to an audience that mostly wants books but would like a little more general use value as well. Especially for older buyers, I imagine a simplified device with a cheap price tag has the potential to carry appeal over a much more expensive full-fledged tablet.
Will a browser and email client be enough to right the Nook ship? Probably not on their own, but B&N is at least expending effort in the right direction to combat flagging consumer interest in dedicated eReader devices.
- May 19, 13
Sometimes, more medical information is a bad thing. The influential United States Preventive Services Task Force recommends against most women getting genetic screenings for their susceptibility to breast cancer. Why? Because the tests are imperfect: for every woman who gets tested for genes associated with onset breast cancer, even more will falsely test positive, leading spooked patients into needless surgery or psychological trauma. Super cheap genetic testing from enterprising health startups, such as 23andMe, have complicated cancer detection for us all by increasing the accessibility of imperfect medical information.
After discovering a mutated BRCA1 gene, known to increase breast cancer 60 to 80%, actress Angelina Jolie’s underwent a radical preventive double mastectomy. Her brave confession in the New York Times brought much needed attention to breast cancer awareness, but it’s dangerous in the hands of a statistically illiterate population.
For instance, as New York Times statistical guru, Nate Silver, once reminded me, while breast cancer mammograms are 75% accurate, a woman who tests positive only has about a 10% chance of actually getting cancer. Since the vast majority of women don’t have cancer, there are far more women who will falsely test positive (here is a helpful blog post with the numbers worked out). Most importantly, surveys reveal that many people don’t understand the math behind false positives in cancer testing, and may make uninformed decisions as a result.
The same math holds true for the mutated BRCA1/2 gene of Jolie’s confession: researchers estimate that a tiny 0.11 to 0.12 of women have the faulty gene. “I believe in doing genetic testing for BRCA1/2 with appropriate counseling,” writes University of Southern California’s David Agus, one of Steve Jobs’ cancer doctors, The answers are not simple in this case and require experienced professionals to discuss with the patient.”
Traditionally hundreds, if thousands of dollars to test, a cottage industry of cheap genetic testing has sprung up. 23andMe, one of the most popular, offers the service for as little at $99, and has even dared to weigh in on the BRCA controversy on the company blog.
Citing a new study that found no negative emotional consequences from patients after learning about their BRCA1 mutation, the 23andMe blog concludes, “The findings are important given that a frequent criticism of direct-to-consumer testing is based on the assumption that it causes either serious emotional distress or triggers deleterious actions on the part of consumers,” wrote the blog.
“Given the absence of evidence for serious emotional distress or inappropriate actions in this subset of mutation-positive customers who agreed to be interviewed for this study, broader screening of Ashkenazi Jewish women for these three BRCA mutations should be considered.”
Sometimes, however, voluntary surveys don’t tell the whole story. Time, in their cover story on Jolie’s decision, recounts the tale of one woman who likely had unnecessary preventative surgery after learning about a genetic defect. ““She freaked out and had a bilateral mastectomy,” said Otis Brawley, chief medical officer for the American Cancer Society, who worried that this patient’s particular mutation was not as troubling as she worried it was.
Interestingly, TIME’s author, Kate Pickart, argues the financial costs of genetic testing has stall mass run on genetic tests. Even a new provision under the Affordable Care Act (a.k.a. Obamacare) only mandates 100% insurance coverage for patients with a family history of genetic flaws.
But, at just $99 (and probably far less in the future), financial barriers are crumbling. This isn’t to say that genetic screening is bad, it just complicates things for the rest of us, especially those who don’t understand statistics. The more women get tested, the more false positives exist, the less confident patients and physicians become in a course of action.
Maybe our only hope out of this cheaper testing spiral is technology that makes detection more accurate and more predictive. One promising solution is a new bra that constantly monitors deep tissue for cancerous signs (below)
So, perhaps, before long, we will innovate our way out of this dilemma.
- May 19, 13
Android UX and interaction design leads Helena Roeber and Rachel Garb gave a talk at Google I/O this year about the Android Design Principles (ADP) they helped create and introduced back in 2012 with the launch of Android 4.0 Ice Cream Sandwich. The ADP foll three simple principles, essentially “enchat, simplify and amaze,” but there’s much more to those principles that that relatively slippery and non-scientific language might lead you to believe.
In fact, Garb and Roeber have based the ADP on compelling recent research that suggests eliciting negative emotional responses have an outsized effect on user experience, and require lots more counterbalance in terms of positive experiences to achieve a net positive, or even net zero lasting impression.
The Math Of Joy
They cited a John Gottman study that found successful marriages maintain around a 5:1 ration of pleasant feelings to bad, whereas those with more like a 1:1 ration have a far greater chance of ending in divorce. Another study they cited offers insight into team productivity, which suggests that positive-to-negative interactions in a work group setting operating in at least a 3:1 ratio result in much more productive teams than those with more negative experiences. Finally, they suggested that humans need three positive experiences to compensate for every bad one.
A lot of that may sound obvious when simplified; it doesn’t take a genius to figure out that designers and app builders should strive to please their audiences. But the execution of enacting that pleasure is where things get interesting, and where Roeber and Garb’s insight really shone through. It’s one thing to say “okay, we won’t anger a user here, and we’ll make them happy instead,” and quite another to actually do it.
Putting Theory Into Action
Hearing them describe it, the ADP almost came about under a sort of moral obligation. Roeber described how the teams in charge of Android UX and interaction found that tech now has “a profound impact” on all of our lives, and as such, when things go wrong, we have a tendency to blame ourselves, and that can have a subtle but ultimately strong impact on people’s wellbeing.
“All those non-ideal implementations eroded people’s confidence in their own abilities and caused frustration,” she said, describing how even small things that you might not think that much about ultimately leave you with a tick in the negative column if left unresolved. So if you can’t figure out what you’ve done wrong in setting up Gmail on your phone, for instance, that’s something you’ll carry, and something that requires that much more to negate in terms of the overall karmic balancing act.
The example offered by the presenters of how exactly this works in action in Android right now is the visual signal given for when you’ve hit the last of your home screens. Android users will know that you’re greated with a blue glow animation and a visual representation of a page turning up to suggested nothing underneath. It’s clear in what it indicates, but it’s less accusatory or finger-pointing than a text alert, Roeber explained, which can still make users feel admonished and leave them internalizing some blame.
Another example meant to explain how interface elements can not only minimize or eliminate bad feelings, but actually generate good ones was the Google Now art which occupies the search box when you call up Android’s digital personal assistant. It changes based on both location and time of day, and Roeber and Garb explained that in testing, the produced a reaction of wonder and enjoyment not just the first time it was encountered by users in testing, but every time after that as well, thanks to its dynamic nature. Experiences like this rack up positive emotions on the part of the user.
The Interface As The Ultimate Customer Service Rep
Essentially, what Roeber and Garb described in their chat is a means of combining the best possible way of tiptoeing around a potentially negative interaction with positive ones that excite and delight. It’s a simple calculus designed to result in an overwhelmingly net positive experience, the ultimate aim of which isn’t just to minimize the negative impact of the tech we now use constantly, but also to add points in the wins column that can be used to offset negative interactions that happen anywhere in our lives. The ADP isn’t conceived as a way to make using apps not suck, in other words; it’s actually designed to turn Android into a means of spreading happiness.
That’s an ambitious goal, but it’s impossible to deny that the experience of using Android on a daily basis has improved dramatically since the introduction of the ADP. And all of these improvements serve to illustrate how mobile software is perhaps at its best when it’s acting as the idealized customer service representative: friendly and informal, but not overly familiar; attentive to and anticipatory of your needs; gentle and kind when you’re barking up the wrong tree. A truly great customer service experience leaves you feeling lifted, capable, intelligent and happy. It’s more than fair to expect the same out of our device interactions.
- May 19, 13
Editor’s Note: Semil Shah is a contributor to TechCrunch. You can follow him on Twitter at @semil.
Apple has a good deal of cash. And, in the Valley, the startup ecosystem — for many reasons — wants to see Apple spend that cash. As their cash pile continued to grow as their stock price and market cap soared, Apple’s inability to provide robust software services combined with opportunities to expand their reach through acquisitions has become a fancy parlor game which includes every stripe of public and private investor imaginable. On top of this, pumping even a small percentage of cash pile into acquisitions could provide another pool of much-needed liquidity for founders and investors alike. While it all makes sense on paper, part of what makes Apple “Apple” is that they operate how they want to — not how the market wants them to. Recently, in response to a variety of pressures to do something, to do anything, Apple announced a two-part share buyback. There are many explanations for this financial strategy, and while the Valley may have their own armchair financial analysts with a Twitter account, I reached out to some friends who actually work in technology banking or at techonology-focused hedge funds and asked them to send me a paragraph on their perception of the move. Because of the world these folks work in, I’ve reproduced their answers below anonymously, as they are not permitted to publicly share their opinions on such matters:
Technology Investment Banker: With the amount of cash stock piled by Apple, and mainly overseas, it was only a matter of time until the water would break, especially with activist investor David Einhorn ruffling feathers. Apple did something very standard and not uncommon, but on a large scale the way Apple likes to do things. At the end of the day I feel Apple’s actions represent the following four points: (1) Increased Shareholder Value: There are many ways to value a profitable company but the most common measurement is Earnings Per Share (EPS). If earnings are flat but the number of outstanding shares decreases. . Voila! . . A magical increase in period-to-period EPS will result; (2) Higher Stock Prices: An increase in EPS will often alert investors that a stock is undervalued or has the potential for increasing in value. The most common result is an increase in demand and an upward movement in the price of a stock; (3) Increased Float – As the number of outstanding shares decreases, the shares remaining represent a larger percentage of the float. If demand increases and there is less supply, then fuel is added to a potential upward movement in the price of a stock; and (4) Excess Cash: Companies usually buy back their stock with excess cash. If a company has excess cash, then at a minimum you can bank that it doesn’t have a cash flow problem. More importantly, it signals that executives feel that cash re-invested in the corporation will get a better return than alternative investments. This is definitely a positive sign for the company going forward. Customers and investors should feel confident with these events transpiring that Apple will continue to deliver value to both parties respectively.
Technology Hedge Fund Principal: Since Apple has around $150B cash on the books (70% of which is foreign), it’s clear they need to do something with this cash because it’s just wasted sitting on the balance sheet earning low interest rates. People have assumed the market would respond well to Apple making acquisitions, especially in software and services, particularly in cloud and mobile software. While they have reaped the benefits of profits in mobile hardware, the value going forward is at the application and services layer. Other hardware manufacturers are catching up, if they haven’t caught up already. Unfortunately, Apple doesn’t seem to have an appetite for these types of acquisitions. Another option is to buy back shares, a proven way to deploy cash, though doing so sends a signal that they are a mature (read: not growth) company. Tactically, buybacks can decouple EPS growth from new product lines, and Apple could see 2x its buyback investment in earnings growth as a result. Ultimately, Apple has withstood significant pressure from the investment community to do something with the cash, especially as growth has slowed. (Venture arms, since you asked, are not an effective use of capital for a corporate player; I see the share repurchase as a much more responsible use of proceeds.
Hedge Fund Partner #2: Apple had four basic choices of what to do with their cash, remembering that apple has a duty to its shareholders: (1) Do nothing (status quo), which makes zero sense. given that they have ~$145Bn in cash and are adding ~ $40Bn in cash annually assuming zero growth earnings earning; (2) Strategic acquisition or expansion, though Apple will be hard pushed to effectively put either their cash hoard or future cash flows to use to do this; (3) a one-time special dividend and increased annual dividend; or (4) a share buyback (or various form of it). Only options #3 or #4 made any sense to me and I assumed it was only a matter of time before they did something. #1 is out as they are would not be meeting their shareholder responsibility and #2 is out simply because of scale.
I see the share buyback as positive for three key reasons: (1) Apple stock is currently very cheap. My back of the envelope calculations conservatively value them at $500-$550/share, so they are effectively leveraging and creating additional shareholder value here until the multiple recovers to fair value. What’s more is that management knows a lot more than what we all do, so they should be able to calculate their own value in two to three years fairly well, and I assume they saw this as a positive. (2) Because Apple issued bonds to finance the deal rather than using cash, this way they will not need to repatriate taxable offshore cash to perform the buyback and they will likely get a bond rate the crazy low prices. Bottom line, they are saving shareholders cash, although at some point they will need to find a way to address the offshore cash, so perhaps they are waiting for another tax holiday. And (3), assuming the market reacts rationally, a buy back signals that managements believes in stock and the story and believes that this will generate returns that will outperform for long-term investors, something that a cash hoard did not address at any level and effectively generate returns far in excess of what could be achieved in any other safe manner.
More often than not I do not like share buybacks. often management does this to boost their own salary bonuses (EPS biased etc) or simply follow bad advice and follow the investment banking herd, but this time I liked Apple’s share buyback at this share price and multiple and applaud the debt financing way of doing it, I would have applauded it more if they had also issued a $40 special dividend.
Hedge Fund Partner #3: The view is Apple has stopped being an innovator. While they were at the forefront of technology, people bugged them to use their cash for a dividend or buyback and they could say “no” because the stock price was going up on leading edge innovation. Once Jobs passed away, Tim Cook hasn’t been able to keep that going, and if anything they are now playing catch-up to Samsung or even Google. When you aren’t innovating and you have $150B in cash, a board has to find ways to keep investors happy and one tactic is to conduct a massive buyback. Showing they are returning money to shareholders, creating a new base if “capital return” investors rather than growth investors. It’s all a game to prop up the stock price, money is cheap because of Bernanke, so it’s an easy way for them to please shareholders without much cost to the business. In general, I think that Apple is falling behind and trying to figure out how to regain their lead, and I’m not sure if its possible any time soon.
Technology Stock Investor: They’re doing the buyback because: 1) they have an unprecedented amount of cash ($140+ billion) that’s earning nearly nothing; 2) the stock is down nearly 40% from its high and shareholders are angry; 3) the stock is cheap on every financial metric, signaling that buying shares is a good use of cash if you believe in the long-term growth of the company. The company does not appear to want to do a large acquisition or massively increase its capital expenditures. They don’t “need” to hold that much cash. So the company had a very inefficient capital structure ($140+ billion of cash and no debt). Equity investors (who, in the end, own the company) sooner or later demand to get returns on their companies’ cash. Capital markets are competitive, and if management doesn’t give investors great reasons to own their stock, investors will go somewhere else. AAPL is facing slowing revenue growth, margin pressure, and uncertainty about their next major product line. A management team that is perceived as unfriendly to shareholders is another reason for investors to sell the stock. The buyback is a big gesture by management that they understand their shareholders’ concerns, in addition to likely being a good investment.
Photo Credit: Eddi 07 / Flickr Creative Commons
- May 19, 13
The Wall Street Journal is now reporting that the rumored $1.1 billion cash acquisition deal for social blogging site Tumblr has been approved by Yahoo’s board of directors. The Tumblr acquisition was rumored last week, with a price tag reportedly north of $1 billion, which appears to be accurate if the WSJ’s sources are correct.
Tumblr would continue to be run as a separate business and independent property, the WSJ’s sources said, and we could see an official announcement as soon as Monday from one or both of the companies. Yahoo CEO Marissa Mayor become interested in the site only a couple months ago, but sees the Tumblr purchase as a way to big inroads into social media and boost revenue growth, according to one of the anonymous people who spoke to the WSJ. Yahoo already has an event scheduled for Monday in NYC, and the WSJ has learned it will deal with Flickr, something which we’ve also heard separately. The Tumblr deal might not have been on the docket initially, but if it’s all approved it’s highly likely we’ll see it mentioned tomorrow, too.
Recently, we’ve seen suggestions that there’s a vacuum developing at the top of Yahoo’s executive ladder, and there have been rumors recently of key people departing from the mobile team. It’s interesting that a lot of these departures are fairly recent, and could go some way to explaining why Tumblr’s may have been willing to accept the $1.1 billion offer when sources have told TechCrunch that the amount was seen as “too low” by some within the company. Our sources also suggested that Tumblr may be looking at a fast-depleting cash pile, which again gives it good reason to sell.
Some users on Twitter are threatening to depart Tumblr if the Yahoo deal goes through, as Ingrid reported on Saturday. Overall, as she noted, visitor growth to the site appears to be flat or declining slightly in 2013, so combined those two facts might not bode well for Tumblr’s future user acquisition. But Instagram also faced an outcry of vocal users claiming they were going to shut down their accounts and depart the service for good when Facebook bought that company. In fact, users, engagement and reach for brands using Instagram have all gone up considerably since the acquisition.
Yahoo has been snapping up companies at a rapid pace this year, with what seems like new acquisitions every week over the past few months. One of the more high-profile purchases was the Summly buy, which brought the news summarization startup into the Yahoo fold for a reported price of around $30 million. The company’s 17-year old founder arguably made more headlines the the company itself, and many debated the merits of the acquisition.
More recently, the companies on Yahoo’s shopping list have been more under the radar, and in general the pattern looks like a strategic hiring spree, rather than a bunch of additions to Yahoo’s product portfolio. Tumblr would likely buck this trend, as it has a massive built-in audience, a full-featured, mature product and targets a relatively young demographic that so far isn’t all that well-represented at Yahoo. There’s a certain amount of “cool” that’s attached to Tumblr, and Yahoo is desperate for exactly that.
The deal size is raising some eyebrows, since, as Fortune’s Dan Primack tweeted, Yahoo had only $1.2 billion cash on hand as of its most recent quarterly earnings, which makes an all-cash offer for Tumblr a lot more of a stretch than it would be for someone like Apple, or even Facebook, which acquired Instagram for $1 billion in a mix of both cash and stock. Yahoo’s purchase of Tumblr, if the terms are correct, is a strong indicator of just how badly it wants to get expand in media-based social networking.
As of 3/31 Yahoo had just under $1.2b of actual cash on hand. And deal is $1.1b cash? Time to liquify that $1.8b of "short-term investments"—
(@danprimack) May 19, 2013We’ve contacted both Yahoo and Tumblr for comment, and so far have only received a boilerplate “We don’t comment on rumors or speculation” from Yahoo. If Tumblr gets back to us, we’ll update this piece.
- May 19, 13
Editor’s note: Glenn Solomon is a partner with GGV Capital. Some of his recent investments include Pandora, Successfactors, Isilon, Domo, Square, Zendesk, Quinstreet, and Nimble Storage. He blogs regularly at www.goinglongblog.com, where the focus is on growth stage entrepreneurs who are thinking big. Follow him on Twitter @glennsolomon.
Stanford-born and Seattle-based Tableau Software (DATA) enjoyed a tremendous debut on the public markets on Friday, closing on its first day of trading at over $50/share, up over 60 percent from its $31/share IPO price. The company raised over $250 million through the sale of approximately 14 percent of the company, and its enterprise value now sits at approximately $2.5 billion.
For the pundits who’ve been arguing that the tech IPO landscape is in crisis, deals like Tableau serve as a powerful reminder that the public market is eager for certain tech companies. In fact, over the past year or so, there have been several other high-profile tech IPO winners, such as Workday, Splunk, Palo Alto Networks and ServiceNow.
What lessons can aspiring tech entrepreneurs learn from Tableau and these other Wall Street success stories? Here are few.
Stand Out In The Crowd
Tableau has built a highly attractive business. Growth has been very strong – March quarter revenue growth was over 60 percent, to $40 million. The company is operating in a huge and proven market: The data analytics and visualization space has produced big winners across several software generations and remains interesting, as big data pushes the limits of existing solutions. Finally, Tableau has been able to show profits, albeit modest, as the company has grown rapidly. For all these reasons, public investors flocked to Tableau.
If you’re considering an IPO for your company in the future, recognize that public fund managers have many companies from which to choose. More specifically, small-cap growth managers have between 500-1,000 companies in their universe. Given the enormity of this number, a typical manager will only follow 50-100 companies closely and, depending on strategy, will likely only invest in 25-50 of these in any one year.
Tableau stands out in this sea of stock tickers. Does your company stand out? If not, what investments do you need to make to help you rise above the noise?
Price Your Company Right
Cynics will suggest that Tableau left money on the table. Since the stock popped over 60 percent on the first day of trading, the company clearly could have set its IPO price higher and raised more money. This misses the point.
Tableau recognized that its IPO is a chance to establish a new shareholder base. By pricing the IPO at $31, the company surely had its pick of new investors since most everyone, seeing the obvious good deal, wanted to get in. I’m sure Tableau’s management team spent time evaluating who was most likely to hold their IPO stock and add to their ownership over time. If the company has done its job well, Tableau has stacked its shareholder list with the best, long-term oriented fund managers. This will serve the company well for years to come.
You should spend time getting to know potential VC investors before you take money into your company. Consider prioritizing things like alignment of outlook and ability to help add value ahead of price. Taking the highest price limits dilution in the short-term, but if you add a VC who either can’t help or has a different vision than you for your company, you’ll likely regret the decision down the road.
Patience Is An IPO Virtue
Tableau deferred its IPO for several quarters. In fact, had it used a $100 million in revenue run rate as a threshold for IPO timing, as many others do, the company would have now been public for over a year. Because Tableau waited longer, the company was able to continue to invest in its business. With more time and investment likely came increased visibility and predictability, which is critical to performing as a public company.
Also, Tableau has become more valuable during the past year, as it has grown and solidified its leadership position in the market. With a higher valuation, Tableau’s IPO brought in more money and established a larger public float than would have been possible a year ago. Public fund managers dislike small, or “thin,” float deals; such thin float IPOs often lead to more stock volatility, which is difficult to manage. As you build your company for IPO readiness, consider waiting until you have predictability well under control and your valuation allows you to sell a larger amount of stock without taking more than 15-20 percent of dilution.
Clearly Tableau is a remarkable company. Emulating these three traits will help you succeed, as well.
- May 19, 13
Retooling the traditional public library for a more technically savvy populace is no small feat, especially when library budgets across the U.S. have been gutted these past few years.
That sad state of events has forced some libraries to take matters into their own hands. Consider the case of the Northlake Public Library in Northlake, Illinois — it wants to give its community (and especially the town’s children) access to a slew of new digital creation tools to help inspire the next generation of makers and artists, and it’s decided to turn to Indiegogo in hopes of making it happen.
All told, Northlake trustee Tom Mukite is looking to raise $30,000 to outfit the library with an iMac, a drawing tablet, a Wacom Cintiq display, a fancy lightbox, and (perhaps most tantalizing) a 3D printer for youngsters and local makers to feed their projects to.
In a bid to attract younger would-be readers, Mukite says the staff is also planning to use the funding to expand the library’s cache of graphic novels — there’s been plenty of debate about the value of these highly visual tomes as motivators for childhood and adolescent literacy, but the folks in Northlake firmly believe that they’ll help get reluctant readers devouring content as well as help improve language skills for non-native English speakers.
Oh, and then there’s the pièce de résistance — a nine foot tall statue of Dr. Bruce Banner’s green alter-ego hulking out, again meant to attract the kiddies. I’ll admit I don’t really get that part, but then again I was the sort of kid who needed to be carefully coaxed out from among the stacks anyway.
It’s not exactly the first time we’ve seen the crowdfunding model applied to spreading literacy — Cassandra Elton and a group of fellow University of Iowa students used Indiegogo to turn a wild-eyed idea into the roving Antelope Lending Library earlier this year even though they missed their funding goal by some $7,000. Northlake’s creation-friendly angle is an intriguing one — I can’t think of any child who wouldn’t like to see their doodles converted into a real-life action figure, and hooking these kids on the joys of making things could help inspire a new generation of designers, entrepreneurs, and engineers.
[Image via the Metropolitan Library System]
- May 19, 13
Google is under fire in the UK for its tax practices in the country, and a new key witness (who spoke to The Sunday Times) might put them in deeper hot water when he hands over a reported 100,000 emails and documents to the British Revenue & Customs (HRMC) services. Barney Jones, a former Googler who was at the company between 2004 and 2006, says he has material proof that Google’s London sales staff which would negotiate and close sales for the UK market, despite claiming its Dublin HQ handled finalizing all deals.
Jones was prompted to speak out by testimony given to the Commons Public Accounts Committee (PAC) last week by Google VP Matt Brittin, who said that London-based Google staff were never closing any ad sales deals, though some selling efforts were made there. Brittin had previously gone on record in November 2012 with statements asserting that no one in the London office was doing any kind of ad selling.
The matter of where the deals were finalized is especially important because if a sale closes in London, it’s likely they’d be taxable in Britain, rather than in the extremely low tax-rated Ireland. Jones told the Sunday Times that Google is fully aware of this, yet there are still records of Google staff closing major deals from companies like eBay and Lloyds TSB, but Google doesn’t seem at all certain that any of the documentation will absolutely prove that it has done anything strictly against UK tax law, according to a statement provided by Google Direct of External Relations Peter Barron to the Sunday Times.
“As we said in front of the public accounts committee, it is difficult to respond fully to documents we have not seen,” the statement reads. “These questions relate to Google’s business in the UK going back a decade or more. None of the allegations put to us change the fact that Google pays the corporate tax due on its UK activities and complies fully with UK law.” Google reiterated this statement to TechCrunch when we contacted them for comment.
Ireland uses its lower corporate taxation rate, which is 12.5 percent, or a little over half of Britain’s 23 percent, to attract big names who base their European corporate headquarters there, including Apple and Facebook in addition to Google. The search giant is currently under fire from UK parliament members for its tax practices, thanks to a Reuters investigation that revealed statements it made last November to the PAC about its London operations may not have been entirely accurate.
Amazon is next in the PAC’s sights for its UK tax practices, as Reuters has also recently uncovered evidence to suggest that it, too, is doing a lot of selling through an autonomous London-based unit, despite routing its sales on paper through a tax-exempt affiliate based in Luxembourg. In fact, for most on Google’s footing, avoiding taxes seems to be the exception, not the rule, and a recent piece by V3′s Madeline Bennett explains that even if this fresh round of hearings reveals that these schemes do run afoul of UK tax regulations, it’s unlikely we’ll see situations change all that dramatically. Governments are too dependent on the general economic benefits of hosting big corporations, and get too much out of awarding them contracts, she says, to risk doing long-term harm to those arrangements.
Still, what Jones claims to have would be incredibly embarrassing for Google, especially if it spells out in no uncertain terms that closing deals was regularly handled by Google’s London staff, in direct contradiction to what Brittin has told the committee, but until we see the goods, there’s no telling how deep down the rabbit hole his information actually goes.
- May 19, 13
YouTube turns eight years old today, reminding each of us in some odd way how young or old we really are. Remember, the company launched back in 2005, the same year that Michael Jackson was found not guilty of child molestation, and Lance Armstrong was winning his seventh Tours De France, and Arrested Development was still on the air.
A lot has changed since then, but YouTube’s growth remains strong as ever. YouTube announced that its community now uploads more than 100 hours of video to the platform every minute. Minute. That’s the equivalent of four days worth of video every sixty seconds.
But of course, the supply makes sense when you consider the demand. YouTube claims that more than one billion people across the world come to YouTube for content each month, which comes out to nearly one in every two people who have access to the internet.
Here’s a little perspective on growth: Two years ago, YouTube revealed that users were uploading 48 hours of video each minute, and last year it had grown to 72 hours. Eight years in, YouTube is still a growing platform, while Facebook may be slipping amongst younger and fresher social niche applications.
Meanwhile, YouTube opens up new possibilities for startups who want to leverage its massive, active user base and content library. Telecast, in particular, comes to mind, as the betaworks company helps makes all those billions of videos discoverable and curated on mobile devices.
Here’s what YouTube had to say about it, in the official blog post:
And so, on our eighth birthday, we’d like to thank you for making YouTube the special place that it is. For showing us how video can create connections, transcend borders and make a difference. For clicking these links even if you aren’t sure what they’ll be, but you trust us. In short, thanks for making us better in big ways and small ones, too. We can’t wait to see what you come up with next.
- May 19, 13
As the Tumblr/Yahoo deal continues to be negotiated by press, and the world gears up for whatever is being announced Monday morning, Tumblr founder David Karp is probably having a very interesting weekend. It’s likely, in between multiple discussions with his board members and Marissa Mayer, that he’ll take a break, like a walk or something, to gather his thoughts.
On this walk (or jog or glass of wine at a bar), he will likely mull over two main outcomes. He could take Yahoo’s money, whether it be the $1.1 billion that the board is trying to approve giving him, or the more that he negotiates. Or, well, not.
If he took Yahoo’s money, he would join the Billion Dollar Exit Club — you know, the ranks of Kevin Systrom, Chad Hurley and Steven Chen from YouTube, the PayPal mafia, Tony Hseih, James Clark, Marc Andreessen, etc. He would be considered “successful” by the Valley’s ridiculous standards and everyone else’s, not Zuckerberg successful, but definitely Michael Birch successful. Maybe he’d buy a nice house in Presidio Heights for when he has to be on the West Coast, and fill it with art and an apartment in Chelsea? [And maybe a vacation home for his family. And maybe a plane.]
He’d still oversee the Tumblr product at Yahoo, at least until his lockup expired, and maybe users would leave and maybe they wouldn’t … But the game would be over. The race would be in its cool-down period. Still, a pretty chill life overall. Especially in this economy. What would Kevin Systrom do?
Sell.
But with this, just like with the Instagram sale, comes a nagging, cloying afterthought: “What if Tumblr (or Instagram or _______) could have been the next Facebook?” And this nagging opportunity cost would grow even louder if Yahoo succeeded with Tumblr, finding a way to monetize its millions of eyeballs much like Google did with YouTube.
“Tumblr could have been a contender.”
It’s this thought that will lead to a “No” from Karp and his board if it gets nagging enough. And this thought is weighty — Zuck had it too when he was being courted by Yahoo, and we all know how that turned out. But what happens after the “No,” the fact that Karp will be challenged to build a real business on top of Tumblr’s scale, is daunting enough to turn that “No” once again into a “Yes.”
Can Tumblr turn the process of following other Tumblrs through your dashboard into a stream it can monetize with sponsored, story-style ads? Or find a way to cram ads into the notoriously independent, and risky, content?
Can Karp put on the big-boy pants, hire a Sheryl Sandberg character, and create a money-making machine? Because if he’s not sure, and he’s not ready for a long, hard, uphill fight, he should sell.
Look what happened to Groupon; still trading below its $6bn offer.
A billion dollars is a lot of money.
- May 19, 13
Editor’s note: Ross Rubin is principal analyst at Reticle Research and blogs at Techspressive. Each column looks at crowdfunded products that have either met or missed their funding goals. Follow him on Twitter @rossrubin.
An ancient and once-sacred bond between author and audience, reading and writing have become but two more tasks along with a multitude of other things that we do on a host of digital devices — watcing videos, listening to music, playing games, and really anything except using Facebook Home. Still, there are some for whom the intimate act of interface between pen and paper retains more magic than all the electrons powering all the devices in the world have not been able to recreate. For them, a trio of European crowdfunding projects have trotted out a range of products to improve both endpoints of analog document creation.
Whacked: LazyPete. Arrgh! Listen up, ye scurvy dogs, as I tell ye the legend of Lazy Pete, a pirate so wrapped up in his romance novels that he didn’t see a great white shark leap from the ocean to leave him with just one hand. ‘Tis in Lazy Pete’s honor that Philip Musche surely named his one-handed book reading contraption, which essentially puts one of those book stands that keep pages open on a beefy handle. Despite showing off the reading aid in nearly enough colors to cover the Seven Seas, Musche failed to capture enough crowdfunding booty, and the campaign ended with only £533 of the desired £30,000 treasure.
Backed: Idae. What the GoPro is to most digital cameras, Idae is to most pocket journals, even the durable Field Notes. The waterproof, tear-resistant notebook is just the thing for when you need to make that critical addition to your grocery shopping list in the middle of your next scuba dive, and a perfect match for your Fisher Space Pen. And if you needed any more proof of just how extreme it is, it has a hole for a carabiner.
That said, fire will consume it along with the haiku you were inspired to write on the slopes. And if you’re not planning to keep your notes around indefinitely, the notebook can be recycled. Developed in Milan and shipped to backers last month for between $20 and $30 depending on cover color, the 32-page thought preserver cleared its $7,200 funding goal with a couple of hundred dollars to spare, but you’d expect that kind of nail-biting excitement from such a tough guy.
Backed: Meteor Grip. The pencil has been thin enough to serve as a benchmark against which to compare high-tech electronics. While it’s comfortable for many, at least for short periods, it can be difficult to grasp for some. Receiving inspiration when his partner Zoë, a tattoo artist, began suffering hand pain in December 2011, Pontefract, UK-based Jai Dickerson Pierce developed the Meteor Grip. Few details are provided about what material is used to create the grip. Rather, the key to its uniqueness is being available in both right and left-handed versions. As the campaign page employs double negatives to claim, “No other manufacturer produces an ergonomic hand grip that is not ambidextrous.”
That said, the campaign is not above covering a spectrum of uses, claiming that the product is useful as a novelty gift while also proclaiming that it is “changing the writing experience forever.” Not yet changed for kiddies, though, as a potential meteorite grip is for now on the drawing board. With a bit over three weeks left to go, the Meteor Grip has collected about a quarter of its humble £875 goal. Seven pounds will marry your love of astronomy with hatred of thin writing tools, and ten pounds can get one for you as well as the cramping tattoo artist in your life as soon as this month.
- May 19, 13
Mark Suster of Los Angeles’ GRP Partners is known for his unique insights on the tech and digital media worlds, having famously had success on “both sides of the table” as a repeat entrepreneur turned investor over nearly two decades in the industry. And he hit headlines several times this past week, with his viewpoints on acqui-hires (he says they’re often very bad) and founders stepping down from the CEO role such as what happened with GRP portfolio startup Awe.sm (he says sometimes, it’s the best thing that can happen.)So when we heard that Suster was in San Francisco for a couple of days, we asked him to come by TechCrunch TV to talk a bit more at length about all that’s been going on. And while he warned us that he was a bit tired due to a late night visiting with industry folks here in the Bay Area the evening before we met, he was just as engaging as ever, talking about the topics mentioned above as well as the latest hot stuff coming out of the Southern California tech scene.
Check it all out in the video embedded above.
- May 19, 13
Editor’s note: Richard Bennett is a Senior Fellow with the Information Technology and Innovation Foundation and co-author of ITIF’s 2013 report, “The Whole Picture: Where America’s Broadband Networks Really Stand.” Follow him on Twitter @iPolicy.
We’ve all heard the story: America’s broadband networks are second-rate. We pay exorbitant prices for shoddy service because broadband providers print money and hold innovation in a death grip. While America languishes, our competitors in Europe and Asia are racing ahead to a user-generated content utopia. The only way forward is a government takeover, or, failing that, a massive dose of regulation.
So go a number of recent treatises such as Susan Crawford’s “Captive Audience”; works by like-minded Internet aficionados Tim Wu, Lawrence Lessig, and Yochai Benkler; reports by public interest advocacy groups Free Press, Public Knowledge, and the Open Technology Institute; as well as numerous tech bloggers.
The only problem with this story is that it’s almost completely untrue.
Granted, as recently as the late aughts, the story was plausible: In those dark days, our rankings in terms of both broadband subscription growth and speeds were falling. Increased demand for data capacity and a technology lull combined to push our average Internet connection speed down to 22nd in the world at the end of 2009, according to Akamai’s measurement of “Average Connection Speed.” Since then, the speeds of such shared connections have nearly doubled from 3.9Mbps to 7.2 Mbps, raising the U.S. to eighth place.
U.S. Average Connection Speed per Akamai
Akamai’s Average Connection Speed measures individual TCP streams over IP addresses that are often shared — and doesn’t sum simultaneous streams — so it’s more a measure of usage than of network capacity, however. To see the capacity of the underlying broadband network, it’s best to look at Akamai’s “Average Peak Connection Speed” metric.
The distinction between these two metrics flummoxed Ars Technica’s Cyrus Farivar, who maintains that the shared-connection measurement is the more meaningful indication of “user experience.” Farivar is clearly wrong about that, and Akamai’s “Average Peak Connection Speed” is the better indicator of network improvement.
The Average Peak measurement shows performance in the U.S. tripling over the past five years, up to 31.5Mbps in Q4 2012. We don’t know where the U.S. ranked on this scale before mid-2010, but it’s currently 13th. The tripling of network capacity combined with a doubling of “shared speed” says that networks are getting faster, as the U.S. is simultaneously using them more heavily
Average Peak Connection Speed per Akamai
America’s broadband speeds are improving for two reasons: first, broadband providers have installed newer technologies, such as Verizon FiOS, DOCSIS 3 cable modems, and AT&T U-verse that are four or more times faster than the technologies they replaced; and second, users have begun to demonstrate a preference for higher-speed broadband by opting into higher-speed upgrades. Some upgrades are costly and others are not; Comcast recently doubled the speeds of most of their Bay Area broadband plans for free.
While our networks are improving, we’re retaining low prices for entry-level broadband plans first noticed by the Berkman Center’s “Next Generation Connectivity” report: the U.S. is currently second in the price of broadband for entry-level users. The nation is also third in network-based competition, second in the fiber-optic installation rate, first in the adoption of next-generation LTE, ahead of Europe in broadband adoption, and doing quite well in Internet-based services.
While U.S. cable TV companies still lead telcos in new broadband subscriptions, fiber-based telco broadband is gaining subscribers at a faster rate than cable. U.S. broadband providers are profitable, but much less so than Europe’s or Korea’s, where applications like YouTube must pay ISPs for access to residential customers. Significantly, we’ve gained ground on competitors despite an enormous disadvantage stemming from America’s very low urban population densities, which make U.S. broadband networks much more expensive to build and maintain than those in most nations.
Amazingly, the European Commission’s top telecom regulator, Vice President Neelie Kroes, tells a story much like the tales of woe we hear from American broadband critics, but with the roles reversed: Kroes laments Europe’s declining standing relative to the U. S., where “high-speed networks now pass more than 80 percent of homes; a figure that quadrupled in three years.” To facilitate private investment in networks, Europe has developed a “Ten Step Plan” for a single, cross-border market for broadband that mimics our interstate, facilities-based broadband market.
But these facts are glossed over by the critics of U.S. broadband policy in large part because they directly contradict their neo-populist narrative of rapacious, profit-hungry broadband monopolists gouging consumers. The long tradition of American populism distrusts private provision of “essential” services and refuses to believe that competition can ever be brought to bear on infrastructure markets. Crawford in particular relies too heavily on a strained analogy with electricity, a genuine natural monopoly that is as different from the competing information networks we have in the broadband space as any network can possibly be: Can you get electric service over the air?
Critics also come up short on research, generally refusing to consult updated primary sources in favor of blog posts and news articles from inside the echo chamber that simply reinforce the traditional narrative. “Confirmation bias” is rampant in broadband criticism.
Broadband advocates would do better to focus their efforts on real problems, such as our dismally low level of interest in the Internet, the primary reason non-subscribers give for refusing to go online. Ideally, these efforts would be combined with initiatives to increase computer ownership among the poor — the second reason so few Americans use the Internet. The world’s high-subscription nations, such as Korea and Singapore, aren’t the price leaders for entry-level Internet services as we are, but they’ve led successful outreach efforts to spread computer ownership, digital literacy, and Internet awareness across their entire populations.
Getting all of America online is a goal that all Americans can support regardless of party creed or ideological doctrine. If we can make as much progress with online participation as we’ve made with speed, Europe will have a second Internet crisis on its hands.
- May 18, 13
Editor’s note: Keith Teare is the founder of just.me and a partner at Archimedes Labs. He is also the co-founder of TechCrunch. Follow him on Twitter @kteare.
Because of Google I/O, this was a momentous week for those of us who are watching the rapid transition that is taking place from desktop computing to mobile, and particularly for those focused on mobile-social as I am because of my job at just.me. Here is my take on what we just witnessed.
Standalone Hangouts. Google announced at its I/O event that Hangouts was to be launched as a separate app from Google Plus, taking personal conversations out from the G+ app and putting them into their own space.
Facebook Home problems. AT&T was reported to have decided to discontinue distribution of the HTC First – the Facebook Home Android phone – due to lack of sales. This comes on the back of publicity pointing to a large number of one-star reviews for the software on the Google Play store.
What is at stake?
There are many common themes and questions that underpin the launch and evolution of Hangouts as a separate app and previously led to the decision to launch the Facebook Home product. These products represent two very similar answers to a common question. The primary question is who will users look to to enable their social communications needs on mobile devices?
To set the context for an analysis let’s acknowledge the elephant in the room that is partially driving these decisions.
Mobile Messaging is rapidly becoming the primary way users engage socially on mobile. Figures released this week imply more than 41 billion messages a day are now being delivered via various “Over the Top” (OTT) messaging apps.
Phones were created as social tools. Smartphones are especially good at being social, integrating text, voice, video and images in an endless number of apps that can serve a user’s needs, and all without the need for a web-based social network.
Users are able to communicate with anybody in their address book anywhere in the world with almost any content mix at any time. This has been compelling to users and has driven the growth of apps like iMessage, WhatsApp, LINE, WeChat, KakaoTalk and some other smaller competitors. Almost 750 million users out of a smartphone population of 1.2 billion are already using these apps.
If you are Google, Facebook or almost any other major provider of social communications platforms originally developed for the web, this move to mobile messaging represents a considerable challenge.
Similar challenges exist from media-sharing apps. As users flock to Vine, Snapchat and, previously, Instagram, the social platforms are challenged to continue to be the primary provider of these services to the growing army of smartphone users.
The other core feature of Facebook and Google+, publishing to an audience for all or many to see, are increasingly becoming activities only a few engage in on mobile — and certainly less often than was the case on the web.
What Is A Platform Provider To Do?
If we look out a few years there is really only one product approach available.
That is to build single apps that embrace and extend the current features of the messaging market leaders — hoping to win users over from WhatsApp, LINE, KakaoTalk and WeChat — while also integrating the features of media sharing, private memory collection and publishing into single unified experiences.
Google and Facebook both seem to be pursuing this approach.
Breaking out Hangouts and going after the messaging audience with enhanced features makes sense. But Google also showed Google Now and Voice Search as possible points of integration for all of its mobile-social features. It’s early days here, but Android clearly wants to find a point of integration for all the users’ needs.
Facebook, with Home, revealed its integrated approach, while under the hood it has Messenger, Camera, Pages and the full Facebook app. Poor as Home’s reception has been, Facebook will certainly continue to deepen and refine its integration efforts and its attempt to be the primary UI a user needs on a smartphone.
Vulnerabilities And Strengths Of Mobile-First Companies
WhatsApp and its clones can be thought of as mobile-first companies. Their apps sit on top of the smartphone, particularly the mobile address book, and just help a user chat to their friends, family or colleagues. Their success is their simplicity and the singular purpose they have addressed.
Insofar as they are vulnerable, it is due to being very narrowly focused on brief “in the moment” conversations in the form of a chat or instant messaging UI. They have added the ability to include media in those conversations, and some voice-calling abilities. But their goal is really momentary interactions with individuals or groups. Their requirement to have both sides of the conversation install the app is another liability.
Human beings have broader needs that are currently served by other single-use apps. Evernote for private memories, email for longer more enduring interactions, social networks like Facebook, Google+ and Twitter for public statements of all kinds and Path or Instagram for photo sharing. This is a little like the era of Windows before Outlook when apps tended to do only one thing and users used many apps.
Can Web Companies Beat Mobile-First Companies?
These recent moves by Facebook and Google represent early moves by the web-era companies to react to the successes of the mobile-first messengers. They certainly do not represent end points in any way, impressive as they are. And there is plenty of time for the mobile messaging apps to respond by offering a broader range of social features.
There are already clues to the future – provided by users. The continuing use of email on mobile (trillions of messages in 2013) indicates that users are not entirely catered for by the chat-centric conversational UI. The growth of Vine and Snapchat (single-feature based as they are) indicate not all media-sharing needs are catered for by these apps. There is a lot still to play for.
If we look five years out, it is likely that the iOS and Android core will support a far more integrated set of messaging tools that cater for many of the needs we use single-use apps for today.
Message saving for private use, shared messaging to individuals or groups, media sharing, video and voice messaging (both synchronous and asynchronous), Timelines to look back and recall what we did in the past. These will all be features of the operating system.
As mobile moves from its Windows 3.1 — single-use apps — era to its more integrated future, apps that used to stand alone will have their features sucked into the operating system. Google and Apple have an advantage here of course as they own the operating system.
The Future Is Being Fought Over Now
In that sense the current product focus – decisions about what features to separate into single apps, and how to integrate those into a unified UI all represent the first moves in defining who wins.
Facebook has Messenger, Camera, Pages and its primary app with Home as an integration point.
Google has Talk, Contacts, Mail, Plus, Hangouts perhaps with Now as a point of integration.
Apple is a little behind but has iMessage, FaceTime, Photostream, Mail and Contacts. iOS itself may be the point of integration.
WhatsApp, LINE, KakaoTalk, WeChat and the others will need to move beyond the chat-centric user interface into a broader set of asynchronous messaging features, and a new set of social features, probably with Timeline support, in order to stay ahead of the curve.
The End Of Social Networks And The Start Of A New Era?
The ground has been set for a fascinating next few years as the web-based social platforms seek to own mobile-social messaging and the mobile messaging apps seek to extend into more fully integrated social features.
As of this moment the mobile-first apps have the lead measured by number of users and levels of engagement. To keep it they will need to continue to innovate.
The human race is already social, and the smartphone has everything needed to enable them to act on their social needs. As the growth of OTT messaging and media sharing shows, a user’s social needs are being met with no need for a social network.
In this mobile-social world the only question is, whose software will we all use to enable human social activities? That is what this week was all about.
- May 18, 13
We’ve all by now heard about how Yahoo is trying to get some “cool” with a supposed $1 billion purchase of hip blogging platform Tumblr, but it may be a moot point if Tumblr’s users fail to stick around post-sale.
Microsoft and Facebook may be trying to make a move ahead of Yahoo, Tumblr may be inching ever closer to running out of cash, and (despite that) may not be afraid to play a little hardball. But here’s something you’re not hearing much about: Tumblr’s users are almost universally unhappy with the news that the site might get sold to Yahoo. And they may let their fingers do the talking, and the walking.
Do a search on Tumblr for “yahoo” and you get a stream of distress, interspersed with the occasional bit of helpless resignation, and some calls for activism. The voices of reluctant acceptance (usually because of the aforementioned cash situation) or anything like positivity are few and far between. No outright enthusiasm.
(Daddy!) See for yourself.
It’s a problem that extends to some of Tumblr’s oldest users.
“If Tumblr goes to Yahoo, I will seriously consider moving my personal blog to Medium, if that’s possible,” Alexia, co-editor over here at TC, told me. She’s had a blog on Tumblr since June 2009, and, while not part of that coveted 18-24 age bracket, is a significant representative of that other cadre of important users: digital influencers. “I don’t know exactly why, but my Tumblr is a part of my identity. And for whatever reason, I don’t want to identify with Yahoo.”
Some have tried to start a petition, with a goal of 5 million signatures, although others are cynical about whether this will actually have any effect.
User attrition is not something to be dismissed, especially when it appears to be underpinned by wider usage trends on the site.
When I wrote a post in January about what might come next for Tumblr as a business (it focused on how it could make money; not how it might need to get sold because it doesn’t), I noted that in the prior month, December 2012, it had 167 million visitors and nearly 18 billion pageviews worldwide (Quantcast figures). The trend over the last six months are down, however: in the U.S. page views are down 21% to 5.3 billion, and uniques down 5% to 76 million. Worldwide the picture is better but still not growing: pageviews are down by 4%; uniques are down by 3%.
Not a sinking ship, but not a zippy little speedboat, either. Yahoo’s MySpace, indeed.
Image via Tumblr
- May 18, 13
Editor’s note: Tadhg Kelly is a veteran game designer, creator of leading game design blog What Games Are and creative director of Jawfish Games. You can follow him on Twitter here.
One of the memories that sticks with me most about the launch of the Xbox 360 was a silly analogy about inhaling. I can’t remember who said it, but the general idea was that it had a concave body to convey breathing in, perhaps a precursor to exclaiming joy. It was as daft as it sounds, but for a while there the 360 was indeed a breath of fresh air.
Xbox 360 had a lot going for it, from online connectivity to a much simpler architecture that developers preferred over the PlayStation 3. In its first few years it maintained the position of being a very games-focused console. Xbox 360 was the home of indie games, for example, and digital distribution. It widely popularized the notion of achievements.
But three, maybe four, years ago Microsoft started to push bigger ideas. It left a lot of the gamer-ish stuff behind and redesigned the console’s dashboard toward a media focus. Over a series of updates, Xbox slowly went Metro, became about Netflix, avatars and Kinect. Most of these innovations didn’t stick so well, and the cost they incurred was significant. Xbox 360 went from being a clear proposition to a complex and all-over-the-place machine.
Many Kinects were sold, but few people actually used them for long. Many channels of TV content were brought into the fold, but finding room for them essentially killed its indie games market and lost a lot of credibility with that group. Ultimately, the successes of these divergences were generally mute. (18 billion hours of video sounds like a big deal until you break it down per unit over a year.)
This is the problem with long hardware cycles (Xbox 360 is 8 years old). Lacking annualized releases of better technology (for some reason the console industry still believes it has to carry on this way), the platform story grows old after a couple of years, leading to the urge to accessorize. Often in so doing it loses itself in the ensuing cruft, and then needs a big reset. All of which leads up to Tuesday’s news: the big event in Redmond to unveil the next Xbox. And boy does the company need it to go well.
Perception-wise, Microsoft has had a bad couple of years. Windows Phone may have won a number of plaudits for its looks, but nobody really went for it. Windows 8 sold a ton of copies, but most users sort of hate it. Surface had a glitzy launch, but people are still buying iPads. That leaves Xbox as Microsoft’s one remaining big consumer push. This one has to go right, or lots of talking heads will start to ask if there’s any market that Microsoft can get right any more.
The reason the company has had a lot of these issues, I think, is that it’s bad at listening. Microsoft consistently gets lost in grand visions, visions that only it can afford to develop, and produces super-complicated propositions that nobody loves. All those years spend trying to convince the public about Windows Live services. All that time spent trying to bring us around to using Bing. All that wasted effort trying to unify user interfaces with Metro (which at its heart is just a bit broken, as has been said over and over) and who really cares? Grand visions that lose the plot are Microsoft’s forte.
Yet, gaming folks are pretty excited about the next Xbox. Will it feature new horsepower? Guaranteed. Will it have Kinect baked into the box itself? Probably, but they don’t care. Will it require an Internet connection? Maybe, and they’re not sure what they think about that. Will it have lots of content partnerships? Undoubtedly. Will it copy Sony’s idea of a Share button on the joypad? Perhaps. Will there be a Halo game on it? You know it.
Will it actually be anything fundamentally different, though? It doesn’t sound like it, but that may not be a bad thing. There is often an assumption in tech blog circles that the audience wants permanent revolution, but often it doesn’t. Often it just wants the thing that it knows works, and if that thing gets that job right then it’s happy. The console gaming audience generally doesn’t want consoles to do anything fundamentally different. It tends to embrace features that are additive to its core desires, like online multiplayer or achievements, but all it wants are big TV games with joypads and mad graphics. Everything else is optional.
There are maybe 150 million console gamers around the world, judging by platform sales over the last few generations, and they love their expensive splashy videogames. They’ve never particularly cared for the frilly extras, like avatars, but that doesn’t stop them buying in. They like that their consoles have ESPN on them, but those are not crucial purchase decisions. They’re not convergence customers in the way that some PowerPoint deck in the depths of Redmond probably drew a few years ago to justify unified interfaces, but again they don’t mind as long as it’s not going to get in the way of playing Dishonored. For those people, the next Xbox is exciting because of the prospect of an even more-lavish Call of Duty and an even more-next-generation Skyrim. All they really want is a box that they believe can deliver that experience.
The risk for Microsoft is if it screws that message up.
When videogame platforms live too long, their platform holder often loses sight of its core competency. When the PlayStation 2 was over it had explored so many areas of the market that it was impossible to convey all of them in one coherent story. Sony tried, with the PlayStation 3, but the result was so confused that developers only really heard “it’s over-complicated” while consumers heard “it’s $599 for Ridge Racer.” This is a business built on razors-and-blades thinking.
A similar thing is happening to Nintendo with the Wii U. The Wii was a wonderfully simple device with a couple of very smart accessories (like the Wii Fit) and a raft of dumb ones. By the time the Wii U came around Nintendo seemed to have lost its sense of focus that drove Wii, instead releasing a very confusing machine. Now it’s paying the price.
The biggest risk for the next Xbox is if Microsoft departs so far from its core audience that the audience feels turned off. If the company comes out only talking about transmedia, television tie-ins, movies on demand, instant messaging, Internet Explorer, phone syncing, emailing from your couch, holographic avatars, Spotify subscriptions, Twitter integration, Facebook integration and party gaming then I fear for Xbox’s survival. The gamers will ask “Yes, but, where’s the games Steve?”
At its heart, the next Xbox needs to simply be about the games the games the games. Will Microsoft actually listen this time?
- May 18, 13
The idea of a VC having its own news aggregator was a bit outlandish in 2007. But Y Combinator was in an unusual position in those days anyway. Startup incubators had been a highly visible part of the dot-com crash, and Silicon Valley was still skeptical of the concept nearly a decade later. So YC set out to be something different — a community of hackers building companies on their own terms.
Hacker News was initially built by YC co-founder Paul Graham as a demonstration of Arc, a new programming language he’d been working on. He quickly realized that it could help bring together the companies he was supporting and the rest of the folks who wanted in. With 1.6 million page views and 200,000 unique visitors on a given weekday, it’s now a key part of the venture firm’s success.
But the site quickly took off, as former Redditors flocked to it to talk about tech and startups (the site was then known as Startup News).
Having a big audience isn’t really the goal. In comparison, Hacker News’ inspiration and the first big YC exit, Reddit has seen as much as 4.4 million page views in a given day.
A Community For Ex-Redditors
As Graham explains, as the site started seeing traction immediately, he realized this wasn’t just a way to test Arc. He wanted to make Hacker News a place to recreate the way Reddit felt in the good old days, when most of its community was made up of hackers. As Reddit drew more traffic, the hacker focus of the site evolved. The community’s user base became diluted as it grew, and Hacker News was a new home for some of the early Reddit hackers.
Graham writes in February of 2007:
Reddit used to have a good concentration of startup-related links, but that was because so many of Reddit’s initial users were connected in some way to Y Combinator. Now that Reddit is so much more popular, the top links tend to be images, or videos, or political news.
Another goal of Hacker News, says Graham, was to be a place where founders could share ideas and communicate. In the spirit of Y Combinator’s own incubator, Hacker News was focused on being a community for entrepreneurs and founders in the tech community: a place where they could freely post and where Y Combinator could also get to know potential founders and leaders in the tech world.
“From the beginning we had a real community, and some of the core group of refugees from Reddit are still prominent on Hacker News today,” Graham explains. Part of what attracted many to Hacker News was its simplicity and voting system. The product’s UI, design and color scheme have remained relatively constant over the past six years.
Thomas Ptacek, one of the site’s first users, explains that he was a Slashdot user and then a Reddit user, and flocked to Hacker News (at the time Startup News) because it was more relevant to the technology and startup community. He found Hacker News to be a refreshing change from past forums where the quality of commenting was declining.
Here’s how Hacker News works: Users submit links to stories, and stories are ranked according to a voting system, similar to Reddit. The difference between Hacker News and Reddit, however, is the voting system. While you can vote stories up, you cannot vote stories down (but you can flag stories). According to Graham, 100 upvotes will get a story to the top of the front page of the site. You can only downvote a comment if you have enough “karma” on the site, which is another compelling element of Hacker News. The Karma factor is determined by the number of upvotes on a user’s submission and comments minus the number of downvotes.
In terms of the design, Graham says he wanted Hacker News to look like your list of processes in a terminal window. The look and feel of the site was aimed at hackers themselves who are familiar with tabular data.
Graham will occasionally add new features, some of which are on the backend of the site. For example, as comments get more deeply nested and heated in terms of exchange, the reply link takes longer to appear. There is a purposeful drag implemented on this, says Graham, because deeply nested discussions are rarely interesting.
Another subtle feature addition: a flame-war detector. Graham has been consistently deploying and updating proprietary software that determines whether there is a flame war, where people argue heatedly. When these flame wars take place (which Graham says can often get ugly and personal), the story in which the commenting is taking place is moved further down the page.
Graham has also created sophisticated spam-detection software, which was just updated with new code six months ago. With the update, Graham says that it’s rare for spam to last on the site for more than 10 minutes. If a user does spam the site or engages in personally vicious behaviors, they run the risk of being banned. But in an interesting twist, called “hellbanning,” the user may not actually know they are banned.
On the backend, Hacker News runs on one core, and Graham calls this a “remarkable feat of scaling.”
In terms of human moderation, Graham himself had been spending three to four hours per day simply moderating the site. And that’s in addition to all of his duties running Y Combinator. While a number of other YC alums have moderating abilities, Graham has been the main human element of the site. “It was becoming my life,” he says. Around six months ago, Graham brought on someone else, who he chose not to name, to moderate the site. He says the individual is affiliated with Y Combinator and is a “prudent and thoughtful guy,” and has been doing a great job ever since.
Hacker News has a strong affiliation with Y Combinator, as well. Graham explains that founders usually all create a Hacker News account when they apply, and that user name is the founder’s identity at Y Combinator. Hacker News also features a jobs page that shows any jobs available at Y Combinator companies. He adds that this jobs portal is very useful for Y Combinator, as the majority of the site’s audience is made up of programmers and engineers.
If you are a YC founder, your username will show up in orange to other YC founders to enable these entrepreneurs to recognize and meet each other.
Graham says that Hacker News gets a lot of complaints that it has a bias toward featuring stories about Y Combinator startups, but he says there is no such bias. Instead, the culture at the incubator is to use Hacker News, and with more than 1,000 YC alumni who have graduated from the incubator, many of these founders are still active on the news site and post links to their fellow founders’ launches and news.
“It was a small intellectual village and now it is a giant city.”
Growth has its downside. What keeps Graham up at night is worrying about the dilution of quality of the Hacker News. He explains that the site was community of insiders in the hacker world, and it has gradually been getting diluted. “That is what I spend all my time thinking about,” he says.
He worries that Hacker News will become what he calls “an old crumbling building.”
“The community has been in a perpetual but slow decline because the site is growing,” he says.
Ptacek agrees that the value of Hacker News has changed a bit. “I don’t get a community feel as much, whereas in the beginning it was a small group of people who all know each other,” he says. “It’s less likely now to see the same people from thread to thread.”
One of Graham’s biggest pain points is the “schoolyard quarrels” he finds on the site on a daily basis, and wishes “users would stop misbehaving.” He cites the example of users organizing voting rings to purposefully vote up stories, which caused Graham to develop additional software to detect this. He adds that more users are trolling under newly created accounts, and are deliberately starting flame wars on the site.
“I wish I could get people to stop posting comments that are stupid or mean,” he says. “It takes only one or two negative comments and a discussion turns into a flame war.”
Graham adds that he gets a lot of vitriol from users personally with accusations of bias or censoring. He clarifies that he, and the other human editor, rarely take links down unless they are dupes. Even with tabloid or gossip stories that surface, Graham will not take them down. Users with high karma points tend to flag these stories, he adds, and they can then be taken down.
“Hacker News makes me sad a lot,” says Graham. “I wish the community would behave the way they did when it was a little village.”
Users are noticing Graham’s frustrations. Ptacek says that he observes that Graham is careful not to tell people what to say or think, but it’s clear that he wants people to treat each other better and he gets more sad over time.
Could This Be A Business?
While Graham is open about not wanting to be the next Reddit, it’s hard to ignore the fact that Hacker News could be a business. Reddit is reportedly raising cash at a $400 million valuation. While Hacker News has a fraction of the traffic that Reddit does, the smaller site could actually have an impressive valuation as a business without any funding or employees.
Graham himself uses the site as his primary source of news. He’s even found Y Combinator companies through Hacker News. A user in the community posted a link to Watsi, a non-profit that allows people in dire need of medical care to raise money for procedures and health care. He noticed Watsi the second time it was posted on Hacker News and thought it was an amazing idea. He cold-called the founders and convinced them to be the first ever YC-backed nonprofit. And Graham recently took a first board seat at Watsi, his first board position ever.
But Graham is adamant that Hacker News is not a business and would not become a business. There are no ads on the site, and he has no interest in making money from ads. He admits that through the jobs page he indirectly makes money, as he is an investor in Y Combinator companies and will inevitably profit if the company’s hires help the business. Nor would he be interested in selling the site.
While it’s clear that Graham has his frustrations with the community, when he talks about the site’s defining moments, he sounds like he is speaking about his own child. One of his most distinct memories about the site is the day following Steve Jobs’ death, when every story on the front page was about the Apple founder.
“Users did it collectively as a tribute, and I found this a really remarkable way to show the power of a community. I thought this is really a living, breathing thing. It was like a bunch of birds flying through the sky forming themselves as an S.”
“There are really good reasons to engage with Hacker News,” says Ptacek. “There is no better place to stay engaged with the hacker community…At the end of day it is a message board. Having a place where you can reach and talk to groups of people is an important concept.”
As for the future of Hacker News, it’s clear that Graham is focused on maintaining quality and making sure that the community treats each other with respect and kindness. “I hope that most Hacker News readers know that I am doing this for their sake,” he says.
- May 18, 13
It’s that time of the week for CrunchWeek, the show where a few of us writers chat up the most interesting stories from the past seven days.
Ryan Lawler, Drew Olanoff (clad in his Google Glass), and I discussed all things Google I/O, including Larry Page’s keynote, Google+’s new photo features, and the latest Google Glass apps and more. We also chatted about Square’s new hardware, Stand, which is a $299 card swiper and stand for iPad registers.
Tune in above for more!
- May 18, 13
Did Google’s conference succeed? It launched dozens of products and services in its 205-minute keynote, but did the world understand them? I saw some of the smartest journalists in technology struggling to handle the information density. But what’s the alternative? Break it up across multiple days, or even multiple conferences? Google’s breadth presents it with a challenge unique among the tech giants.
Apple? Its launches center around a discrete set of devices. That’s why WWDC works. There might be one radically new product, but then just a set of iterations on what we already know. The screen is bigger, the tablet is thinner, the software gets a new sheen. And since Apple is all about hardware you need to touch to believe, it has to do it all in-person. Journalists and pundits can easily digest the news and offer their insights to the world.
Facebook? It prefers the rolling thunder approach that works because it’s mostly a software company. Releasing things when they’re ready rather than waiting months for an event embodies its “move fast and break things” ideal. It reaches out to journalists almost daily about new updates. When it has something big, it throws a laser-focused, dedicated event like it did this year for content-specific news feeds, Graph Search, and Home. Even when it threw its last f8 developer conference 20 months ago, it kept it tight to just Timeline and Open Graph. The media could wrap its head around the social network’s plans.
Those conferences serve their purposes because they align with the identities of producers. Some see Microsoft’s events as a fragmented mess, as they too embody their producer. Microsost has Build for Windows and developers, TechEd for enterprise, a partner conference, a management summit, and a whole event for SharePoint. By splitting them all up, it never feels like there’s one day where Microsoft rules the world.
But Google has its own identity and it’s causing I/O growing pains. The conference certainly captures the spotlight. The problem is that Google’s vast ambitions have left I/O bursting at the seams. This year’s mega-keynote tried to combine search, maps, Google+, YouTube, Google Now, Google Play, music, games, Chrome, Android, and a new phone. And that was just the consumer facing stuff! Then there were a huge set of developer announcements like a native client for C++, location APIs, game services APIs, cloud messaging for notifications, and a suite of mobile app building tools called Android Studio.
Did you watch the keynote? If so, did you remember all these things? Did you have time to read insightful analysis about them? Did journalists even have the bandwidth to write intelligently about it all? It could take a while to unpack everything from I/O. I know I have at least five stories I want to write. And inevitably things will fall through the cracks as a new week will bring new news from elsewhere.
And it’s only going to get more intense. Google employees I’ve talked to say Larry Page is really pushing his 10X innovation mantra and speedier product cycles. They explain that Google could have saved some stuff for another conference later this year, but by then it’ll already have whole slew of new things ready to show off. Plus, developers and futurists might not be willing to come from around the world for two events a year.
The single, 3+ hour keynote with no intermission did symbolized Google’s big theme of unification. Google wants to show it isn’t just a grab bag of different products. They all piggy-back on each other. Android ties mobile together. Google+ ties people together no matter what other Google products they’re using.
But I/O may be too dense and rich. Like a chunk of chocolate fudge, it overwhelms the senses and leaves you struggling to chew up Google’s vision. It was so mind-boggling it put Wired’s Mat Honan into a psychedelic trance.
The three days of developer sessions that followed the keynote were a success, in that they helped developers develop. But perhaps splitting the keynote into two bite-size sessions would make it all easier to swallow. One consumer keynote (Search, Maps, Google+, Hangouts, Music, phone) and one developer keynote (Android, Chrome, APIs, developer tools). They could be split across two days. Alternatively, it could be one keynote with announcements sorted into these two categories with an intermission in the middle. Either would go a long way to making I/O more comprehensible.
But for now, sticking with a single, epic conference may be the best route for Google to create momentum, convey unification, bring its community together, and impress the globe. Google is determined to innovate faster and deliver the future. The duty falls on us to keep up.
- May 18, 13
It’s still practically a newborn but Indian mobile messaging app Hike is already channelling almost a billion messages a month between its five million registered users. Those numbers sound insignificant when you stack them up against the big beasts of the messaging space – WhatsApp claims 200 million+ monthly active users, and some 600 billion in and outbound messages – but Hike’s growth is impressive when you consider it’s only just over four months old. WhatsApp, of course, has been around for almost four years.
Mobile messaging is hot property right now, with tech giants like Facebook and most recently Google bent on owning the messaging space. The reason for all this interest in cross-platform chit-chat is that mobile messaging looks poised to steal social networking’s crown jewels: aka the cool factor, and thus the user engagement (Hike incorporates social status updates and emoji-based moods into its messaging app, to hang on the social chain). But the idea that there can be one ultimate mobile messaging winner — or one player as dominant as Facebook in the full-fat social networking space — seems unlikely. And that’s what Hike is banking on to disrupt WhatsApp and keep Facebook Messenger and its ilk from crashing its just-getting-started party.
There’s no doubt that local market realities intercede much more on mobile than on the traditional social networking playground of the desktop, especially in emerging markets where device, network and carrier variations influence how people communicate based on how they can afford to communicate. Those complexities provide an opportunity for local app makers to triumph over goliath outsiders if they build fixes for the local market, argues Hike.
“Given how competitive this market is we do feel that in about 3 or 5 years from now you will have somewhere between three to five players globally that own parts of the messaging space in the world. You’re already seeing it right now, you have Line in Japan, you have Kakao in Korea, you have WeChat in China, you have WhatsApp in South America and Europe, you have of course Facebook message or iMessage dominating in U.S. and WhatsApp growing there too. In India of course WhatsApp is the dominant player but we’ve come on to be a very strong number two in just four months,” says Hike creator Kavin Mittal.
“We can see that with communication if you solve local problems in the market there is room for a local player to win the market completely.”
Hike is one of the latest contenders to jump into the mobile messaging space, albeit with a few neat tricks up its sleeve that it’s confident will allow it to grab significant share in its chosen markets — namely India, and other similar emerging markets in place like Indonesia, the Middle East and Africa. Some 60% of Hike’s registered users are in India, 40% globally led by the Middle East and Germany (despite its emerging markets focus, Germany was actually the first market to spike an interest in Hike — which its creator puts down to it having 128bit encryption over Wi-Fi and Germans looking for a “much more secure solution to WhatsApp”).
On the neat tricks front, Hike has baked a patent-pending SMS conversion tool into its app to take advantage of fragmentation in the Indian market caused by low distribution of data-capable smartphones. So this is not just about incorporating SMS messages into a unified app — as Google plans to with its Hangouts app – but about making sure a data message can still reach someone who doesn’t have data, via the SMS channel.
Mittal explains that in India, even where people own smartphones they may not have data enabled, or may sporadically turn data off to save money. SMS is therefore still a key comms channel that needed to be brought into the loop. This fragmentation was the problem the app’s creators were setting out to solve with Hike. They have also done this in as low cost a way as possible by building a system that ensures it does not send cross-network SMSes (which incur a termination fee in India) but routes same network to same network.
“The idea behind Hike… is it works free globally. Hike is available on iPhone, Windows, Android S40, S60, very soon BlackBerry now as well. But in case you don’t have a phone than can install Hike, or let’s say you have a phone but you don’t have data, I can still message you from Hike for free. We convert the IP message into an SMS and it’s free for me as a Hike user, to which you can reply back to – and the reply comes back straight to my inbox making messaging very seamless. So I have one app for all my friends,” Mittal tells TechCrunch.
Another future trick — due to launch on June 10 — is something that will allow users who have turned off their data to still be notified that they have a message waiting for them, presumably so they know to turn data back on. “At this point in the market there’s no way to notify you when you have a message waiting on one of these applications. So we’re launching something on June 10th that’s going to solve this problem, so no matter where you are – no matter if you’re online or offline – you’ll be able to communicate via Hike with your friend all the time,” he adds.
Hike is funding the conversion cost of sending the SMSes itself — in the Indian market, with a view to extending it to other emerging markets with similar dynamics — so that is one of its largest sunk costs at the moment, according to Mittal. But its monetisation strategy is based on building off that base in another way. The shift Hike’s creators are ultimately calculating on is the movement of consumer spending in its target emerging markets away from carrier ‘value add services’ — paid for infotainment SMSes and so on — to data-based content and entertainment.
That’s where Hike sees its future profits, by fleshing out its messaging offering to supplement the bread and butter of social comms with “content that’s very relevant to the local market” – much as the Line messaging app is already doing with entertainment content such as stickers and games.
“India is a country of 20 countries. There’s so much diversity, cultural differences, dialects, languages that one has to cater to and given that this is a big entertainment market there is no doubt we’re going to go down the route of enriching messaging around content,” he says. “If you look at why you message it’s around a piece of content, topic, video, something new you’ve found, something funny. And India it’s much more prevalent than other markets so we’re definitely going down that route, there’s no doubt about it.”
Hike is also looking to work with carriers to share some of the SMS conversion cost, with the benefit for carriers being that Hike is acting as an IP pusher, turning mobile owners into data drivers — and data is ultimately where carriers in these emerging will be making their future revenues from too.
“Given the traction we’ve had in the Indian market we’ve seen a lot of interest from the operators who want to work closely with Hike and figure out how to expand and grow the traction with Hike because what we’re doing for the operators is we’re introducing a lot of people to data,” says Mittal. “What one can also do over SMS is send photos, videos and so forth, so if I’m on Hike and do SMS I can send you a picture and you get a link on SMS so you can open it on a browser, so we’re striking deals in the Indian market and the emerging markets like Middle East and Africa where the cost is not only bourn by us but by the operator too.”
Hike is starting out with more resources than most startups, being created by BSB, a 50:50 Bharti Softbank joint venture, that acts as a “quasi-strategic incubator”, as Mittal puts it. Bharti Softbank invested $7 million into Hike about a month ago — a measure of how much traction the app had managed to achieve in a few short months. BSB projects get their first round funded by the parent companies if they achieve enough traction.
Going forward, Hike will likely look outside for funding, says Mittal — assuming it can keep on growing, and reach its goal of at least 10 million registered users (“our internal critical number”), which it views as the baseline required before starting to think seriously about monetisation.
“By the end of the year we’ll be in a positon to raise money from the external market. The reason we’re doing that is the VC market in India has less of an appetite for taking massive risk. Because one of the first questions to ask is ‘hey guys why are you building another messaging app?’ And we were pretty certain that if we did what we did we’d get the traction and so far we’ve proved it,” says Mittal. “We’re in a point where we have the $7 million but we will look outside, even possibly the West Coast for funding.”
Mittal won’t put a figure on Hike’s active user base but says it’s “amongst the highest we’ve seen in the industry and definitely way above 50%”. ”We feel there is a room for a local player to dominate markets like India, Africa and China and so forth, and take care of the local needs, and that is something we’re working on. That’s the big philosophy we have at BSB,” he adds.
India’s technology-adoption stratification poses a huge challenge when you’re trying to build an app that lets people talk to whoever they want. A challenge that, ultimately, gives the local kid a toehold over global mobile messaging players, argues Hike.
“The market kind of splits India into three sort of broad demographics, the top part really mimics the U.S. population — 30, 40 million people – they’re really switched on, they know about the Internet, they have smartphones and so on and so forth; there are about 150 million people that are experimenting with the Internet, but they have a lot of churn there because the Internet is still not a utility for these guys; and then you have a billion people at the bottom of the pyramid that have no clue whatsoever the Internet even is,” says Mittal.
“As you go further down in India, how do you tackle the one billion people? No one knows but we’re in India here, so we’re the guys to figure it out.”
